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Key Takeaways:
To compensate for a dated kitchen, there are different strategies you can take:
- Adjust the price downward to reflect work that needs to be undertaken
- Have sellers make cosmetic changes to help it look fresher
- Compete with up-to-date kitchens by helping buyers envision a major overhaul
Updated, functional kitchens that mirror the best on reality TV shows and hip Instagram posts help listings sell. They’re also among the top interior projects to recover cost at resale, according to the 2022 Remodeling Impact Report by the National Association of REALTORS®. (Download the full reportpdf; a new version is expected next year.)
With competition for listings coming from new construction in many areas, sellers who don’t heed this lesson run the risk of seeing their listing sidelined, says Compass salesperson Jessica Licona. principal and founder of the Licona Team in Austin, Texas.
It’s easy to see why buyers favor houses with spiffy kitchens. Some dread taking on work because of the difficulty of hiring vendors. Increasing costs and possible overruns are another factor as averages climb to almost $80,000 for a mid-range remodel and $159,000 for a high-end change, according to Remodeling magazine’s latest Cost vs. Value report. Chicago-based broker Jennifer Ames, Engel & Volkers, has heard another reason: “Many buyers realized after [COVID-19] that their time is finite, and they don’t want to waste it doing big projects,” she says.
Is the absence of a smashing kitchen a death knell for a sale? No, but your sellers need a smart marketing strategy to compensate. Each of these strategies offers risks and rewards that depend in part on a home’s price point, the sellers’ budget and their interest in making changes. Help your clients decide which is most palatable to close a transaction at the highest price and in the shortest number of days on market.
1. Adjust the price downward.
A lower price will make the sellers’ home more attractive compared to other homes that also aren’t fully updated. Buyers get the benefit of paying less, and then, when they have the funds, they can undertake a kitchen overhaul that reflects their taste. Broker Claire Higgins with Engel & Volkers’ Vero Beach, Fla., office has found that buyers who are most willing now to tackle work are those in their late 20s and early 30s. Many feel lucky to own a home, given still high sales prices, but may be cash strapped to hire help.
Risk. The price may be lowered but still may not be low enough to entice buyers, given concerns about escalating kitchen remodeling costs and anecdotal tales about time overruns and hassles.
Reward. Going lower offers sellers the possibility of a quicker sale and less need to invest more in a home they plan to leave.
2. Provide a floor plan to help buyers visualize changes.
A floor plan gives buyers a realistic vision of how the kitchen could look with updates. Ames says upper-bracket sellers might hire a kitchen designer or architect to measure and draw a new layout, suggest materials and equipment and estimate costs.
Risk. Plans may run several thousand dollars based on design complexity, and some buyers may feel overwhelmed by what’s suggested, spurring them to find a home with a remodeled kitchen.
Reward. Seeing a blueprint helps buyers think outside the box and imagine the kitchen transformed, from lemons to lemonade.
3. Consider the power of staging.
A professional with a keen eye can do wonders, removing furnishings and objects that are too personal, create clutter or make the whole house feel old and tired. Stagers typically try to neutralize rooms, to “remove or camouflage what’s dated and make the best of what sellers have,” says salesperson Jac Smith with Jac Smith Group, Keller Williams Realty St. Petersburg, Fla.
Timing is critical: Staging should be done before a house is photographed. “The first open house is what’s seen online so it should look as perfect as possible when it goes live,” Higgins says.
Who pays varies: Whether it’s the listing agent or the seller, staging is done with the hope the property will be sold for a better price and faster. Many buyers’ agents say staging does have an impact on price. According to National Association of REALTORS® Profile of Home Staging.
- 20% of buyers’ agents put the price increase at 1%–5%
- 14% put it at 6%–10%
- 8% said staging increased the price by 11% or more
In the survey, 34% of buyers’ agents said staging has no impact on price, and 23% said they weren’t sure. (Download the full reportpdf.)
Risk. Staged rooms may become too bland if all color and personalization is removed. It resembles a stage set minus people.
Reward. With colorful flowers, plump cushions, cozy runners, appealing scents, the rooms and house may appeal so much that buyers end up wanting not just the house but the contents.
4. Make cosmetic changes that remove eyesores.
Sellers may not have the dollars needed to remodel a kitchen, but they may be able to afford small changes, says broker Tia Hunnicutt, ABR, SRES, of San Francisco Bay–area Proxima Realty. Tweaks can help transform a space visually and functionally, especially for buyers who aren’t looking at homes at the high end.
It’s key to know what buyers find most appealing in their price range, says Boston North Shore broker Jean-Marie Minton, SRES, Minton Regan Homes with Keller Williams. Ames says sellers can never go wrong with an all-white kitchen. Lighter painted or wood cabinetry trumps dark wood, agrees broker Stafford Manion of St. Louis-based Gladys Manion Real Estate.
Other quick, affordable fixes are newer pulls and handles that turn easily, at least one new appliance with stainless-steel front, new backsplashes or countertops, and coordinated finishes for hardware, lighting and appliances.
The easiest fix is a professional deep cleaning, says Hunnicutt. “Nobody wants to move into someone else’s mess,” she says.
How much to spend should reflect the price of the home and others in the neighborhood, Ames says. “For a $300,000 condo, I would recommend spending $15,000 or 5%,” she says. Another reason to do some work is that many buyers overestimate the cost, she says. “For every project that might cost $1,000, buyers may deduct upwards of $4,000 from their offer price.”
Risk. Today’s buyers are savvy and know certain tweaks make a room look better but won’t overcome all problems. A new counter won’t compensate for the absence of an island. Some changes may even create new problems. Replacing cabinets may damage flooring; same goes for switching out a counter, which may require a new sink, Ames says. And tweaks won’t overcome an awkward layout, she says.
Reward. Freshly painted walls and new lighting won’t make up for dated appliances but will send a message that the sellers are putting their best foot forward.
5. Go for gold with a full remodel.
This approach works best with higher-end homes since it requires bigger bucks and attention to what’s trending. In Hunnicutt’s area, buyers typically expect fully tiled walls, marble countertops or some comparable material and top appliances. Higgins adds the importance of top cabinetry in a lighter tone and a lighter or white paint palette. In her upscale Austin market, Licona sees more customized kitchens with coffee bars, great hoods, interesting wallpaper in cupboards and on ceilings, undermounted lights in cabinetry and vintage detailing. Expensive transformations take two or more months, depending on the availability of materials and labor and complexity of the job, so planning is critical.
Risk. Anyone who’s undertaken a remodeling project, watched movies such as “The Money Pit” or listened to friends’ stories knows the pitfalls well. Also tastes change and what sellers choose today may not appeal to buyers tomorrow.
Reward. A new, gleaming kitchen that checks homeowners’ most frequent wants—even if not all—will raise the joy factor by giving them a great space for bringing family and friends together.
