July 11, 2008
Home Staging Basics
Even the smaller changes can make a big difference in selling your home.
1. CURB APPEAL – Paint the door and window trim – Mow the lawn, prune the hedges, and buy gorgeous potted flowers in nice containers to place at the entrance – Replace old door hardware, knockers and welcome mats – Wash the windows, brickwork, railings, driveway and sidewalk
2. DECLUTTER – Create space by clearing kitchen and bathroom countertops of appliances, beauty products and knick-knacks – Store excess furniture off-site – Closets should be immaculate and organized – Personal photos should be packed away or relegated to one small area
3. FIXER UP – Missing tiles, broken light fixtures and wonky door hinges should be dealt with – Regrout the bathroom – Hire a handyman if need be
4. IT’S IN THE DETAILS – Purchase new light fixtures, cabinet handles and faucets for an inexpensive kitchen or bathroom facelift – Replace dingy bed linens, threadbare towels and dated window coverings with clean and classic upgrades – Fresh flowers, attractive lighting, and even a little soft background music can help create an appealing environment – Brighten rooms with a fresh coat of paint. Stick to a fairly neutral palette. Include all trim and doors.
5. BE A CLEAN FREAK – Sounds obvious but the house should be spotless – Appliances and countertops should gleam – Don’t neglect walls, ceilings and blinds. All should be dust-and cobweb-free – Hire a professional if you want to avoid the grunt work.
July 7, 2008
Home Improvements – Three Mistakes To Avoid
Home improvements are made for a variety of reasons. Sometimes those reasons are confused in the mind of the homeowner. That explains the first of the common mistakes listed below.
1. Not Being Clear About Your Purpose
With any home improvement, you should be clear about why you are doing it, so you can be clear about whether it is worth the cost. People often confuse their motivations, saying that a given project is not only to make the home more livable for them, but is an ‘investment’ as well. The problem is, it may not be an investment that yields any return.
In a report recently in Remodeling Magazine, the average cost and added value of various home improvements was shown for different areas of the country. The worst remodeling projects, including creating a home office, only returned about half of the cost in added value. With the best, including a basement remodel, you get back about 90% of what you spend.
Let me do the math for you: every single one of the improvements in every area of the country was a money losing proposition on average. Now, it is true that some are better than others. The average attic bedroom addition only cost $13,000 more than it adds in value to the home, while you lose $30,000 on the average master bedroom suite project. It is also true that if you are knowledgeable and creative, you can add more in resale value than you spend.
Be clear about this. If you spend $68,000 creating a master bedroom suite, and it only adds $38,000 to the value of your home, this is not an ‘investment.’ The real cost in the long run is $30,000. That’s what you pay for your personal enjoyment of it.
With that in mind, you may want to consider how long you will live in the house, and divide that costs into those months to decide if it is really worth it. If you move five years later, that nicer bedroom cost you $6,000 per year to enjoy, or $500 per month. If that seems reasonable, do the improvement. If an extra vacation or two annually, or $500 per month going into a retirement account, or any other way you could spend that $30,000 sounds better, drop the project or scale it down.
2. Not Being Clear In The Contract
If you don’t know what you want, you are likely to pay a lot more than you think for home improvements. This is because whatever you agree with the contractor on, that’s what you get for the price. Every little change will be extra, so know what you are trying to do in advance, and make sure it is included in the bid and the contract.
You may be wise enough to have a deadline in the contract, rather than just an ‘estimated date of completion.’ But a deadline alone may not be enough. You may also want to consider a clause that specifies penalties for not completing the job on time. A line saying that the price will be reduced by $100 for each day past the deadline is a ‘motivational clause.’ Also, never pay in full until the job is done.
3. Not Being Prepared For The Process
Large home improvements involve large messes. You may have to deal with dust and piles of construction materials for weeks or longer. Consider this when planning when to do the remodeling. Ask the contractor (before you sign the contract) if he will be completely cleaning up the mess in the end, and what you can expect during the process. Will they be providing a bathroom, or will the worker need access to yours? Will there be security issues, like walls that are open to the outside for days? Will you have to chain up your dog or warn the children about dangers?
The bottom line? Avoid these common mistakes and you will probably be happier than most with your home improvements.
June 28, 2008
Getting The Best Return On Home Improvements
The truth is most home improvements don’t increase the value of your house as much as they cost.
