Thinking of selling your home? But not before you add a new “X” (kitchen, bathroom, furnace, heat-pump, windows, floors, driveway, or whichever renovation you were thinking would add more value to the home?). I’m here to help you the home seller make that decision by identifying the renovations that will add the maximum value to your home and avoid those that will only cost you financially, all while saving you some money along the way.
Choosing the wrong renovations when you’re trying to add value to your home can cause you to lose money and time. Find out which renovations will most increase the value to your home.
Not a week goes by when I hear from a client who is thinking of selling their home but has decided (usually because of a television show they watched) that they must absolutely change their entire kitchen before they put the home up for sale, they are convinced that the $40,000 they will invest will make their home worth $40,000+++ more as a result. If only it were as easy as they make it sound on TV! We would all borrow as much as possible, put that money into renovating our home and recoup a huge windfall when its time to sell. Don’t believe everything you watch on TV.
As a real estate broker who has seen clients make these poor financial decisions in the past, I want to help you avoid some of these mistakes and take on the renovations that will actually add the most value to your home when it comes time to sell, while not breaking the bank.
It’s important to distinguish between the renovations you did because you were living in the home and got to enjoy them from the renovations that you are doing because you want to maximize the value of your home now that you’re ready to sell.
The confusion comes when a seller has put in a high-priced feature into their home and figures that this particular upgrade will make the home more valuable than a regular upgrade. Oftentimes the work was done because the homeowner wanted to enjoy it, but justifies that it will also add equal value to the home when it’s time to sell.
“The quality or price of the upgrade has no bearing on the home’s final value.”
The reality is that most renovations done for the owner’s enjoyment do not turn into massive added value for a home. The quality or price of the upgrade has no bearing on the home’s final value. It’s only what a potential buyer values it at, not what it costs. Remember it’s the features and benefits that sell homes, as buyers comparison-shop. For example, an ugly marble floor which costs thousands more than a modern good quality ceramic floor, doesn’t add any more features or benefits to the home and it won’t add to its value.
Of course if in your market homes all have marble floors well then it might be a great way to bring your home up to standard for its neighborhood. It’s important that homeowners have a good understanding of what renovations or upgrades are expected for homes in your market.
One of the very cheapest and most beneficial renovations you can do for your home is freshly painting it. The paint is one of the first things potential buyers see when they enter your home and it’s also one of the things that will turn off a potential buyer faster than anything else.
“Painting a home can cost several thousand dollars but it is perhaps the best renovation you can do to add value to your home.”
Painting a home can cost several thousand dollars but it is perhaps the best renovation you can do to add value to your home. That dark orange room that was the style when you bought can be covered up with a more modern neutral colour that will not turn away buyers.
I will speak with my buyer clients after a visit, and wouldn’t you know it, the one kid’s room that was a horrible fluorescent green is the thing they remember the most from the house. New paint will cover up old scratches and marks that have built up over the years and will give the home a new feel to it which translates into more money in your pocket when you sell. Add some new fresh moldings to the home to complete the new look of the room inexpensively.
Décor goes hand-in-hand with painting, and can really have a massive impact on the emotional value of your home (which turns into real value when it comes to homes) and it’s the area that is perhaps neglected the most by home sellers.
Many homeowners have the décor that they have enjoyed over the years, its functional, its good quality, so why change it? The problem is that even quality (but dated) furniture and decor will turn off many potential buyers way more than the house itself.
Sometimes new paint, a change of curtains, new bed linens, decluttering and a fresh décor can improve the presentation of your home beyond major renovations. They are certainly a more cost effective way of improving value.
You may want to consult with a home stager who can advise you on the best simple improvements you can do for your home.
We all hear that kitchens and bathrooms are what sell homes, and that is mostly true, the kitchen is the heart of the home after all. However it doesn’t always mean you need to put down tens of thousands of dollars to get a brand new kitchen put in. More often than not, a few more cost effective renovations to the kitchen can make all the difference.
Think about changing fixtures in the kitchen, sanding and staining dated wood cabinets, or changing out a worn-out sink with new hardware. Something as simple as changing the cabinet doors to more modern style can make a huge difference. Painting dated wood cabinetry white, changing a counter and adding a backsplash can give you the look of a brand new kitchen. If the counter is worn down and cracked, consider replacing it with a more modern counter. It doesn’t have to be thousands of dollars for a granite or quartz counter either, very affordable counters can be purchased at Ikea and other suppliers.
For bathrooms a new vanity, some fresh paint, new towels and shower curtain, and a tub repair if the existing one is very dated, can give the bathroom a whole new look.
But don’t go overboard, you may enjoy the heated floors in your bathroom but the next buyer may not care if they are there or not. Certainly most will not be looking for them, depending on your market of course. Keep your market in mind, don’t make your bathroom cheap if you are asking top dollar in a high-end market of expensive homes.
“Remember just because a kitchen or bathroom costs $40,000 doesn’t mean you can simply add the price to the value of your home. Real estate doesn’t work that way, no matter what the TV shows say.”
Remember just because a kitchen or bathroom costs $40,000 doesn’t mean you can simply add the price to the value of your home. Real estate doesn’t work that way, no matter what the TV shows say.
This is the biggest mistake you can possibly make and it will actually reduce the value of your home. Do not knock down a wall and make 2 smaller bedrooms into a large master suite. This is probably one of the worst renovations to make (from the point of view of resale) as you have decreased the features and benefits of the home, if it was a 4 bedroom home before it becomes a 3 bedroom, at the new lower price range of other 3 bedroom homes.
As a broker this one I cannot stress enough, removing a bedroom is THE biggest mistake you can make when it comes time to sell.
