The best home renovations that increase the selling price
Selling a home is a significant task, and getting the best possible price for it requires careful planning and execution. If you’re looking to enhance your home’s appeal by taking on significant renovations before selling, renovation loans may be needed to fund these projects. This blog will help you prepare your home for sale by exploring strategic home renovation choices and smart borrowing options so you can make your property desirable to more buyers and get top dollar when you sell.
Home renovations that add the most value
As a homeowner, each year you will be charged a fee called a property tax by your local government. This tax is based on a percentage of your property’s assessed value. Property taxes are used to fund local services and projects, such as building new schools, paying for law enforcement, repairing roads and updating water systems.
| Cost | Resale value boost | Const recouped | |
|---|---|---|---|
| Entry door replacement (Steel) | $2,214 | $2,235 | 100.9% |
Your front door is more than an entry point, it’s the first impression your home makes on visitors and potential buyers. By replacing a tired, run-of-the-mill slab with an affordable steel door that has wood grain patterns, embossed raised panels, windows or sidelights, you instantly upgrade the character of your home and make it more welcoming. Plus, enhanced security features provide peace of mind, while improved insulation helps regulate indoor temperatures and reduce energy costs.
| Cost | Resale value boost | Const recouped | |
|---|---|---|---|
| Manufactured stone veneer | $10,925 | $11,177 | 102.3% |
From the rugged texture of stacked stone to the traditional cottage style of fieldstone to the sophistication and luxurious look of limestone, manufactured stone veneer offers the timelessness of natural stone without the hefty price tag. When potential buyers see stone on a home’s exterior, they immediately recognize a special property that’s both beautiful and durable. Beyond aesthetics, the practical benefits of low maintenance and weather resistance makes your home stand out in the market as an excellent investment.
| Cost | Resale value boost | Const recouped | |
|---|---|---|---|
| Garage door replacement | $17,747 | $18,366 | 103.5% |
Upgrading to electric or converting your HVAC system entirely isn’t just about modernization—it ensures that potential homebuyers feel immediate comfort when they step into your home for the first time. This vital upgrade promises coolness in the heat of the summer, warmth during the frigid months and an overall environment that’s just right, regardless of the season.
Beyond comfort, these systems offer numerous benefits to potential homebuyers. Today’s new HVAC systems are energy efficient, reducing the carbon footprint while providing savings on utility bills. Plus, they need less maintenance compared to traditional systems, saving time and money.
Financing your home renovation
If you’re considering taking out a loan to finance your remodel, there are several options available. Each has its advantages.
Home equity loan (HELOAN): This type of loan can fund your remodel by allowing you to borrow up to 90% of your home’s equity as a second mortgage. HELOANS typically have a fixed interest rate and predictable monthly payments.
Home equity line of credit (HELOC): HELOCs work similarly to a credit card, where you have a line of credit based on up to 95% of your home’s equity that you can draw from as needed. This flexibility can be beneficial for ongoing projects.*
Home renovation loan: This unique financing strategy to purchase or refinance a home while including the cost to renovate it, spreads the renovation costs over the span of the loan.
Here’s how it works: A home renovation loan amount is based on the future estimated value of the home after renovations. An appraiser evaluates the home’s value before and after the renovation. Meanwhile, your licensed contractor plans and carries out the renovation, making sure it meets the lender’s requirements as well as your goals. Together, their involvement ensures a successful renovation project.
A renovation loan can be used to:
- Remodel kitchen and bathrooms
- Upgrade electrical, plumbing, heating and air conditioning
- Make structural or accessibility improvements
- Install new flooring, windows, doors, cabinets and appliances
- Build a swimming pool
If you need more guidance to decide which loan is best, we’re here to help. From choosing the perfect renovation loan for your needs, to applying for financing, to closing and beyond, take the first step and find a Guild Mortgage branch near you.
SOURCE: Cost vs. Value: Key Trends in the 2023 Cost vs. Value Report | Remodeling (hw.net)
*Brokered loan program
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.