How to Increase the Resale Value of Your Home
Whether you're putting your home on the market this year or in the next five years, it is a smart decision to start building your home's resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.
Small Maintenance and Repairs
We show so many homes that lack basic maintenance. The house might look fine and we usually don't find out how normal maintenance has been deferred until the home inspection. Don't think of maintenance as something you don't need to keep up with, or that it's a waste of time.
Neglecting small maintenance and repairs can cost you around 10% of your home's value. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000. Also, if these items are hidden from a normal walk-through and a buyer makes an offer that you accept, you might be expected to fix things or give a monetary concession. After the inspection happens, you are expected to hire licensed contractors to make agreed-upon repairs. No matter how handy you might be, you should have used your talents prior to putting your home on the market.
A study conducted by researchers at the University of Connecticut and Syracuse University shows that regular maintenance boosts your home value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance actually slows down your rate of depreciation. But you're not renting from a landlord, you need to keep your home's mechanicals running correctly.
I've shown homes where we can see ignored maintenance. Buyers think, "if we can see this, what are we not seeing?" If it shows that you've lovingly kept your home up, buyers will also see and appreciate it. This makes your home more attractive, and thus more likely to get higher priced offers.
Home maintenance definitely costs time and money. But your home is a very expensive asset and needs to be taken care of, even if you don't plan on selling. This article by HouseLogic, for example, shows you how to keep home maintenance below $300 a year. Planning ahead will also help make maintaining your home easier. Most professional appraisers and real estate agents recommend a proactive maintenance schedule that includes:
- Keeping enough cash on hand to make necessary repairs
- Creating and following a maintenance schedule
- Planning a room redo every year - it doesn't have to be expensive
- Keeping a notebook of all your maintenance and repairs with dates and receipts
The Virginia Cooperative Extension at Virginia Tech published a study that shows landscaping can increase a home's value by 15%. The study claims that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. Particular landscape elements add different values.
An idea is to spend on your front exterior and just try to keep the backyard clean, the grass cut, and existing foliage trimmed. Having the front exterior look welcoming is what we call curb appeal, and it's the first thing buyers will see when viewing your home.
Replace Entrance Doors
I recently sold a home that was a luxury home and people kept complaining about the front door. It was a wood door that needed staining - bad! I asked the sellers to do it but they were moving out of state, the husband was traveling for work a lot and the wife was ill with children. They simply couldn't do any work. It cost them in their sales price that was lower than it should have been - if normal maintenance was done throughout the house.
If your entry doors are wood, consider switching them out for either fiberglass or steel doors. Steel doors add style and architectural interest to your home while improving security; you can add a deadbolt and electronic keypads to keep out intruders. Unlike wood doors, steel doors do not rot or splinter.
Fiberglass doors can be designed to look like wood doors and give your home a modern look. Fiberglass doors conserve more energy than steel doors.
Garage Door Replacement
At first, you might not think that your garage door increases the value of your home. Once again, this is part of your home's curb appeal. Seeing an otherwise nice house with an old, damaged garage door makes the entire house look neglected.
Some interesting things being done with garage doors include:
Increased Size: Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
Faux Wood: You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
Windows: Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it's no longer a dark space. Garage windows can be one of the most neglected parts of a property. Make sure they're clean, free of cobwebs and if necessary, hang some nice looking but inexpensive blinds.
More importantly, a garage door replacement will cost you about $1,652 and add $1,512 to the value of your home; that's a return on your investment of 91.5%.
Fiberglass Attic Insulation
While energy efficiency isn't something many homeowners think about, installing fiberglass attic insulation saves energy and garners a big payback on your investment. I have recently had 2 home inspections (where I was representing the buyers), and the inspector suggested adding more insulation because neither home had the minimum recommended amount of insulation.
If you're not thinking of moving for a while, you should make sure your house has the recommended amount of insulation to save yourself money on gas and electric, and to keep your home comfortable year-round. This will show potential buyers that you're up on your home's maintenance and they'll feel good about having lower utility bills.
Replacing your windows is another way to save energy and increase your home's resale value. Replacing your old windows with energy-saving models will beautify your home, keep it comfortable, and ease the workload of your HVAC system. According to HGTV, you'll see a reduction in your utility bill by 7% to 15%. However, if you're selling your home, you could expect a 60% to 70% recoupment of your investment. The two types of replacement windows are vinyl and wood.
Replacing windows can be very expensive, and in one of our prior homes, we did a room at a time. I loved the old windows in our kitchen but they didn't all open and were original to the house. The storm windows with heavy wood were installed from the inside (I've never seen windows like them). I loved them because they looked like windows that would have been in a cabin. They were the last windows we replaced and although I loved the old ones, I knew a new buyer wouldn't.
Remodeling Your Kitchen
Kitchen remodeling can get expensive, but small renovations can make your home more buyer-friendly. Changing your kitchen's texture and color using a matte finish and neutral colors such as putty or grey enhances your home's resale value.
We're seeing more and more homes with original wood cabinets that have been painted (usually white). If done correctly, it can be an inexpensive way to brighten and modernize the kitchen. Updated cabinet pulls can also make a big difference. We also see painted cabinets with new countertops, making the "remodel" look even more extensive. Add a new backsplash and you've remodeled your kitchen without having to purchase new cabinets.
Floors are also a make-or-break item in a kitchen. Old vinyl floors or old-fashioned and/or cracked tiles can ruin the entire feel of the room. It can be an expense to change out your flooring, but it could be well worth it.
Bathroom Addition or Remodel
Likewise, there are less expensive ways to update your bathrooms if you're not planning on doing an entire remodel. If you have an old wood vanity (that possibly matches your kitchen cabinets), you can paint them to freshen them up and add new hardware. If you have a standard size vanity bottom, you can purchase a new top/sink without having to replace the entire thing.
Consider purchasing and installing clear glass shower doors vs. old-fashioned frosted glass. If you have neutral tile that's in good shape, make sure it is clean and the grout is also clean. Replace tub caulking if necessary.
Most people don't have the room to add a bathroom, and there's not always a guarantee you'll get your money back with such a big investment. You might have an unfinished basement with a roughed-in bathroom, so my suggestion is to just leave it and let buyers know the rough-in exists.
If your basement is finished and you have the ability to add a bathroom, it might be worth it. But be careful with such a large expense. Make sure you'll be able to get your money back.
Your Needs and Buyers' Wants
We know what today's buyers want and expect. If your home lacks maintenance and updates, you'll have to ask less for your home than a similar home that is maintained and modern and shows better. That home will probably sell quicker unless you price your home according to the work needed.
You could be up against a nicely done "flip house" in the same price range. If your home doesn't compare, it will help the like-new flip to sell. Buyers are seeing more and more flips and this has changed their expectations.
Please call us at 480-877-1549 before taking on any remodeling. We don't want you to spend money on something that won't get you a good return. We'll give you our suggestions as to what today's buyers expect.