Home Sellers Blog

Report: Minor Home Improvements Offer Best Return

A recent release by the Appraisal Institute advises homeowners to choose upgrades instead of major remodeling projects to see the greatest potential return on investment.

“In general, simpler, less expensive projects have the best cost-to-value ratio,” says Appraisal Institute President M. Lance Coyle, MAI, SRA. “With the spring home buying season around the corner, homeowners should invest in projects that are most likely to preserve the value of their homes.”

According to Remodeling magazine’s most recent Cost vs. Value report, only five projects saw their cost-to-value ratios rise in 2014: roofing replacement, garage door replacement, 20-gauge steel entry door replacement, vinyl siding replacement and fiberglass entry door replacement. Among projects with the biggest declines were two-story additions, composite deck additions, master suite and kitchen remodels.

Other minor projects with potential major payoffs, says the Cost vs. Value report, are mid-range and upscale garage door replacements, manufactured stone veneer, mid-range window replacements and minor kitchen remodels.

Coyle says that some homeowners might choose to fund home upgrades with tax refunds. Before calling a contractor or heading for the home improvement store, however, he says they should consider if the improvement is in keeping within community norms.

“It’s possible that consumers won’t be able to recoup the cost of the upgrade when the home is sold, so it’s important to meet, not exceed, what’s standard for the neighborhood, and to also consider expected length of time in the property,” Coyle says.

He also says that making routine home repairs is essential to maintaining a home’s value. A house that has been well maintained likely will have a higher value than a similar house that is in disrepair, Coyle says. For example, replacing worn out trim boards may in certain situations not add any additional value to the home, other than to preserve the value that would be likely as evidenced by sales of similar homes in the area that do not have worn-out trim boards.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a qualified real estate appraiser to conduct a feasibility study.

During a feasibility study, the appraiser will analyze the homeowner’s property, weigh the cost of rehabilitation and provide an estimate of the property’s value before and after the improvement.

Some green and energy-efficient renovations – such as adding Energy Star appliances and extra insulation – are likely to pay the homeowner back in lowered utility bills relatively quickly. Lower utility costs also are a draw for potential homebuyers. When valuing a home, the appraiser evaluates local supply and demand for green and energy-efficient properties and features.

For more information, visit www.appraisalinstitute.org.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes of The Carolinas
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

5 Inexpensive Steps to a Speedy Home Sale

If you’re a homeowner considering a move, you may be wondering what’s next. Do I need to renovate the kitchen? Repaint the exterior? Replace the flooring? Before taking on a costly remodel, consider this: these measures don’t always recoup the highest percentages in return. Many sellers have much more success by investing in upgrades that boost their home’s value in the process. The best part? Both sides of the transaction profit.

Consumer Reports recommends completing these updates:

1. Paint key rooms.
In the grand scheme of things, painting is one of the least expensive ways to freshen up your home for sale, but it can cost up to $300 a room if you’re hiring a pro to do your entire home. Save big by painting just a few select areas: high-traffic rooms, like the kitchen and bathrooms, and rooms with brightly-painted walls. You can save even more by doing the project yourself – a gallon of paint averages about $30.

2. Spruce up the exterior.
Your home’s exterior is the first impression for many buyers online and in person. Aside from keeping up with maintenance like mowing the lawn and trimming shrubs, assess the outside of your home for any repair work – a fading front door, cracked siding or a loose step – that needs to be completed before selling. And don’t forget about the roof. If it needs to be replaced, choose an inexpensive but durable option, like standard, three-tab asphalt shingles. They cost approximately $75 per 100 square feet, including installation.

3. Upgrade the bathroom.
Bathrooms can become a point of contention for buyers if they’re not in tip-top shape. Rather than taking on an expensive renovation, make minor upgrades that have an impact. Caulk the tub, re-grout tile, and install new fixtures. Larger, less costly fixes are also a possibility if you know where to look – a new vanity, for instance, can cost less than $1,000 if you shop around.

4. Make kitchen repairs.
Buyers want to be wowed by the kitchen, but that doesn’t mean you have to fork over tens of thousands of dollars to make that happen. Focus on making repairs that cost well under $500, like tightening a leaky faucet or eliminating burn marks on countertops. For a cheap alternative to repainting your cabinets, consider updating your hardware in a modern finish.

