As I Realtor, I am frequently asked for home selling tips, and among the most common are about the return on investment for various home projects, upgrades and renovations. ‘How much value will this add?’ ‘Will I get my money back?’
A Google search finds countless articles, surveys and expert opinions on the subject, but no real consensus. For example, do a search on how much value a new roof adds. 2 organizations in the business of real estate have vastly different opinions. Zillow says you’ll recover 68% of the cost when you sell, while the National Association of Realtors says you recover 105% of the cost.
Appraiser Ryan Lundquist article explaining it from an appraiser’s perspective. This talks specifically about pools, but really, I think we could insert almost any home improvement project and get the same results. Check it out here: https://sacramentoappraisalblog.com/
The truth is, there are so many factors that affect the value and desirability of a house.
You’ve heard the old adage, the 3 most important things in real estate are location, location and location. That is most often the case. If we have 2 identical properties, and one is located next to the freeway, and the other at the back of a quiet cul-de-sac, which one is worth more? What if the one by the freeway has a new roof? Pool? Updated kitchen? What would make that home worth more than the one on the cul-de-sac? For some, the one by the freeway would be out of the question, but for others all of those goodies may be worth the noise, and maybe more money.
Value is in the eye of the beholder.
So, what do you do? What, if anything, does a homeowner do to improve his/her property and why?
If you’re not planning on moving any time soon, and really want to convert the garage into a studio, or you don’t need 3 bedrooms so you want to knock out a wall to create a master suite, go ahead, make your day. Keep in mind, however, that if and when the time does come to sell your home, you’ll find that most buyers want the garage to be a garage, and with the exception of condos and retirement communities, I don’t think I’ve ever had buyer who wanted a 2 bedroom home. You may want to consider restoring the house to it’s original configuration.
Whatever you do to your home, it only has to appeal to you… unless you’re selling. When you sell, you’ll want to appeal to as many people as possible.
That’s what it’s about.
When it comes down to needing a new roof, paint, carpet, and lighting and plumbing fixtures, those things can give you the most bang for the buck, but the bang isn’t always getting the bucks back.
It might mean you sell it faster, so you won’t have to worry about paying the mortgage and maintenance on it. It might mean you get more offers, and better offers. It might mean you won’t have requests for repairs.
Can you sell a home with a converted garage or only 2 bedrooms? Sure, you might find that person. Can you sell a home with worn out or stained carpets? Sure. Just price it accordingly.
If you want to present your home in the best light possible, make it shine. Fresh paint is better than ok paint. Every now and then, I’ll find a seller who says, “Why should I paint (or put in new flooring, or new anything)? The buyer is just going to change it to their tastes.”
You are trying to sell a product. Make it shine. Who cares what they do with it after you sell it? By the way, I’ve found that most buyers today are looking for a move-in ready house that they don’t have to do ANYTHING to. They may not want to paint and put in new flooring. In fact, with prices so high these days, after down payment and closing costs, buyers may not have anything left, so making it move-in ready. Housing Wire reported last summer that the median down payment in California was 5.37%. Are those buyers more likely to purchase a home with new carpet and paint or without? Someone with young kids, grandkids or planning a family may not want the kids crawling around on and old carpet.
Oh, and don’t be fooled by low rates, low inventory and high demand. Yes, those factors can make it a seller’s market, but with prices high, buyers expect more.
When you’re ready to sell, find an agent who knows your local market, compare the competition, compare recent sales, and your budget. You don’t have to get the hottest most expensive finishes you can find. Just make it shine.
In short, it may seem obvious, but remember that new stuff has more appeal than old stuff and fixed stuff has more appeal than broken stuff.
Any questions? Drop me a line.
Steve Heard is Realtor with EXP Realty, based in Folsom CA, and is the owner of www.myfolsom.com
Reach Steve at 916 718 9577 or email firstname.lastname@example.org – DRE#01368503