ENCINITAS- While researching for an article in the monthly newsletter I produce, I identified March and June as the two months for new home listings to come on the market. With this being established and March right around the corner, it is time for home sellers out there to take a hard look at two very important areas of their home.
Remodeling Magazine recently released a report regarding the return on each dollar invested in home improvements. Unfortunately the negative trend has continued and a homeowner can now expect about a 57% return which is down from the high of 86.7% in 2005. This is primarily attributed to the decline in home prices, not due to the actual costs of the projects, which have reportedly become less expensive.
In the past six years, the return on a remodeling investment has steadily eroded, Alfano says. Payback peaked in 2005, when home sellers earned back more than 86.7% of money they spent on remodeling projects, on average, the survey finds. That return has been eroding steadily ever since, hitting a low of 57.7% this year.- realestate.msn.com
Now while the return on investment has decreased, the importance of putting the best product on the market has skyrocketed. Often times sellers are competing with distressed property and a buyer has to really feel that they are looking at a turn key property and that the higher asking price trumps the headache and expenses of dealing with a distressed property.
Hey San Diego, it’s all about kitchens and curb appeal
In recent floor plans, the kitchen has become the focal point often anchoring the “great room”. It is where we spend so much time and whether it is eating, school work or entertaining friends, people gravitate to the kitchen. Because of this it is the probably the second most important place to concentrate dollars and effort.
I have all too often view flipped homes in San Diego that have had a kitchen remodel done, but the “flipper” in an effort to save less than $1000, and often times more like $500 or less, shortcuts the little things and the kitchen still does not set the stage. It is not due to the fact that they reuse the existing cabinets, it is that they buy the cheapest appliances they can find, don’t convert an electric kitchen to gas(this is HUGE and so inexpensive) or when they repaint the cabinets, they just come in and spray the cabinet and hardware together. The low cost of new hinges, handles and pulls as well as their ability to add a design element just kills me every time I see one of these flip kitchens. They are missing out on a huge opportunity to create positive impact and if you have an electric kitchen, CONVERT IT TO GAS. disclosure- follow and obey all local laws, codes as well as HOA rules.
Remodel Magazine shows that a minor kitchen remodel beats the return of a major kitchen remodel 72% to 65% and it is LESS out of pocket. A minor kitchen remodel is essentially taking and reusing the bones of the kitchen which include the cabinets and removing or relocating any walls or electrical or plumbing systems. While they suggest reusing the floor, I would certainly consider it, as flooring is relatively inexpensive, but this is a case by case opinion. When looking at changing your kitchen, you can start with as simple a change as removing old fashion ceiling light fixtures or boxes with can lighting. If you do this, you too can have all the old style toggle switch replaced with the newer “candy bar” type switches. There are companies that do this for less than $500. Another simple addition, if your counter tops are in good shape, would be to add a backsplash using current design materials to create an illusion of a new kitchen. By adding a nice backsplash, you are adding a design element at eye level throughout the kitchen. You should be able to do these three things for less than $1000 and with a nice fresh coat of current paint color, a new kitchen is born. With another $100, you could go through, clean the cabinet faces thoroughly and add new hinges as well as new knobs and pulls.
The place to have the greatest impact is the exterior of the home and that means curb appeal. After the minor kitchen remodel return on the dollar, the next four most beneficial returns all effected the home’s appearance from the curb. These items would be replacing the entry and garage door, vinyl window replacement and siding replacement, which more appropriately to us wouold be painting or adding a new stucco color coat.
Though these items set the stage and improve the buyer’s first impression, they also mentally tell the buyer that they are walking into a home that has been well maintained and will need little to know “work” after the sale has finalized. I can not begin to tell you how quick buyers are to notice dual pane replacement windows when looking at a home constructed at a time when only single pane windows were used or the aluminum framed early model dual panes. They like the cleanliness of them as well as have an appreciation of the energy savings that come from the enhanced climate control.
The take away is that you do not need to tackle huge remodeling projects to have a great impact on the sale of your home and in fact, regarding a kitchen, less may turn out to be more.
If you are preparing to put your home up for sale, I would like to offer you a free no obligation assessment of your home and create a list improvements that could be made to help you maximize your home’s price potential. You can reach Brian Long at 760.415.3329.