HomeownerSeller
July 31, 2020

Part 3 of Everything You Need To Know About Your Home's Value series

Here are home improvement projects that may not increase the value of your property, and could even bring it down when it's time for you to sell. You might want to keep these things in mind before spending some money to renovate your home.

Upscale kitchen remodel

A high-end kitchen might be the ultimate gift for any home chef. Especially after several months of isolation, our kitchens might have become our comfort place. But if you think upgrading your kitchen to a “gourmet” status with a commercial stove, marble countertops, and high-end appliances will automatically increase its resale value, you might be in for a surprise. 

According to Remodeling magazine's 2020 Cost vs. Value report, an upscale kitchen renovation recoups just 54% of its cost in added value. So think twice before upgrading your space into a fancy, restaurant-style kitchen whose style doesn’t fit in with the rest of the house, or the neighborhood. This kind of kitchen remodel might even deter potential buyers. Focus instead on small kitchen upgrades that could yield a bigger payoff.

 

Swimming pool

It's a dream come true to lounge by the pool, cocktails in hand, in the comforts of your own backyard. But while you can’t put a price tag on how much joy a swimming pool will add to your home and quality of life, you might want to think twice before considering this update. 

According to HouseLogic, installing an in-ground pool might only make more financial sense if you live in a state with a year-round hot or warm climate, or if you live in a higher-end neighborhood where most homes have pools. Your home’s value could only increase by no more than 7% after the pool installation, and only in certain circumstances.

Not to mention, pools are expensive to install, difficult and pricey to maintain, increase your energy costs, and could even raise your homeowner’s insurance. And since a pool could also pose as a hazard, it might be a turn-off for buyers with small children. With its very minor potential value increase, a swimming pool addition may simply not be worth it.

 

High-end landscaping

There's no doubt that landscaping can dramatically improve the curb appeal of a home. However, investing in expensive landscaping and going over the top to create what could be a backyard paradise will not increase your home’s value. Rather, it will only increase the maintenance required for it, which could be a concern to potential buyers. If you plan to sell, the sad truth is you won’t recoup the cost of the high-end landscaping in the sale. 

Likewise, any fancy decorative additions you add to make your lawn more attractive may not match the buyers’ tastes. This is why it’s best to stick with keeping your garden beautiful but won’t require countless hours of work. Should you wish to add any decorative window boxes and other lawn enhancements, make sure that they can be easily removed. A well-kept lawn that is easy to maintain all-year round will certainly make a better impression than a backyard with upscale landscaping.

 

Sunroom addition

Unless the homes in your neighborhood have sunrooms that will help you stay competitive when you decide to sell, a sunroom addition adds very little to your home's value. This project can cost anywhere from $30,000 to $70,000, making it one of the most expensive home upgrades. And yet, it has one of the lowest returns on investment, returning an average of only about 49% of money spent. 

So even if a sunroom can be a great space for you to enjoy the outdoors, think carefully about how often you will use it before deciding to do this costly upgrade. Also, remember that a sunroom can also raise your energy costs in the winter and summer since glass doesn’t provide insulation.

 

Whirlpool tubs and other luxury bathroom upgrades

Similar to swimming pools, tubs and other upscale bathroom improvements are also a gamble. Hot tubs and whirlpool baths take up space, require constant maintenance, and may result in higher monthly energy bills. Plus, home buyers with younger children might consider a tub as a safety hazard as some of them are difficult to climb into.

If a hot tub is one of your must-haves, consider a portable hot tub instead of a built-in one so you could potentially take it with you when you move, or the new homeowners can easily remove it whenever they want to. Also, you might want to consider a walk-in shower that many homeowners can use frequently and will appeal to a wider pool of buyers.

Further, don't get carried away by luxury bathroom additions like waterfall showers and over-personalized finishes that may cater only to buyers with specific tastes.

