Q: I enjoyed your column about home buying, but you didn't address what sellers should do to get a better price. Any ideas? Samuel Seller
A: Dear Mr. Seller: Homeowners are blessed and cursed. On the one hand, a home may be our biggest asset; on the other, it's also a hungry beast that devours every spare dime for upkeep and repairs.
Assuming you decide to downsize or move to a less costly area, upgrades can be a better idea to maximize gain than remodels. Home improvement projects for outside and inside almost always mean a house will sell quicker for more money. According to AARP, the average return on these projects was 6.7 percent higher than a year ago, which easily beat the inflation rate of 1.4 percent.
Stone-veneer siding, for example, and/or replacement of the front door actually bring better returns than a major kitchen or bathroom project. (Obviously, where home prices are higher and job growth is stronger, a greater payback follows.)
The Chattanooga area is on the upswing so readers who are thinking of putting their homes on the market should consider simple replacements. For example, the editor of Remodeling magazine suggests the following improvements, in order of importance, for the best return on your dollar:
* Attic insulation hits the top of the charts with a 117 percent investment return. A year or so back, I wrote about he benefits of insulation for lower heating and cooling bills. After an EPB tech came out and explained the savings new insulation would grant, we paid to have the job done. And sure enough, our monthly bills decreased from that point on.
* Replacing the front door means a 91 percent return. Part of the all-important curb appeal that ensures would-be buyers either stop or drive on by, a few hundred dollars investment can make all the difference in the world.
* Our third best upgrade is to refresh the kitchen for an 83 percent return. A friend of mine was unable to sell her house last year, because her kitchen didn't have stainless steel appliances and she didn't have the funds to replace them. However, a fresh coat of paint, new countertops, a new floor and other rejuvenating features can make all the difference in the world. (My husband and I have never had a problem selling a house — in large part, our Realtors believed, because we painted the entire interior. Nothing says fresh and clean like brand-spanking, newly painted walls!)
* New siding and building a wooden deck tie at 75 percent. Obviously, the siding needs to be done by a professional, but the deck is a great excuse for a party and lots of friendly help. Before listing his house, a friend in Virginia, who also received the deck advice, threw a pizza and beer party for eight of his friends (and wives). Within six hours, a gorgeous wooden deck arose off the kitchen at the back of the house. The friend's only expenses? The wood and materials, a bunch of pepperoni, sausage and cheese pizzas and a couple of cases of beer resulted in several thousand dollars added onto what would have been an average list price.
* Roof replacement comes in at a 72 percent increase. Nobody wants the building inspector to reveal the necessity for a new roof; frankly, I'm surprised this improvement doesn't rate higher. For those of us who live in a region where tornadoes, strong winds, hail and other phenomenon occur on a more frequent basis, the likelihood of roof repair or replacement rises.
* If you're lucky enough to have a basement, remodeling it brings a 70 percent upturn. Finished or unfinished, workshop or in-law suite, you and your Realtor decide what potential buyers most desire and get to it. Regardless of the decision, plumbing for a bathroom or at least a half bath should top the basement renovation list.
* Adding a family room also swells your investment return to the tune of 68 percent. While many folks turn their formal living room into a den/family room for casual living space, putting your home on the market without the additional expanse may be risky. One solution might be to enclose a screen porch, then add that same deck for its 75 percent return; sellers just need to decide if the homes' purchase price (plus haggling) is worth the expense of the bonus location.
* And, finally, at the bottom rung of the upgrade ladder is to renovate the bathrooms. With a 66 percent investment return on this project, perhaps some smaller changes won't be as expensive as one may assume. Recently, I saw a neighbor's master bath, which really stunned me with its relatively minor changes. Replacing the garden tub with a regular-size one opened up a good bit more room to enlarge the shower – and presented an entire change of scenery and enabled the owners to enjoy more practical usage of the bathroom.
Certainly, wise homeowners create their own lists of to-do's to ensure their houses are more palatable before the "For Sale" sign appears in the yard. And any project, unless one goes overboard, should recoup (and more) what you spent on the upgrades.
Contact Ellen Phillips at email@example.com.