Home Improvements Can Make Your Home Easier to Sell AND get you a Higher Price.
Each Year, the National Association of Realtors, Realtor Magazine, Harvard University, and Remodeling Magazine undertake a study to determine the cost of certain home improvements in the 60 different housing markets across the country. More importantly, the study also assesses the return on investment of each of these home improvements. In other words, if you were to make these improvements to your home, how much would the improvement add to your homes' value?
For almost 20 years now, this annual study has followed remodeling trends, and how much that remodeling adds to the value of homes in the median price range in each metropolitan area.
Since homes in Sonoma County fall into the San Francisco metropolitan area, we track the results of this annual survey for San Francisco and compare it to results in other major markets.
In Northern California the results have been very accurate and often conservative. You will see from the details provided below that in many areas of the country one does not get back all of the money invested in home improvements. It is a common perception that if you spend $20,000 remodeling your kitchen, you will not get that money back if you sell your home because the improvement will not add $20,000 to the value of your home. This is true in many parts of the United States.
But, this is historically NOT TRUE of Bay Area and Sonoma County Real Estate.
As the figures below show, money on home improvements is well spent in Sonoma County, as it immediately adds to the value of the home MORE than the amount that was spent. For instance, if you spend $20,000 on a kitchen remodel in the San Francisco area, it adds almost $26,000 to the value of the average home.
Please remember that these figures are based on the median average homes in each locale. In Sonoma County, the median prices are well above the national average, so the costs of undertaking home improvements may be more, but the percentage returns would be similar to those quoted from the study (below).
Also note that there is a difference between "home improvements" and "deferred maintenance".
If you are replacing a leaky roof, you may not experience an increase in your property value. You are, in fact, only maintaining the expected standard of livability the home, not making an improvement.
The Study cited here includes 5 specific home improvement projects; some of them are interior room renovations, while others are exterior improvements or additions. The study is quite detailed in exactly what is included in each home improvement project. (See the article referenced, or contact us for a copy to get the full details.)
Here, as an example, are three home improvement projects which will add to the resale value of your Sonoma County Home, along with the same information for other cities. This will illustrate that it isn't always wise to do home improvements before you sell your home, but in the greater Bay Area including Sonoma County, it usually adds value to your home and also may make it easier to sell.
Kitchen Remodel (minor)
(This is an update to a 200 square foot kitchen, which includes new cabinet fronts, replacing laminate countertops, new sink and faucet, new oven, cook top, new paint, and flooring.)
Market Cost Value at Sale Cost Recouped
San Francisco $20,434 $25,789 126%
Los Angeles $19,555 $20,081 103%
Seattle $19,107 $23,341 122%
Philadelphia $18,920 $15,036 80%
Houston $17,315 $12,573 73%
Bathroom Remodel
(This includes updating a bathroom that is 5x7 ft. Replace tub including ceramic tile surround, toilet, and double sink vanity, recessed medicine cabinet and tile floor)
Market Cost Value at Sale Cost Recouped
San Francisco $16,589 $20,697 125%
Los Angeles $14,731 $15,013 102%
Seattle $14,643 $15,326 105%
Philadelphia $14,272 $11,968 84%
Houston $11,922 $9,391 79%
Replace Windows
(This includes replacing ten windows 3 X 5 foot, double hung with vinyl or aluminum clad, double glazed, wood replacement windows.)
Market Cost Value at Sale Cost Recouped
San Francisco $12,684 $12,963 102%
Philadelphia $11,610 $10,095 87%
Huston $10,038 $7,946 79%
The above examples are illustrative of relatively minor remodeling projects, all cost $20,000 or less. It is also possible to do larger remodeling and renovation projects, in certain real estate markets, and make similar returns.
The fact is that certain home improvements, in certain markets across the country, add value to your home immediately, and may make your home easier to sell. Sonoma County is one of those areas. When prospective buyers see a home, recent upgrades and improvements often make it more desirable. If the option is buying the house and then having to make the improvements after they move in, many buyers would prefer, and may pay a premium for, a recently updated home.
This is why Home & Value Advisors has partnered with Transitions, an architectural design and home renovation company. They know the ropes when it comes to updating your home to maximizing its value and its marketability.
The experts at Transitions can provide you with objective, real cost estimates and design information, which takes the guesswork out of home improvement. They provide analysis of each project detailing the full range of labor and materials costs ensuring that you are in control of the budget and project.
You have made quite an investment in your Sonoma County Home. If you are considering selling it, we can help you get the most out of your home, while at the same time making it easier to sell. Call us today to discuss how we can use our knowledge of the Sonoma County Real Estate market, combined with experience and expertise at maximizing your homes value, to help you get the highest possible price for your home and sell it in the least amount of time.
Call us today, before you sell your home, for a complete analysis of your homes potential.
(Statistical Source: December 2006 Realtor Magazine)
