Thinking about selling your home? If so, you’ll want to start considering renovations.
In real estate, it’s no secret that renovations wield a substantial force in boosting a home sale. Making enhancements to the property before the sale is a popular strategy that sellers employ to set up their transaction for success.
But, there’s still a lot to unpack regarding renovations and home sales.
A major question about renovating before a sale is if they’re even worth it. Do renovations really make an impact on the sale? The answer is yes — but there’s a catch. The degree to which a renovation enhances a sale’s value varies from project to project.
Our team is providing a deep dive into renovation potentials and outlining the projects that have the best bang for your buck. Let’s dive in!
5 Renovations to Prioritize
According to national data from the 2020 Cost Vs. Value report, these 5 renovations give sellers the most bang for their buck. Homeowners, focus on these 5 renovations that are proven to generate substantial resale values:
1. Manufactured Stone Veneer
The renovation project with the greatest recouped cost is replacing vinyl siding from the home’s facade and replacing it with manufactured stone veneer. This project involves replacing the bottom-third of the street-facing side’s vinyl siding with a stone veneer. Outline the entryway with the new material for an added touch!
This job typically costs $9,357 and boasts a resale value of $8,943 — with 95.6% of the cost recouped. The value for this renovation has been steadily increasing over the years and is expected to continue rising.
2. Garage Door Replacement
Replacing the existing garage door with a new four-section door on heavy-duty galvanized steel tracks with a motorized opener has spiked in cost-to-value ratio since 2015.
This renovation costs $3,695 and has a resale value of $3,491 — with 94.5% of the project’s costs recouped in the sale.
3. Minor Kitchen Remodel
A minor kitchen renovation is a pricey but powerful way to increase your home’s selling value. Homeowners should concentrate on replacing cabinet fronts with shaker-wood style panels, adding new hardware, installing energy-efficient appliances, painting the walls, and adding resilient flooring.
On average, this job costs $23,452… but the large price tag is regained with the project’s selling cost of $18,206. 77.6% of the initial costs are recouped in the sale.
4. Fiber-Cement Siding Replacement
Replacing your home’s siding with new factory-made fiber-cement siding is a great renovation to boost curb appeal. Don’t forget to follow up with a fresh coat of paint!
This job costs $17,000, holds a resale value of $13,195, and 77.6% of the costs are recouped.
5. Vinyl Siding Replacement
Installing new vinyl to your home’s siding is last on our list of powerful home renovation projects. This renovation costs $14,359 and resells at $10,731. 74.7% of the costs are made back in the sale.
Investing in Renovations
Prepping a home to be listed is one of the first processes to kick off a sale. Inspections, repairs, and renovations are all key aspects of the pre-listing phase.
However, the idea of a full-scale renovation can be daunting to many sellers. After all, renovations are costly and time-consuming. But, these aspects don’t take away from the value of renovating your property. Homeowners should always view pre-sale renovations as an investment.
By making upgrades to your property, you’re creating a better foundation for the upcoming transaction. Having made renovations before the sale puts sellers in an empowered position to appeal to buyers. When you make renovations, you can add that to the listing description — which sends out a great message to buyers.
Renovations Show Buyers You Care
Buyers are always wary of undetected issues hiding within a prospective new home. Making presale renovations shows the buyer that the previous homeowner was taking care of the property. Knowing that the seller has invested in the home and actively made improvements in preparation for the new owners will attract buyers and help them feel confident about moving forward.
Stand Out from Competing Sellers
Besides wooing buyers, recently renovated homes also out beat comparable market listings. When choosing between two similar listed properties, buyers would be more apt to choose the listing with presale renovations over an unrenovated property. Making renovations can help homeowners stand out within a densely competitive market.
Renovating for a More Profitable Sale
Last but not least, renovations have the potential to boost your listing into a new bracket of value. Increasing the property’s selling value is one of the most enticing aspects of making renovations to a home before listing it on the market. Investing in renovation projects prior to selling becomes a direct investment towards your transaction.
For most people, buying and selling a home is the most expensive transaction made in their lifetime. With so much at stake, it’s important for sellers to do their utmost to prepare. Leveraging renovations allows sellers to empower their transactions and make the most out of their real estate sales.
Not All Renovations are Equal
When considering the power of renovations, don’t think that all projects are equal. It’s important for homeowners to know that not all renovations have the same investment potential. Data-backed reports on building and construction have been identifying the renovations that have the biggest impact on a home’s sale value.
Gauging the effectiveness of a presale renovation project is all about input versus output. Renovations that really provide the most bang for your buck are ones that tangibly generate returns that recoup the initial investment costs. When deciding on what renovations to invest in, make sure you’re prioritizing ones that make observable improvements to your selling potential.
Working with Newrez to Fund Renovations
Facilitating a strategic home sale is all about collaboration.
Sellers who are eager to make these valuable renovations shouldn’t shy away from the price tags of these projects. Newrez can help you fund the upfront costs of these projects with our cash-out refinancing program. A cash-out refi gives homeowners access to a portion of their accumulated equity in cash — which can be used to make renovations.
Get Started On Your Cash-Out Refinance!
