I am often asked, what are the best remodeling investments when it comes time to sell? People want to know if they will get their money back (and more) if they re-carpet or paint, remodel the kitchen and so on. The answer varies because it depends on the specific house, the neighborhood and the type of buyer you are trying to attract. However, here are some basics:
1. Maintenance first. If the roof leaks and the carpet is worn, don't expect a kitchen remodel to solve all of the problems. No matter how lovely your home is, any buyer will likely get a home inspection that will consider the condition of the major systems in the house. Things like heating system and air conditioning, plumbing, electrical systems, the roof, siding and foundation will be examined. Problems in these big system areas can change a buyer's mind about a house quicker than you can say "Uh-oh." If you have deferred maintenance, if there are things you know don't work properly, take care of them first. Truth is, you probably won't recoup much of your investment on these kinds of repairs, but you will make your home salable. In fact, a home in good condition will usually sell near the top of the range of market value, while one with lots of big ticket fix up items usually sits and sits . . . until the price is reduced drastically.
2. Exterior items. Your first task as a home seller is to get people in your front door. You can't give them any reason to eliminate the property before they ever get out of the car. It's true there's not much you can do about the neighbor who seems to only cut the grass in a month with 5 Saturdays, but you can have your own yard looking great. It's often worth the expense to hire a lawn and landscape maintenance company to bring your lawn into tip-top shape and add some blooming plants to the yard. The payoff will be more showings, more potential buyers and a better chance of getting a good offer. If you elect to hire professionals to handle the yard, start them a month or two before the house goes on the market. That will give their handiwork time to show results.
While we're talking about curb appeal, take a look at exterior paint. Clearly if the house needs painting, paint it: that's maintenance and is among the items covered in point 1. But, assuming the paint is generally in good shape, look for touch up tasks. One of my favorite touch up items is the front door. A fresh coat of paint there can make the whole house more appealing. Look at the windows. What do you see in them? Are they clean and are drapes and shades in good shape? Do you see stickers and signs? Time to remove them.
3. The Kitchen. Most people, when they think of remodeling tasks that will make a difference when it comes time to sell, start here, in the kitchen. On my list it is number three because, frankly, if the house isn't in good shape and if it doesn't look good from the outside, not too many people will be paying attention to the kitchen. But if your kitchen does need remodeling you may be able to recoup some of your investment on sale. Some.
Think about it for a moment. Let's say the range of value for houses like yours in your neighborhood is $140,000 - $160,000. Your home comes in right near the center of the range because, while it is in decent shape and looks good from the curb, the kitchen is 20 years old! You know you will be in the house for a few more years and you're thinking a kitchen remodel might make that time more enjoyable. Your remodel costs $20,000, the kitchen is beautiful, the house is now at the top of the range, and for the next thee years, cooking is a delight.
It's now time to sell. You've had three years of average appreciation (say 3% a year), so now the range of value in the neighborhood is roughly $153,000 - $175,000. Your remodel is still fresh and you've maintained the house in tip top shape so you can expect to sell at the top of the range: $175,000. That's a $25,000 gain from the day before you did the remodel, but about $15,000 of that could be attributed to appreciation. So, you recouped $10,000, about half of the cost of the $20,000 remodel. But the remodel did more than add value and make your home more pleasant for the three final years you lived in it. It made your home salable. Without the remodel, you could expect it to take much longer to sell.
4. Bathrooms. The story here is much as it was with the kitchen remodel. An outdated bathroom can be a drag on value and can prolong selling time. But you probably won't make your home hugely more valuable by remodeling it. Truly nothing is going to boost the value of your home above the range for the neighborhood. What a remodel will do is make the home more enjoyable while you are in it, make it more salable when it goes on the market, and boost it's value up within the range of value. Often bathrooms can be refreshed without a full remodel: replace cabinet fronts, paint, replace faucets and fixtures. But the most important thing about bathrooms, remodeled or not, is that they appear absolutely and spotlessly clean.
If you are considering a remodel and are curious about the possible impact on your home's value and sale-ability, we at GreatNest and The Vincent Group would be pleased to consult with you on this. We'll estimate the current value of your home, weigh the cost of the remodel against anticipated appreciation and help you decide if the project makes sense.