When someone decides to sell their home, the first question they ask is almost always, "What's my home worth?" I think that's the wrong question. The better question addresses their real fear, and is "How can I be confident I didn't leave money on the table?"

Whether someone is a Trustee selling an inherited home, a home is distressed and needs improvements, or is in already great shape, the question comes down to, should I sell as-is, or does it make sense to renovate before putting the home on the market.

Risk versus reward

People would love to know in advance how much their home would sell for. Unfortunately, no one can predict the future accurately. How then can someone the best decision possible? How does a Trustee know the right decision as it relates to their fiduciary duty to the Trust, and hence, the beneficiaries?

This becomes a mathematical and risk tolerance decision.

Before deciding whether to renovate, answers to these questions matter:

1. Which improvements are worth making? Not all renovations pay for themselves — this narrows the project to the improvements with the best return for the cost.
2. What is the fixed budget for those improvements? Fixed matters — if it isn't fixed, the contractor or agent isn't carrying the risk, the seller is.
3. What is the real as-is value? Not a guess — the number the market actually produces through competitive exposure.
4. What is the likely after-improvement value? This is the one number in the whole process that can't be made certain — it's still an estimate, no matter how good.

Once those four questions are answered, the decision is arithmetic: after-improvement value, minus the renovation budget, minus as-is value. What's left is the seller's real upside — if any exists at all.

The one true risk that doesn't show up in that math is time: what the market might do  during the renovation period.

The Decision to Renovate Requires The Real As-Is Value

This decision usually blows up at the very beginning, and sellers don’t realize it. What is the skill level, capabilities and service level of the real estate agent being engaged?

If the agent doesn’t have the capability to help someone renovate, or doesn’t have the skill level or confidence to advise someone on the most cost-effective renovations, they will have an incentive to advise selling as-is.

If an agent has an incentive to recommend improving the home before selling, they may guess at a low as-is value to make renovations look most logical.

When the market already knows the actual as-is value, why would an agent bypass the process revealing that value?

Where Does Certainty Exist?

It may seem that the only certainty that can exist is in the renovation budget, IF it’s fixed.

Would it be hard to believe that the actual as-is value is certain as well? Not at the beginning of the process, though it does exist. Why guess at the as-is value when it can be ascertained from the market? It’s simple, not easy.

Is 100% Certainty a Bold Statement?

No. Certainty is simple. Put the home on the market in it’s current, as-is condition. The process works best when the home is listed below expectations. If executed well, the list price will create a bidding war and multiple offers. Buyers will bid against each other. The price gets driven up, the terms become more favorable for the seller with the competition created. The seller no longer has an agent’s opinion of as-is value. They have actual market evidence – a vetted offer they can accept.

No need to guess. Guessing is lazy on the agent’s part. When an agent guesses, they do not fulfill their fiduciary duty to their client. How can a Trustee be confident they fulfilled their fiduciary duty to the Trust when their decision is based on an agent’s guess?  

Simple. Not easy. Well, not easy for the agent, and time consuming. Phone calls and texts from agents, phone calls and texts from investors, monitor showings, receive offers, vet offers, effectively summarizing the offers to the seller, creating a strategic counter offer process, create and send counter offers, final negotiations.

When done effectively and strategically, the result creates certainty. As-is offers. Now the seller knows the actual as-is value they can use in the mathematical formula to determine their best decision. No guessing. With the known as-is value and fixed renovation budget, the agent and seller can easily compare that to the likely (this is where a guess is needed) after renovation value, and the seller decides if it’s worth the risk, if the possibility even exists for a profit.

Real Life Example

I've only gone head-to-head with a "we renovate before we sell" agent once. Their pitch is that they are the hero. Fixing up the home at no out-of-pocket cost to the seller (something I offer too, so it's not a differentiator) and selling the home for "more." The issue isn't renovating; nearly every home sells for more after updates.

The issue is how that agent arrives at the as-is value, and whether there's an incentive to estimate it low, making the renovation decision — and the agent — look better. Whether intentional or not, estimating an artificially low as-is value makes almost any renovation proposal appear attractive.

In this actual sale, the other agent's estimated as-is value was $550,000 and the after-renovation value was $730,000, with an $80,000 renovation budget. On paper, that looks like an easy decision and a $100,000 win for the seller.