5. Clean, clean, clean.
Even if the home has been renovated top to bottom, a messy appearance can be the ultimate deal breaker. Fortunately for sellers, de-cluttering and de-personalizing doesn’t have to cost a dime. A short list that will help buyers visualize living in the home:

– Vacuum, dust and wipe all surfaces regularly while your home is on the market.
– Pare down closets to the bare essentials.
– Replace family or otherwise personal photos with neutral wall art.
– Cut clutter in cabinets and on bookshelves.
– Keep counter and tabletops clear, especially during an open house.

If the project is overwhelming, consider hiring a professional cleaning service or organizer to cut through the chaos. A pro can cost anywhere from $600 to $2,500.

Source: Consumer Reports

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Full Disclosure: How Pre-listing Home Inspections Even the Score for Sellers

By Jay Gregg

When we were kids, we stuffed our closets full of our toys in lieu of putting them neatly away, hoping that our parents would never find the mess we made. We thought we could spend as little time as possible on chores to maximize the amount of time for fun. But eventually, we would come to learn that, time after time, our parents would soon enough find our mess, negating any time saved—and then some.

That lesson is just as germane for those looking to sell a home. Unfortunately, many fail to translate that knowledge to the process of putting a house on the market, with sellers often deferring the home inspection process to buyers. In doing so, sellers are making the same mistake we made as kids, hoping that any surprises won’t make themselves known to buyers. Only now, the consequences of their inevitable discovery are far more serious than earning a grounding.

For the small price of a pre-listing inspection like that offered by Pillar To Post, sellers stand to save big when it comes time for a buyer to put pen to paper and complete the transaction. Below are just a few of the many benefits of having a pre-listing home inspection done.

You stand to earn a return far closer to your initial asking price.
When a buyer invariably performs his or her own inspection, should he or she find undisclosed flaws, you stand to lose more money off your initial asking price than you might assume. In fact, for every flaw a buyer finds that would cost $1,000 to fix, you stand to lose $3,000-$5,000 off your asking price. In truth, the average buyer doesn’t really know what it would cost to fix an issue found. Yet the fact of the matter is, flaws that are not made apparent to buyers before their own inspections are performed are seen as far more egregious than those disclosed beforehand, even if you bring an issue to their attention and make it known that you won’t fix it. It really comes down to a basic cost-benefit analysis: For a $500 pre-listing inspection, a seller could stand to save thousands more than the costly perception of an undisclosed flaw.

You become the most knowledgeable person about your listing.
It may seem self-evident, but a pre-listing home inspection report will make you the most educated person on a listing. Yet sellers often fail to see the value of being completely aware of a home’s condition before trying to sell it. While a seller might be legitimately ignorant of a home’s flaws, that ignorance is no excuse to initiate the selling process blind to a home’s condition. Should a would-be buyer’s own inspection turn up hitherto unknown flaws, the seller appears incompetent at best and as though he or she is taking part in deceptive obfuscation at worst. By having a pre-listing inspection performed, you can be the authority on your property, conveying both credibility and expertise to a buyer.

You gain considerable leverage in the negotiating process. Beyond connoting competence and professionalism, you stand to gain considerable leverage during the negotiating process by having a pre-listing home inspection. With Pillar To Post, for example, you are given a full report on the condition of the property, leaving you to determine which changes are worth fixing on your own, and which are better left to the future owners. Many changes that need to be made are inexpensive, affording sellers the opportunity to nip them in the bud before they can become known to others. But if you find some issues that would cost more to fix than you care to spend, you can get your own direct quote from a respected home repair professional about how much it would take to fix them. You can, in turn, pass them onto a would-be buyer, saving them time by giving them an accurate, upfront assessment of their potential costs.

Moreover, Pillar To Post prints a hard copy of a completed summary—including pictures—that sellers can leave sitting on the table at an open house, for example, which goes a long way in conveying transparency and integrity within the process. This helps to build trust and ensures a smooth, open transaction. Save for meeting disclosure requirements, a seller is not obligated to share the pre-listing report with potential buyers. But in the event that a seller wishes to leave found issues to the would-be owners, it’s entirely possible to convey that fact in a way that suggests you’re still providing a service—issues that would necessitate having to repaint a wall, for example, could be articulated by suggesting that the buyer would probably want to paint it in his or her own preferred color.

When it comes down to it, we’ve found that homes that have had a pre-listing inspection sell faster and at a price far closer to the listed price relative to homes that have only had a home inspection performed by a buyer. Pre-listing home inspections make you better informed, give you control over issues that are found, and make it so that you stand to make a far greater return on your investment. It’s a worthwhile step that should be an integral part of any real estate transaction.

