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Real estate folly: Remodeling is a great investment before selling your home

You don't always get back what you pay for
Courtesy of CAR One Cool Thing

One of the more common misconceptions people have before listing their home is the need to remodel or do major updates to their property in order to bring a higher sale price.

Painting is fine and so is new carpet but experience has taught me the best money invested in a home prior to listing is complete inspections because then you really know what you are working with. There is nothing more disappointing to a seller than finding out there is thousands of dollars in termite repair to be done after really fixing their place up and an offer has been accepted.

There is nothing wrong with remodeling but do not let anyone tell you it is necessary to do before listing your home. Go right ahead and remodel if you want. You will be lucky to recoup your cost, much less make money.

That is not to say that you can't get back some of the money you spend on remodeling when you sell your home — if you choose your projects wisely. The return on your investment dollar will depend a lot on what you remodel, how much you spend on the job and where you live.

Many maintenance projects must be done to keep up the value of a home, but a great return on your money is not always guaranteed. Some projects recoup only about two-thirds of their cost when you sell the house, while others pay a better return.

Remodeling Magazine’s 2013 Cost vs Value report for the San Francisco Bay Area, including Alameda County, is a great resource for those thinking a new kitchen will pay for itself on resale. The higher quality of the remodel the less the return.

The top five best returns on investment for an upscale job in our area:

1. Garage door replacement gets you back 123.7% on your investment.
2. Window replacement gets you back 113.5% (wood) 110.2% (vinyl) on your investment.
3. Grand entrance (fiberglass?) gets you back 98.8% on your investment.
4. Bathroom remodel gets you back 95.8% of your investment.
5. Replacing siding with fiber-cement brings you back 95.2% on your money.

For a complete list check out Remodel Magazine’s 2013 Cost vs Value report for your metro area.

Want to know more about what to do before listing your home? Email me at americafoy@gmail.com.

If you have any other questions, or want to share your story, please reply to this post, contact me via my website, my facebook page, or on Twitter @AmericaFoy.

*Facts are from Remodeling Magazine, and the California Association Realtors® One Cool Thing