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Denver Home Case Study Intro

[0:00] hey Denver homeowners what if I told you there's a way you can make an extra $50,000 on the sale of your home with no headaches no upfront costs and zero risk Probably sounds a little too good to be true but that's what we've been doing for the last 15 years for about 30 homeowners every single year and I decided to take an exact case study where we did this for a homeowner in our Vada and I'm going to break down exactly what we did the before numbers the after numbers and just walk you through our process my name is Alex Sani I've been a local Denver agent since 2010 let me just start where we started with Scott with pictures of the house so when Scott first called us he just walked through his house and what you're seeing are the before photos okay just standard house nothing crazy older kitchen original oak cabinets right uh a little bit tired looking appliances tired looking countertop floors were a little bit rough around the edges right they definitely needed some work to them and it's just a house that they had owned since it was built I believe back in the 90s uh so you know it had some kind of rough edges they had lived in there and so this is where we start analyzing and Consulting with our clients to find out okay what is it that we have to do to this property to increase its value to maximum potential now Scott was also meeting with other agents he was meeting with other companies I believe open door or Orchard was one of them to really find out how much he could get for his house in its current condition right and he was coming up with suggestions from other agents around 8 to 82 so after selling cost you know he'd be netting maybe 750 to 775 all said and done right um and that was just kind of cleaning up the property decluttering getting it on the market your traditional sales route right now I want to show you the comps that we looked at because this is where we start what exactly is topof the market for your house and I always start with square footage okay so this is a two-story home and this property here is 3400 total square ft okay now when an appraiser looks at the proper they're going to measure within 20% give or take of your square footage so when we broke it down into his neighborhood so I'm going to show you his exact neighborhood here right he's off a 64th um and west of Kipling and Wadsworth over here very small community with only about 100 to 150 homes so not the easiest property to comp depending on what is actually sold over the last 6 to 12 months and I had to go back all the way to 12 months to find any other properties that have sold and what that came up with was a list that looked like this okay we've got the top Mark is 1.15 all the way down to 783 now these top two that were at a million and a million .15 were both four bedrooms four baths same as him uh but they were more like 4,000 square feet okay so you're real close to that 20% Rule now when an appraiser is pulling up comps for the property they want at least three solid ones okay so when they're looking at this and they see a property that's 3600 ft one that's 3,000 3200 another 3,000 they're probably going to wait the one at 3600 and 3200 more heavily okay so we're kind of throwing away the top two right off the bat now he's lived in the neighborhood his whole life and he understands like hey my house is not those two houses okay totally get that totally respect that he knows what he's doing so then let's see for 970 what kind of condition do we have to be in if what process did they go through how long did it take to sell everything like that so they started at 9.95 they ended up closing at 970 they were on in October of 23 only took them about a week to go under contract Clos for 25 grand less and then they had a seller concession of $115,000 as well this information isn't seen by the public I don't know why only us Brokers can see it so essentially reducing another 15,000 off of this brings us to 955 okay what kind of condition are we talking about good photos on the outside looks nice it's right by this little Pond there outside looks great inside looks like uh refreshed floors throughout maybe new doors not original Windows to it kitchen uh looks like it's been moderately updated right they put in the quartz or marble countertop there um appliances are white so not perfectly new but it does look nice like it looks like a well-maintained well cared for home new new paint job throughout staged well right up to the trail right up against open space uh just a nice looking home all throughout the primary Suite is a nice five piece bath right uh it's a huge selling point in these price this size home it's almost expected that you have a five piece bath in it nice deck great views right so again Stacks up he didn't really have these views right so at the end of the day can we even get to this price point because of where the house is positioned right and we came to the conclusion no at the end of the day even if we were to fix up everything 100% new kitchens baths Floors doors carpet paint all that stuff like we're probably not going to match this price at a million dollars or whatever 955 at the end of the day but we did think we could get close to around that 900 to maybe 950 would have been pushing at number I'm going to show you this communication too cuz I'm not making any of this up uh and so what we decided to do was come up with a renovation plan right to say okay if we were to do a b and c to your property can we get you above that 900 Mark so he believed in our current market he could get around 800 to 825 and that was from multiple different sources this gentleman had friends who were also real estate agents uh and so