Is it a good idea to remodel before selling?
Is it a good idea to remodel before selling your home? The answer …. “It depends.”
The goals with remodeling before selling your home are to increase the value of your home and to attract more buyers. Generally, upgrades to your home should achieve both goals. However, before starting a major remodeling project, start with a walk through of your home. Are there repair projects or other deferred maintenance that need to be addressed? Are there cheaper updates that can increase value without a major outlay of cash. You may want to start with the lower cost projects rather than an extensive kitchen or basement remodel.
Deferred Maintenance / Repair Projects:
There are three primary issues created from deferred maintenance or repair issues in the sale of your home. First, deferred maintenance and needed repairs can reduce the value of your home. Secondly, buyers may either pass over your home or discount their offer price based on condition. Finally, these property condition issues might present a flag for the buyer’s appraisal or home inspection. For an FHA appraisal, property conditions can prevent the sale if they fail FHA property standards. In addition, in many suburban Chicago areas, villages perform an inspection prior to sale. A poor village inspection can also block the sale.
Some deferred maintenance/repair projects to consider include:
- Check the roof, gutter and downspouts (for both the house and garage)
- Service the furnace
- Fix any plumbing issues
- Removal of mold or mildew
- Repair any holes in the walls, windows or screens
- Peeling paint around exterior windows or doors (FHA flag)
- Check the deck and porch
- Unfinished projects
There are also some cheaper “updates” or projects that can result in a higher value for your home or at least increase the pool of buyers. These projects can include:
- DEEP CLEAN if needed
- PURGE the excess and clutter to create the feeling of more space
- Paint – fresh paint can go a long way to make your home feel less dated. This includes painting over that old wood paneling in the basement.
- Remove old wallpaper and wallpaper borders
- Replace the carpeting or get a good commercial cleaning (if there are hardwood floors under the carpeting, consider pulling it up)
- New kitchen appliances
- Sand and refinish the hardwood floors if stained or damaged
- Change or add kitchen backsplash
- Replace old vinyl tile flooring in kitchen or bath
- Replace older faucets in the kitchen and bath
- Replace kitchen cabinet door handles or pulls
There is no question that a quality remodel will generally increase the value of your home and attractiveness to buyers. However, before embarking, check out other homes in your area to see how much updating is expected in your neighborhood. If granite is not the norm or expected, then save your money and go with laminate counters. This is a guard against “over-improvement”.
You also want to know upfront how much of an increase in value can be expected from your remodel. Consult with a real estate agent to pull comps of improved homes. You don’t want to spend too much on improvements that are not justified by an increase in market value. Again, guard against “over-improvement.
One last word on the decision about remodeling. There are many investors with the resources to do a complete “gut rehab” for the homes they “fix and flip”. When you are comparing to sold properties in your neighborhood, choose those with similar condition and quality of remodeling. Don’t expect a “high end” price unless your improvements merit the comparison. This frontend market research can aid you in directing your sweat and funds to projects that make the most sense.