Should I Remodel My Home or Sell It As-Is?
Many homeowners who are considering a move are often faced with a common dilemma: should they remodel their home first or should they sell as-is? It’s a question that takes thoughtful consideration. On the one hand, remodeling a home can bring a higher sales price. On the other, it can be an expensive undertaking that may not be worth the time nor the stress.
Each approach has its respective advantages and disadvantages. In weighing each, it’s important to consider your unique circumstances. What are the market conditions? What are construction costs in your area? Are you in a rush to sell?
Perhaps the most important factor to consider when deciding whether to remodel your home or sell it as-is are market conditions. In a seller’s market, there will be high competition among buyers due to a lack of inventory. In this case, it’s wise to capitalize on the market by avoiding the added cost of remodeling. This, of course, depends on what type of renovations your home needs and what features buyers are demanding. For example, if you live in an older home without central heat and air, you may want to consider installing an HVAC to get top dollar. Similarly, if your home has shag carpet throughout, replacing it with hardwood or laminate would meet the demands of today’s buyer. Your agent can help you sort out which upgrades are essential and help you find comparable listings in your area.
Even in a seller’s market, it is still important to make necessary repairs and to stage your home. You may want to consider simple steps to prep your home for sale, which can modernize an outdated space, add curb appeal, and be an instant draw for buyers. Even minor updates can have a major impact, such as installing new light fixtures, updating a kitchen backsplash or refinishing a dingy bathroom tub.
In a buyer’s market, there are more homes on the market than active buyers. If you live in a buyer’s market, you may be more inclined to remodel your home before selling to help it stand out among the competition.
Timing is another important consideration when deciding whether to remodel your home. Even small remodels can take months to complete, so this may impact your decision. Finding a contractor, obtaining the needed permits and waiting on supplies can all push back your project — and that’s before the work even begins. Depending on your circumstances, time may be of the essence. Perhaps you’re starting a new job out of state, or you’re trying to get your children into a particular school district. If you’re in a rush, remodeling may not be a viable option.
Cost Analysis: Home Remodel vs. Selling Your Home As-Is
When you remodel your home before selling, you’re basically making a commitment to spend money to make money. So, it’s important to consider the possible return on your investment. Naturally, some renovations see higher returns than others. For example, according to the 2023 Cost Vs. Value Report for Sacramento, an HVAC conversion can result in as much as 135 percent of the cost recouped, but an upscale master suite addition only 19 percent. Other jobs that see a high ROI include garage door replacement (95 percent), siding replacement (95 percent) and minor, midrange kitchen remodels (92 percent).
The cost of construction itself is an important factor to consider as well. In Sacramento, the average cost of a major kitchen remodel is more than $82,470, compared to the national average of $77,900. Replacing vinyl windows is $24,160, compared to $20,000. Your agent can help you decide whether it’s a good idea or whether you should hold off. Agents have expertise on the local market, the types of remodels other sellers are making, and the returns they’re seeing on those investments.
There’s also the question of whether you can complete your remodeling project yourself or whether you’ll need to hire a contractor. This, of course, depends on the project. Painting a room or swapping out a faucet are easy weekend DIY projects, but remodeling a kitchen or replacing a roof require the skills of an expert.
If you’re looking to upgrade before you sell, consider Lyon Real Estate’s Home Improvement Concierge. This service allows you to make small or large renovations before you sell, and you pay for these expenses at closing. Your Lyon agent can help determine which renovations will maximize your home’s value and an on-site project manager handles all the details from start to finish. Best of all, 100 percent of costs are deferred until you sell your home.
Selling Your Home As-Is
Deciding not to remodel your home will come with its own pros and cons. By selling as-is, you may get a lower price, but you also won’t incur the cost and headache of dealing with a remodel. If you sell your home without remodeling, you may forego the ability to pay down the costs of buying a new home with the extra money you would have made from making those upgrades. Your agent can help you run the numbers to see whether you’d be ahead in the long run.
Note that in some cases, updates or repairs may be requested by the buyer (or more accurately, the buyer’s lender). These typically focus on the safety, security and soundness of a property. For example, many lenders require leaking roofs to be repaired, inoperative heating systems to be fixed, and faulty electric boxes to be rewired. Much of this can be determined in the inspection process.
If you decide to remodel your home, it will likely sell for more, but the increased selling price will come at the cost of financing the remodeling projects. If you decide to sell without remodeling, you won’t spend as much money putting your home on the market, but you may be leaving money on the table. Contact your Lyon agent to help you determine whether it’s best to remodel your home or sell it as-is.
*Featured courtesy Getty Images via Windermere