Does Adding a New Air Conditioner Help Sell a Home?

Some realtors call adding a new air conditioner an “invisible upgrade,” because it’s hard to recoup that return-on-investment when you’re looking to sell a home.

This isn’t entirely true. It’s very dangerous to make blanket statements in real estate and this certainly qualifies. So, is adding an air conditioner really an invisible upgrade, or does it actually provide hidden value?

The Numbers at a Glance

The math doesn’t appear to make sense when you consider the fact that installing a new air conditioner will cost you between $3,744 and $7,221. Data also tells us that the average homebuyer is willing to pay $2,520 for air conditioning, which makes it look like you’re setting yourself up for a loss.

On paper, this new air conditioner isn’t going to add any value to your home or help you sell it. However, houses don’t live on paper — they live in the real world where things are considerably more complicated.

When Would a New Air Conditioning System Add Value?

It’s important to know that those figures don’t account for a number of factors, such as the climate.

If you’re selling a house in a colder area, no, a brand new air-conditioning system is likely not going to be a dealbreaker. However, if this house is in a hot and humidex-heavy climate, air-conditioning is going to be very high on the list of a buyer’s must-haves.

At the same time, an old system can hurt you more than a new system can help you. Is your current system demonstratively old, rusty and loud? It could be holding you back and replacing it could prevent a potential red flag from would-be homebuyers.

If a part of your home needs to be updated or replaced, it leads to conversations like, “Well that AC unit will clearly need to be updated. That’s $5000, right there, so let’s talk about maybe knocking a few thousand off the asking price.” Concessions are made and your sale price starts to drop.

An old air conditioning system could be a liability, particularly in today’s real estate market where homebuyers are looking for energy-efficient labels on appliances and HVAC systems.

Other Factors to Consider

As we stated earlier, the upper end of a new air-conditioning system may cost you $7000 to install. But there is absolutely nothing saying you need to spend that much money to upgrade. If you need a bit of help choosing the right AC unit for your home, you’re not alone. Most people know very little about their air conditioner or their HVAC system and end up overspending.

First of all, an air conditioner’s cost is largely determined by the SEER rating, because the higher the rating, the more you will pay. The highest rating you can get is 23, but a rating of 13 or 14 is definitely high enough for most Canadian homes.

You should also consider the time of year you are looking to buy a new air-conditioning system. Seasonality definitely affects prices in a big way and you can save as much as 20% if you buy at the right time.

Does buying a new air-conditioning system give you the same return-on-investment as most other home-improvements? Likely no, but if you’re selling a home in a major city centre with hot summers, it can make a bigger difference than you think. Also, an old and clunky system might actually be holding you back and hurting your offers.