he had some pretty good sources to say hey 8 to 825 is about top of the market without having to do much to it just clean it up right well what does that look like at the end of the day well after your typical selling expenses I usually tell people take off 6 and a half% off the top that's agent fees and about another 1% for title insurance just to build yourself a little bit of a cushion there so with his current plan he was going to net around 750 to around 770 okay well we went through the property with a fine tooth comb and said you know what we think we can pull you to that 900 maybe 9 and a quarter mark right and we think it's going to take $58,000 to get there and I'll show you the rehab scope here in a moment and then we also gave this person $155,000 in cash to get out of the house into their next property uh so that way we could do the work quickly and efficiently right uh it's a pain in the butt to paint your whole house while you're living in there or to redo the floors while you're living in there so we had no problem fronting some more cash to them uh to be able to help them move on so after this work is completed between 9 to 9.25 as a list price hopefully a sales price after we're paid back for the rehab at closing then the seller would walk away with approximately 783 to 87,000 so already about a good4 to $50,000 more than what they were currently projecting so now what I'm showing you is the internal communication between me and my partner who run our fix and list program he is our GC he's also my managing broker and this is word for word exactly what he said I'm not filtering out anything here met with Scott today nice guy wanting to sell and downsize he's talking with other agents and Open Door Etc he really likes the idea of Us coming in and doing some work to his place and selling it for him I think he's a little inflated as they all are which I'm not telling you guys anything that's groundbreaking every seller thinks their house is worth the most right uh that's just how we get as sellers right I'm the same way on our houses just happens with what it will sell for but hey I'm wrong all the time he wants to push 875 maybe 900 and before you say it yes I think he'd have to be fully updated to get that number right Eric my partner a lot more conservative than I am I understand you know on the real estate side uh that sometimes you have to push it a little bit because if you don't ask you're not going to get it but you have to be within reasonable limits of what you can get okay but he agrees he wants to get it done ASAP to avoid the election nonsense I did set the tone that we can push it but as long as you know it may sell for 825 or maybe less he knows the market will decided so their conversation went and he went hey we could do all this stuff but at the end of the day you could still sell for eight and a quarter because no one is in charge of what the buyers are doing in the market interest rates were really high at that point we really don't know what's going to happen at the end of the day we can just use our best judgment from doing this for so long okay so under promise overd deliver okay that's rmo he knows the market will decide it okay he attached our calculator uh to this but we can talk about it basically flooring paint uh deck repainting countertops throughout the house painting cabinets landscape clean up a little mudjacking on the front walkway basically a $44,000 renovation with an $11,300 in loan and management fee that is our profit uh that is his profit I should say for doing the entire project fronting the money all that stuff we are very transparent about how much money we make right so it's about what 20ish 25% on loading the money and doing all the work that's our GC fee essentially uh and we just put that all out there for you if you don't like it sorry uh we got to make money very rough numbers uh then try to shoot for the moons and likely end up lower but it's a higher priced neighborhood in general with a pond out the back door okay so what ended up happening was we ended up having a total budget of 58,000 okay uh that's what the numbers you saw previously were this is the final stuff painting interior walls trim and baseboard painting all the kitchen and vanity cabinets throughout the house install new Quartz kitchen countertops with a new sink install new quartz countertop at secondary bathroom on upper level install new lvp flooring and master bathroom and shower toilet room of secondary upstairs bath refinish existing hardwood flooring new carpet uh new bathroom faucets new fixtures throughout the house new light fixt throughout the house new interior door hardware um we had a couple of 30 yard dumpsters we needed to do we had to repair some concrete we had some uh deck issues to handle some Landscaping tree trimming um a number of things and then we refinished all the bathtubs shower pans shower walls uh removed all the wallpaper from the kitchen and textured the walls like we did a fair amount of work here and that 58,000 is everything included including our profit for doing the work right so now we jump in start doing the work everybody's on the same page we have all our contracts drafted our listing agreement drafted signed and we're in full go mode okay it's time to get this work done get your house prepped to go on the market now before we go onto the market right there's other properties that have come up there's other properties that have closed so we might make some tweaks and adjustments by the time we're ready to go to the market so now just to show you what we had signed in paper uh prior to doing the renovations of what it could go on the market for we have this sign 6306 Holeman Street and the listing price was 900,000 okay uh at that time that's