10 Aug Renovation and Resale: Advice from The Experts
Renovating your house, or even just a part of it, is a major investment. Many of my clients are anxious to know how much of that cost can be recouped at resale time, and whether a given project (or upgrade) is worth it. Keep in mind that what you want for your home may be quite different than what the next owner wants, especially if you are planning to live in it for less than about five years. I consulted several realtors who work in the city of Toronto and its surrounding areas to find out where the balance lies between satisfying your own needs, and those of a potential future buyer.
Leanne Weld of Royal LePage has sold homes all over Toronto, as well as in smaller centres such as Creemore and Niagara. Leanne notes that some buyers are willing to renovate, but most people prefer to buy a house that’s already been done, other than small tweaks like painting. The most common mistakes renovators make are to create spaces that are out of balance – a large house with a too-small kitchen, for example (or vice versa). Especially if you’re planning to sell right after the reno is complete, avoid fancy add-ons or excessive gadgetry, such as sound systems in every room. And there are certain “givens” in real estate that no amount of renovation can influence: these include proximity to transit or schools, too few bedrooms, or lack of parking.
The biggest renovation winners, according to Leanne? A well-laid out floor plan; family room close to the kitchen; enough, evenly proportioned bedrooms; and an updated, attractive kitchen and bathrooms.
Joy Verde of Remax often works with homes that need extra prep work before sale, and offers staging as well as realty services to clients. “Preparing for sale is where people often make the biggest mistakes,” she says. Rather than spending big bucks on renovation, it’s far better to take care of the simple things, such as decluttering and cleaning the house and windows. Add good-quality bedding, art and coffee table books, and choose neutral paint colours for the walls. And a well-maintained house is much easier to sell, even if it isn’t renovated to the rafters. Her top picks for the best investments before you sell are to repair old leaky roofs or basements, alter an awkward layout, or improve parking.
Pat Loughren of Bosley Real Estate agrees that most clients prefer a house that is renovated to a “fixer-upper”; many people find the prospect of renovating daunting. On the other hand, many sellers (buyers too, sometimes) are overly influenced by TV and shelter magazines, and may have unrealistic expectations. If you want to renovate prior to a sale, she advises planning at least two years in advance, and don’t forget the must-dos: upgrade knob-and tube-wiring; upgrade skimpy trim and baseboards; upgrade at least the kitchen countertop, even if you don’t plan a full-scale kitchen reno; remove broadloom if you have hardwood floors (if you refinish them, choose matte or satin-finish, not high-gloss, which shows scratches and dirt); and make sure the bathrooms are updated. To these, she adds know the trends, and avoid anything too personal or ethnic in the décor. “And staging the house is important. Not all clients are aware of the value, but a well-staged house sells faster and for a higher price.”
Kathy Monahan of Forest Hill Real Estate says, “Lots of clients ask me which is cheaper, renovating or moving. But although renovation can be expensive, it is generally cheaper than moving, so often it’s better to stay put.” Some agents, she believes, are so eager to sell they may not give impartial advice, and sellers get stuck in a rut of wanting to recoup what they spent; both of these can lead to problems.
Her advice on the biggest pitfalls for both buyers and sellers: wood or aluminum siding, which can sometimes harbour termite problems; mortgage or insurance issues; or evidence of water damage or mildew, which could indicate long-term water problems.
Peggy Clinton says one of the most common mistakes buyers make, even in a seller’s market, is not to sell their existing house before shopping for a new one. “Demand has far outpaced available housing inventory in Toronto for the past decade, and consequently buyers – sometimes rightly and sometimes wrongly – are overly confident their homes will sell quickly and for top dollar. But the difficulty with this thinking is that they can’t be certain how much they will have to purchase their new home, and they may end up owning two homes!”
Peggy also advises that you make a firm list of what you want in your new home, by sitting down and writing out a list of priorities; location is only one aspect. You should know not only how many bedrooms you want, but how you’ll use your space; convincing yourself you don’t need a family room or a main floor washroom may come back to haunt you.
For sellers, Peggy says, the biggest problem she sees is clients who have a preconceived (and often inflated) sense of their home’s value; just because your neighbour got a certain price doesn’t mean you will. Along with your agent, study the market, and set a price only after you are well informed.