Happy August! In the blink of an eye, the summer break is almost over. Kids are getting ready to go back to school. Usually with the coming of August, our local real estate market activity begins to cool a bit. This is seasonal and expected. Most sellers and buyers complete their relocation during the summer time. However, we have always been busy throughout the whole year and we work with buyers and sellers in all seasons. In fact, several new listings are coming in August. Stay tuned!
This month, I will discuss home improvements in the context of helping home sales.
Q: I know we will be selling our home in a few years. We would like to make improvements that we can enjoy now but would also help sell the home when the time comes. Can you give us some pointers?
A: Certainly! This is a common question. One of the joys of homeownership is the ability to make changes to the home to reflect your taste and style. Home improvement TV shows are extremely popular for this reason. First principle to keep in mind is that, most home improvements do not recover dollar for dollar. The prime example is the additional of a swimming pool. A $40,000 pool may only bring $20,000 in resale or appraisal value. On the other hand, granite, or other premium countertops, may be an exception. Often the value added is not merely how much more the granite countertops is worth, but that such improvements raise the home to another category of comparables. For example, often in an older neighborhood, homes with original features sell for one price range, while homes with renovations sell for a higher range. The granite countertops can move a home from the first category into the second category and justify a higher price. This can be complicated and depends on the nature of the comps in a neighborhood. Ask us for a customized analysis! The following are some major categories of home improvement.
- Roof: In a rainy state like Florida, the condition of the roof is often foremost on a buyer’s mind. Homes with newer roofs usually sell faster and fetch higher prices, but not a full recovery of the cost dollar-for-dollar. If you have a very old roof, you will encounter difficulty passing inspection. But if you replace the roof, you are not likely to recover more than 50% of the cost. When the insurance company pays for the roof replacement after storm damage, it’s a win-win scenario. The seller gets the advantage of selling with a new roof at the cost of the deductible, and buyer gets a home with a new roof at a modest premium over a similar home.
- Air Conditioning System: Like the roof, in a hot and humid state like Florida, the condition of the A/C system is also forefront on a buyer’s mind. Like the roof, new A/C systems are highly desirable but do not recoup dollar-for-dollar. This time, you are not likely going to have the insurance company paying for a new A/C. You have to budget for this and hopefully enjoy the many benefits of a new, high-efficiency system while you live in the home.
- Plumbing: I’m talking about Polybutylene piping. These are polymer pipes that were produced between 1978 and 1995. This type of pipes is obsolete and can cause floods. They are basically uninsurable now and won’t pass inspection. You can replace them now for your own peace of mind, or be ready to provide remedy when you sell your home.
- Flooring: Now we are moving from mechanical items to cosmetic improvements. Flooring trends change faster than other home items. One principle you can go by is to have as few flooring types as possible. Multiple non-matching tile/wood/carpet transitions throughout the house is a major turn-off for buyers. In interior design magazines you will often see one flooring type running through the entire area, be it wood, tile, or even carpet. Remember, less (transitions) is more.
- Kitchen and Bathroom: Most homeowners want new kitchen and bathrooms. They are the most seductive features in a renovated home. Trendy cabinets, backsplash, countertops, frameless showers and such can make a home irresistible. Unlike structural or mechanical items like a roof or A/C, kitchen and bathrooms appeal to buyers emotionally. Typically, they do not recoup dollar-for-dollar, especially expensive kitchen redo’s, but they can do quite well. However, keep in mind that style is a highly subject thing. More stylized improvements you make, more likely you may encounter buyers that do not like them. Do what will make you enjoy your home, but it’s good to consult professionals so your investment does not appeal only to a narrow group of future buyers.
- Interior Paint: Paint colors are highly subjective. I would say enjoy the colors of your fancy and paint the walls any color that makes you happy! Just remember before you sell your home, you should repaint the walls to neutral colors to appeal to the majority of buyers. This is something you can do on your own, so you can control the cost.
- Landscaping: Average good landscaping does not add price to a home, but good curb appeal always helps the home sell faster and better. Unlike other components of a home, landscaping can actually improve over time. You can add small plants inexpensively now and in a few years, they can grow to an impressive state. Of course, proper design is key. A related side-note: A very trendy and popular backyard feature is a stone firepit area!
If you would like a personalized recommendation, just give us a call! It’s never too early to plan ahead.
We will stop here. Give us a call if you have any real estate related questions, or know of someone we can help! We love referrals!
Until next month, take care!
Yien and the Yao Team.