what he wanted out of the house knowing that hey it might go all the way down to 825 but maybe we can push it by the time it comes on the market now this communication happened right before we went live onto the MLS okay all the work is completed the house is as good as it's going to look it was staged everything was 100% done photos taken we know what the final product looks like okay so that's when he reaches out and this always happens right before and everybody wants to push it a little bit more okay but it's got to be within reason so he said uh I'd prefer to strategize list price so we get Lookers SL offers but don't want to leave large money on the table if we start at 875 I can't imagine a bidding war would get us to the stratosphere 950 or something so he's telling me $950,000 is the stratosphere okay but 915 or 920 might thoughts so I have my opinions on that and my response is generally the same hey it's your house at the end of the day but the longer we sit on the market the less you're going to sell for we got to price it right out of the gate within reason or else we're going to end up losing a lot more money down the road in two three four five months from now if we're still sit on the market so it's okay to be greedy but it's my job to keep that greed in check okay now to show you what the house looked like after the work was done K this is when we were in debate mode this is the property the outside the inside floors are refinished nice kind of clear coat on them we went white throughout the entire house right we don't try to reinvent the wheel we look at what all the new home builders are doing and just copy what they're doing right they spend millions of dollars on figuring out what people want and so we just go copy all the big boys out there right um new carpet throughout new flooring throughout new light fixtur staged properly in the kitchen we didn't replace the cabinets we painted them we put a new hardware on them and we did quartz countertops of course new light fixtures in the kitchen we removed wallpaper here we did some retexturing uh we basically spent you know a good amount of money in the kitchen okay so go through everything else just painted uh lighten it up freshen everything up just make it look as nice as it can and then we've got the backyard we had to do fair amount of deck work here because it was getting a little little rough around the edges some rotted boards um did some Landscaping you know sprucing up and there's the lake out of his back door so they see these pictures everything looks beautiful it's probably as good as the home has looked in the last 15 to 20 years so what happens they want to push the price even more from that 925 Mark we go on the market at 99 90 against my better judgment but hey at the end of the day it's your home you're in charge of the decisions I'm here to try to help you to get to where you want to be now there was no other houses on the market at the time so we kind of had control over the visibility of things right that played in our favor if we would have had competition at 950 940 930 something like that like this would not have happened so you know I'd rather be lucky than good any day and we got a little bit lucky that there was no competition on the market all right so to come back to what actually happened here originally he thought he could get 800 to 825 he would net 750 to 770 if we came in and did the fixing list we thought he could sell for 9 to 9 and a quarter with 58 Grand in rehab while giving him $115,000 in cash and he would net somewhere around 783 to 807 netting him an additional 30 $5 to $60,000 okay but we're not in charge of the buyer pool we don't know what's going to happen at the end of the day now what happened at the end of the day we listed at 990,000 we put in 58,000 we gave him $155,000 in cash we got it under contract at 970 minus $2,500 in concession so essentially 9675 okay and then at the end of the day after all the selling expenses after all the rehab costs they netted $846,000 a whopping 75 to $98,000 more than they would if they would have just put their home on the market why is that a range because well we don't know if it would have sold for 8008 and a quarter heck even if it sold for 850 in its current condition right they still netted 50 $50,000 or more by the end of this entire thing everybody wins uh they made money they made out like a bandit and just to show you what sort of time frame we worked with right because that's the next question is how long does it take to get your payday well the listing agreement was signed on March 13th the listing date was May 2nd we were under contract May 27th we closed July 11th the construction time frame from agreement to completion was 49 days the selling time frame from on the market to close was 69 days which was a total of 118 days okay so just under three months if you are considering selling go ahead and scan this QR code fill out some basic information we'll consult together to kind of figure out what the highest and best use for your property is is it to put in a full rehab job $75 to $100,000 or does it make more sense just to do A1 to $15,000 paint jop what's going to net you more at the end of the day and what works for you and Heck if you need some cash up front to get onto your next living situation to catch up on bills whatever it is we've got you covered we don't collect a dime until the property closes okay we'll act as a small lender for you we'll act as your GC we'll act as your real estate agent to help you sell the property for as much as possible

Property Assessment & Comparables

Valuation Analysis

Property Condition & Upgrades

Rehabilitation Scope & Costs

Before & After Staging

List Price Strategy

Final Sale Results & Timeline