For most homeowners, the idea of a major home remodel can be a complete crapshoot. In some cases, such a project may result in netting a higher sale price. In others, however, it may end up netting such a low return on investment, that it’s probably not worth the risk or the hassle.
If you’re considering a major remodeling project on your home before selling it, then you will want to read this post. We’re going to cover some important points and highlight certain potential risks involved. We’ll also make a few recommendations and cautions that should help increase the chances of success.
An important point to lead off with: Home remodeling isn’t for everybody!
If you’re not handy at any minimum level, you’ll ultimately end up depending on other people to get things done right. You may also be a prime candidate to be taken advantage of by a less-than-savory contractor.
For most homeowners, the concept of remodeling can be a fairly simple one, at least in economic terms. Say your house is worth $450,000. Now you decide to invest another $40,000 into improvements and remodeling. Once you’re done, you expect to at the very least recoup the investment, by fetching a higher sale price. Pretty simple concept, right?
But in the real world of home buying and selling, things aren’t quite that simple. There are many factors and contingencies involved in a remodel project that can vastly complicate things. That means it’s almost impossible to predict what improvements will help the selling price and what won’t. External factors, such as local market trends, mortgage rates, and loan availability, among others, can make or break a remodel project as well.
As we already covered in a previous post, there are many kinds of home projects that can help homes retain or improve a higher value. Several “green” and “smart” improvements can dramatically boost a home’s market presence.
Here are just a few key caveats to keep in mind:
A Remodel Project Can Seriously Test A Marriage
It’s no secret that many a major remodel project has been a death knell for an otherwise-healthy relationship. Home remodeling projects rarely go as planned. Over time, they affect the quality of life in the home during the projects, which can also have a caustic effect on harmony.
Be sure to think things through, and talk things over with your significant other before embarking on a project. If there are legitimate fears or apprehensions, then be honest with yourselves. Make the necessary hard decisions that will protect the relationship and keep the family unit intact.
Expect To Go Significantly Over Budget and Past Schedule
Whether you hire contractors or go the DIY route, rest assured that timetables and budgets will always get blown. There will always be inevitable changes, out-of-stock materials, fixture problems, and other issues that will mess up a plan. Even mini-improvement projects have a way of spiraling out of control. Be ready for anything, and make sure you have a backup plan (and funds) for when the inevitable happens.
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You Can’t DIY Everything – Don’t Kid Yourself
These days, there’s no shortage of blogs, Youtube videos, HGTV shows, and other online content that makes home remodeling projects look ridiculously easy. Don’t fall for it. There will be projects that just can’t be done DIY-style. Among them include: replacing a roof, changing out a furnace or AC unit, changing a home’s siding, rewiring a room, among others.
Stick to the easy, doable DIY projects. Then farm out the rest to qualified pros with good reputations and track records. You’ll thank yourself later.
Your Chances Of Getting Scammed Are Pretty Good
It’s no secret that the home improvement industry is a well-known hotbed of scammers. They’ll often get your attention by coming in with an insanely low bid for what’s considered a major job. They may also make big promises for fast turnaround times that are simply not humanly possible. The goal is to get their hands on your initial deposit, because then you’re committed. It becomes quite easy to keep the scam going once they have a good chunk of your money.
From that point on, they’ll just string you along while making it look like things are getting done. But more unexpected costs will pile up and it will seem like the project will never end.
Be aware that scammers like going for exterior projects such as landscaping, roofing, siding, driveway paving, and so on. Most scam contractors will often have bogus or outdated licenses, insurance certificates, and even fake references. Any contracts you sign with them will usually be unenforceable and just get laughed out of court.
Note that most shady contractors will come knocking on the door if they see any kind of work being done on the house. They’ll pitch you with cheap rates and fast turnarounds, trying to get a homeowner to commit on the spot.
The best way to avoid getting scammed is to network through friends, family, and colleagues when searching for reliable and proven contractors. Research them thoroughly and make sure that their bonding, licenses, and other legal requirements are current and in good standing. Assume that any contractor who shows up to your house unsolicited is a scammer until proven otherwise.
Understand that oftentimes a major remodel project will likely not be necessary to fetch a higher selling price. Make sure that the home’s maintenance is up to speed. Also consider investing some time, energy, and money into cleaning the home. Just doing those two things alone may enhance a home’s value far beyond what any major remodel project can. A deep thorough cleaning goes a long way. Get everything pristinely clean down to the doorknobs, light switches, and even the stairway handrails. You’ll reap the benefits come open house day.
There will be many cases where repairs and updates may be needed and warranted. But just don’t go crazy on them. Trying to update and fix everything is not only futile, but it can also become prohibitively expensive. Focusing on the “little things” that stand out to a potential buyer that may indicate bigger problems goes a long way in ensuring a fast home sale at the desired target price.
Everyone wants to make a good impression on prospective homebuyers. Keeping things real and focusing on what will actually help the most to sell a home is always the smart way to go.