You’re ready to sell your home but you face plenty of competition from neighbors selling their own residences and the market is always changing. You want to add value to your home and make it stand out. A renovated kitchen, remodeled master bathroom, and new deck would set your home apart from others on the market.
But when do you run the risk of adding too much value to your home? When do home improvements actually make your home too difficult to sell?
It’s not an easy question to answer. The key is to study your neighborhood carefully. What homes are selling, and what prices are they fetching? You want your home to attract potential buyers. But you don’t want it to be the most expensive in your community. It’s never easy to sell the house with the highest price tag.
Set Limits
Maybe your home has just two cramped bathrooms. Bathrooms are some of the most important rooms when it comes to selling a house. If you invest money to expand one of your bathrooms, turning it into a more spacious master bathroom, you’ll increase your odds of getting a good offer on your home, especially if other properties in the neighborhood boast their own modern bathrooms.
But there is a limit. If you spend $30,000 on your master bathroom, don’t think you can simply add $30,000 to your asking price. If you do, you might price your home too high for your neighborhood. If the homes on your block are selling for $200,000, you’ll struggle to move yours for $230,000.
The perfect solution? You need to add value to your home before you put it on the market, but not too much value so that you price yourself out of your neighborhood.
Look at the Improvements
It’s important, too, to consider the type of improvements that will provide the biggest return on your investment. Buyers spend much of their time studying the kitchens and bathrooms in the homes they are considering.
Spending money to spruce up these rooms can pay off then. Again, don’t expect to recover the full value if you spend $40,000 to renovate your kitchen. Instead, consider buying some new appliances and cabinet doors, adding new flooring, or investing in a fresh coat of paint to make your kitchen look airier and larger.
Look at the Spending
Be wary of spending big money to finish a basement or add a home office. You might appreciate these home improvements, but buyers generally aren’t as impressed. And installing amenities like in-ground pools or large outdoor decks might be seen as requiring too much upkeep.
And as any commercial real estate lawyer can tell you, many potential buyers look at swimming pools as lawsuits waiting to happen. According to Steve Butcher Sr, you should always ask if these improvements are more for you, or for the buyer. Spending a lot on what you want won’t always be as profitable.
The bottom line? Study your market carefully when putting money into your home. Adding value is smart. Adding too much value? That’s asking for problems. To help set your limit contact a First Team agent in your area to get a comparative analysis of your neighborhood. Find an agent online or reach out and we’ll match you with a First Team specialist near you.
Email us at clientservices@firstteam.com
Call us at 888-870-1142
This guest post was written by Brooke Chaplan, a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.
