Return on Investment for Sellers

Clients often ask me which home renovations, remodels and improvements will add the most value to their home when it comes time to sell. More accurately, the question is: which projects will provide the best return on investment (ROI). I have opinions, of course. But now I have some facts to back those opinions up.

 

In the January issue of Realtor magazine, an article entitled “Small Projects, Big Bang” summarizes the results of the Remodeling Cost vs Value Report 2009-10.  The report outlined a number of different home improvement projects, costed them out in different metropolitan areas around the US and calibrated a percentage ROI on each one. There’s a lot of detailed information in the article (and helpful hints on smaller projects) but here’s my summary for the Portland market:

 

With so many wonderful older homes on the marker here, it is well worth investing in the following infrastructure upgrades for your home. Buyers and their realtors are always going to value:

•  new plumbing

•  a good sewer connection

•  new or upgraded electrical system

•  an energy-efficient furnace (not oil)

 

An investment in siding had a really high ROI (92% in our area). Costs averaged out at just below $14,000 but with that ROI, it is certainly an investment worth considering.

 

Improving the basement also came in with a high ROI. And this can be a simple matter of sprucing up what’s already there. New flooring, a coat of paint, and new lighting fixtures could make a big difference and there may be no need to delve into plumbing or dry wall.

 

Curb appeal has always been important. A little front yard landscaping can go a long way to making a good first impression on buyers. However, you might also want to give your front door a good look. Replacing the front door with a mid-range product (approximately $1200) had the best ROI of all the improvements at 128%.

 

Several of the most worthwhile improvements are, not surprisingly, centered on the kitchen:

•  add a breakfast bar (this can be as simple as cutting an opening in a wall, adding a bar and a couple of stools)

•  upgrade the kitchen counter to granite tile (12” tile is a very affordable option compared with granite slab)

•  cabinet fronts (check into refacing or replacing doors or perhaps just the hardware)

•  tidy and organize kitchen cabinets (Yes, buyers open them so adding a roll-out tray or lazy susan can create the illusion of more space.)

•  retile the backsplash to freshen or brighten or just clean up the look of your kitchen

 

If you need any more information on remodeling or renovations, I keep a list of reliable vendors who could estimate your job for you. And I’m always happy to talk to you about plans for your home with a view to selling at a later date.  But remember, don’t make a change solely for the sake of resale. This project needs to be something that you and your family will enjoy for the length of time you live in your home.

Milwaukie Home Great for First-Time Buyers

Great New Home For Sale in Milwaukie

Great New Home For Sale in Milwaukie

This is a lovely home for the First-Time Buyer looking for a no worry, traditional home with an open, modern floor plan. This home is virtually maintenance free, and has the 3 bedroom 2.5 bathroom configuration that the modern family is seeking.

This Milwaukie, Oregon home is situated on a dead end street, limiting through traffic to a minimum. It is also conveniently located close to shopping, entertainment, parks and schools for easy access. Feel the privacy of the neighborhood while being close to the rest of Portland.

The hallway off of the large, two-car garage opens up to a separate Laundry Room, Half Bathroom, and large Kitchen. Passing through the spacious Kitchen leads you through the Pantry and Office Nook and to the vaulted Dining Room and Living Room combination. The skylights and gas fireplace keep this room cozy and bright while allowing the entertainer in all of us the freedom to enjoy a modern lifestyle.

Upstairs you will find all 3 bedrooms including a Master Suite that looks out onto a Private Deck. The Master Suite has a large Walk-In Closet with a built-in closet organizer and a nice Bathroom with a shower. It is just paces away down a short hallway past another Full Bathroom to the other two Bedrooms. This allows enough privacy for adults while allowing quick access to the rest of the family.

Call to set up a showing of this great Milwaukie home!

New FHA Restrictions, What Does it Mean?

A recent article from Realtor.com talks about the possibility of changes to the current FHA loan situation.  Many First-Time buyers have been using FHA loans because of the 3.5% down payment aspect.  This offers the buyer a chance to get into a home without an extremely steep output of initial cash.  I expect to see more tightening of credit in the future and this could be a small step towards that.  It seems that buyers are encouraged to get out there (tax credit, etc.), but discouraged by the credit and banking guidelines.  Which way are we going to sway?

November Stats

There has been a lot of talk regarding reports from the National Association of Realtors and others regarding the record price gains throughout the United States during the last seven months and this month especially.  Sources quote a 7% increase from last month to this month.  However, when you look at the fine print, and glance at stats in the NW, its closer to 1%.  Lets all remember that Real Estate is local, and although the market in Iowa does have an interest to us as a whole, we are really concerned with Portland, OR.

                 RMLS quotes our 12 month rolling Average Sales Price as being –12.6% since last October, compared to the previous 12 months.  Year to date, our total time on the market for homes is 143 days!  A positive note is that our inventory has dropped significantly.  Last October it would have taken 11.1 months to sell out of the city’s inventory whereas now it would take 6.5!  That’s great right?  Well, not exactly.  We have 20% fewer new listings, and we have more people getting frustrated with the market and taking their homes off.  Traditionally higher priced markets such as West Portland (-11.9%) have fewer pending sales because homeowners can’t get the prices that they would have gotten in the past.  If they don’t have to sell, they pull it off the market and wait.

This is all great for buyers, right?  Well, many of the homes still on the market are overpriced listings, and many of the properties that are competitively priced are so competitive that you are competing with 5-6 offers.  Interest rates are great, but appraisals are tight and coming in very low.  With less sold properties to use as comparables, appraisers are expanding their search areas, and some deals are falling through.

Do you Have Questions About the New Tax Credit?

As many of you are well aware, Congress has passed a new tax credit for first-Time Buyers and for buyers that have lived in a primary residence and are moving up.  I have had plenty of questions regarding the credit.  There are regulations that govern the $8000 or $6500, so I have been referring my clients to the source:  www.federalhousingtaxcredit.com