 

Too much customization

We all love to make our homes better and more enjoyable to live in. However, any over-personalized or drastic renovations can hurt your home's value. Quirky tiling, wallpaper, adding textures and bold paint to walls, and other customized features will not appeal to the broadest pool of buyers. Worst, they will see it only as a distraction or as an added expense, especially if they will have to spend time and money to remodel it. So steer clear of any upgrades that are so personal or so specific that they will not add any resale value and will turn home buyers away when it’s time for you to sell your home.

 

Bottom Line

  • Research before you renovate.

Before doing any renovations, you need to look at your neighborhood. Look at comparable homes for sale near you and make sure the improvements you're planning to make align with the norms of your neighborhood, especially since individual markets place different values on different home improvements. And since buyers will also look at the average price of a home in your area, remember to have almost the same features or else your property will be priced out of the expected range and you won’t get your money back.

  • Talk to an agent who is an expert in your market/neighborhood.

Especially if you’re planning to list your home soon, the best way to know what you can expect in terms of resale value is talk to a real estate agent who knows your market well. They’re sure to know the local trends and can inform you about how other homes with similar features you want to add are selling. They will also help you compare your home to all the homes that have sold in the last three years to help define its value. This way, you can make an educated decision before you start a renovation that could affect your biggest investment.

  • Never go overboard.

Lastly, remember that renovations should enhance your home, not price it out of the local market. So avoid any over-the-top renovation or too much customization that could hurt your home’s value and make it a huge turn-off to potential buyers. If your heart is already set on a particular home improvement project, do it mainly for your own enjoyment but not as an investment, especially if you’re staying in the house long-term.

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12 Reasons Why This is a Better Market for Buyers

I TALKED TO A LOT OF POTENTIAL BUYERS AND SELLERS EVERY DAY WITH WHAT I DO AND INEVITABLY A COUPLE OF TIMES A DAY I'M GONNA HAVE PEOPLE THAT I'VE BEEN TALKING WITH JUST SAY, I'M GONNA WAIT TO BUY. I'M JUST GONNA WAIT AND YOU KNOW, IN MY HEAD, I'M THINKING, WAIT FOR WHAT YOU THINK, INTEREST RATES ARE GONNA GO BACK DOWN TO TWO OR 3%. I DON'T THINK WE'RE GONNA SEE THAT AGAIN IN OUR LIFETIMES. I REALLY DON'T UM I HOPE I'M WRONG ABOUT THAT. UM BUT I JUST, I DON'T SEE IT HAPPENING. WHERE THE PRICES AREN'T CRASHING DOWN. WE'RE STILL, IT'S STILL A SELLER'S MARKET, THERE'S STILL UM MUCH MORE DEMAND THAN THERE IS SUPPLY OF HOMES. AGAIN, I STARTED THINKING, I GO, WHAT ARE SOME OF THE REASONS WHY THE MARKET IS BETTER FOR BUYERS AS WE SIT HERE IN THE, YOU KNOW,THE LAST QUARTER OF 2022 VERSUS HOW THINGS WERE FOR YEARS ENDING IN WHEN THE MARKET SHIFTED RIGHT AROUND EASTER THIS YEAR. THAT'S WHEN THE MARKET CHANGED. SO I CAME UP WITH 12 PROS AND ONLY ONE CON. SO LET ME SHARE THOSE WITH YOU.

 

PRO NUMBER ONE IS A SELLER PAID CLOSING COSTS. THESE SELLERS WERE NOT PAYING ANYTHING UH FOR YEARS, IN MOST INSTANCES, YOU KNOW, THEY PAY THEIR, THEIR REAL ESTATE FEES, DOC STAMPS IN THE DEED, BUT YOU'RE BUYING, YOU KNOW, YOU AS THE BUYER WOULDN'T WOULD HAVE TO COME OUT OF POCKET FOR JUST ABOUT EVERYTHING ELSE. WE'RE GETTING SELLERS TO PAY, CLOSING COSTS IN SOME INSTANCES NOW AS A NEGOTIATION POINT. SO THAT'S EXCITING. IT'S LESS OUT OF POCKET FOR THE BUYERS.

