I love talking with clients about all things real estate, whether it be about the possibility of selling their home, purchasing a home, or just how the market is doing. One of my favorite calls, though, is about guiding our clients as they look to upgrade or remodel their home. Beyond simply understanding the current trends or which contractor to use, there are several questions to be answered before making the significant investment of a remodel, not to mention the mess and inconvenience! To start with, a lot of people aren’t sure what areas of their home should get the attention. Should it be the kitchens and bathrooms, or maybe the floors and paint? Should they do all of it at once or piece-meal it? These are all valid questions, and I thought we could explore them and explain what adds actual value to a home and what could just be a sell-ability feature.
To begin, it helps first to understand how a home is valued on an appraisal. When an appraiser does their report, they compare the subject property (the house being appraised) to homes in the general area that are relatively similar, and then they adjust for differences. The adjustments will include things like square footage of both the home and the lot, the quantity of bedrooms & bathrooms, pool, solar, etc. In addition to this, of course, is both the condition and the overall level of upgrades. The keyword is “overall”, because the appraiser doesn’t adjust for specific things like granite countertops or tile floors, crown moulding, or upgraded walk-in showers. The appraiser is looking at the totality of the home as it compares to the other homes that are similar. The easiest way I have found to explain it is to look at homes in tiers. The first tier would be a home with little to no updates since it was first built. A home can still be very clean and well taken care of, and even have new carpets or air conditioning, but it hasn’t been updated to current styles and finishes. The second tier would be homes that have had some updates like paint, new floors, fixtures, and possibly even an upgraded shower or new countertops, but the whole home hasn’t been fully updated or remodeled. Most homes fall somewhere between these two tiers. The top tier is, as you might guess, updated nearly top to bottom—new or remodeled kitchens and bathrooms, new floors, paint, landscaping, etc. With upgrades like media walls, fireplaces, window shutters, and in some cases, walls may have been opened up or removed entirely to open the space. These types of homes are not the norm, and they usually fetch quite the premium sales price, which only homes equally as updated can compare to.
The reason we break this down in this way is to give you a baseline understanding as you embark on your improvements. It doesn’t mean that the only way to improve the value of your home is to remodel it fully; it just means that you should know that many of the upgrades you might do will make your home more sellable, which usually translates to a higher sales price. Still, the upgrade itself individually isn’t a dollar-for-dollar return. The best investment in improvements starts with floors, paint, and curb appeal, then in kitchens and bathrooms. These tend to be the most expensive, but are the most impactful. They don’t have to be gutted to be updated and can be made beautiful quite easily by simply painting the cabinets, changing to more modern hardware, and fixtures. Updating your home doesn’t have to break the bank and can be taken one piece or room at a time. At the end of the day, though, I think you should make these updates because YOU want them, not because of what it will do for you down the line when you go to sell your home. So, if you’re considering making updates to your home and would like to talk and have me help guide you, please give me a call. I’m very happy to help! :)