In this hot seller’s market, you may be wondering if it’s even worthwhile to renovate before you sell. While certain renovations won’t garner a higher asking price there are projects that could make renovating worthwhile. Here are some questions to consider before you decide to renovate your home before selling:
What is the Condition of your Home?
The condition of your home should be your first consideration. If you have visible problems or cosmetic concerns — water stains on the ceiling, stained carpeting or tan painted walls from 20 years ago — then yes, taking the time to do renovations is a good idea.
Many buyers will immediately be turned off by major home problems in need of renovations, so it’s in your best interest to do the renovations yourself before listing. A roof in disrepair or a broken central air or furnace isn’t a cheap repair and house hunters often want a move-in ready home.
If your home is in generally good condition then considering renovations just to keep up with the latest trends isn’t going to guarantee a good return on investment.
What is the Return on Investment for Home Renovations?
There are certain home improvements that will garner a better sale price but not before you pay the price of having the renovations done. A roof in poor condition is worthwhile to repair before selling, according to the National Association of Realtors, a new roof promises an average ROI of 107% of your cost as the homeowner. A brand new roof means the new owners won’t have to worry about the expense and headache for 25-30 years and people are willing to pay more for that kind of peace of mind.
Brand new flooring, whether it is updating old carpet, refinishing the hardwood floors or putting down new floors shows a good return of investment. According to the same report from the National Association of Realtors, new flooring returns 106% of the investment.
Finally, the only other repair that shows an extremely high ROI is your HVAC system. If the system is old or needs repair or replacing then 85% of that cost is shown to be recouped in the sale of your home.
Surprisingly having a new and trendy kitchen doesn’t promise nearly as high of an ROI, especially since you can’t plan for the tastes of the potential buyer. While having a nice and new looking bathroom is important to new buyers, paying big money to update the bathroom doesn’t give an ROI of 100% so you will be out some of that money from the renovation.
What is the Market Like?
Should you renovate before you sell if you’re in a sellers market? We are still firmly in a sellers market, especially in the state of Utah, where home demand is high and homes are selling for all-time highs. If you’re looking for a significant return on your investment when making renovations then a sellers market isn’t the ideal time. In a slower market, or an area where you are competing with a lot of new construction, then renovations can make you stand out from the crowd and give some much needed return on investment.
Do you Have the Time and Money?
Renovations are both expensive and time consuming. Ask yourself realistically if you have both the time and the money to undertake major renovations before selling your home. Time could be of the essence if you need to move to pay off debts or take on a new job. Money could be the deal breaker if the renovations won’t provide the needed ROI and you just can’t afford them right now.
Even if you don’t have the time or money to renovate before selling there are steps you can take to persuade buyers to think seriously about purchasing your home.
What if You Can’t Afford Renovations Before Selling?
Not everyone has $10,000 to spend on a new roof before selling their home. If you find yourself in this situation then it’s important that you take steps to take away the fear of buying a house with cosmetic or major repair problems. One thing you can do is get some price estimates for the repair. Give the potential buyers information about what they will need to spend to fix the roof or HVAC — you would think that the cost of repair would scare them off but it’s often the fear of the unknown that sends potential buyers packing.
Take the fear out of buying a home with repairs by giving the sellers everything they need to know to purchase confidently. With that said if you can afford even small repairs such as paint, patching the wall or re-plastering the ceiling from an old water stain then these small affordable repairs will go a long way in building confidence in home buyers.
Consider a Non-Traditional Buyer Over Costly Renovations
If the repairs to your home are just too extensive then even doing your due diligence and providing price estimates may not be enough to sway some buyers. If you find yourself stuck and unable to pay for expensive renovation but also unable to stay in your home then you should consider working with a non-traditional home buyer. Gary with Gary Buys Houses is one such buyer, he is a trusted real estate investor in Utah and is willing to buy homes as-is and in any condition.
Gary will give you a custom cash offer that will allow you to close on the property in as little as a week. No more waiting, renovating and hoping for a good ROI, contact Gary to see how he can help you today.