Should You Remodel Your Home To Get It Sold?
If you have wondered whether or not to remodel your home to get it sold, you are not alone.
One of the top questions that we get from home sellers at our office is what they should do to get a home prepared for the market.
Some of the stories they share about the advice they have received thus far are downright scary, so I thought I would not only provide a simplified answer to the age-old home sale preparation question, but also provide some actual metrics to back up the answer.
A Tactical Analysis When Selling A Home
Before I push much further, I would like to credit Eric Hempler for giving me the inspiration to write this post. Eric provided great information about cost recapture for various remodeling projects, but I want to take it a step further and make this a tactical analysis for home sellers.
The one thing that you will notice when looking at the anticipated values added is that the costs exceed value gained. If you want to see additional information that compares cost to value for remodeling in the South Atlantic region of the United States, I have included a link from a recent article on remodeling.hw.net.
So if both of these sources confirms that you'll spend more money on remodeling/renovations than you will recapture at closing, why on earth would you remodel in order to sell your home?
And if for some reason somebody has you convinced you will gain value, you have to ask yourself if the reward justifies the risk (as in the risk that the advice you are getting is wrong).
The Real Benefit When You Remodel Your Home
If you knew you could put in a new $20K kitchen and it would help you net $15K more when selling, would you put in the new kitchen?
The answer is ... "do I want a new kitchen?"
That's right, do not do it solely for the purpose of selling a home, remodel your home because you plan on living there long enough to enjoy the new kitchen. But if you are planning on moving as soon as you can sell the home, don't fall for the bad advice being given by poorly trained real estate agents. They are out there in force!
We had a home seller in our office the other day who told us that she had spoken with two separate agents who each advised that she update the entire home in order to sell it. At face value, this sounds like good advice, right? Updating (remodeling) a home will certainly add to its market value and make it easier to sell.
But so too will a price reduction. And the price reduction will net the home seller more money than would a costly remodeling job.
Home Sellers Should Focus On The Bottom Line
Too often, the advice real estate listing agents provide to home sellers focuses on the "top line," but home sellers who want the best results should focus on the "bottom line." The sales price matters far less to a home seller than does the amount of money they get to keep after the sale.
If you are thinking about whether or not to remodel your home for a sale, just drop me a note and we will help you evaluate cost, value, risk and reward in the event you sell your home.
Discussion
Great advice Joe. I did a blog post about this a while back and suggested on the larger improvements like kitchen or room additions that an appraisal can be a helpful tool in this decision making process. You always provide good relevant information to buyers and sellers, thanks.
Thanks Tom, I appreciate the feedback.
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