Collins: When selling a home sensible upgrades can payoff

Even in a tough market with a very tight inventory, your house must show well to achieve the utmost value for your property. But how do you know what upgrades will get you the greatest return on your investment?

According to the National Association of Realtors, 2022 Remodeling Impact Report, refinishing hardwood floors has a 147% value recovery while installing brand new wood floors only has a 118% value recovery. Replacing the roof or the garage door has a full value recovery according to the study. I asked several Santa Clara County Realtors what their advice was to achieve the greatest return for their clients.

William Chea, 2023 president of the Santa Clara County Association of Realtors, says, “from my experience the best return on the investment are the simple things. Decluttering and deep cleaning your home, fresh coats of paint inside and out, can make a dramatic difference.”

Often, sellers feel compelled to catch up on remodeling projects they have been putting off for years.

Lisa Faria of Corcoran Icon Properties has a cautionary tale: “I had a client lay out plans for remodeling their kitchen before selling their home. The wife desired a full kitchen remodel while the husband wanted to leave it as is. I recommended a sensible compromise in which they paint the cabinets and change the faucet. I also proposed painting the oak cabinets in the upstairs bathroom and switching out the old light fixtures. Once completed, these minor expenses showed very well, and my clients were thrilled.”

Michelle Perry of Coldwell Banker Realty adds that in this market the overall condition of a home does matter.

“I had a great listing with a fair number of upgrades such as quartz countertops, painted oak cabinets, new appliances, new bathroom fixtures, freshly painted throughout, and stylish decor. The floors were replaced with new laminate flooring that looks and feels just like real wood. My listing went pending in 5 days for slightly over the asking price. A comparable listing just a block away with white tile countertops, original oak cabinets, and carpet is still on the market. They just lowered the price by $30,000 to try to get an offer.”

While this is an example of a substantial remodel, most will agree fresh paint and basic landscaping will go a long way to getting you a top offer.

Perry also says, “Trust your professional to help guide you through this process. Ask your Realtor about paying for any upgrades at the close of escrow.”

There are options available if you do not have the time or financial resources to manage the project yourself.

Another good reason to lean on your Realtor is that your taste may be detrimental to your transaction. Just because you like a wall of mirrors does not mean your potential buyer will. Realtors have years of experience and can help you determine what broad-appeal renovations look like.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of REALTORS, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on X, formerly known as Twitter.