Your home has served you well over the years. It might be where you raised your family or the first significant purchase you and your spouse made together. But the time has come to move on, either to a bigger home to accommodate a growing family or a smaller place now that your children have grown up. You’re ready to sell your house, but before you do so, you want to make sure it’s in the best condition so it will appeal to as many potential buyers as possible and help you get the highest price. While you want to dress up your house and make it attractive to buyers, you also want to keep an eye on your bottom line and not invest more in the property that you stand to recoup. If you’re wondering what to fix up before selling your house or if it’s worth renovating a home before selling, the answer is yes, in some cases. Before you jump into any major renovation projects, it helps to know what improvements will end up delivering the best return on investment (ROI). Understanding what selling options are available to you can also help you decide whether or not to make repairs.
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Cost vs. Value: Which Home Improvements Offer the Highest ROI?When deciding what features of your home to upgrade, your mind might first go to the most eye-catching and attention-grabbing renovations possible. While updating the areas of your home that are the most visible and the most in-demand, such as the kitchen and bathroom, can have a considerable return on investment, you might be surprised to find out that less high-profile upgrades tend to produce the biggest ROI. Take a look at what you can expect to recoup from the following improvements in the Greater Kansas City area and across the U.S.
1. Siding ReplacementWhen’s the last time you thought about the siding on your house? If it’s been a while, you might be surprised to learn that upgrading and replacing your home’s siding can lead deliver a considerable ROI. In the Greater Kansas City metro area, the average cost to replace 1,250 square feet of siding is $17,120. The resale value is $15,651, meaning the typical homeowner can recoup around 91 percent of their initial investment. The ROI of siding replacement in Kansas City and the surrounding area is slightly higher than the national average, which is 75 percent. Another siding-related upgrade that has a considerable ROI is replacing vinyl siding with manufactured stone veneer. Replacing 300 square feet of vinyl siding with stone veneer on the front of the house has an average cost of $9,312 in the greater Kansas City area and an ROI of around 85 percent. Adding stone veneer in Kansas City produces a smaller ROI compared to the national average, which is closer to 95 percent.
2. Garage UpgradesIn some cases, what seem like small improvements to a house can have a considerable impact on its resale value. Replacing a garage door has one of the highest ROIs nationally. The average cost of the replacement across the U.S. is $3,611 and translates to a resale value of $3,520, or an ROI of around 97 percent. In the Kansas City metro area, the ROI on replacing a garage door is lower, at 78 percent.
3. Roof ReplacementThe roof of a house might not be the feature people think about the most when they’re looking at properties. But it is a feature that plays an essential role in keeping residents dry and comfortable. A leaking roof or a roof that has other issues can be a deal-breaker in many home sales. Although replacing an older roof doesn’t have the ROI of replacing siding or a garage door, it does make a home more attractive to many buyers and does have a relatively high resale value. In the Kansas City area, it costs an average of $24,409 to replace an asphalt roof. The average ROI is 65 percent. Metal roofs tend to have a higher price, around $41,000 in Kansas City and the surrounding area, but don’t produce the same ROI as an asphalt roof replacement. The typical resale value of a metal roof is about $24,000 or less than 60 percent of the cost of the replacement.
4. Kitchen RemodelsFor many buyers, the kitchen is the most essential room in a house. People look for kitchens that are functional as well as attractive. Before you decide to upgrade your Formica countertops and to swap out your ivory or avocado-green appliances for shiny stainless upgrades, it’s important to understand just how much a kitchen remodeling project can deliver when it comes to ROI. It might surprise you to learn that smaller projects often provide a higher ROI compared to major overhauls. A minor kitchen remodel in the “mid-range” has an average ROI of 82 percent. Meanwhile, an “upscale” major kitchen remodel has an ROI of around 59 percent in the Kansas City metro area. Nationwide, the numbers are similar. A minor remodel has an ROI of about 81 percent, while an upscale major remodel has an ROI of about 60 percent. If you are going to remodel or renovate your kitchen, keeping a few things in mind can help you get the best possible return and can help you avoid spending more than the remodel will end up being worth. One thing to do is use the value of your house to figure out how much to spend on a remodel. A standard recommendation is to spend no more than 15 percent of the value of your home on your kitchen project. If your home is worth $200,000, your kitchen renovation budget should be less than $30,000. Setting a cap for your project will help you recoup as much as possible without breaking the bank in the meantime.
5. Bathroom RemodelsAfter the kitchen, the bathrooms in a house are the rooms that can make or break a home sale. If a house doesn’t have enough bathrooms, a buyer is likely to walk away. If the bathrooms in the house are outdated or otherwise unappealing, that can also turn off potential buyers. In some cases, making a few small improvements to an existing bathroom can provide the best ROI. If the bathroom is in good working order, recaulking the tile and replacing fixtures and handles might be all that’s needed to make it a more attractive space. If you decide to do a major renovation or remodel of your bathroom, sticking with the “mid-range” rather than going upscale can help you get a better return on investment. In the Kansas City metro area, mid-range bathroom renovations typically recouped around 67 percent of the cost while upscale renovations often recouped about 63 percent of the price. If the number of bathrooms in your house is limited, it might be a smart choice to add one before you decide to sell. The average mid-range bathroom addition in the Kansas City area costs around $50,000 and recoups about 65 percent of the cost. More importantly, adding a bathroom can be what gets your home to sell. If buyers don’t think a house has enough bathrooms for their needs, they’re going to look elsewhere.
