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Are your client’s home improvement projects actually decreasing the home’s value?

Not every home improvement project is an upgrade – some may leave your client’s bank account empty and turn potential buyers away.



home improvements

Home improvement projects can require a significant time commitment and huge financial investment. Homeowners make improvements for a wide variety of reasons, but almost all expect to increase the resale value of their home according to the money they put down.


Know your buyers’ needs

Unfortunately, not every project will yield the resale value that homeowners hope. For those of us in the real estate industry, it is important to give smart advice to our clients before they begin a major renovation.

Always research your market and decide which upgrades will add to your home’s appeal without pricing it out of the market.

If your client lives in a neighborhood where comparable houses are being sold for millions of dollars, then it makes sense to add some high-end features. But if houses in their community sell for $150,000, adding a luxury bath and entertainment room will probably mean losing money in the long run. Ironically, small projects often make the biggest difference in terms of adding resale value to a home.

Here are some common upgrades that homeowners should be wary of:

Luxury Bathrooms

Bathroom upgrades rarely regain more than half their original expense. Buyers want to see clean, useable bathrooms, but many aren’t impressed by over the top features like waterfall showers, fireplaces, whirlpool tubs, and expensive tiling. These features may not appeal to the preferences of your buyer, and can require unwanted maintenance. If your client plans to remodel their bathroom, remind them to remain practical. A nice, modern shower is likely to be a better investment than a high-end tub.

Swimming Pools

According to HouseLogic, in-ground pools only increase a home’s value by 7 percent. Not only are pools expensive and hard to maintain, they can be hazardous for small children. Many potential buyers won’t consider buying a home with a pool, especially if they live in an unaccommodating climate. Above-ground pools are an even worse investment, as they can actually decrease the value of your home. Many buyers will remove the pool immediately upon purchasing the home, or negotiate for it to be removed as part of the sale.

Wall-to-Wall Carpeting

Although new carpeting can really help spruce up a room, it is quick to show signs of dirt and wear. Also, prospective buyers may dislike the carpet color and texture you choose, or prefer hard wood or tile flooring.

Sunroom Addition

It can cost anywhere from $30,000 to $50,000 to build a sunroom. As one of the most expensive upgrades, it’s very important that homeowners build their sunroom to match the climate. In Minnesota, you will likely get more value from a four-season porch than a patio. According to Remodeling, sunrooms return only 48.5% of money expensed.

Built-In Aquarium

Although they might look cool at first, built-in aquariums are another feature that requires difficult and expensive maintenance. Potential buyers must either take on the responsibility of upkeep, or spend money to remove the aquarium entirely.

Garage Additions

Most one-car garage additions cost an average of $20,000 to $40,000, and homeowners are unlikely to recoup the full price in resale. Though the extra space might be convenient, buyers are often willing to settle for a standard two-door garage for a better price.

High-End Landscaping

Expensive landscaping may improve curb appeal, but it may also discourage buyers that don’t want the extra work or have different landscaping preferences. Simple landscaping is less likely to deter buyers, especially when it looks nice year round and requires little to no upkeep.

Built-In Electronics

A home movie theatre and media room may seem tempting to your client, but potential buyers may easily perceive these features to be a drain on energy costs and a poor use of space.

Personalized Décor

Home improvements should appeal to people generally—not just your particular family. Quirky designs like bright pink walls and colorful tiling might just turn buyers away. Neutral designs are always more likely to increase the value of your client’s home.


Hannah is currently a writer and student in Colorado Springs, pursuing her master's degree in Creative Writing at the University of Denver. Before becoming a Staff Writer for the American Genius, Hannah wrote website content and grant applications for a law office in central Minnesota.

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The phrase ‘starter home’ is overrated and overused

(HOMEOWNERSHIP) You see the term in the MLS for fixer uppers, you hear it when Realtors are working with first time buyers. But the term “starter home” shouldn’t be in anyone’s vocabulary. Here’s why.



starter homes debt existing home sales

Just words

Collins English Dictionary defines a starter home as a “small, new house which is cheap enough for people who are buying their first home to afford.” You won’t find the phrase too often outside of the real estate industry.

There isn’t much about the etymology of the phrase, but most likely, it’s a marketing ploy to get people to buy into the idea of purchasing another home in a few years.

Grind your gears

Mark Greutman, husband to Lauren Greutman, believes that the term “starter home” should bother people. The phrase implies that you will upgrade later.

Your starter home isn’t good enough for the rest of your life. And not to get into how well Americans have it, what about people who will never be able to afford anything more? Is it an insult to them?

Do you really need two living rooms?

Older generations bought one home and lived in it until they could no longer be independent. In today’s world, we buy a starter home, then upgrade to have more space, to live farther away from our neighbors, to have rooms that are only used once or twice a year, and to make sure you have a 2 or 3 car garage to hold your vehicles and more stuff, some of which isn’t taken out very often.

But consider this: You could pay off your starter home in 15 to 20 years, if you budget right.

You could be out from under a mortgage and have money to travel, send the kids to college, or even retire early. When you think about what led to the financial crisis in 2008, isn’t it better to have a smaller house where you can make the payments than worry about losing your house?

