What Are the Best Home Improvements for Resale Value?

September 01, 2013 4:30 am  •  Associated Press

Homeowners are opening their wallets. A rebound in the housing market has made them more willing to invest in renovations that could boost the value of their homes even more in a rising market.

Spending on home remodeling has picked up over the past 18 months and is expected to rise nearly 20 percent to $151 billion by the fourth quarter, according to a recent report by the Joint Center for Housing Studies at Harvard University.

Many homeowners decide to make upgrades with the idea that the bigger kitchen or finished basement will make their home more enjoyable. But those looking to sell should know that not all home improvement projects will boost the value of a home.

Here are six tips when considering investing in home improvement projects:

1. CONSIDER ALL BUYERS

The classic example here is installing a swimming pool.

A pool could make your home a tougher sell and it's unlikely you will recover your expenses, says Richard Borges, president of the Appraisal Institute, a professional association of real estate appraisers.

It may be a deal-killer for buyers who might not want to take on maintenance costs or safety risks for small children. "It's not going to contribute a full measure of its cost of installation because its utility is so limited," Borges says.

The principle holds true for other large projects that can alter the structure of the property, such as adding a second garage. In some neighborhoods, they may be a common feature that becomes a selling point. But if it's not common, it could discourage buyers who don't have a need for it.

2. DON'T 'OVERIMPROVE'

Some home improvements can help lift a home's resale value, especially updates to features like cabinets and appliances that are clearly dated.

The key is to select finishes and appliances that don't go well beyond what a buyer might find in similarly priced homes in the area. The term appraisers have for that is "overimprovement."

Consider a homeowner in a neighborhood with modest homes who splurges on pricey countertop finishes like quartz or marble. They're not likely to recoup the cost when appraisers look at recent sales of comparable homes that may not have such lavishly appointed kitchens.

This applies to everything from lighting to flooring and bathroom fixtures.

3. CONSIDER RISKS OF EXPANDING FOOTPRINT

One of the home improvement projects that's least likely to produce a return on the investment is a room addition that expands the size of a home beyond its original floor plan, says Borges.

Projects that require tearing down an exterior wall often involve moving doors, windows and other features, which can drive the costs higher than, say, converting an attic into a bedroom, which uses existing space in the home.

The more expensive the project, the harder it can be to recover one's costs.

Also, making major changes to the original structure, even when permitted by the city, runs other risks.

"When you become the oddball, the only home in the neighborhood with four bedrooms, probably the fourth bedroom is not going to be that desirable," Borges says.

4. CONSIDER COST-TO-VALUE

One way to gauge whether a home improvement project is worthwhile is to estimate how much of what you spend will be recovered at resale.

For example, if you spend a $1,000 on siding, and it only adds $500 to the resale value of your home, that upgrade is giving you a 50 percent return on your investment.

Remodeling magazine's latest cost-value-study, which is based on surveys of real estate agents, can help provide a ballpark reference. You can find it here: www.remodeling.hw.net/2013/costvsvalue/national.aspx

That said, when home prices are rising fast enough, like during the last housing boom, it's easier to recover costs spent on home improvements, regardless of the upgrade. The alternative scenario also holds true.

5. PRIORITIZE REPAIRS AND CURB APPEAL

Making the master bedroom bigger or converting a downstairs closet into a half-bath might seem like good investments, but not if you need to upgrade your roof or fix window seals.

Those fixes may not be aesthetic upgrades, but often make a home easier to sell.

Replacing your front door might cost you $1,500, but it's the type of upgrade that can make a home attractive to buyers, says Sal Alfano, editorial director of Remodeling magazine.

The magazine says replacing the front entry with a 20-gauge steel door is the upgrade from which homeowners can expect to recoup the most money among renovations that cost less than $5,000. The magazine estimates a recovery of 85.6 percent of the cost.

6. CONSULT AN EXPERT

Before moving forward on a home improvement project, consult with a real estate agent or an appraiser who knows your market.

They should be able to gauge how the upgrade could affect the sales price of your home. That can help you determine how much of your investment you're likely to recoup.

