With remodeling, what’s outside counts

Many buyers judge a house by its exterior, or so it seems from the results of the 2007 Remodeling Cost vs. Value Report. Three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades.

The most profitable project on the national level was upscale siding replacement, recouping 88 percent of costs upon resale. Wood deck additions and wood window replacements also returned more than 80 percent of costs, at 85 percent and 81 percent, respectively. On a national average, the only interior project to return more than 80 percent of remodeling costs this year was a minor kitchen remodel, returning 83 percent of project costs at resale.

You’ve heard the term “curb appeal” but sometimes owners are not sure what improvements will give a return on investment.

REALTORS® know what attracts buyers in their local markets and can help your house put its best façade forward, so to speak – it’s another way REALTORS® add value to the real estate transaction.

The National Association of REALTORS® 2007 Remodeling Cost vs. Value Report compares construction costs with resale values for 29 midrange and upscale remodeling projects comprising additions, remodels and replacements in 60 markets nationwide. Data are provided for nine U.S. regions, following the divisions established by the U.S. Census Bureau.

Buyers in the Pacific region of Alaska, California, Hawaii, Oregon and Washington value their garages. The midrange garage addition returned nearly 70 percent nationally but 88 percent in this region. The upscale garage addition returned 65 percent nationally, 78 percent in this area.

Homeowners in the Pacific region could also expect some of the highest percentages of remodeling expenses returned at resale, with 13 of the 29 projects returning 90 percent or more of project costs 60 percent of project costs.

The least profitable projects were a back-up power generator, sunroom addition, and home office remodel.

When considering a remodeling project, particularly with an eye toward resale, it’s important to evaluate your home’s current condition, and how the project will change it.

For example, using a breakfast nook to expand the kitchen seems like a good use of space, but using the same space to add a first-floor bathroom in an older home that doesn’t have one will draw more buyers.

REALTORS® see hundreds, if not thousands, of homes every year with their buyer clients and can advise which projects and improvements will make a difference with buyers.