Are you thinking about or need to put your home on the market? Are you looking around and thinking to yourself that your dated kitchen or bathroom will hurt your chances of getting top dollar for your asking price? Are there any remodeling projects that can help you in this market? That is what we will explore in this post.
There is the rule of Real Estate that helps to determine price, the L’s. Location, Location, Location. Then you have the sub-rule, Curb Appeal. Often times there isn’t anything you can do about the location, the house is where it is. But you can certainly do a lot to help make the home inviting. Creating curb appeal so that it is easy for potential homebuyers to envision driving home every day to their new house and having a sense of pride cannot be overstated. The other part of curb appeal is to make it manageable. Make it easy for someone to take care of, and if they want to add to it, that is up to them to do. When it comes to curb appeal updates, look to adding Manufactured Stone Veneer to front of the house. It has the highest return on investment (ROI) according to the 2022 Cost vs. Value Report of 92.1%. The average investment in the Sacramento Region to add 300 square feet to the bottom third of the street-facing facade in 2022 was $11,794 and added $10,867 to the resale value. Next would be to replace the garage door, with an investment $4,076, added $3,715 a ROI of 91.1%.
Other updates that add value to the resale value include Window replacement (78.9% for Wood and 73.9% for vinyl), and deck addition (67.9% for composite decks and 64.8% for wood).
When it comes to updating or refreshing the inside of the home, the kitchen and the bathrooms are the places to focus on. But beware, these are very personal spaces, so we always recommend when remodeling for putting a home on the market, to go with simple, use neutral colors and don’t necessarily go with “on trend” designs.
When it comes to kitchen remodeling, a minor midrange remodel design tends to yield the best bang for your investment at 75.5% ROI with an average investment of $29,911 and a resale value of $22,589. A major midrange kitchen remodel drops the ROI to 56.3% with an average investment of $84,488 and resale value of $47,567.
Bathroom remodels have a range from highest ROI to lowest ROI based on design type, Midrange (59.5%), Universal Design (55.6%) and Upscale (45.9%). Their corresponding investments of $30,074, $44,889 and $89,530 in the Sacramento region.
The current housing market we are in is a difficult one for home sellers. As of the writing of this article, we are seeing housing supply of existing homes increasing and the demand for these homes decreasing due to higher interest rates. Homes that have been on the market for a while, longer than 90 days are starting to have price decreases, but new homes hitting the market are averaging listing times of 29 days and some are getting listing price or sometimes even a little better. When it comes to selling your home nothing beats having a knowledgeable Realtor and staging your home for sale. One thing to point out from the research compiled by Zonda, none of the these projects ever brought back a 100% or better return on investment. “We work with many Relators and their clients when preparing their home for sale,” said Al Aldrete, CEO of Black Lab Home Repairs,Inc. “We often recommend to our clients to have the home inspected, spend money on making the repairs that come up in those inspections, add to the curb appeal, freshen the paint colors in side and out with neutral colors. Unless there are major issues with either the kitchen or the bathroom it can often be better to leave them alone and make them presented in a way that shows the buyers their potential.” Black Lab Home Repairs, Inc. is a full service home repair and remodeling company based in Woodland, CA and serves the communities of Woodland and Davis, CA.
There are many things to consider along with tackling a remodel project before the sale of your home. Timing of the project and how long it can take from start of the design to the final inspection can range anywhere from one to six or more months depending on the scope of work. The scope of work will also determine the detail needed in the designs for permits. Your local building department may require certain things like electrical and plumbing upgrades be done to meet current building codes. Some municipalities have resale inspections, that require certain things be brought up to code and in the process may take a minor remodel and push it into a major remodel. This is where working with a local, licensed contractor who has established relationships with the local building department can pay for itself. By having an established relationship with local building officials, a local contractor can often times explain the intent of the upgrade and get the building officials to clearly explain (and have it put in the scope of the permit) the minimum requirements needed to pass inspections. This isn’t cutting corners, but it is making sure that if your municipality doesn’t require certain electrical upgrades if you don’t remove the countertop, that doesn’t get put into the scope of the work and therefore is not required for the final sign off of the project. This can also greatly reduce the amount of time required for a project to take to complete.