Before putting a house on the market, sellers often consider renovating one or more rooms in hopes of attracting more buyers and getting a better price. However, a big investment doesn’t always net a big return. “If you’re a seller, it doesn’t pay to redo your kitchen and bathrooms. It makes it easier to sell, but the bank isn’t going to give you more,” said Rich McQuillan, owner of Exit Links Reality in Rockville Centre.
According to McQuillan, banks usually only add about 20 percent of the improvement’s cost to the property value. That means a $20,000 upgrade to a bathroom may only increase the overall value by $4,000, even though that renovation could make the home more attractive to some buyers.
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A new kitchen with all-red appliances might be the seller’s dream, but it’s not going to appeal to most buyers. “You also have to be careful in the materials you choose, because not everybody wants the same thing,” said Claudia LeMere, a licensed real estate sales person with Hampton Realty Associates. “If you go someplace that’s very neutral, that’s a good bet.” Any renovations sellers decide to do should appeal to a wide range. McQuillan noted that stainless steel appliances and granite countertops tend to have broad appeal.
It’s also important for a seller to realize it might not always be worth springing for a big renovation. Depending on the house itself, it might be better to do nothing. “If I had a house that was $300,000 and was going to be torn down, I wouldn’t say to do it,” LeMere said. “If I had a home that was $800,000, I’d say do it. When you get into the million-dollar range, you’re not going to be spending $20,000 on a kitchen. It’s different for every price point.”
The easiest way to get more bang for your buck, and to make a home more attractive to sellers, is to make small changes instead. “Curb appeal” is a real estate buzzword, but it’s true. The house should look nice on the outside, with a well-maintained lawn, trimmed bushes and some flowers, if the season allows.
Inside, simple changes can go a long way as well. De-clutter the house and make sure everything is neat. If there’s a dirty, old carpet, rip it out. Buyers tend to like hardwood floors anyway. And don’t underestimate what a fresh coat of paint can do. “If you have a bedroom that’s painted pink and has an old carpet, rip it up and paint it a different color and it becomes a totally different room,” McQuillan said. “Even the smell of new paint will do wonders to an older house,” LeMere added.