Almost all appraisers are independent and set their own fees. A consultation could cost between $500 and $1,000.

Real estate agents might be willing to offer their assessment for free, perhaps with the understanding that they might earn your business when it comes time to sell.

Stage Those Bedrooms for Comfort

When potential buyers enter the bedrooms of your home, they want to see one thing about all else ... comfort. Bedrooms do not have appliances or fixtures. Not usually, anyway. So home staging in a bedroom usually consists of painting, furniture arrangement and some light decor.
Think "neutral, comfortable and spacious" when you stage your bedrooms for buyers. Keep those words in mind during your staging process, and you will be in good shape.
Here are some specific home staging tips for the bedrooms.

• Use soft, neutral colors with paints and color schemes. Earth tones are always a safe color that will appeal to the majority.
• Make bedrooms appear larger by limiting furniture to a bed, dresser and a couple of small items. Too much furniture makes a bedroom seem cramped.
• Remove the bulk of your clothes from closets and pack them away in storage. You will have to pack them soon anyway, and doing it early will make your closets appear larger.
• Invest in some new and luxurious bedding (comforter, sheets, accent pillows). You can take them with you when you move, and they will improve the look of the current bedrooms while it's on the market.
• Remove personal items such as photos. Remember, you want buyers to see themselves in the home ... not you and your family.

Remember, your motto when staging those bedrooms — neutral, comfortable and spacious. Open up the room be reducing the amount of furniture items. Neutralize the overall color scheme and add a little bit of "controlled color" with accessories like pillows. Update your bedding if needed. Make your bedrooms relaxing and tranquil.


Home Buying Institute

Staging Bathrooms for Function

"Kitchens and baths" ... that's the expression used by real estate folks to indicate the areas of a home that carry the most resale value. Kitchens and baths. We already talked about staging your kitchen. But what about those bathrooms? How do you carry your home staging efforts in there?
I can sum up your bathroom plan-of-attack with two simple words — cleaning and updating. If you remember, "clean and bright" was our motto for staging the kitchen area. That same motto applies to the bathrooms. Bathrooms should be sparkling clean and well-lit (but not overly bright).
If you add "luxurious" onto that motto, you'll score extra points with home buyers. Clean, bright and luxurious. Those are the keys to staging a bathroom.
Here are some specific tips for carrying your home-staging efforts into the bathrooms of your house.

• If your bathroom fixtures (handles, spigots, etc.) are outdated, replace them with sleek and modern fixtures. Stay away from brass fixtures — they bring the 1980's to mind.
• Put some high-quality plush towels on the towel rack. Color-coordinate them with the bathroom's color scheme (matching them to the rug, flower arrangement, etc.).
• Fresh flower arrangements do a lot for a bathroom, both in appearance and aroma.
• Before showing the home, clean those bathrooms until they look like they're in a model home. Signs of use, such as soap scum and recently used sinks, will turn buyers off.
• Glass shower door a little gross? Remove it and take it outside for cleaning. Use a solution of one part muriatic acid to 10 parts water (wear goggles when mixing). Scrub it with steel wool, rinse it clean, and replace the door.
• If you have the budget and you really want to increase your home's appeal, consider installing a pedestal sink. They are very popular with buyers right now, and they make the bathroom seem larger by freeing up space.

Remember, when potential buyers tour your home their agents will probably be whispering "kitchens and baths" in their ears. So when staging your home to sell put some extra effort into those bathrooms. Your motto is clean, bright and luxurious.


