One of the most common questions homeowners ask themselves is if it’s worth spending money on renovations before selling their home. Nobody likes to spend hours of their time and thousands of dollars on renovating unless they see a return on their investment when the home is sold.
There’s not much point sprucing up your home before selling it if you’re going to be out of pocket. You don’t need to fix things up that the buyer will never notice and when it comes to decorating you need to remember it all comes down to personal taste. For instance, you could spend time and money on painting and/or carpeting that the buyer simply isn’t attracted to.
Know The Current Market
If demand outweighs the supply in your local real estate market it’s definitely easier to sell your home as it is without the need for major renovations. This is simply because buyers don’t have much to choose from and are willing to do their own renovations if they feel it’s necessary. In addition, each potential buyer is unique as some prefer to fix up their new homes themselves while others shy away from houses that need work. Of course, the price is also a factor. If a home is more expensive then most buyers feel it shouldn’t need any additional renovating. On the other hand, if a house seems like a great deal then buyers usually don’t mind spending a little more to renovate it.
There are also those who buy low, do the necessary renovations and repairs, and then sell the home for a profit. But in general, most buyers are willing to spend time and money on minor renovations such as carpeting, painting, and replacing light fixtures etc. The selling and bidding price of a home is often affected by renovations. For example, if your home is worth $500,000 and you spend $50,000 on renovations you may want to list it at $550,000 to recoup your costs. On the other hand, if the buyer realizes the home needs $50,000 worth or renovations or repairs, they may offer just $450,000. In certain situations, it’s better for a seller to do the renovations first to make sure they get what they ask for in the sale since most buyers want homes that are in move-in condition.
If a home needs major home remodeling renovations such as a new roof, you’ll find the number of interested buyers may be limited. It’s recommended that the cost of renovating is weighed against the value of the home in the current real estate market. If the value of the home doesn’t go up after the work, then it’s not a good investment. However, there are some types of renovations which typically work well when it comes to return on investment and these include the bathrooms and kitchen and painting the walls. If possible, it’s a good idea to tour several other homes for sale in your area to compare the condition of their kitchens and bathrooms. For example, if the majority of kitchens and bathrooms have been upgraded then you may want to do the same.
If your home has several visible areas that are in need of obvious repairs or renovations it will be harder to sell as you have only one chance to make a first impression on potential buyers. Some examples of minor renovations that should be taken care of include: leaky faucets, cracked walls/ceilings, broken appliances, stained/worn carpeting or walls, and broken windows/ fans/light fixtures. However, sometimes you might be able to get away with these things in a seller’s market. If you do decide to renovate, it’s often better to refurbish what you already have rather than replace it if possible as it’s more cost-effective. A good real estate agent can help you determine what will give you the most bang for your buck.
In addition, you need to remember you’re renovating a home that you’ll never set foot in again after it’s sold. If you’re going to spend on renovations they don’t have to be to your personal taste. It’s recommended that you speak to a real estate agent to find out what most buyers are looking for. If most buyers prefer hardwood floors and you prefer carpeting, then hardwood floors may be the better option. It’s not easy to decide which areas of a home should be renovated before selling and that’s why it’s a good idea to speak to a realtor and/or general contractor. But perhaps the best way is to put yourself in the shoes of the buyer and make a list of the things you’d be looking for when buying a home.
To Renovate or Not To Renovate?
It really comes down to the condition of your home, what you hope to get for selling it and the current market conditions in your area. Regardless, make sure you work with a quality real estate agent as well as a good contractor to help you make the right choice.