Some home sellers want — and need — a faster sale. But a speedier home sale could be robbing hundreds of thousands of other sellers billions of dollars in additional wealth. How homes are sold today is changing and now requires consideration of which path is best for a seller.
The emergence of the hottest new category in real estate, Listings Concierge, is resetting how homes are sold.
Pre-sale renovations — allowing sellers to renovate now and pay later — are maximizing the final price of the home sale, delivering a faster closing, and ultimately creating more wealth.
Most homes need a little love. Sellers often focus on cosmetic repairs: a fresh coat of paint, new landscaping, deep cleaning, replacing carpet, refinishing floors and staging. This allows the home to be listed quickly, and the seller typically gets a speedy home sale.
Or sellers can take a little more time and make smart renovations to maximize their profit. With a pre-sale renovation option, sellers can make significant improvements, and they won’t have to do the work or pay the upfront costs. Instead, it all can be done for them, and they can pay for these improvements once their home sale closes.
Research shows that while a speedier home sale is an excellent strategy for many sellers, others leave money on the table by opting for a faster sale. In fact, most homeowners who put their home on the market as-is are missing out on between 15% and 20% of the value.
We dug into the data at Revive and found that the average seller who chooses a pre-sale smart renovation path over a faster sale made $186,000 more when they sold. In addition, the average return on a seller’s renovation investment (or ROI) is over 200%.
The extra benefit is that once the home does list for sale, the seller is not only ready for a faster sale, but they also get one. Move-in-ready homes are among the most desired listings as they sell more quickly. Revive found that renovated homes sell 72% faster.
Why the way homes are sold is changing
The Listing Concierge category, or pre-sale listing renovations, is growing exponentially. Again, the wealth creation factor is the driver.
Redfin recently reported that a record number of US homes (6 million properties) are now worth $1 million or more. A little more than 8% of all homes in the US as of February 2022 were worth at least $1 million. That number is up from 4.8% (3.5 million) pre-pandemic, almost doubling.
Most importantly, in California, the biggest real estate market in the US, the percentage of new homes worth at least $1 million is staggering. In San Francisco, it is 89% of all homes. In San Jose, it is 86%, and in Anaheim and Oakland, it is 55%. Seven of the Top 10 Metro markets with the highest percentage of $1 million-plus homes are in California.
If just one in ten sellers of all homes worth $1 million or more chose a pre-sale renovation, sellers would net tens of billions of dollars in additional sale proceeds.
The potential of additional annual wealth creation is staggering. Every year, some 5 million to 6 million existing home sales occur. Revive data suggests that if just 5% of these homes chose a pre-sale renovation, total seller wealth would increase by $56 billion.
The benefits that Listing Concierge firms offer sellers are dramatically altering how homes are sold. All the major seller pain points are gone: zero out-of-pocket expenses for the seller, all the knowledge and expertise in one place, professionally vetted contractors with proven track records, and a streamlined process and system that removes the stress from the seller and their agent to deliver quick turnaround times and a move-in ready home.
Renovating before listing disrupts the traditional way homes are sold while creating new wealth for sellers.