I often get asked about renovations and increases to home values during a home evaluation. “If we replace the deck will we get a higher sale price?” “Should we upgrade the countertop to granite?”
My main answer is always about disrepair. If there are elements in your home in disrepair or lower quality than comparable homes in your neighbourhood it is worth a good review to avoid a negative adjustment. For example, all the homes in your neighbourhood have a small deck in the back. Your home has stairs only with no back deck. This will probably be a negative adjustment as your home will sell for less than comparable homes.
All other homes for sale have relatively neutral paint in good condition. If you home is painted in unusual colours or is obviously damaged then folks will see a price tag. This same thinking goes for any major items (functional or cosmetic) that a buyer sees as they view your home online or during a showing. It is a beauty contest after all.
Most home buyers do not have additional money for major repairs after purchase. The exception is a ‘fixer upper’.
The decision to renovate or not depends on how livable the home is in the current state and how your home compares to others in your neighbourhood. I can help you with the details here.
What is new paint worth compared to other homes? A new roof? A new deck? A pool?
Having access to a 2019 renovation guide specifically for Alberta I can help you answer those questions.
Renovation values have a range. For example, new hardwood floors ($9-$13 sq ft) net a return of approximately 60-80%. A more preferred colour and design as well as professional installation would increase the return over a less popular design choice or poor installation. Interestingly a cork floor ($7.50-$10 sq ft) has a return of approximately 25-45%. That’s good information when you are standing at the flooring store picking your samples.
An item such as a roof is a typical consideration. Looking at a home with a roof that needs immediate replacement, buyers see the replacement cost as a big immediate expense but the ‘what ifs’ also enter their mind. What if there is a leak? What if there is mold? What additional repair costs are there? What if…. When a buyer sees a new roof they have more confidence that they will not have any issues with this part of the home and they just move on to looking at other aspects of the property. The new roof home will sell for more and most likely faster than the home with a roof that needs to be replaced. Expectations here differ depending on price point, but when comparing two similar homes that would be a trend I have seen often.
Basement developments. What is your guess on return? Would you be surprised the approximate return is 50-75%? If you complete without permits this number will be less.
If you are considering renovations specifically for sale please give me a call. I am happy to share the report and meet with you to develop the best plan to get your home sold. You can reach me directly at 403 850 2446.
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