I'm not sure I can explain it any better than your realtor --

In the example you gave the sellers were asking $320,000 which I presume to be the cost the home would have been listed for had it been in prime condition. They were admitting upfront that there were some decorating issues and were offering $10,000 for the buyer to use at his/her discretion to remedy the bad decorating etc. So yes it was in effect like listing the home at $310,000 and then accepting $300,000. The difference is that a lot of people actually love the idea of getting $10,000 back at closing to decorate the house the way they want it to be decorated. Some don't even do the decorating right away and just take it as a $10,000 windfall and live with the worn counters or bad wallpaper etc. until they replace them.

In your instance you could list at the full price after you replace the counters but you may get that buyer in there that doesn't like your choice and then mentally deducts the cost of new countertops from the offer. Offering the money up front for them to do it themselves is as appealing as buying a new home and being able to pick your own countertops or carpet etc.

I would personally in your case do the other repairs around the house to bring the home up to speed but leave the counters. Clean them as well as you can, scratches on laminate can be minimized with car wax . Try selling it for a month without offering the decorating allowance. Then in 30 days reevaluate and offer the decorating allowance of maybe half what the realtor suggests to cover the countertops.

johnmari, the above post explains the list price vs "credit" stuff very well.

I'm also in New England (coastal CT). Our market is slow although prices here have not dropped discernably. But, our prime selling season is very short. If doing the various smaller repairs will take 4-6 weeks (or, even longer) and you don't list until they are complete then, I believe, your realtor is trying to encourage you to list sooner rather than later. Hence, offering the credit instead of doing the repairs. I see it as a timing issue.

I agree with the logic that many buyers will like the idea of having cash available for cosmetic changes that would be of their choosing. No matter what you put on those counters many potential buyers will see them as "needing" replacement. Even in the upper-end finishes it's true..."Oh, I just don't like THAT color of granite...we NEED to replace all of these countertops!" So, the credit helps...IMO, it's mostly attractive to young & often first time homebuyers.

BTW, we just moved to CT four years ago after spending a dozen years in Manchester, NH. Interesting you've seen prices drop. Our market is slower than molasses but prices are holding.

Good luck...

Tricia

I wouldn't do the counter tops and am not when we list ours. I know that what ever I pick, someone won't like it, so why bother with the aggravation? My house is used. I've done enough changes these last few weeks and once we're done with what we started, that's it. I do like giving a smaller credit, I may use that one but surely not $10,000 for kitchen counters.

my understanding is, giving the credit DOES cut into your profit, but it makes it possible for the buyer to access their own money by rolling it into the mortgage.

Price $310,00, w/ $10k credit; you clear $300k ($10k less), but they borrow $310k (or $10k more than your profit.

And that's why buyers like it

Personally, I'd go for anything that will make the sale happen FAST. Like, new countertops if yours are really worn, so buyers don't say, "Oh, but that house, we'd have to replace the kitchen counters, we'll pick the other one." Of course I'd pick something neutral, and the least expensive option, but I think most buyers, esp. nowadays, would rather buy a place they don't feel they *have* to fix before they could show it off proudly to their family.

And I'd find the fastest way possible to tackle any of those other fix-it chores, rather than offering a credit. As Tricia points out, you don't want to miss the wave in the market timing, but I also think you don't want to put it on the market looking worn.

Of course credits reduce the money in your pocket. Your realtor works for you. He cannot make you do a thing, so you really do not need "ammunition" to back up your intentions. Do what you feel is in your best financial interest, but do recall you hired the realtor in part, for his judgment and expertise.

You said the DOM are long in your area. Just how long? Have the houses that offered a "credit" sold faster? Have the houses that are move-in-ready sold faster?

Personally, I would swap out the countertops if they look as horrible as you say. I would also wait to list until you are ready (although I'd move it along as spring has sprung). Since your market is slow a good first impression may be of paramount importance. If you need to adjust the price later, you could always offer a credit at that time.

The thumbnail at the bottom of the post leads to "before" pictures.
I dont see a thumbnail. Could you post a link?

What matters most, IMHO, is what makes you stand above the crowd. The approach you are taking in your opening post is exactly what we did. We sought to make the house turnkey-ready, so that buyers could just move right in. The idea was to remove the stumbling blocks. (We also had financial downsizing, by the way.) We were really pressing to get listed during the spring and ended up getting on the market on May 6. I believe your realtor is worried about timing, but really, offering a big decorating/redo credit would be a big hit on you. Better to keep your listing price reasonable, and make the house easy to buy by making it move-in-ready. Our house sold in the first week. Oh, and the buyers had been looking for months, so in that respect I think our listing late in the season was to our advantage. These buyers knew what was out there, so our house looked really good to them. (I am pretty sure that the condition of the houses that were our competition was offputting.)
You might consider asking your agent to actually show you a few houses so that you can assess the competition yourself.
If it were me, I'd do the counters.

