ALWAYS CHECK THE MARKET!
You have to know the market when rehabbing. Will the market pay more for high-end granite? OR are you in a middle-tier market that’s ok with Formica? Just because you’re putting in a certain finish that you THINK might boost the value, you could be wrong because the market doesn’t care.
How do you counter that? Know the market by looking at comps in the area and look at the finishes in the properties that are selling. Try to replicate what people are doing successfully. Don’t try to lead the market because you think stainless appliances or granite counter tops are going to yield more money. Keep it simple and copy the success of others! DO NOT OVER RENOVATE!
Over renovation can not only lose you money in the long run by eating away at your budget with material costs, but also the house will sit on the market longer because you’re priced too high. Eventually, you’ll have to take an offer that’s much lower than you originally listed due to the fact that you’re way above the comps in the market and you’ll lose money as well as time. We often play “follow the leader” when it comes to pricing, and situate ourselves just below the higher end of sales prices in our area. This allows us to sell quickly and be competitive. Quick sales also enable us to move on to our next project and keep the profits flowing!
Long story short: check what kind of finishes are selling in your area, copy those finishes, and price yourself competitively. Getting your house sold in the first month for slightly less profit may allow you to act on a great deal that you’d miss out on if you waited for a better offer. GET MOVING!