How to determine the true value of home improvements

 

(BPT) – As the U.S. housing industry continues to emerge from the Great Recession, signs are pointing toward positive recovery. In fact, a recent report from the Joint Center for Housing Studies of Harvard University states that the home improvement industry could see record spending this year. It's news like this that may have you contemplating an update to your house. Even if you plan to stay in your home for years to come, it's important to consider which home remodeling projects offer the potential for a positive return on investment.

"Research shows that more homeowners intend to remain in their homes after remodeling, however, resale value is still a major factor when planning renovations," says Susan Selle, chief marketing officer of exterior building products manufacturer Ply Gem Industries.

Before spending a significant amount of time and money on your next home improvement project, consider these tips.

Five home improvements with the highest ROI

The Remodeling Magazine Cost vs. Value report identifies these top five mid-range exterior home renovations as beneficial investments that allow homeowners to recoup a substantial percentage of their investment when they resell their homes:

* Replacing the front door (steel 101.8 percent)

* Adding manufactured stone veneer (92.2 percent)

* Replacing the garage door (88.4 percent)

* Replacing the siding (vinyl 80.7 percent)

* Adding a deck (wood 80.5 percent)

The cost-value ratio compares resale value to construction cost. The higher the percentage, the more of the job costs you are likely to recoup when selling your home.

"Homeowners want lasting value from their exterior renovation projects, so it's important to select the best materials for the job upfront," says Jerry Blais, senior vice president of marketing for Ply Gem Industries. "For example, when choosing siding for the home, vinyl siding provides overall better performance than wood, engineered wood and fiber cement and requires less maintenance both in the short and long term, allowing homeowners to complete their renovation and enjoy it, hassle-free, for years. In addition, vinyl siding provides the styles, textures and stylish colors homeowners want to create beautiful curb appeal."

Budgeting for success

Once you've decided which replacement and remodeling projects will offer the best ROI, develop a schedule and a budget to ensure the home makeover remains financially sound. The budget defines the project's scope, estimates overall costs, and helps to establish priorities. Generally, renovation costs should not exceed 30 percent of your home's value and should be consistent with housing trends in your neighborhood.

What should the budget include? To start, consider these likely-to-occur expenses:

* Contractor costs. These include labor and may incorporate employee benefits, professional fees, permit and inspection charges and, of course, profit. Get at least three contractor estimates to ensure your contractor is cost-effective and reputable.

* DIY costs. Should you forgo a contractor? Keep in mind you will need to rent or buy power tools and equipment and potentially learn new skills.

* Hidden costs. For example, bringing outdated electrical or plumbing installations to code, or removing lead paint.

* Site preparation costs. For exterior renovations, this may include tree trimming, clearing land, and renting a haul-away container.

* Interim housing costs. If you plan to relocate, you will need living expenses for the project's duration.

* Material cost. These include large expenses and small ones (ex. nails, trim) and could account for as much as half to 75 percent of the total cost. Factor in an extra 6-to-10 percent for waste for materials that are cut and fitted.

Bringing it home

If you're interested in near-term resale value, it's important to make sure that selling your home will at least recoup the cost of any completed projects. If you plan to stay in your home for many years, however, you'll not only benefit from an improved resale value down the road, but you're also more likely to appreciate the improved comfort and curb appeal in the meantime.

5 upgrades for under $5,000 to put your home at the top of every buyer’s list

 

(BPT) – It's a sobering truth of real estate that sellers often have to spend money to make money. Even if your home is relatively new, you still face costs associated with getting it ready to show, such as repainting interior rooms or hiring professional cleaners and stagers. If your home could use some TLC and updating, spending as little as $5,000 on key upgrades could improve its appeal for buyers – and ensure a speedier sale at a better price.

Here are five upgrades you can make for under $5,000 to help put your home at the top of every buyer's must-see list.

 1. Upgrade your entryway – Replacing an old, dated or worn entry door can be a cost-effective way to ensure buyers get a good first impression when they walk in your house. Whether you choose a fiberglass, wooden or steel model, installing a new entry door can cost a few thousand dollars, yet the return on investment at the time of resale can be significant. A fiberglass entry door returns about 72 percent of its investment, while a steel door recoups more than 100 percent of its value, according to Remodeling Magazine's Cost vs. Value report.

Enhance your new door with attractive plantings, fresh paint and clean windows around the entryway to create a memorable, attractive entry for just a few thousand dollars.

2. Increase natural light – More buyers are becoming aware of the mood- and productivity-enhancing benefits of natural light, and homes with big, bright windows have always been in demand. Adding windows to a room can be a costly, time-consuming affair. Not so with adding a skylight. For well under $5,000 and in just a day or two, a professional can install an Energy Star qualified, solar powered no-leak fresh-air skylight, like those from Velux America. Professional installation costs nationally ranges from around $900 to $2,325, with an average of $1,400, according to HomeAdvisor.com.

The low installation cost will leave you plenty of budget to enhance the skylight upgrade even further with energy efficiency-boosting solar-powered blinds. The skylight and blinds are operated by remote control and the blinds are available in designer colors and patterns to enhance your décor. The products, as well as installation costs, are eligible for a 30 percent federal tax credit to further reduce the cost of the improvement.

The most popular rooms in the home for fresh air skylights are baths, where they provide privacy in addition to natural light, and kitchens, where they vent cooking odors and humidity naturally while brightening this much-used workspace. Visit www.veluxusa.com to learn more.

