There are times when we walk into homes and sellers tell us, “We repainted all the main living areas. Doesn’t that raise the value of the home?”
We completely understand. The work you put in to sell your home takes time and money. But the work to ADD value to a home is different than the work required to MAINTAIN the value of a home.
Below, we review ongoing maintenance and remodeling to add value.
Keeping your house updated and maintained helps tremendously when you are ready to sell. This includes regular landscaping, cleaning the exterior and interior of the house, maintaining appliances, and keeping decor up to date. Fresh paint, stained decks, and new light fixtures are also considered ongoing maintenance.
On average, homeowners should set aside 1-2% of the purchase price of the home for maintenance every year. For a $300,000 house, that is $3,000-$6,000 each year, depending on factors such as the age of the home, weather conditions in your location, and the overall condition of the house when it was purchased.
Keeping up with maintenance helps to avoid a decrease in value when you sell your home. If you are selling your home in a market that is similar to when you first purchased it (i.e., there was not a big crash or revival in your local real estate market), this ongoing work will keep the value of the home similar to your purchase price.
Remodeling to Add Value
Renovations and remodels can add value to the home. You must take into consideration how much each project will cost versus how much profit it will add to the resale of the house.
Below is a chart showing renovation projects that appeal most to buyers and projects that are most likely to add value, according to the 2017 Remodeling Impact Report, a report by the National Association of Realtors.
Rank of Projects Appeal to Buyers (highest to lowest)*
Rank of Projects’ likely value to the home for resale (highest to lowest)*
|Complete Kitchen Renovation||Complete Kitchen Renovation|
|Kitchen Upgrade||Kitchen Upgrade|
|Bathroom Renovation||Bathroom Renovation|
|New Wood Flooring||Add New Bathroom|
|Add New Bathroom||New Master Suite|
|Hardwood Flooring Refinish||New Wood Flooring|
|New Master Suite||HVAC Replacement|
|HVAC Replacement||Hardwood Flooring Refinish|
|Basement Conversion to Living Area||Basement Conversion to Living Area|
|Closet Renovation||Attic Conversion to Living Area|
|Insulation Upgrade||Closet Renovation|
|Attic Conversion to Living Area||Insulation Upgrade|
*From REALTORS® 2017 Remodeling Impact Report
Kitchen and bathroom renovations are at the top of both lists. There are times when extensive renovation projects cause a seller to lose money, because they spent too much on the project, or added on something that doesn’t add value. Adding a swimming pool, spa, a new roof, HVAC, or solar panels are all extensive projects that don’t add much value to the resale of a home.
As a homeowner, focus on maintaining your home each year so that you are not weighed down by projects when you want to sell the home. If remodeling, determine what will help most in terms of resale, and stick to your budget.
Are you ready to sell your home?