Top 5 Ways How to Increase Home Value with Renovations & Upgrades for Appraisal Before Selling
This round-up article summarizes what adds more value to a home and what features increase home value by so much that you can do them with the sole purpose of making a top dollar when selling a house.
We asked our expert property appraisers and real estate agents, “What are the best ways to add value to your home?”, and they advised our readers on the value-increasing home upgrades as well as how best to do them.
Read on to learn more.
Does Remodeling Increase Home Value?
In general, home renovations do increase property value. This is actually the only practically doable way to increase the value of your house before selling.
However, not all home remodels are worth doing with this purpose in mind. Some home improvement projects can actually make your house less desirable for potential buyers, which may lead you to lowering the asking price.
Below, you will find tips on what adds most value to a house according to our experts — professional real estate appraisers and agents.
They advise on what increases home appraisal value unlike remodeling projects that are a waste of time and money.
5 Most Effective Improvements to Increase Home Value
According to our experts, there are five best ways to increase home value, and a kitchen remodel is the most popular one.
#1 Kitchen Remodel
A kitchen remodel is an instant boost to the property and sets the tone for the prospective buyer’s expectations for the rest of the home. It’s work that the new owner doesn’t have to do.
The key is if you are remodeling or renovating for the purpose of selling, don’t go overboard. Keep it simple and clean, so you can appeal to more people.
Kitchen remodels definitely help make homes more attractive, especially in a market where more people are adverse to doing work.
The thing is, you need to be careful when doing the work. You may be better off not touching the kitchen as you might not make back the money spent on renovating it.
There’s a thin line when it comes to doing work to determine what’s worth doing and what’s not.
Working with a real estate agent in your area will be quite beneficial as they can best advise on whether or not it’s worth doing and if so, how much to actually do.
Sometimes just sprucing up a kitchen is helpful enough; new hardware, paint, replacing cabinets, etc.
How much value a kitchen remodel adds to your home depends on the current condition of the kitchen and the renovation needed.
For example, if the home is in the original condition from 1965, renovating the kitchen may not get you a much higher price.
Anyone looking to purchase that kind of home will be doing a large scale renovation, and a new kitchen may not increase the value for them.
If you have a home that is mostly updated, then doing a kitchen renovation to make it more ‘move-in ready’ will increase the value and appeal to more buyers.
The kitchen tends to be the most important room in the house. But renovating before selling does not necessarily guarantee that the value of your home will increase enough to cover that expense.
It may make more sense to do more cost-effective home updates. Painting cabinets and changing hardware, for example.
A kitchen remodel can often be the big WOW that makes your home stand apart from other real estate listings when it hits the market, especially when many homes you’re competing with have small or outdated kitchens.
A great kitchen is very important. But it also depends on how the rest of the house looks.
Do replace outdated kitchen appliances with neutral or stainless steel appliances.
#2 Bathroom Remodel
Sometimes having a clean and fresh-looking bathroom is perhaps more important than doing a complete remodel.
A ‘refresh’ is key unless you’re doing a total ‘as is’ sale where the asking price will reflect that position.
It’s really easy and inexpensive to update a bathroom in a way that makes it appealing to prospective buyers.
Fresh paint, clean up the caulk and/or regrout tiles, new white towels, replace a vanity and lights, and reglaze a tub.
It’s easier to make a bathroom remodel more basic so it appeals to the masses than a kitchen. People are adverse to doing work.
In some markets such as NYC, when redoing a kitchen and/or bath, you have to submit architectural plans to the board, and depending on the extent of that work, maybe the DOB.
So things take a long time. But It might be better to do some basic upgrading, like replacing the vanity, glazing the tub, grout/caulk, switch light fixtures than tackle the whole job.
The kitchen and bathroom are the most expensive projects to take on.
Remodeling these rooms can definitely help get your home sold faster, but the cost of remodeling may be high and there is no guarantee it will increase the value of your home enough to cover the cost.
Also it is important to keep in mind that not everyone has the same taste. You may spend a lot of money and the new homeowner could have other plans for the room and decide to redo it anyway.
When the homes your listing will be competing against have modern, updated bathrooms, updating yours to even the playing field often becomes a must-do if you want your home to sell in a reasonable time frame.