3. Beautify a master bathroom – Bathrooms and kitchens sell homes. Making a few cosmetic upgrades to even a small master bath can help increase a home's appeal and value. For less than $5,000 you can easily repaint, upgrade faucets, replace old cabinet hardware and add decorative touches like designer towels.

If you've already done all that, take a look at the floor or countertops – two cost-effective upgrades that can wow buyers. Since counters don't make up that much square footage in most bathrooms, replacing them with granite can cost just a couple thousand dollars. Tile flooring is also a relatively inexpensive way to improve a bathroom's look and usability.

4. Heat things up in the kitchen – Kitchen remodels can offer high ROI for sellers, but a full remodel may be outside your budget. If you've already done the obvious – like repainting and decluttering – it's time to look for a few more cost-effective improvements that will appeal to buyers.

Just as in the bathroom, swapping old faucets and cabinet hardware with new designer options can enhance the appeal of a kitchen. Shabby, outdated appliances can hinder a speedy sale, so consider replacing them with new ones. You don't necessarily need to install top-of-the-line, high-priced appliances to make a good impression, either. Newer, Energy Star qualified appliances represent savings for buyers down the road.

5. Lavish landscaping – No single aspect of your home has a greater impact on a buyer's first impression than the landscaping. A great front yard sets the tone for the rest of the home, appealing to buyers on a number of levels, including beauty, practicality and savings.

With $5,000, you can accomplish a lot in terms of landscaping. You can sod a small front yard, add decorative planting beds to a lush lawn, or even install shade trees that will both beautify the yard and enhance the home's energy efficiency in summer. Decorative concrete stamping of walkways and driveways is another cost-effective way to improve a home's curb appeal.

Whether it's a buyer's market or a seller's market, no one wants to see their home linger long before selling. A few simple upgrades can help ensure your home gets plenty of attention this season.

To Do List for First-time Home Buyers

 

GET YOUR CREDIT SCORE AS HIGH AS YOU CAN
Pay off credit cards and only use 10% of your limit moving forward. You can sell large things, but don't make any major purchases (like a car). Don't cancel any lines of credit and don't open any new lines of credit. Stay current on all of your bills and remember, no major purchases!

SAVE
You'll need money for the down payment (if you need to), closing costs, and escrow for insurance and taxes

CHOOSE A REAL ESTATE AGENT
A good real estate agent will guide you through the next steps so that you don't make any errors. If you're reading this, it's because you got it from your local real estate agent, me! It's also important to have an understanding of how your real estate agent is going to market your property (i.e. email, social media, MLS, open houses, etc).

CHOOSE A LENDER
Your real estate agent should provide a list of preferred lenders. (Hey, that's me! I can help!) The lender runs your credit and gives you mortgage options and estimated rates. The lender also calculates how much you can spend on a house  based off of your debt to income ratio.

DECIDE WHAT FEATURES ARE IMPORTANT AND VISIT HOMES
Make a list of features most important to you before you start looking. Your real estate agent will book showing for houses that match your list. Visit the homes and take notes and photos.

NARROW CHOICES
Make sure to test the commute, consider resale value for the home, and finally make a decision!

MAKE AN OFFER
Offers are contingent on appraisals, home inspections and termite inspections (where applicable). Side note: you're not "stuck" with a house that wasn't built to code or has major structural damage that wasn't present at the time of showing.

FINAL WALK-THROUGH AND CLOSE
Make sure the house is the way that it should be, as this is your final moment to speak up if something is wrong. Bring your closing money to the table, and get ready to sign paperwork!

MOVE IN
Congrats and enjoy your new home!

How to Get a House Ready For Sale

 

CALL YOUR REAL ESTATE AGENT
One mistake that home owners make when they are ready to sell their home is getting their home "ready" to sell before they call an agent. The home owners will make repairs or upgrades that have will little or no return on their investment. Your real estate agent (hey, that's me) will give you tips on what renovations are necessary to sell, if any. 

DE-CLUTTER
Remove everything but the essentials. Donate what you don't want and store the rest. Plenty of people prefer to use storage units for items they want to keep. Take a minute to organize kitchen cabinets, closets, bathrooms and the pantry. It if looks like a clothing store in your closet and a well-fronted grocery store, you're doing great.

DE-PERSONALIZE
Potential buyers want to be able to walk into your home and imagine themselves living there. They can't do that if you have pictures of your family up and decor like "Thomas Family. Established in 1988" hanging on the front door. Remove these items, and any built-in items that you'll be taking with you. Place personal items from your bathroom vanity in accessible boxes.

DEEP CLEAN
Wax the floors, dust everything, and polish metals. Get every single crack and crevice as clean as it can be and remove odd odors. If this seems like an overwhelming task, break it down into smaller tasks and put it on a calendar. 

REPAIR THE BASICS
If the door squeaks, get some WD-40. If the bathroom needs re-caulked, that's okay. Small projects are good, large ones are not (i.e. you do not need to replace all of the windows in your house). The biggest project you should tackle is painting bright colored walls. Bright colored walls says to potential buyers "this is going to take work." Try neutral colors, off whites and light grays. 

SPRUCE UP THE CURB APPEAL
Maintain the lawn, pressure wash the exterior, and clean up the shrubbery. Hire a professional or shell out a couple of bucks for flowers or seasonal plants for the garden!