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Room For Improvement |
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Seller's Mathematics |
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A New You |
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I am pleased to present you with the latest issue of Life@Home. Delivered to home buyers, sellers and owners on a monthly basis, this electronic newsletter is designed to give you the real estate information that is important to you. In each issue, you will find practical tips and articles related to buying, selling or owning a home, as well as the latest news on real estate trends. I hope that you enjoy this issue of Life@Home. If I can be of any assistance, please do not hesitate to contact me. |
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Room for Improvement
 When it comes to home improvements, you want to choose projects where the answer to two key questions is a resounding, “Yes.”
First, will the change make the home more comfortable and appealing for you and your family? Second, does the project boost your home’s value and have a good “return on investment?” In other words, if you make this improvement, will you likely be able to recoup most of the cost when it comes time to sell?
Studies show that improvements to kitchens and bathrooms have the highest return on investment or “ROI” percentages. A kitchen remodel averages an 80 percent return, while a bathroom renovation averages 90 percent.
However, in each case, you should carefully consider the scale of the project. It's not always necessary to rip a room down to the studs and start from scratch to make an impact. A kitchen remodeling involving new paint, a new countertop and complimentary back splash, can make a statement without breaking the bank. It may also make it easier to recoup your expenses, since the cost won’t be nearly as high as replacing flooring, cabinets and fixtures.
Another good idea is to choose a style and approach that reflects your personality, but one that is still appreciated by others. In other words, try to find amenities, tiles, fixtures, flooring, carpet and that reflect your taste. At the same time, remember that you might be selling this home one day, so you also want to appeal to prospective buyers. It is a fine line to walk, but when done well, it can pay dividends down the road.
But no matter what project you are considering, try and make a change that will improve your home, while still maintaining the character and quality of the neighborhood. A home improvement should be just that.
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Seller’s Mathematics
When buyers begin the real estate process, they are often encouraged to carefully consider their finances. The fact is sellers would be wise to do the same. You want to know exactly what money you have, how much you owe and what expenses you might incur.  Each of these will be factors when determining list price and ultimately the final sale price.
Here are four steps that can help you see the big financial picture.
1. Ask a real estate agent for a Competitive Market Analysis (CMA) to help determine the value of your home.
2. Estimate how much it will cost to sell the home. Including commission, closing costs, taxes and the cost of getting the house ready to show.
3. Think about how much it will cost to purchase your next home. In addition to sale price, add in things like moving expenses, home inspections, homeowners insurance and other ancillary costs.
4. When you have all this information together, do the math. Take the estimated value from the CMA and deduct the amount left on your mortgage note. (This number can be acquired by calling your lender.) From that result subtract what you expect to spend on selling the home. What is left is an estimate of your total proceeds. This number will help you gauge how much money you have to spend on a new home and/or how much you may need to borrow.
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