Many homeowners believe that if they can make some minor repairs or even do some major remodeling, they will sell their home more quickly and for a higher price. The truth is a little more complex. There are two primary factors to consider when selling a home. The first is the quality of the home. Obviously, if a home is in better condition, you can ask for a higher selling price. The second is time on the market. The longer a home sits on the market, the more its price drops. So some renovation will create value by getting more potential buyers interested. If you can get a few buyers interested, you may even create competition, driving the price up even higher. As a contractor, you may be asked about the best renovation before selling a home. Here are a few answers you can provide your customers.
Keep Resale Value in Mind
When making renovations to a home you plan to live in for a while, your return on investment comes in the form of use. You will enjoy having a new kitchen, remodeled bathroom, or a fresh coat of paint. Even if the cost of the renovation isn’t entirely recouped upon sale, you got your value. However, if you plan on selling within a year of the renovation, you should be a little more focused on your immediate return on investment.
Never make a renovation that won’t pay for itself with a higher selling point.
If you are trying to sell, then you don’t want to get carried away with large, expensive remodels. Instead, focus on the factors that really drive sales. There’s lots of information out there about which improvements recoup the most value, so that’s one place to start. But remember, bringing in buyers quickly, and even securing competing offers, is another way to raise your selling price. So there are really only two reasons to make any improvements at all: to get buyers in the door and to increase the value of the home more than the cost of renovations.
A Lot Depends On Your Neighbors
The value of your home is largely contingent on the value of comparable homes in your neighborhood. If homes similar to yours are selling at high prices, you have a good chance of doing the same. If home values in your area are depressed, you’ll have a harder time asking for more money than your neighbors. In the same vein, when selling your home, it really does pay to think about “keeping up with the Joneses”. If your house or apartment is less desirable than your comparable homes in the area, you may have trouble selling at all. The only way to get buyers to bite would be to offer a real steal, which is not what you want.
The best way to start thinking about which renovations to make is to look at other homes in the area that are selling well. Remember, the buyers who look at your home are also looking at other homes for sale. If your house doesn’t keep up, it will be overlooked. On the other hand, if you can make your home stand out even a little bit, you may be able to ask a premium.
Another rule to keep in mind is that this renovation is for the buyer. Forget about your personal tastes. Work with your realtor to determine what buyers like and what sells. When in doubt, stick with neutral colors and broadly popular upgrades. Home buyers who want a custom look will do it themselves after the purchase.
The most important room to many homebuyers is the kitchen. An outdated or worn looking kitchen can drag down a whole house. On the other hand, a bright, clean, updated kitchen can make potential buyers forgive some less desirable details elsewhere in the home. Consider the kitchen one of the most important selling points in your home.
While kitchens are a major selling point, it isn’t necessary to do a complete remodel. Remember, it’s all about return on investment. If you sink too much money into your kitchen remodel, you will have a gem that sells your home, but you still won’t recoup your costs. So focus on lower-cost ways to give your kitchen a look that will appeal to potential buyers.
One cheap and easy way to improve a kitchen is by painting cabinets or replacing cabinet doors. It gives your kitchen a fresh look with minimal investment. New hardware is also a plus. Soft-close drawer slides are incredibly cheap, less than $20 a drawer, and they can make a kitchen feel much more upscale.
If you’re willing to spend a little more money, look at your appliances. If you have old appliances, it may be worth replacing them. You don’t want to just give away fancy new appliances when you sell your home. But if you’re appliances look out of date, it can drag down a whole kitchen. Stainless steel is the way to go for most homebuyers. Installing a stainless steel refrigerator, oven, and dishwasher can be money well spent.
Finally, look at your counters. Counters take up a lot of visual space, so upgrading your counters can make a large impact. Granite and quartz are popular but can be expensive. However, if your kitchen has wood or laminate countertops, an upgrade may be in order.
Freshening Up Bathrooms
Next to kitchens, bathrooms are one of the most significant selling points in any home. But like kitchens, it may be worthwhile to avoid expensive remodels. Instead, focus on visual appeal. Bathrooms are one of the most humid and moist areas in your home and can build up a lot of scum and other discoloration. Making a few cheap upgrades can make a bathroom look fresh and appealing.
Target areas of your bathroom that look worn. If your grout looks aged, regrouting is a relatively cheap fix. Recaulking bathtubs, showers, and toilets is another very low-cost improvement that makes a significant visual impact. If your toilet, fixtures, or mirror look dated, consider an upgrade. You don’t have to break the bank to put in a stylish new toiled, sleek faucet, and bright new mirrors.
If your bathroom hasn’t been touched in decades, you may need to invest a bit more. If you have an old plastic tub, consider replacing it with a tile shower. This is a slightly higher-cost upgrade, but it can transform an older bathroom. For small bathrooms, one way to add space is to install a pocket door. When thinking about these more expensive updates, just keep in mind the ROI. A worn-looking bathroom can kill a sale, but don’t start spending more money than you can recoup when you sell.
There’s nothing that will make your home look fresh and tidy more quickly than a fresh coat of paint. Homeowners sometimes underestimate just how beat up their walls have gotten. But once that new coat of paint is on, the difference is obvious. Stick to paints in neutral colors. Grays are always safe and stylish. If you’re not sure, look around at some other homes for sale. If a house looks particularly stylish, note the paint color. Avoid beige or yellow, as they make a room look old and dated. Also, stay away from pure white, as it can look cold and clinical. A warm shade of gray is usually the easiest to sell.
Curb appeal is the first impression your home makes. When a buyer pulls up to the curb, they will judge your house before they even step in the door. First impressions are hard to shake, so it’s crucial to make a good one. Luckily, it doesn’t take much.
The key to curb appeal is simply looking clean and well-maintained. Power washing your siding can make your house looks much newer. You should also consider painting your front door. It’s the first thing potential buyers see, and it can be done for very little. If your doorknob is looking old, replacing it is also a low-cost improvement that can make an outsized impact.
Landscaping is also essential to making a good first impression. If your front lawn looks overgrown, it will be hard to come back from a first impression that a house is rundown or poorly maintained. But you don’t need to install all new landscaping. Mow the lawn and trim bushes, so they are neat and tidy. Also, lay down some fresh mulch. Black mulch can make your bushes or flowers pop. If your front lawn is mostly one color, installing a few brightly colored bushes can also make a big difference.
The Contractor as Expert
Many homeowners are unsure about the best renovations before selling a home. As a contractor, they may rely on you as an expert to help them make those calculations. It pays to work with realtors in your area to get an idea of what homebuyers want. What you bring to the table is real-world knowledge of how expensive it is to make each type of improvement.
One of the best ways to track the cost of any renovation is with Needo’s construction management software. You can keep track of labor, materials, and vendor costs for every job, so it’s easy to price out the next one. You can also create documents like bids and invoices quickly and easily. No more wasting time with formatting and custom building documents on a word processor. Needo makes it all simple, saving you time and money. Contact Needo today to find out how we can improve your workflow and make you a better contractor.