If you are getting ready to move and want to make some improvements that will actually increase the value of your house, check out the Home Sale Calculator at HomeGain. The calculator will help you determine which areas you should concentrate on and list the top 10 home improvements that will give you the most bang for the buck.
Here is an example of their recommendations:
1. Clean / de-clutter – 973% Average Return on Investment: Remove clutter by storing items in basement, attic or friend’s home. Rent a storage space or sell excess items, if needed. Keep every room very clean during open homes. Do pre-open house cleanliness inspections.
2. Lighten and brighten – 865% Average Return on Investment: Replace any burnt-out bulbs and use higher wattage bulbs, if possible. Have defective electrical components repaired or replaced. Make sure skylights are clear and keep drapes open during the day.
3. Yard and Landscaping- 426% Average Return on Investment: Store away personal effects from front yard. Hire gardener or landscaper to trim back the overgrowth and maintain yard. Make sure that your lawn has a healthy green appearance.
4. Plumbing and electrical – 260% Average Return on Investment: Consider repairing or replacing any defective plumbing or electrical items in your home. Make sure you have the right person for the job by getting several estimates.
5. Staging – 251% Average Return on Investment: Buy some fresh flowers, live plants and other decorations to liven up the home. Dispose of old furniture or other large items. Consider renting furniture or hiring a staging consultant.
6. Update kitchen and bath – 168% Average Return on Investment: Update kitchen and baths by resurfacing cabinets or painting with neutral color. Replace toilet seats, dated fixtures and drawer/cabinet handles. Freshly caulk and redo grout in countertops, sinks, tubs and showers.
7. Paint interior – 148% Average Return on Investment: Repair any damaged interior walls by patching all chips, holes and cracks; then touch up or repaint interior walls with neutral color.
8. Carpeting = 104% Average Return on Investment: If carpets are only lightly soiled, shampooing and/or spot removal should suffice. If there are rips, fading, heavy wear, smells or deep stains, replace with neutral colour.
9. Flooring – 101% Average Return on Investment: Repair and refinish damaged floors, or cover with neutral-colored wall to wall carpet and note damage in your disclosure.
10. Paint exterior – 76% Average Return on Investment: Repaint or resurface the outside walls of house, as needed. Patch and repair any damaged areas.
June 27, 2008
House not selling?
New design shows can help distract you
The real-estate market has turned medium-cool lately. The mortgage crisis south of the border, a slowdown in new-home sales and general North American economic malaise have expectedly reduced the volume of buyers and sellers in the housing market. With daily reports of a semi-recession and gasoline prices reaching new highs, fewer people are looking to change their address.
The market value of home and design TV shows, meanwhile, booms away. The renovation and design genre does not require permits to make additions; most often the new shows simply appear on television and immediately connect with some segment of the viewing audience, whether on a mainstream scale (Trading Spaces, various Martha Stewart incarnations) or to a more select viewership (World’s Greenest Homes or the curiously popular Colin and Justin’s Home Heist).
The niche category expands slightly for the launch of four new shows on HGTV, the cable mother ship of home and design television. And in a very rare occurrence, each new arrival is of Canadian origin.
The hottest new listing: The Stagers (Tuesday, HGTV at 10 p.m.) focuses on a handful of experts who transform average-looking homes into posh showroom spaces, with the express intent of driving up the price, of course. Even in the fussy TV design field, home staging is an extremely specialized craft.
See story in the Globe and Mail »
June 26, 2008
Major mistakes that home sellers make
From incorrect financing to lack of preparation, there are countless mistakes that sellers make when putting their house on the market. Here are some of the most common mistakes made by sellers during the property selling process.
If you’re serious about selling your house, it’s important that you know the facts. It seems like a simple prospect – just put your house on the market, show it to a few buyers, and make the sale – but as many sellers find out, selling a home can be a difficult, expensive and long prospect. By knowing about the real estate industry, as well as some tips and tricks about selling your property, you’ll be able to more effectively tackle today’s buyers market. Selling your home can be a difficult job, especially since you’re competing against hundreds of other properties. So it’s vital that you be aware of what works and doesn’t work when it comes time to sell your home.
