What Remodels Offer the Biggest Payback at Resale

As a Realtor, I am always asked about what things can be done to a property that will have the highest payback or return on investment. This can be a loaded question if someone is planning to sell their home immediately after completing the work or if they are planning down the road to sell in a few years after enjoying their investment.

The most immediate answer is “you can’t go wrong with painting and cleaning”. People will pay a lot more for a clean property and they will also pay a lot more for a property freshly painted (providing the paint colors are neutral and not wild colors). After cleaning and painting a homeowner should consider what the property needs to make it more appealing and more functional. Investing money in hopes of selling a property for more money can be a trap where the investment may be into something the seller does not like and post closing they tear out or replace what the sellers had done.  That is why “neutral” should be a key term applied to any home improvement project where the sale of the property is the goal versus enjoying the property for a few years prior to the sale.

Here is a list of time proven remodel projects that have the most appeal to buyers along with what a seller can expect to receive back at the home’s sale. (This list comes from www.FloridaRealtors.org website October 2017)

  1.  Complete kitchen renovation
    • Cost estimate: $65,000
    • Realtors estimated cost recovered: $40,000
    • Percent of value recovered from project: 62%
  2. Kitchen upgrade
    • Cost estimate: $35,000
    • Realtors estimated cost recovered: $20,000
    • Percent of value recovered from the project: 57%
  3. Bathroom renovation
    • Cost estimate: $30,000
    • Realtors estimated cost recovered: $15,000
    • Percent of value recovered from the project: 91%
  4. New wood flooring
    • Estimated cost; $5,500
    • Realtors estimated cost recovered: $5,000
    • Percent of value recovered from the project: 91%
  5. Add new bathroom
    • Cost estimate of project: $59,000
    • Realtors estimated cost recovered: $29,750
    • Percent of value recovered from the project: 50%
  6. Hardwood flooring refinish
    • Estimated cost” $3,000
    • Realtors estimated cost recovered: $3,000
    • Percent of value recovered from project: 100%
  7. New master suite/owner’s suite
    • Cost estimate: $125,000
    • Realtors estimated cost recovered: $65,000
    • Percent of value recovered from the project: 52%
  8. HVAC replacement
    • Estimated cost: $7,475
    • Realtors estimated cost recovered; $5,000
    • Percent value recovered from the project: 67%
  9. Basement conversion to living area
    • Estimated cost: $40,000
    • Realtors estimate cost recovered: $25,000
    • Percent of value recovered from project: 63%
  10. Closet renovation
    • Estimated cost” $3,750
    • Realtors estimated cost recovered: $2,000
    • Percent of value recovered from project: 53%
  11. Insulation upgrade
    • Estimated cost: $2,100
    • Realtors estimated cost recovered: $1,600
    • Percent of value recovered from the project: 76%
  12. Attic conversion to living area
    • Estimated cost: $75,000
    • Realtors estimated cost recovered: $40,000
    • Percent of value recovered from the project: 53%

In summary, if the home remodel project is something you really want to do also include in your plan time to enjoy it for a while before selling. Don’t wait until you are ready to move unless you fully understand how your investment will improve your property’s sale and what the estimated return on investment will be when the sale closes.

Sell a Home

SELLER TIPS

  1)  Identify a Professional Realtor

  2)  Decide when you want to sell your home

  3)  Sign Listing Agreement

    • Determine Selling Price

  4)   Show Your home

    • This will be done through the Realtor’s listing office
    • By appointment only
    • You do not have to be home

  5)  Prepare your home

    • Remove or store all “unnecessary items such as pictures & “knic-knacs”
    • Remove clutter from rooms
    • Keep kitchen & bathrooms neat at all times
    • Make beds
    • Keep yard neat and uncluttered
    • Garage can be used to store items to be moved

  6)  Review offers

    • Accept
    • Reject
    • Counteroffer

  7)  Home Inspections when Offer Accepted from a Buyer

    • Home Inspected
    • Termite Inspection
    • Roof Inspection
    • Agree to replace, fix or repair items found during inspections

  8)  Closing Preparation

    • Date set in the Buyer offer
    • Title company prepares deed and title papers
    • Repair, replace or fix open items from inspection
    • Buyer Appraisal (for financing)
    • Buyer Survey (if required by bank)

  9)  Buyer Final Walk Through

  10)  Closing