When Remodeling For Resale, Minor Improvements Pay Off More
WASHINGTON — If you’re trying to sell your house, you’ll probably need to grab a paint brush — or at least a phone to call a contractor. But as you fix up the place, keep a close eye on costs, as major remodeling projects rarely add to a seller’s bottom line.
Even a minor, mid-range kitchen remodeling project in the D.C. area would cost about $21,000, and a major “upscale” kitchen upgrade would cost $110,521, according to Remodeling magazine’s 2007 Cost vs. Value report. That report seeks to estimate the costs of common remodeling projects and how much of the investment will be recouped at resale.
“To sink those kinds of dollars into a property that you are planning on leaving is very risky,” said John Wuestman, a broker and an owner of suburban ReMax Advantage Realty. “Any thought of recapturing 100 percent of that isn’t true. … It’s more like 70 to 75 percent.”
Payoff for recent remodeling projects at resale varies depending on the project, Remodeling found. That mid-range kitchen upgrade, for instance, would add about $17,000 to the home’s resale price, recouping about 82 percent of its cost. The upscale version would add about $85,000 to the bottom line, for a 77 percent payoff on investment.
Some projects had worse payoffs than kitchens, the Remodeling report found. Installing a backup generator, for example, cost an average of $12,874 but returned only 55 percent of that in value. Home-office remodeling also brought a poor return, costing an average of $26,679 and recapturing 56 percent of that in value.
That doesn’t mean you should just throw up your hands and ask for less, though. “Anything that’s broken or that you’re thinking, ‘We’re just going to knock off the price,’ fix it,” Wuestman said.
“You’re better off doing it yourself,” agreed Barbara Nowak, an agent in Long & Foster’s suburban Burke, Va., office. She cautioned sellers against avoiding the work by instead offering credits toward repairs such as carpet replacement.
Still, “people have to be very cautious,” she said, noting that in her experience, many of the projects with the biggest payoffs were also the least expensive. The most important improvement is to “clean the house and clear the clutter.”
After that, “paint’s always a big thing,” Nowak said. Sellers should remove dated wallpaper and stained or worn flooring. Consider replacing any dated light fixtures, Nowak said. “Those things will give you pretty good bang for the buck.”
Overhauling a kitchen is costly and should be taken on cautiously. Most sellers should focus on small changes instead.
One easy upgrade, for several hundred dollars, is installing a microwave over the stove, Nowak said. “Having a microwave on the counter takes up valuable counter space. Even a microwave cart really closes up a room.”
Bill Millholland, who oversees the kitchen-and-bath division at suburban Case Design/Remodeling, said he encourages clients who plan to move within a year to approach upgrades “fairly modestly.” The biggest money saver is not moving any appliances or sinks: “It still counts as a brand-new kitchen if that stuff is in the same place.”
In bathrooms, too, sellers should consider small fixes before major ones, Nowak said.
A mid-range bathroom remodeling job would cost a Washington-area homeowner an average of $16,028, and an upscale one nearly $52,000, according to the Cost vs. Value report.
But you can reglaze a tub for about $400, Nowak pointed out. To spruce up a room, “sometimes it’s just a matter of replacing a vanity.”
The project that provided the greatest return on investment in Remodeling’s report was the addition of a wood deck, a project that would cost $10,260 in the Washington area and return an average of 98 percent in value.
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