Home improvements are one of those aspects of real estate that can’t always be summed up solely with cold hard facts.
One benchmark for judging the best home improvements is the annual Cost vs. Value Report published by Remodeling magazine in cooperation with the National Association of Realtors for the past 16 years. The report, which can be downloaded free, compares 35 midrange and upscale improvements in 100 markets nationwide. The projects range from relatively inexpensive ones like replacing entry and garage doors to substantial investments like adding an attic bedroom or an entire second story.
* Based on percentage of cost recouped nationwide according to Remodeling magazine’s Cost vs. Value Report
Home office remodeling returns the worst value at 48.9 percent, according to the Cost vs. Value Report. Other potentially poor choices are sunroom additions, bathroom additions, master suite additions and backup power generators, all of which yielded less than a 68 percent return on investment.
With window replacement so highly rated, another area to consider when investing in home improvements is energy efficiency. According to a new National Association of Home Builders Remodelers survey, high-performing, low-emissive windows proved to be the most common green building products used by residential remodelers.
“Remodeling can not only improve the overall layout and features of a home, but depending on the upgrades you choose, you can also save money on utilities, improve indoor air quality and strengthen the long-term value of your home,” says NAHB Remodelers Chair Paul Sullivan.
The home builders group says other popular green projects include high efficiency HVAC systems, programmable thermostats and Energy Star appliances.
The return on investment of green home features shouldn’t be underestimated. In Builder magazine, researcher Suzanne Shelton says that about 25 percent of the population has embraced the concept of more sustainable, efficient, healthier homes. “They see it not only as something good for them and their families, but as a way they can do their part to make the world (and) environment a bit better,” Shelton says. “They tend to be on the affluent side, and consistently tell us they would pay a price premium for a home with sustainable, efficient features.” Shelton estimates that a home with such features could yield a 5 percent to 10 percent price premium.
Although some projects can be expensive and extensive, careful attention to a home’s exterior curb appeal and its interior staging can pay off in many ways, not the least of which is in ensuring a great first impression for potential buyers.
Minor kitchen upgrades provides one such good return on investment. Leslie Molloy, a Certified Kitchen Designer and residential designer at Normandy Remodeling in Hinsdale, Illinois, says that at an absolute minimum she recommends updating finishes, painting cabinets that are a less-than desirable color and adding new knobs and hinges. “That would be huge,” Molloy says.
Granite countertops are big, too, she says — but advises caution. “I’ve seen so many kitchens with new granite but dated cabinets and fixtures. People will pick up on the fact if you’ve done a half-hearted job.”
When considering home improvement projects, don’t forget to evaluate your kitchen appliances. If any are more than 20 years old, homeowners should consider replacing them. “Stainless is a way to convey modernity and quality,” Molloy says.
Making sure your kitchen impresses prospective buyers is extremely important. “People want to move into something that’s ready,” she says. In addition, with today’s buyer preference for open floor plans, buyers realize they’ll be “staring at that kitchen the whole time.”
In the kitchen and elsewhere, paint goes a long way, Molloy notes. Get rid of dark trim, and if, like so many homes built 25 years ago, yours has “oak everywhere,” whip out that paintbrush. “Paint oak railings, pine doors and wood trim (in a white tone). That will have a huge visual impact.”
Donna L. Stoutenburg of Artistic Endeavors 4 U, a staging and redesign company based in Streamwood, Illinois, agrees that small remodeling can have a big impact. She agrees with Molloy that painting is something sellers must address, especially if they have rooms — bedrooms are repeat offenders — with garish colors.
In such situations, prospective buyers see negative dollar signs. “They know they’re going to have to paint, and that one coat isn’t going to do it,” Stoutenburg says. Sellers should do the painting themselves, rather than risk having a buyer suggest a price reduction.
Neglecting to perform careful and cost-effective remodeling and staging can seriously derail your ability to market your home, she says. If a home remains on the market for a long time, incremental reductions demanded by a property that fails to ignite buyer interest can add up.
“We’re talking maybe $20,000 in a year’s time,” Stoutenburg says. “If (the sellers) had spent $2,000 in the beginning, they’d be out of there and in their new home.”
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