Often we get asked how to increase the value of a home before selling it. Sometimes the answer is simple, and sometimes the answer if more complicated – especially, if the seller is interested in investing a little time or money. There are some improvements that increase the value of a home and some that just increase the sellability. Most sellers are prepared to get their home staged to sell, but in some cases they can dramatically increase the value of their home by replacing or remodeling. Here is a look at how to get the top dollar for your home by staging, replacing or remodeling.
The key to create sellability is to create a clean, decluttered, and depersonalized home. Curb appeal, or more importantly, web appeal, while viewing online is critical. When a buyer approaches the home or sees the first photo online they should be visually attracted to the home. For example, groomed front gardens, fresh tanbark, fresh flowers, power washed siding, and a clean or newly painted front door. Once inside, the same theory applies – clean and decluttered surfaces free of personal photos or knick-knacks. We tell clients to start packing and start decluttering to make their home look larger and more inviting to buyers. When a buyer feels comfortable enough to sit down on your living room couch, they have begun the process of envisioning the home as theirs.
Going beyond staging can yield a higher value and simpler, lower-cost projects tend to return greater value. Every year, The National Association of Realtors commissions a study done by Remodeling magazine on Remodeling and Replacement Cost vs Value, and each year they come up with very similar results. Here is the 2017 list of the return on investment of the top 5 and the bottom 3 replacement projects rated by cost recovered.
Project Cost Recovered
Garage Door Replacement 121.1%
Entry Door Replacement 101.5%
Minor Kitchen Remodel 100.5%
Window Replacement 93.1%
Adding manufactured Stone Veneer 89.9%
Bathroom Addition 70.2%
Master Suite addition 67.9%
Deck addition 65.5%
Notice a pattern? With the exception of the minor kitchen remodel, they’re all replacement projects that enhance the curb appeal. In general, replacement costs less and provides a bigger payback than remodels or additions. First impressions are important. The replacements that offer the greatest payback to sellers are the ones that are most obvious to buyers when they first view the house in person or online.
The remodeling cost vs value report makes it clear that large scale jobs aren’t likely to return sellers their full cost; but, there are remodels worth doing in anticipation of an upcoming sale. Some may return 100% of their cost or more. Others may not have as much of a payback, but they can improve the market position of the property in relation to the competition. In addition, several projects can provide owners with a few years of enjoyment while still offering decent payback down the road. Kitchens still offer the most remodeling bang for your buck.
Another way of drastically increasing the value of your home is by adding square feet; but, unless you can do it cheaply, you’re not likely to recover your full cost. New construction cost per square foot is high, and in many cases, higher than the resell price per square foot. We have seen some remarkable value added to homes by inexpensively adding square feet – usually by finishing off a daylight basement. We saw one seller double their square feet by simply adding sheet rock, some interior walls, windows, flooring and lighting to finish their basement. In another case we advised a buyer to pay an extra $30,000 to add a usable daylight basement with a bathroom on a custom built home. Although it is not completed, the owner can complete it at any time, adding another 1200 square feet to his home with very minimal effort or cost.
If you do decide to remodel your home before selling, here are a few words of advice – make sure you complete all projects before putting your house on the market, there is nothing that turns buyers off faster than a house filled with the owners’ unfinished remodeling projects.
So whether you decide to Stage, Replace or Remodel, just remember to consult your Realtor on values in your area and projects that will yield more than your investment. With the increasing demand for homes, and limited supply, it has led to a sellers’ market, so if you have been thinking of selling, now is as good a time as ever.