Special offer

When Selling Your Home Does it Pay to Remodel?

By
Real Estate Agent with Broker 0576813

 

Selling a home is a big deal. You naturally want to get the most money you can considering that it's one of the biggest investments you'll ever make. You also want it to sell quickly. Quick sales and high asking prices often do not go hand in hand, which leaves sellers with a few questions. If you remodel and turn your home into the absolute perfect house, can you get more for it while helping the house sell faster?

 

While it's a nice thought and it would seem to be a logical one, it actually doesn't work that way. You will never recoup the funds that it takes to remodel. A complete remodeling job on a three bedroom home can be as much as $40,000 for average remodeling work. You will not be able to add on that much to the asking price and expect to see any offers.

 

Of course, there are also other factors to consider. Not everyone has the same tastes. If you spend a great deal of money and time on a remodeling job and a prospective buyer comes in talking about how they're going to remodel your remodeling, how are you going to feel? A lot of money just went into trying to create the perfect home and it just isn't possible.

 

You can't please the whole marketplace with your tastes. What looks heavenly to one person can look atrocious to another. No matter what you do with your remodeling job there will always be some changes that the new owners will want to make. Since you're not going to get back your investment it's really not worth it.

 

The only exception to this is when you completely remodel the house only to find that it's actually perfect for you. There have been numerous incidents of such tales. When owners put the time and energy into remodeling their home based on the belief that the makeover will increase the asking price and decrease the time on the market sometimes they realize that they are the ones who have fallen in love with their home.

 

Staging a home is much more cost effective when you're trying to sell a home. Remodeling is simply too expensive. Home staging will give you the ability to get the best possible asking price in the shortest amount of time. Staging is designed to appeal to everyone and it can be done on a tight budget. 

 

 

Wale Adewoyin
1st Crown Realty Corporation 503-512-6200 - Saint Helens, OR

You remodel for two reasons, if functional obsolescence requires you do, and if it will improve the marketability of the subject property. You may not get 100% return in sold price, but it can make a difference in getting an offer.

May 12, 2011 02:24 AM
Jeanne M. Gavish
Jeanne Gavish, Keller Williams Realty Elite Partners - Spring Hill, FL
Keller Williams Realty Elite Partners - CIPS,GRI,S

It would not pay to remodel in my market.  Prices are still falling.  I have seen where updating an older home pays off though.

May 12, 2011 02:24 AM
Peg Barcelo
Fluff My House! Home Staging Inc. 250.486.6369 - Summerland, BC
The FlufftasticStager from Summerland, BC

James, Thanx for helping educate people on the value of staging! The whole time I was reading your post, I was thinking staging would be a better value for a seller, and then you said it! :D

May 12, 2011 02:26 AM
Jon Solomon
Owners' Ace - Tampa, FL
Owners' Ace | The Homebuilder Guru

Great points on your post.  The link below is to an annual survey of the more common remodel and addition projects.  It provides the cost and value for those specific projects for specific geographies.  Thanks.

http://www.remodeling.hw.net/2010/costvsvalue/national.aspx

 

May 12, 2011 02:41 AM
Drick Ward Property Management / Broker Assoc
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

James, good post, thanks for sharing.  I think the best time to remodel is while you still have some time in the house to enjoy the changes - then you don't feel obligated to "get your money back" on the entire cost of improvements.  I also feel that sometimes outdated floorplan or features NEED a remodel in order to be competitive in the market and attract an offer.  In that instance, a remodel is worth every penny.

May 12, 2011 02:42 AM