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Renovations can pay off when it comes time to sell...
A kitchen facelift is the best way to boost value in your home.
A swanky bathroom can increase the value of a property by as much as 12.5 per cent.
Painting your home can add as much as 7.5 per cent to the sale price.
Anyone who has been on a first date knows that first impressions matter. By putting in the effort to look your best, you’re more likely to attract a suitor. And then, if there’s chemistry, it can lead to a promising romance.
The same holds true when selling a home, especially with the dearth of listings in Toronto’s slower but still-competitive real estate market. With less to choose from, today’s sellers have to woo potential buyers with a beautiful property that will stop them in their tracks and tick off most of boxes on their wish list. Then, if the property feels as good as it looks, it can lead to a speedy sale.
While the city’s housing landscape hasn’t seen the drastic downturn that Vancouver has experienced, the gains in prices are modest at best. Fewer homes are being listed, and those that are on the market are taking slightly longer to sell than in previous years. With that in mind, there’s never been a better time for sellers to consider investing in a few choice upgrades to maximize their property’s resale value.
“People will spend no more than 2.5 per cent of the value of their property on renovations, but your return on investment when doing a kitchen or bathroom can be much higher than that!” says Tom Storey of Royal LePage Signature Realty.
Even in strong markets, a good-looking home is going to fetch a higher number.
“We live in a world of HGTV where buyers see perfection,” says agent David Batori of RE/MAX Hallmark Batori Group. “[Yet] I only recommend you spend a dollar, Mr. Seller, if you can get $5 in return. Most of our buyers spend between $2,000 and $5,000 in prep work – just general handy fixes, painting, touchups, cleanups, garden cleanups – and they’ll see $20,000 to $50,000 in return.”
Here, then, are six of the most important ways to make your home stand out from the limited competition once that coveted For Sale sign is in the ground.
The kitchen is definitely the heart of any home so it’s important that it be in the best shape possible. According to a 2018 cross-Canada Royal LePage Home Improvement Survey that still holds true today, a kitchen facelift is the best way to boost a property’s value by more than 12.5 per cent. There are many cosmetic fixes that will completely change the look without breaking the bank. Storey says it’s as simple as taking down the cupboards and sanding them, painting them off-white and changing the handles. If the island has a wooden base, paint it to match the cupboards. “It looks like a brand new kitchen but we’re not changing any physical things. We’re just improving what is already there,” he explains. A backsplash is also fairly inexpensive and easy to install and can really enhance the space, he adds. And upgrade to stainless steel appliances if the existing appliances look dated. Still, if the kitchen is truly in a sorry state, Penzo urges clients to give it an overhaul. “You could do an IKEA kitchen [for] $20,000 and it could be very attractive, fresh and appealing.”
“Women fall in love with kitchens and bathrooms,” gushes Debbie Penzo, sales rep at Chestnut Park Real Estate Ltd. And that means they crave master ensuite and powder rooms that shine. Penzo describes the most luxurious master ensuites today as commanding a freestanding tub, glass standing shower and double vanity. If there isn’t enough room, she’d leave out the tub. Adds Storey: “If your home has two or three bathrooms, leave one bathtub because any potential buyer with a young child is still going to want a bathtub. Other than that, it’s redoing the vanity, painting the bathroom, redoing the lighting and the mirrors, and redoing the tile.” Cost can range from $10,000 to $25,000 depending on square footage and finishes, with a swanky bathroom increasing the property’s value between 2.5 and 12.5 per cent, according to Royal LePage.
A finished basement adds living space, particularly for younger buyers who are opting for smaller homes so they can squeeze into the housing market. Penzo’s ideal basement includes a family room, a bathroom, an extra bedroom and “a sexy laundry room with a washer, dryer, sink and hanging rod for drying.” If it has a separate apartment to generate rental income, says Storey, it can raise the home’s value by 10 per cent. Price tag: About $50,000 if the basement doesn’t need underpinning (raising the ceiling). “You want to make the basement livable, but it is the most expensive reno you’ll do to your house,” cautions Storey.
What’s going on where you can’t see? A seller’s home inspection, starting at $500, will provide details on the least sexy – but perhaps the most important – elements of the house such as structure, attic, roof, plumbing, heating, air conditioning and electrical systems. “It puts the full understanding of your property on the seller’s side” so they can upgrade as needed before the house goes on the market, explains Sal Folino, manager of home inspections at Carson Dunlop & Associates Ltd. While cautious buyers may be scared off by knob and tube wiring, he adds, it’s not crucial to replace it because it’s fully serviceable and fully insurable. “We work closely with a couple of brokers and underwriters that totally appreciate that there are hundreds of thousands of homes in the GTA that still have knob and tube and will insure it without a problem,” he says.
5. Curb Appeal
Attractive landscaping can go a long way to wow people from the street. Pots of flowers and inviting greenery add colour and intrigue for as little as $500 to $1,000 and can increase a home’s selling price by 7.5 per cent. Still, it’s not the reason that people will buy. Says Storey: “One inexpensive thing you can do that will make your home stand out is changing the front door. We’re seeing a lot of really cool colours like red or yellow to make your house stand out. It’s just … making it more modern than it previously was.” And get a new roof (about $5,000) if it’s old and tired. “If a home inspection states that the roof is at the end of its life, the buyer will automatically say, ‘I want to deduct $15,000 or $20,000 [from the home price]’ when it’s really never that much,’” warns Batori.
Renovating sound too pricey? Change the look with a fresh coat of neutral-coloured paint. “It’s the oldest trick in the book and it still works amazingly well,” says Storey, adding it can increase the home’s value by 7.5 per cent. “You want to use a modern warm colour that will appeal to everybody. As much as you might love your red room and your orange room, you want to have the entire house the same colour. The photos look better of the property, and you can match the furniture with the paint when staging for a modern look.”
Copyright Postmedia Network Inc., 2019