5 Improvements NOT to do before selling your home

You’ve made the decision to sell your home and now your mind is quickly filling with a lengthy to-do list.  Before panic begins to set in, take heart and repeat a new mantra:  “Soap and paint are my friends.”  While the home should be neat, clean and in good repair, major improvements are not necessary and cost more than usually can be recouped in the selling price.  So, give the house a thorough cleaning, a fresh painting and perhaps recarpet areas that have worn footpaths through them.  Rest assured that money spent on soap, paint and carpet will reappear in the selling price of the home.  And remember, if buyers can’t see the money you spent, you won’t recoup it…even if you tell them about it.  Resist the temptation to undertake major renovations or replacements – particularly these five costly projects.

CLOSETS
Buyers may oooh and ahhh over a large walk-in closet that could double for a well-organized bedroom, but they won’t pay you extra for it.  Adding, expanding or customizing closets can cost thousands of dollars and while they look impressive, the return on investment isn’t.  Save your money.

ROOM ADDITIONS
Unless your home is a two-bedroom/one bath in a neighborhood of four-bedroom/two bath homes, don’t waste your time, sanity or money on adding rooms.

There’s no way to predict a buyer’s preferences, so it’s best to present the home in the best way possible – using soap, paint and carpet – and leave any remodeling to the new owners.

POOL
A pool may seem like a good way to attract buyers, but many folks just don’t want the maintenance that comes with it.  A buyer who doesn’t want the upkeep of a pool won’t purchase a house that has one.  Pools and their surrounding deck areas are expensive and this cost is rarely returned in the selling price of the house.  However, someone who adores the house would be willing to put in a pool later.  Let them shoulder that expense.

NEW ROOF
Putting on a new roof isn’t a good idea for a couple of reasons.  A seller is only required to have a roof that doesn’t leak.  Leaky roofs are easily and inexpensively patched.  The money saved by patching the roof makes repair a better choice.  Also, replacing the roof involves making a subjective choice about the color, shingle style and durability of the roof.  If the buyer doesn’t care for the new roof, the cost of it could be money wasted.
MAJOR RENOVATIONS TO KITCHEN OR BATHROOM
Remember the mantra?  “Soap and paint are my friends.”  These renovations are costly and require decisions as to style, colors, brands and price.  In lieu of remodeling the kitchen or bathroom, experts suggest reducing the asking price to reflect the outdated kitchen and bathrooms and allow the purchaser to take care of these projects.

Now that we’ve dismissed most of the major projects, it’s easier to focus on cleaning, painting and carpeting.  When deciding which projects to undertake, keep in mind that you want to do the least amount of fixing up required in order to sell the house for the maximum selling price.

Before You Decide to Sell Your House, Take a Minute to Read This Letter (It Could Save You a Lot of Money)

Did you ever wonder why some homes sit on the market unsold for what seems like forever? The most important factors that determine whether a house will sell quickly happen in the time before the house ever goes on the market. There are some simple things you can do before you put your house on the market that will give you a much better chance of selling your home quickly and for a higher price. Did you know homes that sell quickly almost always sell for more money than homes that sit on the market for several months? It’s true.  A free “Room-by-Room Review” will tell you the secrets to making sure your house will sell quickly and for a good price.

Just give me a call at 503-409-5861 or email me at Dana@LovelySalemHomes.com and we can arrange a convenient time to get together.

