What are advantages of a well maintained home when selling?
- Your home is more emotionally appealing in and out,
- You create a level playing field or advantage over competition,
- The home’s value is preserved, as inattention lead to costly repairs,
- Speaks of a safe and environmentally healthy home,
- Eliminates or lessons renegotiations due to deficiencies found,
- Results in a profitable net gain over time
What do maintenance, repairs and replacements cost?
Caulking windows, replacing a furnace filter, cleaning gutters and sealing an asphalt drive may only added up to a few hundred dollars a year and your time. At some point, replacing a new furnace, roof and central air can add up to thousands. Windows, kitchens and baths; flooring and decorating eventually become worn and outdated, necessitating periodic and potentially costly remodeling.
Industry estimates on average annual cost over time
Industry estimates suggest that a homeowner should expect an average annual cost of 1% to 3% of the price paid for the home as a measure of anticipated cost for maintenance, repairs and replacements. A home’s age and condition at time of purchase can affect these averages.
How does overall maintenance and replacement affect value? We certainly didn’t do an in depth study. For fun and as a small test, we looked at 8 mid-range homes, their initial price, the cost of maintenance over time, the homes age when purchased, length of ownership and selling price or appraised value. Here’s what we arrived at:
- Homes new to 4 years old when purchased averaged an annual maintenance cost of $2,003 and 1.25% of initial purchase price. Their average length of ownership was 15 years and their average net gain in value after cost of maintenance was 3%.
- A home 27 years old when purchased required updating and repairs. It had a length of ownership of 32 years and was 59 years old when sold. This home averaged maintenance and replacement costs of $2,891 per year or 8% of initial price and a net gain of 3.86% when sold.
- Another home, 22 years old when purchased resulted in the following: Length of ownership was only 3 years, average annual maintenance/updating was $5,000 or 2.2% of initial price and net gain on sale was 3.2%.
The industry average of 1% to 3% annually for maintenance represents a good rule of thumb. As well, our little study produced a net gain of around 3% for average, mid-range homes.
For an in depth look at your home’s value, contact us.