Homeowners face major decision: Fix up before moving up?
By Kathy Flaxman, Toronto Star
Ken and Grace Bugg have lived happily in their midtown Toronto home for over 20 years, bringing up their family and enjoying life’s pleasures: tennis in the summer and curling in the winter.
Semi-detached, it’s a home with a good sized lot in a good neighbourhood in the city. Three bedrooms, one bathroom, plus a powder room and partly finished basement make it pretty standard fare.
Next door, a home sold for close to a million big ones after a complete renovation and addition. Down the street, mansions, one recently listed at $5 million, back onto the ravine system, with untold luxuries ensconced inside.
But the Bugg home is modest and for a few years they have been considering renovating. Maybe a new kitchen? Or a family room addition spreading into the spacious back garden? Grace has been pulled by the appeal of the condo life – after all, the couple is the proud owners of a gorgeous Haliburton A-frame cottage with all the bells and whistles.
If the Buggs were to sell, should they renovate first? If they were to spend $50,000, say, and get a $100,000 more would it be worth the hassles and the gamble?
And let’s not fool ourselves, it is a gamble. If you renovate a home to your own taste, and nobody likes your style, you will create a big brick lemon.
“Renovation before sale can be good, but people should try to stick to items that will improve the esthetics and the layout and create sex appeal,” says Monika Merinat, a broker with Coldwell Banker Terrequity Brokerage.
“They will get their money back and more if they do things like a new kitchen or bathroom. Floors can do a lot for the selling price. But doing it all, roof, electrical, plumbing and so on may not provide an immediate return. Of course, it all depends on the house.”
Interior designer Nathalie Thorel, of Interior Affairs, is likewise wary.
“I am not sure I would go through substantial renovations to then put the house on the market myself. Going through renovations while you live in the house is extremely stressful and disruptive and you have to be sure that you will be able to at least cover your expenses. How do you know whether you’ll encounter a loss or a gain,” she asks.
Samantha and Craig Thomson sold their 60-year-old ranch-style bungalow near Eglinton Ave. E. and the Don Valley Parkway this spring after a complete renovation where they transformed the basement into a one-bedroom apartment where they and their 11-year-old daughter Hannah lived for eight weeks during the rest of the construction. “We’d lived in the home for eight years before we decided to move, but we hadn’t bothered to do the work,” Samantha explains. “We’d been looking at homes and knew what was selling and what wasn’t and we could see that by renovating, we would get more.”
Craig Thomson, a contractor with a toolkit full of skills, was able to do a lot of the work himself, along with Samantha’s father, which saved a lot of money. “Craig did all the plumbing, tiling and carpentry,” Samantha says. “We replaced the kitchen and put in a slate tile floor and new stainless steel appliances. We gutted the bathrooms, put new windows and baseboard everywhere plus all new doors and handles. We kept a very simple colour scheme of greys, beiges and whites. Overall we spent just under $40,000, but it would have been a lot more if we hadn’t been able to do so much of the work ourselves.”
Living in a basement from February to April with the noise and mess – including plaster dust – to contend with doesn’t sound like fun. Was it worth it? According to Frank Petriglia, a broker with Coldwell Banker Terrequity Realty Inc., the listing agent for the property, the home would have sold for about $499,000 without the renovations, but sold for $660,000 with them.
“The important thing to remember when doing something like this is that you need to have a firm budget for the work you are going to do and you need to stick to that budget,” he stresses. “I was in the construction business myself and I can pretty much tell my clients what to do and how much it will cost,” he says.
But not everyone has the luxury of being married to (or being) a contractor. Or wants to camp out or move house when earning some extra money from a sale is only a possibility.
So where does this leave the Buggs? Should they renovate or should they skip the headaches and sell as is? Thorel is definite. “This house is full of potential. The lot is wonderful and it’s close to excellent schools and shopping. But it would ideally be gutted,” she says.
And Merinat thinks that as the home is semi-detached, the money might not be recouped. “I say as it is it may go for low in the $600,000 range; with some improvement, $650,000 – maybe $670,000 – depending how it looks at the end.”
Grace Bugg is prepared to stay in the home as is, if not forever, for now. “I have seen some acquaintances make huge changes in their lifestyle and their home and regret those changes,” she says. “So for now, I am happy to stay as we are.”
First published in the Toronto Star on Feb. 9, 2012.