By Christine Hardenberger
Gleaming granite countertops, stainless steel appliances, slate tiled bathrooms, and jetted garden tubs. Upgrading your home to sell used to mean sinking big money into high-end kitchen and bathroom renovations. Upgraded kitchens and bathrooms sold homes. Now, renovating your kitchen or bathroom could cost you far more than you’ll ever make back at the closing table.
In order to sell your home in today’s buyers market without losing your shirt, don’t over invest in expensive updates, and forget about making your home look like the cover of a magazine. Focus on making the home clean, fresh and inviting.
“Pay-back for high-end projects has declined over the past few years,” said Kermit Baker, chief economist for the American Institute of Architects (AIA). “People planning to sell shouldn’t over-improve. They won’t get the money out if they sell in the next two or three years.” That’s sound advice. A quick look at the numbers proves it.
According to the National Association of Realtors (NAR) survey, in 2005 a major kitchen renovation generally returned 93% of its cost when the home was sold. The survey reveals that the same renovation today would only realize a 70% return. Bathrooms fare no better. The survey shows that in 2006 a major bathroom overhaul would return 77.4% of its cost. Today that figure is down to just 68.4%.
High-end appliances also don’t provide the returns they once did. “We’re seeing a lot of pullback in the high end,” says Fred Ugast, chief operating officer of HomeTech. High-end kitchen appliances and wine refrigerators have declined in popularity. Home buyers clearly are more interested in practical spaces than flashy finishes.
Where should homeowners invest their money if they want to sell? Perhaps surprisingly, it is the cheapest fixes that are grabbing buyers’ attention and generating the most bangs for the buck. Long and Foster Real Estate’s web site says, “You may not be able to improve the market value of your house with major remodeling projects, but you can improve its marketability. This usually can be done with more elbow grease than hard cash.”
If you want a 200% return on investment, paint your home inside and out. This easy, cheap upgrade will net an incredible resale return and make your home look fresh and new. Adding a new bathroom will return 96% of your investment, while adding a fireplace will realize a 94% resale recovery.
Want to spend even less money? Mow and trim the lawn, replace dead light bulbs and organize your closets. A home that appears well-cared for will appeal to buyers. Make sure the house smells fresh and clean. Limit renovations to necessary repairs and the correction of safety hazards.
A few pretty flowers in the front yard will draw buyers’ attention. Once inside, buyers aren’t as interested in your countertops as they are in the overall presentation of the home. Don’t waste your money on things that just don’t matter anymore to sell your home without losing your shirt.