At times, it may seem that the ideal upgrades to make before selling a home are basically the same from one home to the next. However, the best home improvements highly depend on the home’s unique needs, its competition nearby, and the homeowner’s budget and expectations. Understanding how these factors come into play and hiring a professional to help make the practical decisions ensures a better result and return on investment.
Home renovations made simple
Here are some strategic steps to consider before you take the plunge into large home renovations.
1. Determining buyer needs
There is a target demographic for every type of home, from the coziest cottage to the most expensive mansion. Although buyers certainly are not a monolith with identical wants and needs, it is possible to get a sense of what buyers are looking for in a particular home type. The largest growing segment of home buyers focuses on those in the Millennial generation. With only a third of millennials owning property and a majority wishing to become homeowners, there is a tremendous amount of pent up demand from this generation. Buyers shopping at the lower end of the price range may be looking for an older home that needs improvements, while more expensive homes often attract buyers looking for homes that are modern, move-in ready, with luxury upgrades.
2. Assessing the competition
If you can determine buyer expectations, you can take that information and apply it to researching competition in the area. Comparable homes, often referred to as “comps,” are based on the neighbourhood, square metres of the home, property size and other factors. A real estate agent can help sellers create an image of the average home for their area to determine which kinds of improvements will be most attractive to potential buyers and maintain or even exceed the predicted sale price. Giving buyers precisely what they want and what they expect is the quickest route to the best return.
3. Selecting the best renovations
Since meeting or beating the competition is such a subjective experience, the right upgrades to make really depend on what each home needs to put its best foot forward. Houses that are new or have been newly renovated might only need a few touches. By comparison, a home that was built decades ago and has only sustained minor improvements since then might require a more significant overhaul. Kitchens and bathrooms are usually a great place to start since they get such heavy use within the home and can appear outdated quickly. Homeowners who want to improve their ability to compete dramatically might consider extending the home or possibly add a suite that could provide additional income.
4. Identifying the scope of each project
Fortunately, every project has a lot of choices to determine the full scope of the renovation. Bathroom upgrades range from installing a new bathtub or changing the cabinet doors to building onto the home to create an entirely new bathroom. Although the extent of the upgrade usually depends mostly on the seller’s budget, it also relies on timing and what the seller envisions in the home for sale. Some sellers may have the schedule and inclination to accommodate a much larger renovation, with the desire of capturing a higher selling price.
Plan ahead before you make any investments
If a homeowner will invest possibly tens of thousands of dollars into upgrades before selling, making the best investment is common sense. Analyzing the market, the typical buyer’s expectation for a similar property, and the renovations the home needs based on that criteria provide sellers with vital information to guide their decisions. With this research, sellers can identify the best upgrades to earn a quick sale at a better price.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.