Is it time to sell your home?
By Tom Phelan - ReminderNews
Featured Article - posted Thu., Mar. 21, 2013
In case you missed the housing news from the National Association of Realtors in February, the housing market is rebounding somewhat. Even though the economy as a whole seems to be at the bottom of that political “fiscal cliff,” there is some positive news for at least one side of the home sale market.
Based on the completed transaction sales of single-family homes, townhomes, condominiums and co-ops, the NAR numbers are not jaw-dropping. But NAR says they indicate that “a seller’s market is developing and home prices continue to rise…”
NAR’s chief economist, Lawrence Yun, characterizes the market as constrained by “tight inventory.” In short, people are out there buying homes of all types, but they do not have a lot of options from which to choose.
Meanwhile, “Remodeling” magazine published its annual Cost vs. Value Report in the January issue, posting some positive results. It said the cost-value ratio improved by 2.9 points over the 2011–12 number (the lowest point since 2001). The history of the reports shows that projects categorized as "replacement" generally have better cost-value ratios than the "remodeling" improvements. "The dramatic improvement to curb appeal that most replacement projects produce is a strong factor in raising the perceived value of a home in the eyes of prospective buyers," the report said.
Improvements such as new siding or windows, and replacing entry or garage doors fall into the "replacement" category. Seven of the top 10 cost-value projects in the magazine's report were replacement projects.
What does this mean to you, if you are considering selling your home?
Look first on the outside, and think about any major projects your home might need. Replacing a roof that is showing its age is the type of project that will recoup a significant portion of the cost in the sale of the home. Not replacing it might discourage buyers from even looking, much less making an offer. And if they make an offer, the number might reflect project costs higher than you would actually incur.
It might seem strange to you that something as relatively small as a front door could make a big difference, but the “Remodeling” report shows installation of a new door recovers almost all of its cost. Your prospective buyers will come face to face with that feature as they walk through it to see the rest of the house.
If you have a deck that needs any work or could use an upgrade, that project cost would be principally recouped if it helps to sell your house. The same is true of replacing garage doors and windows.
On the interior, a "minor kitchen remodel" is among the top 10 cost-value ratio projects in the magazine's report, and fourth in the New England data focus. Here is how "minor" the remodeling might be. You might not replace the cabinets themselves, but replace the doors and drawers with new raised-panel wood, and adorn them with new hardware. If the appliances are dated, replacing a wall oven and cooktop with new energy-efficient models is a good idea. Laminate countertops are a turnoff. So upgrade them, and install a moderately priced sink and faucet. Repainting the trim is inexpensive, while replacing worn flooring is well worth it.
Don't go crazy about remodeling your bathrooms. You might feature a porcelain-over-steel tub, and surround it with standard 4-inch square ceramic tiles. Install a standard white toilet and a new vanity counter that includes the sink. If the medicine cabinet and lighting are dated, replace them. Then finish by putting down a ceramic tile floor.
One other thing NAR’s chief economist said may also get you thinking about selling your home. He said that although they expect to see a “seasonal rise of inventory this spring,” that may not be enough to help the market break away from “frequent incidences of multiple bidding and faster-than-normal price growth.” That should be music to the ears of prospective sellers.