Not all renovations and upgrades are equal, and some might actually cost sellers in the long run. Here’s how to prep smarter, not harder.
SEATTLE, March 26, 2019 /PRNewswire/ — Home shopping season is quickly approaching, which means home sellers are busy cleaning, painting, decluttering, landscaping and deciding which other projects might reap the greatest reward given limited time and money. Their best bet – once the curb appeal projects are done, tackle the bathrooms.
The typical seller has 13 years’ worth of wear and tear on their home, and that can make it tough to know where to start. But we know they do — sellers average 2.2 renovations or improvements to prepare to sell their home, with 79 percent making at least onei. And for good reason — nearly a quarter of sellers who make improvements sell above list price, compared with 16 percent of sellers who don’t.
The key is making smart decisions about what to upgrade, because home-improvement projects don’t necessarily pay for themselves — and some improvements actually cost more than they return in value. To help homeowners who are preparing to/thinking about selling their home, Zillow® has analyzed the return on a variety of projects and put together some tips to maximize return and minimize headaches.
A good rule of thumb: A smaller, inexpensive upgrade typically brings a bigger reward than a more involved and time-consuming one.
Here are a few items on Zillow’s “Do” list for sellers looking to pocket the biggest payoff:
- Dive into the “curb appeal” projects first, and do them smartly — New paint inside and out and basic landscaping and yard care typically runs about $3,000, according to recent research by Zillow and Thumbtack, and are typically the most common and necessary improvements. And choosing the right eye-catching colors can increase a home’s value far beyond just the appeal of new paint. A recent Zillow analysis found that yellow homes sell for nearly $3,500 less than expected, while the right color door can lead to an extra $6,000 in a seller’s pocket.
- Upgrade the bathrooms (but not too much) — A mid-range bathroom remodel — replacing the toilet, tub and light fixtures, adding a double sink, tiling the floor and hanging some wallpaper — typically results in a $1.71 increase in home value for every dollar spent, if the bathroom is at least 25 years old. But an upscale bathroom remodel — top-end features, full-body-wash shower wall, bidet — will actually cost a seller, adding 87 cents of home value for every dollar spentii.
- Install new windows — New mid-range windows can return $1.15 for every dollar, but get too fancy and you’ll end up breaking even.
- Pay attention to current design trends — Warm modernism and organic accents are in, bold colors and an overtly rustic feel are out. The right design can show buyers the potential in your home.
And some important “Don’ts”:
- Focus on the kitchen — Kitchen renovations, at any level, are among the worst return on investment of the home improvements we studied, at about 50 cents on the dollar. Part of the reason is that the kitchen is one of the few rooms in a house where different people want different utility. You could spend $30,000 renovating a kitchen only to turn off some potential buyers who would have done it differently.
- Bother with the basement — The only renovation we studied that paid off worse than a kitchen remodel was finishing a basement, at a bit less than 50 cents on the dollar, even if you add a bathroom.
“If you’re fixing up your home to appeal to a variety of potential buyers, go for changes that have a broad appeal,” said Skylar Olsen, Zillow’s director of economic research. “Fresh paint in the new ‘it’ neutral signals a well-maintained home, and most people can imagine their own furniture matching the walls. A luxury chef’s kitchen won’t matter to the majority of folks who can’t call themselves a good cook and just eat out often anyway. Sometimes the basement is best for storage. Start small and seek expert advice.”
An important thing to consider is that these figures reflect national averages, not local real estate markets. The definitions of “mid-range” and “upscale” can vary widely from Manhattan, New York, to Manhattan, Kansas, so consult with your agent to decide how to best position your home to sell quickly and at a premium. And to avoid prepping your home altogether, consider turning to Zillow for a no-hassle cash offer and a closing date you can select.
Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.
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i Data from the 2018 Zillow Consumer Housing Trends Report.
ii Data from Zillow Talk: Rewriting the Rules of Real Estate.SOURCE Zillow