City of Pensacola Florida

Four home updates every home seller must do, four updates to avoid and four updates for a tight budget.

The secret to successful pre-sale home remodeling is to keep up with the Jones’, but never surpass them. Whether you want to make more money than you spend, or just recoup your remodeling expenses when you sell your home, know what’s standard in the neighborhood.

Does everyone have laminate kitchen countertops? Splurge on granite and you’ll be the envy of your friends, but you won’t get your money back at resale. Is your home in a high-end neighborhood? Put in laminate countertops and your house will sell for less than full value, or worse yet, linger on the market for months.

Never be the last homeowner on the block to remodel. Homebuyers will pass up your property in favor of the one down the street where everything is already updated. Your home will sell slowly and for less money.

Before you pick up a hammer, visit real estate open houses and new home communities. Ask the builder to show you a spec home (that’s an already built home without the model home’s decorative features and upgrades).

"The three main things in real estate are location, location and location," says Nancy Jones, a Realtor® with Hunt ERA Real Estate, Williamsville, NY. "Some homes will sell no matter what they look like depending on the location and, of course, the right price. The main things to keep in mind when remodeling are: neutral, clean, and classic. That will always recoup your money."

To get the biggest bang for your remodeling buck, try one of these four projects, which have the highest payoffs, according to Remodeling magazine's 2005 data:

1. Midrange Bathroom Remodel
   
2. Siding Replacement
   
3. Minor Kitchen Remodel
   
4. Attic Bedroom

You may need a home office and your kids may want a playroom, but you’re not likely to recoup the costs of either of those improvements, according to Remodeling magazine's 2005 data. Kiss some cash goodbye when you do these money-draining updates:

1. Home Office
   
2. Upscale Master Suite Addition
   
3. Family Room Addition
   
4. Upscale Kitchen Remodel

Tight on cash? These quick fixes add the most value for the least money:

1. Interior Paint
   
2. Flooring
   
3. Front Appearance
   
4. Light Fixtures

4 Updates Home Sellers Must Do

1. Minor Bathroom Remodel
Average cost $10,499
Average resale value: $10, 727
Percentage of cost recovered 102.2 percent
Best return: 168.7% in San Francisco
Worst return: 61.7% in Cleveland

Spend money to remodel your bathroom and it’s likely to come back to you when you sell, particularly if you focus on the master bath. "To make the most of a 5x7 bathroom, do two pedestal sinks with glass and wooden shelves from Restoration Hardware to create openness and the perception that the bathroom is big," says Mark Riley, president of Mark P. Riley Luxury Real Estate Group, Sarasota, Fla. "Slate colored tile looks rich and matches a lot of color schemes and looks great with brushed nickel fixtures."

Replace your 5x3 tub with a tile shower with glass doors to create space.

"Replace the sink and toilet," Riley adds. "There’s nothing worse than a nice bathroom with a cheap toilet and a plastic seat. You don’t have to buy a $500 Toto toilet. You can go to a home store a buy a reasonably priced toilet then add a honey-colored vanity and a nice sink."

It many homes, it’s a better investment to update what you have than to spend more to add on. "For example," say National Association of Realtors President Thomas M. Stevens, senior vice president of NRT Inc., Vienna, Va. "Adding a bathroom to a one-bathroom house in a neighborhood where most homes already have two may not return as much as remodeling an outdated bathroom in that same community

Updates Home Sellers Must Do

Siding Replacement
Vinyl siding job cost: $7,239
Vinyl average resale value $6,914
Percentage of cost recovered: 95.5%
Best return: 140% in Orlando, Fla.
Worst return: 44.3% in Philadelphia

Fiber-cement siding job cost: $10,393
Fiber-cement average resale value: $10,771
Percentage of cost recovered: 103.6%
Best return: 166.6% in Birmingham, Ala.
Worst return: 42.6% Philadelphia

Buying new siding for your home is like buying a new outfit for yourself. The right choice will help you both fit in and look great. "Exteriors are often neglected," says Vince Butler, Chairman NAHB Remodelors™ Council and president of Butler Brothers Corporation, Clifton, Va. "If you do a gourmet kitchen but the rest of the house doesn’t wear that same coat, that takes away value."

Fiber-cement siding can resemble stucco, wood siding or cedar shingles. It resists fire and some brands offer 50-year guarantees. However, it’s trickier to put up than vinyl siding (you’ll need diamond blades for your saw and a respirator for yourself), is more expensive and can have freeze/thaw issues if not properly installed.

Minor Kitchen Remodel
Cost of midrange minor kitchen remodel: $14,913
Average resale value: $14,691
Percentage of cost recovered: 98.5%
Best return: 152.7% in San Francisco
Worst return: 58.1% in Detroit

If your kitchen has good flow and functions well, a minor remodel will pay off at resale. Reface the cabinets with new doors and drawers, put in new appliances, update with resilient flooring and laminate countertops and finish with neutral wall paint. "It’s easy to overspend remodeling the kitchen, but you can’t go too low-end or the kitchen will look cheap," warns Susan Huerta, a sales associate with Long & Foster Real Estate, Clarksville, Md. "For instance, buy stainless steel appliances to give the kitchen an updated look, but don’t spend thousands for professional-grade appliances unless you’re in a high-end property

Attic Bedroom
Cost of attic bedroom: $39,188
Average resale value: $36,649
Percentage of cost recovered: 93.5%
Best return: San Francisco 151.6%
Worst return: Allentown, Pa. 58.8%

Turning an unfinished attic into a 15x15 foot third or fourth bedroom with a 5x7 bath really pays off in hot housing markets where older, close-in neighborhoods offer homes with easy commutes but smaller square footage. The payoff for remodeling this existing space is higher than the payback for adding new space. Putting on even a modestly priced master suite addition costs typically costs about twice as much as finishing an attic and the return (82.4%) is lower.

Remodeling magazine 2005 data courtesy of Hanley Wood, LLC. Reproduced by permission. Republication or dissemination of the 2005 Cost vs. Value Report is expressly prohibited without the written permission of Hanley Wood, LLC. "Cost vs. Value" is a registered trademark of Hanley Wood LLC. Unauthorized use is prohibited.