As a broker this one I cannot stress enough, removing a bedroom is THE biggest mistake you can make when it comes time to sell. Do not do it. Legally we cannot market the home at the original number of bedrooms, and all those potential buyers searching online for a home your size (but with the original number of bedrooms) will not see your home.
The flip side is that if you can create more liveable space out of the existing home inexpensively, you will add direct value to the home. Generally more square footage means more value. Ideas include converting a garage to a family room, expanding a basement playroom, converting a basement storage room to a bathroom.
Knocking down walls and adding more living space will help increase a home’s value.
Oftentimes these renovations are relatively inexpensive compared to some and create more liveable space and thus more benefits and more value. On average an extra bedroom or bathroom will add between ten and thirty thousand to the value of a home. Think about where you can add more liveable space to your home’s value.
Hand in hand with this is sometimes opening up rooms by taking down walls to make the home feel larger will have an impact on value.
Windows and doors are another area where you can sink in vast amounts of money with only a slight return on your investment in the short term, if you are thinking of selling. Most buyers expect that your windows and doors will be attractive and functional, so adding energy-efficient windows and doors when you are about to move (and will not benefit from the very long-term energy savings), is not a great idea.
The exception might be older doors, the front door and older doors inside the home, changing them out will help the value as the right ones can help the home look better.
Of course moldy, rotten or leaking windows or doors need to be replaced. You do however need to know your market, in more expensive upscale markets buyers of larger executive homes have different expectations versus smaller starter homes in less expensive markets.
The same goes for furnaces and the other heating, air-conditioning, and non-visible behind-the-scenes systems of your home. Adding a new furnace and HVAC system to the home just before you list it for sale, will not return you the cost of it in increased value.
“Most buyers expect that the system will be functional and in good working order, and adding a very expensive system to your home with the idea of increasing value is just not a good idea.”
Most buyers expect that the system will be functional and in good working order, and adding a very expensive system to your home with the idea of increasing value is just not a good idea. The one exception is the old oil heating systems, these you should consider changing or adding a dual-energy system that will compensate for the high cost of heating a home by oil. Old oil tanks are also becoming a big issue for insurance companies and the new buyers insurance may not be willing to cover the home adequately with a dated oil tank in the home.
Adding a new french drain, better drainage system, foundation work, or adding insulation will not add much value to a home compared to their cost. If you are staying in the home long-term by all means go ahead if you will benefit from the reduced cost in maintaining the home, but as a general rule, systems-type renovations will not add to the bottom line when its time to sell.
Of course you shouldn’t ignore a leaking roof or a foundation that has a water infiltration, absolutely take care of any big problems (as your house definitely won’t sell with major issues) but just don’t expect to add your costs and more to the price you sell for.
Contrary to what many people believe a pool (inground or above ground, heated or not, chlorine or salt-water) will not add any value to a home. In fact it will diminish the number of potential buyers who will want to buy your home. Families with young children and those who don’t like swimming or the maintenance, will be looking elsewhere.
In fact in the years that I have been a real estate broker I can count on one hand the number of buyers who have told me that having a pool was a top requirement in the home they wanted to buy, it’s usually either a small benefit if they like swimming or a headache that they don’t want to deal with but may be willing to put up with it. Also if the yard can accommodate it, most buyers who like pools will still buy a house without one and put in the pool later.
“Especially with Quebec winters, many buyers don’t see the benefit of having to maintain a pool with so few usable months.”
Especially with Quebec winters, many buyers don’t see the benefit of having to maintain a pool with so few usable months. A heater can add some months to that, however it will also add to the heating costs of the home – a negative to most buyers. If you enjoyed the pool over the years then that is the most important thing, but don’t consider that it adds any value to an average home when you sell it.
Again this is an issue where it’s important the home has good curb appeal without requiring massive amounts of time to tend to a huge garden and landscaped yard. Adding a fence (a plus for families with young children and dog owners, and a not a negative for those without either) or a nice clean walk-way inexpensively can be a good thing, however paying for the most expensive stone entrance and unistone driveway may make you enjoy the home more but will not add a lot of value in the eyes of a buyer. Keep your home’s landscaping up by all means, don’t be the home with the run-down lot and overgrown weeds everywhere, but don’t assume your buyers are gardeners either.
Remember the first impression the buyer gets of your house is when they either drive by to check it out or walk up the walkway to the front door when they are visiting. Run-down broken steps are red flags that speak to the overall maintenance and care the owners took with their home.
If the roof is not leaking but is over 10 years old, consider having a good roofer over to take a look, replace any damaged or curled tiles and have them give you their evaluation of the attic space. It’s important to fix any roof problems as they come up, a new roof is a plus, not a requirement for getting top dollar for a home.
Overall, if you are considering a move in the near future, focus on the inexpensive renovations that will have the most appeal to the largest group of potential buyers. Painting, décor, kitchen and bathroom updates and increasing liveable space are the best areas to focus on, and ensuring your home is presented at its best to potential buyers. The cost of expensive systems renovations, and high-end fixtures and materials will not necessarily come back to you when you sell in most average homes. If you have systems that are broken, get them fixed by all means, but don’t add their price to the price of your home, if you want to sell.
If you are considering renovations on your home in preparation for a sale, or would like a personalized consultation with simple improvements you can do to your home that can increase its value in today’s market, I invite you to contact me.
I’m Andrew Mitchell, Chartered Real Estate Broker, Owner and Agency Executive Officer of Mitchell Group Real Estate Agency. I consult and work for buyers, sellers and investors in Vaudreuil-Soulanges, the West Island and the Greater Montreal area. My goal is to provide you with useful, straightforward insights and relevant real estate market updates. Contact me with any questions. Follow me on Facebook.