Cost vs Value
Each year, Realtors in conjunction with Hanley Wood’s Remodeling Magazine put out Remodeling Costs vs. Value Report. Interesting information, but I don’t consider it gospel. We meet with a lot of home sellers and most want to know what they should do to get their house ready for sale. They are looking to do three things: maximize value, shorten market time and eliminate objections. I have read this report many times over the years and the takeaway is that almost nothing you can do will return dollar for dollar, with some exceptions. Apparently steel entry door and garage door replacements return just over 100%. So the question is, why do anything to your home to prep for sale?
Here are some reasons I might recommend pushing forward on a project that returns less than 100%.
- When homeowners are clearly skilled at DIY. You can save enough money doing a project yourself, provided it is done professionally, to more than make up the shortfall.
- The project under consideration may be a weak point in an otherwise strong set of selling features. For example, maybe that living room with harvest gold shag and simulated woodgrain paneling is the only remaining room to remodel. Yes, do it.
- Sometimes the project can eliminate a major objection.
- Carpet and paint don’t appear on this report, but they return at least dollar for dollar. If your carpet is dated or badly worn, it is generally advisable to replace it. Paint is not expensive. Even if you have to hire a painter, it usually makes sense to do so if the current color is highly taste specific or if the walls are marked up or chipped.
- When the project is at the front of the house, especially entry. Curb appeal is critical and remember that buyers stand on your front porch for 30 seconds to a minute while the agent is fumbling with the keybox. That is your first impression.
If you have questions about a specific project, talking to a local Realtor can help. Agents who work with buyers hear feedback and understand a lot about what buyers want.