Deciding whether to renovate your home before selling it
Some homeowners can list their property for sale knowing that the residence will easily turn buyers' heads. The home might be a perfect example of beautiful design, useful features, and perfect location.
Most sellers aren't so lucky, though. When it comes time to put your home on the market, you may worry that parts of the home are outdated, in disrepair, or otherwise unattractive to buyers.
For this reason, sellers often ponder whether to complete a few renovations before trying to find a buyer. Doing so can spruce up your home and help bolster its overall appeal. Of course, you'll also run the risk of sinking money into home improvements that cost more than you'll recoup during a sale or, worse, completing work that inadvertently makes your home less appealing to buyers.
If you're not planning to sell your home in the near future, it can be helpful to take on some larger upgrades. Brett Martin, writing for House Beautiful, says you can focus on renovations that will improve your own enjoyment of the property if you expect to stay put for the next five years or more.
When planning a sale, you can see how your residence stands up against other comparable homes on the market in your community. Elizabeth Weintraub, writing for the financial site The Balance, says you can review these properties to see what features they have and whether your own home is lacking in any areas. You may want to consider renovations similar to those completed at other listings so they won't have a competitive edge with buyers.
Consult with your real estate agent to see what recommendations they have to offer. Lee Wallender, writing for the home design site The Spruce, says you'll want to avoid any outdated trends and that your agent can inform you about any features or styles that buyers are interested in.
If your home does not look too dated and is not in need of any repairs, it may be best to avoid renovating. Stephanie Booth, writing for Realtor.com, says you won't know exactly what buyers are looking for, and might find yourself making a costly upgrade only to find that it doesn't appeal to many of the people checking out the listing.
If you aren't careful, you might also get carried away with the number of projects you want to do. Once you renovate a room, you may decide that you need to upgrade other rooms to match it. A home improvement project may also uncover other issues, such as code violations, that need to be addressed.
Even if you are wary of completing larger, more expensive upgrades, it helps to fix any problems with the structure. Weintraub says buyers are typically less willing to purchase a home "as is" at a discounted price and complete repairs later on. In less competitive markets, buyers are more likely to be drawn to a home that is a little pricier but only requires some cosmetic updates. Completing the necessary fixes may be necessary to help make your home more competitive, even if you won't completely recoup the money you invest in the project.
Before listing your home, consider getting a pre-sale inspection. Booth says this process will identify any major issues with the property and help you determine where it makes the most sense to spend money on improvements.
You can also fix many small deficiencies without too much expense. Weintraub says there are several issues that buyers are likely to spot on a walkthrough, such as stained carpeting or leaky faucets. Eric Stewart, of the Washington, D.C. brokerage Eric Stewart Group, recommends cleaning up any clutter in the home as an easy step with a good return on investment. Other economical options with a good return include repainting walls, having carpets professionally cleaned, or refinishing hardwood floors.
One common consideration when deciding whether to remodel before a sale is how much value the project might add to the property and how much that value will offset the expense of the job. The "Cost vs. Value" report from Remodeling Magazine is a good resource to research individual projects.
According to the latest Cost vs. Value report, replacing a garage door is the most cost-effective upgrade you can make to a home; an estimated 97.5 percent of the expense necessary for this work is recouped in added value. Other projects with a high return on investment include manufactured stone veneer (94.9 percent) and a minor kitchen remodel (80.5 percent).
Homeowners may be disappointed to find that they'll only break even on the money they spend in a renovation, or that they'll spend more money on the work than they'll get in a sale. However, the investment may still be worth it. Wallender says that if one part of your home is outdated or in poor condition, it may dissuade buyers from making an offer even if they like other aspects of the residence.
Kitchen and bathroom upgrades can be costly, but typically add substantial value to the home and will increase your enjoyment of the property if you plan to stay there for awhile. Martin says quartz countertops are currently a popular feature in kitchens, and that some homeowners may find it easier to add a new bathroom instead of remodeling an old one.
If you want to keep remodeling costs down, a few inexpensive updates can vastly improve the appearance of a room. Deborah Kearns, also writing for Realtor.com, says your kitchen may look much better with a new backsplash. Booth says that improvements may be detrimental if they are improperly done or look cheap, but that simple work like installing new handles and knobs on cabinets and drawers can have a beneficial effect.
Steps to improve curb appeal, or a buyer's first impression of the property, will also prove valuable. Martin says improving the lawn and landscaping will make the exterior of the home look beautiful. Stewart says some inexpensive exterior upgrades include resealing the driveway, removing trees or shrubs that block views of the home, power washing the siding and other exterior surfaces, and repairing any obvious deficiencies such as broken shingles.
Kearns says you'll want to stay away from renovations that are costly and won't necessarily appeal to buyers, such as finishing a basement or attic. Wallender says replacing windows also tends to have a lower resale value, and should only be done if you expect to stay in the home for at least five more years before selling. The 2019 Cost vs. Value report says a master suite addition has the lowest return on investment at 50.4 percent, followed by a backyard patio at 55.2 percent.
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