Remodeling...Is it worth it?

Something that I think is very important when a homeowner does any updates or remodels to their home is to make sure that those updates do not cost more than the home is worth. I took a client out Sunday to see several homes and many of the homes needed lots of updating or remodeling (this is something this client does not mind doing, I think they think it is fun). When we looked at the homes and the "remodels" that they wanted to do I wanted to make sure they did not "price themselves out of the area"....in other words-they would do too much cool stuff to the house that it would be worth way more than the area is worth.

When you make an upgrade to your current home feel free to call me and see what I think about it adjusting the value. Don't get me wrong, I will even do upgrades to my home that I know I probably won't see dollar for dollar that money back but if you WANT to get the most money for the upgrades that you do (if that is important to you) call me and I can give you good advice on what is good and what is not so good for the value of your home or your area.

This is an article that I came across in our MIBOR newsletter publication of the Metrolitan Board of Realtors that speaks on this very issue.


The Cost of a Remodel

According to the National Association of REALTORS®’ 2007 Profile of Home Buyers and Sellers (featured in the March 10 edition of this publication), over half of sellers engaged in some kind of home improvement or remodeling project within three months of listing.

Obviously a popular decision, but is every project worth it? And when deciding which project to tackle, how do you know where the money will be best spent?

Remodeling Online has some answers. The 2007 “Remodeling Cost vs. Value Report” provides a percentage of recouped cost on 29 typical home remodel projects. Projects range from garage and bathroom additions to a minor kitchen remodel and window replacement.

Breaking the U.S. into nine regions, the report provides national and regional averages for further detail. What feature will provide sellers with the highest recouped cost on their investment?

Siding replacement (fiber-cement). Nationally, this project provides an 88.1 percent recouped cost and in the East North Central region (Wisconsin, Michigan, Illinois, Indiana and Ohio) 82.4 percent is recouped – the highest percentages for both locations. The lowest recouped cost projects in the East North Central region include adding on a sun room, installing a back-up power generator and a home office remodel.

Cost information for the report is pulled from Home Tech Information Systems, a remodeling estimating software company. Home Tech creates its database of cost information from a network of remodeling contractors and suppliers. Figures include labor, material, sub trades and contractor overhead and profit. Values used in the report were provided by the National Association of REALTORS®. A survey of over 2,500 appraisers, sales agents and brokers provided an estimated value of what remodeling projects would add to the home at resale.

To see the complete list of projects and findings of Remodeling Online’s “Cost vs. Value Report”, visit http://www.costvsvalue.com/index.html. While numerous factors affect the ultimate recouped cost of a project, this might be a good place to start investigating.