We work with a lot of people who want to sell their homes. One of the most common questions we get is in regards to home value, and recent renovations and maintenance.
Many people think that because they recently had their roof, furnace or other items replaced, they can include that cost into the price and recoup some of that expense.
Additionally, people ask about their remodels and renovations and how that influences the price of their home. Let’s dive deeper into this topic and explain what items affect price.
How Are Homes Priced?
Before we begin talking about how maintenance and updates, let's talk about how homes are valued. Homes are priced based on the sale of recent comparable home sales that are similar and in close proximity.
When I'm looking to price a home, I will look at recent home sales within a mile or closer of the subject property, and homes that have sold within six to nine months.
Out of those homes, I will narrow it down to comparable homes based on size, square footage, bedrooms, bathrooms and of course style and current state.
Below we will go into detail about how updates can raise the value of a home, while maintenance doesn't. However, they can both help you sell the home faster as they compare to other homes in your area.
These are things that every home, sold for fair market value, comes with in good working condition. These items are things like roof, HVAC system, electrical, plumbing, water and other systems.
I recently had a client who needed a new roof and was quoted $17,000, and in another property a new HVAC system was about $12,000. These expenses are the cost of home ownership, not things that you can demand more for in your price.
This is because it is an expectation that homes should come with these items in good working condition.
Now, the home may not sell for more with these updates but it can definitely help it sell quicker, especially if comparable homes in the area aren't quite as maintained as yours.
Let’s take for an example a used car. If I make regular oil changes to the car and change all of the fluids then I will have a great running car.
That doesn't mean that I can sell it for more solely because I did oil changes. Oil changes are mandatory for a great running vehicle, and I won't be able to use my car for long if I don't maintain it.
Updates are used to enhance a property and can be used to raise the value of a home. Updates are things done to a home above mere maintenance.
Examples of this can be larger decks, custom kitchens, grand entries, luxury bathrooms, finished basements and many others.
One thing to keep in mind when purchasing a home to update, or updating your current home, is to not overdo it for the area you are in.
If you overbuild a home for the area, you may not see the return from the sale you are hoping.
My recommendation is, if you are completing updates in order to get more for the resale of your home, consult a reputable realtor in your area first.
If you are doing updates to make the home more enjoyable for yourself, then have at it! The sky's the limit!
If you have any questions about updates versus maintenance or want to find out what your home is worth send me an email at email@example.com or give me a call on 907.302.1011, and we can schedule a consultation.