To renovate or not to renovate a guide for home-sellers

Renovation season is here! When it comes to selling your home, renovations are distinct from cosmetic touch-ups.

The latter involves superficial changes such as deep-cleaning, decluttering, landscaping, staging and painting. Cosmetic touch ups are part of the protocol of the selling-process. Renovations by contrast, are costlier, more time consuming and labor intensive. Examples include installing a brand new kitchen or bathroom.
Sellers agonize over the decision to renovate vs. selling their property as is. Though each situation is unique and multifactorial, these relevant real estate guidelines will inform you so that your final decision is one that pays off.

Consider your home’s selling point
The decision to renovate before listing, involves many variables, chief amongst them, location, market and price-point. Generally, it is possible to recoup strategic renovation costs in homes up to 15 years old, under $2 million, in desirable areas. Buyers in this range typically have not built up much equity and would prefer to pay for renovations over time as part of their mortgage. Conversely, we may advise clients with homes over $2 million to sell with cosmetic touch-ups only since costs are unlikely to be recovered through the sale. Buyers in this range typically renovate to their own specifications, rendering the seller’s renovations a waste of money, time and effort.

Property Condition
It happens in every price range. Some homes suffer years of obvious neglect. Mechanicals need replacing, roofs and windows need to be done and landscaping is virtually non-existent. It is better to complete obvious repairs with cosmetic touch-ups in homes that require extensive work unless it is a teardown. In these instances, renovation expenses will far exceed the return.

Prospective Buyers
Over the past two decades, neighborhoods all across the GTA have transitioned dramatically. Understanding who is moving into your area and the features that attract them can help guide your decision to renovate to sell or sell as-is. Consulting with an experienced, trusted Realtor is a the best way to learn about how your property fits current market preferences.

Profit potential
Buyers gravitate towards stylish, well maintained properties. Partial replacement or refurbishing options can help attract them. For example, refacing cabinets, replacing laminate counters and refinishing floors can cut costs and impart a fresh, updated look to your home while increasing the likelihood of recouping your expenses.

Market Conditions
Consider today’s market, banks are tightening lending and, compared to last year, fewer buyers exist. Make no mistake, the market is still moving, but slightly less so. This current trajectory of the market favors selling now while decent buyer activity still exists. You may invest the time and cost of a renovation, but the market could change by the time it’s completed. You may not recoup your expenses. Always pursue professional advice from an experienced Realtor if planning to renovate to live or to sell, to help you make an informed decision.

Janice Williams is a local Broker and certified
Interior Decorator with Sotheby’s International Realty Canada