When economic times are topsy-turvy, more people choose to remodel their homes than put them up for sale. But you’d be surprised how many keep their eyes on the time when they expect a rebound. I’ve seen many blog posts about how tricky it can be to gauge the time to a more favorable market and whether you can count on the full return on your remodeling investment come the thaw.
If you’re committed to selling, you just may be committed to waiting now, undertaking small improvement projects to dress up your home or add features buyers are likely to covet. Getting a comparative market analysis (CMA) from a Realtor may influence your decisions. A CMA weighs considerations like lot size, square footage, and number of rooms. Then your home is matched against sales of homes in the neighborhood that offer similar features.
Pricing Your Home
Real Estate.com offers solid tips on how to price your home. They suggest that you calculate value based on the following variables: Interest Rates, Supply and Demand, Economy, Location, House Condition, Size, Tax Rate, Amenities, and Terms.
Authors also suggest that your list price should fall between 2.5 and 5 percent of the final price you’re willing to accept.
Choosing Renovations
Often your choice is made for you by economic realities. Making your home more comfortable for your family may not map directly against the wish list buyers will have when the market turns. Can you turn lemons to lemonade without busting your savings account?
One way to be safe is to renovate and repair with a mind toward eliminating negatives. For example, if the sound of nearby traffic has grown, check your windows for tightness and sound ratings. If there’s visual pollution from a nearby eyesore or adjacent neighbor, consider new fencing and landscaping. If the crime rates are up in your neighborhood, think about installing outdoor lighting, security gates, or home security systems.
I’ve blogged in recent months about projects that currently seem to have a decent return on investment, like basement remodeling projects. Small kitchens and small bath improvements and additions are also faring well in the current economy.
There are many variables to consider right now—equity notwithstanding. Submit your plans to several bidders and gather estimates. We can help you to understand your price quote.
Small bathroom renovations have proven effective for me – adding in a newer sink, adding new tiled, changing the mirror, painting, etc. Added to the monetary value of my house as well as made my family happy with a new upgraded bathroom. Small upgrades to fix any of the shifty parts of your house are key as well when inspection time comes around.
People are pretty smart. Our remodel customers here in Southern California are not pushing walls out, not adding square footage (since 2007) they are (for the most part) having us remodel their kitchens and their bathrooms. They see the value for quality of life and resale – though most do not have resale on their minds…
Thanks for the advice. I enjoyed it, because nothing is too overwhelming, yet makes all the difference in the world. All do it yourself type projects!
The key to this real estate market is to wait it out, as these market conditions are the worst possible for trying to sell your home. Everyone is expecting to pay pennies on the dollar for real estate, even if the property is not in foreclosure or distressed. If sitting tight for a few years means NO remodeling or improvements, then so be it.