How large is your kitchen? If you would consider replacing them with granite or caesarstone I would do it before listing - in our area (NJ) I would not spend money to change to laminate, because buyers may still want to change to granite. If you can not do that - I would offer a credit at closing - definitely no more than $5000 (or if a smaller kitchen with no island maybe a $3000 credit). Maybe you could even get some granite samples to entice buyers. I would not spend the money to change to laminate however - the last thing you would want is to spend that money and then still have people wanting to change it when they see the house.

Seems to me that your agent gets a commission on that elusive money that you're giving back to the buyer since the commission is a percentage of the selling price....and the selling agent gets his/her share too. Money out of your pocket and into theirs.....

redcurls -- my son just bought a foreclosure and the bank that owned it put in the listing that commission would be paid on the purchase price minus any concessions. I wonder if this is common or if it's something that is just normal for bank owned homes.

If you are effectively taking less for the house due to cash back at cloing, I would insist that your agent take commission on the sales price less the redecorating credit. Otherwise I would not do it.

Giving cash rebates/credits to the buyer IS reducing the amount of money coming into your pocket as the seller. Realtor needs to go ahead and admit that - and then tell you why the realtor thinks its a good idea (which it may or may not be). But the realtor should not try to convince you its somehow $ not leaving your pocket.

Like any saleman, sometimes realtors doublespeak just to try to close the deal. When I was buying year's ago, I worked with a realtor who got frustrated with me because I wouldn't close a few offers where I was around $10K apart on price. He would always tell me the difference between $140K (my top) and 150K (sellers botoom) is $10K to the seller but to me as the buyer it is only $8 per month per $1K in price difference. I told him eventually I would be a seller and the $10K extra sales price he wanted me to pay to close the deal would be $10K less I would get when I would sell. He just got frustrated with my inability to understand.

Well, thanks for the clarification of what I thought about the crediting thing. Sounds like it's a better deal for the buyer than it is for the seller, unless the seller's getting a big enough profit that the amount of the credit isn't going to hurt much, or there's room to raise the total price to balance out the amount of the credit.

This is basically a semi-starter tract-type house (it may be 4br/2.5ba but it's small with small rooms, doesn't have a big yard or a family room, so it's pretty different from most of the other 4/2.5s around)... it's the kind of cookie-cutter generic vinyl siding, vinyl flooring, oak cabinets, Formica counters, fiberglass baths type house that was built in vast quantities in the 1980s and early 1990s (this one in 1994, but we joke that the builder was cheap and bought all the 1980s style stuff no one else wanted because it looked like it should have been built in 1986). It looks like it should be in a subdivision but it's not. Yeah, it's got a spiffy - if rather idiosyncratic - master bathroom we put in when we were expecting to stay here another 15+ years, but trying to bring the rest of the house up to par with that would run us easily $50k+. I had picked out a neutral speckly laminate (Wilsonart Milano Brown), not one of the expensive high-def laminates, but not something cheesy either. Because of the cabinet layout we wouldn't even be able to use the stock postform counters, which I know some people think of as being "cheap". Granite or solid surfacing would be inappropriate for the rest of the house - not to mention being yowza expensive, because there's a lot of counter for the kitchen size. {{gwi:1893053}}, but it's handy; at this point there's a different stove and hood, different lighting and hardware, the floor's in boxes stacked in the laundry room... :-)

Turnkey houses and "handyman specials" (the two ends of the spectrum) seem to be selling the fastest, but of course the serious fixer-uppers are selling for commensurately low prices. Our realtor did send us off to look at the competition/comparables, and we've gone to some OHs, few of which really seemed to be really close - similarly priced houses were either nice looking and smaller/fewer BR/BA, or comparable in BR/BA/SF and needing a lot of work. We had planned on asking a sensible price from the start, allowing for imperfections (we're not blind to the property's failings!), without completely screwing ourselves. But MY thought is that if people are thinking "gotta fix this, gotta fix that" every time they turn around instead of "hey, I can just move right in" when they're viewing the place, I expect they'd be likely to drop their offers even lower (which is exactly what I would do, and exactly what we did when we bought the house!). I'm trying to minimize the "worn" look particularly in the kitchen and baths, and get it closer to looking just move-in-ready rather than trying to make it look like new construction, which would be lame because it's not. For instance the once-shiny brass-plated plastic on the "OMG how 80s" contractor's-caselot lighting fixtures was peeling; I spent a few hundred dollars on new ceiling fans and light fixtures and the difference was overwhelming.

