Spend More, Make More?


Planning to put your home on the market? Congratulations! It's time to start on a whole bunch of renovations to make it the most modern, desirable place on the street, right? Stop right there.

Before doing any kind of home improvement, consult with your real estate sales representative to get a feel for your local real estate environment and to get advice on which projects are worth your time and money. Is it a hot market or a cold one? What's the condition of similar properties for sale in the area? What's the likelihood of a positive return on your renovation investment? Who's the demographic expected to be attracted to your finished product?

Keep in mind that your property is only worth what neighbourhood homes of the same size and structure are appraised at, and that what you spend on renovations isn't a guarantee of what you'll receive back.

While kitchens and bathrooms typically produce the best return on your renovation dollar, recognize that, according to the 2018 Cost vs. Value Report*, homeowners typically make back about half of what they spend when they add a brand new bathroom to their home, while an owner could typically expect to recoup about 70 percent of what they spend on a minor bathroom remodel. When it comes to kitchens, a minor kitchen remodel is shown to recoup about 81 percent of its cost while midrange major kitchen remodel recouped 59 percent and an upscale major kitchen remodel recouped 53.5 percent of the cost.

That being said, an attractive bathroom and kitchen can tip the scales in your direction should a buyer be comparing two otherwise-similar properties, so at the very least, after thoroughly cleaning and decluttering those rooms, fix any drips in the plumbing, replace faucets and hardware if the existing ones are old/worn, and wash and paint the walls and even have the cabinets professionally painted if necessary before putting your home on the market.

Projects to avoid right before you sell? High-end purchases such as new, state-of-the-art major appliances for your kitchen, luxury upgrades (depending on the price point of the home) such as expensive countertops or imported tiles, and the installation of extreme, built-in "smart home" features that may not appeal to all potential buyers.

Work with what you have if possible. For example, if you have stained wall-to-wall carpeting or scuffed wooden floors, see if you can deep-clean the existing carpeting instead of putting down new carpeting, and sand and re-finish the old floors instead of replacing them.

It's crucial to avoid over-improving — and therefore over-spending — to add home features that are not common in the region, especially if they result in a bump in sales price to well over the average.

Your real estate sales representative has seen enough properties to recognize what you need to improve before putting yours on the market, and what is likely to be a waste of your renovation dollars. You might even ask your salesperson to take you on a tour of other, similar properties for sale in your area — aka "the competition" — so you can compare the condition and amenities in those homes versus your own!

* https://www.remodeling.hw.net/cost-vs-value/2018/key-trends-in-the-2018-cost-vs-value-report