Homeowners are looking for ways to wow potential buyers, as spring and summer real estate sales heat up. How much time and money should they devote to making a good impression? Which renovations and upgrades are worth the investment?
Sellers typically have at least 13 years’ worth of wear-and-tear on their homes, according to research released in March from the real estate website Zillow, and 79 percent of them will undertake at least one improvement project before listing their house for sale.
Projects should be chosen carefully because not all will boost the sale price, and some won’t even pay for themselves, research shows. Smaller, inexpensive upgrades generally make the most sense and bring the highest return.
The average payback nationally on 22 common remodeling projects in 2018 was 69 cents on every dollar spent, according to an annual “Cost vs. Value” report from Remodeling Magazine. In the Middle Atlantic region, which includes Pennsylvania and New Jersey, homeowners recouped 61.6 cents on the dollar.
Replacement jobs such as a new garage door yield higher returns than renovations to kitchens or bathrooms, the study found. Nine out of 10 high-return projects involve exterior fixes that improve “curb appeal.”
“If you’re fixing up your home to appeal to a variety of potential buyers, go for changes that have a broad appeal,” said Skylar Olsen, Zillow’s director of economic research. “Fresh paint in the new ‘it’ neutral signals a well-maintained home, and most people can imagine their own furniture matching the walls. ... Start small and seek expert advice."
Here’s Zillow’s advice on where to spend your time and money:
Eliminate clutter. We’re talking full Marie Kondo here, which may mean throwing away even some things that do bring you joy. Sell, donate, recycle, or discard unused or unwanted items. Remember that there’s no “out of sight,” so resist the temptation to cram and close. Potential buyers will open drawers and closets, and inspect the attic, garage, and shed.
Deep clean. Set aside time (or hire professionals) to do the ultimate spring cleaning. Give special attention to the kitchen and bathrooms. Sparkling windows improve the property’s overall appearance.
Focus on the first impression. Paint inside and out with neutral colors, and decorate with contemporary accents. Trim shrubs and trees. Plant or pot seasonably appropriate flowers. Clean and repair walks and driveways. Repair gutters and downspouts. Put out new welcome mats.
Upgrade bathrooms (a bit). At the least, fix leaky faucets and running toilets. Replace caulking around tubs, showers and sinks. Freshen or repair grout. A mid-range remodel would include replacing the toilet, tub and light fixtures, adding a double sink, and tiling the floor, and painting or hanging wallpaper. Zillow says the mid-range remodel could result in a $1.71 increase in home value for every dollar spent. On the other hand, sellers could actually lose money on a high-end makeover with top-end fixtures and extras like a bidet.
Install new windows. Mid-range windows could return $1.15 for every dollar, Zillow found. Fancier windows, however, could cost money.
Kitchen remodeling. Kitchen renovations, at any level, brought among the lowest returns on investment, Zillow found. They were similarly low in Remodeling Magazine’s Cost Vs. Value report. The explanation? People have very different tastes and needs. “A luxury chef’s kitchen won’t matter to the majority of folks who can’t call themselves a good cook and just eat out often anyway,” Olsen said. Leave the makeover to the new owner.
Finishing a basement. The return is even worse than the kitchen, Zillow found, at less than 50 cents on a dollar. Not everyone wants a man cave. “Sometimes the basement is best for storage,” Olsen said.
Larger, discretionary projects “tend to be too individualized to provide broad, lasting appeal,” Remodeling Magazine’s Clay DeKorne wrote in the 2019 report. “One person’s elegant new kitchen or bath will be viewed by a range of other prospective buyers as tacky and outdated and in desperate need of a reset."
Like the Zillow researchers, DeKorne advised focusing on upgrades that could foster a positive first impression.