Last year, Denver experienced a record low in the number of homes for sale in the city, according to 5280, a local magazine. Because of a lack of inventory, a trend that has permeated into 2014, the competition to sell a home remains steep. Luckily, there are many different upgrades home owners can do to increase curb appeal and help attract potential buyers.
If you’re considering remodeling your home, it’s important to know which renovations can bring the biggest return on investment — and which ones may not have as much potential. Here are some renovations you may want to consider to help make your home attractive to a potential buyer:
One way to decide what fixes to make is to compare the exterior of your house against other homes in your neighborhood, says local Realtor Anthony Rael, with RE/MAX Alliance.
If other homes have features such as newer roofs and windows — making your house appear less attractive by comparison — start out with those repairs. Replacing a roof yields a 68 percent recoup, while new windows can put as much as 79 percent of the project cost back into your pocket, according to CostVsValue.com, a website that compares the value of remodeling projects based on data from real estate agents.
“You only get one chance to make a good first impression,” Rael says. “It becomes clear to buyers — consciously or subconsciously — that if the outside is well maintained, the inside will follow.”
Besides the outside, there are some basic upgrades you may need to make inside your house to appeal to potential buyers. Those can include new electrical wiring or a furnace, which won’t make your home more attractive, but may help you sell your house. Rael recommends that sellers mention any upgrades to buyers, especially if they’re not visible.
“Bad electrical [wiring] or a bad furnace can be deal breakers,” Rael says. “Lenders can refuse to approve a [mortgage for a buyer] unless these are mitigated.”
While kitchen remodeling can add value, it’s better to go with moderate upgrades rather than an expensive overhaul, Rael says.
“This will prevent the owner of a $200,000 property from spending $20,000 on a kitchen makeover with high-end appliances, when a $5,000 face-lift would have been adequate,” he says.
But that’s not a reason to cut corners either, he adds. When owners mismatch too many high-end materials with cheap ones, it can turn off potential buyers. For example, kitchens with rickety, painted-over cabinets attached to $3,000 worth of granite counter tops are not likely to give great returns, Rael says. The same is true with pricey improvements like crown molding next to high-end cherry cabinets sitting on laminate flooring, he says.
Again, it’s also good to take a look at how your house compares to others nearby.
“Make sure you’re not over-improving for your neighborhood,” Rael says.
Homes with outdoor spaces facing west and with views along the Front Range are particularly valuable in Denver, making a new deck or remodeled one well worth the investment, Rael says.
According to U.S. News & World Report, adding a wooden deck can help you recoup nearly 81 percent of the project’s cost when selling a home.
And in Denver, says Rael, buyers will pay a premium for great views of the surrounding mountain ranges.
Some projects may suit your needs but won’t do as much to boost your home’s resale value.
For example, home offices aren’t a great investment, averaging only a 48 percent return compared with bathroom remodeling, which brings in 77 percent, and kitchen remodeling, which yields about 74 percent, according to CostvsValue.com.
In-ground pools also don’t add a lot of value, returning anywhere from zero to 25 percent, according to TheNest.com, a website geared toward home decor, real estate and financial tips.
“In Colorado, [an in-ground] pool doesn’t add value,” Rael says, adding that the climate doesn’t justify the purchase.
Sunrooms are another project you may want to skip. They’re an expensive add-on and the return is only 46 percent, according to doityourself.com, a website that offers how-to tips around the house. Rael agrees, saying he rarely sees sunrooms mentioned in listings.
By making a few strategic renovations, Denver homeowners with properties on the market can help increase the value of their home and be one step closer to making the sale.
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