Thursday, March 23, 2006

Cost vs. value when remodeling

There are many benefits to remodeling a home rather than moving. Then there are a lot of inconveniences also. The National Association of Realtors in a recently released report found the four remodeling projects that would have the largest return at resale. They are the kitchen, bathroom, siding and windows. This is a national study and regional differences do occur.
Their findings were based upon the average cost of the remodeling projects and the increased value that a seller received within one year of the remodel. For instance:
A minor kitchen remodel cost $14,913 and the increased in value actually received upon resale was $14,691 or 98 percent of cost. A major kitchen remodel was found to cost $43,862 but the owner only recaptured $39,920 or 91 percent of the cost.
To remodel a bathroom (midrange) would cost $10,500 and a seller could get $10,727 upon resale. Siding replacement averaged $7,239 and the seller only got $6,914 for the effort. Window replacement may cost $9,684 yet only recoup $8,681.
The total and more detailed report can be found in the Remodeling magazine’s “Cost vs. Resale Report available on line at And my point is…………..
Many potential sellers when considering selling their home will incorrectly value the improvements that they have made. As an example I did an evaluation for a seller last week who had completed some extensive remodeling over the last year. His expectations were unrealistic and my truthful reality check probably cost me a listing.
There is a difference between cost of an item and it’s value. Sometimes it is more and sometimes not. Rarely should a seller do a major remodeling project within a year of putting their house up for sale. Paint, carpet, removing the cluttering and perhaps some landscaping will have a greater return on money invested than a major remodeling project


Post a Comment

<< Home