Will an HVAC upgrade add value to your home?

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Will an HVAC upgrade add value to your home?

wondering if it is worth upgrading your AC unit first? Will an HVAC upgrade add value to your home? You should consider a few things.

You want to sell your home soon, but you’re not sure it’s worth upgrading your AC unit. Every home is different, and every homeowner’s needs will differ regarding their air conditioning unit. If you want to sell your home soon and are wondering if it is worth upgrading your AC unit first? Will an HVAC upgrade add value to your home? You should consider a few things. The answer that keeps coming up is whether it’s a buyer’s or seller’s market.

A well-respected real estate broker in my circle, Martin Atencio, owner of Bear Flag Realty, answered this question for me:

He said, “The more recent the upgrade, the more value you can expect from an appraiser. A lot of variables come into play. Do the comparable properties in the market also have upgraded AC systems? Who is the utility company, and what are their rates? And was the upgrade made known to the appraiser?

Rarely would it ever be a dollar-for-dollar return, but it will make your home more marketable, and that alone holds value, especially in a shifting market where buyers have gained power. If it’s no longer a clear seller’s market; buyers can demand more.”

He added, “Most questions are around the age of system and life expectancy. This is a hot topic during property inspections. In a seller’s market, if it’s working, that’s all sellers have to consider. In a neutral or buyer’s market, buyers are pickier about what the home lacks. My thought is always upgrade sooner than later so you can enjoy those upgrades while still in the home.”

Let’s touch on those comments.

Make sure the appraiser is aware of your new AC system. Let them know how old the air conditioner and furnace are. It might be favorable to let them know if it’s not only new but that you bought a more efficient two-stage unit rather than a single-stage one. Most appraisers will give you back at least 75% of your spending on a new system. Not only will this make your home more marketable, but it’ll also keep you comfortable while it’s on the market.

Think about the cost of the upgrade versus the potential return on investment. How much will it cost to upgrade, and how much more will you be able to sell your home for because of the new unit? About $10,000, depending on what market you’re in. Upgrading your AC unit before you sell is almost always a good idea. If you can think ahead on this, say two or three years before you sell, go ahead and upgrade the 20-year-old system and enjoy it for a little while.

Do the other homes being sold in your area also have newer systems? It’s hard to know that answer. You have to think that your house on the market with a two or three-year-old AC system will be perceived in a much more favorable light than the others on the market that have older, shabby equipment. If they’re not willing to invest in newer appliances before they put their house on the market, they can fall behind in the race to sell.

Who are the utility companies – and what are their rates? Check out my SEER Comparison Calculator blog, where I discuss this. If you go to my “Products” page, towards the bottom is the actual calculator; you can input those numbers yourself. The calculator can help you determine how much money someone can save by upgrading their older system to a new modern efficiency HVAC system. Knowledge is power.

If the HVAC is already pretty old, potential buyers may be turned off by its lack of energy efficiency. On the other hand, they may be more inclined to pay attention to its higher efficiency rating if it is a newer model. It also matters whether it’s a buyer’s or seller’s market. Don’t forget to let the home appraiser know about it too.

Ultimately, whether or not you decide to upgrade your AC unit before selling your home is a decision that only you can make. However, these factors will come into play when it comes time to sell your house. Hopefully, this helps answer “Will an HVAC upgrade add value to your home?”

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