6. Window ReplacementThe windows in your home let light in and provide a view to the surrounding neighborhood, but they also help to keep your home insulated, warm in the winter and cool in the summer. Older windows often don’t have the insulating abilities of newer ones. For that reason, replacing the windows of your home before you sell can be a smart move. Window replacement projects also typically have a good return on investment. Nationwide, homeowners often recoup between 70 and 73 percent of the cost to replace their windows while in the greater Kansas City area, homeowners can expect to recover around 65 to 69 percent of the cost of the replacement, depending on whether they replaced wood or vinyl windows.
How You Sell Your House Can Influence the Repairs You MakeAnother thing to consider when deciding how to renovate a home before selling or what to fix up before selling your house is how you’ll go about selling your property. You have multiple options, including listing your house with a real estate agent, selling it “for-sale-by-owner” or selling it through an auction.
Traditional or For-Sale-by-OwnerWhen you work with a real estate agent or go the “by owner” route, the timeline for selling your home is often longer than the timeline for selling a house at auction. When you decide to auction your property, you choose a date for the auction. Usually, the property sells on the date of the auction. In many cases, there are often multiple interested buyers who are willing to bid on the property. In the case of a traditional listing or for-sale-by-owner listing, there is no set sale date. Your house could sell in under a week if there’s a lot of demand in your area. Alternatively, it could languish on the market for weeks, months, or a year. If you are listing your house the traditionally or selling it by owner, it’s often in your best interest to do what you can to make the property as appealing as possible. That can mean taking on major renovation projects such as upgrading your kitchen and baths. It can also mean replacing the roof or windows to make the house more functional. If you are working with a real estate agent, they are likely to recommend particular renovation projects to you, based on what they think would provide the best ROI.
AuctionIf you decide to sell your house through an auction, you usually don’t have to worry as much about upgrading it or investing in it. While traditional listings and for-sale-by-owner properties are typically sold on a contingency basis, meaning that if the home inspection turns up any issues, a buyer has the option of backing out, houses sold through auction are often sold “as-is.” A buyer who’s purchasing a home at auction recognizes that there might be some issues with it, but is often willing to accept those issues in exchange for getting what seems like a good deal on a home. In some cases, a buyer at auction might be looking for a project, a house they can put their stamp on, and will be happy to purchase something that hasn’t been recently updated and refreshed.
Pros & Cons of Selling Your Home “As-Is” vs. Fixing It UpBefore you decide to list your home “as-is” and skip out on any repair or renovation projects, it’s a good idea to compare the pros and cons of selling a property “as-is” compared to fixing it up in some way. Pros: One of the pros of selling “as-is” is that you don’t have to worry about taking the time to find a contractor, arranging for repairs, and then paying for those repairs. You might end up getting a lower price for your house when you sell it if it needs extensive repairs, but you also save money by not having to make those repairs yourself. Another benefit of selling “as-is” is that you can connect with a pool of buyers who are looking for exactly what you have to offer. Investors and house-flippers are likely to be on the market for a house they can get for a reasonable price, renovate, then sell for a profit. In many cases, these buyers are often savvier than a person who might be looking for their first or second home. They also tend to be cash-buyers, which eliminates the risk that financing will fall through. Cons: It’s also worth looking at the drawbacks of selling your house “as-is.” One of the most significant disadvantages of doing so is that you might get a lower price for your house than if you had spent the time and money to fix it up. Another drawback is that you are limiting your pool of buyers. People looking for a turn-key or move-in-ready property aren’t going to look twice at a listing or auction for an “as-is” house.
Is It a Buyer’s Market or a Seller’s Market?Another thing to consider when deciding what’s worth renovating before you sell your house or whether the best option is to sell it “as-is” is the type of market in your area. If it’s a buyer’s market, there are more houses available for sale than buyers who are looking for a property. People who want to sell their house in a buyer’s market typically need to do whatever they can to make their property stand out in a crowded field and to get buyers to take a look and put in an offer. In a buyer’s market, it can make sense to make as many repairs to your property as possible to give it an extra edge. In contrast, during a seller’s market, inventory is low, and there are often more buyers than houses for sale. The ball is in the court of the seller in this case. You can usually expect bidding wars or multiple offers when you’re trying to sell in a seller’s market. That can mean that you can make fewer upgrades or repairs to the property and still see it move quickly.
What Do Home Inspectors Check?Should you decide to sell your house through a traditional agent or for-sale-by-owner, it’s very likely that the buyer will order a home inspection before the sale goes through. During the inspection, an inspector will evaluate the condition of a variety of structures and systems in the home, including:
- HVAC (heating/cooling) systems
- Electrical systems
- Windows and doors
- Ceilings, walls, and floors