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Dan JonesREALTOR® · Penticton, BC

Should you renovate before selling

By Dan Jones ·

Bottom line: renovate less than you think, fix more than you think, and leave the kitchen alone unless it is genuinely failing. There are three kinds of money you can spend before selling. Repairs that remove a reason for a buyer to walk away or ask for a discount almost always pay, because they protect the price you set. Cheap presentation work, decluttering, cleaning, light and small fixes, pays well because it changes how the house shows. Renovation to taste, new kitchens, new bathrooms, new flooring, rarely returns what it costs, because it is a bet that your choices match an unknown buyer’s, made at the moment you have the least reason to care. If you are tempted anyway, do not rely on a national return percentage. Compare recent sold prices of renovated and original homes on your own streets, and remember that time is a cost too.

I am Dan Jones, a REALTOR with Royal LePage Locations West in Penticton, licence number 1118346. I was a Red Seal journeyman carpenter from 1980 and spent twenty-four years building and renovating houses before I was licensed in 2004. I have done a lot of the kitchens I am now telling you not to do, which is exactly why I know what they cost and how rarely a buyer pays it back.

Three kinds of spending

It helps to sort every idea into one of three groups before spending a dollar.

Repairs that end deals. Water getting where it should not. A roof at the end of its life. Electrical or plumbing that affects insurability. An unsafe railing. These are not improvements. They are the removal of reasons to walk away or renegotiate, and a buyer’s inspector is being paid to find them. What to fix before you list sets out the order.

Presentation. Decluttering, cleaning, windows, light bulbs, the sticking door, the running toilet. Almost free, and it changes every photo and every showing.

Renovation to taste. New kitchen, new bathrooms, new flooring, a layout change. This is the category people think of first and it is the one that least reliably pays.

If an idea is in the first group, do it or price for it. If it is in the second, do it. If it is in the third, it needs to earn its place.

Why kitchens and bathrooms rarely pay

It is a taste bet. You are choosing cabinets, counters, tile and fixtures for a buyer you have never met. Some buyers will love your choices. Many will be pricing what it costs to replace them.

Buyers discount for condition more than they pay for finishes. A dated but sound kitchen does not scare anyone. A leak under the sink does.

You are spending at the worst moment. You have the least reason to care about the result, and very often the least time to manage the work well.

The exception is a kitchen or bathroom that is genuinely failing: rotten subfloor, a leaking shower, cabinets falling apart. That is a repair wearing a renovation’s clothes. Fix what is failing, and stop there.

I will not give you a return percentage

You will find national studies claiming a kitchen returns some percentage of its cost. I am not going to repeat one.

Those numbers are averaged across markets that are not Penticton, homes that are not yours, and buyers who are not the ones looking at your street. A percentage that is wrong for your house is worse than no percentage.

What actually answers the question is local sales. Look at recent sold prices of similar homes nearby, comparing renovated ones with original-condition ones of similar size and lot. If the difference clearly exceeds what the work would cost, plus the months it would take, renovation may be worth considering. If it does not, it is not.

I can pull those comparables for your area. That is the data worth deciding on.

Time is a cost

This is the part that gets left out of renovation arithmetic.

Carrying costs. Every month of work is a month of mortgage, taxes, insurance and utilities on a house you are trying to leave.

Contractor availability. Good trades in the Okanagan are busy. A four week job can become three months, and you do not control that.

Market timing. A renovation that pushes your listing from spring into late fall has cost you something that never appears on an invoice.

Living in it. Dust, noise, no kitchen, while also preparing to move.

And never list a half-finished house. An unrenovated house reads as an opportunity. A half-renovated one reads as a problem the buyer has to finish.

Permits

If you do renovate, pull the permits the work requires and keep the paperwork.

Work done without required permits can raise disclosure questions, insurance questions and questions from a buyer’s inspector or lender. Worse, it leaves a buyer wondering what else was done the same way. A permitted renovation with a final inspection on file is an asset at sale. An unpermitted one can be a liability that costs more than the renovation added.

This matters most for electrical work, which in BC requires a permit and in most cases a licensed contractor, and for suites, where permits and zoning decide whether a suite is legal.

What buyers pay for instead

Buyers pay more reliably for confidence than for finishes, and confidence is cheap to provide.

