According to a Zillow consumer survey, 52% of homeowners said making improvements is the most stressful aspect of selling a home.
Whether it’s a minor cosmetic repair or a complete kitchen remodel, undertaking a project can be stressful and overwhelming, especially during the home-selling process.
But many homeowners are under the false impression that they have to fix up their home before they sell. You may be surprised to hear that this is not true. In fact, you may be wasting precious time and money by doing those repairs before you list.
Home Improvement Values Sharply Declined
We often hear homeowners say, “We’re going to list our house in 6 months. We need more time to remodel the bathroom, fix all the windows, and redo the landscaping.”
While it is true that many buyers are looking for the picture-perfect, updated homes, it doesn’t always mean you will see a positive return on your investment.
Zonda Media’s 2023 Cost vs Value (CVV) Report reveals that average project values fell to their lowest levels ever. This means that the average homeowner is spending more money to do those repairs than the value it adds to the sales price.
To put this into perspective, let’s take a look at two most common renovations. Updated bathrooms and kitchens are often regarded as the most worthwhile home improvements, with many sellers believing they will increase their home value significantly. However, the aforementioned CVV Report estimates them to bring in only a 36.7% and 31.7% return on investment, respectively.
Based on the national average, a luxury bathroom renovation costs about $76,827, but only increases your home value by $28,203. Similarly, a major kitchen remodel would be a $154,483 project, but adds only $48,913 in value.
This could be partly due to individual preferences. As Remodeling by JLC explains, “A ‘dream kitchen’ or ‘luxury bath’ conceived by a former owner may not include the finishes and selections that all buyers will value highly. There are vast differences in aesthetic tastes; one person’s elegant new kitchen or bath will not be viewed by all prospective buyers equally.”
Why It’s Important to Time the Market
Another thing to consider is timing the market. While there are pros and cons to each season, during the summer months, the real estate market is typically as hot as the weather. Homebuyers are trying to take advantage of the favorable showing conditions and many families are trying to make the move before their kids go back to school.
When there are more buyers, it creates competition in the market. Historically, we have seen that during the spring/summer season, homes tend to sell faster and at a higher price. This is especially true in today’s market where there is limited inventory (not enough homes to supply the rising buyer demand).
With that being said, home repairs usually take anywhere between a few weeks to a few months. Waiting to finish those projects could mean missing the summer rush. Besides, depending on your local market, your agent should be able to negotiate for the buyers to accept the property in as-is condition - so you wouldn’t even need to worry about repairs!
There may be some minor touch-ups (like a fresh coat of paint, fixing the leaking faucet, cleaning up the front yard, or patching the hole in the wall) that could improve your home’s showability and result in a higher purchase price. However, in most cases, spending an extra few months to make home improvements may end up costing you more in the long run.
Thinking of selling your home?
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