A homes most valuable improvements start on the outside of the house. Curb appeal is crucial because it can be the first thing buyers notice about a home. That's why REALTORS® rated exterior projects among the most valuable home improvement projects in the 2014 Remodeling Cost vs. Value Report.
With many factors to consider such as cost and time, deciding what remodeling projects to undertake can be a difficult decision for homeowners. REALTORS® know what home features are important to buyers in their area, but a home's curb appeal is always critical since it's the first impression for potential buyers. That's why exterior replacement projects offer the greatest bang for the buck. Projects such as entry door, siding, and window replacements can recoup homeowners more than 78 percent of costs upon resale.
REALTORS® judged a steel entry door replacement as the project expected to return the most money, with an estimated 96.6 percent of costs recouped upon resale. The steel entry door replacement is consistently the least expensive project in the annual Cost vs. Value Report, costing little more than $1,100 on average.
Eight of the top 10 most cost-effective projects nationally, in terms of value recouped, are exterior projects. A wood deck addition came in second with an estimated 87.4 percent of costs recouped upon resale. Two different siding replacement projects also landed in the top 10, including fiber-cement siding, expected to return 87 percent of costs, and vinyl siding, expected to return 78.2 percent of costs. Out of the top 10 projects, the fiber-cement siding replacement project improved the most since last year, with costs recouped increasing by more than 15 percent. Two garage door replacements were also in the top 10; a midrange garage door replacement is expected to return 83.7 percent while an upscale garage door replacement follows closely at 82.9 percent of costs recouped. Rounding out the top exterior remodeling projects were two window replacements; a wood window replacement is estimated to recoup 79.3 percent of costs and a vinyl window replacement is estimated to recoup 78.7 percent of costs.
According to the report, two interior remodeling projects in particular can recoup substantial value at resale. An attic bedroom is ranked fourth and is expected to return 84.3 percent of costs; nationally, the average cost for the project is just above $49,000. The second interior remodeling project in the top 10 is the minor kitchen remodel. The project landed at number seven and is estimated to recoup 82.7 percent of costs. Nationally, the average cost for the project is just under $19,000. The improvement project likely to return the least is the home office remodel, estimated to recoup 48.9 percent.
Every neighborhood is different and the desirability and resale value of a particular remodeling project varies by region and metro area. Before undertaking a remodeling project, homeowners should consult a REALTOR® as they are the best resource when deciding what projects will provide the most return upon resale. REALTORS® have a unique understanding of local markets, home features and buyer preferences and know that there are a variety of factors that affect a home's value, such as location, condition of surrounding properties and regional economic climate.
It is very important to avoid over-improving a property based on what other homes offer in your neighborhood. If you over-improve, it is very unlikely you will recoup any of the money you shell at as a house can only appraise as high as the most recent sales in the neighborhood and there are not many people who are going to over-pay for a house in this economy. If you are considering making improvements to your home prior to selling it, give me a call and I will be happy to offer my guidance.
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