Illuminations on Leadership Video Series

Sign up for Larry's video series that will inspire you with ideas on leadership and personal development.


Back

Reports: Build Resale Value into Home Remodeling Projects for Improved Sales

No homeowner decides to replace their roof or a dozen windows because “it seemed like a good idea at the time.”  Home improvement projects are often significant purchases that impact most people’s financial lives.  These projects take homeowners lots of research to understand both the price and the value they’ll bring.

Why Do People Make Improvements to their Homes?
According to both the National Association of Realtors® and the National Association of the Remodeling Industry (NARI) there are two major reasons customers choose to start a remodeling project:

  • To increase the resale value of their home
  • To increase their enjoyment of the home they live in.

Quote from Houzz

Additional research backs up the importance of value. Houzz’s 2018 study of Annual Renovation Trends involved surveying over 130,000 U.S. homeowners about their 2017 remodeling activities and their plans for the future. Over two-thirds (69%) cited increasing the home’s resale value as a factor in their decision to take on a home improvement project. One-third of those undertaking a kitchen renovation believed the increase in value was equal to the cost. (source: https://www.houzz.com/press/554/Home-Renovation-Boom-Continues-Houzz-Survey-Finds.

It found that 80% of homeowners felt that their kitchen and master bath renovation projects increased the value of their homes by 83% and master bath updates by 81%. Smaller projects, like deck renovations and landscaping, were perceived to add value. For example, while only 25% of renovating homeowners felt the value of their home increased by 100% of the cost of their deck project, 44% felt there was a positive ROI, ranging from 1% to 99%.

Demonstrate Value with Retained Value
Back up your sales presentation with data. Of course, make sure that you have a fantastic sales presentation that each one of your salespeople follows.

In The School of Entrepreneurship we have six courses that directly address a sales system that you can follow step-by-step to get your sales team all working off the same program.

These Sales Courses include:

  1. Sales Basics
  2. Clarifying Your Sales Distinction
  3. Resident Sales Pro
  4. Profectus: Sales Training Handbook
  5. Dressing for Influence
  6. A Tale of Three Salesmen

[All these courses are available in the School of Entrepreneurship.]

A good resource to support the value that a specific remodeling project adds to a home is RemodelingMagazine’s Cost vs. Value report. The report released in 2018 provides average costs and the value retained or recouped upon selling your home, by project, region and nationwide. Some highlights:

 

Investment Value Retained

Roof Replacement

68.4%

Siding Replacement

76.7%

Minor Kitchen Remodel

81.1%

Wood Deck Addition

82.8%

 

The Value of Enjoyment
Of course, many home improvement projects are undertaken for the enjoyment they will bring, whether it’s expanded living space, more comfortable living space (energy upgrades, for example), better organization, or improved aesthetics. It might seem somewhat difficult to measure how much enjoyment a homeowner will get from a remodeling project, but it’s worth building up the idea of “enjoyment value” in addition to resale value.

In 2017, REALTORS® Magazine did just that when they asked homeowners who completed a home improvement project how much happier they were at home, then crunched the numbers to create what they called the “Joy Score” scaled 1 to 10.

Talking to a homeowner about how much they’ll enjoy their new roof or cabinets allows you to connect with their desires. It’s interesting to note that even small projects can give homeowners a great amount of joy, such as a new front door.

How Does This Data Help You?
Don’t worry about drowning your potential customers with data. It’s clear that homeowners are concerned about more than price and just “getting the job done.” Use these resources as needed to support the value of your proposal and build credibility that you understand the value of remodeling.

Quote from NAR

After a remodel we know that 75% of homeowners feel a major sense of accomplishment. According to the 2017 Remodeling Impact Report from NAR (https://www.nar.realtor/newsroom/homeowners-who-remodel-gain-equity-and-enjoyment-say-realtors), 75% of homeowners, after completing a remodeling project, have a greater desire to be in their home, while 65% say they have increased enjoyment in their home and 77% feel a major sense of accomplishment when thinking of their completed project.

Next Blog Post
Top