Be content where you are

Realtors are motivated to make sure that they have customers. If people buy one home with the intent to stay, will the market dry up? Probably not, because people move and a new generation will be ready to purchase homes for their own family.

Let’s think about that phrase, “starter home.” It fuels consumerism and discontentment. Don’t call cheaper houses starter homes, but just a home.

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The remodeling projects with best ROI that actually increase home value

(HOMEOWNERSHIP) Knowing which remodeling projects to tackle when a home is being put on the market can save a lot of wasted effort and money.




If you’re looking to help your clients to identify which projects to tackle before putting their home on the market, look no further: the National Association of Realtors surveyed thousands of real estate agents, industry professionals, and consumers on interior and exterior house remodeling projects, and these are the best projects for upping a home’s value before listing it on the market, ranked on the most value and cost recovery a homeowner can get.

  • Refinishing hardwood floors. Start from the bottom to earn top dollar. Refinishing floors transform a home from worn-out and aging to vibrant and inviting, and only costs about $2500 according to the National Association of the Remodeling Industry (NARI). The project also increases a home’s value by that same amount, meaning a homeowner can recover 100 percent of the costs. Pretty sweet deal.
  • Upgrading insulation. Because it’s what’s inside that counts. This project costs about $2100 based on NARI Remodeler’s estimate and increases a home’s value by $2000 according to Realtors surveyed. That’s a 95% cost recovery.
  • Adding new wood floors. If you don’t have wood floors to refinish, add them in! This costs about $5,500 according to NARI Remodelers, and the increased sales value is $5000. A homeowner can recover 91% of costs from a new wood floor addition.
  • Replacing HVAC system. A new HVAC system adds energy efficiency and refreshes the entire home, and NARI Remodelers estimate doing so costs $7000. The increased value for sellers is $5000 according to NAR REALTORS, meaning an easy breezy 71% cost recovery for homeowners.
  • Converting a basement into a living area. Not only is this cost and space-efficient, it’s also undeniably trendy. A basement makeover costs about $36,000 according to NARI Remodelers estimate and increases value for sellers by $25,000 according to Realtors surveyed. That comes out to a cost recovery of 69%.

Which projects are the most costly?

In case you’re curious, these are some of the most expensive remodeling projects:

  • New master suite. More like master $uite – this costs about $112,500 with a cost recovery of 53%. 
  • Converting an attic into a living area. Cute idea, but also a $65,000 one with a 61% cost recovery. One might say the price is through the roof.
  • Complete kitchen renovation. This project costs an estimated $60,000 with a 67% cost recovery. Even more if you want to throw in a brick oven, and you probably do.
  • New bathroom. With an estimated cost of $50,000 and a 52% cost recovery, make sure you aren’t flushing money down the drain with your bathroom addition!

These trends change over the years, so make sure your knowledge is up to date locally since we all know local trends trump national. Hopefully today you’ve garnered some ammo to help clients better understand how to improve their home’s value!

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How to inform clients about well-known homebuyer scams

(HOMEOWNERSHIP) Real estate scams continue to victimize people, but Realtors are in a position to better protect homebuyers. Here are some tips.



home buyer

Despite warning after warning and news story after news story, homebuyers keep getting their money stolen in real estate wire transfer schemes. Some blame the mortgage and real estate industries for not doing enough to educate and protect their clients. Others say the people committing these crimes are getting more and more sophisticated. No matter who’s to blame, there’s no arguing that this crime is on the rise.

What exactly do these real estate scams look like? These criminals usually hack into a business’s emails, often a title company, and get all the pertinent information they need. They then steal and copy that company’s letterhead, and the email addresses, signature blocks and any other relevant information they will need to fool the homebuyer. The homebuyer then gets an email that appears to be from the title company, asking them to wire money, often tens or sometimes hundreds of thousands of dollars.

So, you’re probably wondering right now: What can I do? You want to know how to warn and protect your clients and keep your reputation intact (and avoid costly lawsuits). The following safeguarding tips can help keep cash out of cyberthieves’ hands:

1. Pick up the phone. If you’re closing on a home and receive an email with instructions on how to transfer money to your closing company or lender, take a few minutes to call your agent or broker to make sure it’s legit. Yes, this might be a bit annoying, but not as annoying as losing thousands of dollars in an email scam.

2. Be aware. These scammers usually send emails that look like the real thing. If you’re a homebuyer, look for weirdly timed emails (sent in the middle of the night) or spelling and punctuation errors. Is there a sense of urgency to the email?

3. Educate your clients. If you’re a real estate professional, make sure your clients know about this scheme. Not everyone is aware they could be a target (which is why it keeps happening). Set up a specific passcode for each client.

4. Consider using ClosingLock and asking your title company to use this technology for all of their transactions… What’s ClosingLock (previous name was BuyerDocs), you ask? This tech startup provides secure document delivery for closing companies and homebuyers. The company says it has protected more than $5 billion in wire transfers and works with big and small businesses across the country.

Scams will never be eradicated, but it is part of your job to know the current scams and how to protect transactions against shady folks.

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