It’s here again. Remodeling Magazine has issued its 23rd Annual Remodeling 2010-2011 Cost vs Value Report of the cost of home improvement projects and the return on investment at resale. The costs below are for the Middle Atlantic states (NY, NJ and PA). Across the board, the ROI’s for this year are down compared to 2009-2010 returns. This table shows the five most common projects in which sellers expect a return on their investment:
*Upscale versions of these same projects consistently resulted in even lower ROI’s. Complete data from the Remodeling 2010-11 Cost vs. Value Report can be downloaded for free at www.costvsvalue.com. Reprinted with permission from Hanley Wood Business Media.
Based on this data and what we see daily in our market, we would never suggest to a seller to remodel their kitchen and bathrooms in order to sell. There are much smaller improvements that can be made to ensure a speedy sale. For example, replacing older Formica countertops with granite or replacing the appliances may be just the touch the kitchen needs to prepare it for sale (and well worth the $3K-5K investment). Try sanding and painting kitchen cabinets before replacing them. Replacing a damaged bathroom sink or simply updating a bathroom with a new medicine chest and faucets could do the trick. Minor remodels and being frugal (not cheap) with home projects is the way to go in the current economy. As evidenced from the table above, remodeling projects typically do not bring a full return on investment.
When selling, we think the best return on your investment will come from:
Decluttering (less is more)
Thorough Cleaning (scrub, scrub, scrub)
Fresh Paint and Carpeting (no wallpaper please)
Smart Staging (let a professional eye make recommendations keeping cost vs value in mind)
Curb Appeal (trim, manicure, plant, mulch, weed, paint, decorate)*
Repairs (if it is broken, fix it)
* A new front door and new garage doors have the highest ROI's nationally at 102.1% and 83.9% and are the least expensive projects cited by the report with both under $1,500. The highest returns this year will be in the improvements that affect the exterior appearance of your home and improvements that will better utilize space and expand the interior and exterior living space.
Bottom Line: It is becoming increasingly difficult to recoup the cost of a home improvement project, especially as project costs climb and home prices are still well off their 2006-2007 peaks. In general, keep improvements simple to maximize value at resale. Replacing fixtures in otherwise good condition will only further lower your ROI. But keep in mind, home improvements are for you and your family’s standard of living now and pride of ownership will always make your home sell faster and at a higher price.
Simply put, you don't need blueprints if you just want to sell.
~Lisa
Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County of Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.
How Much Do I Need To Do To Sell? Remodeling versus Staging - Copyright © 2011, The Scott Loper Team, All rights reserved.
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The Scott Loper Team
Scott Loper - Associate Broker
Lisa Loper - Sales Associate
Gina Wherry - Sales Associate
RE/MAX Realty Group
439 Main Street
Harleysville, PA 19438
Ph: 215-256-1200 x-213
These are good tips...sometimes "simple" just "does it"!
Great info on de-clutter, spruce up and stage over remodel to sell.
I have found most people remodel for themselves and it is a plus when they go to sell, or the home was purchased as a fix up and easily remodeled because of the deeply discounted purchase price.
Best regards,
Most Excellent information! Now, I gotta go find the numbers for my area! BTW...I had a seller recently who remodeled prior to calling me...Wallpaper throughout! Arghhhhh!
Li, I always think of the acronym KISS - Keep it simple stupid. Holds true in real estate too.
Judi, We run into people who think they will get more than their investment on the remodels and those who do think they have to remodel in order to sell.
Amy, Arghhhh is right. FYI - You just have to email Remodeling Magazine for permission to reprint some of their information if you want to get data for the Southeast. They are getting stricter, last year I was able to reprint the whole table with 20+ projects.
Lisa
Updating can make your buyer comfortable. If you do a renovation you should give yourself time to enjoy it as that is part of the ROI. Not all of the return is in cash. The key thing is that the buyer feels the house will suit their lifestyle until they can make the changes they envision.
Suggesting updates is all part of the consult and process. I agree with Janice....remodeling should be enjoyed and the ROI recouped over time!
Lisa - As a home stager I was delighted to read your post today! I firmly believe it doesn't behoove a seller to make major renovations. Most people don't realize the impact of cleaning, decluttering, editing out too much furniture and painting. A seller would see an amazing transformation just by using a little elbow grease! I'm hitting the suggest - this is great information and I live in NJ!
Janice, Sometimes we tell sellers "Just when you get your house to the point where you think, 'this is a beautiful house, I should have done this years ago. Why am I moving?' then you know you have it ready for sale."
Kathy, Some updates may be necessary but I don't think remodeling projects are needed for sale. They are for the current owners' enjoyment.
Kristine, Thanks! You and I are on the same page with remodeling versus staging.
Lisa
That's great information for sellers, Lisa! I'm in agreement with your own best return on the money list. Clean-Clean-Clean and fresh paint get a lot of bang for the buck.
Clean it, fix the broken bits and stage it - that's the way to go!