Should you make repairs before you sell?
When you’re deciding to sell your home, you want to ensure you’re getting the best bang for your buck. It’s true that if you make repairs before you sell, you’re likely to profit from your investment. However, this depends on the kinds of repairs you’re willing to pay for. There are several important decisions to make, like figuring out which fixes will get you a bigger return on investment than others, and how you’d be able to finance those home updates.
After all, you don’t want to end up with a repaired home that sells for less than what it cost to upgrade it. We’re here to guide you through repairs that are worth making, which ones may not be worth your money, and how you’d be able to finance these upgrades.
Yes, make these profit-boosting and time-saving repairs before selling
You’ll put yourself in a position to get the most ROI on details prospective buyers immediately notice and feel, such as garage and entry door replacements, exterior veneers, a fiberglass grand entrance and HVAC conversions. External updates to your home and improvements to insulation that result in utility savings are important to buyers. You might even find yourself with competing offers. Your home could sell for more than it was listed to the highest bidder, which means more money back to you.
According to the 2024 Journal of Light Construction’s analysis of reconstruction projects, the following are some of the best investment-boosting home upgrades when selling (based on national averages):
- Garage door replacement — cost recouped: 193.9%
- Entry door replacement — cost recouped: 188.1%
- Manufactured stone veneer — cost recouped: 153.2%
The below projects won’t result in major profits, but will make your home favorable so buyers won’t delay on closing by trying to negotiate the price or request repairs:
- Fiberglass grand entrance — cost recouped: 97.4%
- Minor kitchen remodel (midrange)— cost recouped: 96.1%
- Siding replacement (fiber/cement) — cost recouped: 88.4%
- HVAC conversion/electrification — cost recouped: 66.1%
Other repairs, such as roof fixes, might be a bit more costly, but they’re necessary if you want to avoid the possibility of stalling your home on the market or potentially discouraging offers.
Cost-efficient but impactful upgrades include new paint and landscaping enhancements.
Buyers will be heavily focused on the long-term, and many will want a property to be move-in ready, so you may need to be willing to spend more if you want your home sold faster.
No, these fixes aren’t worth the cost when you’re selling
Some fixes, like major kitchen remodels or upscale room additions, may hurt your wallet if you’re planning to sell. Refrain from the following repairs and changes, which likely won’t add much to your home’s appraised or fair market value:
- Major kitchen remodel (upscale) — cost recouped: 38%
While a minor midrange kitchen remodel is on our list of recommended repairs, a major upscale kitchen remodel may not be to your advantage. Replacing cabinets entirely with top-of-the-line customs, incorporating pricey ceramic or glass-tile backsplash and selecting higher-end refrigerators and commercial-grade cooktops are pricey. This may be something your future buyers should invest in.
- Primary suite and bathroom additions (upscale) — cost recouped: 23.9% and 32.6% respectively
The cost for a primary upscale suite addition has risen steadily since 2020, with a few small dips in total cost in 2023 and 2024. Meanwhile, the value of this addition significantly dropped in 2023, with a small increase in 2024. This major discrepancy in cost vs. value is not a beneficial investment if you’re planning to sell. The same trend is replicated for primary upscale bathroom additions. Midrange room additions have more bang for your buck but are still far from necessary if you want to increase your home’s value and profit from a sale.
Afford your renovation by refinancing your mortgage monthly payments
Guild offers three different renovation refinancing options — Conventional, FHA 203(k) and FHA 203(k) Limited — that will allow you to consolidate your existing mortgage with the estimated costs of your project, all in a single monthly payment.
Our programs will help you get started, even if you don’t have all the needed cash for your project readily available, by allowing you to pay over time by using your home’s post-renovation value.
| Conventional | FHA 203(k) | FHA 203(k) Limited | |
|---|---|---|---|
| Loan type | FNMA HomeStyle renovation loan | Government renovation loan | Government renovation loan |
| Kind of project | Any | Complex | Minor/cosmetic |
| Length of project | Any | Long-term | Short-term |
| Min. down payment | As low as 3% | As low as 3.5% | As low as 3.5% |
| Occupancy type | All | Primary residence | Primary residence |
| Consultation required? | No | HUD consultation required | No |
| Funding distribution schedule | Funds are distributed after a third-party inspector approves each phase of the renovation | Funds are distributed after an HUD-approved consultant approves each phase of the renovation | You can request up to 50% of the funds up-front to get started; the remainder is distributed once the renovation is done and inspected (if applicable) |
Once you get pre-approved, our loan officers can help you apply for financing, and search for a licensed general contractor with you. Then, you’ll get an appraisal for your home’s estimated value after renovations. After the general contractor approval process is completed, your file will be sent to our loan processing team and the underwriter.
There’s a lot to consider, and our renovation specialists are prepared to assist you in your neighborhood. Reach out today and we’ll help you decide what financing option is best for your pre-sale home repair project!
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.