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Renovating to Increase Value

Renovating to Increase Value

A question that I am often asked is, “Should I undergo renovations or make kitchen, bathroom or system upgrades before I list my home?” The answer to this question is not the same for everyone and depends on many factors including the condition of the property and the current market as well as personal dynamics.

There are typically three types of buyers in the market: 1) those who want a completely renovated property, 2) those who are willing to make limited stylistic changes to personalize the home and, 3) those who are open to a partial or full renovation to accommodate their own needs and preferences. In any market I find that most buyers are interested in renovated properties that ‘show well’ and these are the listings that, if priced right, sell quickly and for the best prices.

Purchasing real estate is an emotional experience and most buyers are easily swayed by properties that are well-designed, renovated with high-end finishes and appliances, and decorated beautifully. Even in a market with limited inventory, a home that shows well and does not require a buyer ‘with vision’ will have a significant advantage over comparable listings that do not show well. That being said, a buyer who is willing to undertake a renovation may not want to pay for someone else’s choice of design and finishes which is something to keep in mind.

Let’s review some basic scenarios:

  • Renovating now for future added value.
    Renovating with a potential resale in mind means selecting designs and materials that will appeal to the widest range of buyers. If the renovations you are contemplating fit that description, and you will be happy living with these upgrades, then it could be a very good idea to renovate. However, if you want to do a high-end renovation, but to a very specific taste or style, it may not be the best investment. Also, keep in mind that if you are not planning to sell for several years, certain designs and finishes may go out of style by the time you are ready to list, although certain upgrades, such as high quality kitchen appliances, have enduring appeal.
  • Renovating kitchen and baths.
    Kitchens and baths are typically rooms where you can add the most value. When buyers see tired or original bathrooms or outdated kitchen appliances and old cabinetry they see a property that requires work, and this perception can significantly impact value in their eyes. Sometimes a $10,000 – $20,000 investment in renovations can yield a higher sales price of $100,000 – $200,000 or more. If you decide to renovate before listing, make sure you seek advice on finishes, fixtures and appliances to be certain your renovation will have the widest appeal for buyers.
  • Estate condition properties.
    Properties that are in ‘estate’ condition (typically not upgraded or renovated in decades) often yield lower sales prices based on the amount of renovation work required to make them ‘move-in’ ready. These properties require buyers who have vision. There is also a perception among many that they can negotiate a deal. It is best to shift that view by investing to properly prepare the home for sale. Some of the most basic tasks might include applying a fresh coat of paint, fixing anything that is broken, re-grouting bathroom tile, re-glazing original tubs and refinishing floors. Modern upgrades such as new appliances, counters, cabinetry and backsplash, flooring, fixtures and vanities can make all the difference. If furnishings in the home feel tired or dated it is a good idea to empty the home and have it staged.

Seeking the Best Guidance
When you are ready to sell, an experienced broker will be able to guide you on how to prepare your home for showing and discuss optional steps that may be taken to achieve the highest possible sales price.

I recently sold an estate condition apartment on Central Park West that was in need of a complete facelift. The executor of the estate did not want to undertake a full renovation so my team and I helped the seller arrange to make basic repairs, install new kitchen counters, appliances and fixtures, paint walls and cabinetry, and refinish floors. Then we staged every room. Even without major renovations, with a relatively small amount of work you can make a major difference in the property’s appearance and sales price. In this case the apartment sold quickly, and near the asking price.

Many brokers do not have the breadth of experience in design and renovation that my team has, nor would they be able to provide all the services that it takes to assist a seller in achieving the best possible sales price. A recent example of our work involved staging a seven-room apartment, including taking on the role of designer and liaison with contractors to renovate the kitchen with attractive finishes and high-end stainless appliances. We had a signed contract after only 10 days on the market, and for $100,000 above the asking price.

Whether you are thinking about the future resale value of your home or you are preparing to sell in the near term, I am happy to answer any questions you may have on what it would take to create the best first impression and highest sales price for your home.

From my experience, a seller who works to improve the appearance of a property that doesn’t show well will almost certainly be rewarded in the end with a higher sales price.

If you have any specific questions about your property or if renovation would increase the value, I would be happy to help. Click here to contact me directly.
 

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