Talk to you soon…

Dana

The Value of Repairs, Improvements and Additions to Your Home

Anyone who has owned a home for any length of time can attest to the ongoing maintenance required to keep a home in good condition, not to mention the time and expense involved in updating and improving. Over those years, it’s not unusual for some of the “little maintenance jobs” to have been overlooked or even forgotten. As a result, features and systems in homes vary considerably in age and condition. In many cases, the fact that these features have not been replaced or improved can present a substantial negative when it’s time to sell.
The purpose of this report is to separate the different types of home maintenance and improvement tasks that you may encounter, and how they may affect the market value of your home. The nature of the task will in large part determine the return-on-investment potential you can expect, but never underestimate the importance of aesthetics. The details of any project can make or break it. A poor execution can leave an expensive project looking shoddy, and a great execution can make an inexpensive one look great. The return-on-investment potential can be divided into three categories:
Repairs/Routine Maintenance: Fixing or replacing those items or areas of the home that have fallen below the standard level of acceptability in today’s real estate market. Replacing rotten boards on soffits, or tuck pointing the bricks on the chimney that have eroded through are both examples of repairs. Repairs should be considered routine maintenance – those things required by you, the homeowner, to keep your home in good condition.
Additional areas in this category include furnace, roof, driveway, siding, tuck pointing, and even new windows. These repairs will usually return only a fraction of their cost if you sold your home immediately after completing one or more of these projects. But, if you do not make these kinds of repairs, they may cost you even more money if they become an issue down the road during negotiation with a buyer. A home requiring many repairs would likely be viewed as a “fixer-upper,” often selling for far less than other homes of the same size.
Improvements: Updating kitchens, baths, painting, replacing older carpeting, adding premium roof shingles, replacing an asphalt driveway with concrete, or replacing a concrete driveway with paver bricks are examples of improvements. The return-on-investment potential for these projects can vary from 25% (concrete driveway) to well over 500% (painting). Updating kitchens and baths has a reputation of returning a high percentage of the investment, but don’t “over-expect.” There are not many new $20,000 kitchens that add anywhere near $20,000 to the home’s value. Expecting a buyer to pay retail price for a kitchen or bath that you designed, selected and enjoyed is unrealistic. Like a car, the minute you take it home, its value is reduced.
Additions: Additions are improvements with added square footage or functionality. Room additions, adding a second bath, and replacing a one-car garage with a two-car garage are all examples of additions. Care must be taken with these projects. They can be very expensive, and often require time for the home to appreciate and absorb the expense. Due to the expense of such projects, return on investment will likely be poor upon completion of the project, but will increase as the home has an opportunity to “appreciate” into it.
A good rule of thumb is to avoid such projects unless you plan to stay in the home a minimum of three to five years after completing large, expensive projects. If you plan on doing much of the work yourself, or have friends in the trades that can save you money, you may fare better and ultimately recoup more of your cost. Keep in mind that the finished product must look professional if you expect maximum return on investment. It is important to know that any addition, improvement or even repair can be very subjective. If a simple repair makes a substantial visual improvement, then it will likely be worth much more than the investment. Inversely, if an expensive family room addition is built onto a home but doesn’t “flow” with the home or varies from conventional standards for such a room, its value can be greatly diminished in terms of return on investment. In other words, “The best addition is an addition that doesn’t look like an addition.”
You will occasionally see a newspaper or magazine article quote the return-on-investment percentages that you can expect from various home improvement projects. In theory, these figures are wonderful, but theory and reality are often strangers. These estimates can vary greatly from one corner of the U.S. to another. Knowing the reasonable market value of your home prior to your proposed project is a good place to start. This cannot be determined by simply keeping your eye on the home sales published in the newspaper, or by making a reasonable assumption. Remember that similar homes can vary greatly in condition and appearance, resulting in wide ranges in market value. A close comparison of your home to neighboring homes like yours that have sold in the recent past is the best way to determine your home’s current value. This is where a Realtor can be invaluable. The Realtor should be familiar with your area’s homes, both inside and out. A “Before & After” evaluation of your home will give you both the current, reasonable market value of your home as well as an estimate of your home’s value after the proposed addition. This will, of course, be a speculation, but may shed additional light on the entire project.
A good question to ask yourself when making improvements is, “Will this project give me more than I have now?” If yes, then the project has the potential for a good return on investment. If the answer is, “It won’t give me more, but it will be better, nicer, etc.,” then be careful not to over-expect.
Try to fight off the urge to buy top-of-the-line fixtures. As a rule, anything you spend above the “slightly above average” price range should be spent for your own personal enjoyment. Excessive luxury adds little value (except in ultra-expensive homes).
A point that cannot be overstressed is neutral decorating. If you have plans of selling someday, keep things simple. White, off-white, or light beige are the paint and appliance colors to use. Benjamin Moore Navajo White is the most widely recommended brand and color of paint. Kitchens and baths fall under the same white/beige rule. If replacing wood cabinets, the wood should be light or natural in color. Painting wooden cabinets is a popular and inexpensive alternative (white/off-white).
Be careful with bold colors. Magazines are filled with many beautiful kitchens and baths that use bold colors effectively, but most of those homes are very expensive, where decorator touches are expected. New carpeting should also be light and neutral. If you have hardwood floors, consider exposing them or partially covering them with area rugs.
Keep wallpaper to a minimum. Painted walls can easily be repainted if the buyer doesn’t like your colors, but wallpaper is tedious and time-consuming to remove.
Ask your friends and family what they think of your project (and ask them to be honest with you). You may not agree with them, but it’s their opinion and worth noting. The person who someday buys your home will also have an opinion uninfluenced by your opinion. If you’ve spent many hours working out your plan, you will quickly become biased. Also, architects, builders or service people may have an inflated opinion of how much value their service or product will add. Opinions from disinterested third parties, if considered, can help keep your thinking realistic.
Over-improving your home can also be risky. Your home’s value is affected by the price of surrounding homes. Turning your home into the biggest and best home in the neighborhood will usually result in a lower sale price than if it were nestled among other similar homes.
Of course, with something as personal as a home, exceptions exist. Many unusual improvement plans have a surprisingly good effect on the home. Other, seemingly mainstream projects fall short of their intended effect and yield a less-than-expected result. Your preconstruction research and homework will still be your best bet for home improvement success.
– Courtesy of Alan & Dana Burk, John L. Scott Real Estate, Salem, OR

