Because homes are flying off the market for outlandish prices, sellers aren’t putting much TLC into their properties before listing them.
Many sellers are skipping repairs because they know they’ll get at or over the asking price without making them.
“The need to stage a home is minimal to none, the need for cosmetic repairs is non-existent,” said Erin Madden, an Idaho REALTOR®. “Buyers are almost forced to overlook cosmetic and minor issues when trying to purchase homes.”
In addition to buying homes as-is, Madden told Inman News that buyers are waiving inspections or signing contracts that state the inspection is for the buyer’s information only, a trend that has been solidifying across the country for several months.
Buyers are even forfeiting appraisals, according to Redfin and many agents.
This Market Won’t Last Forever
Looking ahead, the housing market has been showing early signs of cooling (see the CVAR Snapshot in this week’s CVAR Connect for local stats), which means sky-high prices will eventually float back down to earth. According to a recent report by the U.S. Census Bureau, sales of newly built homes in June were the lowest since the onset of the pandemic.
While sellers can get away with not doing cosmetic repairs right now, Madden warns that the bigger maintenance issues, like roof replacements or leaks, should be addressed.
Not only can bigger repairs chip away at the sale price, but a seller runs the risk of losing time on the market if the prospective buyer terminates the deal.
“At this point, as we start to cool down, if you lose time on market because someone does an inspection and decides they don’t want to take on that cost, then you could be shooting yourself in the foot,” Madden said.
Rick Abbiati, owner of Colony Property Investments, LLC, explained that while sellers can get away with doing the bare minimum, they should put some thought into the decision because repairs could mean a higher return on investment.
“Yes the market is hot, however if you want your property to be at the top of the pile in terms of consideration, then make it nice,” he said. “Regardless of market temperature, when a buyer is looking at one home that is move-in ready and one that is a dump, they will pick the move-in ready home most of the time.”
Agents Also Cutting Corners
Not only are sellers ditching repairs, but there isn’t much effort being put into the visual representation of listings either.
A recent study by BoxBrownie, a real estate image enhancement company, revealed that the majority of listings on the market right now lack good visual marketing.
The study looked at over 25,000 U.S. listings on Zillow and realtor.com from March 2021 to June 2021, and found that 94 percent didn’t offer virtual tours and only 16 percent included a floor plan.
“It’s fairly safe to assume that right now agents are cutting corners on visual marketing for listings because of the speed of sales right now,” BoxBrownie general manager Peter Schravemade said.
But listings that focus on virtual marketing are bound to catch more eyes than those that don’t, regardless of the state of the market.
“Buyers are more receptive to listings when they have professional photography, virtual tours, and floor plans,” said Vanessa Bergmark, CEO of California-based Red Oak Realty. “Homes that offer these features to prospective buyers almost always sell quicker than those that do not.”