Can hardwood flooring improve the resale value of your home?

Do hardwood floors increase a home's value

Absolutely!  Hardwood floors can help sell your home faster and for more money.  Why?  Because hardwood flooring is the preferred flooring choice and it improves the value of your home.  And, if you don’t believe me, ask any realtor, and they’ll tell you the same thing.

 

do hardwood floors improve the resale value of your homeIn fact, a majority of real estate agents surveyed by the National Wood Flooring Association said houses with hardwood flooring are easier to sell, sell for more money, and sell faster.  And, a study of home buyer preferences by USA Today using data from the National Association of Realtors found that the majority of home buyers were willing to pay more for a home with hardwood flooring, especially among buyers under the age of 55, and it seems to be especially important (and often expected) in homes in cooler to mid range climates (i.e. Northeast, Mid Atlantic/most of east coast, Mid West).

 

I often have people ask me about the Return on Investment (ROI) for hardwood floors, and I’m going to tell you that it’s flat out near impossible to find accurate  and recent data for this.  Virtually all of the Home Improvement ROI studies don’t include hardwood flooring as one of their projects (I have no idea why that is, but I find it kind of annoying because I’m pretty sure the ROI is very strong.)

 

Perhaps they don’t include it because it’s just too challenging for them to measure (especially in our area where so many of the houses already have hardwood flooring) or it could because hardwood flooring is in such demand that’s it’s either refinished or added as soon as someone buys a new home…and hence, they are far away from selling their home (and may not sell the house for another 20-30 years and by then, so many other home renovations have occurred and of course the market has changed as well.).

 

Does hardwood flooring increase your house's valueI have seen anecdotal reports estimating that the ROI probably ranges from 90% to 250%, but I’m not sure if these estimates have real or just perceived data behind them.  (Bear in mind that most improvements do NOT net you a positive return…kitchen and bathroom remodels generally only give you a 60-75% ROI).

 

Please note that improving value and return on investment are 2 different things.  They often go hand in hand, but they are two different questions.  1.  Does hardwood flooring improve the resale value of your home?  Yes, without a doubt.  How much?  That I can’t tell you.  2.  What is the return on your investment?  This is the golden question and there aren’t good data available.  But, most likely it is positive (and very positive, and probably one of the smartest investments you can make on your home). And, it appears to provide a higher return than most other remodeling projects (such as additions, kitchen and bathroom remodels).  And, as you’ll see, you’ll have a much better return on hardwood vs most other flooring surfaces.

 

The trend towards hardwood flooring keeps growing year after year.  Not only has it become more stylish (and more affordable), but also as allergies and asthma are on the rise, the number of home buyers requiring hardwood has increased.

 

what is the return on investment for hardwood flooringHardwood flooring is a smart investment not only because hardwood looks beautiful and feels luxurious, but they are also easier to clean and they last a long long long time.  In fact, most hardwood floors last well over 100+ years.  (We’ve even refinished many from the 1800s and several from the 1700s).  They are the real deal and they are an authentic part of our lives and homes.

 

Hardwood flooring adds more elegance and natural charm to virtually any room in the home.  Aside from its genuineness, hardwood floors are visually warmer and radiate an aura of warmth and friendliness within your home. From traditional to contemporary, wood flooring offers style and versatility, allowing you to decorate and redecorate without having to perform costly renovations.

 

While adding new hardwood floors will INITIALLY cost you more than carpet, in the LONG RUN, it will save you a lot of money.  Carpet gets dirty and worn and needs to be replaced.  Many replace carpet every 7-10 years.  As a rule of thumb (and costs and assumptions will vary), hardwood flooring usually costs around twice as much as carpet.  So, by the time you replace the carpet once, you’ve already spent at least as much as you did on hardwood (and that doesn’t even factor in that prices are rising over time…and rising more rapidly on carpet than hardwood (as carpet is petroleum based)).  Nor does it factor in the improved value for your home if you add hardwood (vs. carpet does not improve the value of your home).

 

hardwood floors increase a home's valueFor perspective, as a general rule of thumb, hardwood floors often cost 30%-50% more than laminate floors.  Hardwood improves the value of your home much more than laminate (in fact, it’s not clear if laminate will improve the value of your home…and this may depend on the neighborhood…it may have a modest impact in lower end areas and may have no impact (or potentially negative impact) in high end areas.  And, of course, hardwood floors will last way longer than laminate floors.

 

While hardwood floors need to be periodically sanded and refinished, please note that this cost is significantly lower than the cost of replacing the carpet, and with carpet you also have annual carpet cleaning costs.

 

Tax benefits of hardwood flooring

In addition, you have some tax benefits when you add hardwood flooring to your home.  Hardwood floors are considered a capital improvement, and therefore the sales tax is lower (it may vary by state, but most states charge tax on the material and not the labor for hardwood flooring).  For carpet, you have to pay tax on the full amount.  So, short term, you have an added benefit.

 

hardwood floors increase a home's valueSecond, there is a potential long term benefit on your taxes.  Because hardwood flooring is a capital improvement project, when you eventually sell your house, you MAY be able to reduce your capital gains tax.  This is more likely to happen if you own your house for a long period of time so that you’ve acquired a larger gain.  (Please note that I’m not a CPA and you should consult a tax consultant for your particular situation).

