





Keep in mind that agents, because they earn a percentage of the sales price, may push for improvements that raise the price even if the improvements' cost reduces the seller's profit. Also, agents generally prefer quick sales, which allow them to move on to the next property.

A fix-up also makes sense when there are large variations in the cost of the job to be done and the buyer is likely to over-estimate the cost, says Jack M. Guttentag, emeritus professor of finance at the Wharton School.

"In the case of a septic system, for example, the cost depends on the condition of the soil, and if the seller knows that the condition is favorable and the cost low, it makes sense to fix it before sale," he says on his website, The Mortgage Professor .

The fix-up is also advisable when buyers are unlikely to have the cash to pay for the work after buying the home, he says. Many buyers are in this situation today, because lenders are demanding large down payments and buyers are not getting top dollar when they sell their previous homes. If the seller does the improvement and raises the price accordingly, the buyer, in effect, will finance the improvement at today's low mortgage rate rather than lay out a lot of cash after the purchase, Guttentag says.