By Home Staging Institute

Staging the Kitchen

• Spend some extra time de-cluttering. Kitchens are notorious for being full of clutter. So when you stage this area of your home, be ruthless about removing unnecessary items. This includes countertop appliances, utensils, the coffee pot, etc.
• Clean like the sale of your home depended on it ... because is does. Pay particular attention to the sink, counters, stove, etc. "Clean and bright" should be your motto for kitchen staging.
• Turn the lights on and open the curtains to showcase the sparkle. Shed some light on the subject. If you have dark areas of your kitchen, you might even consider adding supplemental lighting, such as recessed lighting around the edges. Remember your kitchen staging motto — clean and bright.
• Consider making upgrades. If you're in a buyer's market, it might be wise to go beyond cleaning and actually upgrade some of your kitchen features. Cabinets and counters is the rule of thumb here. If your cabinets and counters are outdated or ugly, an upgrade can make a huge difference in resale.
• If, based on your circumstances, it doesn't make sense to pour extra money into cabinetry, you might try staining the cabinets. This can make a big improvement at a fraction of the cost. In addition to staining, you could also paint the cabinets.
• If your cabinets are in decent shape, you can modernize them simply by updating the knobs and handles, or adding them if you don't have any. This is a low-cost way to improve a kitchen, and that's what home staging is all about.
• The same goes for your kitchen faucets, lights and other fixtures. You can make the entire space more modern just by updating these items.
• Give the walls a fresh coat of paint, following the paint tips mentioned previously. If the kitchen is connected to the family / living room, use the same color paint -- or one shade lighter or darker. This will make the eye flow from one room to the next, making the entire place seem more spacious.
• Do you have an eat-in kitchen? If so, accentuate it by setting a small table. This will showcase the fact that the space serves double duty. Don't leave it up to the buyers to envision the eat-in kitchen — show it to them!

Remember, people spend a lot of time in their kitchens, and most people realize that they are a resale value item of importance. If you spend some extra time or money anywhere while staging your home for sale, the kitchen is probably the place to do it.


By Home Staging Institute

Staging Living Rooms and Family Rooms

People spend a lot of time in their living room and family room areas, especially when they have children. The family room / living room is also an entertainment area of the home.
So when buyers walk through the living room or family room area of your home, they will want to envision these two activities — spending time as a family and entertaining guests.
Stage the living room / family room area with this in mind. Make it warm and inviting, with good use of space and a conversational arrangement.
Here are some specific tips to help you stage this key area of your home.
Staging the Family Room / Living Room

• Clear the room of family portraits and other items that say "you don't live here" to buyers.
• Arrange the room in a conversational way, if it's not that way already. Try different furniture arrangements until you get the best fit.
• Choose a nice and warm paint color for the living room. Use neutral tones in this space. That doesn't mean you are limited to beige. There are plenty of warm colors that will neutralize the space, while also adding visual interest. These include the softer shades of green, blue and brown.
• "Neutral" does not have to be boring. You can liven up a neutral color scheme with colorful accent items, such as pillows and rugs. Color-coordinate these items for a professional and "put together" appearance.
• Let the room breathe. If it's crowded or hard to walk through due to having too much furniture, remove some items and place them in storage.
• Consider renting furniture for staging purposes. If your family room ensemble consists of that old couch from college days and a cheap table with wobbly legs, replace them with some nice rental pieces.
• If the furniture is a bit worn but otherwise intact, use a slip cover as a low-cost way to enhance the appearance of your couch and chairs. Slip covers can also help you neutralize overly bright or "loud" fabric colors.
• If you have a mantle, make sure it's not overloaded with knick knacks. A couple of well-placed items (like a vase or flower arrangement) are all you need.
• If you have a fireplace in this room, make it the focal point and the star of the show. Arrange seating to face the fireplace. Remove the TV if it's too large -- a huge television will draw attention away from the fireplace.

Remember, people want a living room or family room area that seems open and inviting. Make the room airy and bright, and arrange furniture for the best possible flow. Replace or cover worn furniture as needed. When people naturally want to sit down and spend time in the room, you've achieved your home-staging goals for the room!


by Home Buying Institute

Staging the Exterior for Maximum Curb Appeal

When most people hear the phrase staging a home they immediately think of preparing the home's interior — painting, arranging furniture and the like. While the interior is certainly important, the home's exterior is an equally important (but often overlooked) home staging hot-spot.
Curb appeal is exactly what it sounds like. When potential buyers pull up to the curb in front of your home, you want the home to appeal to them as much as possible. This gives a good first impression, so it should part of your home staging checklist.
Here are some tips to help you stage your home's exterior for maximum curb appeal.

