In today’s real estate market, you can find several companies that will be willing to purchase your home as-is. Because of this, it can be tempting to sell your home without going through all the hassle of doing a major renovation. However, there are several reasons why it will be beneficial to renovate before selling a home.
Renovating a home will make it more appealing to today’s buyers
When potential buyers are looking for a home, many of them will want to consider a home that does not need any repairs. Watching the do-it-yourself television shows might make it seem that everyone wants to roll up their sleeves and grab a sledgehammer. However, not everyone wants to have to make major home repairs or have the skills to do so.
Because it’s impossible to know exactly how much home repairs will cost until you get involved, it could be frightening for buyers to buy a home that needs repairs. For this reason, a home that is move-in ready will be more appealing to these buyers.
A renovated home can be used as an investment property
With the shortage of affordable housing in many areas of the country today, renovating a home can create an income-producing property that can make it more attractive to buyers. Stanley Acton, founder and chief executive officer of ActonADU.com, has been building homes in California for over 30 years. Action maintains that accessory dwelling units (ADUs) give homeowners more housing options for keeping family members close or to rent out for extra income.
Whether a basement is converted into an apartment or a backyard shed is turned into a small apartment, this is extra space that can be used as an in-law suite, privacy for a college student, or potential rental income property.
A renovated home will help ensure the house is up to code
Depending upon the age of the home, it may be necessary to update the home to ensure that it meets the current code regulations. Older homes may require some electrical wiring or plumbing pipes to be replaced. Although there may not be any apparent problems with the electrical wiring or plumbing, these items could cause problems for the new owners down the road if they are not replaced.
Replacing old wiring and plumbing will also help ensure the house will pass a home inspection. Savvy buyers have knowledge of these types of issues and may steer clear of buying a home that has not been updated.
Repairing items that are broken or not working are necessary renovations
Unless you are selling your house as-is, you should ensure that the house is structurally sound, and all the essential items are in good condition. Before investing money in cosmetic improvements, make sure everything in the home is in good working order. Some of the concerns a buyer may have are the age of the roof, air conditioners, and appliances. If possible, these items should not be ignored.
It will not help to have Corian countertops and maple wood cabinets if the water pressure in the kitchen sink is weak due to hard water buildup. Window treatments that are missing or torn can easily be replaced.
If you have enough time or money for renovations
Your reason for selling the home may determine whether making the necessary repairs is possible. If you do not have much time to sell the house because of a job transfer or some other reason, it may make more sense to sell the house in an as-is condition. Some of the needed repairs may be too expensive or may take too long to be completed.
In this case, it may be better to reduce the price of the house to compensate for the cost of the needed repairs. Some buyers may want to purchase a home under these conditions because they get to use their own ideas and decorating choices when renovating themselves. Other buyers may like the idea of buying a house for less, knowing that the appraised value will increase once the renovations are complete.
When selling a home that needs repairs, it may not be possible to obtain traditional financing. Therefore, it must be priced appropriately to make it more attractive to cash buyers or investors.
A renovated home will be move-in ready
In 2017, the Home Improvement Research Institute (HIRI) conducted a study, which revealed that 51% of the buyers looking for a new home planned to purchase one that did not require any major renovations. For those buyers, a house that does not need any significant repair work done will be more appealing.
This does not mean that the house must be perfect. Studies conducted by the HIRI also showed that most homeowners spent about $4,000 on home improvement projects within their first year in the home.
A renovated home may sell for more money
According to some top-selling real estate agents, you can expect to get back almost 70% of the amount of money you spend on renovations. However, you must be careful in choosing the project and make sure the upgrades are ones that a new buyer will appreciate. Bathroom and kitchen upgrades tend to bring the most return on investment. Replacing worn-out flooring with new tile or hardwood flooring can also yield positive returns.
Renovating a home will make it more appealing to today’s buyers who don’t have the money, skills, or time to do home remodeling. If a house has been recently renovated, it lets potential buyers know that it is both up to date and up to code. This will be especially important if it is an older house with the potential for outdated electrical wiring or plumbing.
When remodeling your home, make sure that the renovations are ones that count. It’s more important to make sure that everything works right and not just looks good. A renovated house will be move-in ready and has the potential to sell for more money. If an ADU is added to the home, it can produce potential rental income that can help pay for the renovations.
If you have the time and money to ensure the house is in its best possible condition before selling it, why not do so? Renovating the house will help ensure that you do not leave any money on the table.