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Wednesday, July 10, 2002 It pays to know which remodeling projects will help you sell Before you remodel, make certain the improvements you are considering increase your home's resale value, as well as provide comfort and convenience, according to the Fayette County Board of REALTORS. "Remodeling a room or two in your home doesn't necessarily mean you'll recoup the entire cost should you sell your home," said Michael Faulkner, President of the Fayette County Board of REALTORS, who cites a recent report by REALTOR Magazine, the official publication of the National Association of Realtors, and Remodeling magazine on the cost compared to the value of 12 popular home remodeling projects. "How much of that cost you can recoup will also depend on the market conditions in your area and possibly on how soon you can sell after the remodeling is completed," he added. The remodeling report Faulkner cites focuses on projects ranging from remodeling a kitchen, bathroom and master suite to family room, bedroom and second floor add-ons. The report provides an average cost for the renovation or remodeling work and also calculates the average amount the homeowner can expect to recoup if the home is sold within a year of the project's completion. A minor kitchen renovation will differ from a major one, says Faulkner. The minor project, which could include updating the kitchen with vinyl or ceramic tiling and adding under- cabinet lighting, was found to have the most "bang for the buck" at resale time a national average return of 94 percent of the project's estimated cost of $9,182. By comparison, the report found that a major kitchen renovation, which includes a total remake right down to installing additional shelving, upgrading appliances and adding a second sink and cooking area, generated an 87-percent return on a national average cost of $24,486, he said. "Keep in mind that these averages are based on if the home is sold within a year of the project's completion," he noted. "When it comes time to sell your home, very often your real estate professional can help you determine how much value you can add to your home through renovations and remodeling," he said. "When you're aware of the costs and value of various property improvements, you can help increase the chances of your home selling quickly and for the price you want," Faulkner added. According to the report, add-ons to homes such as family rooms, additional bedrooms and even second floors were found to recoup more than 80 percent of their national average cost at resale time. The report found that homeowners who opted to spend a national average of $32,958 to add on a 16-by-25-foot family room can expect to recoup $27,830 if the home is resold within a year of the renovation. "Meanwhile, ambitious homeowners who spend a national average of $60,732 to add a second story to their home can expect to recoup 84 percent of their investment, or $50,761, if the home is sold within a year of completing the addition, Faulkner noted. The report also found that the home improvements that proved nationally to have the least potential to recoup their costs included a deck addition (70 percent of the cost is recouped); window replacements (68 percent of the cost is recouped); and the addition of a home office (64 percent of the cost is recouped). "It's also important to remember that how much value a renovation or remodeling project adds to a home will also depend on a number of factors specific to its location," Faulkner explained. "For example, how much you can expect to recoup from a remodeling project may depend on your market area's housing stock, current market conditions, buyer preferences in a certain area and the location's climate." According to Faulkner, if you plan to move within a year or two, it's wise to limit yourself to relatively inexpensive touch-up projects you can do yourself or have done for little cost. "Cosmetic improvements will easily give your home a fresh look, add to its market value and create a favorable impression that will make it easier to sell," he said. "The market value of your home is determined mainly by the value of the homes around it, regardless of renovations," he said. "Of course, if you plan to stay in your home forever, recouping your costs is not a factor. You can let your imagination and budget be your only limitations." The Fayette County Board of REALTORS is one of more than 1,600 local boards and associations that comprise the National Association of Realtors. As the nation's largest trade association, NAR is "the Voice for Real Estate," representing nearly 700,000 members involved in all aspects of the real estate industry.
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