UPGRADE WITH ROI IN MIND
Return on investment
Making upgrades to your home can be as easy as replacing the handset on your front door or as daunting as remodeling a kitchen or bath.
There are two things you must remember when updating your home to sell with regard to market value and return on investment.
What home improvements give you the best return on your remodeling dollar?
The return on investment is generally less than 100% in real estate, so the rule of thumb is "less is more."
In 2016, a remodeling publication said the best ROI improvement a home seller can make is insulating the attic space, with 116% return.
If your home is worth $1.1M and you spend $60,000 to revamp the kitchen, don't make the mistake of assuming that the investment will increase the value dollar for dollar.
The remodel may add value to the home, but the return in dollars spent will be around 50%.
Smaller upgrades like replacing outdated fixtures in the kitchen and bath are certainly worthwhile, but major remodeling of those rooms is not wise.
That's not to say you can ignore necessary repairs that a home inspector would red-flag or mortgage company would demand before issuing a loan to a buyer.
If you are facing major problems like a leaking roof or outdated electrical wiring, it may be not the best time to put your home on the market, so expect to give up concessions to the buyer.
Starting with the Basics
Every home that is listed should meet the basic expectations of any buyer.
Your home should have a sound roof, functioning gutters and downspouts, a foundation without cracks, a functioning heating and air-conditioning system, solid subflooring, and safe and secure electrical wiring.
With financer-mandated home inspections, any shortcomings may be required to be remedied to get the buyer's financing approved.
You do not need to undertake extensive remodeling projects to sell your home or to increase the value of your property.
Your property needs to be up to the standards of the neighboring homes.
What's important, though, is that you understand that the market value of your home is determined by the prices of homes recently sold in your area.
Remodeling your kitchen to outshine others may not get you more money for your home, especially if it exceeds the market value buyers are willing to pay.
You could spend more money than you will get back in return.
Mechanical Maintenance Is a Must
It is easy to get wrapped up in the more eye-pleasing aspects of getting a home ready to sell.
However, you should never overlook the upkeep of all the more mundane aspects of your home.
Take a close look at these mechanical features:
•electrical boxes and wiring
•natural gas lines
•central heating and air-conditioning system
If these components of your home are old, outdated, or not working correctly, you are lowering your home's appeal unless you are willing to reduce your price.
According to the National Association of Realtors®, 65% of home buyers surveyed wanted to be sure their new home had a working central air system.
Of the 31 mechanical features inquired about in the survey, this was the most important one across the board.
People want to purchase a home that reflects their aesthetic
tastes and lifestyles, but also one that is safe and sound.
Faulty electrical systems do not provide a feeling of safety.
Leaky plumbing arouses concerns of mold infestation and sewage problems.
These areas can require extensive work, but they are extremely important.
Overlook them in the preparation stage, and you run the risk of trouble later with inspections and appraisals.
Professionals should do most of the mechanical work-Having a professional inspection is a big plus to most buyers as well.
•Have a certified plumber inspect your entire water system for leaks.
Check the well and septic field if applicable.
•Hire an electrician to check your wiring.
•Call your local HVAC company and have their technicians perform a thorough service checkup.
•Contact your natural gas supplier and have them double-check the mechanics of your tank and lines.
There is an alternative to calling and arranging all the different inspections.
Certified home inspectors can usually cover all items related to mechanical issues and more.
They will be able to identify possible trouble spots you need to address.
Many buyers hire an inspector, so you may even be saving them a step.
Having antiquated wiring and plumbing replaced is not cheap.
If you do have mechanical issues and decide to sell your home as is, it may be necessary to negotiate with the buyer.
There isn't any doubt that new appliances make an impact on buyers.
The National Association of Realtors® conducted a survey of buyers in the market over the past several years and found:
•Buyers were somewhat interested or interested in buying a home that featured new appliances.
•Roughly 17% of the respondents preferred stainless steel.
•The most important factor: Appliances were available.
•Most buyers who were unable to get their sought-after appliances said they would have been willing to pay, on average, nearly $2,000 more for them.
Potential buyers want appliances included and will pay more for them, especially if they are new or in excellent condition.
If you can afford it, new appliances might be what sets your house apart from the home for sale across the street.
f new appliances are a bit out of your reach, offer them your immaculately clean, and fully functioning existing ones.
