Home Improvements May Not Pay Off
It used to be an axiom in real estate that money spent fixing a home up before putting it on the market would always pay off once the sale was made. Money put into remodeling work was seen as an investment that would gain a homeowner value. In today’s sluggish market however, many analysts are questioning these assumptions.
Remodeling Magazine has reported a sharp decline in the percentage of payback obtained from remodeling work. It has declined to 58% according to most recent data. That is down from a 2005 peak of 87%.
A beneficial side of the slump in home values is the lowered costs for remodeling work. With so many home builders idled by the glut of unsold homes and so many contractors and construction workers desperate for new job orders, prices have declined for getting work done.
There is nonetheless no longer a reason to assume that any remodeling project will pay off if the house is expected to be sold soon. There is also the danger that potential buyers will not like the work that has been done. They may have their own ideas about how the kitchen or bathroom should be done. When people have their homes remodeled, they tend to have improvements done to their own tastes which may not be in sync with the general market.
Odd Tales Abound in What not To Do
A home should be put into the best possible shape before selling. Repairs to doors, windows and roof can assist in a sale. Most buyers hope to purchase a house that is free of leaks and where items such as the furnace and air conditioner are working properly.
Many realtors have noted a lot of homeowners have unrealistic ideas of their house’s worth. They have not accepted that market conditions have changed.
Owners of homes with just one bathroom understand that is a drawback when trying to sell a home. While the house would be an easier sale with two bathrooms, adding a bathroom is an expensive proposition. Some people try to do it on the cheap by shoehorning a half bath with just a toilet and sink into a closet space. There is hardly enough room to turn around in such a small space. Bathrooms have also been hastily added to unfinished basements. Such arrangements add nothing to home value.
What makes sense when selling a home is sprucing up the look of the house by refreshing all the surfaces. Rugs and drapes should get a thorough cleaning. Outdated wallpaper should be replaced. Apply a fresh coat of paint to the ceilings and walls. Have the floors refinished.
To take things a step further, driveways can be refinished, and the formica counters in the kitchen can be upgraded with granite. These types of projects are not considered costly and can help a house move on the market. One should be wary though about undertaking costly remodeling jobs. If they are done shortly before a sale, they must be done with an eye to what is current on the market rather than to individual taste.