Home Improvements: What project has the best ROI?
19 Tuesday Jan 2016
19 Tuesday Jan 2016
08 Tuesday Sep 2015
Whether planning to sell the house, have it rented out, or simply for personal satisfaction, a little renovation and upgrade is always necessary to help increase its market value. In order to boost a house’s value in the market, it is first important to learn what prospective buyers or tenants are searching for in a house. For most homeowners, the biggest concern is usually the budget required for upgrade, renovation and home maintenance. The great news is that there’s no need to spend thousands of dollars for home improvements. Just follow these 10 tips for the best home upgrades to add home value.
10 Monday Mar 2014
Please consider these steps before listing your home for sale. As one of my Sellers discovered, you will sell it faster, with less headaches and at a higher price.
Attend to Cosmetics
It is easier to sell a house that is attractive to potential buyers, which means that you spend a little time and money on cosmetics. This is partly just a matter of making sure it is clean, the yard is neat, the driveway is swept, bushes pruned, and so on. Easily-fixed structural defects, like a loose shingle, should be fixed.
Houses almost always look better when furnished than when empty – they also look larger! If you are moving to another residence and plan to take your furnishings with you, if possible, arrange things so that you show the house before you move out of it.
However, if your house also has structural defects that are costly to fix, as mine did, the challenge is in deciding whether or not to fix them before sale.
Structural Defects
Every house has defects, some obvious and others hidden. Both types will affect the price a buyer is willing to pay. It is a mistake to think that a potential buyer will assume that the only defects that exist are those that are visible.
Serious buyers will most likely invest in an inspection by a firm that specializes in such services. The firm retained by my buyer produced a document of 22 pages of small print, plus many photographs. Buyers that don’t retain an inspector will probably assume the worst about the unseen condition of the house.
There aren’t many buyers who will pay a price based on the assumption that everything they can’t see must be OK. Pricing the house on that assumption is a good way to keep it on the market unsold indefinitely. While you continue to pay for utilities, taxes and insurance, the condition of the house worsens and your Realtor loses interest in trying to sell it.
Facing up to the issue means asking yourself whether you will come out better if you fix the structural defects, or if you offer it at a lower price “as is”. If the repairs cost $15,000 but it results in a sale price $20,000 higher, you want to do it. If the post-repair price is only $10,000 higher, you don’t. Which outcome is more likely depends on the circumstances.
When it Pays to Fix the House Before Sale
There are two circumstances that favor fix-up before sale. One is where there is a large variance in the cost of the fix-up, and a potential buyer is likely to over-estimate the cost. In the case of a septic system, for example, the cost depends on the condition of the soil, and if the seller knows that the condition is favorable and the cost low, it makes sense to fix it before sale.
The second and probably more compelling circumstance is where most potential buyers have the capacity to make only a small down payment, and are therefore not in a position to fund the cost of major repairs after purchase. By making the repairs before sale while setting a correspondingly higher price, a seller is in effect financing the improvement in the mortgage. If a buyer with limited cash had to make the improvements after purchase, the financing costs would be substantially higher.
But note that fixing structural defects before sale takes more time, which a seller may or may not have. In addition, depending on the type of defect, the value to a buyer may be less than the cost to the seller if the “fix” involves questions of taste.
When it Pays to Sell As Is
I sold my house as is because I had already committed to a new one and wanted detachment from the old one as soon as possible. Furthermore, the buyer who fell in love with my old house had the financial capacity to pay for all needed improvements. She didn’t need the larger mortgage that would have been obtainable if I had made the improvements. In addition, one of the required improvements to my old house was to a deck, which could be done in a variety of ways based on individual taste, and it made no sense to do it according to my taste.
Sellers Should Order Their Own Inspection
If a house has significant defects, the smart seller will order her own inspection, and in some cases, solicit estimates of the cost of required fix-ups. This will help in deciding whether the best arrangement is pre-sale fix-up, sale as is, or some combination of the two.
