Projects Worth Investing In for Resale, According to Zillow

by Kacey Larsen

As home buying/selling season begins in earnest, Zillow Research investigated where those looking to sell their homes should invest time and money as they ready a home for sale. Many findings indicate a smaller, inexpensive upgrade typically reaps a bigger reward. [Consistent with the results historically seen in the National Association of Realtors with help from NARI Remodeling Impact Report.] Here are a few other highlights from Zillow’s findings:

  • While the typical home has 13 years worth of wear-and-tear, sellers average 2.2 renovations or improvements to prep the home for sale, with 79 percent making at least one. Such efforts are typically worth it considering nearly a quarter of sellers who make improvements sell above list price, compared with 16 percent of sellers who don’t.
  • New paint inside and out as well as basic landscaping are typically the most common and necessary improvements, according to Zillow. Choosing the right colors can further increase a home’s value beyond simply the appeal of fresh paint. A Zillow analysis found that yellow homes sell for nearly $3,500 less than expected, while the right color door can lead to an extra $6,000 in the seller’s pocket.
  • A mid-range bathroom remodel for spaces at least 25-years-old—replacing the toilet, tub and light fixtures; adding a double sink; tiling the floor; and hanging some wallpaper—typically result in a $1.71 increase in home value for every dollar spent. But an upscale remodel of a bathroom—incorporating features like a bidet, full body wash shower wall and other top-end features—can actually add 87 cents of home value of every dollar spent.
  • Mid-range window replacement can return $1.15 for every dollar, but going higher/fancy will likely result in breaking even.
  • A kitchen renovation, at any level, delivers among the worst return on investment—about 50 cents on the dollar—of the home improvement projects studied by Zillow. Finishing a basement is the only project coming in worst than a kitchen remodel at a bit less than 50 cents on the dollar, even if a bathroom was added.

Zillow notes these figures reflect national averages, not local real estate markets, and that “mid-range” and “upscale” vary depending on area/location.

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