If you watch real estate reality TV shows, you may be under the impression that to sell a home, you need to make a lot of renovations. The truth is that renovating a home will help it sell as long as you are thoughtful about what you choose to do. Spending money on the wrong improvements or over improving your home for the neighborhood could be a costly mistake.
When deciding what to upgrade, you should consider the real estate market. Understanding whether it is a buyer’s market or a seller’s market will help you determine what renovations are the right ones to make.
A buyer’s market is one where there are more houses than there are buyers. This means that buyers have a large selection of homes from which to choose. When this is the case, nicer well-priced homes sell faster than homes that need a lot of repairs or updates or homes that are priced too high.
If you are selling your home in a buyer’s market, you will likely need to make more renovations in order to make your home stand out from the competition. If you can make your home appeal to more buyers, it will have a better chance of selling. You should think about renovations that have a higher return on investment and make the greatest impact. Such renovations include things like:
A seller’s market is one where there are more buyers than houses. Homes tend to go on the market and sell quickly. In fact, many homes get multiple offers.
When in a seller’s market, you have to do less because there are more people competing for your home. In most cases, some fresh paint and a little elbow grease will be enough.
You want to be sure that you do not renovate your home to the point that it is the highest priced home in the neighborhood. Pricing yourself out of a neighborhood with renovations is a sure-fire way to lose money. A good rule of thumb is to never renovate in such a way as to make your home’s value more than 10% higher than the surrounding neighborhood.
When thinking of renovations, keep in mind that older homes in older neighborhoods should never look out of place. Although you can improve the exterior appearance, be sure your home still looks like it belongs in the area.
If most of the homes in your area are dated, then a few focused updates can really make your home stand out from the crowd. Consider focusing your attention on the bathroom and kitchen.
If you live in a newer area, be sure that your home meets the criteria for that neighborhood. Look at what finishes or amenities recently sold homes have and consider adding them to your own home.
When deciding where renovations should occur, the best thing to do is figure out what buyers look for when purchasing a home. Most homeowners want updated:
However, in some areas, homeowners may be looking for other specific features. That is why it is important to do your research before starting renovations.
If you are thinking about making a few small changes to your home before you sell, you should focus on the following:
When it comes time to consider renovations, make sure you base your decisions on current research. Know your market, your neighborhood, and what buyers in your price range want to find in a home. Doing so will help you make renovations that count. Feel free to call us to discuss the current market and trends that will affect your home selling process.