Carefully inspect your bathroom and kitchen hardware. If it is unsightly or worn, it is best to replace it.
Put yourself in a buyer's shoes.
Your home will potentially be their new home.
Old, worn-out fixtures are not going to speak to them the way nice, shiny new hardware will.
Unless your knobs, pulls, handles, or hinges are broken, there is no real reason to replace them .
Get that new look simply by thoroughly washing, sanding, and painting them with spray paint made specifically for kitchen and bath hardware, making it cost-effective.
Check these hardware items closely and replace as needed:
•toilet paper holders
•dated light fixtures
The goal is to touch up your home up nicely without excessive spending.
The Internet has a wealth of do-it-yourself videos that can help you update your bath and kitchen if your budget is limited.
If you do have broken or completely worn-out hardware, it's
best to replace the whole set.
If you can find matching pieces, you can paint the old and new to match.
You could also consolidate all the good parts in one bathroom and replace all the hardware in the other.
Other Inexpensive Ideas to Update the Bath and Kitchen:
•Buy a new toilet seat.
•Repair the grout in tile back splashes, floors, and tub surrounds.
•Refurbish tired-looking cabinets with fresh paint or finish.
•Replace a dated bathroom sink with a pedestal variety or cabinet sink.
Let There Be Light
Whether natural or artificial, bringing in light is one of the most effective ways to show off your home.
The part of staging that is often overlooked, using light to enhance your home's appeal, can make a difference.
Harsh light is unflattering even to the best furnishings and features.
Dim lighting gives everything in the house a dingy feel.
Assessing the lighting in each area of your home will give you a quick idea where to bring in more light.
Rooms with abundant windows greatly benefit from natural light, as your home will be seen during the day.
Supplemental light is necessary for rooms with smaller
windows or little natural light coming in.
Increase the wattage of light bulbs in your lamps to improve artificial light.
As a rule of thumb, there should be 100 watts for each 50 square feet of space.
Keep in mind that there are three kinds of lighting.
General lighting or overhead is typically ambient.
The pendant light is good for tasks like food preparation or reading.
Accent lights are usually on tables or mounted on walls.
You can use all three to bring out the best your home has to offer.
Key areas, such as foyers, can set the stage by impressing buyers with a dramatic light source.
If you do not have an abundance of natural light coming in, a chandelier-type light works if your ceilings are high.
Otherwise, wall sconces are impressive in smaller spaces.
Don't assume you need to buy new fixtures if you can update your existing ones.
The aim is to make sure each area of your home is effectively lit.
Kitchen and bathrooms are pivotal rooms to any home seller.
These two areas can make or break a sale.
The combination of ambient, natural, and pendant light can bring out the best in your kitchen space.
Mounting track lighting underneath cabinets gives the counters a chance to shine aesthetically and functionally.
Make sure the light over the sink area is sufficient and working properly.
If you have a hood over the stove, install clear bulbs to ensure the brightest light.
Lighting in the bathroom needs to be intense without being harsh.
Soft lighting enhances any part of the house you want to highlight .
Avoid harsh lighting in the bedrooms as well.
Lamps strategically placed will give the bedrooms a peaceful, restful feel.
The closet light should be bright, though.
One last tip: Lightly painted rooms still need sufficient light so the room doesn't appear drab.
Although you don't want home shoppers looking down on your home, they will be looking down at what is under their feet.
Your home's value can be downgraded by the buyer if your floors are in bad shape.
On the flip side, if your home's flooring is well done and in excellent condition, buyers will pay more for it.
Maximizing your profit without compromising your investment dollars is certainly the goal, but if your flooring and carpeting are not in salable shape, you need to take inventory.
There is no point in spending money unnecessarily if the improvements do not add significant value or help the home sell more quickly, but you do have options that don't break the budget .
Repairing and thorough cleaning of your floors are the least expensive way.
Take stock of your home's flooring by examining all the floors. Move furniture out of the way and make notes regarding condition, stains, or blemishes.
Write down what needs to be replaced, cleaned, or repaired.
Carpets can be steam cleaned to eliminate stains and odors.
If the carpets are path-worn and dull, you can replace them easily with other kinds of flooring with a reasonable ROI, although carpeting does make a room feel cozy.
Laminate floors can be cosmetically fixed with repair kits found at home improvement stores.
Hardwood flooring can be easily refinished if the wood is worn or water damaged.