Jay Gregg is Pillar To Post’s director of Marketing, as well as a certified home inspector based in Orangeville, Ontario, Canada.

For more information, visit www.pillartopostfranchise.com.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Tips for a Faster Sale at a Higher Price in 2015

Many homeowners today are wondering how to improve the appearance of their property for a faster sale at the highest possible price. With the start of 2015 around the corner, now is the ideal time to consider a variety of fresh and creative ways, both big and small, to achieve the goals of increased functionality, visual appeal and resale value.

1) Make kitchen improvements a top priority. Your kitchen is the most utilized room in your home, a place where families and friends gather for daily meals and holiday celebrations. The kitchen space, now more than ever, serves as a central gathering point and an extension of living and family rooms, the so-called great rooms. It’s also one of the most important areas that buyers look at when searching for a home. An updated kitchen is great for resale value.

2)  Make small, cost-effective improvements for a fresh look. Painting, whether interior or exterior, is relatively low-cost and adds a quick revamp to your home. Another way to improve on a small budget is by cleaning up and trimming landscaping, and adding new, affordable plants. Adding new plants will give your yard a pop of color and won’t break the bank. You want the best first impression and “curb appeal” for your property, and fresh flowers and landscaping will add allure to the outdoor area.

De-cluttering is another easy step, and makes a big difference in making the home look larger.

Imagine that you are a prospective buyer seeing your home for the first time, and use that critical eye as a guide for getting your property into shape.

3) Pay attention to market trends. When looking to make renovations to your home, pay attention to what will also contribute to resale value. For example, modernized bathrooms and showers are important to homebuyers. Also, creating an open floor plan for the living space, and choosing dryscape and water-conserving landscaping can be effective. Pay attention to market trends and any new and important features for homebuyers. This will help make sure you get the best return on your renovation investment.

4) Stay neutral. Keep your color palettes centered on neutral earth tones when renovating, while incorporating some contrast. You want to appeal to the largest selection of buyers, and neutral colors make it easier for buyers to visualize living there. Also, neutral colors can easily be painted over to meet buyer preferences. The most important thing is for the buyer to be able to visualize the home to meet their tastes after they make the purchase. It will be harder for the buyer to picture this with loud and outdated, odd colors throughout the home.

5) Look at houses in your neighborhood that have recently sold. By checking out homes that are for sale and have recently sold in your neighborhood, you can get a better idea of where to improve. Which styles and finishes garnered the best values? Hire a licensed and experienced contractor familiar to the area. Decide which areas of the home are most important and serve as the best areas to spend your money to see the highest return.

6) Don’t over-improve. This is a common mistake among many homeowners, especially when deciding to take on a home renovation project without the help of a professional. If you over-improve and spend money on unimportant remodeling projects, you won’t see a return on your investment, particularly if the work makes your property the highest priced home in the neighborhood.

If you are unsure of which renovations to make, and where to spend the money, it’s best to get the opinions of professionals. Consult multiple contractors, compare notes and make an informed decision on where to improve, including the areas that aren’t as critical to be updated.

7) If it’s too tough to DIY, hire a professional! Make sure to hire a professional before taking on a project that’s too tough to do it yourself (DIY). The last thing you want is to spend the money to start a home renovation project before realizing that you are in over your head, and need to spend additional funds and time hiring a professional to correct your mistakes. Before starting a project yourself, be 100 percent confident that you can finish the job correctly on your own. If not, you will save time and money by hiring a licensed contractor.

Source: Renovation Realty

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Q: What Should I Do to Prepare My Home for Sale?

A: Start by finding out its worth. Contact a real estate agent for a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties.  Or get a certified appraiser to provide an appraisal.

Next, get busy working on the home’s appearance.  You want to make sure it is in the best condition possible for showing to prospective buyers so that you can get top dollar.  This means fixing or sprucing up any trouble spots that could deter a buyer, such as squeaky doors, a leaky roof, dirty carpet and walls, and broken windows.

The “curb appeal” of your home is extremely important.  In fact, it is the first impression that buyers form of your property as they drive or walk up.  So make sure the lawn is pristine – the grass cut, debris removed, garden beds free of weeds, and hedges trimmed.

The trick is not to overspend on pre-sale repairs and fix-ups, especially if there are few homes on the market but many buyers competing for them.  On the other hand, making such repairs may be the only way to sell your home in a down market.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.