Staging the Exterior

• Start by creating a list of items needing attention. Go out to the curb in front of your house with a notepad and pen. Jot down anything that "leaps" out at you.
• Have a friend perform the same type of inspection. It will only take them 10 or 15 minutes to spot areas that need attention. Add their list to your list.
• If the home's paint is chipped or faded, give it a fresh coat. Pay particular attention to shutters, doors and trim.
• If the door and shutters are different colors, you may want to make them the same color. Choose the color that's the more neutral of the two and standardize the color scheme.
• Keep the lawn mowed and neatly edged. A nicely mowed lawn does wonders for curb appeal, so you might have to mow every few days while the home is on the market (depending on where you live, season, etc.).
• If your lawn is in really bad shape from years of neglect, you might have to lay down fresh sod. Do this at least a month before listing the home, so the new grass has some time to grow in and look nice.
• Mulch is your best friend when trying to boost your curb appeal. Adding fresh mulch to your existing flower / plant beds can make a big difference in appearance. Best of all, it cheaps and readily available at your local garden store, Home Depot, etc.
• Weather and season permitting, plant or pot some fresh flowers outside the front door. For simplicity, you might want to stick to potted plants. This will allow you to place them wherever you need them, and with less effort. Bright plants or flowers do a lot to enhance the entry.
• Think "yellow" when adding accent plants to your home's entry. Yellow is a great color for this purpose. It draws the eye and makes people feel at ease, which is exactly how you want them to feel when entering your home.
• Check your flower beds and lawn for weeds every day while your house is on the market. Remove any weeds you find. It's important to check daily, because weeds can literally sprout up overnight.
• In the fall, be sure to rake leaves from your lawn and also from flower beds. Do this every couple of days, or as needed to keep the lawn free of leaves.
• Trim bushes and trees as needed to give a tidy appearance. In particular, make sure they are not blocking windows or doors.
• Speaking of windows, make sure they are spotless. This includes the frames around the windows, as well as the shutters. This adds a lot of sparkle to your overall curb appeal.
• If you have vinyl railings outside your home's entrance, give them a good washing. All you need is a bucket, a hose, and some concentrated car wash liquid.
• You might want to rent a power washer if you have a lot of dirt and grime. It's an easy way to clean everything at once -- the siding, sidewalks, doors and shutters, etc.
• If you have wood railings, consider giving them a fresh coat of paint.
• Do you have a large porch that's ideal for sitting? Add a nice bench, or a pair of chairs, to help people see themselves relaxing on the porch.

Remember, people will see the outside of your house before they see the inside. Unless, of course, you escort them in with a blindfold.  If the home's exterior makes a bad first impression on potential buyers, they will carry that negativity inside the house with them. So when you stage your home prior to listing, work on the outside as well.

By Home Buying Institute

What is Home Staging and the Benefits?

Before we dive into home staging tips for a quick sale, we first need to define what exactly staging is — just so we are on the same page.

Definition: Home staging is the act of preparing a home (and the contents of the home) for sale, with a special emphasis on presentation and appearance.

It's important to realize that preparing a home for sale and staging a home is not always the same thing. For example, as part of your pre-sale preparations, you might go through the home to make small repairs where needed. This is an essential step in preparing your home for the market, but it's not the same as home staging.

Staging a home for sale normally involves things of an aesthetic nature, such as design, organization and overall appearance (as opposed to mechanical or functional improvements).

The goal of home staging then is to improve the home's appearance in the eyes of potential buyers, with the ultimate goal of selling the home more quickly and for the highest possible price.

If you are selling a home, then you've obviously been on the other side of the process as a home buyer. Think back to your home buying experience. Try to recall the difference between the homes you thought were "just okay" and the homes that made you say "wow!" Professional home staging can help you turn your "okay" house into a "wow" house.

