real estate agent showing clients possible renovations

Renovation-Hesitant Clients? Here’s How To Ease Concerns

Carey Chesney4 minute-read
October 29, 2020


Contemplating home renovations can be exciting and daunting all at the same time, and can unearth a spring of emotions for both you and your clients.

Ultimately, home renovations should be seen as a possible tool to get your clients more home for their money, a return on their investment over time, and the ability to turn their “right now” home into their “forever” home. It’s a lot to take in, and sometimes clients can become justifiably hesitant. Knowing how to put them at ease by helping them feel supported and informed can go a long way toward assisting them in realizing their home goals.

Home Renovation Vs. Buying A New Home

This year has brought a lot of introspection to all of us, especially when it comes to where we live. After all, nothing can help you decide if you’re in the right home like being quarantined in it with your family for months!

Your clients may be pondering a new home office, larger learning spaces for the kids who are schooling remotely, or a number of other possible renovations geared toward improving their personal and professional lives. Or, they may just be fed up with their current house and want to find a new one that better meets their needs.

To guide them through this journey, start with the big question: Why? Why do you want a change? Why will this improve your lives? Why now? Once these questions are answered, the critical decision can be made whether to try and make the current home fit their needs, or to move on – with the obvious caveat that any decision needs to work within their budget.

How Much Does It Cost To Renovate A House?

Like most things in life, it all comes down to cost versus reward. Take your client through the costs of various renovations with a focus on distinguishing the “must haves” from the “nice to haves.” It’s also important to get them to determine what is a “need now” compared to a “would like it someday.”

Price things out so they can make the hard choices. Maybe that $25,000 renovation can wait but the $10,000 bathroom renovation is something they feel needs to be done right away.

Study the homes in your market and the prices for various renovations, as they differ greatly depending on geography and season. It’s also a good idea to have a list of builders, plumbers, electricians, landscapers, etc. that you have worked with and trust to refer to your clients.

Is It Better To Buy A Cheap House And Renovate?

If your clients have decided to move or buy for the first time, you are likely looking at a variety of houses in different stages of completeness. From “turnkey” to “tear down” and everything in between, helping your client evaluate all the options on the table will go a long way toward making them comfortable with the final decision they make.

There are a number of pros and cons to buying a fixer-upper house and the decision on whether to go this route is unique to each client. The best thing to do is provide the best possible advice regarding some of the advantages and disadvantages and let them make the final call.

One obvious advantage is the cost of a fixer-upper versus a move-in-ready home. By coming in at a purchase price well below their budget, your clients will have some money left over to improve the house, making it more comfortable and desirable for them to live in while at the same time increasing the value if they decide to sell down the road. Make sure they understand that they don’t have to remodel everything in the home right away, which means their budget and workload can ebb and flow over time. Be sure to educate them on which home improvements add the most value. Kitchen renovations tend to get the most bang for their buck. Adding a shed, not so much.

Disadvantages to buying a fixer-upper really revolve around one key concept: biting off more than your clients can chew. Whether it’s more work than they can handle from a time and expertise perspective or getting in financially over their heads, the pitfalls of buying a fixer-upper can be deep. A strong buyer beware message is key.

Can You Get A Home Loan On A House That Needs Work?

Refer your clients to a lender that is well versed in their options and can take them through the finer points. Knowing that most banks prefer licensed builders so most lenders will decline your loan unless you use a licensed builder to repair or renovate your property is critical. It’s important they know all their options when it comes to renovation loans. Let’s look at a few.

FHA 203(k): Federal Housing Administration (FHA) loans can be used for most improvement projects and are a good option for buyers facing lower income and/or credit scores.

HomeStyle: These mortgages are guaranteed by Fannie Mae, and require higher credit scores than FHA loans. The benefit is that they can be used for pretty much any improvement. Have clients ready to finance that new hot tub and pool house? This may be the loan for them.

VA Renovation Loan: Department of Veterans Affairs (VA) loans include the purchase and renovation of a home. There are some limitations, like the need for a VA approved contractor, but a good lender can weigh the pros and cons to help clients decide if this is a good option for them.

HELOC: A home equity line of credit (HELOC) can be a great option for clients that don’t want to move but have built some equity in their home.

Bottom Line

Clients can be hesitant when it comes to renovations for a variety of reasons. Explore the specifics that are producing some anxiety and help them work through evaluating all the options available. At the end of the day, all you can do is educate and support your clients to the best of your ability so they can make the right decision for their unique situation.

Carey Chesney

Carey Chesney brings a wealth of residential and commercial real estate experience to readers as a Realtor® and as a former Marketing Executive in the fields of Health Care, Finance and Wellness. Carey is based in Ann Arbor and attended the University of Wisconsin-Madison, where he majored in English, and Eastern Michigan University, where he recieved his Masters in Integrated Marketing & Communications.