Homeowners preparing to sell can find themselves between a rock and a hard place: Pouring money into renovations rarely pays for itself in added value, but buyers who spot maintenance issues are likely to offer less.
Now is the time to determine what your home needs to be sale-worthy. March is when buyer traffic typically picks up, Lawrence Yun, chief economist for the National Association of Realtors, told CNBC.com earlier this year. Many are families hoping to find and close on new homes in time to move during the summer.
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Big projects aren't your best bet. The average project recoups just 62.2 percent of its cost in added home value, according to Remodeling Magazine's 2015 Cost vs. Value report. A major, midrange kitchen remodel costs an average $56,768, for example, but adds $38,485 in value at resale—67.8 percent of that cost. (See chart below for some of the most and least valuable projects.)
Which remodeling projects pay off?
|
Midrange Project
|
Cost
|
Resale value
|
Percent recouped
|
|---|---|---|---|
| Entry door replacement (steel) | $1,230 | $1,252 | 101.80% |
| Manufactured stone veneer | $7,150 | $6,594 | 92.20% |
| Garage door replacement | $1,595 | $1,410 | 88.40% |
| Siding replacement (vinyl) | $12,013 | $9,694 | 80.70% |
| Deck addition (wood) | $10,048 | $8,085 | 80.50% |
| Master suite addition | $111,245 | $68,596 | 61.70% |
| Backup power generator | $12,135 | $7,263 | 59.90% |
| Bathroom addition | $39,578 | $22,875 | 57.80% |
| Home office remodel | $29,066 | $14,155 | 48.70% |
| Sunroom addition | $75,726 | $36,704 | 48.50% |
A better strategy: Stick to small maintenance and repair projects. "Pretend you're the buyer," said Cheryl Reed, a spokeswoman for review site Angie's List, which helps its members find contractors and other service professionals. "Walk around your house and think about things you would reject in a home." Peeling paint, a leaky faucet, scraggly landscaping and crumbling concrete steps to the front porch might all make the list.
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If you're in an area where curb appeal is limited because said curb (and everything else) is still buried under snow, focus on the inside of the home. A few good photographs of your home in other seasons can show off landscaping and other outdoor features that Mother Nature is currently keeping hidden.
Call in licensed professionals for plumbing and electrical work, along with any structural problems spotted, said Reed. Much of the rest could be done by a handyman or with your own elbow grease.
This article originally appeared in CNBC.
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