Consider the following list of the most common mistakes made by home sellers:
Mistake 1: Setting the wrong price for your home
Experience shows the right price sells a house faster than any other factor. When the listing price is more than 5% over market value, the price alone discourages buyers. That’s because an overpriced house scares away potential buyers who think they can’t even afford to look. Buyers who do look at an overpriced house know they can get more house for their money elsewhere.
Mistake 2: Selling your home in ‘As-Is’ condition
In today’s competitive market, most buyers will not even consider a house that needs fix ups. In contrast, a sparkling showcase home gets top dollar when it comes to the bottom line. What most buyers are looking for is an inviting home in move-in condition, one that looks as good as a model home. Buyers who are willing to tackle the repairs after moving in automatically subtract the cost of needed fix-ups from the price they offer. Either way, you save nothing by putting off fix-ups and likely slow the sale of your house.
Mistake 3: Selling your home with a dull interior
A clean, bright decor is what buyers want. Probably the best dollar-for-dollar investment for selling your home fast is fresh paint. Neutral colors are best. Next to fresh paint, new carpeting–replaced for either condition or color–makes a big difference. Elbow grease can be as effective as spending cash to brighten your home. Start by ruthlessly getting rid of the junk you’ve accumulated. Clean each room top to bottom. Dare to make your home look better than you’ve ever had it looking before. Focus on the three rooms most inspected–kitchen, master bedroom and garage (if you’ve got one). Forget those and you may as well forget the buyer, too. In the kitchen, clear off counters and organize cupboards. Keep in mind, some prospects willjudge the whole house by the cleanliness of the oven or refrigerator. In the master bedroom, move or remove furniture to create spaciousness. The ideal garage stores only cars and perhaps an orderly display of garden tools, so throw out your junk to show off room for theirs.
Mistake 4: No ‘Curb Appeal’
Your house gets only one chance to make a good first impression. That’s why “curb appeal” is one of the most critical points in selling. Buyers are apt to fall in love at first sight–or not at all. If your home lacks curb appeal, chances are the first impression will not be counteracted by the most perfect floor plan or the most tasteful interior. Spruce up the view of the house from the street, including lawn, shrubs, shutters, windows, front door, mailbox. Add potted flowers out front, a wreath on the door, brass outdoor lighting fixtures–whatever will enhance your home’s “buy me” look.
Mistake 5: Over-improving your home
While it’s important to fix whatever needs fixing to get your home ready for sale, undertaking a major project could cost more money than you would recover from the sale. Spending too much on remodelling projects just drains money out of your pocket. If your improvements will push your home’s value more than 20% over the average neighbouring home values, don’t expect to recoup the entire cost. (Some major projects, however, like replacing a roof, should be done if they are needed.)
Mistake 6: Inflexible Financing
The more buyers you appeal to in terms of financing, the greater your chances of selling faster. Be flexible. Consider accepting FHA and VA financing, offering seller financing, paying closing costs or points, providing a decorator’s allowance or other irresistible buyer incentives.
Mistake 7: Stretching out buyer negotiations
One of the most important moves you can make is to reply immediately to an offer. When buyers make an offer they are, right then, in the mood to buy. Moods, as you know, change, and you don’t want to lose a sale because you stall in replying.
Mistake 8: Being Adversarial during negotiations
No one wins if you enter negotiations with boxing gloves on. Instead, approach negotiations in a positive frame of mind, not as an adversary of the buyer. After all, you both want the same thing–a sale. Leave most of the discussion of price, terms, possession and other conditions up to your agent. We’ll make it our business to get you the best deal.
Mistake 9: Not having a presentable house
The presence of your family can make prospective buyers feel like intruders. If you’re at home when your home is being shown, be your usual friendly–but low-key–self and keep children and pets out from underfoot. It’s the agent’s job to show buyers what they need to see. Buyers can better focus on your home’s advantages by viewing them than by socializing. If an open house is scheduled, plan to be away from home, but let us know how to reach you quickly. When you’re not at home at other times, agents accompanying prospects will leave their business card. Please alert us afterward so we can follow up.
Mistake 10: Selling without a professional
Going it alone like General Custer could invite disaster. Without a professional advisor, you probably won’t sell. Even if you do sell, surveys show self-sellers often net less from the sale than sellers who use a real estate agent. Selling a house is a team effort between you and the listing agent. You’ll find agents do a lot more than most people know–from bringing qualified buyers to keeping things on track to settlement.