Each year the National Association of Realtors in association with Remodeling Magazine sponsors a cost versus value report showing the average cost for home remodeling projects and the anticipated increase in value for homeowners. The report is available for nine different regions in the US and shows what remodeling projects may give homeowners the most bang for their buck. The report can be viewed at: http://costvalue.remodelingmagazine.com/index.html

I find the information to be very helpful when we are working with sellers when they are considering a remodeling project. Many sellers are under the impression that a major kitchen remodel will help sell their home. While this may be true, it generally won't help them maximize their overall profits. In order for a remodel to pay for itself it needs to return to the seller more money than it cost the seller to purchase. This calculation should also include the increased taxes, commissions, and other variables that increase in respect to the higher selling price of the home.

The cost versus value report helps to highlight the types of remodels that may make sense for your geographic area. Generally, high end major kitchen remodel will recoup only 74.1% of the cost of the remodel. A normal major remodel will recoup 78.1% while a minor kitchen remodel will oftentimes have the best return at 83%. In other words, bigger is not always better.

These numbers reflect some of the issues that sellers have when they over-improve a property for their neighborhood. We have used this report as a mailer to our clients each year. The reprint rights for the report are available for a nominal fee for your geographic area.