At one point or another, nearly every real estate agent has been asked by their client about what home upgrades they can make prior to listing for the biggest impact. After all, everyone wants to get the most possible out of their home, sell it quickly, and finish the home sale process without any major headaches or surprises. The best way to accomplish this is by completing strategic upgrades that net the highest return on investment (ROI). As we’ll detail in this article, this includes essential repairs, kitchen renovations, and energy-efficiency upgrades.
Focus on the essentials first
As any long-time realtor can tell you, trying to close the deal on a home that has a leaky roof, a dead air conditioner, or a slab leak is nearly impossible. These major problems can instantly endanger any home sale. Outside of very specific conditions, most buyers will balk at closing on a home with thousands of dollars in needed repairs. They’ll likely ask your client to make the repairs before close, knock the cost of the repairs off of the list price, or—most likely—decide this is all too much trouble and back out of the deal altogether.
So, what counts as an “essential”? Basically, think about anything that might come up as a major red flag in the buyer’s home inspection, or that you need to disclose according to state or local laws. Homebuyers and their agents expect a home to come with minor defects and general wear-and-tear. A major plumbing issue—such as a leaking pipe, a broken water heater, or a cracked sewer line—is another story altogether. In this scenario, have your homeowner call a local plumber out for repairs. Whatever the cost of dealing with the plumbing issue is now, it’s worth it.
If you’re working with a homeowner who is prepping their home for listing, ask them about these potential deal breakers ahead of time. While fixing a slab leak or addressing structural damage might not be as sexy as an upgraded kitchen or master bathroom, you and your client need to remove as many red flags as possible from the property ahead of listing. If the homeowner’s budget only allows for these essential repairs, prioritize them over other upgrades.
Assuming that all the essentials check out, a homeowner looking to add value to their home should next turn to the kitchen. Kitchen remodels are among the best home projects for long-term return-on-investment: homebuyers, just like all of us, love renovated kitchens and dining areas. If your client invests into their home by remodeling the kitchen, they not only can expect their home’s value to jump, but they’ll also see their home get much more interest when listed.
The first thing that prospective buyers are going to notice are the countertops and cabinets. If your client is asking for your advice on what to remodel in their kitchen, recommend that they go with stone countertops and wood cabinets in neutral colors, such as white quartz paired with charcoal cabinets. Not only are neutral colors in vogue right now, but they appeal to the widest range of potential buyers, making them an ideal choice for homeowners looking to maximize their value and curb appeal.
While kitchen remodels are generally high-value projects, make sure that it’s a good fit for your client’s home. If none of the comp properties feature a remodeled kitchen, that’s going to blunt the positive impact of the project and reduce their ROI. If the comps all have kitchens that are far nicer and more extensively renovated than what your client is planning, you should also take that into consideration. It’s hard to attract buyers to a unicorn: for the most part, you want to invest just enough to stay competitive with comps and other homes in the neighborhood.
If there’s one thing that unifies all homeowners, it’s their disdain for high electric and gas bills. More and more buyers—especially millennial homebuyers, who now make up a majority of the real estate market—are interested in purchasing homes that have energy-efficiency upgrades already ready to go. This is good news for you and your client: efficiency upgrades can be a relatively low-cost way to add value to the property, make it more attractive to buyers, and stake out an advantage over other properties in your size and price range.
For starters, encourage your client to call their local HVAC company out for a whole-home energy audit. This specialized service will provide them with an assessment of where their home is wasting the most energy—and what they can do to address this regular energy loss. A professional energy audit provides the homeowner with a punch list of items they need to complete to get the most-possible return. This typically includes adding attic or wall insulation, installing a programmable thermostat, and caulking around windows.
In most cases, homeowners can complete a whole suite of energy-efficiency upgrades for under $500. If you have a client who wants to invest back into their home prior to sale, but is short on upfront cash, you might want to recommend they go in this direction.
Help your client get more out of their home
Looking for even more high-value home projects that will help your clients list and sell their homes for more? Be sure to take a look at this home remodeling infographic from King Heating, Cooling & Plumbing in Chicago, Illinois. It has even more great tips for maximizing a home’s value and curb appeal ahead of sale.