If the competing homes have older, outdated bathrooms, much like in the kitchen, updating your bathrooms can be the game changer that gets your home sold more quickly.
Be sure at least one bathroom has a tub.
#3 Landscaping Improvement
Landscaping can definitely help increase value because it is the first thing people see when they pull up to the home.
There are many inexpensive ways to improve the landscape of the home and improve curb appeal, making your home more attractive to buyers.
I have heard from many friends that they bought their home because the landscaping was beautiful and they fell in love with the outside of the home first.
While upgraded landscaping doesn’t normally increase the sales price of the typical home, it can often be the difference maker that determines whether your home will sell quickly or linger on the market.
The average buyer makes a decision whether or not they want to like your home listing in 10 seconds or less upon arrival at their showing.
Then they spend the rest of the showing subconsciously gathering evidence that supports their initial impression.
Great curb appeal, including awesome landscaping, means more buyers will have a strong first impression of your house, which makes it more likely your home will sell more quickly than its competition.
It depends on the project. If the home has not been maintained, then performing a good cleanup and taking extra care of the grass can increase the value.
Not all improvements will increase the value.
For example, putting in a Japanese garden and covering all the grass with walking paths may lower the value if your target market is families with small children who are looking for open yard space.
Landscaping and cleaning exterior and adding finished square footage in attics or basements get the highest return on investment.
Replace outdated landscaping. Keep outside lawns and shrubs trimmed and cut.
Keep the grounds tidy and plant blooming flowers. Generally, flowers will entice buyers.
Remove any and all large, overgrown trees and bushes.
#4 New Light Fixtures
Very few people like dark, shadowy rooms. Great light can make or break a sale.
Before changing out light fixtures, try first swapping the existing light bulbs with higher-wattage daylight, or white light bulbs that remain consistent throughout the house.
Often this is enough to brighten up the home and make it feel more clean and inviting to potential buyers.
If your light fixtures are in poor condition or outdated, upgrading them could help your home sell more quickly, but except in unique situations are unlikely to increase your home value much.
Light is incredibly important, especially in darker homes.
While you may not necessarily have to replace fixtures depending on the room, you may want to switch your bulbs out for higher wattage white bulbs.
Also if you have high hats, it’s worth switching to LED. I have a client doing all the above in the rooms in her home that don’t get as much light.
Install new, bright light fixtures (white in kitchen, daylight in bedrooms).
New lighting/updated light fixtures are still the only item that consistently helps a home’s resale value with positive ROI.
Changing light fixtures can be a relatively inexpensive way to update the aesthetic of the home. It can make an outdated home feel more modern and bright.
I think it’s an easy way to update or contemporize a space.
#5 Replacing Carpets with Better Flooring
New flooring can have an amazing impact on a home. Old, worn carpets often make everything else in the home seem in diminished condition.
Additionally, odors — especially pet smells — can become trapped in carpeting which quickly makes your house less appealing and less valuable.
If your existing carpets are a detriment to your home, not replacing them will surely cost you money on your sale.
If the carpets are in good condition, replacing them is more likely to help your home sell more quickly than bring more money.
Of course, if the other homes for sale you’re competing against are mostly carpet-free, you may need to replace yours just to get market value for your home.
Replacing carpets with hardwood floors is always preferable.
One thing about floors is, it is best to keep all flooring the same. Multiple colors and textures of flooring make the home feel smaller.
If you can’t afford to replace the carpets, they should be cleaned before listing.
In NYC, people love seeing the hardwood floors. Most people don’t have wall-to-wall carpet, so if one has it, it’s recommended to remove and then sand/polish the floors underneath.
Removing, cleaning, or replacing carpet is key in having the overall space be photo and appointment/open house ready.
Replacing carpets with flooring can increase the value of your home. Choose a light and neutral color that will appeal to a broad range of potential buyers.
Always a good idea. Most folks are not a fan of carpet these days. A carpet allowance is also a good compromise.
Replace old, stained carpet, or upgrade to good quality laminate.
Replace all carpet and vinyl with wood or laminate.
Now that you know what upgrades work best, let’s discuss how to add value to your home the right way.