 

THE SECOND REASON IS SELLER PAID RATE BY DOWN. WHAT WE'RE DOING IN SOME INSTANCES IS RATHER THAN REDUCE THE PRICE, WE'RE TAKING THAT MONEY THAT YOU WOULD NEGOTIATE WITH THE SELLER AND HAVING THE SELLER BY YOUR RATE DOWN. SO I MEAN THAT'S EXCITING TO BUY IT DOWN. MAYBE, AS WE'RE SITTING HERE IN OCTOBER, THERE ARE 7%, YOU CAN BUY IT DOWN TO SIX, MAYBE EVEN FIVE. SO THAT'S SOMETHING THAT WASN'T GOING TO HAPPEN IN THE PAST.
 

THE THIRD IS THE SELLER PAID TO ONE RATE BY DOWN. AND WHAT THAT IS IT'S A NEW, IT'S A NEW PROGRAM THAT A LOT OF LENDERS HAVE WHERE THE SELLER BUYS DOWN YOUR RATE AND IT'S 2% LESS THE FIRST YEAR. SO IF IT'S 7% YOU'D PAY 5% THE SECOND YEAR, IT'S 1% LESS. SO IF IT'S 7% YOU PAID SIX AND THE THIRD, YOU'D BE AT SEVEN IN THE THIRD AND BEYOND, YOU'D BE AT 7%. OKAY? BUT HERE'S THE DEAL WITH THAT THAT GETS YOU THAT GETS YOU ABLE TO AFFORD MORE HOUSE HERE IN THE SHORT TERM AND THERE'S GONNA BE OTHER,ONE OF TWO THINGS WILL HAPPEN IN THE IN THE FUTURE EITHER THE FIXED INTEREST RATES ARE GONNA COME DOWN SO YOU CAN REFINANCE OR THERE'S GONNA BE OTHER LENDING PRODUCTS THAT ARE GONNA COME OUT MAYBE ARMS UM LOOK THEM UP WITH OTHER SOLUTIONS TO,BECAUSE AFFORDABILITY IS AN ISSUE NOW WITH THE RATES GOING UP IN THE PRICE INCREASES IN RECENT YEARS. SO THAT'S ANOTHER OPTION FOR YOU ON THE TABLE.

THE FOURTH REASON WHY BUYING A HOME CAN BE BETTER HERE NOW AT THIS POINT IN 2022 THAN IN RECENT YEARS IS SELLER PAID REPAIRS. UM YOU KNOW, SELLERS DIDN’T WANT TO DO ANYTHING. IN FACT, THEY SOME OF THEM DIDN'T EVEN WANT BUYERS TO HAVE INSPECTIONS FOR HEAVEN'S SAKES. NOW THE SELLER IS THE SELLERS ARE GOING AHEAD AND MAKING YOU KNOW, REPAIRS ON THEIR PROPERTY BEFORE PUTTING THEM ON THE MARKET. THEY'RE REPLACING ROOFS, YOU KNOW, IF THEY NEED TO REPLACE ROOFS AND THERE'S ALL SORTS OF THINGS THAT THE SELLERS ARE WILLING TO DO THAT THEY WERE RESISTANT TO DO IN RECENT YEARS JUST BECAUSE THERE WAS SO MUCH DEMAND.

 

THE 5TH REASON IT'S BETTER TO BUY A HOME IS SELLER PAID IMPROVEMENTS. SELLERS ARE GOING AHEAD AND MAKING IMPROVEMENTS TO THEIR HOME PRIOR TO PUTTING THEM ON THE MARKET WHERE UM YOU KNOW, WHEREAS BEFORE THERE WAS JUST ABSOLUTELY NO REASON TO, SO, YOU KNOW, YOU AS THE BUYER ARE GONNA BENEFIT FROM THAT BE THE ONE THAT WILL BENEFIT MOST FROM THAT.

