Budgeting for a renovation can be an exhausting and overwhelming exercise, but when you keep the big picture in mind (is this investment going to increase my home value when I sell?) it makes it a little less daunting. We spoke with one of Utah’s top realtors about what factors home inspectors and appraisers consider when valuing your home, and what features make home owners jump (or run).
Meet Haley Hodges. Haley is a top producer within her brokerage, Utah Homes Network. She specializes in selling residential real estate along the Wasatch Front & Davis County. Haley also has extended education and training in negotiation through Next Level Exchange.
Question: What are the most common “must haves” on your clients list when they are looking for a home?
Answer: Many homeowners are in the market to live in a specific area or neighborhood, so the top of their list is typically location. After that, the structural elements of the home are top priority – open concept, large bedrooms and lots of closet and storage space. It’s been common to see a newly renovated home that has expanded a room, but left the closet with the same (limited) space.
Second to layout are the guts of the house – your foundational, structural elements that are costly to redo.
Question: What do you consider to be the “guts” of the house that buyers are focused on.
Answer: The guts are a lot of the hidden (non-wow factor) elements that make up your home. Good plumbing, updated electric, vinyl windows and a fenced in yard with a strong, vinyl fence. Many buyers are open to a fixer-upper to replace flooring, cabinets and paint, and often times will replace those elements with their own touch and style even if you have top of the line features. But replacing anything foundational is costly and will likely turn a buyer away. So when considering upgrades to your home, make sure foundation gets a bigger piece of the budget to style.
Question: How do I make sure my home appraisal appropriately captures all the work and upgrades I’ve done.
Answer: Keep in mind that an appraisers will value features on a scale, and might not get into all of the detail. It’s up to you to make sure you clearly document and line item all of your renovated features up front so they can factor that into your valuation.*
*check back for a follow up on the dangers of overvaluing your home when prepping to sell
Question: What is the biggest risk you’ve seen when selling a recently renovated home?
Answer: The biggest concern with a newly renovated home is checking the permits. When a home is first built, there is a lengthy permit process that takes place between the builder and the city to ensure everything is built to code. When a homeowner takes on a project, they need to make sure they are permitting every upgrade made and doing it by the book. If you take on a project and don’t get the proper permits, it is a case for your home owners insurance not covering damage caused as a result of your upgrade (think – improper electric update causing a home fire).