Not every improvement done on a house pays off in the end. But in a bid to attract great offers, many home sellers ignore this and make unnecessary upgrades to their homes.
The result of their over-improvement? Lack of prospective buyers (compared to expectations) or loss of investment.
To save home sellers from making this kind of mistake during their home sale, we present this simple guide. Come with us as we show you how to avoid over-improving your home before sale. But first:
What Does Over-Improving a Home Mean?
Over-improvement of a home happens when a home seller puts more money into a house than they can get out of it after selling.
For example, let’s say you have a home worth $200,000. You made an upgrade worth $40,000, hoping to sell it at $250,000 – $270,000. But the house value only increases by $10,000.
The reason for this difference is because home improvement is the only factor that determines the value of your home. Other factors, like location and size, may play a more prominent role in your home value.
For example, let’s say improvements made to the property violate your city code. An appraiser might value the property as if you never made the changes because the city could condemn those improvements and require you to revert the changes or pay daily fines until the changes are reverted.
Disadvantages of Over-Improving a Home
One disadvantage of over-improving a home is that you scare prospective buyers away. If your house has improvements that they don’t want to pay more for, they’d instead go for similar and less costly homes around your area. Would you pay $1,000,000 for a mobile home with walls plated in gold? Probably not!
Another disadvantage of over-improving is that you lose the money you invested in your home improvements. That is, you may have to settle for a less valuable offer when you eventually sell the house.
So, how can you avoid over-improvement?
Three Ways to Avoid Over-Improving a Home
1. Get a comparative market analysis
Comparative market analysis is a tool real estate agents use to determine a home appraisal value. It involves comparing the price of your house to recently sold properties or listed properties around you.
A good CMA compares your house with properties of similar size, structure, and, yes, upgrades. Through the analysis, you will learn the types of improvements buyers in your area value. For example, if homes in your area all have granite kitchen countertops except for yours, you may want to invest in that upgrade.
A CMA will also let you know how much you should spend on making these upgrades. For example, if your home is valued at $230,000 and comparable homes with granite countertops sold at $270,000, that means you have about $30,000 to spend on improvement.
Bost Redevelopment can help you identify comparable homes in your market. That way, you will understand the upgrades that are appropriate and the ones that are unnecessary.
2. Make only improvements that matter
After conducting a comparative market analysis, target only the improvements that add value to your home. Keep in mind that home improvement doesn’t mean you have to renovate everything. For example, replacing the flooring may sufficiently excite prospective buyers without you needing to perform a full-scale bathroom remodel.
Examples of home improvements that matters are:
- Kitchen upgrades: The kitchen is one of everybody’s favorite rooms in their house. Make yours stand out by investing in new appliances, adding modern fixtures, replacing your flooring, etc.
- Bathroom upgrades: As with the kitchen, people love their bathrooms. You can install cool features like a showerhead, tub, lovely shower curtains, etc. Resurfacing tubs and showers makes them look fresh and can save a lot of money compared to replacing them.
- Technology: We live in the digital age. You can never go wrong with equipping your house with the internet and wireless services. Also, you can install an innovative home technology system.
A big part of making home improvements that matter is knowing the upgrades that make the most significant impact.
3. Make improvements that appeal to many people
Another smart way to avoid over-improving your home before the sale is making renovations that appeal to the majority of buyers. Put simply, make improvements that are tailored to general taste, not personal preference.
For example, because you like colorful wallpapers does not mean most buyers would. Therefore, go for neutral colors and designs. This same rule goes for every other aspect of your home – walls, lights, curtains, bathroom, etc. Unless your CMA shows you otherwise, you should focus on improvements that appeal to most people.
When you invest in upgrades that appeal to a large group of people, you get to attract a large pool of prospective buyers. This makes you more likely to receive attractive offers – fast.
Let Bost Redevelopment Help You Sell Your House!
Do you need help marketing your home and attracting the right buyers? We are here to help you!
At Bost Redevelopment, we are experts at handling every home selling problem you may be facing. We would use our marketing expertise to ensure you get the best buyer for your home at the maximum value possible. Want to talk more about your options? Please leave us a message below with your contact information and let us know how we can help you.
Orem Utah Home | Bost Redevelopment 