The demand for home remodels is expected to remain strong—even as the COVID-19 pandemic begins to ease as vaccinations rise and people are no longer trapped inside their abodes obsessing over all
Home Sales And How To Profit From Your Biggest Investment
Dated: February 13 2017
People buy and sell homes all year, but spring is traditionally seen as the kickoff. Homes look best with green grass and flowers. And a home placed on the market in March, April or May has a good chance of selling in time for the buyers to settle in before the school year starts in the fall.
That means late winter is the time to prepare the home for market. Some owners go all out, ordering a new kitchen or bath; others just paint, de-clutter and tidy the yard.
Which preparation really pays off in a faster sale or higher price rather than just chewing into your equity?
Remodeling Magazine's annual study shows that most common projects do not raise the home's sales price by as much as they cost. Among homes in the mid-price range, for instance, a major kitchen redo costs an average of $62,158 nationally, but adds just $40,560 in value.
Of 19 major improvements, only one adds more value than it costs: putting fiberglass insulation in the attic, costing $1,343 and raising the sales price by $1,446.
Of course, the survey looks at work done by professionals. By saving labor costs, a handy homeowner might come out ahead. That's why many experts recommend simple pre-sale projects like painting and landscaping, improving the lighting and making sure all the appliances work and doors don't stick.
"First impressions can make or break your chances of getting an offer on the home," says Rhonda Duffy, a longtime real estate agent and consumer advocate in Atlanta. "Make sure that you are setting a good impression by cleaning up the yard and preparing the exterior of the home."
Rather than expensive upgrades, she recommends highlighting the best features with top-quality listing photographs, sensible pricing and using an experienced agent who knows the local market.
For the best return on investment, Amy Fedosky, owner of New Again Home Interiors of Dallas, recommends painting, which she calls "money in a can." She says sellers can do well by hiring a stager to recommend colors, furnishings and other tricks, like making sure floors are in top-notch condition.
The real estate mogul has offered some glimpses about what to expect.
Marc Carver of the Carver Property Group, a luxury real estate company in the Atlanta area, says that while a full kitchen replacement may not pay off, it can be worth the cost to replace out-of-date knobs, paint cabinets or replace cabinet doors.
Experts say sellers should remember that their interests and their agent's are not always the same, even though it would appear that the highest possible sales price would benefit both. While a high price will produce a larger commission for the agent, it won't put more money in the seller's pocket if it was achieved with improvements that cost too much.
Also, the agent may prefer spending time marketing other homes, and recommend pricy upgrades to sell yours faster. Or the need for speed could spur the agent to recommend a lower asking price.
So it's important to take advice on upgrades with a grain of salt and to hire an agent who will really work to sell the property, not just wait for customers to spot it in the multiple listings book.
"It is helpful for homeowners to interview at least three agents before signing a listing contract," Fedosky says. "What is the agent providing? How will they market your home? Do they stick a sign in your yard and wait for the phone to ring? (Just) post iPhone photos to the local MLS? Or is the agent truly servicing their listings?"
In recent years it has become much easer for homeowners to sell without a real estate agent, saving thousands in commissions, and there are numerous online services that will put a home on the multiple listing service for a fee that's a fraction of what you'd pay an agent.
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In most states, the title company rather than the agent handles the nuts and bolts of the closing. Their fees are often set by the state.
But the for-sale-by-owner option takes a thick skin, knowledge of price trends and things like anti-discrimination rules, and time to show the home. One option is to offer buyer's agents a partial commission, since agents are used to getting just half in sales involving two agents. Selling a $300,000 home would therefore mean paying a commission of $9,000 instead of $18,000.
Real estate agents see for-sale-by-owner sales as a threat and tend to emphasize negatives like legal hassles and the fact that many buyers prefer to work with agents. Though a for-sale-by-owner site can get your home on the MLS, that doesn't guarantee traffic from buyers.
"It becomes rather easy for a Realtor to steer a buyer away from a listing that is not offering commission," says Ryan Hoffman, owner of Leverage Real Estate in Albany, New York. "These days, buyers are finding the homes online and it is up to the Realtor to provide access. Many times, agents avoid contacting FSBO homes and lead buyers to see (other) properties, sometimes mostly (listings from) their own firm. Home buyers usually don't balk at such occurrences and are whisked away to a dozen other homes, quickly forgetting about that FSBO themselves."
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....