Five Deadly Mistakes Home Sellers Make

Sooner or later, most homeowners will be in a position to sell their home. This report summarizes the top five mistakes that home sellers make, simply because the experience is new to them.

Mistake #1.  Using a Real Estate Agent Instead Of a Realtor 

When you’re looking for help buying or selling property, it’s important to remember that the terms “real estate agent” and “Realtor” are not synonymous.
To be a Realtor, you must be a member in good standing of the National Association of Realtors (NAR).  The equivalent organization in Canada is the Canadian Real Estate Association (CREA).  Both are non-profit trade organizations that promote real estate information, education and professional standards.
NAR and CREA members adhere to a strict code of ethics founded on the principle of providing fair and honest service to all consumers.  Realtor business practices are monitored at local levels.  Arbitration and disciplinary systems are in place to address complaints from the public or board members.  This local monitoring keeps Realtors directly accountable to the individual consumers they serve.
The National Association of Realtors also has earned a strong reputation for actively championing private property rights and working to make home ownership affordable and accessible.

Mistake #2.  Failing to Maximize the “Curb Appeal” of Your Home

When you’re preparing your house for sale, remember the importance of first impressions.  A buyer’s first impression can determine whether they’ll choose to look inside.  It’s estimated that more than that 50% of shoppers decide to purchase a home even before they get out of their car.  With that in mind, be sure to stand outside your home and take a realistic “fresh look.”  Then ask yourself (and your Realtor) what you can do to enhance the “curb appeal.”  It could make a significant difference in your final sales price as well as the speed of your sale.

Mistake #3.  Not Appreciating the Buyer’s Point of View
Unreasonable though it may be, a prospective buyer would like to see a perfect home from top to bottom and inside and out.  To improve the likelihood of an easy, fast and profitable home sale, we suggest that you attend to the following items:

On the outside
Sweep the front walkway.
Remove newspapers, bikes and toys.
Park extra cars away from the property.
Trim back the shrubs.
Apply fresh, clean paint on your home, wooden fence, and outbuildings.
Clean windows and window coverings.
Maintain sprinkler systems.
Maintain sealants around windows and doors.
Make sure roof and gutters are clean and in good condition.
Mow the lawn frequently and plant flowers.
Keep pet areas clean.
Take down out-of-season decorations.

On the inside
The kitchen and bathroom should look and smell clean.
Vacuum rugs and carpets (and have them professionally cleaned, if necessary).
Place fresh flowers in the main rooms.
Put away dishes, unless setting a formal display for decoration.
Make all beds and put away clothing.
Open drapes and turn on lights for a brighter feel.
Straighten closets.
Put away toys.
Turn off televisions.
Play soft music on the radio/stereo.
Keep pets out of the way and pet areas clean and odor-free.
Secure jewelry, cash, prescription medication and other valuables.
Consider removing unnecessary furniture and appliances from counter tops to create a greater sense of space.
Consider baking cookies or lighting scented candles to create a homey atmosphere.

Mistake #4.  Thinking You Need To be In the Home to Provide Details to Prospective Buyers

Allow your Realtor to do his or her job without you on site.  Most potential buyers feel more comfortable if they can speak freely to the real estate professional without the owner present.  If people unaccompanied by an agent would like to see your property, refer them to your real estate professional for an appointment.

Mistake #5.  Over-Pricing Your Home

Perhaps the most challenging aspect of selling a home is listing it at the correct price.  It’s one of several areas where the assistance of a skilled real estate consultant can pay for itself versus trying to sell your home yourself.