In addition, a seller-ordered inspection will tend to equalize the negotiating power of the two parties. I discovered this the hard way, when the seller used her report to drive down the price. Buyer-ordered inspections are designed, consciously or unconsciously, to provide bargaining ammunition for the buyer by exposing everything that is wrong or might go wrong. I did not have my own inspection, which would have emphasized the trivial nature of most alleged defects, and the small cost of fixing them. That was a costly mistake.
Thanks for reading!
03 Monday Mar 2014
If you’re planning on selling your home next year, now’s the time to start preparing. Selling your home can be a stressful process, but with a little foresight, some smart organizational moves, and the right resources, you’ll be well on your way to a successful home sale. Use this simple checklist to stay on track and get the best deal possible.
Do Your Research
Timing is everything when it comes to buying or selling a home. The national housing market has been steadily recovering, but can vary vastly from city to city. Talk to real estate professionals like Claire and Polly that you trust to get their advice and expertise to find the ideal time to start the selling process. They’ll be able to lend insight into where the market is headed and how it may impact your home sale.
Organize and De-clutter
When it comes to selling your home, sometimes it’s not about what you don’t have—it’s about having too much! Clearing out closets, paring down on piles, and tossing trash are some of the most cost effective ways to get top dollar for your home. Start these tasks early and take them on little by little to keep from feeling overwhelmed. The goal is to create a home that is open and bright. Consider a storage unit to help get larger items that you’re not ready to part with out of the way.
Make Minor Repairs and Upgrades
The smallest repairs can sometimes make the biggest impact on your home sale. Visit a local open house or two in your local area. Take note of the little eyesores that you notice, then turn the critical eye on your own home. Does your house need a new coat of paint? Are your bathroom fixtures outdated? These small, budget-friendly fixes can make a big difference when it comes to getting a great offer.
Hire a Experienced, Credentialed, Full Time REALTOR
The right real estate professionals can ease the stress of a home sale. Look for an agent who demonstrates expertise in your neighborhood, is full time, credentialed and is a REALTOR and/or BROKER. An experienced real estate agent can help you through the details of the home sale process and can help set realistic expectations for how much your home is really worth.
Consider Having a Pre-Listing Inspection
A pre-listing inspection will cost you a couple hundred dollars up front, but can save you money in the long run. The inspection will alert you to any issues ahead of time—which can be particularly valuable if you have an older home. You’ll be able to fix any minor issues ahead of time or allow a credit for the issue in the home price.
Set a Realistic Price
Many sellers have an emotional attachment to their home—as they should—but at times this can lead to unrealistic expectations for the market value of the home. Your REALTOR is your team leader in the pricing game. They’ll be able to walk you through what comparable properties in your neighborhood sell for and can help you settle on a realistic asking price. You should also be open to course-correcting your asking price if the market necessitates it. Evidence for the need for a price correction is best indicated according to the number of showings and buyer feedback.
Help by Listing Your Homes Best Features
Your real estate professional will help you create a strong sell sheet, but sometimes you know the best features about your home and neighborhood. Help your REALTOR out by sending them a quick note highlighting your favorite things about your neighborhood and community. The little details may be just the thing needed to get a buyer to pounce.
Prepare for Your Open Houses
Now’s the time to clean, clean, clean. Buyers will want to explore the nooks and crannies of your home and notice every detail. Keep pets out of sight, eliminate any strong odors, and open the drapes. You’ll also want to depersonalize the space so that buyers can picture themselves in your home. Remove an excessive number of photos of your friends and family or any strong indicators of your specific interests and hobbies.
While Showing Your Home
During the period where you are actively showing your home, you will want to be open house ready at all times. Best to leave all lights on and window coverings open to let as much light in as possible. Soft semi-classical music sets the mood. You never know when the best buyers will want to see your home. Even on non-open house dates, it’s smart to keep your home clean, the lawn and garden maintained, and any pocketable valuables and personal drug prescriptions out of sight.
Negotiate and Close the Deal
Once you get an offer, finalize negotiations, and get into contract, the hard work is almost over. However, deals can sometimes go south at the final moments. Cooperate with your home’s buyer, appraiser, inspectors, contractors, escrow providers and your local authorities to get your home sale transaction closed smoothly. Your REALTOR is the key to keep you on course.
Thanks for reading!