One of the top questions we get from our clients as they get ready to sell is if they should think about renovating before selling their home.
Sure, you want to sell it for more than you paid. But the truth is, the “right” answer is complicated because certain renovations will never raise the value of your home enough for you to break even on the cost.
Here’s what you need to know when you’re asking, “Should I be renovating before selling my home?”
What do Buyers Really Want?
When your agent is preparing your selling strategy with you, one of the main points you’ll discuss is what type of buyer are you looking to attract. Are you looking to target those who want a move-in-ready home, or are you aiming for people who want a fixer-upper property?
For buyers who are looking to fix up their own homes, saving money is the main factor. Many who want to fix or flip the property simply like the house and the neighborhood – and some even think they’ll enjoy the work.
When you’re selling your home, you should make renovation plans based on which type of buyer you’re looking to attract. You need to make plans based on your:
Timeline
Budget
Listing price intent
In other words, you may not want to launch a complete kitchen remodel if you plan to move in a month. Similarly, you shouldn’t expect to list your fixer-upper home for the same amount as the pristine, move-in-ready home next door.
Things to Consider Before Renovating
There are a number of factors to consider before jumping into a pre-listing renovation. It’s a big undertaking and a large investment, so it’s best to be sure you know if your time and money will provide the return you’re looking for.
Market Health
One of the first factors we examine with our clients is the health of the market in their neighbourhood.
If it turns out that your home is located in a sleepy market, renovating it could make sense. This especially rings true during the winter months when transactions sometimes slow slightly. But a close examination of the market is necessary because one of the biggest mistakes a seller can make is to miss a hot market because they want to do renovations.
If the market in your neighbourhood shows comps are selling within a few days on the market, you may want to reconsider that reno and list as quickly as possible.
You’ll likely save yourself a large amount of cash, plenty of headaches, and still get a solid price on your home.
Consider Your Timeline
The timeline for listing your property determines the scale of your remodel projects. How much time do you have on your hands before you move? If you don’t have a lot of time, you may want to consider a simple refresh of certain items that won’t take that long to complete. Things we suggest include:
- Painting rooms
- Updating lighting fixtures
- Paint kitchen cabinets
- New kitchen fixtures
- Improved landscaping
Long-term renovation projects could involve getting a contractor over several weeks, and while we’re still in a COVID environment, could take as much as 6 months to complete:
- Basement remodeling
- Kitchen remodels
- Custom cabinet installation
- Bathroom changes
- Deck installation
- Roofing installation
In other words, if you’d like to list the home in 6 weeks, you might squeak by with some of the smaller items, but not a full kitchen remodel or basement reno.
Renovating Before Selling: Return on Investment
Not all renovations are guaranteed to bring you the return on investment through a dramatic price increase that many sellers are looking for.
When you consider renovating before selling and think about your ROI, you need to take into consideration many things:
- Cost of renovations
- Timeline of renovations
- Sweat equity
- Delays
- Carrying costs
- Missed market costs
It’s important to keep in mind the cost vs. value mindset when it comes to renovations. What does this mean? It means how a remodeling project is perceived depends on more than just the straight amount you spend on renovations – it also depends on a variety of factors – the condition of the rest of the house, the value of similar homes nearby and even how much other homes in the area fluctuate in value. In addition, home renovations rarely generate profit in a seller’s market.
DIY Projects To Increase Profit
Do-it-yourself projects can help save on labor costs and increase your ability to spread your DIY wings. You can choose from many small- to mid-scale projects without professional help:
- Paint makes a home look larger and well maintained. Choose neutral colors such as gray and greige, the current best colors for selling a house.
- Lighting makes your home look lighter and brighter and more inviting. Try to cover every 50 square feet with at least 100 watts of electricity. Try to include ambient (overhead) lighting, task-specific lighting (such as under-cabinet and reading lights) and accent lighting for tables or walls.
- Update cabinets if they’re mild toned or honey oak color and/or update your hardware. Outdated cabinets can make your house look out of style. You can paint the cabinets for a less expensive option.
- Add cellular blinds. Get rid of curtains or dated heavy drapery that blocks light and makes your space look smaller.
Enhance the Exterior
Does your home have curb appeal? Get (literally) into the dirt and fix up a few things before you sell:
- Paint the front door. Think of your front door as the cheery welcome every buyer sees – after the landscaping. It’s worth it to make sure it’s adorned with a cheerful, neat fresh coat of paint before you sell.
- Replace exterior lighting. Make sure you add new exterior fixtures and add uplights where you’d like to draw attention to particular areas, such as a gorgeous Japanese maple near the porch. Use lighting to your advantage.
- Wash the siding. It’s easy to accumulate dirt, cobwebs, and other debris on the siding. Wash with a pressure sprayer and investigate where you need to touch up the paint, fix a loose piece of siding or two, and more.
- Fix the walkway. Is there a broken brick or loose flagstone in a few pieces along your walkway? If there are lots of weeds in your sidewalk, spray them or pull them regularly. You don’t want to plant seeds of doubt with potential buyers by revealing unsightly weeds or cracks before they even make it inside.
- Add pops of color with flowers and plants. Flowers and plants like brightly colored annuals make such a difference when you’re showing your home. Don’t forget to place a few potted plants on the porch and deck for added appeal.
Repairs and Deep Cleaning
Even if you’re considering renovating before selling, you still need to make obvious repairs and updates, plus deep clean the property – doing these things alone can increase home value. You can:
- Wash your interior walls and exterior siding.
- Clean your gutters.
- Mow the lawn, remove weeds and prune bushes.
- Repair the fence (if missing pickets exist) and repaint if necessary.
- Make sure you remove leaves and sticks from the pool.
- Pressure wash your driveway, sidewalk, and other walkways.
The decision to renovate or not should be based on your timeline, market, budget, and price intent. Unfortunately, there’s no “right” or magic bullet answer to whether you should renovate your home.
But the number one factor any seller should consider is how hot is the market now in your neighbourhood and are you willing to chance missing that market to make some updates to your home.
In deciding when to sell, a strategy should be developed with your agent to ensure you get the most money for your home, and many times, striking while the iron is hot will get you more money in the long run for your home.
If you’d like to learn more about how the Toronto Realty Boutique Team can help you set up a selling strategy that will get you more for your home, simply fill out our form on this page or email us at info@TorontoRealtyBoutique.com – we’ll be in touch right away.