Return on Investments and Pricing to Sell

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Wow! Look at that beautiful kitchen in the picture. It has new cabinets, a gas stove, stainless steel appliances, and granite counter tops. The owners put a lot of money into their kitchen remodel, but can they expect to get all their money back when they sell?

The short answer is: No.

Remodeling Magazine asked real estate professionals which remodeling projects will pay the greatest return when a home is sold, and they estimated that a major kitchen remodel could cost $59,999, but the resale value would be $38,938. That’s still a 64.9% return on investment, but there’s a problem. When we talk to people about listing their home, they want the selling price to reflect what they paid for their house and how much money they put into it, yet guess who doesn’t care about those factors?


Unfortunately, when you decide to sell your house, you don’t make the decision about the selling price; you decide the listing price. The buyers, or the market, decide how much they are willing to pay, and they don’t care about what you paid for the house, what you owe on the house, how much money you put into the house, how you poured your blood, sweat, tears and memories into the house. Buyers want a good deal, and they don’t want to unnecessarily pay more for your house than a neighbor down the street recently paid for a similar property.

This may sound harsh, but it is all true. Sellers need to realize these factors up front so that they price their home to sell, not just to list. The first few weeks are when a new listing generates the most buzz and activity, so it’s best to get the price right from the very beginning than to throw out a number you’d like to get and see what happens.

If you’d like more information on how agents determine sale prices, click here to watch the A Team video on pricing.

If you’d like to see remodeling projects with the greatest return, click here.