With the year wrapping up, Zipcode’s been discussing home prices, examining them where currently rest (Diving? Stable? Plain flat?), as well as where they may go in the future.
But what if you’re in the position of home seller right now? For one reason or another, you can’t afford to wait for spring or summer, seasons that (for most of the nation, anyway) offer better conditions for sellers to list their homes. What can you do to get the best price for your home?
Not all renovations were created equal when it comes to selling a home. Zipcode takes this opportunity to explore which renovations offer the most return for the money and effort and which may actually negatively affect your home’s price.
Projects that Pay You Back
The National Association of Realtors, among other industry professionals, collects data on what people do before they sell, and how those improvements affect home prices. After surveying more than 3000 appraisers, sales agents, and brokers in the summer of 2010, Realtor.org produced the 2010 Cost. Vs. value Report, which confirms that some renovations are worth both the expense and the work involved.
On some projects, the return on your investment can be close to dollar for dollar.
Selected 2010 Cost vs. Value Report Statistics - Nationwide Return on Investment:
· Deck addition -- 72.8%
· Major kitchen remodel -- 68.7%
· Bathroom remodel -- 64.1%
· New roof -- 59.5%
· Family room addition -- 62.5%
· Master suite addition -- 63.0%
· Two-Story addition -- 65.0%
· Basement remodel -- 70.0%
Where to Focus:
In general, if you have to pick just one area to improve, your best bet is one of these four:
Kitchens: People like to see all mods con in kitchens, though you may keep original features as well if your home has nostalgic charm. There’s just not much charm in a dated, borderline dysfunctional kitchen appliances: For proof, check out some home-for-sale ads. Kitchens, if remodeled, are heavily touted.
Bathrooms: Modern appliances, good storage, and clean (even new!) surfaces go a long way in the bathroom.
Curb appeal: Stand outside of your house and take a look with an unbiased eye. How’s the yard? Is the paint peeling? Is the siding outdated? These issues can be cheap fixes (yard work, for instance, can cost little more than elbow grease) or be expensive. Fiber cement , which Realtor.org acknowledges is expensive, also has the best return on your investment.
Roofs and windows: Nolo says it best here: “Roofs and windows are expensive to replace, and buyers expect these to be in good condition. Unfortunately, that means that while replacing them won't dramatically increase resale value, not replacing them could significantly decrease it.”
Projects You’d Better Shelve
Luxury upgrades: skip the Italian marble and go with high quality mid-range materials for best return.
Room conversions: Covering a porch and calling it a den or converting a garage into a living room may add square footage, but it may also make your home’s layout awkward and strange, not to mention some people like porches and garages!
Recreational Additions: Selling isn’t the time to add a pool, tennis or basketball court. If you have a buyer who mentions one of these as a passion, point out where in the yard such a renovation could be made. But if that buyer never shows, you poured a lot of money—not to mention concrete—into a renovation you didn’t need to make.
Words of Advice
Whatever you choose to do, keep these tips in mind:
Upgrades in newer construction make less impact, generally, than those in older homes.
Your changes shouldn’t make your home into a neighborhood anomaly: If the charm of your street is its historic bungalows remodel away iconic features, your home may lose value. On the flip side, if all your neighbors are remodeling and you don’t, your home can seem less valuable to a buyer than those other homes on your block. Along these same lines, keep the remodel in line with the price your neighborhood commands. If the median house price on your street is one of the attractions for a buyer, you lose that buyer if you remodel so much you now need someone in a different income bracket.
Our agents, who work with clients selling homes all the time, have much knowledge on what kinds of renovations pay off the most, and which you can put off—perhaps forever. The comment section is a great place for experts to post their insight, as well as those of us with questions to seek advice. And finally, you can find local real estate agents and contact them directly through Zip's directory, here.