Expert: Jessica Bryan - 4/20/2010

Question
We would like to move in the next 3 years or so.  Our 2 car garage is in bad shape (peeling paint, animals can get in), and the asphalt driveway is cracked and uneven in parts.  We thought about getting a new garage and driveway rather than selling at a lower price, and the first estimate for the garage came back $12,500 - more than I was expecting.  Is it better to get a new garage/driveway now or just sell as is?

Answer
Dear Rita;
There are so many variables that affect the answer. There is no hard and fast rule.  Much depends upon your answers to a few questions.
The first question is: what condition is the rest of the house?  If everything sparkles and looks to be in good condition and the garage is a contrast that will hurt the sale, then fix it.  Another question is how are other homes selling in your area and in what condition?  Considering the competition and leading it is an important consideration.  What about other listings?  Do they have garages?  If not, then someone may come in and think that a garage (regardless of the condition) is worth buying your home over someone else's.  You need to consider the value of your home with or without a garage.  If selling with the improvements will tack on an additional $12,500 to the price but it is not worth that much more, then you need to be prepared for that.  What is a comparable home worth in your area?  How would you feel about being in line with that price regardless of what it costs to get there? You then decide if you can afford to get there and make a profit.  Again...if your home is valued at $150,000 for example with a two car garage in good condition and all other listings are in that range; then you cannot expect to get $162,500 just because you bring the garage up to the condition of other homes.  In fact, unless you have a competitive edge; like a larger yard, or all new appliances, or new paint, carpet, etc.  you are level with the competition at the same price and may need to reduce your price to make it attractive to the buyer.  Remember; if there are two identical homes with pretty much thee same things, condition, etc.  the buyer will certainly be motivated by the price.

Leaving the garage as is, then, is dependent upon the market and the competition.  It is also dependent upon how much value it will actually add to your home in the current market.  I advise that you visit the competition or talk to a local agent who can discuss the other listings around you and show you what their prices are and what they offer.  Only then can you get a clear picture of what you must do.

Best wishes,
Jessica Bryan