4 Updates Every Home Seller Should Avoid

Don't start that pre-sale home remodel yet. We tell you which updates won't recoup their losses.

Before you put your home on the market, consider remodeling. Even small projects can recoup 100% or more of their costs. 

The projects most likely to make back their money include a remodeled master bathroom and minor updates to the kitchen. But there are four that won't increase your home's value:

  • Home office
  • Upscale master suite addition
  • Family room addition
  • Upscale kitchen remodel

Remodeling rooms people spend less time in (a home office, media room or master bedroom addition) might be worth it if you're planning on staying in your home. But if you're looking at return on investment, these projects only give you a 50% to 75% return rate.

1. Home Office

  • Cost of home office remodel: $13,143
  • Average resale value: $9,569
  • Percentage of cost recovered: 73%
  • Best return: San Francisco 115.2%
  • Worst return: Wichita, Kan. 36.4%

If you work from home, spending money to turn a room into a home office with custom cabinets, laminate desktop and upgraded wiring for all your electronic gadgets may be worth it. But as a pre-sale investment, it doesn’t pay off.

2. Upscale Master Suite Addition

  • Cost of upscale master suite: $137,891
  • Average resale value: $110,512
  • Percentage of cost recovered: 80.1%
  • Best return: 124.4% in Seattle
  • Worst return: 48.4% in Detroit

Creating a dream master suite with a sitting area, a gas fireplace and a large walk-in closet will leave you with a fabulously high remodeling tab that won’t be repaid when you resell your home -- unless you live in a luxury house in a high-cost area where the real estate market is hot.

3. Family Room Addition

  • Cost of family room addition: $54,773
  • Average resale value: $45,458
  • Percentage of cost recovered: 83%
  • Best return: 113.3% in Albany, NY
  • Worst return: 55% Kansas City, Mo.

Adding a family room sounds like a smart remodeling investment, but it won’t be if you have to add completely new square footage to your home. On average, you’ll spend over $50,000 to build a 16x25 room and finish it with recessed lighting, hardwood floors, windows, patio doors and skylights.

Spend that same $50,000 to remodel existing unfinished space in your basement or attic and you can add a full-size bath and a wet bar for the same money. You’ll also recoup closer to 90% on your remodeling costs at resale.

4. Upscale Kitchen Remodel

  • Cost of upscale kitchen remodel: $81,552
  • Average resale value: $69,194
  • Percentage of cost recovered: 84.8%
  • Best return: 136.1% in Seattle
  • Worst return: 46.2% in Burlington, Vt.

A top-of-the-line kitchen with commercial-grade appliances, stone countertops and custom cabinets will set you back more than $80,000 and you won’t be getting that investment back at resale, unless you’re in a high-cost area where that price tag is relatively small compared to your total home price, like Los Angeles, New York, San Francisco or Seattle.

When you go high price, be careful not to go too high style. For instance, black lacquer kitchen cabinets with black granite countertops may look cool, but it only appeals to one in a hundred buyers. White cabinets with black granite would appeal to many more buyers.

Copyright 2007 Hanley Wood, LLC. Reproduced by permission. City data from the Remodeling 2007 Cost vs. Value Report.

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