As for hurryup-timing the listing, can anyone do something about the weather? :-) We've got at least two, probably three solid weekends' worth of outdoor work that can't even be tackled until the weather improves a good bit. We'd be lucky if DH can get that stuff even started next weekend - gotta love this spring weather, it's been snowing/sleeting/icing for the second dadratted weekend in a row! The property looks absolutely wretched outside - curb appeal? What's that? Don't make me laugh! Our deadline for listing is 5/25, being ready 2 weeks before that would be great but there is no way we can be ready much before that unless miracles happen right darn quick. And since Murphy's Law has gone into effect with an absolute vengeance in the last couple of months, I really cannot foresee any miracles. :-(

I think the kitchen looks fine. What would it cost to replace the laminate with laminate? (Not much, me-thinks. So, do it if the existing is a bad as you say.) Clean, unclutered, de-personalized, maintained houses will sell quickly at the right price.

Sorry for your financial reverses and need to move!

I'd fix up and replace as much as possible with modest neutral replacements and get the house looking clean and well kept up. For me, when looking at a house, I don't mind so much if things aren't new but if they're clearly worn out, broken, scratched, stained, etc., it gives me a general feeling of "this house hasn't been taken care of". An allowance is not attractive to me, because it never seems like it would be enough to get what I'd want, and I'm basically financing that allowance for the length of the loan (30 years?!).

Plus, sometimes, the very thought of having to do a bunch of redecorating/remodeling before moving in or just after can be overwhelming. Moving in and of itself is a major hassle, so on top of that, now I have to worry about replacing the countertops just to make it livable?

My current house had a lot of things I knew I'd want to change as time went on, but very little that HAD to be done immediately. Since you said the best selling houses are turnkey or handyman, and with just a few items to fix, yours wouldn't qualify as handyman (and you wouldn't want it to) then I think you should do what you can to make it turnkey.

Good luck!

I think your kitchen looks great and I am generally not a fan of oak but yours looks more like some other wood to me (I know it is not but it is a little redder rather than goldeny the way oak usually is)

I also like the wood borders on the counters although in person it may look dated, cannot say but in the picture I really like it. I would spend money elsewhere. If you are in an area where no one puts in granite, why wouldnt your existing kitchen be considered turnkey. Also it sounds like your house has more space than new construction and is in better shape than old construction so someone who neeeds more bedrooms will be interested. I would get in the market by mid may if you can, 5/25 sounds late since that is already memorial day and people are thinking about vacations not houses

I'm in the mortgage business and one thing to consider is that many lenders do NOT allow those kinds of credits on the settlement statement and either they must be handled outside of closing or the sales price must be reduced. This is common practice in FL yet real estate agents continue to do contracts & addendums with all kinds of credits.
For example, the house next door to me is offering $50k cash back at closing with a full price offer of $495k or you can just purchase for $445k with no cash back. The first scenario would never fly w/a mortgage company - it would have to be a cash sale or the lender would require the sales price be reduced by that $50k.
Ultimately the sales price is still the same but it's all a marketing tactic.
I think these things are done to entice more buyers.

Mari- do we live in the same house?! Because that is EXACTLY how I would describe mine, down to the leftover 1980s fixtures! Well, except the selling it for $300,000. I'd be lucky to get the $148,000 we paid for it 8 years ago!

Sorry things aren't going well. I know this is a huge upheaval for you. I am afraid to do any kind of weather dance. I can bring snow (no help) and can make sun from clouds but it only seems to come with crazy strong winds attached.

Have you considered painting the kichen countertop? Sounds ridiculous, but it can make a big difference for a little money. Just seal with marine varnish.

Good luck and hang in there...

This appears to be yet another story that supports utilizing an attorney to advise one in real estate transactions.

Your agents suggestion is not necessarily a bad one....however the presentation of such, as described, was deceptive. The money DOES come out of YOUR pocket...structured in such a way that the agent does not see a hit on their commission...and, it may not even be advantageous to a buyer for the reasons listed above.

Try suggesting that the agent pay for the new countertops out of his commissionwhen he asks you to explain how that would not result in less money in HIS pocket, tell him that if he is so convinced this is necessary for a sale, some commission is better than none. Let us know his opinion on THAT suggestionLOL!

Your kitchen looks fine...personally I would not try to guess a buyers taste...leave the counters as they are now. If a buyer makes noise, you can always consider making some sort of concession at that time...but IMO, I would not give away the store unless my hand was forced with no other choice.

Last but not least, take the agents advice with a grain of salt...as he appears to be taking advantage of your unfortunate financial situation and is more concerned about closing the deal than being truthful with you regarding all of the pros and cons of his "suggestion".