How to sell a home that needs renovation but has a new roof?

Question

I'm in a unique position where I'm selling an older home for roughly $450,000 and has a ton to offer. It has a brand new roof which is $25k alone! The problem I'm facing though is that the other homes in the neighborhood have renovated kitchens (probably less expensive than the roof) and are older too. People see the house I have listed and say, "Oh, the kitchen isn't renovated." I explain that the roof alone is more than the kitchen renovation so they can come in and put their own kitchen in to their own tastes. Still, I can't get an offer. I wish I could say the owners have it overpriced but it is priced great for the neighborhood.

Anybody have any ideas for me to get this one sold? What could I do differently?

Zach Sikes · Answer

@Chris Farrugia

The roof is a maintenance item, and is expected to be in good shape. All of the other houses also have good roofs. It's not sexy, but the only way to compete with the other houses is to rehab or drop the price.

Kenneth Garrett · Answer

@Chris Farrugia

You are in a no win situation. Kitchens and baths sell homes. Although it is a benefit to have a new roof it does not resonate with most buyers. Try some inexpensive updates in the kitchen or if the funds are available update the kitchen.

Good Luck.

Account Closed · Answer

If it is not getting offers then it IS overpriced! All objections are conquered by a lower price.

Andrew Johnson · Answer

@Chris Farrugia It sounds like you have a property for investors. But investors want to buy at 80% of fair value to get a "deal". Even if it's a 1:1 relationship between the money they have to invest in kitchen/bathrooms to get the property renting well there's always the issue of getting return on your time/capital. Non-investors will pay "fair market value" or even overpay because of the emotion of a great kitchen, spa bathroom, etc. There isn't much emotion involved in a new roof. And a kitchen renovation involves time and effort from the individual -- to your point, picking what they want. There aren't nearly as many decisions when it comes to re-roofing so (costs aside) it always seems more simple to tackle. Market to investors and price appropriately. What doesn't make sense is that in an era of Trulia, Zillow, etc. your potential buyers are mystified that the kitchen isn't renovated. Shouldn't it be apparent on the photos that are online?

Patrick Britton · Answer

@Chris Farrugia Hi Chris. I would do something to try to target investors. In my area of the world, a home that needs a new kitchen but already has a new roof is a great find!

Keep in mind, people have a hard time valuing something they cannot see, touch, or smell, despite the fact that having a newer roof is more important than a new kitchen. So perhaps you might need to have the seller offer a large seller concession/contribution at closing to upgrade the kitchen?

Another idea might be to have seller spend a few bucks and get some new appliances. As well, very good staging could help "modernize" a kitchen to a certain degree.

best of luck

Sam Shueh · Answer

You need to have the entire house renovated. Many people do the bottom and let next owner fix the roof later....

The reason is simple you spend 5 hours on the roof cook?

Frank Trigoso · Answer

Yes, kitchens and bathrooms is what will impact your deal. A shingle/tile roof does not mean much to a buyer of SFH. I renovated my roof two months ago, and I honestly don't feel no change to the house. Kitchens and bathrooms. Grant Cardone states the 35% for rehab cost rule. Meaning you must receive 35% profit on top of the original money used for rehab.

Daniel Guas · Answer

What type of house is it? $25k seems like a lot to pay for a roof.

Daniel O. · Answer

@Chris Farrugia, things are not hopeless. If you think you have the place priced great for the neighborhood, you might consider raising the price a bit and offering $10K toward a kitchen remodel. Doing that changes the psychology of the deal. That way people are only looking at a slightly higher monthly payment, but they feel like they come out with 10K in hand for the kitchen. If a buyer is challenged to come up with the down payment, needing to come up with another 10-15K for the kitchen may deter them, especially when you are competing against places that already have that new kitchen installed.

How to sell a home that needs renovation but has a new roof?

How to sell a home that needs renovation but has a new roof?

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