Monday, January 07, 2008
Some Home Fix-ups are Worth Skipping - Pre-Inspections
Some Home Fix-Up Tasks Are Worth Skipping
By Amy Hoak From The Wall Street Journal Online
If your New Year's resolution is to sell a home in 2008, it's probably time to start thinking about how to make that home stand out from the rest.
But before planning any projects, beware: Homeowners aren't recouping as many improvement costs as they could in recent years, according to a recent study by Remodeling magazine. In fact, real-estate agents advise clients not to overdo it, regardless of what the local market conditions are like.
"It's more important that it's neat, it's clean and it looks spacious, rather than making sure it's the top of the line," said Cheri Kuhn, owner-broker of Waters Realty in Minnetonka, Minn. She cautions her clients to bypass projects that aren't necessary.
"The thing I find with sellers: If they do a lot of remodeling, they will take the cost of the remodeling and add it to the cost of the home and ask the buyer to pay for it," she said. Often, though, sellers won't get that higher price.
The reason is that asking prices are based largely on comparisons with similar homes in the area, Ms. Kuhn said. And in the many markets that aren't exactly booming right now, buyers have more negotiating power over the price of a home.
To keep costs down and spend remodeling dollars wisely, consider the following tips.
1. Ask for advice. Before making any remodeling plans, clear your home of clutter and rent a storage unit, if necessary, to hold extra stuff while the home is on the market, said Shannon Aldrich, a Realtor licensed in Maine and New Hampshire with Keller Williams Coastal Realty. Then, get some advice from a local real-estate agent on how the home stacks up against the competition.
"I see more houses in a month than most people see in their lifetimes," said Ms. Aldrich, whose blog includes a series about getting rooms ready to sell. Sellers can use that experience to their advantage when deciding what projects to do.
When Ms. Kuhn first meets with clients -- sometimes six months before the house is listed -- she makes a prioritized list of improvements that will make a difference. Cleaning the carpets, painting the walls and removing wallpaper are common fixes. It is wise to budget for these tasks before putting money aside for more expensive projects.
2. Dig deeper. It also could pay to look below the surface by getting a home inspection before listing the property. That way, problems that could hold up a sale are addressed in advance, said Dan Steward, president of Pillar to Post, a home-inspection company in Tampa, Fla.
Some estimate that for every dollar of perceived defect, buyers want a $2 to $3 discount, Mr. Steward said. If that's true, it might pay to spend $2,500 to replace an old furnace.
Also, replacing something as necessary as a furnace helps create a favorable perception of how well a seller took care of the home, Ms. Kuhn said. If there is a problem with an essential element of the house, a buyer might think, "If that was neglected, what else was?" she said.
3. Look outside. Pay attention to exterior details like the condition of siding and windows, Ms. Aldrich said.
According to Remodeling magazine's 2007 Cost Vs. Value Report, a wooden-window replacement recovers on average 81.2% of its cost at resale, and siding replacement recovers on average 83.2% of its cost. The payoff for those projects is much better than for an upgrade that a buyer might not need. A home-office remodeling, for example, recovers 57% of its cost on average. The estimates are national averages for midrange homes, not upscale ones.
4. Spend time in the bathroom. Freshening up the bathroom doesn't have to be expensive, but it could be important.
"People will put up with a lot of cosmetic challenges in a house if they know they could use the bathroom right away," Ms. Aldrich said.
It's most important for the bathroom to be clean, but sellers should also consider replacing the fixtures, tub, sink and toilet -- if they need it, she said. Replace cracked tiles and curled linoleum.
The replacements don't have to be expensive, Ms. Aldrich added. A toilet can cost less than $250, and she recommends taller, handicap replacement toilets to appeal to an aging population.
5. Keep it small in the kitchen. The other room that often sells a house is the kitchen, but it might be best to keep renovations modest. Remodeling magazine's report found that homeowners could recover 83% of the cost of a minor kitchen remodel at resale, compared with 78.1% of a major kitchen remodel.
Ms. Kuhn cautions her clients not to replace refrigerators, stoves or dishwashers. Buyers considering remodeling the kitchen will likely have their own preferences, she said.
Along those same lines, sellers should replace a countertop if it is crumbling but not if its only fault is that it is outdated, Ms. Kuhn said. Even then, seriously consider material costs: There is no need to update to granite unless the competition has granite countertops as well.
