How much should you invest in renovations before selling your home?

By Kasey Hacking

When our team does market evaluations, one of the most common questions is, “What should we do to get the best price for our home?” All things being equal the best answer is kitchens and baths. I mean, if the roof is curling and the aluminum sliders of windows are broken we have bigger problems, but sometimes even those things can be washed over with a quartz countertop and a soaker jacuzzi.

Kidding aside, according to the appraisal institute of Canada these are the Top 5 Renovations with the Highest Return on Investment. Here are their recommendations followed by my comments.

1. Kitchen – renovation or update with quality of materials and workmanship consistent with the area. This # 1 for me too, especially if you don’t have a master ensuite bathroom or another feature space. You want to have some feature that separates your home from the pack if possible, while maintaining budgetary and style balance. Usually a 10,000$ investment will yield a $19,000 value increase

2. Bathroom – renovation or addition with quality of materials and workmanship consistent with the home and the area. This another area where you can stand out. Everyone wants to see a clean bright space. With a typical room dimension of 8’ x 5’, efficiency and design matter.

3. Repainting interior/exterior – completed in tones with wide-ranging market appeal. I am sometimes torn on this one. If the colour is on point, as a buyer’s agent, I would prefer to see old paint. It gives me more structural confidence for my buyers that things are not shifting and have not been covered up. Still, if the area is renovated, it is expected to have new paint. If something seems unusually painted or more commonly, painted poorly (i.e., roller marks on the ceiling) it can get the spider senses tingling. 

4. Updating décor – lighting and plumbing fixtures, countertops, replacing worn flooring (vinyl or carpets) or refinishing hardwood floors. This is one that can be challenging as in where to stop. I once had a house that was not selling so we pulled the listing off the market and refinished the hardwood floors. It sold with multiple offers two weeks later well over list price. It is better to do it if you have the funds and the time. Often the bank will provide a home equity loan to complete renovations but let them know why you are doing it as well. We can provide you with a before and after estimate to take with you.

5. Decluttering – removing all excess items to showcase the features of your home. To me this is the cheapest and easiest way to make money. It sends an instinctive “moving signal” when you make space in your closets, cabinets, and cupboards. The buyer can visualize their possessions going there. When four brooms and a bushel of shopping bags fall out of the closet it sends the wrong message. 

There are many more areas that can add value, but their return is generally $ in $ out and difficult to predict. Not having central air conditioning is worse in the summer. 

Geothermals and other efficiencies don’t generally move the needle except in comparison to other listings on the market. They may help you sell faster but are not cash-positive generally. That being said, shingles, furnaces, windows and doors are more important than they were 10 years ago. If your home has a structural defect or other major problem, disclose it. Honesty is the best policy. 

Get two quotes for repairs and include them in your listing if you can’t fix them before listing. If you are doing major work, please get permits. Agents are checking and if there’s evidence of major work with no permit it is a major red flag. The city is also watching the market to find unpermitted work, and those fines to your new buyer could get you sued for damages. I could go on for hours, but I promise not to. Just call us or your trusted professional of choice to get some good advice before you finish the basement, pave your driveway, or buy new appliances. 

Kasey Hacking is the daughter of George Hacking who is an award winning realtor at Century 21 Advanced Realty on The Hacking Home Team.

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