When you first think about listing your home for sale, a million thoughts may run through your mind. There’s much to consider before the “For Sale” sign goes up. You’ve got to research the neighbourhood and determine what price will get the most attention. However, those details come later. The first thing you want to do is find out how to maximize the value of your property in the current market.
It makes sense to make some upgrades to make your house more appealing. A few strategic renovations can potentially add thousands of dollars to your final selling price. Others can disrupt your lifestyle and cost far too much to be worthwhile. How do you know what is worth it and what is not?
Before investing in any updates, your first step should be to find out what your home is currently worth. You can book a home evaluation for free right here.
The General Rule of Home Renovations
For many years, the general rule was that you should expect to earn $10,000 for every $2,000 invested in home improvements. It wasn’t uncommon for house flippers to buy a fixer-upper, make a few cosmetic upgrades and then sell it at a huge profit. However, all bets are off in the current market. There are too many factors at play and no easy answers.
Even if an upgrade adds value, it’s up to you to decide if the extra money is worth the time and effort of living in a construction zone. Extensive research will help ensure your renovations pay off before investing several months and thousands of dollars on something that doesn’t increase your selling price by a high margin.
Your best bet is to focus on the low-cost, minimally invasive upgrades that help make your home show well to potential buyers.
Selling your home can be a complicated process, but it doesn’t have to be. Here are some other resources to take the stress away:
- Should You Wait Until the Timing is Better to Sell Your Home?
- How To Negotiate A Real Estate Contract
- How To Stand Out In A Changing Market
Consider the Current Market
The current market is another factor that will influence the value of any upgrades you make. In a buyer’s market, homes take longer to sell because fewer people are searching. You may face a lot of competition from other sellers. In that case, you’ll have to pull out all the stops to make your house stand out. Still, we don’t recommend investing in a major overhaul of your home–unless the research shows it will pay off.
In a seller’s market, buyers have few listings to choose from. Multiple offer scenarios and bidding wars happen frequently. In these conditions, your home may sell quickly above your listing price with few, if any, upgrades.
The real estate market moves quickly, and what happens to the market overall isn’t the same everywhere. For example, houses may sell slowly in general but quickly in highly desirable neighbourhoods. The bottom line is that every situation is different, and you’ll always want the advice of a local real estate agent before investing in significant renovations.
Who Is Your Audience?
In any given market, you’ll have different profiles of buyers looking at your home. It could be a young professional who is a first-time buyer, a family looking to upgrade to a larger house or an empty nester looking to downsize. If you’re selling a condo or small townhouse, your listing will not likely attract a move-up buyer.
On the other hand, a two-storey, four-bedroom home is probably out of reach for most first-time buyers. Why is it important to know this?
- Young first-time buyers may be unable to make upgrades themselves and will likely want something move-in ready. Any renovations should add functionality to the home, but you’ll want to avoid adding luxurious features that unnecessarily drive up the price.
- A downsizer who is selling their family home will have money to spend. They could hire a contractor to renovate the property to fit their needs. However, many would prefer to avoid the hassle altogether. A downsizer with money may appreciate your luxury upgrades much more than a first-time buyer!
- A family with dual income may be looking for a home with a modern touch. A few upgrades to smart technology and an energy-efficient HVAC system may be what you need to stand out.
Knowing who your most likely buyer will be will help you decide what renovations to make and how much to invest.
The right real estate agent can help you maximize the results of your sale and leave you with more money in the bank after your transaction closes. Find out more in our posts below:
- Fact Vs Fiction About Working With A Real Estate Agent
- Can a Local Agent Sell Your House For More Money?
- How Do Real Estate Agent Fees Work?
Renovations to Avoid
When preparing your house for sale, it’s critical to understand that there’s a difference between renovating for enjoyment and upgrading to add monetary value. For example, adding a swimming pool may give your family years of happiness and fun, which is worth it at any price if you plan to stay in the home. But it doesn’t make any sense to pay $30,000 or more to install a pool that the new owner will remove. Renovations for your enjoyment can end up costing you when the time comes to sell. Other examples may include:
- Adding solar panels
- Installing carpets
- Installing a wine cellar
- Removing a bathtub in favour of a shower only
- Eliminating a bedroom to create an oversized room
- Too many customizations
Top Upgrades That Increase Your Home’s Value
Before deciding to invest any time or money, it is always wise to consult with your real estate agent. As we mentioned, every buyer is different, and conditions vary by neighbourhood. However, many updates almost always pay off, even if it’s just to help your home sell faster in a slow market.
Your first step is to clean, clean, clean and then clean some more. A thorough cleaning and decluttering of your home costs you nothing but time. But this step alone can help you make a stunning impression on a prospective buyer!
Here are some other minor updates you can perform that can add significant perceived value to your home:
- Refresh the paint, especially in the kitchen, bathroom, bedrooms and living room.
- Replace light fixtures.
- Install new handles on all cabinet and closet doors.
- Replace the silicone around the bathtub and showers.
- Clean up the front yard and add a few seasonal decorations.
When it comes to renovating and preparing your home for sale, less is sometimes more. Done right, a few strategic but minor updates will help you achieve the best results in the least amount of time.
Do you want expert guidance to prepare your home and maximize the value of your sale? Our dedicated professionals are committed to your success and are here to answer any questions you have. Reach out to us right here or call 905-332-9223 to get started.