Ten ways to get more money from your home
Tim Kiladze
Forbes
Published: Wednesday, February 24, 2010
At last some hope for American homeowners: A week ago the National Association of Realtors reported that fourth quarter existing home sales surged almost 14% over the previous quarter. Still homeowners must be realistic; the median existing single-family home price remains 4.1% below 2008 fourth quarter levels, according to the same report.
The freefall in home prices may be over, but the buyers' market persists -- there's stiff competition to get a house sold for a good price. In a competitive market sellers need to make every effort for their properties to appear more attractive so they sell for more.
And it's the simple touches -- not the big renovations -- that often matter the most.
Clean and De-Clutter
HomeGain's 2010 Home Sale Maximizer Guide, which identifies key repairs to increase your home's selling price, says "cleaning your home and freeing it from all clutter can be the most important of all pre-sale activities." Suggested tips include organizing closets and storage rooms, removing all personal possessions and removing appliances from kitchen counters to free up the space.
Staging
Staging means dressing up your home by hanging artwork, putting out fresh flowers or turning on the fireplace in the winter. The techniques may seem basic, but a 2009 survey of Realtors found that $300 to $400 spent on staging can yield a $1,500 to $2,000 increase in home price.
Online Advertising
Most home buyers browse online listings, and good ads with video walk-throughs are clicked on 150% more than those without. Web appeal is more important than ever in selling a home.
New Front Door
Jean Nayar, author of Staged to Sell (or Keep), says a home's exterior can have a big impact on potential buyers. For cash-strapped owners, replacing the front door is a cheap exterior enhancement that can have a big impact.
"Tier 1" Renovation
Bill Carter, president of the National Association of Remodeling, recommends piecemeal renovations rather than complete overhauls, such as upgrading HVAC systems and hot water heaters, as well as installing double- or triple-paned windows. Homeowners who are able to get a small loan should invest in energy-saving projects and utilize the available tax credits.
Outdoor Entertainment Areas
Because of the recession, "people are starting to realize they've got to rethink their way of life," Carter says. He notices that families in warmer areas are emphasizing outdoor living space, such as patios and decks, rather than taking vacations.
Attic Bedroom
An attic bedroom is a great green renovation for families able to afford it. Instead of building an addition, homeowners can add space without increasing their carbon footprint. "You already have the roof and the joists and the walls there, so you can take advantage of costs already spent," Nayar says.
Inexpensive "Greening"
Installing water-conserving faucets and adding weatherstripping to movable joints are good, money-saving improvements for buyer and seller alike.
Pre-Sale Home Inspection
A pre-sale home inspection may not add value to your home, but it can certainly prevent loss, says David Tamny, president of the American Society of Home Inspectors. He says some homeowners are now advertising their completed pre-sale inspections as added insurance that their home is ready for sale.
Neutral Paints & New Carpets
It's easy to get lost in the suggestions for increasing home value, but a new coat of a neutral-colored paint and new (or shampooed) carpets are always a good base from which to start.
Look the Part
Louis Cammarosano, general manager of HomeGain, a real estate marketing company in Emeryville, Calif., stresses the importance of subtle yet crucial marketing tactics such as staging, or dressing up your home. "It's the same thing when you go for a job interview," he says. "You're looking at a person -- how they dress, how they speak. You're not looking at their credentials initially."
Last year HomeGain surveyed 1,000 real estate agents to determine which home repairs offer the biggest rewards. After ranking for return on investment, the survey found that cleaning and de-cluttering -- including removing personal possessions, polishing woodwork and glass and removing excess furniture -- is the most important. Spending US$100 to US$200 tidying up can increase a home price by US$1,500 to US$2,000.
Putting out fresh flowers, hanging artwork and turning on working fireplaces in the winter all can be equally helpful, but there are exceptions to the rule, Cammarosano says. In some parts of the country, including California, staging seems to matter more than it does in other places, where online presentation might be more important.
"Web appeal is the new curb appeal," says Julie Reynolds, senior director of PR at Realtor.com, which is run by the National Association of Realtors. She recommends making your home stand out online because "the value of a home is what a buyer is willing to pay." Ads that stand out often include walk-through videos; those that do are clicked on 150% more than those without, she says.
Sellers should also think about the type of buyers they have in mind. Targeting families? Make the house look lived-in. Hoping for a young couple to move in? Remind them that kid-friendly parks and other activities are nearby.
Renovate with Marketability in Mind
Certain renovations can also add value, but they don't have to be major overhauls. Jean Nayar, author of the book Staged to Sell (or Keep), which offers simple suggestions to add home value, says installing a new front door is an inexpensive exterior improvement. She also suggests replacing worn-out siding. New fiber-cement siding will generate the best return on investment, but vinyl siding will work for those with smaller budgets.
Bill Carter, president of the National Association of the Remodeling Industry, also stresses "piecemeal" renovations.
"Without HELOCs [home equity lines of credit], without property values, without lending, without people working, you're not going to see a big reach for [big renovations] yet," he says. He suggests upgrading HVAC systems and hot-water heaters, as well as installing double or triple-paned windows.
Outside projects can also add value, depending on geographic location. Particularly in warmer climates, consider adding a new patio or deck. But if you do have the budget for a big renovation, Nayar recommends thinking green.
"There is a trend in general to reduce your carbon footprint," she says. "Consumers are more aware of green living concepts and reducing your energy consumption because of the good that it will do the planet."
For example, creating an attic bedroom is a good way to add space to your home without using more energy. Plus, "you already have the roof and the joists and the walls there, so you can take advantage of costs already spent," Nayar says.
But thinking green doesn't have to be expensive. She also recommends installing weatherstripping and low-flow faucets as cheap alternatives.
Safety First
Pre-sale home inspections have gained traction in the depressed market because buyers are trying anything and everything to outdo one another. With a heavy supply of houses on the resale market, a pre-sale inspection can provide extra assurance that there won't be any surprises after signing the sale contract. David Tamny, president of the American Society of Home Inspectors, admits these inspections may not identify ways to add value, but they can certainly prevent a loss of some.
"Because of the do-it-yourself movement, people do things that are unsafe," he says, citing botched ceiling fan installations and improperly spliced wires as examples. If these problems are not detected when the home is sold, some sale contracts allow buyers to renegotiate prices if inspectors find them after signing.
Sellers needing to move quickly, however, should remain focused on the basics, Nayar says -- neutral paint jobs and replacing or cleaning carpets. That could be the difference between a signed contract and the for-sale sign remaining on the lawn.
Photo By: Tosska
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