As you are getting ready to sell your house, you may be wondering which home improvements are worth the investment. Obviously, you don’t want to spend $20,000 on that kitchen renovation to only get a $10,000 increase in your home value. According to the Remodeling 2016 Cost vs. Value Report, there were very few improvements that actually saw a positive return on investment. In my experience, I would not advise sellers to undertake a large renovation project before the sale of their home unless they were planning on doing it anyways regardless of the sale. Instead, I would focus on the most cost effective repairs that will have the greatest impact on the buyer’s perception of the home.
In This Article, You Will Learn:
- Important considerations before upgrading your home
- Which upgrades you should focus on first
- Where to find great contractors
Important considerations before upgrading your home
Question #1: Why are you making these improvements? Is it so you can enjoy them yourself or are you just doing it to sell the house?
If you are still a few months (or years) away from selling your place, you’ll get to enjoy the home improvements that you are making and may choose a higher quality finish than if you were just making the improvement to sell your home. For example, you may choose to replace your carpet with a higher quality padding than if you were just going to replace it to sell. Or you might splurge on quartz countertops versus granite countertops. Keep in mind that these upgrades may not have a positive return on investment, so just go in knowing that. The worst scenario is when I talk to the seller and they expect their luxury upgrade is going to provide a huge return on investment when it rarely does.
If you are making improvements for the sole purpose of getting your home to sell higher, then you will need to determine the quality of your upgrades. Take a look at homes that recently sold in your neighborhood to determine the level of finishes that you need. Does everyone have stainless steel appliances with granite countertops? Or are you OK with white appliances and laminate counters? Do not upgrade more than necessary. I repeat, do not upgrade more than necessary! It rarely pays to be the most upgraded home in the neighborhood and you may run into difficulties with the appraisal.
Question #2: Do you have the time and resources to make updates?
Taking on any home improvement projects will cost you time and money. The benefit of selling a home as-is is that you don’t have to put out the upfront costs of updating your home. Figure out what your budget is and how much time you have to devote to making updates. Are you ready to spend your weekends at Home Depot (or be willing to pay a contractor for their time and expertise to do it for you)? Knowing your budget upfront will help to determine the extent of your upgrades.
Focus on Cosmetic Improvements First
Yes, people just books by their cover and buyers are no different. The only exception to this rule would be if one of your major systems or appliances is already broken. Otherwise, if the systems are old, but still functioning, consider offering a home warranty upfront to ease the buyer’s concerns over the systems.
In my experience, sellers should focus on the following cosmetic improvements:
- Make a great first impression by updating or replacing your front door and improving the curb appeal of the home with improved landscaping.
- Paint your home with a neutral, but trendy color. For example, the 2017 Sherwin Williams Color of the Year is Poised Taupe.
- Change out the entrance light fixture to something more modern since it will be the first fixture buyers will see.
- If you have an old thermostat, replace it with a programmable one or a Nest
- Replace the vanity in the bathrooms and make sure it has plenty of storage space
- Replace old light bulbs with high wattage bulbs so your home looks brighter
Where to Find A Great Contractor
Now that you know what you want to fix, you have another choice: should you do it yourself or have a professional do it? It it is something that requires skill and experience to do (e.g., painting, tile work, etc..), I would contact a professional to do it. I cannot tell you the number of times that my buyers have walked into a house and their first comment is “I can tell the sellers painted this themselves.” It looks cheap and makes the whole house feel cheap, so don’t do it!
Here are a few places to go to find a good contractor:
- Referrals from your real estate agent – Real estate agents works with all different types of contractors everyday, so they have their favorite contractors who are reliable and do quality work. The price may not be the cheapest, but they provide the best value to their client. Plus, you know the contractor will be on top of their game since they won’t risk losing the business from the real estate agent.
- Referrals from your friends and family – Did your neighbor recently remodel their basement? Getting first hand recommendations from people you trust is another great way to find reliable contractors.
- Online Review Sites such as Angie’s List or Home Advisor – I have found these sites to be reliable to find high quality contractors, but often they are expensive and it may take longer to get to your project since more people are going with them based on their online reputation.