Times have been tough recently for some military sellers. Many may be planning to sell and wonder which, if any, upgrades will add value when it comes to attracting and landing the right buyer.
Knowing which upgrades to make, and how much to spend, is important. Not all upgrades automatically increase your home’s value with buyers (e.g., some do not want an in-ground pool).
So what do buyers want in 2023? “Buyers are hyper-focused on hanging onto extra cash right now, especially if buying a house has put a big dent in their savings. They want workable kitchens and baths and don’t necessarily want to take on an interior remodel before they move in,” according to Remodeling’s 2023 Cost vs. Value Report (Zonda Media). Zonda surveyed more than 6,000 real estate agents, providing them with project specifications and cost estimates, along with photos and illustrations describing the projects.
The agents answered a series of questions such as, “What value does this project add to the sales price of a home?” Results were broken down regionally and nationwide. Overall, the highest return on investment (ROI) was available with exterior upgrades while the lowest were attributed to high-end remodels of kitchens and bathrooms.
Related: How to Sell Your Home Quickly in Any Market
Highest-Return Projects for 2023
Exterior projects such as new garage doors, siding replacement and new entry doors have stayed near the top of Zonda’s ROI report for the past 30 years and continue to do so. Simply put, exterior projects boost your home’s curb appeal and draw buyers into your home. If a buyer’s first impression of your home is its run-down exterior, they tend to enter the property making project lists in their head and will become reluctant to pay full price. If, on the other hand, the home looks well taken care of, they “enter with a more positive view from the outset,” according to the report’s publishers.
The number one ROI project was replacing an HVAC unit (converting a gas HVAC to an electric unit) with an average return of 104%. Replacing a garage door will cost about $4,300 with a 103% return and replacing siding with vinyl siding will cost about $16,300 and yield an average 95% return. Replacing your entry door will cost about $2,200 and return an average 101% of the investment when you sell.
Related: How to Negotiate a Home Sale
When remodeling comes to mind, most people think of kitchens and bathrooms first. These are good investments, if you keep expectations modest, it seems. A minor kitchen remodel, where you replace cabinet doors and major appliances and upgrade your countertops and flooring, costs an average of $26,700, and offers about 86% ROI. Installing new vinyl windows costs about $20,000 with a 68% recoup when you sell.
Building a 16×20 foot deck will cost an average of $17,000, and will return just 50% of that investment upon sale of the home.
A mid-range bathroom update costs about $24,600 with an ROI of 67%.
The lowest ROI projects on the list are among the most pricey — dream kitchens and luxury baths. An upscale bathroom remodel yields 37% and costs an average of $77,000. Similarly, an upscale kitchen remodel will cost homeowners $154,000, and recoup 32%. For a primary suite addition, homeowners will spend an average of $326,000 and only recover 23%.
While you’ll spend a lot for these upgrades, they may not add the value you’re hoping for in terms of ROI because the finishes and product selections you make for these areas could differ from those a buyer would have preferred, says Zonda.
Related: Refis and Seconds: How to Get Money from Your Home
Consider Home Investments Carefully — and How to Pay for Them
If you’re a homeowner with equity and want to make upgrades but haven’t saved the money for them, you might consider taking out a second mortgage, refinancing, or home equity line of credit (HELOC) — especially if you’re planning to sell soon.
And, of course, if you really want to add an outdoor kitchen or update your master bathroom, you should. After all, why not enjoy your home to its fullest? However, if you think you’ll only own the home for a short time, carefully consider the upgrades you make and how much you’re willing to spend.
It’s also a good idea to talk with a real estate agent if you plan to sell in the near future since they will know which projects in your area are popular with buyers. They may be able to make recommendations on projects such as adding color to your front yard that will be economical and may help your home sell faster.
Related: Avoid Buyer’s Remorse with Help from AMS
We’re Here to Help
Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.
Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-422-3622!