There’s nothing wrong with wanting to perform home improvement projects before you put your Bloomington home on the market. In fact, some fixes should be mandatory. When you’re considering major renovations, however, you need to be careful that you don’t over-improve the home for the neighborhood.
Before you hire anyone or hammer one nail, get in touch with us so we can calculate your home’s current market value. In the process, we’ll learn what neighboring homes are worth; important information when you are considering renovation projects.
Appraisers have a lot of tools in their evaluation tool belt and two of them are the principles of progression and regression. The latter says that a larger home or more updated home, surrounded by smaller homes or those without updates will be devalued because of the market values of those small homes. The principle of progression says the opposite: tiny homes surrounded by big homes benefit from the value of surrounding homes.
So, the watchword when contemplating your projects is “over-improve.” Don’t create the best home on the block, thinking you’ll get a return on your renovation investment. You probably won’t.
The Next Step
The next step is to determine how much the project costs and how much value, if any, it will add to the home. This will let you know if the project is cost effective.
For instance, a minor kitchen remodel costs, on average, $19,648. The resale value of this project is $13,793, meaning you will realize a 70.2 percent return on your investment when you sell the home.
If that return is higher than the local market will bear, it doesn’t make sense to make the improvement to a house you’ll be selling.
To avoid wasting money by over-improving your house, choose your projects carefully and learn the maximum potential sales price you’ll realize from the performing the improvement.