Turnkey or As-Is: Should I Remodel My Home Before Selling?
FSBO homeowners are often stuck pondering two questions. The first is “Should I remodel my home?” And the second is “If so, what should I remodel in my FSBO home?” Many FSBO homes are sold as-is, but many others are sold after some renovations -- or even a significant house-wide remodel. Determining which is best for your home -- and its resale value -- can be difficult, especially when financial expenditures are involved but a guarantee is not possible. Homeowners often think that renovating their home will take far too much time and not result in the kind of sale price bump they are looking for. However, turnkey and remodeled homes do tend to sell faster and for more money than as-is homes. Trang Dunlap explains the misconceptions common of home sales in his article “Should You Remodel Your Home Before Selling? Debunking The Top Three Myths That Say No” for Forbes.
Dunlap writes that “remodeling can actually be a time-saver when it comes to selling your home.” Dunlap continues on to note that homes "freshly remodeled and updated are going to sell much faster than houses that are outdated or in need of repairs.” Homeowners seeking to sell their homes prefer to avoid remodels due to the time and expense. The same is often true of buyers. The majority of buyers prefer to purchase a turnkey or near-turnkey home in which few renovations would be needed before move-in. If you are comfortable conducting renovations as a FSBO seller, the question of what to remodel -- to get the biggest bang for your buck -- remains. Follow below to learn more about if and what you should remodel before selling your home.
Should I Remodel My Home Before Selling?
#1 Determine if You Have the Budget
To determine whether or not to remodel your FSBO home before listing on the market, follow Realtor.com writer Wendy Helfenbaum’s advice. In her article “Should You Sell Your Home As Is, or Spring for a Renovation? Here's How to Decide” for Realtor.com, Helfenbaum outlines the questions each seller should ask before moving forward. First, ask yourself whether or not you have the time, money and expertise to conduct the renovations either partially or fully by yourself. Do renovations really fit your timeline for sale or will the extra time spent remodeling push your home out of a booming market? Helfenbaum notes sellers should also determine how much buffer they have in their budget to accommodate rainy and stormy days -- for outdoor renovations -- and unexpected issues -- like plumbing failures or back order problems. Before you decide whether or not to remodel.
#2 Discuss Your Options With Experts
Helfenbaum recommends getting “an expert opinion—or better yet, several opinions—regarding how much updating and repair work would be required to boost the home’s bottom line.” In short, Helfenbaum encourages homeowners to remodel before sale only if their home will truly benefit from the renovations. Just because other homes sell for more after a kitchen reno or a bathroom remodel, does not mean every home will. It is possible that your home could sell for just as much with new coats of paint and “a good scrub.” As such, be sure to seek expert advice before deciding.
#3 Consider Your Personality and Existing Responsibilities
You should also consider your responsibilities and personality when determining whether or not to remodel, writes Helfenbaum. Do you have the patience for months of bathroom or kitchen remodels or a dozen subcontractors traipsing around your property each day? If you choose to hire a team, can you step back and let the professionals work uninterrupted or do you need to be in on every detail and supervise constantly? Are you ready and willing to accept the inconveniences associated with undertaking home renovations? Helfenbaum recommends taking all of this into consideration -- especially the latter -- as, “depending on how extensive your revamp is, you might need to find temporary housing while your property is being gutted.”
#4 Keep the Market in Mind
When deciding whether or not to remodel, homeowners and prospective sellers should keep the general real estate market and that specific to your neighborhood or region in mind. If seller demand has spiked but supply is low, your home might sell for your asking price without any remodeling at all. However, if your area is struggling to bring in buyers and achieve high sales prices, remodeling might make your home a more competitive contender -- attracting a higher echelon of buyers. Helfenbaum recommends considering the age, style and value of your home compared to the value of the land it sits on before renovating. She writes that “when the land is more valuable than the structure sitting on it, you might be better off selling the property as is.” Quoting Eric Stewart of Eric Stewart Group of Long & Foster Realtors, Helfenbaum writes that “‘there’s little point revamping a house that will probably be torn down as soon as the ink on the purchase agreement is dry.’”
What Should I Remodel in My FSBO Home?
According to Terri Williams in an article for Realtor.com, “taking on a home renovation can improve your property's value, remedy any nagging structural or cosmetic flaws, and generally make your place way more comfortable to live in.” However, renovations that might be well worth it for another home -- like a kitchen, patio, deck or bathroom remodel -- might not be necessary for your home or your area. On the other hand, some homes might not need the renovations that your home could truly benefit from once it hits the market. As such, how does one decide which rooms to remodel before listing?
