Making upgrades can be as easy as replacing the handset on your front door and freshening up the paint job, or as daunting as remodeling an entire kitchen or master bath. The question always is, what home improvements give the best return on the remodeling dollar?
If your home is worth $275,000, and you spend $25,000 to revamp the kitchen, don't make the mistake of assuming that the investment will increase the value, dollar for dollar. The remodel may add value to the home, but the return on dollars spent will be around 50%. Smaller upgrades, like replacing outdated fixtures in the kitchen and bath, are certainly worthwhile, but major remodeling of those rooms isn't wise, just to sell your home.
That's not to say you can ignore necessary repairs that a home inspector would red-flag or mortgage company would demand before issuing a loan to a buyer. If major problems, like a leaking roof or outdated electrical wiring exist, you may want to repair those before putting your home on the market or expect to give concessions to the buyer.
Starting With the Basics
Every listed home should meet the basic expectations of any buyer. It should have a sound roof, functioning gutters and downspouts foundation without cracks, a functioning heating and/or air-conditioning system, solid subflooring, and safe and secure electrical wiring. With finance-mandated home inspections, any shortcomings may be required to be remedied to get buyer financing approval.
It is important to understand that the market value of a home is determined by the prices of comparable homes recently sold in the area. Extensive remodeling to sell the home or to increase the value may not pay off. The property needs to be up to the standards of neighboring homes, so while the kitchen has to be comparable to others, spending $25,000 to remodel a kitchen in an area where comparable homes recently sold for $275,000 will not increase the house's value to $300,000. While it may be a helpful selling feature, it won't return dollar-for-dollar value.
Mechanical Maintenance is a Must
It is easy to get wrapped up in the more eye-pleasing aspects of preparing a home to sell. However, the upkeep of all the more mundane aspects of the home cannot be overlooked.
These mechanical features require consideration:
- Electrical boxes and wiring
- Natural gas lines
- Plumbing
- Central heating and air-conditioning
If these components are old, outdated, or not working correctly, the home's appeal is lowered, as is the eventual sale price.
According to the National Association of Realtors*, 65% of homebuyers surveyed wanted to be sure their new home had working central air system. Of the 31 mechanical features inquired about in the survey, this was the most important.
People want to purchase a home that reflects their aesthetic tastes and lifestyles, but also one that is safe and sound. Faulty electrical systems do not provide a feeling of safety. Leaky plumbing arouses concerns about mold infestation and sewage problems. These areas can require extensive work and they are extremely important. Overlook them in the preparation stage, and you run the risk of trouble later with inspections and appraisals.
Having a professional inspection for buyers to review is a big plus in marketing. (If you have mechanical issues and decide to sell your home, it may be necessary to negotiate with the buyer).
Replacing Appliances
New appliances undoubtedly make an impact on buyers. The National Association of Realtors® conducted a survey of buyers and found that:
- Buyers were usually "interested" or "somewhat interested" in buying a home that featured new appliances.
- Roughly 17% of respondents preferred stainless steel.
- The most important factor: that appliances were available in the home.
- Most buyers who were unable to get their sought-after appliances said they would have been willing to pay, on average, nearly $2,000 more for them.
Potential buyers want appliances included and will pay more for them, especially if they are new or in excellent condition.
New appliances might be what sets a house apart from the home for sale across the street. If new appliances are out of reach, offer immaculately clean and fully functioning existing ones.
Updating Hardware
Carefully inspect your bathroom and kitchen hardware. If it is unsightly or worn, it's best to replace it. Put yourself in a buyer's shoes. Your home will potentially be their new home. Old, worn-out fixtures are not going to speak to them the way nice, new shiny hardware will.
Unless your knobs, pulls, handles, or hinges are broken, you don’t need to replace them. Get that fresh look simply by thoroughly washing, sanding, and painting them with spray paint made specifically for kitchen and bath hardware, making it cost-effective.
Check these hardware items closely and replace them as needed:
- Towel bars
- Toilet paper holder
- Door handles
- Dated light fixtures
The goal is to touch up your home nicely without excessive spending. The internet has a wealth of do-it-yourself videos that can help you update your bath and kitchen if your budget is limited.
If you have broken or worn-out hardware, it's best to replace the entire set. If you can find matching pieces, you can paint the old and new to match.
Let There Be Light (My Favorite and Most Sensitive Item to Pay Attention to in Ambients)
Whether natural or artificial, bringing in light is one of the most effective ways to show off your home.
Using light to enhance your home's appeal can make a difference. Harsh light is unflattering, even to the best furnishings and features. Dim lighting gives everything in the house a dingy feel.
Supplemental light is necessary for rooms with smaller windows, or little natural light coming in. There are three kinds of lighting. General lighting or overhead is typically ambient. The pendant light is good for tasks like food preparation or reading. Accent lights are usually on tables or mounted on walls. You can use all three to bring out the best your home has to offer.
“Key areas, such as foyers, can set the stage by impressing buyers with a dramatic light source.” If you do not have an abundance of natural light coming in, a chandelier-type light works if your ceilings are high. Otherwise, wall sconces are impressive in smaller spaces. Do not assume you need to buy new fixtures if you can update existing ones. The goal is to make sure each area of the home is effectively lit.
Kitchen and bathrooms are pivotal rooms.
These two areas can make or break a sale. The combination of ambient, natural, and pendant light can bring out the best in your kitchen space. Mounting track lighting underneath cabinets gives the counters a chance to shine aesthetically and functionally. Make sure the light over the sink area is sufficient and working properly. If you have a hood over the stove, install clear bulbs to ensure the brightest light.
