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BRYAN, TX — Linda and Steve are looking forward to this year’s home buying season. They have prepared their house
according to HGTV’s Curb Appeal. Their REALTOR offered advice on which home improvements would bring the best bang for their buck. So when the young couple stepped up to the closing table Steve and Linda walked away with a profit in their pocket. Thanks to their sweat equity and the REALTOR’s remodeling knowledge the sellers recouped most of their monetary investment from the upgrades they performed. Which projects return the highest value for the cost?
Remodeling Magazine surveyed appraisers and REALTORS last summer on remodeling projects and the values that they hold in 80 markets. Home Tech Information Systems analyzed the data and factored in regional pricing differences. The results were published in the January 2010 REALTOR Magazine on page 21. There were three categories of home improvements – additions, remodeling and replacements.
For those of us in the south and central United States, replacing your front entry door offers the best return on your investment. The cost for a 20-guage steel door is $1043 – materials and installation. The resale value of the new front door is $2496! That’s 239% of your cost recouped…a huge perceived value.
The second best bang for your buck is an attic bedroom addition. The general job cost is $41,000 a large price tag. The perceived value is $40k, or 97% return on your money for the add-on. You certainly can’t receive that matching dollar in your IRA or CD.
Another high return in construction is changing the exterior finish. By replacing siding, you can regain 86% of your initial cost. Further down the restoration list, a kitchen or bathroom remodel will bring 82 and 81% back to you.
This is fabulous information for home sellers or others who are staying put in their existing home for another year. The perceived value from the buyer translates into dollars for the seller on the Settlement Statement. They see a turn-key home that has been well-maintained and spruced up. And buyers are willing to pay for it.
For an interactive job cost analysis featuring 80 various markets, click on the Remodeling Magazine Report.
What has worked for you? Tell me which home improvement projects have given you leverage at the closing table below in our comments section!
Cindy Seaton, REALTOR