July 14, 2013 in Business

Simple home upgrades can pay off for sellers

Jamie Smith Hopkins Baltimore Sun
 

Michael Evitts and his wife are in the midst of renovating their first-floor row house in south Baltimore. The remade parking spot out back has great resale value, real estate agents say. Evitts, shown at the parking pad on June 27, opted for one that’s permeable so rainwater can go through.
(Full-size photo)

Pop quiz: What’s the home-improvement project that comes closest to paying for itself when you sell?

Not a snazzy new kitchen or bathroom. A lowly steel front door.

So says Remodeling magazine in its annual survey breaking down the cost benefits of spiffing up your home. Nationally, the survey says, replacing your door costs an average of $1,137 and has a resale value of $978.

“That’s the entrance of the home,” said Dave MacLean, director of sales at Brothers Services Co., a Hampstead, Md.-based remodeling firm. “That’s the absolute first impression.”

A steel door, if Remodeling magazine is right, will recoup 86 percent of its cost at sale. The survey suggests that beats the heck out of a major kitchen renovation (69 percent) or a bathroom remodel (65 percent).

The takeaway is to think on a smaller scale – at least if your priority is resale.

Costs for the survey’s five most valuable projects range from the $1,137 door to a minor kitchen improvement of about $18,500 (new cabinet fronts and hardware, plus replacement countertops and the like). For the bottom five, costs start at $11,400 for a backup power generator and top out at nearly $73,000 for a sunroom addition.

The survey relied on appraisers and real estate agents – about 3,900 nationally – for its resale estimates. But appraisers warn that home improvement is not an exact science. It depends on the property, the neighborhood and what buyers expect.

At a certain point – say, a property with a bathroom and kitchen predating the Eisenhower administration – you might need to do major updates just to get anyone in the door to look. And market expectations vary a lot by neighborhood.

In affluent areas, “you need to know your competition,” said Sharon L. Cremen, owner of Cremen Appraisal & Consulting Inc. in Forest Hill, Md. “If they all have these great gourmet kitchens, you need to have a gourmet kitchen if you’re putting your house on the market. Or you need to be extremely realistic about how much the property is going to sell for.”

Cremen, by the way, isn’t convinced that a steel front door gets you such a hefty return. It’s not that she doubts the importance of curb appeal, but she says this example of it is so hard to measure. “Front door” isn’t even its own line item on her appraisal reports.

“There’s just no way to isolate the value of a front door,” she said.

Where she agrees with the survey findings is that simpler is generally more cost-effective. Replacing cabinet fronts and appliances, say, rather than gutting the kitchen. Or building a much-needed bathroom within the footprint of the house rather than adding on.

If you’re improving your home to live in it, the value proposition gets a lot more complicated to reduce to hard numbers.

Really, really want a home office? Then you might not mind so much that Remodeling magazine’s survey says you’ll get only 44 percent of the cost back, on average. That’s dead last on the list of 22 typical – as opposed to upscale – home-improvement projects. And you’re probably not thinking about what you’ll get back when you sell if you’ve had so many power outages that you’re planning to shell out for that backup power generator.

Kenny Gordon of home-renovation firm KSG Contractors in Odenton, Md., thinks it makes sense to consider all the various ways to measure the value of a project. But if someone’s just looking to sell, his top recommendation is so simple you can DIY.

Repaint. Preferably in a neutral color.

“Paint,” he said, “is like magic.”

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