Sale price increase after improvements

Investor · Lawrence, KS · Member since 2012 · 51 posts · 15 votes

I listed a property ~2 months ago for $600k.

After buyer feedback wanting a/c, I’m planning to add the improvement this month.

My current list price is $565k and break even on this fix and flip is $555k, so a very tight deal at this point.

My question is - what would you do? Would you increase the sale price back up to $575k to account for the improvements? Or take the loss but remove buyer objection to get it sold for $565k?

Any advice for how people think thru these tough decisions would be appreciated.

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Matthew MorrowBusiness Member
Investor · PA - NY - NJ · Member since 2019 · 674 posts · 235 votes
1d
@J.C. Martel I'd get a real quote on the A/C before deciding. If buyers keep bringing it up, it's probably what's holding the house back more than the price. The math is the A/C cost plus another month or two of holding against the $10K bump, and whether it sells faster with it. If the quote is reasonable and it can go in quickly, it might be the thing that gets you a buyer. If install drags on for weeks, the holding costs eat the difference. Good luck getting it sold.
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Jimmy Samaha
Staten Island, NY · Member since 2013 · 47 posts · 10 votes
1d
I wouldn't raise it back up. After 2 months and a cut from $600k to $565k, buyers and their agents see the price history, and a bump to $575k reads like you're testing them. You'd likely end up negotiating back to $565k anyway.
I'd put the AC in, keep $565k, and make "new central air" the headline. If you can, take it off for a couple of weeks and relist with new photos so it shows up as new again. You're only $10k over break even, so the real enemy is holding time. If your carrying costs are around $3 to 4k a month, one extra month sitting eats most of that $10k bump.
Other option if the install will take a while: get a written quote and offer it as a credit at closing. That handles the objection now and you don't wait on the contractor.
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Aaron Zucker
Realtor · New York, NY · Member since 2019 · 53 posts · 15 votes
1d
Don't raise it — and here's the check that settles it: pull the closed comps that actually have central air and compare $/sq ft against the ones without. If the with-A/C comps don't support $575k, it doesn't matter what you list at, because the buyer's appraisal will land where the comps land and you'll renegotiate back down anyway — after burning more days on market to get there. Buyers and their agents can see the $600k → $565k history, and a bump back up after adding A/C reads like you're charging extra for something their feedback already told you is expected at this price point.
On sequencing: don't wait for the install to be finished before you market it. Get it scheduled, then update the listing remarks now — "new central air being installed, completed prior to closing" — so buyer's agents can sell the fix to their clients while the work is underway. Two months in, fresh showing activity is worth more than the $10k spread.
The real math: you're $10k over break-even at $565k. One extra month of taxes, insurance, utilities and loan costs eats most of that. Take the objection away, sell the certainty, and move on to the next deal.
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Hossein Sharifi
Investor · Member since 2023 · 115 posts · 56 votes
1d
@J.C. Martel I'd treat the A/C and the price as two separate decisions. The A/C removes the objection. The price is what buyers think it's worth once it's in.
At $565K against a $555K break-even you have $10K of room, so if that $555K doesn't already include the A/C, the install comes straight out of it. Another month of carry on top and you're at zero.
What I'd do: install it, relaunch at $575K with "new central A/C" in the first line of the remarks, and decide now that you'll take $565K-570K if a solid offer comes in the first two weeks. Ask your agent which showings gave the A/C feedback and have them reach out directly. A relaunch with a reason gets more attention than a quiet price change.
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