I believe you need to ask yourself the following questions before making a decision (running the idea by a Realtor is also a good idea so you will have an unbiased point of view):
- How much money do I have to update my home? A lot of Sellers like the idea of doing improvements, but don't want to go into debt to do it. If you are cash poor I would suggest working on low cost alternatives (see below), versus large scale remodeling or replacements.
- How much is my home worth compared to other homes around me? Unfortunately, it is very easy to get carried away with making improvements to your home and end up with a home that is worth quite a bit more than the surrounding homes. The values of the surrounding homes will then pull down the value of your home. Conversely, if your home is the least expensive home in the neighborhood, you can probably do quite well by investing in some quality upgrades.
- If you are thinking of doing it yourself, will you be able to do a professional quality job? The idea of doing it yourself is great, the reality is often quite different. If you won't be able to finish the project quickly, it is better to hire a professional. If you aren't sure of the quality you'll be able to have after the project is done, it is better to hire a professional. Buyers can usually spot work that was done by someone who isn't an expert on a project. This can actually cause the offering price to go down!
If you are on a strict budget, I would recommend that you focus on making the home appealing to buyers when they walk in. This would include things like a fresh coat of neutral, updated paint inside and outside the home. Pay particular attention to the front door and entry area. Even something as subtle as a nice planter, a brass kick plate and a door that's free of scratches will make a great first impression. Remove all wall paper from the home, as it is often a big turnoff to most buyers. If you have old wood grain cabinets that date the home, paint over them! Hiring an interior designer is a good way to start, so you can focus on the most important aspects and wait on the rest (this is why we provide a one hour designer consultation to all of our sellers when they first list).
If you have a little more money to invest, I would suggest considering what the return on your investment will be. The Association of Realtors just published it's yearly report on what projects are likely to bring the greatest returns. Just go to: http://www.realtor.org/rmomag.NSF/pages/2006CostvsValue?OpenDocument . The top three returns on your investment in the Southeast are as follows: fiber cement siding (93%), vinyl siding (90%), mid scale bathroom remodel and vinyl windows tied (87%).
Some items, aren't a matter of how much return on your investment you will reap, but if your house will be able to sell without them. Some items like an unsound roof or an inadequate air conditioner will cause buyers to shy away from making an offer on your home. At the very least, most offers would come in at a lower price because the buyers are planning on having to cover these expenses in the near future. Items like these, are better to be replaced before your home goes on the market, making them a non-issue. If you can't afford to replace these items right now, offering a credit for the replacement would be the next best thing.
Final thoughts: Given the current buyer's market, I would be wary of making high cost improvements to your home. You are more likely to do better by pricing your home correctly. Right now, price is the most important factor in the buying process. Buyers have a large number of homes to choose from, so they tend to visit the homes with the most reasonable price for the square feet and area. You want to be in this category, otherwise, no matter how nice you have made your home, it won't sell simply because no one is interested in seeing it to begin with.
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