The reality. The seller hired me. We listed the home at $599,900. Fourteen days later, 18 offers received, and the seller accepted an as-is offer of $680,000. $130,000 higher than the other agent's as-is guess. Had the seller gone with the other agent and put $80,000 into renovations, the math tells a different story: $730,000 projected value minus $680,000 real as-is value, resulting in a $50,000 gain. With the $80,000 renovation budget, the seller realizes a net loss of $30,000. Not the advertised $100,000 gain.

The final sale price after a renovation will always involve uncertainty — that part can't really be avoided. The renovation budget should be fixed, so the contractor or agent carries the cost-overrun risk, not the seller. The as-is value should never be guessed when it can be determined in the open market. I believe it's the agent's fiduciary duty to help a seller determine the most reliable as-is value possible before recommending a major financial decision.

The market is willing to answer the question. Why guess instead of asking?

What about the speed and convenience of selling off market?

Selling off market to an investor like “Seller’s Advantage” may be enticing. It may even fulfill a need.

An investor doesn't want the home listed on the MLS. Why? The broad exposure to every potential buyer creates competition, drives the price up, and shrinks their margin. It’s a smart move for an investor to buy off market. It's just not a smart move for the person selling the house. How can what's good for the buyer's profit also be good for the seller?

One Buyer Can't Create a Market

I'll make this offer to anyone skeptical of this: give me the keys to a home, ideally have the home emptied at no out-of-pocket expense (if preferred), price the home under market value, and I'll show you what happens next. I've seen this play out enough times that I'm comfortable calling it a pattern rather than a guess.

Here's how it plays out:

The goal is never to sell below market value. The goal in pricing the home is to make sure every potential buyer who might compete for it decides to participate. In my experience, pricing low has not backfired when the home is exposed to the full market; I've had homes sell $100,000 to over $300,000 above asking. The market reveals the home’s value.

Markets determine value. Opinions don't.

Give buyers about a week to see the home and submit offers. From there, we decide which offers to counter, usually the most motivated and qualified buyers, which often (though not always) means the highest offers.

When the buyer counter offers come back, it's common for a handful of buyers to want the home badly enough that competition pushes them to their real ceiling, the price at which they won't pay more and are okay with not getting the home. This usually lands above both the seller's and my expectations. With a final counteroffer from the seller, we clean up any remaining offer terms, which buyers are generally happy to agree to once they know they've been chosen.

At that point, the seller no longer has an opinion of value. They have actual market evidence – a vetted offer they can accept. Not a guess. Only then should the seller decide whether to accept that offer or compare it against the economics of renovating.

Example Of How This Process Creates Real Competition

A recent, fairly typical example: Chris's mom passed away, he was the Trustee, and he had never sold an inherited property before. He didn't want to squeeze every last dollar out of the house. He simply wanted to know he was making the right decision.

Chris and I guessed the as-is value might land somewhere in the mid-to-upper $600,000s. When we talked about pricing strategy, he asked me, half-joking, what the sell the mother f**ker number should be to make sure the home sold. I shared $599,000, and that's the number he chose.

What followed was the familiar pattern: offers at asking, offers below asking, offers above asking, eighteen total. We chose which offers to counter based on the offers themselves rather than comparable sales. The winning buyer closed at $700,000, with financing, planning to move in himself. Chris walked away confident he hadn't left money on the table.

Timeline: Chris reached out April 10th, and the home went on the market May 2nd, after about three weeks to empty it since Chris lived out of the area and wanted to be involved. There was an accepted offer within 10 days, and escrow closed June 2nd.

For context, before the home went on the market, the next-door neighbor — herself an agent — was disappointed Chris didn't accept her investor client's offer of $600,000 cash with a quick 14 day close. That gap, $100,000, is a clear picture of what competition and a little time can do.

Sellers May Choose To Sacrifice Money for Limited Convenience

There may be situations where saving about two weeks is worth accepting a lower price.

My only advice is this:

Make that trade knowingly.

Don't accept less because an agent guessed at the as-is value without testing the market.

Don't accept less because someone convinced you one buyer represented the market.

One buyer isn't a market.

Competition discovers market value.

Competition doesn't guarantee perfection. It gives sellers the strongest evidence of what the market is willing to pay.

Is there ever a good reason to skip a competitive process? Shaving off roughly two weeks of the process? Convenience? How often is that timing or convenience so essential, especially when the money left on the table likely runs into the tens of thousands, or more — money that goes straight to the investor's profit instead of the family selling the home?