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Remodeling Rewards: Cost-Effective Improvements For Home Sellers

The remodeling industry is booming, with homeowners coast to coast pouring money into their homes in order to make them as comfortable – and as valuable – as possible. The National Association of the Remodeling Industry surveyed homeowners in 2004 and found that nearly half (47%) of its survey respondents chose to remodel in order to boost their home’s market value. The majority of people surveyed did a remodel to update their homes aesthetically (79%) or address changing family patterns.

NARI’s survey reports that half of all remodeling projects cost $5,000 or less, and 23% cost between $5,000 and $10,000. Kitchen remodels are usually among the most expensive projects.

Major improvements

The benefits of a remodeling, adding on to your home, or replacing systems vary widely by market, housing type, and neighborhood, but Remodeling Magazine’s annual rankings weigh the cost of renovation against the amounted at resale. According to Remodeling, the top 10 renovations in 2004 and the amount of investment recouped were as follows:

Renovation ROI
Major kitchen remodel 93%
Siding replacement 93%
Bathroom remodel, mid-range 90%
Deck addition 87%
Bathroom addition, mid-range 86%
Bathroom remodel, upscale 86%
Window replacement, mid-range 84%
Window replacement, upscale 84%
Attic bedroom addition/conversion 83%
Bedroom addition, upscale 81%

Minor improvements

If you’re planning to sell in the near-term, you may not have the time or resources for a kitchen or bathroom remodel. However, even cosmetic changes, the sort a home staging professional would provide, can have positive effects on your home’s asking price. Fresh coats of paint, some minor landscaping, and de-cluttering rooms all give the buyer the sense that the home is move-in ready. Agents surveyed in 2000 by the real estate site HomeGain.com reported that the following presale improvements – for less than $2,000 – generated the most return on investment:

Improvement Avg. Cost ROI
Lightening/brightening rooms, washing windows $86 to $110 769%
Clean and de-clutter home $305 to $339 594%
Landscape and trim front yard and backyard $432 to $506 266%
Repair electrical and plumbing problems $338 to $381 196%
Spruce up decor, including flowers $812 to $1,089 169%
Update kitchen and bathroom $1,546 to $2,120 138%
Source: HomeGain.com’s May 2000 survey of about 2,000 agents in 46 states.

Resources for remodeling