Gather the paperwork before you list:

  • Roof: the invoice, the year, the material
  • Furnace, air conditioning and hot water tank: install dates and service records
  • Plumbing and electrical upgrades: permits and final inspections
  • Windows, insulation and drainage work: receipts and any warranties
  • Engineering, for retaining walls or structural work

Picture a buyer comparing two similar houses. One has a dated kitchen and a folder showing a six year old roof and a two year old furnace. The other has a new kitchen and no records for anything. Many buyers will trust the first one more, and so will their inspector. That folder costs you an afternoon.

When renovating does make sense

It is not never. It is less often than people expect. Renovation can make sense when:

  • Something is genuinely failing and fixing it properly amounts to a renovation
  • The work is small and highly visible, such as replacing one badly damaged countertop rather than redoing a kitchen
  • Local sales clearly show a gap between renovated and original homes that exceeds the cost and the time
  • You are staying for years anyway, in which case you are renovating for yourself, and that is a different and perfectly good decision

If you are downsizing

Usually, do not.

Downsizing already asks an enormous amount of time and energy, and the belongings alone are a project. Adding months of renovation to a house you are about to leave, for a result the next owner may rip out, is rarely a good trade.

Put the effort where it pays: repairs that end deals, a hard declutter, and getting the move itself right. What to look for if this is your last house is where that energy is better spent.

What I would do

  1. Walk the house with me before spending anything, so we sort ideas into the three groups honestly.
  2. Fix or price the deal-enders. If your house is older, a pre-listing inspection is the cheapest way to find them.
  3. Do the presentation work. It costs almost nothing.
  4. For any renovation idea, look at local comparables first. If the numbers do not clearly support it, do not do it.

If you want an honest opinion on what your house actually needs before listing, email me at dano007@shaw.ca or call 250.488.0226.

Common questions

Should I renovate before selling or sell as is?
Usually less than people expect, and rarely the kitchen. Fix the things a buyer's inspector will write up, because those turn into price reductions with interest. Renovating to taste is spending your money on a decision the next owner wanted to make themselves.
Does a new kitchen increase what my house sells for?
Rarely by as much as it costs. A new kitchen is a bet that your taste matches an unknown buyer's, made at the moment you have the least reason to care. If the kitchen is genuinely failing, fix what is failing. Otherwise clean it, repair what is broken, and let the buyer spend their own money on their own choices.
What is the difference between a repair and a renovation when selling?
A repair removes a reason for a buyer to walk away or ask for a discount: a leak, a failing roof, a broken window, an unsafe railing. A renovation changes finishes or layout to someone's taste. Repairs protect the price you set. Renovations are an attempt to raise it, and they are much less reliable at doing so.
How do I know if renovating will pay off in my neighbourhood?
Look at recent sales of similar homes nearby, comparing renovated ones with original-condition ones of similar size and lot. If the difference in sold price clearly exceeds what the work would cost plus the months it would take, a renovation may make sense. National renovation return studies do not describe Penticton, so use local sales rather than a percentage from a magazine.
Can unpermitted renovations hurt a sale?
Yes. Work done without required permits can raise disclosure questions, insurance questions and questions from a buyer's inspector or lender. It can also leave a buyer unsure what else was done the same way. If you renovate before selling, pull the permits the work needs and keep the paperwork.
How long should I allow for renovations before listing?
Longer than the contractor's first estimate, and I will not put a figure on it because it depends entirely on the work and on availability. Get a firm schedule in writing before committing to a listing date. Every month of work is a month of carrying costs, and listing a half-finished house is worse than listing an unrenovated one.
Is it worth renovating a house I am downsizing from?
Usually not. Downsizing already asks a great deal of your time and energy, and a renovation adds months of disruption to a house you are about to leave for a result the next owner may undo. Put that effort into repairs that end deals, decluttering, and getting the move itself right.
What if my house is well behind the rest of the street?
Then the price reflects its condition, and that is not a failure. Buyers looking at an original house on a street of renovated ones are often looking for exactly that opportunity. Occasionally a targeted update closes a gap that recent sales clearly show. Let the comparables decide, not the feeling that the house is letting the street down.

Start with a conversation

Tell me what you are thinking about and roughly when. I will tell you straight whether it makes sense, including when the answer is to wait.