You’ve probably heard about Remodeling Magazine’s annual Cost Vs. Value Report. The folks at Remodeling Magazine compile data from hundreds of sources all over the country and provide information on the “real world” costs associated with a wide range of remodeling projects. They also provide “return on investment” information for all the published projects. This report is a good tool for remodelers and consumers alike; I rely on info in this report to conduct my own business.
This national report is definitely a valuable tool. That said, remember: All real estate is local. Let me give you a recent example: We have a client whose mother is getting on in years and made the decision to move to an assisted living facility. We were called in to prepare her home for sale and to get it listed and sold. Because we are licensed real estate agents as well as remodeling contractors this was not a problem. In fact, it is something we specialize in.
This home is a very large, two-story colonial with four bedrooms, 2 ½ baths, a two car garage, and a full basement in a very desirable part of town. The home was obviously way too much house for our client and, as a result, had slowly begun to deteriorate. The home had not been updated in years. However, it was built during a time when people still took pride in what they built. All the building materials were of excellent quality.
After doing an initial assessment of the property including a Comparative Market Analysis, we advised out client that if we simply cleaned it up, removed the carpet and maybe painted the interior we could probably list it for $320,000 – $325,000 and actually sell it for around $300,000. But we also advised the client to spend a little more money to try to maximize their return on investment. Now remember that doing minimal work would probably result in eventually going to settlement with a contract for $300,000.
We applied our knowledge of the local real estate market and our understanding of who our buyers are and what today’s buyers are looking for in a home. We also took the following into consideration:
- We can’t do everything.
- We have to maximize return on investment.
- We have a reputation of providing quality remodeling services that we won’t compromise.
- We want to get this house on the market ASAP.
Here is what we did:
- The house needed a new roof so naturally we did that.
- We decided to do absolutely nothing to the kitchen. It is the most expensive room in the house to remodel and is where the widest range of styles and choices are found. We focused on everywhere else.
- We painted the whole house
- We got creative in updating the bathrooms and saved a lot of money by refinishing the vanity cabinets instead of replacing them. We could do this because the cabinets were of good quality.
- We installed new vinyl tile, new light fixtures, mirrors, blinds, etc.
- We removed all the wall to wall carpeting and exposed the beautiful hardwood floors.
- We cleaned up the garage and basement.
When we finished, it was like walking into a different house.
The initial anticipated sale price was $300,000.
The house was listed for $359,000.
It sold in 3 days and settled on March 15th for $363,000
The total cost of the renovation was $35,273.00
Our clients realized a net profit directly related to the work we performed of $27,727.
We believe that the remodeling contributed significantly to both the higher sale price and to the speed with which the house sold. Had we not updated this house, it could have lingered on the market for months or even longer.
If you’re thinking of selling your home, definitely review the most recent Cost vs. Value Report. But also find a local real estate and remodeling professional who can advise you based on what buyers are looking for in your community.