Before putting our house on the market, we are considering home improvements like new wainscoting, fireplace mantels, and fixing cracks in our flagstone pathways. But this is all adding up! Is it really worth it to make structural improvements?
We’re asked this question about home improvements quite a bit. Let’s put it in context and start with defects. In a hot market with multiple offers, questions about defects are generally met with blank stares and the seller’s agent asking: “Do you want the house or not? I have 4 other offers…”
On the other hand, when the market is dead, dead, dead, the slightest little thing (“Oh, you didn’t get a permit for moving the laundry?”) can result in disappointing counter-offers… and you’ll probably give it to them because what else are you going to do?
Your selling agent will know best where you stand at any given time for your neighborhood.
Now on to home improvements and how they can affect resale value. Small ones like you mentioned before are more about curb appeal than ROI(return on investment). Again, your agent knows best what will make it sell fast, and you must weigh improvement costs against your monthly costs for DOM(active Days On Market).
Larger home improvements (basement development, new kitchen, new deck, etc.) are another matter. Again, depending on what kind of market you’re in, the general rule is: The sale value is equal to or less than the cost as-is plus the retail cost to remodel. If that weren’t the case, remodelers would be a lot busier preparing homes for the market. There are too many qualifiers and exceptions to this rule to discuss here, and once more, your agent should advise you based on realistic quotes (read: not-ones-you-get-for-free) for projects contemplated.
One more thing. There is a general market expectation that the home will be in good working order. If your kitchen is 80 years old, chances are the cost to replace it will be easily returned on resale because of the discount for bad condition. This makes the improvement, in some cases, almost obligatory if you are to get a decent price for the home. In that case, you may want to do it sooner than later so that you can enjoy it for a bit…
Got a question about your home? Here’s your chance to ask the “Design-Build Advisor!” Give us a call at 415-459-3349 or send your question to john@theperfectbuilder and we’ll answer either in this blog or by e-mail.