Source: NAR

Real estate agents add value by helping sellers prioritize home improvements to maximize their net sale proceeds. The Remodeling Impact Report compares estimated project costs (from a NARI member survey) with real estate professionals’ estimates of the likely resale value added by various home improvement projects, guiding sellers on which renovations offer the best return on investment

The report revealed the following home remodeling projects may offer the highest returns, based on their estimated cost recovery at resale:  

• New steel front door: 100% (estimated return based on upfront cost)

• Closet renovation: 83%

• New fiberglass front door: 80%

• New vinyl windows: 74%

• New wood windows: 71%

• Basement conversion to living area: 71%

• Attic conversion to living area: 67%

• Complete kitchen renovation: 60%

• Minor kitchen upgrade: 60%

• Bathroom addition: 56%

• New primary suite: 54%

• Bathroom renovation: 50%

A Balancing Act

Because owners often plan to stay in the home and enjoy the improvements for a few years before selling, the report also assigns a “joy score” to each project. The score is derived from a survey of homeowners conducted by NAR’s consumer website HouseLogic.

Last year, Americans spent an estimated $603 billion on home remodeling. With the average U.S. home over 40 years old, remodeling is increasingly important for maintaining both the home's condition and its value.

Consumers surveyed for the report said their top motivations for undergoing a home remodel were:

• To upgrade the home’s worn-out surface finishes and materials (27%)

• To improve energy efficiency (19%)

• A desire for a change (18%), or

• Because they plan to sell their home within the next two years (18%).

  
  

Because every home and every neighborhood are different, a presale project that’s right for one home won’t benefit another. But for those who do plan to sell within the next couple of years, the Remodeling Impact Report offers agents a starting point for a discussion.

How Real Estate Pros Are Helping

Forty-three percent of homeowners say home remodeling, repairs and maintenance stresses them out, according to Angi’s State of Home Spending report.

According to NAR’s Remodeling Impact Report, the top agent-recommended projects were painting—either the entire home or at least one room—as well as installing a new roof, if necessary, to make a home more marketable.

Real estate professionals report a rise in homeowners wanting kitchen upgrades, new roofs, and bathroom renovations—key and costly projects buyers value. Nearly 46% of buyers are less willing to compromise on home condition, so prioritizing these improvements can make homes more move-in ready and support recent price increases.

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