Lighting in the bathroom needs to be intense without being harsh. Soft lighting enhances any part of the house you want to highlight.
Avoid harsh lighting in the bedrooms, as well. Lamps strategically placed will give the bedrooms a peaceful, restful feel. The closet light should be bright, though.
One last tip: Lightly painted rooms still need sufficient light so the room does not appear drab.
Flooring Plan
Although you want to avoid home shoppers looking down on your home, they will be looking down at what is under their feet. Your home's value can be downgraded by the buyer if your floors are in bad shape. On the flip side, if your home's flooring is well-done and in excellent condition. buyers will be more willing to pay more for it.
“Maximizing profit without compromising investment dollars is the goal”, but if flooring and carpeting are not in salable shape, you need to take inventory. There is no point in spending money unnecessarily if the improvements do not add significant value or help the home sell quickly; however, there are options that don't break the budget.
Repairing and thoroughly cleaning the floors are the least expensive ways, so start with those. Take stock by examining all floors. Move furniture out of the way and make notes regarding condition, stains, or blemishes. Write down what needs to be replaced, cleaned, or repaired.
Carpets can be steam cleaned to eliminate stains and odors. If the carpets are path-worn and dull, you can replace them easily with other kinds of flooring with a reasonable ROI. Laminate floors can be cosmetically fixed with repair kits found at home improvement stores.
Hardwood flooring can be easily refinished if the wood is worn or water damaged. Seek the advice of a flooring professional because real wood floors add a level of quality to a home that laminate floors cannot match.
Tips for Kitchen and Bath
When making upgrades to the kitchen and bath, be aware of what constitutes a substantial investment. The key is to consider the mass appeal for the sake of resale value. Let's say one homeowner decided to add a backsplash and more cabinet space in the kitchen and then updated the appliances and refinished the oat flooring. The total cost was $4,000. The seller kept the price comparable to sales in the area and ended up selling for $27,000 more than the asking price because interested buyers started a bidding war!
The lesson here? You do not need to bust your budget to sell your home, but you do want to have mass appeal. Kitchens are pivotal in home appeal.
Here are some suggestions of what you can do to your kitchen and bath to impress buyers without losing ROI:
- Paint neutral colors.
- Add a new backsplash in the kitchen.
- Install new countertops if dated or if you need to bring the home up to current area standards.
- Add new, multifunctional kitchen faucets.
- Add cabinet space or increase storage in the pantry.
- Replace dated bathroom vanities. Pedestal sinks or trendy cabinet sinks have mass appeal.
- Replace toilet seats - or the entire toilet, if necessary.
Two Energy-saving Upgrades to Lower Utility Bills
More and more buyers are looking for homes that reduce consumption and save them money on utility expenses. Here are two options that can make your home more energy efficient.
- Install an energy-saving smart thermostat (less than $300) that saves on utility bills.
- Install solar vents ($500-$700) in the attic space that help expel hot air during the summer months
Making a Case for Space
When people accumulate an abundance of possessions, they need space to store it. They also want a way to clear the clutter. According to the National Association of Realtors", most homebuyers would have preferred improved and greater closet space, as well as other storage options. Consider these statistics showing what buyers are looking for in a home:
- 93% wanted a laundry room
- 90% wanted a bathroom linen closet
- 86% wanted garage storage
- 85% wanted a walk-in kitchen pantry
Storage is a Plus
Give buyers great storage, and you've won their hearts. If you can add new closets to your home easily, do so. Building a simple closet isn't difficult if you are moderately handy. If you're selling an older home, where closet space is typically minimal, this will help!
If your rooms are already small, you might not want to take any square footage away from them. Existing closets can be updated to maximize the space at hand. If you don't have the skills, or the funds to hire someone to build new space, consider investing in closet organizers to make the most of what space you have. For instance:
- You can easily design your custom closet kit online with a storage solution company like ClosetMaid.
- Your standard home superstore or hardware store often has exactly what you need in an inexpensive, prefabricated form.
- Organizers won't enlarge your closets, but maximizing vertical and horizontal space is a suitable alternative.
And don't stop there - after all, storage isn't restricted to closets. Storage improvement opportunities apply to all cabinets, clothes closets, linen closets, and attic and basement spaces.
Make sure you organize your cabinets. The same retailers that provide closet organizers can help with this.
Look for any place you can provide attractive and inexpensive storage space. Make sure your improvements are tasteful, and you will benefit from increased storage solutions.
Updating your home with ROI in mind is the best approach when preparing your home for sale. Look over this recent list of what buyers want in a home. Compare it to what you have in yours, and upgrade accordingly, without surpassing the price line for comparable homes in your area.
Features Most Homebuyers Want
- Energy Star-rated appliances - 94%
- Laundry room - 93%
- Energy Star rating for the whole home - 91%
- Exhaust fan in bathroom - 90%
- Exterior lighting - 90%
- Bathroom linen closet - 90%
- Energy Star-rated windows - 89%
- Ceiling fans - 88%
- Garage storage - 86%
- Table space for eating in the kitchen - 85%
- Walk-in kitchen pantry - 85%
Keep in mind these features are not guaranteed to be effective or profitable upgrades.
Features Fewer Buyers Want
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Shower stall without a tub in the master bath - 51%
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Wine cooler - 42%
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Wet bar - 41%
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Laminate countertop - 40%
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Laundry chute - 32%
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Outdoor kitchen - 31%
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Game room - 31%
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Glass-front cabinets - 31%
