If you are preparing to sell, you may wonder if updates are really worth it given the current shortage of homes for sale. That’s a good question. According to Freddie Mac and the National Association of Realtors (NAR), nearly 2 in 5 homebuyers would consider purchasing a home requiring updates… but that still leaves more than half of homebuyers who want to purchase a move-in ready house, often because they don’t have the time, money, skills or desire to tackle updates themselves. I see it over and over again when showing homes to prospective buyers. Homes that show well are flooded with showings and typically get multiple offers very quickly while homes needing updates are passed over waiting for the right buyer.
Return on investment for updates can vary widely depending on where you live and your specific home, but I was surprised when I saw there was one update that yielded the highest return by far nationwide, according to Freddie Mac and NAR.
Refinishing hardwood floors can yield more than a 140% return!
It made me think of the home I listed in the photo above. It was a mid-century classic, built in 1953 with hardwood floors hidden under carpet for many years. The owner had someone who was interested in buying it before she did any updates, but she wasn’t happy with the price he was offering.
She contacted me and decided to move forward with some updates, the biggest being the floors. It wasn’t simply a matter of removing the carpet because the addition in the photo above never had hardwood, it was always carpeted. She decided to fill in new hardwood where it was missing and tie it into the kitchen… then had the hardwood floors throughout the main level refinished and the house professionally staged.
It looked spectacular! All the updates including the hardwood floors cost her about $10,000… and she sold it with multiple offers for $65k over the offer she had selling it AS IS. In today’s market updates would likely have cost a little more, but sale price would also likely have been a lot higher. Read more about it, including before and after photos, in Getting ready to sell? A case study of how strategic updates and staging can pay off
Other updates can also result in good returns, in this market often the greatest being a quick sale with multiple bids pushing the sale price way over list price.
A new roof and new garage door each yield a 100% return according to the assessment in the infographic below… and a new front entry door is also often included in the list of upgrades yielding the highest returns. Bathrooms, windows and kitchens complete the list of highest returns for investment according to this list and experience agrees with these assessments. Just be careful not to overdo it if you are making the updates solely for resale.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
