Q & A with the Real Estate Expert

REMODEL NOW, SELL LATER?

Q: Dear Jay, My husband and I and our two children live in a home that was built over 30 years ago and have never updated or remodeled. We’re planning on selling our home in three years when both of the kids are in college but, until then, we would like to make some improvements that we can all enjoy now and will also increase the resale value down the road. What type of updates or remodeling projects do you recommend that will hold their value and raise the overall worth of our home when it comes time to sell? – Katie

A: Dear Katie, Thanks for writing and this is a great question! Right now, it is a seller’s market and many people, just like you and your husband, have owned their homes for decades and are thinking about listing for the first time.

I typically stress to homeowners that getting it listed as soon as possible, while the market is still hot, will generally put more money in your pocket than making improvements or embarking on a large remodeling project. In fact, a recent study published by the Harvard University Joint Center for Housing Studies, recently reported that only 30% of homeowners in the past year have remodeled, and this includes urgent repair projects such as cracked foundations or pipes.

It’s also important to keep in mind that there are all types of buyers out there that want vastly different things, from fixer-uppers to move-in ready, right now there’s a likely someone out there looking for your home—exactly as it is at the moment. However, since you’re planning on staying put for a few more years and are ready for a change now there are updates you can make that you will love and will generally hold their value, as well as many that are not worth the time or money.

For starters, updating the kitchen or a bathroom is, more often than not, a pretty safe investment. Last year, on average, kitchen and bathroom remodels produced a 102% return to home homeowners. For resale purposes, replacing outdated cabinets, fixtures, counters and backsplashes are all relatively inexpensive improvements that will please your family and certainly appeal to buyers later. Although these types of projects won’t necessarily add a lot of extra value to the home, it’s safe to say you’ll be able to recoup most (if not all) of the money invested. Just be sure to steer clear of anything too busy or eccentric and choose colors, patterns, materials and designs that give the room an open, modern and natural feel.

With that said, there are many other types of remodels that are notoriously poor at returning the investment and may end up costing you more in the long run. Areas that tend to not to have good resale value are media rooms, theaters, offices, basements, attic remodels, decks, and extensive backyard work. Garage conversions are typically not held in high regard by buyers, either.

With replacing windows, my rule of thumb is to only do this if you plan to remain in a house for at least five more years. Since you are planning to move in three, I would advise against replacing any windows unless they are not functioning. For people that are looking to sell immediately, the money spent on replacing windows is rarely recouped after closing.

Removing lighting instead of replacing fixtures is, in most cases, a bad move. Even distasteful lighting is generally better than none at all. In fact, many cities have codes that all rooms must have a switch-controlled lighting so removing a ceiling light for cosmetic reasons may result in being asked to replace it when it comes time for an inspection. Consulting with a seasoned real estate agent is always best when considering making changes to your home, especially if you’re planning on taking out a home equity loan or intend to put the house on the market soon.

As a licensed local real estate agent, I am up-to-date with our area, current housing market trends, city codes and can advise you about the cost vs. value angle of remodeling projects, as it relates to your unique home and neighborhood.

Feel free to call me anytime and I would be happy to answer any other questions about buying or selling a home or to set up a time for me to come walk-through your home and suggest more specific low-risk remodeling projects for your family.