Home Upgrades That Add Value in a Seller’s Market
If you’re a homeowner looking to sell during a seller’s market, you may be in luck.1 A seller’s market means the number of buyers exceeds the number of homes for sale.2 As you prepare to put your home on the market, you probably want to do whatever you can to get the best possible price. So, you may be wondering what renovations could improve the price your home will fetch on the market. Let’s review some home upgrades that actually add value, vs. some that don’t make as much sense in a seller’s market.
But first, what creates a seller’s market?
Before you put your home up for sale, it’s important to understand what kind of real estate market you’re facing. This can help you with pricing and negotiation. Here are a few signs that it’s a seller’s market:1
More people are moving.
Today, more people are working remotely, which means they can move anywhere, rather than just live near their place of employment.
Properties are selling fast.
Chances are, it’s a seller’s market if you notice the houses in your neighborhood are turning over quickly.
Mortgage rates are low.
The market goes up and down over time. When mortgage rates drop, more buyers will jump at the chance to purchase a home.
Fewer homes are for sale.
Simply put, when fewer homes are for sale, there aren’t as many options for buyers. This is the perfect recipe for a seller’s market and everything that comes with it — bidding wars, cash offers and higher sales prices.3
If you’re a seller and the market is in your favor, you probably have more negotiating power. And, you may even experience a bidding war. But beware, just because people are vying for your home, doesn’t mean you should skip making valuable upgrades. It’s still important to make your home look attractive. Otherwise, you may not receive as much for your investment.
What home upgrades are worth pursuing in a seller’s market?
Here’s a hint: You don’t need to fully remodel your home before buyers knock at your door. But, if you’d like to make a few home upgrades that garner attention and help you attract the best offer, here are a few that usually offer a solid return on investment.
Garage door replacement:
A new garage door can give your home a major facelift, and influence your home’s selling price. According to Remodeling Magazine, a new garage door can offer a cost replacement of 94.5%, which means you’ll get most of your money back when you sell.3 In addition, take some time to evaluate your home’s curb appeal. A visually appealing home is more likely to sell fast — and at a competitive price.
Minor kitchen remodel:
Good news for your wallet — you don’t need a full kitchen remodel to sell your home, especially in today’s market. Instead, opt for a minor kitchen remodel. Paint your kitchen cabinets instead of replacing them. Add a modern backsplash or upgrade appliances. Simple updates can make a world of a difference when you’re selling a home.4
Fixing known issues (like plumbing, electrical and heating problems):
If you have any known, “big” issues, now is the time for repairs. As a word of caution, you may need to spend extra money hiring a professional plumber, electrician or HVAC technician, depending on the problem. For most issues, though, it’s worth the extra cost. You don’t want a buyer walking away after they discover an issue during the home inspection.5
If you don’t have the cash to pay for a remodeling job, it’s OK. Fortunately, a seller’s market is still in your favor. Instead, spend your time and money on do-it-yourself, low-cost upgrades that can help attract the right buyer’s attention. For example, here are a few places to focus your energy:
A fresh coat of paint on the walls, ceiling and even the front door can make a home look nearly brand new. Pick out a soft neutral color (like soft white, beige or griege) and paint the entire interior of your home.4 These colors give buyers a blank slate, so they can easily imagine their furnishings and décor within the room. They also can make rooms appear fresh and clean.5
You don’t need to do major landscaping work. Instead, add a few yellow flowers near your front door. Some real estate experts say the color yellow can actually help sell a home.5 In addition, keep your lawn neatly mowed and free from debris, like sticks and leaves. You can even add final touches like a hanging flower basket and a new welcome mat.
Cleaning and decluttering:
Roll up your sleeves, grab a pair of gloves and do a thorough cleaning of your home. Spend time washing your windows, steam-cleaning carpets and wiping down baseboards, ceiling fans, floors, doorway frames and door knobs. Finally, put away or donate extra clutter to make your home feel open and spacious.6
A little sprucing up can go a long way in making your home enticing to buyers. It can make a big difference in your offers, too. After all, don’t you want to get as much for your home as possible?
What home upgrades should you skip in a seller’s market?
While remodeling your home can be exciting, some major upgrades might not pay off for you in the end. According to experts, you don’t want to add an addition, like a sunroom or luxury master suite. The cost of lumber is high, and you won’t get a worthy return on your investment. If you can, it’s best to hold off and look for these features in your next home.4,7
You may also want to skip these home investments:
Although pools can be a great addition to a property, many buyers see them as something that will take a lot of time and money to maintain. When it’s time to sell your property, you may get as little as 25% back on what you spent to install the pool, according to one landscaping design expert.7
New wood floors:
Why install new floors when you can clean and potentially refinish your current ones for less? Plus, most new homeowners want to put their own design stamp down and install their preferred floors or carpeting.
Built-in and custom upgrades:
Upgrades that are unique and custom don’t necessarily sell a home. This might include a custom, food-warming drawer or a built-in kitchen appliance. The problem is, if they break, it’s difficult for the new homeowner to make a repair. The bottom line: They probably won’t offer a decent return on your investment.8
A new driveway:
A new driveway installation can cost thousands of dollars, but you can reseal and protect your driveway for much less. Unless it’s absolutely necessary, avoid installing a new driveway before selling your home.7
Selling your home? Your life insurance policy may need an adjustment, too.
Selling your home is a major financial decision. As with any big moment that affects your finances, it’s always a good idea to reevaluate your life insurance needs. If you don’t have a policy, look at whether you should get coverage now. If you already have life insurance, this is the perfect opportunity to make sure your policy fully covers your needs.
Here are a few reasons why, if you have a life insurance policy, it may need to change when you sell your home:
Your mortgage is larger — or smaller.
Depending on where you move and what type of home you buy, you may have a different mortgage. Take a look at your current life policy and see if you can make adjustments so it more closely matches your financial situation.
You’re experiencing a major life event.
If you’re buying a house and also undergoing a life event, like having a baby or starting a new job, you may want to reevaluate your policy. You’ll want to take out enough coverage to provide for your children.
You have more debt right now.
If you have more debt right now, whether it’s a larger mortgage or college loans for children, you may need to increase your death benefit. You don’t want to leave your loved ones burdened with debt. A life policy should be able to pay it off.
Remember, life insurance is incredibly important. It’s designed to protect your family financially if you pass away and they can no longer rely on your salary. It can help pay for outstanding debts, like a mortgage, college loans and even a credit card balance. In addition, life insurance can help cover the costs of your funeral and burial, and even leave a legacy to your children. Dealing with a loss can be hard, but life insurance can help ease financial burdens for your family.
As you pack up boxes, clean your home and put out a For Sale sign, don’t forget to call your insurance company, too. They’re here to protect you — no matter how your life changes.
1 Yes, It’s a Seller’s Real Estate Market in 2021, Home Buying Institute, 2021.
2 How Does A Seller’s Market Affect The Housing Market?, Quicken Loans, 2021.
3 'It's crazy. There is no inventory.' Housing industry veteran marvels at real estate boom, CNN, 2021.
4 It's a Seller's Market. Should You Bother With Renovations Before Listing?, Million Acres, 2021.
5 Foolproof Paint Colors That Will Sell Your Home, HGTV, 2020.
6 How to Prepare Your House for Sale, The Balance, 2022.
7 Renovations to Make — and Skip — Before Selling Your Home, GOBankingRates, 2021.