Last month, Philadelphia Realtor Kieran Diamond was looking to sell a duplex property in the Art Museum section of that city. A strong selling point, Diamond says, was the 20 thermal-paned windows that had been installed in the building within the last year. The windows came with a lifetime transferable warranty, which was passed from seller to buyer at closing.
“That was something that was very important to the buyer,” he points out. Diamond was able to document month-by-month heating costs for the building and to explain how those new windows would reduce energy consumption and save on fuel bills. It was important, he says, because the buyer would be living in one unit and renting out the other, and she'd be paying to heat both.
FORM AND FUNCTION The Cost vs. Value Report projects the percentage of outlay recouped by home improvement projects, should the house be sold within a year. For instance, a year after spending $24,693 on an upscale roof replacement a homeowner could expect the value of his or her property to increase by $18,012, or 72.9%. Who says? Some 2,188 Realtors, in 60 markets, who made up the survey respondents.
This year's Cost vs. Value Report, assembled jointly by the National Association of Realtors and REMODELING magazine (a sister publication to REPLACEMENT CONTRACTOR), shows that to Realtors and real estate brokers, exterior home improvements such as siding and window replacement rank as high as or higher than any other type of remodeling project, including traditional high value-producers like kitchen and bath remodels.
The report divides 25 projects, 11 of them exterior, into midrange and upscale. Of 16 midrange home improvement projects, Realtors rated vinyl siding replacement as returning the greatest value — 87.2% of cost recouped if the home were sold within a year — with wood window replacement (85.3%) coming in second.
All of this makes sense to Celeste Morawski, who has been selling residential real estate on Chicago's pricey north side for 16 years. Roofing, siding, and window replacement, she says, are not projects where home buyers get to make design choices. “It's not sexy, like a kitchen or bath remodel,” Morawski says. And often new homeowners know little about replacing roofing, siding, or windows and are confused by the disparity in pricing among different contracting companies. For all these reasons, they'd rather those replacements be done and in place well before they buy, and they would prefer not to have to think about roofing, siding, or windows at all. That's why those projects add high value to the home, she says.
Atlanta Realtor Peggy Witt says that any obvious roofing or siding problems throw buyers off. Mold on the side of the house, for example, is “a deal-killer.” Customers, Witt says, especially younger ones, increasingly want a home they can move right into without having to replace anything or make repairs or alterations.
REGIONAL VARIATIONS Of the 11 exterior projects in the report — windows, siding, roofing, sunrooms, and decks — respondents suggested the one that returned the most value for the cost was a fiber-cement siding replacement job, priced at $13,149, with 88% of cost recouped.
Window replacements — including different prices and quality levels of wood and vinyl windows — also yield a high value, ranging between 82.5% and 85.3%, according to Realtors. Much of the attraction in new windows, they say, has to do with energy savings. Allen Miller, of Ken Meade Realty, in Sun City, Ariz., says about half his prospective buyers ask whether or not the windows are double paned. Their concern? Hefty Arizona air conditioning bills.
In addition, Morawski points out, new windows contribute to curb appeal. “It definitely ups the value of the house,” she says. “If it's clean and new, that will make people want to come in and look.” And if a roof's recently been replaced, Allen says he's quick to include that in sales verbiage, as long as he has the receipts to prove it.