Seek the advice of a flooring professional because real wood floors add a level of quality to a home that laminate floors cannot.
Tips for Kitchen and Bath
When you're making upgrades to your kitchen and bath, what constitutes a substantial investment?
The key is to consider the mass appeal for the sake of resale value.
One homeowner decided to add a backsplash and more cabinet space in the kitchen.
They also updated the appliances and refinished the oak flooring.
Total cost? Eight thousand dollars.
The seller kept the price comparable to sales in the area and ending up selling for $54,000 more than the asking price because interested buyers started a bidding war.
You do not need to bust your budget to sell your home, but you do want to have mass appeal.
Kitchens are pivotal in home appeal.
What can be done to your kitchen and bath to impress buyers without losing ROI?
•Paint neutral colors as discussed earlier.
•Add a new backsplash in kitchen.
•Install new countertops if yours are dated or if you need to bring the home up to current standards in your area.
•New, multifunctional kitchen faucets have mass appeal.
•Add cabinet space or increase storage in the pantry.
•Replace dated bathroom vanities. Pedestal sinks or trendy cabinet sinks have mass appeal.
•Replace toilet seats.
Two Energy-saving Upgrades to Lower Utility Bills
•Install an energy-saving smart thermostat that saves on utility bills for less than $300.
•Install solar vents ($500-$700) in the attic space that help expel hot air during summer months.
Making a Case for Space
According to the National Association of Realtors®, a majority of recent home buyers would have preferred improved and greater closet space, as well as other storage options.
When people accumulate an abundance of possessions, they need the space to store it all.
They also want a way to clear the clutter.
Consider these statistics showing what buyers are looking for in a home:
•93% wanted a laundry room
•90% wanted a bathroom linen closet
•86% wanted garage storage
•85% wanted a walk-in kitchen pantry
Storage Is a Plus
Give buyers great storage and you've won their hearts.
If you can add new closets to your home easily, take the opportunity to do so.
Building a simple closet is not difficult if you are moderately handy.
If you are selling an older home, where closet space is typically at a minimum, this will help!
If your rooms are already small, you might not want to take any square footage away from them Existing closets can be updated to maximize the space at hand.
If you do not have the skills or the funds to hire someone to build new space, consider investing in closet organizers to make the most of what space you have.
•You can easily design your custom closet kit online with a storage solution company like ClosetMaid.
•Your standard superstore or hardware store often has exactly what you need in an inexpensive, prefabricated form Organizers will not enlarge your closets, but maximizing vertical and horizontal space is a good alternative
Don't stop there, after all, storage is not restricted to closets.
Storage improvement opportunities apply to all of your cabinets, clothes closets, linen closets, and attic and basement spaces.
It is important to make sure you organize your cabinets.
The same retailers that provide closet organizers can help you with this.
Take a good look at your laundry room and linen closet.
Adding extra shelving in these places can make a big impact.
Look for any place you can provide attractive and inexpensive storage space.
Make sure your improvements are tasteful, and you will benefit from increased storage solutions.
Updating your home with ROI in mind is the best approach in the decision-making process when getting your home ready to sell.
Look over this recent list of what buyers want in a home.
Compare it to what you have in yours, and upgrade accordingly without surpassing the price line for comparable homes in your area.
Features Most Home Buyers Want
•Energy Star-rated appliances — 94%
•Laundry room — 93%
•Energy Star rating for the whole home — 91%
•Exhaust fan in bathroom — 90%
•Exterior lighting — 90%
•Bathroom linen closet — 90%
•Energy Star-rated windows — 89%
•Ceiling fans — 88%
•Garage storage — 86%
•Table space for eating in kitchen — 85%
•Walk-in kitchen pantry — 85%
Keep in mind these features that will not necessarily be effective or profitable upgrades.
Features Fewer Buyers Want
•Only a shower stall in master bath — 51 %
•Two-story family room — 43%
•Wine cooler — 42%
•Wet bar —41%
•Laminate countertop — 40%
•Laundry chute — 32%
•Outdoor kitchen — 31 %
•Game room — 3 %
•His & her baths —31%
• Glass-front cabinets — 31 %
Once your curb appeal draws them in, you must make sure the interior of your home keeps them interested.
In the next chapter, you will learn what can repel home buyers.
The most successful home sellers spent time and effort depersonalizing, de-cluttering, and deep cleaning their homes.