Let’s say you just listed your house for sale online and a frenzy of people are looking at your posting on all of the popular real estate websites. Do you think it would be helpful to understand what most buyers are focusing on when they look at a new listing for the first time? This article will help answer that question!
What Is “The Big 5 Upgrade” List All About?
First of all, when it comes to residential real estate what are “The Big 5”? This list represents the 5 most expensive items to upgrade that are commonly done in the home today. Let’s focus on renovated houses for this overview, because in a newly built home nothing needs to be replaced (we hope!)
The 5 Most Expensive Items to Upgrade Are:
- Replacing your furnace
- Installing new windows
- Replacing your roof
- Installing new siding
- Replacing your hot water heater
The Secret Of “The Big 5”
And here’s the secret, in today’s market where the price of homes has risen so rapidly, people tend to pay more attention to the items on this list than ever before. That’s not to say new kitchens, bathrooms, flooring, trim and paint are not important – this will almost always improve your chances of selling your home. The point is people who are looking to purchase homes today are very price sensitive, so if they can get a house that covers as many of “The Big 5” as possible, then the shiny and modern upgrades can wait. I’m not saying these aesthetic upgrades will never get done, but folks are searching for affordability more than ever and statistics show that there is a willingness to live in a home with a more dated interior (in a good area of course) in order to have the peace of mind that the more expensive upgrades are looked after.
What Are the Costs to Replace Each Item?
This depends on where you live and how high end you go. As an example, an asphalt shingle roof will cost less than a slate tile roof. Triple pane glass windows are more expensive than single pane. These prices are provided to give you an idea of the price range you might typically see in an average replacement. I used a typical 1,500 square foot bungalow for my estimates:
- Furnace: $7,000 – $10,000
- Windows: $10,000 – $30,000
- Roof: $8,000 – $15,000
- Siding: $8,000 – $25,000
- Hot Water Heater: $6,000
We know the same principle applies for bathroom and kitchen renovations, it is easy to spend $20,000 and these days that could be a very basic overhaul. If you have a dated home that you want to sell fast and only so much money to spend then I would consider directing that money at “The Big 5”. This takes care of some expensive and vital upgrades to the home, and your potential buyer can plan to upgrade the rest as time permits.
What Are My Options If I Don’t Have Any Upgrade Budget?
What if you don’t have any funds to direct at “The Big 5?” You still have options! You could always use some of the equity in your home in the form of a HELOC in order to do some upgrades. You could try your luck on the market and see if the home sells for a price that works for you. Another option would be to reach out to a local “we buy houses” company because they can provide you with an all-cash offer on your home. When you sell to these companies they buy as-is, so you don’t have to worry about any repairs or upgrade costs.
Tips For Replacing Each Item
1. Furnace
When replacing your furnace, you will want to make sure you contact a qualified HVAC professional. Google reviews and personal recommendations are very helpful with this. This is going to be a common theme anytime you hire someone to work in your home, but it is especially important when dealing with trades that require certification. Be sure to pick a furnace that meets your personal budget, sometimes you can spend more upfront on a more efficient furnace that will save you in the long run by using less electricity and burning less natural gas or propane, depending on how your home is heated. Be sure to have the install technician show you how to change the filter so you can do it yourself on a regular basis (every 3-6 months depending on the model of the furnace and filter used.)
2. Windows
When having new windows installed it is important to consider energy efficiency. The three items that effect energy efficiency are:
- Glass Type & Coatings – Installing windows with Low Emissivity Coatings will provide better energy efficiency. These coatings are best described as a thin, invisible, metallic coating that reflects heat while simultaneously allowing light to pass through. It helps keep heat inside during winter and outside during summer making it incredibly effective for northern climates!
- Double or Triple Pane Glass – Multiple panes trap air or gas between layers, improving insulation and reducing heat transfer.
- Gas Fills (Argon or Krypton) – These gases are denser than air, minimizing heat transfer and improving efficiency compared to regular air-filled windows.
Frame material is also an important consideration. Typical options are vinyl, fiberglass, wood, and aluminum. Vinyl is typically an affordable option that requires very little maintenance. It also has good insulation properties so it lends well to energy efficiency.
3. Roof
In Canada this is not a regulated trade, meaning anyone can start a roofing company and it is legal for them to work on your home. Kind of scary right? Choosing the best roofing company in your area is critical to make sure you get a quality install that will last a long time. Like all other items on “The Big 5” list, there are several different types of roofing products that vary in price and quality. The most commonly installed roofing material is laminate asphalt shingles. There are several manufacturers of this product, and they all offer great products. Your roofing contractor will point you in the direction of the product they enjoy installing and that they trust in performance. The reality is, if you choose the best product on the market, it will be a waste of money if it is not properly installed. Rely on Google reviews, past client testimonials, and personal references. Having a new roof will certainly help you sell your house fast!
4. Siding
Replacing your siding is a great way to improve the curb appeal of your home. Like roofing there are many types of siding you can install on your home and they vary in terms of performance, price, and quality. Some common options are vinyl, fibre cement, metal, wood, brick, and stucco. Vinyl is an economical option that offers a lot different colours, durability, and performs well in all climates. It also has very little maintenance. Fibre cement is a more expensive option, looks like real wood adding a higher end look to your curb appeal. This product performs well and offers virtually no maintenance.
5. Hot Water Heater
Looking for a budget-friendly option? Your best bet is a traditional tank water heater. These come in varying sizes depending on the size of your home and how many people are living there. This is an effective option, but once it runs out of hot water you have to wait for it refill. We have all been the one stuck with a cold shower! If you have a big family then I would go with a larger option. If energy efficiency is your focus, then a heat pump water heater is likely your best option. These take up a lot of space as they extract heat from the surrounding air and transfer it into the water in a large storage tank. This is what makes them so energy efficient, rather than creating heat (like a gas or electric hot water heater) they move existing heat from the air. If you are looking for unlimited hot water then a tankless water heater is your best bet, also known as a rapid hot water heater. These units heat water on demand but can have trouble supplying multiple appliances at once, depending on the size. The unit itself is smaller so it does save on space, but the upfront cost is typically more than traditional tank hot water heater.
Final Thoughts On “The Big 5 Upgrade”
Directing whatever budget, you have towards the items on this list are sure to help you sell your home quickly. People focus on these items when they look at new listings and see the value in these items more than ever. If you are going to replace any items on the list, remember to do your due diligence on the company you hire to work on your home. The cheapest option is rarely the best option, and in today’s world there is no excuse for not doing solid research on the company of your choice. Where possible speak to the owner of the company, and ask for references!
