IMPROVEMENTS THAT PAY
If you’re thinking about remodeling your kitchen, or finishing your basement, you probably want to get your investment back when you sell your home. When it comes to payback value of home improvements, some are definitely more profitable than others. As a general rule, kitchen and bathroom projects typically receive 90% return or more. Things like adding rooms or finishing basements tend to pay back the least. Finishing a basement usually returns less than 50%, so it’s not a project likely to show profit at selling time.
There are a number of factors that go into determining how well a project will pay back. Payback value depends a lot on the current market conditions in your area. If the market is hot and homes are selling fast, you can expect a higher payback value than you would get in a slow market.
The type of project you do and how it fits in with other homes in the area can have a big influence on payback too. If you put your money into the wrong type of improvement, you won’t get your money back. But if you're smart about what you do, you can make money. The payback will be better on improvements that are in demand and conform to neighborhood standards. Adding a second bathroom in a neighborhood where most homes have two bathrooms will give a high return on investment. Building a large addition that makes your home twice as big as the other homes on the block probably won’t pay back very well. Likewise, the popularity of a project will factor into how much it pays back. An improvement heavily customized to your wants and needs won’t pay back as well as something more common to other homes in the neighborhood.
Another factor to consider is the cost of the improvements. If you can do the work yourself, you can save significantly on the cost of the project and greatly improve the chances of getting a good return on the investment.
The list below is compiled from several published surveys and shows typical payback for some popular remodeling projects:
Kitchen remodeling – 90%
Add a bathroom – 90%
Bathroom remodeling – 80%
Install central heating – 90%
Install central air – 75%
Add a deck – 70%
Replace windows – 70%
Add a room – 55%
Build a pool – 45%
Finish a basement – 40%
MAKE SURE YOUR HOME IS EASY TO SHOW
To get your home sold quickly, it’s important that other agents in the area show it to as many potential buyers as possible. The first thing a good agent will do when working with buyers is talk to the buyer and learn what kind of home they are looking for. Then the agent will search all the available homes for those most closely matching what the buyer wants. Next, the agent puts together a list of the best matches to go show to the buyer. When a busy agent is compiling a list of homes to show a buyer, the agent will naturally tend to show those houses that are easiest to gain access to first. Many homes on the market have “lock boxes” on them. The lock box is a device which holds a key to the home, that only qualified local agents can access. Homes that are listed as being “lock box, no appointment needed” will get shown more often than homes listed as “agent has key, call for appointment”.If at all possible, you should let your agent put a lock box on your home for easier showing.
If you can’t do a lock box, you need to be sure that you make it as convenient and easy as possible for other agents to show your home. If they call, do whatever you have to do to accommodate letting them show your home to buyers on their schedule. If you don’t, the agent will probably show the buyer other homes, and if that buyer makes an offer on one of them, you’ve just lost a great opportunity.
It’s best if you can leave when the agent and buyer arrive to see your home. Buyers won’t feel comfortable with you there, and it could sour an otherwise good impression.