7 Expert Tips for Making Home Upgrades
Even if you choose the right upgrades for renovating a house to add value, there are things you may do wrong.
Besides telling our readers about the things that add value to your home, our real estate appraisers and agents also advised on how best to do those renovations. Read below.
#1 Keep Up with Home’s Theme
The upgrades should fit the theme of the structure. An over-upgrade can create an over improvement and an under-upgrade can create an under-improvement.
Remember, potential purchasers are looking at your home for a certain reason; the level of upgrade should increase that theme.
#2 Follow Trends
Upgrades should follow trends of the competition of the properties in the marketplace. Highlight the existing features of the home and do the things that bring out the qualities of the use of the home.
Watch the upgrades of neighbors, see how their renovations work out within the market. Follow the trends.
Do look at the trends in the market. I suggest people go to new home projects and view the sales models for ideas.
The architects, decorators, and interior designers all drive the trends that buyers are looking for and typically the sales models will have the latest and greatest.
Make sure the majority of homes in your neighborhood are also updated with similar finishes.
Take a look at new construction and try to copy even if your home is 80 years old.
#3 Don’t Overdo It
Additions aren’t always good for adding value. Some items will cost more than any value added to an existing home.
Also, some items have submarket demand — meaning, not everyone is willing to pay a premium to add the item.
Don’t think a finished basement will add value the same as the cost.
Plan for upgrades by allowing the correct amount of time and money for upgrades while allowing for changes along the way.
Allow the selection of finished materials to support your way of living in the space being upgraded and used. Let the level of the upgrade reflect your stage of life or living conditions.
If the roof, windows, siding, furnace, A/C, and water heater are working, you won’t make money replacing them. If there are issues, like a leaking roof or windows, then they should be replaced.
Don’t replace carpet with new carpet, as you probably won’t get your money back.
Don’t overdo it. Unless it’s broken or non-functioning, most items are best left alone from a value standpoint.
Remember cost does not equal value. Some people who upgrade spend too much, and market value will not support.
Do not overimprove for the neighborhood.
#4 Don’t Personalize Upgrades
Don’t get caught using decor and color schemes that don’t appeal to the market. Here in South Florida, most prefer light and bright, as dark tends to make spaces look smaller.
Re-paint odd colors or colors that stick out (e.g., purple bedroom).
Don’t paint in non-neutral colors. Don’t wallpaper.
Clean and paint white. Do not paint with colors.
Do not personalize upgrades. If you are selling a house, do not renovate as if it will continue to be yours.
If updating to sell, avoid taste-specific finishes.
Do not include political/religious items.
#5 Avoid Expensive Upgrades
Your idea of an expensive kitchen and/or bath remodel may not be to the taste of prospective buyers. You will likely not get a good return on the expense.
Make expensive upgrades only if you plan to stay awhile to enjoy them.
Don’t install overpriced items in a mid-priced home.
#6 Upgrades Should Make Space More Useful
Make sure the upgrades increase the activity zones of the home and do not decrease the use of the space involved.
#7 Clean/Declutter/Fix
Cleaning is the easiest thing to do to impress the buyer, which can lead to a higher offer. In some cases, a messy house can even affect an appraisal.
Perhaps, cleaning is not a way to actually increase the value of your house before selling from the appraisal point of view, but it will definitely help you get a better offer.
Declutter the home. Empty and clean, garage, boiler room, attic space, etc.
Clean and polish the existing floor.
Fix any broken screens.
Power wash and stain decking and siding.
Shed excess furnishings and empty the closets.
Additionally, you may want to learn about the home improvements that do not add value to your property.
Kristina Morales is both a licensed mortgage loan originator and real estate agent in the State of Ohio. Inspired by her years of working with buyers and sellers and seeing a need for more consumer education, Kristina created loanfully.com, an online educational resource for borrowers and industry professionals. In addition to real estate sales and mortgage lending, Kristina had an extensive corporate career in banking, treasury, and corporate finance. She ended her corporate career as an Assistant Treasurer at a publicly traded oil & gas company in Houston, TX. Kristina obtained her MBA from the Weatherhead School of Management at Case Western Reserve University and her B.A in Business Management from Ursuline College.
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