Why do so many people pour countless dollars into their home improvement projects each year? There are several reasons for this.
1. They want to improve the look or function of their home to make it a better or more ideal place for them to live.
2. They need to make repairs to keep the house and up and running well.
3. They want to add value to their home?s bottom line through upgrades.
But, do home improvement projects really add money to the value of a home? There are several different reasons that it can and several reasons that it may not. For each individual, the specific considerations must be considered. What are you planning to improve? How will you improve it? What is the value of the investment over what was already there?
There are many things to ask yourself when looking to increase the value of your home through home improvement projects. One of the most important things is knowing what will actually improve the value. Here are some things to think about in that regard.
Does the home improvement project add space, function or added benefits to the area?
Does the home improvement project make the area more attractive, not only to you but to others?
Does the home improvement project make significant positive changes to the home?
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Each of these things is something to take into consideration. If you were to walk into a home like yours without the improvement project in it, would you pay more for the home if it did have this feature? Of course, what your thoughts are do not matter as much as what the potential buyer?s thoughts are either. Since the value of a home is more defined by the actual way that it is valued by the buyer, if your home is for sale, then it is really up to pleasing them with these projects.
One way to learn more about the value of your potential home improvement project is to talk to a home appraiser. Locate one that is licensed and talk to them about the potential added value to your home through the home improvement project. What you must realize, though, is that adding $10,000 to your home through this investment does not mean that the value of your home goes up that much. It could be more. It could also be much less too.
During the last few years, sellers who staged their homes for sale reaped huge profits. It was a seller's market in which buyers grossly outnumbered sellers. There were plenty of buyers who were willing to pay a premium for a home that looked like a dream. But, the market has changed. Will staging still payoff for sellers in a today's softening real estate market?
Some sellers will shun the idea of fixing up their home for sale because the upside potential, or return on the dollars invested, is limited. When the market is racing upwards, it's easy for sellers to justify putting money into preparing their homes for sale. But, why make the effort if the potential reward is diminished?
The best reason to consider improving the look of your home before marketing it is to improve your chances of selling in a more challenging market. Most buyers are turned off by a messy, dirty, tired-looking home. This is particularly the case when there are plenty of listings to choose from, as there are in many areas today.
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Some staging projects -- like painting and changing worn floor coverings -- usually do payback a premium on the amount invested. But, even if you were to only recoup the money you invested, it would be worth the effort if it improves your chance of selling and reduces the amount of time you're on the market.
It may be even more important to stage your home in a softening market than it is in an extremely low inventory seller's market, such as the one we are leaving. Most buyers have difficulty envisioning how a house will look cleaned up. First impressions are lasting. If your home smacks of deferred maintenance, it will leave a negative impression with most buyers.