Enhance Your Real Estate And Increase Its Value.
October 9th, 2008 Categories: Selling Thoughts
It doesn’t matter if you live in Boulder Colorado or any other part of the country and it doesn’t matter if you’re a homeowner, buyer, seller, fix and flipper, or part time re-modeler. Knowing what makes property value go up or down is important to maximize your return on every dollar you spend on your home. It is especially important when listing your real estate in a buyer’s market that you separate your home from others with home improvement projects that increase value. Don’t waste your time or money installing that swimming pool, unless your swimming in money, in Boulder Colorado and read about some of the basic forces that determine real estate value.
How is value determined?
All real estate value is determined by the interaction of buyers and sellers in the marketplace. According to appraiser, Chet Boddy, the real estate market goes up and down in cycles for reasons which can only be understood after they occur. The economic principle of supply and demand prevails. In a buyer’s market, supply exceeds demand, driving prices down. In a seller’s market, demand exceeds supply, driving prices up.
There are ways to increase the value of a home that go beyond remodeling your kitchen.
One way is to clear up any potential legal issues ahead of time when getting ready to list your home. For example, unrecorded access easements are a big turnoff to buyers so be sure to record any easements. If you share a private drive, make sure the easement is recorded on your deed. Sometimes this is something that needs to be worked out with the neighbors and possibly a lawyer but will pay off in the long run. Don’t wait until your home is under contract to find out that there is an issue or your deal might fall and then you are back to the drawing board!
Consider ordering a survey and obtaining building permits as it may be necessary to clear up any discrepancies with boundaries, code violations, etc.
We recently had this experience during the sale of one of our properties. Sometimes we make improvements without obtaining the proper permit(s) and this can come back to haunt you at a later time. Some buyers do not want to buy non conforming property or property remodeled without the proper permit(s) being pulled. It can take awhile to get through the permit process - do it right away!
Now for the fun stuff!
Yes, you know - remodeling the kitchen. Many times it adds the most bang for your buck but there is no need to go overboard. Its’ quality should not “out do” the rest of your home. If you own a $150,000 home there is no need to spend 75K or more to remodel your kitchen.
Fresh exterior and interior paint. There is nothing like a fresh coat of paint to cheaply and effectively create the WOW factor prospective buyers are looking for.
Work with what you have. No need to construct and addition to your home or pop the top. Look at transforming your unused or wasted space into a fantastic deck, finished basement, usable attic, or functional garage which will entice buyers and separate you from the other sellers on the block.
I can’t emphasize this one enough - LANDSCAPING! Buyers usually make their decision about your home when they see it for the first time. I’ve had many, many buyers tell me to drive on when we come to a home that doesn’t have curb appeal. The saying “you can’t judge a book by it’s cover” does NOT apply especially when the buyers won’t even consider going into the home. First impressions are very important so take some time to spruce up the outside of the home, specifically the front of the home.
Upgrade the bathrooms or install an additional one. Master baths are GREAT selling features.
Food for thought - While some remodeling may enhance the value of your home, don’t do anything major right before you sell. Studies have shown the most profitable home remodeling projects recovered only about 60 to 90 percent of contractor costs when the home was sold. Let the buyer remodel the home to their liking. Save as much money as you can for your next home.
Leave home remodeling to the pros unless you have the experience. While DIY projects can be less costly than hiring experienced professionals, if it doesn’t look professional and high quality, it can be a major turnoff for buyers and may actually reduce the value of your home.
[...] that needs to be said and the folks at Blog the Rockies have said it really well in their post Enhance Your Real Estate And Increase Its Value. In today’s market, there are a lot of things we cannot control, but as professionals, we can [...]