The Kitchen
In her article “These Are the Most Profitable Home Remodeling Projects” for Realtor.com, Clare Trapasso writes that upgrading an old, dilapidated kitchen will likely fetch the steepest increase in value. Trapasso explains that “a sleek kitchen with top-of-the-line appliances is most likely of any interior home improvement project to appeal to buyers and increase the value of a home.” Keep in mind that a full remodel might not be necessary to increase your home’s value. Many homeowners choose to simply upgrade rather than fully remodel -- replacing cabinet doors instead of ripping out the cabinets or painting the floor rather than swapping it for another material. Simply adding new appliances and coating storage units with a fresh layer of paint can make a huge difference.
As you consider a kitchen remodel, keep in mind that “a new kitchen won't come cheap.” Referring to a National Association of Realtors survey, Trapasso notes that on average, “folks will shell out an estimated $68,000 on a full remodel…[but] should expect to recoup only $40,000, or 59%, of their investment.” Those who choose to conduct upgrades rather than a full remodel “spend an estimated $38,300 on the job—and get back only about $20,000, or 52%, in the resale value.” Kitchen remodels are often conducted by prospective sellers who will live in the home and use the kitchen for a while before either listing or selling their home.
The Master Bathroom
A well-done master suite is attractive to potential buyers because it offers a true oasis and a formal separation from the rest of the house. After kitchens, bathrooms are the most common type of remodel in listed homes. In her article “Bathroom Remodels Increase Home Value—Fact or Myth?” for HomeLight, Jennifer Billock consults with real estate agent Jacki Shafer about the cost and benefits of a bathroom remodel. Billock writes that “bathrooms are deal breakers (or makers) in a home sale, and buyers will place a hard minimum on their number of desired baths.” However, according to Billock, while “bathroom remodels won’t necessarily recoup at resale...they are one of the higher return projects you can do.” While a complete remodel might bring in more buyers -- including those willing to spend more on the home -- minor updates can also attract buyers and increase your home’s value. Billock estimates that “small, inexpensive updates to [your bathroom] could help you fetch 2-3% more for your house.”
Powder room and guest bathroom remodels are typically cheaper -- as the square footage and number of appliances is less and fewer than a master bath. However, the cost of renovating a master bath does not even come close to that of renovating a kitchen. In his article “How Much Does It Cost To Remodel A Bathroom?” for Home Advisor, Dan DiClerico -- the publication’s “Smart Home Strategist and Home Expert” outlines what to expect. The article notes homeowners should expect to pay between $10,000 and $25,000 for a master bath remodel. For reference, a full remodel “includes a separate tub, shower, double vanity and larger space for cabinets and fixtures.” However, the national average falls much closer to the $10,000 number -- at $10,684. The typical range for a complete master bath reno is $6,079 - $15,306.
The Exterior
According to Than Merrill in the article “Exterior Home Remodel: Tips, Tricks, & Hottest Designs” for Fortune Builders, renovating the exterior of one’s home can bring in more prospective buyers. Merrill writes that “because the exterior of a home gives potential buyers, tenants, and more, a good idea as to what’s inside, it’s crucial to do whatever it takes to ensure your curb appeal is on point.” In fact, staging companies and realtors often stress doing up a home’s exterior -- including adding a new coat of paint, replacing broken shingles and completing a bit of landscaping -- when trying to sell. While you might not have considered renovating the exterior of your home, Merrill writes that “if you are hoping to boost the overall aesthetic of a given property, an exterior renovation is a great strategy.” There are four primary questions to ask when considering renovating a home’s exterior. The first is “how much does it cost?” while the second is “how much money will it return?” The third and fourth questions are “how long will it take?” and “what will be involved in the renovation?”
Merrill notes that homeowners can expect to pay between “$5,000 to $15,000,” with most “of these expenses to be spent on painting the exterior, redoing the siding of the house, and basic landscaping expenses.” Landscaping might include not only the front of the home but also the backyard and side-yards. For a full renovation that truly wows drivers-by -- a growing demographic of potential buyers during the COVID-19 pandemic -- you might consider a few additional elements. Merrill recommends considering “replacing garage doors...installing fencing on the property” and repairing or replacing the foundation or roof if either is damaged.
Even if you simply break-even after your remodels, doing so can be worth it just to attract a wider range of buyers willing to meet your asking price and commit to a swift sale.