Think like a potential buyer and your mission becomes clear, an expert renovator says. That means fixing what can be seen (or, ugh, smelled) first.The single most cost-effective investment you can make to increase the value of your home is to buy a roll or two of plastic trash bags. Stuff them with junk outside the house -- from beer cans to raked leaves.
Nothing could be more common sense than cleaning up the yard and exterior, right?
You'd be surprised at how many people don't recognize the importance of doing these kinds of items. When preparing your house for sale, spend money on things a buyer can see.
One of the things that you don’t want the potential buyer to do when they drive up to your house is to have what we refer to as high 'Yikes!' appeal. "Yikes appeal" is the state of a house in which a normal person would drive up, say, "Yikes!" and keep on driving.
What a 'Yikes' house looks like:
A house with high "Yikes!" appeal has weeds, a boat parked in the front yard and an old car transmission on the side of the house, nested amid beer cans. A rain gutter hangs down. Overgrown shrubs obscure the front windows, creating a dreary interior. People actually try to sell their homes in such condition, creating opportunities for bargain-hunters.
A lot of money is at stake. Homeowners spent $166 billion on home remodeling in 2001, according to the Harvard Joint Center for Housing Studies. More than three-quarters of that was spent on what the Joint Center calls improvements, with the rest going to maintenance and repairs. Another $48 billion was spent on the remodeling of rental properties.
Researchers discovered that 6.3% of remodelers spent more than $20,000 on improvements in 2000-2001 and 2.7% spent more than $35,000. Much of that was targeted toward fixing up kitchens and bathrooms.
Protect, improve, and appreciate:
"Families that spent more on home improvements also realize the greatest rates of price appreciation," the Harvard study said. "In many regions of the country, homeowners recover as much as 80% to 90% of the cost of home improvements in the form of higher home values. Little wonder, then, that homeowners spent almost $2,300 on average in 2001 to help protect and improve their most important financial asset."
If you're getting ready to sell a house, you want to be among the homeowners who recover 80% or more of their investments in the form of a higher price. The key is thinking like a buyer. And what do buyers do? They drive up to a house and look at it. If they're not repelled by what they see, they step inside and look around.
Based on that typical experience, here are a few guidelines:
• Spend money on what can be seen vs. what can't be seen.
• Fix up the exterior first, then the interior.
• Focus first on "Yikes!" appeal -- clutter, trash and bad smells that drive down a home's value.
The improvements that are most visible are the things you need to focus on first.
What you see is what pays off:
This means that, if you have $10,000 to spend, and you can either spend it all on a new roof or all on repairing a cracked foundation (but you can't do both), you should replace the roof because it can be seen. Whatever your budget, put a higher priority on improvements that can be easily seen, because those give you the best bang for the buck.
Because an unkempt yard and ugly exterior can cause prospective buyers to drive away without going inside the house, you should work on those first. Clear up clutter. If you want to, hire day laborers to remove that old engine block in the driveway and reattach that rain gutter that fell two years ago and has been lying by the side of the house ever since. Then concentrate on landscaping. Prune hedges, trees and shrubs, especially if they obscure the front of the house. Paint. If the roof is dirty, hire someone to power wash it.
From the curb, the roof takes up 30% of what you see. If you have a nice-looking roof, that goes a long way in curb appeal for the house.
Cut clutter, clean:
I am not recommending that you break the bank -- just that you spend a little time and money to make the place look better. You should do the same inside the house -- reduce clutter and clean everything. If you own a pet, invite a non-pet owner inside the house to sniff around. You might be inured to the smell of your pets urine, but the stench could make a buyer retch.
If you can, repainted wall-to-wall and have the carpets and vinyl flooring replaced. You might think that by offering a flooring allowance, a family could move in and select their own flooring. Buyers don't want to select their own flooring. They want to move into a house that they don’t have to do too much work to. It delays their move in time. People don't want to fool around with painting and replacing carpet and fixing the house up. In the world of fast food and instant gratification, people just want to buy a house and move in."
When you're trying to decide how to spend remodeling money, seek the advice of an experienced real estate agent who is familiar with your neighborhood. A licensed appraiser should be able to provide guidance, too.