 

So, what does this mean if you’re going to sell your home soon?

 

Leverage your hardwood floors to help sell your house

If you have hardwood flooring (rather than carpet), your house will generally sell for a higher value and sell faster.  Any real estate agent will confirm this…after all, this is what buyers are looking for (especially Millenials and Gen X’ers

 

Can hardwood flooring improve your house's resale valueI work with a lot of real estate agents, stagers, home sellers and home buyers.  And, the preference is consistent.  And, it’s especially apparent when I’m working with new home buyers…they are almost always ripping up carpet and refinishing the hardwood underneath, as well as adding hardwood to rooms where it’s missing.

 

It is rare for carpet to remain in place with a new home buyerthey will almost always rip it up….either refinish the wood underneath, replace it with wood, or if it is a bedroom, some will replace it with new carpet.  If a room has been “lived” in, the carpet will be removed VERY quickly (usually by the day after closing).  The new owners are concerned about the germs, smells/odors from previous owners, not to mention that they rarely have the same taste in carpet style or color.  There are usually furniture indentations as well as areas where the carpet is stained or discolored from light (and it becomes very apparent after the sellers’ furniture has been moved out).

 

So, when a buyer sees carpet, they see a lower value and higher costs that they will need to pay to replace it.  This can reduce the offer on your home as well as increase your time on market.

 

So, if you are selling your home, what should you do/what shouldn’t you do with your flooring?

does hardwood flooring make your house sell fasterThese are some general recommendations.  Every house/community is different, as is the ability to spend to fix up your home.  I recommend that you consult your real estate agent and/or stager for advice.  I understand that when you are selling your house, you want to spend the least amount of money for the highest return.  So, in that context, here are my recommendations:

1.  If you have hardwood underneath the carpet, rip up the carpet and refinish the hardwood.  This is often one of the smartest investments you can make to sell your house.  It will make a HUGE difference and is well worth the investment.  It will make your home look nicer, often it will make it look larger and it will improve the value.  If funding is limited or if this is too inconvenient to do, then consider just refinishing the wood for some of the rooms to at least show that you have hardwood and what it looks like. 

 

Do NOT replace with new carpet.  This will cost you more and will be less appealing to home buyers.

 

2.  If you have hardwood that is badly scratched up, sand and refinish it.  If your hardwood isn’t in good condition, it will usually be worth it to sand and refinish.  This will make your hardwood look good as new and show your home at its best. 

 

Alternatively, if you don’t refinish the floors, your house won’t show as well and the new owners will need to refinish the floors…and they will factor this cost into the purchase price.  (And, in my area, refinishing hardwood is not terribly expensive, and most people think it costs more than it does…so you can either give them an allowance, allow them to guestimate the cost (which will be higher) or pay for it upfront.  I’d recommend (when you can), to refinish it before your house goes on the market…since you will pay for it one way or another, and it makes sense (in my opinion), to refinish them and have your house look its best so it will sell faster.  (And, generally selling faster means it will net a higher price).

 

Should you ADD hardwood floors to your home, if you’re selling it?

hardwood floors increase a home's valueWell this depends on your neighborhood and how your house compares to others in the area.  Usually, hardwood will improve the value of your home and can often be worth it.  But, there are also cases, especially in lower end neighborhoods or apartments where you may “over improve” your home and you may not be able to recoup the investment (e.g. if your target buyer is not going to spend more than a certain amount to buy your home give the area, schools, stage of life, etc). 

 

In general, in Westchester county, in mid to higher end homes, you will usually get back your investment, and then some.  But, I would advise you to consult your real estate agent and/or home stager to get their opinion. They know the market.

 

do hardwood floors add value to your homeOf course this decision also depends on your budget and how much you can invest to prepare your house for the market.  Also bear in mind that hardwood flooring is a capital improvement, so investing in hardwood floors can be a tax benefit as well when you sell your house (it could reduce your capital gains pending on your purchase and selling price.)

 

What color should you refinish your hardwood floors if you are selling your home?

This does depend on the style of the house, but generally when most people in my area are looking to sell their homes, I usually recommend going natural (the lightest option) as this is a) very neutral, b) makes your space look larger and c) generally costs less than doing a stain. 

 

However, there are exceptions to this.  First, in some older homes (e.g. tudors), light colors just don’t look right for the style.  In those homes often a dark brown  (e.g dark walnut) just looks better and it’s what buyers would expect in that type of home. (And, dark is super popular now).

 

Also, if your floors are really old/beaten up and/or have some water stains, you may need to select a darker stain to cover the imperfections.  Whatever color you are doing, I would try to avoid stains w/ red tones as these are polarizing – some customers love, others hate.  Brown tones or natural is more neutral and widely appealing, and that’s what you want when you are selling your home.

 

If your budget is limited, I would recommend the following:

  • dark hardwood gray walls - how to decorate and accessorizeIf you can’t afford to do “everything,” you may want to pay a professional to refinish the floors while you paint the walls and save money here.
  • If you can’t refinish all the floors, consider doing some of them so that buyers can see what the floors look like.
  • If you can’t afford to pay anyone to refinish the floors, at least rip up the carpets so that buyers can see there is wood underneath.  (You can even do this yourself for free…and you’ve already reduced the costs that the buyer needs to invest later.

 

Other useful articles:

 

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