SHOULD YOU FIX UP YOUR HOME OR SELL IT AS IS?
Sell the home as-is or renovate? This is a question that many sellers deliberate on before putting their homes on the market. The big decisions on whether to replace the outdated countertops or put in more modern and desirable fixtures are enough to keep a seller-to-be up tossing and turning at night. Unfortunately, the answer is complicated and requires the consideration of multiple factors.
THE STATE OF THE REAL ESTATE MARKET
If the market is a seller market, then it’s likely the home will sell quickly, whether it has the most up-to-date bathroom furnishings or not. A hot market allows a seller more leeway on selling a house as-is, due to the fierce competition amongst buyers. If there is no or low inventory, a buyer will look past the out-of-date fixtures. When the market leans the other way, buyers may be hesitant to even look at a home that “needs work.”
THE CONDITION OF THE COMPETITION
With the help of an agent, you’ll be able to do a comparative market analysis (CMA) and review the condition of comps. For example, suppose comparable houses to yours are more updated, or the less-updated comp sat on the market longer before selling. In that case, you will want to consider these factors and potentially consider a remodel.
WHAT IS THE LIKELY ROI?
Unfortunately, the average amount recouped for home remodeling projects has dropped in recent years. According to real estate professionals, the national average return on 21 popular remodeling projects in 2020 was 66.5%, whereas 2019 had 68.6%*. Additionally, it is essential to understand that you should not expect a 100% return on your investment, as it is far from the norm.
If you do choose to remodel, where even to start? Although focusing solely on the interior may be tempting, don’t forget the exterior remodels. In fact, according to Remodeling Magazine’s 2021 Cost vs. Value Report, the remodeling projects that will provide the most ROI are ones that seek to improve curb appeal. It found that projects like replacing a garage door ($3,907) provided a 94% ROI and a 92% ROI on installing exterior manufactured stone*. When moving inside, some key areas to focus on are:
- Kitchen renovations: average national cost of $23,452 with potential 77.6% ROI
- Bathroom renovations: average national cost of $21,377 with potential 64% ROI
- New Flooring: $6-10 per foot and potential 70-80% ROI on new hardwood floors
- Repainting: average national cost $967 and potential ROI of 107%
WHAT DO YOU WANT TO DO?
Although the real estate factors are important when considering this question, it’s also important to ask yourself more personal questions. One of them is, do you want to live in a construction zone (if you’re currently living at the property), and do you want the hassle of managing a remodel? Remodels are messy, and if you’re preparing to sell and move on with your life, the hassle may not be worth it. Additionally, if you really want to do a remodel of something for yourself, and not a potential ROI, then you should do it.
OUR AGENTS THOUGHTS
We posed the question to our real estate agents, and they offered the following advice. If you’d like to chat to any of them on selling your own home, please reach out!
JANE: PREPPING THE PROPERTY IS A GO, BUT HOLD UP ON ANY MAJOR RENOVATIONS
“We’re still experiencing a seller’s market; inventory is low, and demand is high. However, even with a large pool of eager buyers, sellers can still benefit from prepping their property – taking care of deferred maintenance items, touching up paint, decluttering, and depersonalizing – to bring in top dollar for their home. Replacing a broken window, resurfacing a tub, or painting that purple bedroom a warm white is a ‘yes,’ but I would steer clear of any major projects, e.g., redoing your kitchen or bathroom. Often, major home upgrades don’t provide a good return on investment. On top of that, many buyers prefer to fix it up once it’s theirs, rather than buy a newly renovated property that’s not to their taste.”
NINA’S THOUGHTS: CLEAN & WELCOMING, OVER BIG REMODEL PROJECTS
MIKE’S THOUGHTS: FOCUS ON CURB APPEAL AND MINOR FIXES, BUT STAY AWAY FROM MAJOR RENOS
“I would always recommend fixing up anything that improves overall curb appeal to help generate interest. Additionally, in the interior, focus on the “little things” like repainting, cleaning up any disorderly areas, and deodorizing. In terms of major renovations, don’t go overboard because buyers today typically want to do their own renovations.”
Overall, if your house is a little outdated, don’t go rushing to do a big remodel before you sell because you think it will improve your home’s sale chances; instead, take your time and talk with your agent about what makes sense to potentially fix up before the sale.