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I was always taught that the value of a home is dependent upon location, size, amenities. I was taught that if you spend $10,000 to fix up your bathroom that is not going to add $10,000 to the value of your home. Similarly, if you spend $60,000 to add an in-ground pool, that is not going to add $60,000 of value to your home. And, if you paint your walls grey vs blue vs white that will have no bearing on the home's value.
So, in line with this, my neighbor sold his house. I spoke to his Realtor who would like to list our home. This Realtor told me that he comes into your home, tells you what changes to make in order to make your home worth the most. He had our neighbors spend $20,000 to put in new tile floors, paint the kitchen and bathroom cabinets white, put in glass shower doors, recessed lighting, paint the interior walls, change the faucets to modern fixtures, put in a modern backslash, and other cosmetic (decorating) things.
I wouldn't have thought the changes they made to their house would have added any value. However, now that they sold their house, which is pretty much the same house as ours (minus the decorating), it becomes a good comp for us.
Meanwhile, my friend who is selling her home spoke with a different Realtor. She was thinking of pulling out the carpet and putting down the tile that looks like wood, She planned to paint her walls a light grey, put in quartz or granite counter tops, paint her cabinets white, and she wanted him to give her other ideas to make her home worth more. This Realtor told her that the only thing she should do is get her carpet cleaned because she wouldn't get her money back with those changes.
I've seen on HGTV all these shows (ie Love It or List It, Property Brothers, Flip or Flop, etcl) where people put money into homes and then their house is worth more than what they put into it and no one seems to be taking into account the value of the surrounding homes. But, I've always thought that was just TV and not what actually happens.
Is HGTV changing the way people value homes and making prettily decorated homes more valuable? Or are they just quicker to sell?
I live in a Sellers market where DOM tends to be around 45 if properly priced and homes sell for close to asking price.
Thank you for your thoughts. This house required a lot of work... new roof, new water heater, landscaping, new A/C and I'm not sure it is worth putting more money into the cosmetics before we sell it.
My daughter is planning to sell her house and the realtor has told them they should replace very nice counter tops with granite, add ss appliances, paint cupboards, etc. because "buyers expect those things in the price range of their home."
They really have a very nice home and these things are only cosmetic or style considerations, which, IMO, will cost them more than they will get back on the sale. I've suggested that, IF they decide to make these changes, they should instead offer an allowance for them and allow the buyers to make their own choices, if any. The point is, these changes are really unnecessary and most buyers in this market are going to offer slightly below asking price anyway. (If there was something wrong or dated about what they have, it might be a different situation).
It's not my house or money, but, I think this realtor is going to unnecessarily cost them several thousand dollars - which they will likely need for their replacement home.
Nice finishes don't necessarily bring more money, but they do help the house to sell faster. A fast sale is good, but I can't see putting $30,000 into decorating that you won't get back out. Clean and tidy is what sells. Fresh paint inside is worth the expense. Most other things you won' get your money back.
On some of those home shows, the house they start with is a wreck and bought for well below market. Updating just brings the house up to its potential market value.
You can't take a nice house in good condition, buy it for its fair market value and sink $60,000 into upgrades. All you'll get when you sell is fair market value for the area, with maybe $5,000 or $10,000 over market if the buyer has cash and is not financing. $10,000 is not an acceptable return on a $60,000 investment.
It can make a big difference, although it's hard to put a monetary value on it. The fact is that a dated-looking home will not fetch the same price as an updated home.
Friends of ours tried to sell their 1970s house 3 years ago with a kitchen that had been remodeled in the 90s but was certainly not up to modern expectations. It sat there, in a very hot market, for 3 months with more than 100 showings and 1 offer, which they did not take.
They pulled the house, remodeled the kitchen, lived there three more years then recently sold it in 24 hours in an even hotter market, with more than 11 offers all above asking. The selling price was $30K over their previous list price, and while the market had improved since then, it hadn't improved THAT much.
Buyers do weigh the "cost" of changes they will have to make to your home to make it livable for them. Different things matter to different buyers, but on the whole, changes that don't disrupt their lives too much (floors, kitchen, bathrooms) that are already done will certainly make selling your home easier.
Clean walls. Paint works wonders
If there is old wall-to-wall carpet, I think ripping it out and putting in something new and fresh is also good. Even if it's just that same-day stuff from Home Depot
Sparkling clean bathrooms even if they are old. Re-doing all of the caulking. Perhaps a new shower door if the old one is really cruddy
After that, just clean clean clean.
Trim back any bushes, try to make the landscaping look as neat as possible.
We bought a house that needs updates. I would have preferred an updated house but we couldn't find one. So what was important to me was that I could move in and live there right now and do the updates as we went.
The one thing I did appreciate the previous owner doing was putting in a new appliance set in the kitchen. There is something nice about getting new appliances. But I would have been fine with used stuff too
Personally, I'm not a fan of pouring major amounts of money into a house just to sell it. Just my opinion. Yes, you will lose some buyers who want a certain type of kitchen or flooring or whatever. But a lot of people like to update a house the way they want it, and would rather pay less. And other buyers aren't phased by "dated" bathrooms and kitchens as long as they are clean, pleasant and functional.
If you have a new roof, water heater and AC, you are in great shape (I hope I am understanding your comment correctly)
Depends on the area. If we were to put our house on the market, replacing appliances, countertops, and painting cabinets would probably make a big difference in price. That's what people expect here.
There isn't a dollar for dollar correlation. But an updated house sells for more than one that hasn't been updated. Things like paint color *shouldn't" affect the value but buyers make choices based on emotions. If the walls are dusty rose and baby blue, they may not have the same emotional connection to the house as they would if the walls are a more sophisticated and modern looking gray and white.
So, in line with this, my neighbor sold his house. I spoke to his Realtor who would like to list our home. This Realtor told me that he comes into your home, tells you what changes to make in order to make your home worth the most. He had our neighbors spend $20,000 to put in new tile floors, paint the kitchen and bathroom cabinets white, put in glass shower doors, recessed lighting, paint the interior walls, change the faucets to modern fixtures, put in a modern backslash, and other cosmetic (decorating) things.
...
This house required a lot of work... new roof, new water heater, landscaping, new A/C and I'm not sure it is worth putting more money into the cosmetics before we sell it.
Did the above house need a new roof, new water heater, or new AC as you said your does? Newer mechanics within a house will get you more than newer cosmetics. People won't want the big-ticket items to crap out on them as soon as they move in. Plus, with what you described of your house, it's possibly not insurable if the roof is that bad.
As someone else said, it might not add dollar value, but it'll sell faster, which in and of itself is a dollar factor. Less time for you to be bothered with showings, less interest you're paying on the loan, and a quicker time frame to move forward with your future plan. Is that added value? I think so...
Thank you, FalconheadWest. We did replace the roof, the water heater, the A/C. The front yard had erosion issues so we needed to re-landscape, and the house had no curb appeal so we got the added benefit of fixing that too. For us, I don't know that speed of sale matters as we don't have a mortgage and have no particular place we need to be.
I appreciate everyone giving me their thoughts. I wasn't sure if I needed to sink more money into this house or not.
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