Every experienced home seller knows investing the time and money to properly prepare a home for the market can result in a faster sale and a bigger returns.
However, home repairs and renovations can be difficult to keep within budget, and, if a homeowner spends too much, it will be difficult or even impossible to recoup those costs at the closing table.
If you are preparing to put a home on the real estate market, the following information can help you get your home into show-ready condition without wrecking your home renovation budget.
Make a Plan and Stick to It
If you have ever tackled a little home repair job and watched it morph into a much bigger, more expensive project by the time it was completed, then you know the importance of having a good renovation plan and sticking to it. Before you begin, decide what repair or renovation issues are really necessary and which are less important, then look for ways to get the desired result without going over budget. Here are some good examples of problems that can be remedied for a lower cost:
- ugly kitchens - gutting the kitchen and starting from scratch is an exorbitantly expensive undertaking but homeowners can often make their kitchens appealing to buyers simply by changing worn flooring, installing new small appliances, lighting, countertops or sinks, and repainting or refacing dated cabinetry
- dated living areas - instead of changing out unsightly, dark wooden paneling, consider painting or papering and adding new carpet to lighten to up the room and give it a fresh feeling
- lack of storage space - buyers gravitate to homes with expanded storage spaces, and home sellers can build more storage into their homes for little cost by simply adding shelving to the garage or basement, creating storage under staircases, or adding an inexpensive storage shed to the backyard
- unappealing bathrooms - fresh paint, tile or flooring and updating the lighting and faucets can add fresh appeal to bathrooms that seem tired and unattractive
Spend Money to Satisfy Buyer Expectations
Most buyers expect the basic systems of the home to be in proper working order and will discount the value of a home or mark it off their list of possibilities if they find they are not. These systems include air conditioning and heat, water and sewer pipes and the electrical system. In addition, make sure that all ceiling fans, light switches, outlets, garage door openers and any appliances that will remain in the home are working correctly.
Choose Upgrades Based on the Expected Returns
If your home is in need of some upgrades to make it more competitive, consider choosing which upgrades to make based on the amount of return you can expect from the upgrade at the closing table. According to recent sales statistics on cost versus value made available by the National Association of Realtors®, some of the best upgrades for sellers to consider include:
- replacing the home's entry door, which recouped an average of 101.8% of what it cost to purchase and install
- adding stone veneer to enhance the home's appearance, which recouped an average of 92.2% of the total cost
- replacing a damaged or outdated garage door with a mid-range replacement, which recouped an average of 88.5% of the cost
Get a Professional Opinion
Buyers may be fickle at times and it can be hard for sellers to predict what they hope to find in a home. Your real estate agent is your best source of up-to-date information on buyer trends. In addition, their knowledge of local housing trends will help ensure that you spend your renovation budget in a way that will help you get the biggest return.
To make the best use of your agent's knowledge and experience with the local market, ask him or her to accompany you on a room-by-room tour of your home. Take along a notepad to write down their suggestions as you move through the home or use your smart phone to record the conversation and take photos of areas that need attention. Ask your agent to join you in looking at the outside of the home, too, focusing on both curb appeal issues and any repairs that need to be completed prior to showing the home.
You may also ask your agent for referrals to trusted professionals, service companies, or contractors that can help you maximize the money you have for repairs and renovations.
Not all projects will give you a return on your investment, so make sure to run the numbers with your agent to see what will make sense for your home's sale. Determining what to improve isn't always an easy task, but you will be happy you did when it comes time to show your home.