Resale Value Potential
Last year was a great year for the home improvement market. This year looks to be equally as promising as homeowners indicate that they will continue to undertake remodeling projects to make their homes better places to live. As you consult with your customers about potential projects, two factors can help make the decision much easier for them: 1) help them understand the resale value that they will get from their project, and 2) discuss their financing options.
Recently, REMODELING Magazine, in cooperation with the National Association of REALTORS® and REALTOR® Magazine, released its 2015 Cost vs. Value Report. This report lists the projects that contribute the most to the resale value of their home.
While most home improvements will not provide a full dollar of resale value for every dollar spent, larger home improvement projects, such as a kitchen remodel, offer some of the biggest value with an average cost of $19,000, yielding a 79% return—or about $15,000 in added resale value. Other large projects that improve value include:
- Window replacement with an average cost of $11,000, yielding a return of up to 79% in resale value.
- Deck addition with an average cost of $10,000 to $15,000, yielding a return of up to 80%.
- Roofing replacement with an average cost of $20,000, yielding a return of 72%.
The top 10 home improvement projects that provide the biggest increase in resale value are the following:
- Entry Door Replacement (steel) – recoup 102%
- Manufactured Stone Veneer – 92%
- Garage Door Replacement – 88%
- Siding Replacement – up to 83%
- Deck Addition – up to 81%
- Minor Kitchen Remodel – 79%
- Window Replacement – up to 79%
- Attic Bedroom – 77%
- Basement Remodel – 73%
- Roofing Replacement – 72%
Homeowners do not necessarily have to spend a lot of money to make some significant improvements in both curb appeal and long-term worth of their home. Some small additions—even those under $10,000—can upgrade a home while providing greater resale value. In addition, many larger projects, such as those over $10,000, can bring big dividends when it is time to sell.
Financing
Having a financing program and offering a choice of payment options to every customer gives them a way to pay for their project. There are great options available, including a Same-As-Cash Loan and a low monthly payment loan option with either a zero interest or reduced interest rate. Helping your customer understand these options and giving them a choice greatly increases your ability to close the sale. By doing this, you will be viewed as not just their contractor, but as a partner in helping them achieve their home improvement dreams or resolve an emergency situation.
For the full 2015 Cost vs. Value Report, visit www.costvsvalue.com.
