Small replacements that boost curb appeal are the easiest way to get more attention from buyers.
- Looking Sharp – The Debate over Staging
- Comparing Cost to Value
- Bigger Isn’t Better
- Snap Judgments
- Kitchens Best Large Project Return
- Consider Your Region
- Awash in a Sea of Factors
Looking Sharp – The Debate over Staging
Everyone wants to get really strong bids when they sell their house, and that often involves sound strategy.
The two most obvious pieces of preparation are a deep-clean and staging of your home.
If you haven’t thought much about staging, it’s basically preparing your home for potential buyers – such as removing clutter and rearranging furniture. It’s worth noting that the staging industry came under fire last year when a study found that the practice does not actually add value to a home. However, the same study concluded that sprucing the property up does make it likelier a buyer will become interested in the home (indirectly increasing its value).
Ohio Coldwell Banker agent Virgil Mathias firmly believes that staging is effective and well worth the cost, so much that he always has it done. “After years of doing this, I feel very strongly about it,” he says. “We wouldn’t pay for it if we didn’t think it worked.”
It seems highly unlikely that staging doesn’t increase value, but there is another option to consider that’s a bit more aggressive: remodeling.
Comparing Cost to Value
Large projects typically will not allow a home seller to recoup the full cost. However, there are some repairs and enhancements that make better sense than others. Some will almost completely be recovered in a sale, while others may not be as good from a strict investment perspective but make it likelier that you attract multiple offers (as when you can show off a new kitchen). It also just helps to know what home-improvement projects are the smartest for you to enjoy years in advance of a sale (since the payoff typically doesn’t match the price).
Here are some basic findings:
Bigger Isn’t Better
A major rule of thumb right now is that smaller, less involved projects are the best investment, according to a report from the National Association of Realtors (NAR). “The national average cost for a steel door replacement was $1,230, for example,” explains the NAR’s Stacey Moncrieff. “That’s the least expensive project on the list, and it ranks highest on the payback scale, returning 101.8 percent nationally on average.”
The report looks at 102 different markets, and the door makes back its expense completely in 43 of them. Out of the 36 different types of projects analyzed in the study, four others pay themselves off completely in most markets: minor kitchen remodel, midrange wood window replacement, luxury garage door replacement, and midrange garage door replacement. In other words, five of the six smartest remodeling projects you can buy are replacements – which also tend to be relatively inexpensive.
Specifically, here are the top five in terms of cost vs. value recovered:
- Replacement of entry door – 102%
- Replacement of manufactured stone veneer siding – 92%
- Replacement of midrange garage door – 89%
- Replacement of fiber cement siding – 84%
- Replacement of luxury garage door – 83%
People look for homes online now, so they really do quickly judge whether or not they think your home is appealing. For that reason, you will get the best returns for replacements that are immediately apparent, such as garage doors.
“Siding replacement also provides great value at resale,” says Moncrieff, “particularly … manufactured stone veneer, which is expected to recoup 92.2 percent of its cost nationally on average.”
Kitchens Best Large Project Return
When we think about a remodel instead of a replacement, the only project in that category that is in the top ten in terms of recouping cost is the minor kitchen remodel. Across the United States, a typical bill for this project is $19,000, 79% of which is recovered in additional value at sale.
Consider Your Region
The best region in the United States for payback on remodeling is the Pacific region (California, Oregon, Washington, Alaska, and Hawaii), with six projects that offer greater than a 100% return. East South Central (Kentucky, Tennessee, Alabama, and Mississippi) is the second best place to make home improvements, with two projects that yield better than 100% in value improvement over cost.
Awash in a Sea of Factors
There are really many factors at play when we think about the value of a certain replacement or remodeling project, including geographical location, common updates in the neighborhood, how well the project is completed, and how critical that particular project might be to an individual buyer.
Selling a home can be mind-boggling, so looking for a new one should be fast and intuitive. At Realty.com, we are disrupting the real estate market with a core focus on higher quality service for buyers and sellers. Find a new home now!