By Amy Hoak From The Wall Street Journal Online
If your New Year's resolution is to sell a home in 2008, it's probably time to start thinking about how to make that home stand out from the rest.
But before planning any projects, beware: Homeowners aren't recouping as many improvement costs as they could in recent years, according to a recent study by Remodeling magazine. In fact, real-estate agents advise clients not to overdo it, regardless of what the local market conditions are like.
"It's more important that it's neat, it's clean and it looks spacious, rather than making sure it's the top of the line," said Cheri Kuhn, owner-broker of Waters Realty in Minnetonka, Minn. She cautions her clients to bypass projects that aren't necessary.
"The thing I find with sellers: If they do a lot of remodeling, they will take the cost of the remodeling and add it to the cost of the home and ask the buyer to pay for it," she said. Often, though, sellers won't get that higher price.
The reason is that asking prices are based largely on comparisons with similar homes in the area, Ms. Kuhn said. And in the many markets that aren't exactly booming right now, buyers have more negotiating power over the price of a home.
To keep costs down and spend remodeling dollars wisely, consider the following tips.
1. Ask for advice. Before making any remodeling plans, clear your home of clutter and rent a storage unit, if necessary, to hold extra stuff while the home is on the market, said Shannon Aldrich, a Realtor licensed in Maine and New Hampshire with Keller Williams Coastal Realty. Then, get some advice from a local real-estate agent on how the home stacks up against the competition.
"I see more houses in a month than most people see in their lifetimes," said Ms. Aldrich, whose blog includes a series about getting rooms ready to sell. Sellers can use that experience to their advantage when deciding what projects to do.
When Ms. Kuhn first meets with clients -- sometimes six months before the house is listed -- she makes a prioritized list of improvements that will make a difference. Cleaning the carpets, painting the walls and removing wallpaper are common fixes. It is wise to budget for these tasks before putting money aside for more expensive projects.
2. Dig deeper. It also could pay to look below the surface by getting a home inspection before listing the property. That way, problems that could hold up a sale are addressed in advance, said Dan Steward, president of Pillar to Post, a home-inspection company in Tampa, Fla.
Some estimate that for every dollar of perceived defect, buyers want a $2 to $3 discount, Mr. Steward said. If that's true, it might pay to spend $2,500 to replace an old furnace.
Also, replacing something as necessary as a furnace helps create a favorable perception of how well a seller took care of the home, Ms. Kuhn said. If there is a problem with an essential element of the house, a buyer might think, "If that was neglected, what else was?" she said.
3. Look outside. Pay attention to exterior details like the condition of siding and windows, Ms. Aldrich said.
According to Remodeling magazine's 2007 Cost Vs. Value Report, a wooden-window replacement recovers on average 81.2% of its cost at resale, and siding replacement recovers on average 83.2% of its cost. The payoff for those projects is much better than for an upgrade that a buyer might not need. A home-office remodeling, for example, recovers 57% of its cost on average. The estimates are national averages for midrange homes, not upscale ones.
4. Spend time in the bathroom. Freshening up the bathroom doesn't have to be expensive, but it could be important.
"People will put up with a lot of cosmetic challenges in a house if they know they could use the bathroom right away," Ms. Aldrich said.
It's most important for the bathroom to be clean, but sellers should also consider replacing the fixtures, tub, sink and toilet -- if they need it, she said. Replace cracked tiles and curled linoleum.
The replacements don't have to be expensive, Ms. Aldrich added. A toilet can cost less than $250, and she recommends taller, handicap replacement toilets to appeal to an aging population.
5. Keep it small in the kitchen. The other room that often sells a house is the kitchen, but it might be best to keep renovations modest. Remodeling magazine's report found that homeowners could recover 83% of the cost of a minor kitchen remodel at resale, compared with 78.1% of a major kitchen remodel.
Ms. Kuhn cautions her clients not to replace refrigerators, stoves or dishwashers. Buyers considering remodeling the kitchen will likely have their own preferences, she said.
Along those same lines, sellers should replace a countertop if it is crumbling but not if its only fault is that it is outdated, Ms. Kuhn said. Even then, seriously consider material costs: There is no need to update to granite unless the competition has granite countertops as well.
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