What do you do with a stack of money when it comes to your house? We get this question all the time, especially from buyers who are looking for a new home. But it is just as an important question for sellers (maybe even more so).
When it comes to a home, most people have very similar desires (beyond the basic need for shelter). Real estate, like fashion, changes over time. Unlike fashion, it rarely cycles back though. We’ve all experienced it whether we are looking for a new home, selling one or visiting a friend’s house: The kitchen is brand new, but you go to the bathroom and it’s like stepping into the 1950s.
That’s what we see, so it’s natural for people to focus on kitchens, bathrooms, flooring and paint. There are entire TV Networks whose programs focus on renovating homes. Of course, during the remodel, problems always pop up that increase the budget, but everyone looks for the sexy results at the end of the program.
So if you’re selling your home, which is more important remodeling or repairing? Most of us don’t have TV show budgets, so we need to make a decision.
We have written extensively about curb appeal and making your house desirable. It takes a unique buyer to walk into a house that hasn’t been updated since the 70’s and see what it could be. But that comes with a problem: older homes that haven’t been updated are not going to be worth as much as homes of the same age that have.
The reason is simple: buyers will walk into the home and automatically start calculating the amount of money it will take to remodel. Then they subtract that amount from the market value of the house.
That’s bad for you.
Of all of the things to remodel, the most important is paint (believe it or not). It’s not sexy, but it’s a subconscious indicator of what shape the rest of the house is in. Scuffed walls and uneven paint lines indicate a house that has been beat up a little. No one wants that. A fresh coat of paint is often the cheapest of the renovations you can do and has a serious impact. If the paint looks good (don’t forget the exterior of the house as well), focus on the kitchen and then the bathrooms. Leave the flooring for last, or offer to give a credit to a buyer if it’s really bad.
And don’t forget, if you’re going to remodel, don’t go super crazy with the style. Pick designs and features that will appeal to the highest number of people.
Minor Home Repairs
We cannot tell you how many times we have had buyers walk away from houses because the inspections reveal minor to major problems.
Most homeowners don’t spend the day staring at their air conditioners and most never even see the top of their roofs. How many times have you told yourself you’ll repair the grout in a shower, only to leave it for years never noticing the moisture (and often mold) that is building up behind the tiles?
These are all the things that we don’t see, but that can actually cost the most amount of heartache for buyers. There long term costs of ignoring even the most minor of repairs can be catastrophic.
For us, one of the most significant selling points for a house that our buyers are looking at seriously is the age and condition of the roof, AC units and water boilers. If those are recently repaired or new, the value of the home shoots up.
To a buyer, it means that the $10,000-$20,000 they may have for the house after they purchase it can be spent on making remodels that they will really love without having to worry about what disaster lurks in the shadows.
In our experience, there isn’t much that beats a house that is in great repair. Roofs that don’t leak, ACs that cool in the summer and water heaters that let you take hot showers are more valuable than a subway tile backsplash any day of the week. These are the things that savvy buyers look for and if you have $20,000 to spend on your home to get it ready for sale and want the most value, repair first. If all of that is ok, then have fun remodeling some old aspects of the house (but again, don’t go too nuts because buyers may not like what you do).