After navigating through some rough patches in their careers, a magazine designer and her journalist husband began searching for new jobs. Figuring they’d soon be moving, they decided to renovate the dated kitchen of their 1920s-era townhouse.
After calling in their favorite contractor, the couple in this true story opted for a mere facelift for the kitchen at an expected cost of $10,000. But the project quickly zoomed out of control as the homeowners added more upgrades to their list.
Before they were done, the couple’s kitchen remodel cost nearly $90,000. When they sold the townhouse just over a year later, they were able to recoup only a fraction of that expense.
Kathi Fleck, author of "Renovate, Remodel ... Relax!" is not surprised by the story. She urges owners expecting to sell within a year or two to consult with real estate pros from their area before committing to pre-sale renovations. This is an especially good idea if they’re in a hot market where willing buyers outnumber sellers.
“You don’t want to overspend on unnecessary renovations unless you’re going to stay more than five years,” says Fleck, who, with her husband, owns a 10-year-old remodeling company that often assists home sellers on behalf of agents working for Coldwell Banker realty offices.
Mark Nash, a real estate analyst and author of “1001 Tips For Buying and Selling a Home,” says by consulting a knowledgeable real estate agent before heading into a remodeling project, homeowners can often avoid major errors.
Here are a few pointers for those planning to remodel before selling:
-- Seek counsel from real estate people with expertise in your area.
“Make sure the agents you call in really specialize in your community and price range. Then ask for their honest opinions on the project you’re planning,” Nash says.
Homeowners who are unsure when they’ll move are often reluctant to ask for advice until they have a certain timetable. But Nash says good agents won’t pressure you to list your property until you’re ready.
“The idea here is to keep your eye on the prize. You don’t want to spend any money you won’t get back when you sell,” he says.
-- Don’t “over-improve” relative to neighborhood standards.
Tom Early, who twice served as president of the National Association of Exclusive Buyer Agents (naeba.org), says most purchasers are reluctant to pick up the tab for renovation work that raises a property above neighborhood standards.
“Even though many markets are now strong, buyers are still selective. They remain very focused on property values, and hate overpaying,” Early says.
What sorts of upgrades constitute “over-improvement”? For example, you’re unlikely to recoup the cost of adding a three-car garage in a neighborhood where most homes have no garage at all.
-- Avoid renovation work that reflects your personal tastes.
Nash tells the true story of an architect who owned a colonial house in a desirable urban neighborhood. Given his plans to retire and sell his high-end place, the man agreed to spend $150,000 for an ultra-modern kitchen renovation that suited his taste alone.
“What he ended up with was extremely minimalistic and included a bunch of tiny pin lights in his 12-foot ceilings. The buyers who came through thought it looked like an embalming room,” Nash recalls.
-- Bail out of renovation work that’s over-the-top.
If you think you’ve arranged for too much remodeling, Nash suggests you phone your contractors to negotiate alternative scenarios. For example, you might decide to forgo top-of-the-line kitchen and bathroom appliances and fixtures.
“Most buyers aren’t looking for the finest slabs of granite or super-brand stoves or refrigerators in the kitchen. It’s usually the overall look they want, not the famous brands,” Nash says.
Often, real estate agents can suggest less expensive products than those recommended by contractors. For instance, they might advise you to replace worn family room carpet with a generic brand.
Besides recommending alternative supplies, your listing agent may be willing to help you renegotiate the overall scope of your project.
“Perhaps you’ll face contract penalties for backing out of some of the work. But these charges will probably be far less than the cost of going forward with an ill-planned renovation,” Nash says.
-- Slow the pace of your renovation schedule.
As the architect with the ultra-modern kitchen discovered, a thoughtless pre-sale renovation can be costly. Nash says the ultra-modern design was so objectionable to buyers that he had to discount his property by 10 percent to close a deal for the house.
“People looked at that kitchen and groaned. All they could think of was how much they’d have to spend to bring it back to normal,” Nash says.
One reason the architect made his expensive mistake was that he was in a hurry to put his home up for sale and launched the kitchen redo without thinking through its implications.
“When you’re in a big rush with renovations, you’re at risk for putting a white elephant on the market,” Nash says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)