If you plan on selling your home you want to sell for top dollar. In order to do so you’ll need to make sure your home is in premium condition. According to HGTV there are 15 home updates that pay off before you sell your house. Their research determined which improvements represent the highest return on investment. The top four included; minor bathroom remodel, upgraded landscaping, minor kitchen remodel, and exterior improvements.
Let’s take a quick look at each of these projects:
#1 Minor Bathroom Remodel
What is included: Replacing the tub, tile surround, floor, toilet, sink, vanity & fixtures will give your outdated bathroom a welcome face lift.
Cost to Complete: $10,500 | Return On Investment: $10,700 | Average Return at Resale: 102%
#2 Upgraded Landscaping
What is included: Many homeowners will hire a professional for help with landscaping if the don’t have a green thumb to add pops of color with flowering shrubs or trees, install a flagstone walkway, planters, fresh mulch & more.
Cost to Complete: $4,967 | Return On Investment: $4,967 | Average Return at Resale: 100%
#3 Minor Kitchen Remodel
What is included: If your kitchen’s floor is good, but requires a cosmetic update, refacing cabinets, adding a new counter top, and under cabinet lighting is a great start.
Cost to Complete: $15,000 | Return On Investment: $14,913 | Average Return at Resale: 99.42%
#4 Exterior Improvements
What is included: If your kitchen’s floor is good, but requires a cosmetic update, refacing cabinets, adding a new counter top, and under cabinet lighting is a great start.
Cost to Complete: $7,239 | Return On Investment: $6,914 | Average Return at Resale: 95.5%
HGTV’s top four are all valid projects to consider. The other 11 projects on their list also have merit. However, the only thing that matters when considering an upgrade before selling your home is what average buyers expect from similar homes in your area. Therefore, if your condition is average, or better, then improving it typically doesn’t pay off.
Here’s why … buyer’s think in reverse when it comes to home improvement projects. They are more focused on features that do not meet their average expectations. Then, for each deficiency they will SUBTRACT, from their offer price, the perceived cost to correct each deficiency.
If a buyer doesn’t like your kitchen, and they think it will cost $20,000 to improve it to their taste, then you have an opportunity to consider.
As an example, if you can improve the condition to meet the average buyer expectation for $10,000, then you stand to achieve a 200% return on investment. This is because your investment neutralized their need to lower the value of the home by $20,000.
No matter which improvements you consider, make sure you consult with an experienced real estate broker who can help you connect your research to current market realities.