To Renovate or Not to Renovate, That is the Question

By
Real Estate Broker/Owner with Sandra Nickel REALTORS

If you are preparing to list your house for sale, you may be wondering if the financial reward will be worth the time, effort and money to fix up things that are in disrepair or that are dated.  The answer to that question depends on a myriad of circumstances such as the current real estate market, the condition of competing inventory and whether the renovations that need to be made generally provide a return on investment.

Some home buyers are looking to purchase a “fixer upper”. They are looking for properties priced to sell, perhaps because they don’t qualify for more expensive homes or maybe because they want to make a profit by fixing the home up themselves. Most fixer buyers want to do simple repairs such as painting walls, replacing light fixtures and putting in new carpet. Only a few want to take a house down to the studs and completely redo it. These potential buyers will want a price for the home that will allow for all the repairs, the inconvenience of doing the work, and often a bit more. For example, if a home is worth $200,000 fixed up but needs a new roof, and the roof costs approximately $10,000, a buyer most likely will not offer $190,000 for this home. The reason is that they can probably find a similar house that already has a new roof for $200,000 and save themselves the headache of replacing it themselves. A buyer in this situation might offer $175,000 or less, in which case it would make more sense for the seller to replace the roof and sell it for $200,000.

It is important to note that there are also many buyers looking for “turn-key” homes. They fear having to make major repairs because they might be costlier than anticipated or other problems might be revealed. Even if the price is right, homes listed for sale in “as is” condition might not attract as many buyers.

However, before doing major renovations, there are many things to consider. 

Smart sellers will research what their home’s market value will be once improvements are made and compare it to the cost of the renovations. If an upgrade will not provide return on the investment, it probably does not make sense to do it.  Knowing the condition of your competition is helpful. For example, if other homes for sale in your neighborhood all have modern kitchens, it might make sense to update yours. This does not mean you should tear it down and start from scratch. Often a minor kitchen remodel will suffice. Also, keep in mind that kitchen and bathroom remodels are known to bring the best return on investment.

Start by making a list of the things in your home that are dated or in disrepair and then prioritize.


​Here is a list of 10 minimum improvements to make before putting your house on the market:

  • Patch all holes and cracks in walls and ceilings.
  • Fix all appliances and HVAC systems.
  • Repair leaky faucets.
  • Replace worn carpeting.
  • Repaint dark or marred walls in neutral colors (not white).
  • Replace broken windows.
  • Repair the roof.
  • Change dated light fixtures/ceiling fans.
  • Replace old linens/window coverings.
  • Fix any code violations.

If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out https://www.homesforsaleinmontgomeryalabama.com for more information!

Photo credits: youtube.com, hookedonhouses.net, smartasset.com

Comments (9)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

In this market just lipstick on the pig.  Have a productive day, and Merry Christmas. bill 

Dec 22, 2021 06:25 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Sellers need to be cautious as to which repairs, they do and which they pass along.  When a hoe buyer sees something to do, their sense of value becomes distorted.  They will see an item that might cost $200 in reality and for them it's close to $2,000

Dec 22, 2021 08:34 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Great post to remind homeowners, that not all upgrades/repairs will equate on their bottom line.

Dec 22, 2021 02:42 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Good analysis, Sandra. It's not an easy question to answer in this market and there is a lot to consider! Obviously consulting a highly qualified agent such as yourself is important early in the process before making any decisions.

Jeff

Dec 22, 2021 07:36 PM
Paddy Deighan MBA JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

it seems that the time between renovations is shortening al of the time....in the past it seemed to be 25 years...then 10....now every few years!!!!

Dec 23, 2021 12:23 AM
Scott Seaton Jr. Bourbonnais Kankakee IL Home Inspector
SLS Home Inspections-Bradley Bourbonnais Kankakee Manteno - Bourbonnais, IL
The Home Inspector With a Heart!

whatever you decide, make sure the job is 100% done. Not 85% or 92%. Make it 100% and it will add whatever value it will add. Unfinished, it's just not worth anything. And you wasted your time and money.

Dec 23, 2021 04:56 AM
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

Always a tough decision with sellers. Fix & stay or move. 

Dec 23, 2021 11:47 AM
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

Great tips.  Here in Boise, Idaho; I have my handymen do many of the top 10 minor things you mentioned before listing a home to help my sellers get the best price in the least amount of time with the minimum number of issues along the way.

Dec 23, 2021 01:30 PM
M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Recently, sellers of a 4 bedroom home had a functional but dated kitchen, and one of two bathrooms that didn't function.   In addition to a lot of small repairs inside and out, plus interior painting, I advised them to fix the bathroom and at least paint the kitchen cabinets white.   They ran out of time and didn't paint the kitchen.     We had it scrubbed and staged.   The Santa Cruz mountains market had such low inventory at the time, 3 buyers weren't very concerned about the kitchen so my sellers made great money anyway.    If there just aren't enough homes for buyers, updates might not matter as much as if there are plenty of homes to choose from.    Timing is key also!

Dec 28, 2021 08:49 AM