4 Things Realtors Need to Know About Pre-Listing Updates During COVID-19

Inventory is at an all-time low in many markets across the United States as eager buyers return to market more quickly than sellers. Your clients may be seeing their neighbors’ homes going under contract at record speeds and thinking that selling fast for their target price will be a breeze, but they might have forgotten about pre-listing updates—even if their living room looks like this:

While not every home needs a major renovation prior to listing, Realtors who want to win more listings and build a pipeline of referrals should take note: pre-listing updates will pay off big time for your sellers in current market conditions. Here’s why:

1. Low Inventory = High Profit Potential

With bidding wars raging, the profit potential for smart pre-listing updates is sky-high. Low-interests mortgages may make purchasing a home possible for more buyers, but it doesn’t change the needs of those buyers. Today’s buyers, particularly millennials, who make up 53% of recent borrowers, prefer properties that won’t require renovations. Even small improvements, like fresh painting or moderate kitchen updates, will deliver a huge return on investment for sellers. After mostly minor renovations, this home renovated by Curbio sold in 6 days for $63,000 over asking. With the renovation cost coming in just under $20,000, the homeowners received an ROI of 538% and a profit of $105,000.

2. First Impressions Matter More than Ever

While relying on virtual tours isn’t a new phenomenon, particularly for millennial or Gen Z buyers, COVID-19 has made it a part of the search process for buyers across all age groups. In the past two months, 61% of prospective buyers have toured a house virtually, and an additional 33% said that they plan to do so soon. Buyers aren’t just browsing for homes online, they are using online listings to create a short list of homes worth visiting during COVID-19. To make the cut, your listing needs to look updated and move-in ready.

3. To Make the Most of a Seller’s Market, Get Ahead of New Construction

New construction slowed this spring as builders gauged home buyer confidence, but now that the strength of buyer demand is clear, new construction is on the rise. While new homes are often out of reach for many buyers (particularly first-time buyers) record low mortgage rates are making them an option. If sellers of existing homes want to compete with new construction or capitalize on low inventory ahead of the return of new builds to the market, pre-sale renovations are a must.

4. Local Data Matters More than National Headlines

The national average for days on market is the lowest it’s been in years, but at the city and neighborhood level, the pace of home sales varies dramatically. If your clients want to sell their home for the same price as their friend down the street, their home needs to be in comparable condition. In some cases that might mean cosmetic updates, in others it may be a major remodel. Either way, it’s critical to assess the need for pre-listing updates based on comps, not headlines.