When Selling A House, The Wrong Renovations Will Cost You

Homeowners looking to sell and hoping to command the highest price possible can expect to drive up the final sales price of their house if they invest in an improvement or two.

But choose the wrong projects and the investments won’t pay off as expected, according to Zillow. In fact, some projects could lose money.

Based on an analysis of the returns on a variety of projects, the real estate data company has laid out the do’s and don’ts when choosing a renovation or improvement.

The first priority, Zillow suggests, should be curb appeal—i.e., the house’s appearance from the street. According to research by Zillow and Thumbtack, an online service for hiring local professionals, new paint inside and outside plus basic landscaping and yard care typically costs around $3,000. Of course, that could be much higher depending on the size of the house and yard and how neglected the landscape had been.

Choosing the right color—or the wrong color—also can have a dramatic effect on price, Zillow says. Yellow homes sell for nearly $3,500 less than expected, while the right color door can lead to an extra $6,000 for the seller, a recent analysis found. The Zillow Paint Colors Analysis said a black front door could increase the price of a typical U.S. home by 2.9 percent.

Bathroom upgrades are also recommended, but overspending must be avoided for a return on investment. Zillow reports that a mid-range bathroom remodel—replacing the toilet, tub and light fixtures, adding a double sink, tiling the floor, and hanging some wallpaper—typically results in a $1.71 increase in home value for every dollar spent, if the bathroom is at least 25 years old.

But an upscale bathroom remodel—top-end features, full-body-wash shower wall, bidet—actually will be a losing prospect for the seller, adding only 87 cents of home value for every dollar spent.

Are the windows old and inefficient? “New mid-range windows can return $1.15 for every dollar, but get too fancy and you’ll end up breaking even,” Zillow advises.

While the kitchen may seem like a natural place to target for renovation, Zillow found that the payoff is not there. Whether a low-end, mid-range or high-end renovation, the return is only about 50 cents on the dollar. Zillow attributes this to the kitchen being a room where different people want different things. A setup that appeals to the homeowner may be a turnoff to a potential buyer.

And finishing a basement before putting a home on a market was an even worse investment. Even if a bathroom is added to the basement, the return the seller can expect is even less than 50 cents on the dollar.

“If you’re fixing up your home to appeal to a variety of potential buyers, go for changes that have a broad appeal,” said Skylar Olsen, Zillow’s director of economic research. “Fresh paint in the new ‘it’ neutral signals a well-maintained home, and most people can imagine their own furniture matching the walls. A luxury chef’s kitchen won’t matter to the majority of folks who can’t call themselves a good cook and just eat out often anyway.

“Sometimes the basement is best for storage. Start small and seek expert advice.”