When my husband and I were viewing the home we ended up buying, it was fairly empty. The previous owner was already starting to move on to his new residence, despite not having sold his home. My husband was enamored with the home, coming up with ideas left and right for interior decoration. I, on the other hand, saw only a nice space that needed work.
It took my husband a few months to get our house to start looking like it belonged in a magazine. We haven’t made any structural changes or had to fix major issues. But it makes me wonder what we would have paid had the house looked like this when we bought it, considering that most people would not have seen what my husband saw.
Technically, the interior design does not affect the material value of the home. Most of it will come with us if we ever sell the house. There are a few expensive pieces that increase the price of our insurance. If you’re wondering what homeowners insurance covers, it includes the structure and all contents unless they are particularly valuable (and fall under certain conditions). Our premiums only changed because we added individual pieces, not because the house is worth more now.
But that’s the thing about home values. They are to a large extent based on a number of factors that are loosely connected to the house. For example, the cost of other homes in the area, the supply available, and the demand for homes all make a huge difference. Ultimately, a house is worth as much as the highest bidder is willing to pay for it.
So, does something like interior design have any impact on the value people are willing to pay for a home?
We will get into how some interior design choices can increase the value of your home, but let’s start off with the design that has the most apparent effect. When you put your house up for sale, there are decisions you can make that will get people to pay for the home.
The most effective strategy is to use furniture and mirrors to increase the sense of space in a home. In determining the value of any home, the square footage is something that can be quantified, and people know they’re willing to pay more for more space. But few people could tell you how a space of a thousand square feet feels. As such, the sense of space is enough to increase the perceived value of your home.
Another common strategy is to stage the house using rented furniture. People pay to rent expensive furniture for their open house because this furniture makes the home feel more expensive. There is a sense that no homeowner would buy expensive furniture for a cheap house, and this is a smart strategy to eke up the home’s perceived value.
But let’s get back to the more organic interior design choices. The features that are likely to have the biggest impact on a home’s value are those that are permanent. If you replace cheap tiling with beautiful wooden flooring, the home’s value will increase.
This is also true for anything you’ve repaired in the home. When visiting an open house, people notice anything that’s wrong, even if it’s not urgent, and estimate how much that may cost them in the future. If your buyers never have to make these calculations, they may be happier to spend more on the home.
One reason that great interior design will make a home more valuable than if it was empty is that people are better able to see the potential. My husband could see how our home would look but I couldn’t. Based on how it looks now, I would’ve been more pliable to paying a higher sum.
However, it is probably the flipside that is more important. A home with interior design that looks old or just plain bad is likely to lose some of its value. It will simply attract fewer buyers, meaning you have to take the best offer you get.
Interior design rarely increases the actual value of a home. But it is perceived value that is more important, and design can make a significant difference.