You have seen the articles called “Top 10 Renovations to Increase Value.” Keep in mind you can increase the value straight in to bankruptcy if you spend without an increase in equity.
Replace the front door, and get 85% of your money back. Wake up you just lost 15%! The following 6 tips will show you how to increase profits and minimize expenses. These are the simple steps Steve Schappert has used for over 30 years to help banks, investors and home owners make money in real estate.
Clean it, Fix it, Paint it, Landscape it, Energize it, if you are going to sell Stage it before you List it!
STEP 1. Clean it: Start outside and remember buyers have the ability to “NOT” get out of the car. That means all the improvements you did inside will never get noticed if the outside puts them off. So start simple and start picking stuff up inside and out. Get a dumpster if needed they have these great new lightweight and affordable green options called Bagsters offered by local retailers like Home Depot and collected by Waste Management. Simply buy the bag, fill it and call for pick up, problem solved. Now that you can walk through the property without tripping over anything, take it to the next level and power wash the outside and broom clean the interior. Power washing the exterior will quickly tell you the condition of the surface, crumbling mortar and peeling paint will become very evident and simply removing mold and mildew can make a dramatic difference in appearance. At this stage, grabbing a broom and a vacuum will give you a better perspective of what you can work with and what needs fixing. Use some common sense on the interior cleaning, if it is obvious that the carpet is going to be replaced, just roll it up and toss it.
STEP 2. Fix it: Now it’s time to get your pen, pad and a camera. Start outside at the front door and go left, keep going till you are back at the front door. Make notes of everything that needs repair or replacement. Does the whole house need paint or just sections? Do the windows open and close, roofing, siding, foundation, are there issues that need to be addressed before painting begins? Check the property itself, are there cracks in the driveway, or damage to other hardscape? What about big ticket items? Make sure you test the septic field if applicable, furnaces, hot water tanks and all the mechanicals. Keep in mind that replacing items typically only returns a fraction of the cost. If it’s broke, it needs to be fixed, but not necessarily replaced, and when replacement is needed you don’t have to use all new material. People hate work and unknowns!
STEP 3. Paint it: It never makes it to the list of “top home improvements” but keep in mind those home improvement lists all feature negative numbers. A major kitchen remodel returns 70-78% of your capital. Painting typically adds value, meaning $2000 in paint can increase a sales price by $5000 or more and can often make the difference in whether people come inside. Paint is curb appeal in a can! A home that has been completely caulked and painted will not only look better but it will be more energy efficient. You would be amazed how many new windows get installed incorrectly and the wind blows straight thru. Home buyers associate sights & scents to their emotions. The largest benefit to paint is psychological. Many buyers may drive right buy the house with peeling paint. The EPA has become very rigid about working on homes with lead paint. According to the EPA, “Common renovation, repair, and painting activities that disturb lead-based paint (like sanding, cutting, replacing windows, and more) can create hazardous lead dust and chips which can be harmful to adults and children. Home repairs that create even a small amount of lead dust are enough to poison your child and put your family at risk.”
STEP 4. Landscape it: Never underestimate the difference color can make. No matter what the season, you can always add a little bling to the yard and keep costs under control. Keep it simple, an extravagant garden may look like work to the next buyer, choose perennials that will keep coming back year after year. Mow the grass, trim the shrubs, weed the garden, basically you want to tame it. Then you want to assess how the view affects the value of your home, small trees and shrubs can create privacy and a warm fuzzy feeling. If the buyer can’t visualize entertaining the family, they won’t be bonding with your home.
STEP 5. Energize it: There are many ways to save energy and money these days and this can help increase the value and equity in your home. It usually starts with an energy audit. In CT the audit costs the homeowner $75 and for that the home is tested, improved and re-tested by a team of energy experts. The value of the work is around $800 and the utility company picks up the remaining balance. Suggestions are made for additional improvements and rebates are offered. Solar has come along way and can now add value to your home both via perceived value from having panels on the front of the home to actual number crunching of investment vs cash flow created. An appraisal journal article states that any energy improvement made to your home adds twenty times the yearly energy savings in value. So if a solar system saves you $1,000 a year in energy, it adds $20,000 to the value of your home.
STEP 6. Stage it: Staged homes sell faster and for more money, it’s a statistic! Staged homes can sell in half the time of their nonstaged counterparts. A survey found that 94% of staged homes sold on average in one month or less. Homes that were staged spent 80% less time on the market than those that were not staged. Similar to painting, staging increasing perceived value. When a buyer or buyers walk through a home and they get an emotional desire, the feeling that they would like to live there, the deal is about 95% done. A Home Gain survey of 2,000 practitioners found that the return on investment from home staging was as much as 343%. Homes that stay on the market are faced with price reductions, lowering your nest egg by roughly $10,000 each drop.
-Sellers Trust Founder, Steve Schappert is an internationally recognized expert in real estate, home improvement and energy.
Cost effective green contractor, Steve Schappert interview with John Gogliettino, owner of John C Gogliettino Insurance. How to maximize the equity in your home instantly!