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New report reveals ROI, satisfaction, and buyer perception for home repairs

depositphotos_13440192_s-2015Which home improvements will yield you the best payoff once it comes time to value your home or sell? Furthermore, which home renovation projects provide the most satisfaction and joy for homeowners, and which improvements are deemed most valuable in home buyers’ eyes?

We can track all  of these things thanks to a comprehensive yearly report by the National Association of Realtors Research Department. By assembling data on thousands of remodeling projects, we glean an accurate ranking of which home improvements recoup the highest percentage of their cost when it comes time to sell – and much more.

But this year’s report offers a couple interesting new twists. In the past, cost-versus-return home improvement reports all focused on the seller’s financial investment and return but not the relative intangible happiness or satisfaction it gave them, nor did it take into account the potential homebuyers’ point of view.

So in this year’s report, Realtors were also asked to rank home improvements based on how much the finished work gave the homeowner a sense of happiness or satisfaction, regardless of cost. These were given a numerical value of 1-10 (10 being the most gratifying), which became a “Joy Score.”

They were also polled about how which home improvements shined the brightest with potential homebuyers.

Using these new perspectives, we can cross reference the percentage of cost recovery with the Joy Score to find out which home improvements did, in fact, offer the best intrinsic and practical value for homeowners. We can also reveal the totally subjective rating that homebuyers would assign these improvements.

Why is that so important? Homeowners should always be thinking about future value and not fall victim to over-improving their home if it won’t yield them a higher return when they sell. Likewise, when it comes time to sell your home, working with an experienced home sale specialist like Renee’’ Catricala will assure you that you’re seeing things through the buyer’s eyes and spending the least amount of money for the highest reward – and the most profit in your pocket.

So what did we find out?

A new roof is the #1 improvement, recouping 105% of its costs at resale and offering a Joy Score of 9.6%.

Here are the other projects with the greatest cost recovery:

Hardwood refinish

Approximate cost: $2,500

% recovered at resale: 100%

Insulation upgrade

Approximate cost: $2,100

% recovered at resale: 95%

New wood floor

Approximate cost: $5,500

% recovered at resale: 91%

New garage door

Approximate cost: $2,300

% recovered at resale: 87%

The home improvements with the highest Joy Scores were often the most expensive ones, although that wasn’t always the case.

Highest Joy Scores for interior projects:

Add bathroom

Joy Scale: 10

Approximate cost: $50,000

Complete kitchen renovation

Joy Scale: 9.8

Approximate cost: $60,000

New master suite

Joy Scale: 9.7

Approximate cost: $112,500

The exceptions came with hardwood floors, which were not expensive but offered high Joy Scores:

Hardwood refinish

Joy Scale: 9.6

Approximate cost: $2,500

New hardwood floors

Joy Scale: 9.5

Approximate cost: $50,000

How about the highest Joy Scores for exterior projects?

New fiber-cement siding

Joy Scale: 10

Approximate cost: $19,100

New front door (fiberglass)

Joy Scale: 9.7

Approximate cost: $2,500

New front door (steel)

Joy Scale: 9.7

Approximate cost: $2,000

New roof

Joy Scale: 9.6

Approximate cost: $7,600

New garage door

Joy Scale: 9.5

Approximate cost: $2,300

So it looks like renovations that focus on highly visible aesthetics, like front doors and garage doors, yield high Joy Scores even though they are relatively low-cost projects.

Now we know how these projects rate with sellers, but what about with potential homebuyers?

Remember that buyer perceptions and opinions are so important because they are the ones that drive home sales.

Interior top 5 home improvements:

Kitchen upgrade

Approximate cost: $30,000

Recovery rate: 67%

Joy Scale: 9.4

Complete kitchen renovation

Approximate cost: $60,000

Recovery rate: 67%

Joy Scale: 9.8

Bathroom renovation

Approximate cost: $26,000

Recovery rate: 58%

Joy Scale: 9.4

New wood flooring

Approximate cost: $5,500

Recovery rate: 91%

Joy Scale: 9.5

New bathroom addition

Approximate cost: $50,000

Recovery rate: 52%

Joy Scale: 10

Exterior top 5 home improvements:

New roof

Approximate cost: $7,600

Recovery rate: 105%

Joy Scale: 9.6

New vinyl windows

Approximate cost: $15,000

Recovery rate: 80%

Joy Scale: 9.4

New garage door

Approximate cost: $2,300

Recovery rate: 87%

Joy Scale: 9.5

New vinyl siding

Approximate cost: $12,000

Recovery rate: 83%

Joy Scale: 8.9

New wood windows

Approximate cost: $26,000

Recovery rate: 58%

Joy Scale: 9.4

When it comes to the Realtor survey, which home improvements don’t offer a high recovery rate, even though they had high Joy Scores?

HVAC

Recovery rate: 71%

Joy Scale: 8.6

Basement conversion

Recovery rate: 69%

Joy Scale: 9.4

Attic conversion

Recovery rate: 61%

Joy Scale: 9.4

New fiberglass door

Recovery rate: 60%

Joy Scale: 9.7

New wood windows

Recovery rate: 58%

Joy Scale: 9.4

Bathroom renovation

Recovery rate: 58%

Joy Scale: 9.3

Closet Renovation

Recovery rate: 57%

Joy Scale: 9

Add bathroom

Recovery rate: 52%

Joy Scale: 10

If all of these numbers are starting to blur into each other, don’t be discouraged. When you work with a fantastic listing agent like Renee’’ Catricala to sell your home, she will do a detailed walk-though and analysis of your home and tell you which items are best to be fixed before you sell, which home improvements would yield the best return on investment once you sold, and which repairs or additions were better left alone. That way when the home sells and the ink dries, you’ll be assured that you received the maximum profit possible – the goal of every home seller!