Every year, the National Association of Realtors publishes a cost value report. The graphic to the right is from their 2008 report. It is important to note that not a single item on the list has a return equal to its cost. That though doesn’t tell the whole story.
In years past, it was fairly easy for a buyer to access cash to complete renovations and remodels. Then equity lines and other sources of money got harder to acquire which then limits the buyer’s ability to take on a project house rather than a completed house. Even in the case of building sweat equity the buyer still has to be able to fund the materials cost.
The result is that we are seeing move-in ready houses sell faster than project houses. The question becomes what remodeling to do? The answer isn’t set in stone but here are my thoughts:
The house needs to be commensurate or better in relation to itself and its surroundings- avoiding extremes. If your gutters are falling off they need to be fixed but they don’t need to be copper gutters unless all the surrounding houses have copper gutters. Your buyer probably won’t pay more because its the only house on the street with copper gutters.
Looking at the house itself, what sticks out as not being on par with the rest of the property? The 1970s wall oven may function perfectly but it sticks out as being out of place in remodeled kitchen. I wouldn’t refinish wood floors if I wasn’t going to paint walls but you’ve also got to aware of the snowball effect of remodeling. If it sticks out and is viable to do something about it, do it.
In my opinion, adding a half bathroom to a three bedroom one bathroom house has more value than adding a full bathroom to a four bedroom two bathroom house even if the projects cost the exact same amount. There is less return as you get away from minimums (adding a second garage space does not have the return of adding the first).
You need to address what you want versus what the buyer wants. That really cool customized space for your wigimillwallit is really cool but only cool for your wigimillwallit. If you are going to get years of enjoyment out of it before selling, go ahead and customize it but don’t be hurt when the buyer conveys the first thing they are going to do is rip out your wigimillallit holder. It is not a selling point for most. Do you need to remove it before selling? Pools are similar. Great if you want a pool but not everyone wants a pool.
Everyone has their own opinions and needs. The reason brokers are so fond of Realtor Beige (also known as Latte, Cashew or light brown) is that its pretty noncontroversial. The buyer probably isn’t going to lovvvve it but they probably wont haaaaate it either and ask, “why the hell they do that?”. Then again, it’s just paint.
Nice post. It’s true that before you sell you have to remodel everything to make the price go higher. But you have to spend monet first. This report shows how much the cost of remodeling.
This is a really good explanation of why someone should remodel even though they cannot get their full investment back. It is more about getting the home ready to sell while somewhat improving its value. I completely agree that remodels or upgrades that are unique or too expensive for a neighborhood should only be done if the owner plans to enjoy them for years, not as a resale feature.
im very interested with the Table that it’s shown. it’s kind of help full for people outside there who will sell they’re house but still need fixed in some spot. And i agree about to selling something it has to look in a mint condition. thats the way we get high our good’s value…
Sometimes when I go to someone’s home to give them a toilet remodeling estimate, I provide them with most of the queries and answers, that they’re ever going to want. This is how I do business, but some contractors don’t do business this way. Therefore , it’s your decision, the house owner to ask your rest room remodeling contractor the proper questions.
Killer post, but that link is dead. Not sure if that was just a one-time thing or not but thought you might want to know. Thanks for all the helpful info!
Link works for me.