According to the National Association of Realtors (nar.realtor), the average time a homeowner stays in their home is ten years. This is higher than the seven-year average prior to the great recession (but is less than the thirteen-year average immediately following the recession). Needless to say, many homeowners are approaching (or have exceeded) their ten-year stint, and are likely selling their home during the spring.
Any home sale preparation in today’s housing market should include some renovation. If you haven’t replaced the home’s systems (such as the roof or HVAC) while you lived in your home, there’s a good chance that they are approaching or have exceeded their average life expectancy. Additionally, the décor and fixtures in your home are likely outdated. The home sellers who make the mistake of not updating or renovating before they list inevitably face home inspection issues. They ultimately find that the home takes longer to sell at a reduced price.
Let’s face it, remodeling can be expensive and overwhelming. According to the NAR’s 2017 Remodeling Impact Report, about $340 billion was spent on remodeling projects in 2015. Although a majority of homeowners would remodel their home themselves, thirty-five percent would prefer to move instead of remodeling their home.
The Report cited functionality and livability as the top reasons for renovating a home. It’s a no-brainer that home buyers prefer homes that are functional, comfortable, and sustainable. Aesthetics is not enough for a home to be appealing to today’s home buyer, it has to fit their life style. Additionally, home buyers want efficient systems in their new homes that can help save on utility costs.
Keeping functionality and livability in mind, what projects will get buyers who will pay top dollar into your home? It should be no surprise that the number one interior project, listed by the 2017 Remodeling Impact Report, is a complete kitchen renovation. Other essential interior projects include renovating bathrooms, installing new wood flooring, creating a new master suite, replacing the HVAC system, and finishing a basement or attic.
It also shouldn’t be a surprise that the Report listed replacing the roof as the top exterior project. Other exterior projects in high demand include new windows, new garage door, new siding, and installing a new front door.
There’s no doubt that renovating your home can be expensive. Although the costs can tempt you to cut corners, don’t. Cutting corners on renovation projects can actually cost you more. You may have to repair, or even re-do the project if not finished adequately. Home buyers are savvy, and can spot low quality materials and poor workmanship. Also, make sure to get permits when required. If the home buyer doesn’t ask you, the home inspector will likely recommend that the home buyer check for permits.
Although many homeowners don’t mind a DIY project, many hire home improvement professionals. When hiring home improvement professionals, check with the Maryland Home Improvement Commission (dllr.state.md.us/license/mhic) to ensure they are licensed contractors. You should also ask for proof of their insurance, including Workman’s Comp insurance, in case there is an accident on your property while completing the project.
If you hire a contractor who will accept payment when the house sells, read your contract carefully and thoroughly. Do your due diligence. There may be provisions in your contract that you may not be aware of, such as added costs, charging interest, and setting/lowering the sale price.
Dan Krell is a Realtor® with RE/MAX Success in Potomac, MD. You can access more information at DanKrell.com