I showed a house yesterday. Nice place. It was all original except the kitchen.
It wasn’t that old of a house, so it wasn’t what I would call outdated. Since it wasn’t that old, nothing was worn out either. I would call it neutrally nice-not bad and not great at the same time.
But that kitchen was super nice, and that was the problem with this house.
Yeah, you read that right. The remodeled kitchen was a negative.
Because the people who are attracted to the house due to that super nice kitchen will be disappointed that the rest of the house isn’t as nice. They leave thinking they would have to “Finish” the rest of the remodeling.
The people who won’t mind the rest of the house don’t care about that super nice kitchen and won’t want to pay for it through the higher list price. They leave thinking the house is overpriced.
It would have been better for this seller to have spent less on the kitchen and updated all of the house evenly.
That has always been my advice after observing how buyers react to houses. All of your house should be consistently nice if you want your updates to add value. If they aren’t, then you are usually giving away that one space where you spent the most money.
I just don’t buy it.
I read an article put out by the National Association of Realtors and the National Association of the Remodeling Industry. It said putting on a new roof is the biggest single item a seller can do to get the highest return. They said it increased the value of a house by 105%. Get this, remodeling or updating your kitchen only brings back about 67% in added value.
I laughed so hard I snorted a little.
About 50% of my work is with buyers. I sell a lot of houses. I have been doing for over 10 years. My experience in and around Lexington Ky is that very few buyers even notice the age or condition of the roof. The HVAC too for that matter. Most buyers care more about the appearance of the house than anything…..assuming they were okay with the location to have even considered viewing the house. Most don’t think about the roof (or windows or HVAC or water heater) until the home inspection. That is why I always try to think about these things for them. I am always telling people the age and condition of the roof and the rest of the house. In fact, I’m working with a buyer right now who fired their old realtor because they kept making offers on houses that were in terrible shape and the deals fell apart after the home inspection. The last thing I want is a client of mine to emotionally move in, tell their friends and family all about the house, and then it fall apart after the home inspection.
Several years ago I listed a house for some clients/friends have used me several times. Their house had new windows and literally a brand new roof. The house was a bit outdated. They found their dream home before doing much inside to this one. The seller knew a lot about houses and wanted to take care of those big items first. LOL, I guess I am the same way because I am sitting in my own home, that has a new water heater, sump pumps and I am about to put in new windows…..yet I have a master bathroom that dates back to when Dallas and Knots Landing were new shows.
I put their house on the market. I showed it several times. It took a while to sell because it was outdated. I would remind buyers that there was $15-20k in windows and the roof that they would not have to spend. I would tell them it is more fun to spend that much on flooring and granite than to buy another house that was updated inside but would need new windows and a roof. It finally sold, but my point is that most buyers make decisions on how updated a house LOOKS. That is just how it works. 99% of the time, I would rather have my sellers drop money on updates that can be seen verses maintenance items than cannot. Unless a roof is just ancient or really ugly, most buyers don’t care as long as it doesn’t leak.
So, I totally disagree with this report. It just isn’t happening in my area.
And ALWAYS consult with a knowledgeable real estate agent in your area before making big decisions. I spend a lot of time advising friends and clients about how to spend money on their houses. You need somebody who knows the market and even your neighborhood to help make decisions.
There are a lot of variables depending on your neighborhood and price range.
We had a hail storm several years ago in South Lexington. Almost everybody got a new roof. The norm in those neighborhoods was to have a new roof. Buyers expected a new roof. It was a negative in that situation to not have a new roof.
There are several neighborhoods that are about 15 years old right now. The norm is to have original HVAC and roof. Since buyers will be viewing houses that all have an older roof or HVAC, a seller would do better to spend money updating the interior if they are considering selling any time soon. If they plan to stay forever, it is okay to spend their money any way they want.
Kitchens and master baths. There is a lot of confusion about them. Watch HGTV and you’d think that is all home buyers care about. Since I don’t want you taking your advice from people who don’t sell houses, here are some things I tell people:
- While kitchens and master baths ARE very important, the whole house must be attractive. All too often I see sellers who blew the budget on a kitchen renovation and left the hall baths and other rooms the same. That is polarizing. Plus, the new stuff just makes the old stuff look worse. If you have $50k to drop on your house, spread the love all over the house.
- Watch out for over-improving. It is soooo easy to get carried away. You’re like “Everybody has granite. I want marble. Well the Carrera Marble is just a little more and I love the veining.” You only have to be a little better than all the other houses in your price range. If you’ve got a $150k house, no $150k buyer is expecting higher end updates.
- Some things just don’t give you a good return on your investment. A massive deck that cost $10k to build might only get you an extra $3k compared to other houses with normal sized decks. A $7k roof really isn’t worth any more than a roof that is less than 10 years old and doesn’t leak. A new water heater has no value over an existing one unless the existing one is just super old. Buyers don’t like to reimburse sellers for maintenance. If it isn’t exciting, then it has no value. It is easier to sell a house with bad windows and granite counter tops than it is to sell a house with argon filled, Low-E triple pane windows and a green laminate counter top.
- THE cheapest thing you can do to help your house sell is fresh paint and carpet/flooring. Think about it, flooring and paint is all you see in most rooms. Even an ugly kitchen or master bath can get a nice facelift with just new flooring and paint.
All this reminds me of several houses I have been in over the years. The best (or worst) one was a house behind where I use to live. A realtor was flipping it. This is in a 1970s neighborhood where most houses still had everything original. He came in and did an amazing kitchen and master bath. He also left the paneling in the downstairs family room. It was a polarizing house. You loved some of it and hated some of it. It didn’t sell.
My wife and I looked at a house in our current neighborhood. It had an amazing deck and high end kitchen cabinets….the kind you see in a magazine. We tried to like it, but the 99 cent laminate floors in the kitchen and the paneling downstairs turned us away. Those sellers must have run out of money when renovating the kitchen. I’ve never seen such cheap. rental grade laminate floors with such nice cabinets.
So when you are thinking about resale, look around and see what is the norm in your neighborhood and price range. Definitely don’t cheap out, but also don’t go overboard.