So to sum up our introduction: You can think of home staging as presenting your house in a way that appeals to the largest possible audience, in order to ensure a quick sale for the best possible price. It bears repeating. The key to this whole thing is appealing to the largest audience — that's what it's all about.

Why should I bother staging my home? What do I get back for all the time and effort I put in? This is one of the most common home staging questions among sellers, especially those who are selling in a seller's market.

Here's the bottom line: Staging your home can benefit you regardless of what type of real estate market you are in.
In a buyer's market, you will need every advantage you can get in order to sell your home for a decent sale price, so it's extra important to stage your home effectively. But even in a seller's market staging can help you achieve a quick sale for the maximum sale price.

So no matter what kind of real estate market you are in, it's always wise to stage your home for the market.
Here are some of the primary benefits you will get out of it:

Home Staging Benefits

• Staging forces you to think like a buyer. When you set out to stage your home for the market, you will be looking at the home as if you were a buyer. Adopting this perspective early on will help you in many ways when preparing your home for the market.
• Staging forces you to organize and de-clutter. Clearing away shelves, closets and cabinets is a big part of the home staging process. It also helps with moving, because you'll have to pack things away at some point anyway. So when you stage your home, you will also get a head start on packing to move.
• Staging increases likelihood of a sale. When selling your home, you must do everything within your power to increase your chances of selling — and I mean everything. These techniques can give you an extra edge in selling the home quickly.
• Staging reduces the home's time on market. When you put in the extra effort to stage your home effectively, you will move closer to a quick sale. Anyone who has sold a home before can attest to the fact that the least time the home is on the market, the better. This is especially important if you will be paying two mortgages until the home sells (as is the case when you buy a new home before selling the old one).
• Staging helps justify the asking price. If you are in a seller's market and you price your home correctly, you probably won't have to haggle over the asking price. But in a market that leans toward the buyer, you need everything in your favor to justify the asking price. Proper home staging can help you justify the asking price by positioning the home more favorably in the buyer's mind.
• Staging can be fun! It may sound like all work and no play at first. Granted, you will certainly be putting some elbow grease into the process. But staging a home can be a creative process as well, and many people find they enjoy it once they've begun.

By Home Buying Institute

Setting the Stage for a Home Sale

            “You never get a second chance to make a great first impression.”

            This saying strikes a chord in the real estate industry, where many buyers are quick to jump to a conclusion about a potential home after just one glance. That’s why an increasing number of homeowners are employing professional home stagers to prepare their homes for sale.

            “Much of what staging accomplishes happens on a subconscious level,” said Carla Grammatica, a consultant with Stage Setters in New York’s Westchester County. “You are trying to create a positive association between your house and the prospective buyer. Anyone can change a paint color after they move in, but first impressions are difficult to undo.”

            With 91% of buyers searching first on the Internet for homes, MLS photos and virtual tours are extremely important in the selection process. Staging, as a priority instead of as a last resort, will give sellers key advantages.

            Stagers help eliminate clutter, give advice on adding colors, help in rearranging furniture and bring in various items to help spruce up a home.

           

“One of the most important things is getting rid of things that look messy,” Grammatica said. “Life can get messy, especially with kids and storage issues, but you have to pretend that’s not how you live. You have to pretend your house is [always] neat and well maintained.”

            That means picking up shoes from the hallway, removing papers from tables and furniture and even taking down personal items—such as diplomas, pictures and trophies.

—that clutter the walls.

            Professional stagers take into account buyer demographics and buying psychology, and they use design elements in planning out the rooms, space and lighting.        “Some people think that staging is simply cleaning and packing up some of your things, but it is so much more than that,” said Linda Barnett, a certified staging professional with Indianapolis–based Home Matters. “Understanding traffic patterns and highlighting the positive attributes of a home while downplaying its negative features, all go into play.”

            One tip homeowners can do to stage their home themselves is to pack away unneeded items—such as seasonal clothes and old books—and put them in storage.

            It’s also important not to overwhelm potential buyers with wild colors and furniture, even if you think it makes your home “special.”

            Remember, making your home look like a model rather than lived-in can make all the difference in selling a home.

