Kevin O’Reilly knows he got his money’s worth from the $2,400 he put into his house before it went up for sale earlier this summer.
He stripped old wallpaper, painted and updated bathrooms, installed neutral carpet and painted the four bedrooms. The work paid off fast.
“The couple that made the offer was the first couple to look at the house,” he says. The two-story in Sterling Heights, Mich., listed for $179,900 and sold for $179,000 three days later.
People preparing to sell their homes sometimes wonder how smart it is to invest in things like paint and new carpet when they’re getting ready to move.
According to real estate agents, they’d be wise to stop wondering and to grab a paintbrush. Sellers who make needed cosmetic updates nearly always recoup their costs, and often more. They may also hasten the sale.
“Homes that are fixer-uppers don’t appeal to people anymore,” says Jim Ford, an associate broker with 30 years of experience at Weir Manuel Snyder & Ranke Realtors in Birmingham, Mich. “People want to move in and have to do nothing.”
Ford describes a three-bedroom ranch in a nearby suburb listed earlier this year that had lots of lookers but no offers.
After the home spent several months on the market, the owner decided to spend $10,000 to improve its appearance. New paint and carpet updated the interior. A bathroom was freshened with paint, new fixtures, a tub surround and strip lighting. Exterior paint was touched up.
When the house went back up for sale, it was listed for about $8,000 more and sold within days for an even higher amount, Ford says. In his view, the improvements made all the difference.
How much sellers spend on quick fix-ups depends on what needs to be done, as well as the price the house is expected to bring.
In O’Reilly’s case, he credits a previous owner with making sound changes that gave the house a more modern feel. For example, the kitchen had already been lighted with color and new fixtures. The family room’s dark wood paneling had been painted off-white.
So O’Reilly concentrated his efforts on removing dated wallpaper in the bathrooms, painting, replacing toilets and flooring. In the bedrooms, he repainted walls, spending $120 on a power roller that allowed him to work faster.
He and his wife, Sharon, and their three children — two girls, 12 and 8, and a boy, 7 — rounded up extra equipment and toys and stashed them in a storage unit, which rents for about $104 a month.
That allowed them to free space in closets and the basement. O’Reilly came up with the idea after looking at many houses that were crammed with items.
“You want to see a furnished home, but you want to see the space that’s there,” he says. The O’Reillys will use the storage unit until after their move. Their broker, Dennis Nabor with Red Carpet Keim Macomb in Clinton Township, Mich., says the best improvements to make just before selling are those that update, freshen and sharpen the home’s image. They should be visible to prospective buyers.
So if it’s a choice between spending $600 to add insulation to the attic or $600 to paint and paper a bathroom and add a new vanity top and faucet, the bathroom improvements are a better investment.
“That $600 would yield a much greater return than in fiberglass insulation,” Nabor says, especially if it transformed the bathroom from “dreary to cheerful and nice.”
He says real estate professionals should be able to suggest what needs to be updated or replaced and give ideas on ways to do it so the house will sell more quickly and for a good price.
Clients don’t always want to hear the advice, however.
“One of the biggest jobs I have is getting across that it’s in their best interest to do these things, whether they do it themselves or hire it out,” Nabor says.
The kitchen is particularly important, Ford says. Older cabinets should be replaced or refaced, and appliances should be recent.
“It’s not the money you spend, it’s where you spend it,” says Sharon Snyder, broker and owner of Snyder & Company of Ann Arbor. For houses in expensive neighborhoods, even spending $50,000 or more to remodel an older kitchen just before selling the house can pay off.
“Where you expect granite, Corian and high-end appliances, you will get your money back,” she says.
On the other hand, “If it’s a $125,000 house and you put $40,000 in a kitchen, I wouldn’t expect the same return.”
In a separate category are major structural repairs a house may need. State laws require sellers to sign a disclosure of defects or problems such as leaky basements or roofs.
Snyder advises her clients whose homes have any structural problems to make the repairs before putting the house on the market.
Otherwise, sellers should disclose the problem and get several estimates of how much the repair will cost. They can then present the estimates to potential buyers and adjust the asking price accordingly.
Cosmetic improvements generally cost less, and Ford says it’s a no-brainer: Just do it.
“As much as you put in, you will get back, sometimes with a little profit, and the house will sell quickly. Whereas if you don’t, the house will sit around for a while,” he says.
Snyder says the key to remember is that people buy houses based on emotion.
“You want it looking as fresh as possible. You want to unclutter the house and you want it neutral . . . always neutral for resale,” she says.