 

THE SIX POINT OF WHY THIS IS A BETTER HOME FOR A BUYER TO BUY TO BUY MARKET IN RECENT YEARS IS PRICE NEGOTIATION. THERE WAS NO NEGOTIATION AND PRICE PREVIOUSLY IT WAS, HOW MUCH ARE YOU WILLING TO PAY OVER LIST PRICE? TO TRY TO GET THE HOME RIGHT AS CRAZY AND PEOPLE ARE PAYING, YOU KNOW, PEOPLE ARE PAYING, YOU KNOW, $6100 OVER LIST PRICE. THEY WERE GIVING AWAY THEIR SEASON FOOTBALL TICKETS. I MEAN, MAD TRIPS, its MADNESS. OKAY, ALL THAT'S GONE. SO WE'VE GOT PRICE NEGOTIATION NOW, THAT'S THE WAY IT SHOULD BE.

 

THE 7TH REASON WHY THERE'S IT'S BETTER TO BUY A HOME HERE IN THIS MARKET THAN THE PREVIOUS MARKET IS YOU PAY LESS THAN ASKING PRICE. RIGHT? YOU FIND OUT IF THERE'S ANY OTHER COMPETING OFFERS, IF THEY'RE NOT, WE CAN NEGOTIATE A LITTLE BIT RIGHT? SO, I MEAN, THAT'S EXCITING, YOU GET A BETTER DEAL THAT WAY.

 

THE 8TH REASON WHY IT'S BETTER TO BUY A HOUSE IN THIS MARKET THAN THE PREVIOUS HOT MARKET. YOU DON'T HAVE TO WAIVE INSPECTIONS, OKAY, WAIVING INSPECTIONS IS A TEAR. IT WAS A TERRIBLE IDEA, BUT I MEAN, PEOPLE HAD TO DO IT TO GET A HOUSE RIGHT? UM YOU WANT TO MAKE SURE THAT EVERYTHING IS AS YOU WANTED TO BE BEFORE YOU BECOME THE OWNER OF THAT HOME AND UM, YOU KNOW, NOW WE'VE GOT TIME TO DO INSPECTIONS AGAIN AND JUST MAKE SURE, YOU KNOW, IT'S A, IT'S THE SMART INVESTMENT FOR YOU. SO THAT'S BACK IN PLAY.

THE 9TH REASON WHY THE MARKET IS BETTER NOW FOR BUYERS THAN IT WAS IN THE RECENT HOT MARKET IS INSPECTION NEGOTIATIONS, OKAY. UM, EVERYTHING WAS AS IS BEFORE FOR THE MOST PART, OR VERY, VERY SMALL, REPAIR LIMITS THAT WERE PUT ON THE, PUT ON THE CONTRACTS AND UH, NOW YOU CAN GET STUFF FIXED. YOU KNOW, IT'S A LOT EASIER. IT'S A LOT EASIER TO GET A FIXED SELLER, TAKE CARE OF IT BEFORE YOU MOVE IN AND THEN HAVE IT BE YOUR PROBLEM ONCE YOU BUY IT.

 

 

THE 10TH REASON WHY IT'S BETTER FOR BUYERS TO BUY NOW THAN IT WAS IN THE PREVIOUS HOT MARKET IS YOU GOT TIME TO THINK IT OVER RIGHT SO MANY BUYERS JUST NEEDED A HOUSE, RIGHT? AND I MEAN, IT'S LIKE, YOU GOTTA, YOU GOTTA DECIDE RIGHT NOW, YOU KNOW, IT'S IN, YOU KNOW, OFTENTIMES THE BUYERS WERE SETTLING FOR A LOT OF STUFF THEY REALLY DIDN'T WANT JUST BECAUSE THEY NEEDED A PLACE TO LIVE. SO YOU GOT A LITTLE BIT OF TIME TO THINK THINGS OVER AND JUST MAKE SURE THAT THIS IS GONNA BE THE RIGHT MOVE FOR YOU.

