How Much Value Can Replacing Flooring Add to Your House?

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Buying a house is a big purchase. Keeping it in top shape can be costly, so knowing what changes to make can be critical to increasing its value. Replacing the flooring teeters on the fence between increased house value and pocketbook liability; market factors, property appraisal and neighborhood comparatives will affect the bottom line and determine which way the valuation goes.

Valuation Factors

  • In terms of real estate appraisal, value is considered in terms of hard value (square footage, number of rooms, bathrooms, structural condition and neighborhood comparatives) and soft value (the cosmetic condition of the property as it pertains to marketability).

    If you want to increase value to facilitate a top-dollar sale, snazzy floor renovations may attract a buyer, but it doesn't guarantee increased value. According to the National Association of Realtors (NAR), the biggest increase in value to a house is bathroom and kitchen renovations (adding rooms and square footage). Although replacing the flooring may contribute to the home's market appeal and help a seller sell for the top dollar that his neighborhood comps designate, there is little evidence to suggest replacing the flooring adds hard value to a home's appraised value. Flooring, in terms of appraised value, is dependant upon the condition of the floor's structure (sub-flooring condition) and not on cosmetic appearance.

    A March 2009 article in "Realtor Magazine," From an Architect: 6 Affordable Ways to Make Your Listings More Attractive, by David Applebaum, suggests that going overboard on flooring won't net you increased value. According to Applebaum, flooring is an aesthetic choice that many people want to make for themselves; they don't like paying for expensive renovations they may tear out and replace.

Trends vs. Value

  • Trends may increase immediate market value but could actually decrease the home value later down the line and become a value liability. Trends are cyclical: That $25,000 exotic wood floor may be all the rage right now but may not hold up to the test of value when trends shift.

    The mortgage appraiser's evaluation will be the most significant factor in determining how much dollar value you'll gain by replacing the floor. House value, as it pertains to appraised value, is determined by comparing like with like, so if the majority of houses that have sold in your neighborhood have wood and/or tile flooring, and you've just replaced your floors with new vinyl, you're going to lose value in the appraisal; however, if you've upgraded your floors above the standard neighborhood comps, as long as your cost doesn't put you above the neighborhood cap, you can get a bump up in the value.

Equity vs. Value

  • What you owe on your mortgage is a factor in whether or not replacing the flooring will add value to your house. If your neighborhood sets the cap value as $300,000 for a 3,200-square-foot three-bedroom home and you owe $298,000 on your mortgage, changing the flooring will put you upside-down on value until your neighborhood valuation adjusts to accommodate the difference.

    According to Reggie Hock, a Realtor with Exit Realty North in San Antonio, Texas, national averages show that in a stable market, homes will increase in value up to 5 percent per year. "If you're concerned about adding value to a house, you must carefully weigh the cost of changing the floor against three factors: neighborhood comparatives, your aggregate mortgage and the current market conditions," said Hock.

Aesthetic Value

  • Enjoyment and sense of pride have their own worth. If you don't care about the consideration of monetary assessment, changing the floors will definitely add significance to your house; how much and what kind is subjective to your personal definition of value.

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