Deciding to sell your home doesn’t mean the end of decision-making, and one thing that might be running through your mind is whether or not you should renovate your home to try and make a better sale. To help out, we’ve done some thought-organizing for you—keep reading to learn 5 things you should consider when you’re considering a home renovation.
- A lot of buyers want a move-in ready home, but not everyone.
According to a 2020 survey done by Coldwell Banker, 80% of respondents said that they would prefer a move-in ready home over one that needed updates. That sounds like a lot, but skipping renovations doesn’t mean that your house won’t sell. There are plenty of homebuyers out there who want to be able to update a home to their liking, as well as homebuyers who may be priced out of the move-in ready market. Don’t fixate on an imaginary buyer. Instead, take a look at what kind of homes are selling around you.
- Your investment isn’t guaranteed to pay off.
The driving force behind doing pre-sale renovations is being able to sell your home for a larger profit—to get a return on investment, or ROI. But even a perfectly-done renovation project isn’t guaranteed to net you the ROI of your dreams. If you pour too much money in, you could end up with a house that’s priced too high for the neighborhood. And keep in mind that there’s no way to account for individual taste—you might spend weeks revamping your kitchen and still lose out on a sale to someone who loved everything BUT the kitchen.
- Renovations don’t just cost money.
Remember that renovations aren’t just a monetary investment—they’re also an investment of your time, and if you’re doing the renovations yourself, a labor investment. Before you commit to gutting your bathroom, take a look at your timeline. If you need to sell quickly, you should probably take major renovations off the table. And even if you do have the time, make sure to ask yourself if you’re comfortable with living in a construction zone for a while.
- Avoiding some repairs may slow the sale of your home.
While doing renovation can be a risk, sometimes NOT doing them is just as much of a risk. Some types of loans restrict potential homebuyers from purchasing homes that don’t meet minimum property requirements—i.e., that have issues related to safety, soundness, and security. Even if that’s not a problem for a buyer, major issues could still cause contract negotiations to get drawn out longer than you might like. If your home has major issues (like utility or structural problems) and you can’t or don’t want to renovate, your best bet may be to market the home explicitly as a fixer-upper.
- Small-scale updates and basic maintenance can net you big returns.
Let’s assume that your home doesn’t need any major work done. It’s structurally sound and all the utilities are in safe working order—but you’re still interested in trying to renovate to get that ROI. The good news is that you can do that without tearing your home apart and rebuilding it—in fact, minor updates often pay off more than major ones do. For example, in 2021 minor kitchen remodels had an average 72.2% ROI, while major kitchen remodels clocked in at only 53.9%. The bottom line? If you don’t need major renovations, don’t do them. Instead, focusing on fixing anything that’s broken, making cosmetic upgrades (like repainting or replacing hardware), and keeping your home clean.
The decision to do pre-sale renovations should be based on your budget, timeline, and market. But before you dive in, consult with your real estate agent—they’ll know what will and won’t pay off better than anyone else.