Whenever we list a property, the homeowner always wants our advice on what improvements or changes they should make before putting the house on the market. As part of answering that question, we often look to Remodeling magazine, where every year, they publish the Cost vs. Value Report.
In that report, they analyze the average cost of typical remodeling projects versus the value that project might generate at the time of sale. Remodeling magazine then provides the results on a major regional and national basis. Here’s what the national numbers look like for 2017.
First off, most homeowners think that most improvements will pay for themselves when it comes time to sell. Unfortunately, that’s seldom true. In past years, there was generally only one update that would be worth more than it cost. That update was a new front door.
We can understand why a new front door might top the list. After all, it’s the first thing people see coming into your house, and if the front door is shabby looking, that can cast a pale over the rest of the house.
However, in 2017, front doors dropped a notch to second place. This year, attic insulation came in first, recouping 107.7 percent of the average cost. Nationally, the cost of some new fiberglass attic insulation came in at $1,343, but it generated an additional $1,446 in resale value. However, attic insulation was the only project listed by Remodeling where the value was more than 100 percent of the cost. The front door came in second at 90.7 percent, and a minor kitchen remodel came in third at 80.2 percent.
Remodeling defines a minor kitchen remodel as "a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new shaker-style wood panels and drawer fronts, including new hardware. Replace cooktop/oven range and slide-in refrigerator with new energy-efficient models. Replace laminate countertops; install mid-priced sink and faucet. Repaint trim, add wall covering, and remove and replace resilient flooring."
Other popular home improvements, such as a basement or bathroom remodel, are also losers when it comes to recovering your investment at the time of sale. For a basement remodel, you’ll get 70 cents on the dollar, and a bathroom remodel will only turn up 65 cents for every dollar you spend.
Although this study indicates that nearly everything you do to a house will cost more than it’s worth, we don’t suggest that sellers just dump places on the market "as is." There’s a lot you can do to a house before bringing it to market, and sometimes it’s necessary to make certain improvement just to make a house competitive with other properties for sale.
Plus, given the fact that virtually every buyer is going to do some sort of home inspection, it’s also important to make sure everything is in working order. So, here’s what we believe is the most efficient way to prepare a house for sale.
First, meet with your agent and, with an open mind, listen to what they suggest. Agents have seen a lot of houses, and they know what turns buyers on and off. Also, it can sometimes help to employ the services of a stager, not necessarily to transform everything in your house, but to work with what you’ve got and amplify the best use of your current furnishings.
Second, clean and declutter your house to within an inch of its life. A good dose of elbow grease, scrubbing every nook and cranny is one of the lease expensive yet most productive things you can do to get your house ready for sale. Part and parcel to that is getting rid of all the junk. You don’t need to completely depersonalize your house, but you do need to clear the decks and display the fine china. It might seem kind of hokey to put out flowers and place settings in the formal dining room, but that stuff works.
If you want to know how it all should look, go to the model at some nice, new home construction projects. They know how to set up a house for maximum appeal.
Third, get some new paint and carpet. Next to cleaning, paint and carpet is the cheapest thing you can do with the greatest payoff. Plus, it gives a house a great fresh scent. Just like that new car smell, homes also have a smell that excites buyers, and it’s not the smell of your dog or cat. Some homeowners don’t even realize that their house smells because they’ve gotten used to it. Don’t be self-conscious about asking your agent how the house smells. They’ll know how it will smell to buyers and that can make a big difference.
In sum, forget about tearing out your kitchen and putting in a new one. You’ll probably never recover the cost of that. Instead, just freshen the place up, make sure everything works right and price it accordingly. In the end, that’s how you’ll maximize the market value of your property.
Bob and Donna McWilliams are practicing real estate agents and can be reached at 443-994-9589 or mcwilliams@bobdonna.com.
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