How to generate 800% ROI
Almost every home can sell for more with a little strategic freshening-up. But sometimes the imagination and work to get from a property's current condition to what it could be is a much bigger lift. In these cases, the property is in such poor condition cosmetically that the price we could get for it "as-is, where-is" is radically lower than the home's potential value.
Smart buyers and investors look for these types of homes, because they've developed the skill to look past dirt, grime, scratched floors, dim or out-dated paint colors, mismatched light bulbs of various colors and strengths, pocked and dead lawns--even disorderly interiors overflowing with a seller's possessions, papers and furnishings. But why let the smart investors get your property at a discount from its potential value? Why not capture the up-side yourself?
This is one of my most important roles as a listing agent: to bring my clients an understanding of their property's true potential, and develop strategies for getting it there in order to capture double, triple, or quadruple returns on investment.
And that's exactly what we did here. This essentially great home in a desirable location was deeply obscured by surface conditions that made it worth $1.8M to $1.9M. By spending $50,000 on new interior paint, junk removal, multiple rounds of deep cleaning, a landscaping refresh, a few minor repairs, 4 new light fixtures and good quality staging, we were able to up-level the home to the point it merited a list price of $2.1M. Already, this represented a 400% ROI on that $50k.
And we managed the whole process for our senior seller, who would had been feeling overwhelmed with the property and the prospect of all the work she faced. We helped her transition out, take the things she wanted, and leave the rest for us to deal with. It was a huge project.
But here's the best part: by doing this work, we now had something we could leverage into beautiful marketing. Our digital and print assets communicated a home that excited our pool of target buyers. Now we had the opportunity to get the best we could out of the market conditions (which were spotty in early 2023). The confused market had something special to respond to; something to which it was easy to say "yes", without reservation.
The results? A constant stream of showings. 183 people through our two 2-hour open houses. And despite all the hesitancy about the market, interest rates, and values, on our sixth day on the market we still managed to generate four offers and an all-cash sale $220,000 over the asking price of $2,100,000.
Our senior seller was deeply comforted, as the proceeds of this sale represented her retirement fund. In the end, we leveraged that $50,000 investment in preparing the property for market into $420,000, by making the $1.9M home we started with into a $2.32M sale. That's over 800% return on investment. Not a bad outcome.
Here were our marketing remarks in the MLS listing for this home:
Have you got a fistful of functions you need from your home? We’ve got spaces for all of them! Indoors and out, this one offers the flexibility to accommodate your needs today...and as they evolve over time. There's room for all your people and activities indoors and out.
You've got that coveted great-room layout. Here, it opens onto a three-season covered terrace and fully fenced yard for easy in-and-out play or entertaining. There is a main floor suite plus a palatial primary suite upstairs, not to mention the three additional bedrooms. The big bonus room is isolated from the bedrooms; that means late night TV won't wake others. Smart, right?
Walk to top-in-State elementary, middle & high schools (ensuring high appreciation rates even if you don't have kids). All this is tucked on a quiet laneway, with Kirkland's charming waterfront village just 6 minutes away.