This question arises quite often while consulting with potential home sellers. The best advice I can give is know what the buyer places value on most. Spending an exorbitant amount of cash on repairs that really will not sway a potential buyer is not cost effective. Every situation is different, but a common example is carpet replacement. Do you replace a worn carpet? Most of the time I would suggest NO. A simple remedy is to price carpet and offer a credit in the sale. This way the potential buyer can select what they want instead of disliking what is installed and moving elsewhere. Generally, if someone walks into a home with brand new carpet that they “can’t live with” , they will not even consider purchasing the home, but if the carpet “needs replacing” and are offered a credit, they will be more likely to consider the home. When preparing a home for sale think about this before sinking lots of money into any drastic cosmetic changes.
When it comes to mechanical items, the best rule to follow is make sure it operates correctly. If that is not possible be prepared to offer a credit to the buyer for the repair or replacement of the items. This makes the home more marketable.
As a seller, put yourself in a buyer’s shoes and make your decisions from that perspective. Nine times out of ten your instincts will be correct.