Electrical tips to add value to your home

5 electrical upgrades that can increase your home's value

Jennifer Spinelli, real estate professional and CEO of Watson Buys, a homebuying company in Denver, told us it’s common for potential homeowners to ask for the last few utility bills of houses they’re looking at before making a decision to buy.

“This is a great way to get an idea of what kind of energy costs you may be looking at with the property and if there are any electrical upgrades that may need to be done in order to reduce those costs,” she explained.

To prepare for this and make your home more marketable, below are five changes that can lower those utility bills.

1. Install energy-efficient lighting

A beautifully decorated and well-lit space can certainly make your home more appealing to buyers, but it’s a good idea to make energy-efficient choices since lighting accounts for 15% of most utility costs. Homeowners can save about $225 a year by switching to LED lighting. It’s also a good idea to add dimmers since LED lights have the ability to run at reduced wattage if dimmers are installed.

» ON THAT NOTE: Energy-efficient mortgage: what it is and how to get one

2. Upgrade electrical panels

Potential buyers want to make sure they can run new appliances if they buy your home. If your home is older, your panel might not be able to power the most up-to-date air conditioners, washers or dryers. For example, fuse boxes are common in older homes, but they’re only rated for 60-amp service. Most modern homes need at least a 200-amp service.

A new electrical panel is likely to cost $1,000 to $5,000, but a home inspection that reports an out-of-date fuse box or panel might turn off potential buyers, especially since some insurers won’t cover a home with outdated service boxes.

» MORE: What does home insurance cover?

3. Add smart-home technology

High-tech smart thermostats, security systems and other timer-controlled technologies can impress potential buyers with their ease of use and automated features. (In fact, two-thirds of all buyers say they’re looking to buy a smart home.) Many insurers offer lower premiums — sometimes as much as a 15% discount — to those seeking a quote on a smart home.

You — or potential buyers — might be able to get up to a 15% discount on your homeowners insurance if your home has smart tech.

As far as electrical upgrades go, adding smart technology is a pretty low-cost way to add value. Some products, like Energy Star-rated thermostats, are eligible for a 30% tax credit. There are often little to no labor costs with these, since many smart products can be installed without help from a professional.

Edward, a ConsumerAffairs reviewer from Pennsylvania, was able to DIY-install their entire ADT security system. “Just follow the instructions,” he said.

A word of caution: The National Association of Home Builders points out that because this technology is so new and regulation is currently uneven, consumers should verify all claims made by smart tech companies before making a purchase. Consult reviews while shopping to make sure the product is living up to its promises.

» MORE: Best smart-home security systems

4. Install electrical outlets with USB ports

Items that are plugged in but not in use burn energy and raise your electric bill. For example, the AC adapter you plug into a USB cable to charge your cellphone, often called a “brick,” continues to draw power even after your phone is fully charged.

One solution is upgrading to smart outlets so you can remotely turn off the outlets when you’re not home, preventing plugged-in items from continuing to draw power. Many of these smart outlets have USB ports that let you plug your USB cable directly into the wall without a brick.

In addition to decluttering your plugs by removing bulky bricks, these USB outlets, which are fairly new technology, signal to buyers that you’ve made smart electrical upgrades to the house.

“Having reliable, properly installed outlets and switches can be attractive for potential buyers who are looking for convenience or are considering using a lot of electronics in their home,” Spinelli said.

5. Upgrade wiring and electrical systems

It’s a good idea to make sure your home’s electrical system is up to date since it’ll be examined during the inspection. Old or faulty wiring could cause a potential buyer to pull out at the last minute.

Many insurers won’t cover knob and tube wiring since it poses a fire risk, meaning buyers may not be able to get an insurance quote. Replacing knob and tube wiring typically costs $5,000 to $7,000.

While that may seem expensive, Adam Nelson, an electrician and co-founder of Young Cardinal Electric in Wesley Chapel, Florida, explained to us that some electrical repairs, like proper grounding, may be necessary before putting your home on the market.

“These requirements are dictated by insurance companies and the National Electrical Code,” he said.