This article is for the average homeowner and not for people wanting to upgrade "high class" homes in excellent neighborhoods. Things that ad value to a house come in two aspects; one being the value of the house to a new buyer and two being the actual appraisal value. There are different things that add value to one or the other and sometimes both.
First, things that add value to a new buyer are visual things. 80% of the sale is curb appeal. Houses that sell are a lot like humans if you think about it. We all have problems and malfunctions of our own, but we don't want to advertise that to our neighbors. Yelling at the husband/wife and kids is something we try to do in the house if you know what I mean. Selling the house has some similar characteristics; it is the house that looks pretty on the outside that sells first. Any minor defects within the house can be repaired once the buyer has moved in. Most people don't want to be the one with the ugliest house on the block.
Another similar characteristic is that newer is better. People like new trends, what is currently popular, and always looking for something better. Having a few of those popular items sprinkled throughout the house will spell updated, even if the whole house hasn't been remodeled. What does updated and modern look like? Here are a few tips;
- Cleanliness (the most important)
- Green lawn, trees. Trim the shrubs and trees, plant Annuals for excellent curb appeal.
- If you kitchen cabinets are looking bad, consider painting them if you can't replace them.
- If your sinks or toilets are not white, replace them.
- Light and neutral paint colors. Paint the ceiling lighter than the walls to add height.
- Neutral and light brown toned carpets.
- Tiles with a natural stone look to them (if they aren't real already)
- Stainless Steel.
- Bronze or brushed steel fixtures (gold is out)
- Vinyl windows, energy efficient
- Textured Walls.
- Kitchen and Baths are the most important rooms in your house.
Creative Decorating can be a huge asset. Get creative and make it look clean and tasteful - this will add the most value to a new buyer. Just keep in mind that "general decorating" is better. Not everyone likes that same décor. I once bought a really nice (expensive) ceiling fan to put in a house. I thought it would be a huge selling point as it was very beautiful to me; it was the first thing the homeowner ripped out when they moved in. So don't go overboard and fall in love with your decorating.
Second, things that add value to an appraiser and actually make your house worth more are more structural and product based. Modern updates have a small bearing, but it is mostly updated in a general form that makes the best difference. For example, if you replaced your old wood grained Formica countertops with a tile countertop that would be considered an "update". Whether you used granite tiles or ceramic may or may not make any difference at all. That difference would depend on your house, if you're in a 500,000 dollar house and you add ceramic while all your neighbors have granite, then your tile countertops would be a small upgrade. But if you live in a modest neighborhood where most of the other countertops were still Formica (but newer than wood grain) then installing granite doesn't add anymore value to your house over the ceramic. A good example is like seeing a really big and beautiful house with all the bells and whistles built in a neighborhood where all the houses were have that size with minimal upgrades. The value of that big and beautiful house will less than one of its equals placed in a better neighborhood. What your neighborhood is offering will give you an excellent gauge on how far you should upgrade to add value. Go a "little" beyond your neighbors, going all out and surpassing them by miles is not going to gain you as much value as it would appear. Just try to think of updating in a general form, shop wisely, and forget about the "brand name" shopping. 25 year carpet and 10 year carpet rarely make a difference in appraisal value.
Then it comes to adding appraisal value to a house, it will be limited to things like square footage, age of the home, stick built or manufactured, etc. Within those boundaries, here is the best way to add that value (yes, these are in order);
- Add square footage with an addition.
- A garage or shop space.
- Drywall and textured walls. (Get rid of any wood paneling, especially if it is dark)
- Kitchens and Bathrooms are the most important rooms.
- Kitchens; new countertops, new (or re-faced cabinets), new linoleum or tile flooring, etc.
- Bathrooms; good lighting, white tubs and sinks, tile or linoleum flooring, very clean toilet, etc.
- New Carpet/Flooring - wood floors (real and laminate) can have a higher value. Brand of carpet usually doesn't make a difference, nor does padding.
- Details like fixtures, appliances, paint colors (neutral is best, not white), etc.
Above all, new paint goes a long way for value, even if it looks ok, a fresh coat of paint can make all the difference in the world to both a potential buyer and appraiser. It is also a task the whole family can do.
Determining what adds the most value to a home will require a little neighborhood research, but when you are done, you will be confident that your hard earned dollars will be spent on things that actually add value. Plus, we all love to save both money and time. If you need a definite number on what a certain upgrade might add in terms of value, then you should visit with an appraiser in your area.
