Blog - Should You Renovate Your Home Before You Sell?

Should You Renovate Your Home Before You Sell?

If you’re thinking of selling a home, you’re likely wondering if you should renovate or sell the home as-is. Many popular home improvement shows have led us to believe that doing renovations will get you a much higher asking price. However, that’s not always the case. Sometimes renovations are a lot of headaches, and you get little in return.

So when should you renovate your home? If you do renovate, which renovations will get you the biggest return on your investment? Read on to find out!

Factors to Consider

What should you consider before deciding whether to renovate your home?

Cost vs. Value

Before you renovate your home, you need to consider a few factors. First, you need to compare the cost of the renovations vs. the value. For example, let’s say your house appraises at $172,000. You want to do some renovations that will cost $14,000. After the renovations, your house appraises at $180,000. You’ve increased the value of your home, but you still lost money because the renovations didn’t add enough value to your home.

If your renovations only add enough value for you to break even or make a small profit, it may not be worth it if the house needs too much work. The only exception here would be if you plan to live in the house for a while before selling, since then, you’ll get to enjoy the benefit of the renovations.

The Real Estate Market in Your Area

Every market is different. In some areas, new and move-in ready homes are selling well, while in other areas, buyers prefer to get a fixer-upper and do the renovations themselves. You’ll need to get a good read on your market to see what people want. You should only renovate your house if that’s what seems to be selling.

It’s a good idea to tour some other homes for sale in your area. See what condition they’re in and which of the rooms seem to be renovated. You can get a good idea of what you may (or may not) need to do.

Pros of Renovating Your Home Before Selling

There are quite a few reasons to renovate your home. Here are some of the biggest reasons you may want to make some upgrades.

A Higher Asking Price

The biggest reason to renovate your home is to get a higher asking price. For some homes, a few renovations can go a long way. You may spend a few thousand dollars but get a lot back in return once the house sells.

Faster Sale

Once you put your house on the market, you want it to sell quickly. Renovated houses tend to move faster, especially if you live in an area where people are looking for turnkey homes. Even a few cosmetic changes can make the house more attractive to buyers.

Fewer Reasons for Buyers to Say No

Buying a home is a major decision, and most buyers tend to be picky. Anytime someone makes a huge financial decision, they may be nervous and looking for ways to talk themselves out of it.

Renovations can put your home in tiptop shape and give buyers fewer things to find wrong. You’re giving them a house they can’t say no to.

Tax Deductions

You can sometimes get tax deductibles for renovations that make your home more energy-efficient. Renovations can sometimes reduce the part of your sale price that counts as profit, which can help you qualify for the home sale exemption.

Cons of Renovating Your Home Before Selling

There are also quite a few reasons to sell your home as-is. Here are some reasons you may want to wait before you do any renovations.

You May Not Get Your Money Back

Even if you’ve done your research and feel confident that you’ll get a return on your investment, there’s always the possibility that you’ll only break even or even lose money. While you’re waiting for the renovations to get finished, the market could shift, and your home’s value could decrease.

It Takes Longer to Get Your House on the Market

Renovations can take time. A few cosmetic renovations may only take a few weeks, but if you’re doing anything major, you could be looking at months. If you need to sell your house soon, renovations put you way behind.

It’s a Lot of Work

If you’re doing the renovations yourself or even just overseeing them, it can be a lot of work to get everything done. It can also be stressful, especially when you inevitably face some setbacks.

You May Be Reluctant to Sell

You’ve already made the decision to sell your home, likely because there are things about it you don’t like and you’re looking for something more suitable. However, a renovation may convince you to stay. Staying may be considered a con if moving is in the best interest of your family.

What Should You Renovate?

Some rooms and renovations will get you a higher return on investment than others. Kitchens are often the most expensive room to remodel, but they also increase your home’s value. A great kitchen can make or break your house when it comes to buyers, so unless you already have a beautiful kitchen, you should start there.

Bathrooms can also be expensive to renovate, but they also get higher returns. Buyers love a bathroom that feels fresh and peaceful.

When thinking of how to renovate a house, you should also consider any repairs or maintenance that needs to be done. If there’s anything wrong with the house, buyers may be reluctant to buy or may ask you to reduce the price.

What Should You Leave As Is?

You may also wonder what not to fix. Almost any room in the house or area outside could help your home sell if you make it more appealing. However, you start to lose money when you make a lot of luxury upgrades.

Unless you live in a high-end neighborhood, buyers appreciate practical upgrades like a double vanity in the master bathroom over luxury upgrades like a soaker tub. Other expensive upgrades, like a pool, can sometimes make your home less appealing.

Final Thoughts

If you’re thinking of selling, you can often update your house to help you get more money. Just be sure that you live in an area where renovated houses are selling, and make sure you make affordable, practical upgrades.

Contact me today to learn more!

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