When Getting Ready to List Your Home, Avoid Extreme Makeovers
When Getting Ready to List Your Home, Avoid Extreme Makeovers
Bud Fox has just closed on a penthouse on the Upper East Side, and he has hired his girlfriend (played by Darryl Hannah) to decorate it. After a montage sequence showing the extensive transformation of Bud's place, Darryl's character proudly announces that she's going to have House and Garden come up and photograph it before it gets lived in. Fast forward 20 minutes in the movie, and Bud is having an argument with his realtor about the value of his penthouse - apparently all that interior decorating didn't increase the value of his investment one cent - and Bud concludes the argument by telling his realtor to just dump the place.
More than one homeowner has played out a version of this scene with his or her agent, and as a broker, I have never enjoyed having to tell a client that all the money he or she has poured into renovations isn't going to translate into a higher sales price. Often times, I encounter clients who say, "Well, I just put $20K into my home, so my home should be worth $20K more than what I paid for it." I always hate to have to be the one to break the news to them, but there are very few small improvements ($25K or less) that homeowners can make that are going to increase the value of their home significantly.
So if you're getting ready to list your home and think you need to spruce it up before going to market, let me break down which improvements will get you the BEST RETURN on your investment - not a dollar-for-dollar return in every case, but at least a return:
1) Repainting the interior walls to a neutral color if you currently have lots of bold colors, murals or distinctive decorating styles in your home. In order for buyers to fall in love with your home, they have to be able to imagine themselves living in your home. And buyers can't do that if they have to block out all of the decorating that you've done. Painting the interior in neutral colors at least allows buyers to visualize what they could do with your place. Painting the interior walls is also a good idea if the walls have taken a beating from your kids. Lots of scuffs, dings and dents in the walls and trim send a signal to buyers that the home has been neglected - that may not be the case - and covering up the wear and tear with some spackle and a fresh coat of paint does wonders for the perception of how your home has been maintained. As far as your return on investment, I would expect at least a 50% return for this improvement. One note of caution: Because painting jobs involve mostly labor, I always encourage my clients to get 3 quotes. In my own experience, there can be as much a 40% difference between the high and the low quote, so it's definitely worth the exercise to get 3 quotes.
2) Cleaning up the landscape beds in the front and backyards of the home - this one is a no-brainer in terms of increasing curb appeal, yet many homeowners miss this one. If you don't have a green thumb, don't sweat it. Hire a landscaper to weed the beds, put down some fresh mulch, trim up the shrubs and plant a few flowers. Your investment will be less than $500, and trust me, you will get every dollar of it back. I always say that well-maintained landscaping on a house is like a nicely-wrapped present. You are always more excited to see what's inside a wrapped present than what's inside a paper bag.
3) Having your carpets professionally cleaned if they are more than 2 years old and show average wear and tear. There are folks who would tell you to just replace the carpet, but in this day and age of so many flooring choices and configurations, you are throwing your money away on new carpet if your ultimate buyer plans on tearing it out and putting in wood floors. That buyer is never going to give you any credit for the new carpet when it comes time to negotiate price. If your carpet is in really bad shape, a better option is to offer a credit allowance for new flooring and build that into the listing price and let potential buyers know about the allowance. Most buyers would much rather have the allowance anyway, and you've just avoided the cost and disruption associated with replacing all of your carpet.
4) Updating light fixtures and door hardware if your home's décor is more than 10 years old. This is one that you're not going to hear a lot of brokers mention, but it is a much cheaper alternative to updating your bathrooms and kitchen. There are lots of articles promoting the idea of updating your kitchen and bathrooms as a way to increase the appeal of your house, and yes, it will increase the appeal - and the outstanding balance on your credit card. It is a fact that of everything that makes up a home, bathroom and kitchen cabinets and fixtures have the most mark-up to their pricing - hands-down. Most renovation experts say that you'll get back 50% of your investment in redoing a kitchen or bathroom when it comes time to sell - but you're also talking about a 50% loss on a renovation that will likely cost $20K or more. If your kitchen and bathrooms need updating, chances are your door hardware and lighting fixtures do as well. Just updating those two areas will cost a fraction of what a kitchen or bathroom redo would, and the overall impact can be just as good on a dollar-for-dollar basis. And unlike the kitchen and bathroom redos, which will require the services of a carpenter and a plumber, you can probably handle the hardware changes yourself and hire an electrician to switch out the fixtures. Assuming you go with neutral, middle-of-the-road hardware and light fixtures, you should expect a 75-100% return on your investment - and more importantly, a significantly smaller investment.
5) Moving excess furniture, exercise equipment, boxes, etc. to a storage facility. What I mean by this is going through each room, de-cluttering it as much as possible and moving that clutter off-site before you list your home. The purpose is to make each room appear as big as possible by reducing the amount of "stuff" that is in it. If you think this is hokey, I happen to know of one very large, publicly-traded builder that used to have all of the most popular furniture brands rebuilt - at 2/3 of the normal size - so that when potential buyers walked through a model, they would see "their couch" or "their bed" in a room and think the room was spacious because it could accommodate their furniture. Imagine what move-in day must have been like when they realized that "their furniture" barely fit into a room. Not the best way to market a house, but you get the basic concept: Anything you can do to open up your rooms and make them appear larger will help in the marketing of your home. Depending on how much stuff you have and assuming a 90-day marketing and closing period, your investment should be less than $1,000 to move and store your excess stuff, and you should get a return of every dollar of your investment on this strategy.
So if you are thinking of selling your home, print off this article - this is your to-do list to get your home ready for market. If you have other ideas about what to do with your home and want to know if they would be a good investment, call your broker and ask him or her to give you their professional recommendation before you go spending any money. If you currently don't have a broker, then shoot me an email at email@example.com and someone from our team can help you figure out which improvements will give you the best return on your investment.
*25 Years in Real Estate *Averaged 100+ Home Sales Per Year Since 2010 *Top 1% of Realtors Nationwide Since 2010 *Over 10 Years Advising Large Institutional Banks, Hedge Funds and Investors *Top 1% in....
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