Upgrades: What's Worth the Investment?
Selling a home is stressful enough without the added pressure of last-minute renovations. Unfortunately, television has convinced many sellers that a “quick” remodel can substantially increase property value. In reality, the ROI of most major upgrades just isn’t worth the cost.
So what should buyers repair or replace before listing? While each situation is unique, here are some general guidelines.
WHAT TO FIX:
Landscaping: Bare minimum tasks include mowing the lawn, pulling weeds, trimming overgrown foliage and clearing away dead brush. Budget permitting, suggest that your clients invest in fresh grass and mulch, as well as new flowers and shrubbery.
Painting: Avoid dark, bold solids that may be off-putting to buyers. Instead, suggest neutral tones that will appeal to a wider audience.
Essential upgrades: Mechanical systems (e.g., heat pumps, water heaters) that are outdated or in disrepair should be replaced or repaired accordingly. Pertinent structural damage (e.g., roof, foundation) should also be addressed.
What to Skip and Why
Significant renovations: Sellers should understand that remodeling isn’t as easy as it looks on TV, and it typically doesn’t add to the resale value. In fact, most major renovations (such as a bathroom or kitchen upgrade) only net a 50 to 60% ROI.
New floors: Unless there is a structural issue or major stains, new floors provide little ROI. As such, it’s better to leave this mostly aesthetic decision to the new owner. Consider suggesting a professional cleaning service to prepare homes for listing.
Uncommon upgrades: It’s best to keep the property in line with comparable area homes rather than try to differentiate with offbeat additions. For example, there’s no need to install exotic hardwood flooring if other area homes feature laminate.
Comparative Market Analysis (CMA)
Present the client with a CMA to put desired upgrades in context. If the CMA reveals the property to be lacking in terms of features or condition, discuss getting estimates. If not, explain that accurately pricing the home for the market should be sufficient.
For more ways to add value to the client experience, reach out today.