On Saturday Dec 15, I was standing in the rain in South Minneapolis talking with Alex Eaton, a Realtor, and his buyers. We were looking at a cute house on 14th Ave S. It was well maintained, but like most story and a half homes in that neighborhood, the kitchen was very small.
Alex’s buyers were looking a purchasing this home and remodeling the kitchen and the garage using a Wells Fargo renovation loan product they had learned about from Brad Gustafson, a loan officer at Wells Fargo.
Usually, the layout in these small kitchens is hard to do and this one was no exception. But today, Alex lined up something I had never seen a Realtor do before. He figured out how to get a couple of the neighbors who had similar style homes to show his buyers and myself what they had done to their kitchens.
We talked about kitchen pricing and what it might cost to have a kitchen remodeled.
There is a very good resource that exists for Realtors or homeowners to get an idea of what a project might cost. This resource is the Cost Versus Value report from Hanley Wood Productions. It provides some great information and tracks the average cost of particular remodeling projects across the country as well as the amount of value it adds to the house.
For a mid-scale major kitchen remodeling project in Minneapolis, the Cost Versus Value report lists the average cost to be at $65,500, with a resale value of $41,209 or about 62.6% of the remodeling costs.
Furthermore, the Cost Versus Value report lists the following as a description of what they view as a mid-scale remodel.
Update an outmoded 200-square-foot kitchen with a functional layout of 30 linear feet of semi-custom wood cabinets, including a 3-by-5-foot island; laminate countertops; and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal, and custom lighting. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
The Cost Versus Value report is a great tool to use when talking to your buyers about what a remodeling project might cost. This report can be a high level view of what it might take to do a remodeling project and it may save you the headache of trying to line up contractors to give you ballpark ideas of what a project might cost.
For example: Your buyers are looking at doing a 203K or a renovation loan for a particular home and the Cost Versus Value report says the average cost of the project is going to be $65,000. But you know that the house will likely only appraise out at $20,000 more. In this case, you know you can expect an issue with the appraisal and can save yourself the time of bringing contractors and look for better opportunities for your buyer.
For more information on kitchen pricing check out this article.
(MARY LINK COST VERSUS VALUE REPORT TO www.costvsvalue.com