First impressions matter in any housing market—but all the more so now that home sales are cooling. So, presale renovations may become more commonplace as home buyers, who are already stretching their budgets, seek move-in-ready properties. More renovation companies are partnering with real estate professionals to offer this kind of help. The companies work with pros to decide what home updates are needed based on the return on investment, handle the design and renovation work, and offer financing options so homeowners don’t have to pay up front. Owners can use the proceeds from the sale of their property to pay for the remodeling work later on.

Presale renovations can make hard-to-sell properties more attractive to buyers and boost the final sales price. One case in point: A townhouse in Charlotte, N.C., had not a single cosmetic improvement since it was built in 1999. The home’s cabinets and flooring were outdated, the countertops and bathrooms had old-fashioned tile, most of the appliances and lighting fixtures no longer worked properly and the paint colors did not reflect current trends, says Will Allen, owner of Renovation Sells Charlotte, a home improvement company specializing in presale renovations.

“In the current real estate market, it is more important than ever to understand what buyers are looking for,” says Kathryn Heynen, a sales associate at Cottingham Chalk who was the listing agent for the townhome. “As a seller’s agent, I encourage my clients to get their home as market-ready as possible.”

Prior to the renovation, the three-bedroom, two-and-a-half bath townhouse was valued at $340,000. Renovation Sells recommended $64,000 in renovations. After the four-week project, the home was listed at $495,000—and in just two days, it sold for $570,000. That’s a 350% ROI on the renovations. “We’ve been in a killer market,” Allen admits. “But still, our design team’s vision is what truly made this listing take off. The design brought this listing even more attention.”

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A Hands-Off Renovation Process

Renovation Sells met with Heynen and her client during the planning phase to collect input to ensure that they made the most impactful design decisions for ROI while staying on budget. An in-house design team familiar with local trends presented proposed materials, colors and finishes. Once approved by the agent and seller, the firm completed the work.

The key cosmetic changes prioritized for the townhome centered in the kitchen and bathrooms, which, in general, tend to offer the highest ROI. These also were the most outdated features inside the home, Allen says. “Countertops, cabinet refinishing and backsplash truly made the biggest difference,” he adds. In the owner’s suite, the bathroom also got a refresh with new flooring, paint, lighting and fixtures.

Allen says his company most commonly recommends upgrades in paint, flooring, the kitchen, bathrooms, landscaping and exterior curb appeal because they tend to generate the biggest ROI.

Presale renovations could become even more important as the market cools, Allen says. “Coming out of a hot market like we’ve been having, agents and sellers are having to shift their expectations. What worked over the past few years—list a home as-is and having it sell the same day above asking price—just won’t cut it with higher interest rates and lower demand. Agents are now educating their sellers that in order to maximize their sales price, they need to make smart updates to get homes Instagram-worthy and move-in-ready.”

Allen, who has a construction management background and a real estate license, says cosmetic adjustments—big or small—can help generate higher final sales prices. “There’s nothing I love more than creating a vision for a property and transforming it into something truly beautiful,” Allen says. “Almost all of our business is working with REALTORS® and their clients, whether it’s to prepare a listing or make cosmetic changes before the client moves into their new home.”