The decision to put your house on the market is often the easy one. The hard part is deciding which, if any, home improvements to make before hanging the For Sale sign. Whether you leave the home “as is” or upgrade for a higher sale price, the answer depends on the category of home.
“In the half-million-dollar category, expectations are lower,” says Tracy Bacigalupi of Harbor Sotheby’s International Realty in Bay Harbor, Mich. “Buyers reason that if the home isn’t fixed up, they’ll do the work.” But in the $1 million-plus range, they “expect the home to be in really good condition, needing only minor cosmetic changes.”
Bacigalupi recalls one home that sat on the market for two years before the owner finally invested in improvements. Immediately after the overhaul, the home sold.
Home improvement expert and host of DIY Network’s “Money Hunters,” Matt Blashaw, says one of the easiest ways to increase the value of a house is to beef up its curb appeal. “This will increase the value of your home as well as your neighborhood.”
Remodeling Magazine’s 2010 Cost vs. Value report supports that suggestion. Something as simple as an entry-door replacement gets a big bang for the buck. In fact, this fix tops the magazine’s list of home improvements, with a 102.1% return in the midrange project category. Replacement projects historically perform better in resale value than remodeling. They are less expensive, for one thing, and contribute to curb appeal, which strongly influences homebuyers.
Big-ticket projects, of course, require both a budget and due diligence. “The kitchen is king,” says Blashaw. “Unless your home is falling down around you, the smartest place to put your hard-earned dough is in the kitchen. That’s where all the magic happens. If you have the means, make sure to place all your new toys into a nice flowing workspace. This will pack a lot more value into your home renovation,” he says.
A major upscale kitchen remodel averages $113,164 according to the Remodeling Magazine survey and returns 59.7%. A midlevel kitchen averages $58,367 with a 68.7% return. Blashaw recommends stylish choices but nothing too lavish. In high-end homes, he suggests quality stainless-steel appliances, gas stove, stone countertops and tile floors. “You don’t have to go with professional-grade appliances or blow your budget on Travertine.”
Bacigalupi agrees on the role a kitchen plays in a home’s salability. “I’ve watched buyers fall in love with the house, but if the kitchen isn’t where it needs to be, they walk away. It’s such an emotional aspect of the home. They want it to be amazing.”
The master bathroom is another important area that can prompt an offer. “A sanctuary, it truly needs to feel special, like a mini spa,” says Bacigalupi.
Sellers should think like buyers and ask themselves, what aspects of the home detract from the experience of living there? Weigh the quality and condition of the countertops, cabinetry, flooring and fixtures against their age and style, recommends architect David Ellison of The D. H. Ellison Co. in Cleveland, Ohio. Old doesn’t always mean less marketable. “A vintage kitchen or bathroom in good condition is often of equal or better value – and more attractive – than a brand-new kitchen. Never replace a high-quality vintage item with a low-quality new item as this degrades value,” he says.
Most remodeling projects with the best returns are practical, such as siding and window replacements. The average cost of fiber-cement siding is more than $13,000, but it returns 80%, second in the Cost vs. Value survey.
Another factor to consider is whether the home is a primary or secondary residence. Vacation homebuyers just want to show up and enjoy. They may be willing to rip up a carpet, but they’re generally not interested in ripping out a kitchen. In Mallorca, Spain, about 70% of properties are holiday homes, with many owners hailing from Germany and Great Britain, says Stephen Dight of Mallorca Sotheby’s International Realty. Easy fixes that won’t interfere with the enjoyment of the house get buyers’ attention. “The majority of people like to have something ready as they have neither the time nor the inclination to source furniture, decorators or building contractors. This is especially true with first-time buyers who know fewer people and are daunted by such a project,” Dight says.
Whether primary or a vacation home, renovating up to buyers expectations is always a sound investment. A home’s appearance should measure up to the best property in the neighborhood. Anything that might raise questions should be repaired, restored or replaced. “Don’t give buyers a reason not to buy. Give them a why,” says Blashaw. “If there’s one thing out of order, that’s when a potential buyer starts focusing on the negative.”
Thanks for reading today,
Benson Sotheby’s International Realty
Crested Butte CO