Selling in Colder Months

            While the warmer months are generally regarded as the time for home sellers to get their property ready for sale, marketing the home in winter and early spring is just as important. Homebuyers are out looking for homes 12 months a year and there’s no reason to drop the ball on sprucing up a home December through March.

            Here are some tips for selling a home in the winter months.

            Heat it up: If you are planning an open house or have showings scheduled, turn up the thermostat and make the home warm and inviting. A cold home shopper will race through a house and start questioning the windows and insulation.

            Light it up: For homes with fireplaces, this is the perfect opportunity to show the potential buyer how cozy a fireplace can be. Leave some marshmallows and sticks nearby and invite those seeing the home to test it out.

            Take care of snow and ice: For those selling in heavy wintry climates, make sure that the walk is clear, the driveway is shoveled and put down salt to control any icy surfaces. If a buyer pulls up to the house and has to slush through inches of snow, they may not even bother to enter. For those who aren’t currently living in the home that is for sale, make sure to hire someone to clear it for you.

            Use photographs: If you have a beautiful lawn, stellar landscaping or an outdoor pool or deck, many times these are quickly overlooked or passed by because of snow. Take some eye-catching photos of these amenities during the warm months and display them during a winter showing so buyers can get a better understanding of what the outside truly offers.

            Schedule Open Houses: There are still many who don’t believe that selling in the winter is a good idea, so it’s a great time to take advantage of less competition. Many serious buyers often come out during the winter months, including corporate clients who usually need to relocate within the first quarter of the year. 

            Emphasize the Positives: Does your street get plowed quickly? Is it near public transportation to make it easier to get to work in the snow? Is it within walking distance of stores? Does it have a great hill for the kids to sled down in a safe environment? If so, accentuate these features.

            Since a lot of people are waiting until spring to put their home on the market, having a home ready in winter is a great way to beat the rush.

Avoid These 8 Staging Mistakes

            You may love your home, but that doesn’t mean that everyone coming through the door will feel the same way. What may be “charming” to the seller may seem off-putting to a prospective buyer. Many sellers attempt to stage their home themselves and, in doing so, create mistakes that can actually sidetrack the sale of their homes.

            Here are some of the biggest staging mistakes, according to professional home stagers.

            1. Getting too personal: Home staging is meant to create a neutral canvas that will appeal to the majority of buyers. Staging is all about de-personalizing the space, and creating more of a luxury hotel or a model home look that will appeal to most everyone. This is not the time to bring in your unique style and create a look that appeals to just you.

            2. Using dark colors: If painting, you should choose a nice, neutral and warm color, such as beige tones, grey tones, or light blue or pale greens. You’ll be amazed at the transformation a few coats of fresh paint will make on your home.

            3. Not taking advantage of natural light: People love natural light, so blocking off any light with heavy curtains or furniture can hurt your sale, especially if the home has attractive views. Anything dated in a home is a turn-off to a potential buyer and window treatments are one of them.

            4. Thinking more is better: Scale down your furniture. The size of the furniture needs to be in balance with the scale of the room and the other furniture in it. Remember that the purpose of furniture when selling a home is to define the purpose of the room and to show what will fit where. It is not meant to show that you can provide seating for 15 in your living room and every seat has a side table to rest drinks on.

            5. Leaving pets at home: You need to remove all traces of animals from the house and make sure “Fido” or “Sunshine” is away during showings. Having a pet could kill a sale before someone even steps into a house.

            6. Neglecting the outside: People care about the outside space just as much as the inside, so add flowers, make sure the lawn is mowed, the yard is tidy and add a few backyard accessories for the kids.

            7. Only dealing with “main” rooms: People are quick to stage living rooms, kitchens and bedrooms, but don’t forget to spruce up the garage, basement and closets as well. 

            8. Forgetting fixtures: When staging a home, it’s important to ensure all lights are burning with fresh bulbs, and that all fixtures are working. 

Remember, staging a home means showcasing the property’s many features, not concealing its flaws. Make sure your house is in good condition and use staging to cast the home in the best light.