 

 

THE 11TH REASON WHY IT'S BETTER TO BUY A HOME IN THIS MARKET THAN THE PREVIOUS HOT MARKET IS YOU CAN HAVE CONTINGENCY CON CLAUSES IN YOUR CONTRACT, YOU CAN'T HAVE THAT, I MEAN, PREVIOUSLY, IF YOU HAD A CONTINGENCY CLAUSE, WHY WOULD THE SELLER EXCEPT THAT WHEN THERE'S YOU KNOW 10 OTHER OFFERS OR 20 OTHER OFFERS THAT DON'T HAVE THAT RIGHT? MAYBE GOT A HOME TO SELL. NOW YOU CAN FIND A HOUSE, YOU KNOW, THAT'LL FIND A SELLER THAT'LL TAKE A CONTINGENCY ON THE SALE OF YOUR HOME AND YOU CAN TIME EVERYTHING BETTER THAT WAY AND YOU KNOW, HAVE A LOT LESS STRESS.

 

 

THE 12TH REASON WHY IT'S BETTER FOR BUYERS TODAY THAN IT WAS IN THE PREVIOUS HOT MARKET IS YOU'VE GOT LONGER CONTRACT TO CLOSE IF YOU WANT IT RIGHT THERE, THEY'RE NOT PUSHING TOO CLOSE AND YOU KNOW, 20 OR 30 DAYS LIKE THEY WERE IN THE PREVIOUS MARKET. SO YOU'VE GOT LONGER TIMEFRAMES, YOU KNOW, MAYBE YOU'VE GOT A HOME TO SELL OR YOU KNOW, YOU JUST DON'T WANT TO MOVE FOR A CERTAIN PERIOD OF TIME, YOU NEGOTIATE IT OUT NOW.

AND OF COURSE, THE ONE CON OF BUYING TODAY AND IT'S A VERY SHORT LIST IS THAT INTEREST RATES ARE HIGHER, RIGHT? UM YES, THERE'S STILL HISTORICALLY LOW EVEN AT 7%, BUT IT'S A LOT HIGHER THAN THREE. AND UH WE UNDERSTAND THAT, BUT YOU KNOW, LIKE WE ALWAYS SAY UM MARRY THE HOUSE AND DATE THE RATE UM THEY'RE GONNA COME BACK DOWN. I MEAN THERE'S GONNA BE OTHER PRODUCTS THAT ARE GONNA SHOW UP. UM IT'S A LOT BETTER TO BUY AT 7% THAN IT IS IF IT GOES UP TO 10 OR 12 AND THERE'S A LOT OF REALLY SMART PEOPLE OUT THERE WHO ARE SAYING IT'S GONNA GO UP TO 10 OR 12 BEFORE THIS IS ALL SAID AND DONE. SO 7% ISN'T GONNA LOOK SO BAD WHEN THAT DAY COMES. SO AND AGAIN LIKE I SAID, YOU CAN ALWAYS REFINANCE LATER IF YOU WANTED TO. UM THERE'S GONNA BE ALL SORTS OF OTHER PRODUCTS THAT WILL COME OUT. BUT YOU KNOW AT LEAST YOU CAN GET THE HOME YOU WANT AND LIVE YOUR LIFE. AND WHEN THAT DAY COMES YOU'LL HAVE OTHER OPTIONS. IF I CAN HELP YOU WITH ANYTHING BUYING OR SELLING, JUST REACH OUT TO ME. YOU CAN IF YOU'RE SEEING THIS ON SOCIAL MEDIA, GO AHEAD AND DIRECT MESSAGE ME, I'LL BE THE ONE ANSWERING YOU SO MAKE SURE THAT YOU DO IF YOU TALK TO ME I WILL BE THE ONE TALKING TO BACK, IT WON'T BE AN ASSISTANT, IT'LL BE ME. AND SO JUST KEEP THE CONVERSATION GOING. IF HE COULD AND UM IF YOU PREFER YOU CAN CALL OR TEXT ME AT 85O-677-1630. YOU FOUND THIS HELPFUL GO AHEAD AND LIKE THIS, SHARE IT WITH ANYBODY THAT YOU MIGHT KNOW UM PUT IN THE COMMENTS WHAT YOU THINK ABOUT THIS PROS AND CONS LIST. AND UM IF YOU WANT TO FOLLOW ME ON INSTAGRAM YOU CAN FOLLOW ME @MEETSCOTTGREGORY, LOOK FORWARD TO TALKING TO YOU SOON. TAKE CARE!

 

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