Doing your taxes isn’t fun, but getting a refund is! For the past five years, the average tax refund has hovered around $3,000, which is plenty of money to spend on a shiny new gadget or a trip to an exotic locale. However, if you’re planning to sell your home this spring, you should consider a trip to the hardware store instead.
“Spending your tax refund on sprucing up your home before you put it on the market can really pay off,” said Mia Simon, a real estate agent at Redfin. “A few simple improvements go a long way toward making a positive first impression when people tour your home, and that can lead to more offers and a higher sale price.”
Spending your refund on home improvement projects can result in a great return on your investment, but those projects can add up quickly. So where do you start?
Thumbtack, a site that helps you find the right professionals for your projects, teamed up with Redfin, a real estate brokerage, to determine which home improvement projects to prioritize if you only have $3,000 to spend.
“Financial planners often advise Americans to invest their tax refunds towards retirement or to save it for a rainy day,” said Jon Lieber, Chief Economist of Thumbtack. “And that’s solid advice, but putting that money into a home that’s soon to be on the market can generate an immediate return that can help boost your nest egg even further.”
First, Redfin agents identified four common home scenarios:
- The home could use some curb appeal: The interior of the home is in good shape, but the exterior has been neglected after a long winter.
- The interior has lost its sparkle: The exterior of the home looks good, but the interior needs a deep clean and/or small repairs.
- It’s hard to see past the junk: The interior and exterior are in good condition, but the home is full of clutter and needs to be organized.
- It needs a design makeover: The home is older and could use some updates to feel more modern.
With these scenarios in mind, Thumbtack analyzed thousands of quotes from professionals to get price estimates for services that would improve each type of home with a budget of $3,000. The estimates are based on the most common type of home according to the most recent Census; three bedrooms, three bathrooms and 2,384 square feet.
“If you have a small budget, you’ll want to focus on cosmetic changes that will wow people from the time they see photos of it online to the moment they walk in the door,” Simon said. “You may need to mix and match services depending on your home; definitely talk to your real estate agent to identify the repairs that will get you the greatest multiplier back on your $3,000 dollar investment.”
Now is the ideal time to get estimates and start scheduling appointments with professionals so your home is ready for its grand debut on the market. According to a recent Redfin report, homes listed between March 21 and June 20 sell faster and for more money than any other season.
If you didn’t get a tax refund or would like additional money to spend, you can enter to win $3,000 from Redfin and Thumbtack by liking us on Facebook and telling us which home improvement project you’d put the money toward. Visit the Redfin Facebook page for details! And if you plan to sell your home this spring, be sure to get in touch with a Redfin real estate agent to discuss which projects will work best for your home.