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The Hidden Costs of DIY Presale Renovations: A Guide for Real Estate Agents

March 20 2023

construction house toolsAs a real estate agent representing sellers today, you may find homeowners are eager to maximize their return on investments and be tempted to take on DIY improvement projects. To help your sellers make the right choice, it is crucial to understand the risks and potential pitfalls of pre-sale renovations.

Every DIY project comes with pitfalls. But few projects take on the magnitude or the impact of a DIY home renovation undertaking. The challenges associated with DIY presale renovations can lead to significant setbacks with hidden costs that are only uncovered after it is too late.

Let's look at some of the most common hidden costs that are typical to sellers wanting to do their own upgrades and repairs compared to the advantages of partnering with a professional firm with a proven track record that specializes in presale renovations.

1. Time and effort

Sellers often underestimate the time and effort required to complete DIY presale renovations. What may seem like a simple project that might take a few days can quickly turn into weeks or even months of work. As a result, the property won't be on the market when planned, causing the seller to lose potential buyers, and possibly compromise the listing as the homeowner may become overwhelmed by what their undertaking and decide to wait to sell.

2. Inexperience and mistakes

Homeowners who lack experience in home improvement may make costly mistakes during the renovation process. Incorrect installations, poor quality materials, and lack of attention to detail can lead to further expenses down the line. Hiring a professional firm with in-house designers, project leaders, and a network of professional, high-quality contractors ensures the job is done right the first time, saving your clients from these costly errors.

3. Permits and building codes

Many homeowners are unaware of the need to apply for building permits and the impact of local building codes that regulate renovation projects. Navigating this complex process can be time-consuming and often frustrating – especially for someone who is inexperienced in dealing with local government regulations. Failure to obtain the necessary permits may lead to fines, delays, and even the need to redo the project. A professional presale renovation firm knows the permitting process, understands local building code requirements, and can handle all the necessary paperwork, saving your clients time and potential headaches.

4. Safety risks

DIY presale renovations can present safety hazards for inexperienced homeowners. Electrical, plumbing, and structural work can be dangerous if not performed correctly. Many of these projects require licensed and certified professionals, all of whom have liability insurance coverage. The risk of injury or property damage increases when homeowners try to tackle these projects on their own. A professional firm that specializes in renovations will have the necessary safety equipment, training, expertise, and insurance coverage in place to complete the job safely and reduce homeowner risks.

5. Reduced resale value

In a worst-case scenario, when a DIY presale renovation is executed poorly, it can actually decrease the value of the home. Potential buyers are turned off by subpar work and may factor in the cost of correcting mistakes when making their offers. Hiring a professional firm specializing in presale renovations ensures high-quality work that adds value to the property.

Bottom line

While a DIY presale renovation may seem like a cost-effective solution for sellers, the hidden expenses and potential risks make it a highly unattractive option. As a real estate agent representing sellers, it's essential to educate your clients about these overlooked aspects. You can help your sellers by guiding them to partner with a professional presale renovation firm. By doing so, you'll help your clients avoid costly mistakes, ensure they experience a smoother selling process, and most importantly, help them obtain the best possible sale price for their home.

Dalip Jaggi is at once an active entrepreneur, a highly skilled technologist, and a profoundly passionate business leader. Today, Dalip is co-founder of Revive Real Estate, a PropTech with a goal to democratize house flipping.