If the listing price is too high, you’ll miss out on a percentage of buyers looking in the range where your home should be priced.  Some people think that if they leave some “wiggle room” in the price, they’ll always have the opportunity to negotiate and accept a lower offer.  However, chances are the offers won’t even come in, because the buyers who would be most interested in your home have been scared off by the price, and won’t even take the time to consider it.  By the time you correct the price, you’ve already missed exposure to a group of potential buyers.

The listing price becomes even trickier to set when prices are quickly rising or falling.  It’s critical to be aware of where and how fast the market is moving – both when setting the price and when negotiating an offer.  An experienced, well-trained real estate consultant is always in touch with market trends – often even to a greater extent than appraisers, who typically focus on what a property is worth if sold as is, right now.
This report courtesy of
Dana & Alan Burk
John L. Scott – Salem
725 Commercial St SE
Salem, OR 97301
(503) 409-5861 or (503) 551-4688
http://www.LovelySalemHomes.com

How to Avoid Tying Yourself Up With a 3-6 Month Listing An Easy Exit Listing Puts YOU In Control!

MONEY SAVING ADVICE: Never sign a listing based on vague verbal promises. Some agents will tell you whatever you want to hear in an effort to get you to sign a listing.
Traditionally, real estate agents have required home sellers to sign long term listing agreements. Unfortunately, many sellers found that after listing their homes, the promised advertising and marketing efforts did not occur.
This is understandably a key reason why home sellers are concerned about listing their home with a real estate company. How do you know that the company will uphold their promises? How do you know that you have an agent who fully understands the art of marketing and is skilled at attracting a steady stream of qualified, ready-to-buy buyers through your home?
NEW PROGRAM: While a written agreement is necessary, there is no reason that you have to be locked into a long term listing agreement. Now the risk and anxiety associated with listing your home can be eliminated, thanks to our Easy Exit listing.
The Easy Exit listing allows you to cancel your listing at any time, for any reason. If at any time you are not 100% satisfied with our marketing efforts, you can exit from the listing just by calling us on the phone or sending us a letter. No hassle. No questions asked.
WARNING: If you decide to list your home with a real estate company, don’t be tied up by a listing without specific, written, verifiable performance guarantees and an Easy Exit listing.
Your listing contract should state exactly and specifically what services and marketing the agent and company will do for you. How many open houses each month? How many showings (minimum) every month? How many advertisements in the newspaper every month? Will your home be in every issue of the Homes magazine? How many feedback calls will you receive every month?
MOST IMPORTANT: Your listing contract should state that if the agent does not perform and produce results exactly as promised that you can cancel the listing, at no cost or further obligation to you. Without this protection clause, you are gambling with what may be your most valuable asset.
Statistically, a real estate agent skilled in marketing can sell your home for 6% more than an agent unskilled in marketing. On a $100,000 home, that’s a whopping $4,000! Know your agent and his or her qualifications!

Alan Burk                                 Visit us at:            Dana Burk
Real Estate Broker    www.LovelySalemHomes.com    Principal Broker
503-551-4688                                                       503-409-5861

John L. Scott – Salem, 725 Commercial St. SE, Salem, OR 97301 • Telephone: 503-585-0100 • Fax: 503-585-8832
This office is independently owned and operated

6 Reasons to Reduce your Home Price

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home, houses, oregon, real estate, salem

6 Reasons to Reduce Your Home Price
By: G. M. Filisko

While you’d like to get the best price for your home, consider our six reasons to reduce your home price.
These six signs may be telling you it’s time to lower your price.
1. You’re drawing few lookers
You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.
2. You’re drawing lots of lookers but have no offers
If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.
3. Your home’s been on the market longer than similar homes
Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.
4. You have a deadline
If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.
5. You can’t make upgrades
Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.
6. The competition has changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.

Ten Simple Steps You Can Take To Ensure Your Home Sells At Top Dollar

Ten Simple Steps You Can Take To Ensure Your Home Sells At Top Dollar

1. Emotional appeal. Make sure your home looks, feels and smells its best. You’re competing with 900 to 1,200 other homes for sale. Buyers buy on emotion… let your home be the cleanest, freshest and cheeriest, and you’ll have a much faster sale… at a higher price.
2. Read my “How To Show Your Home” flyer very carefully. If your home is logically a good value, but a buyer doesn’t feel warm and emotionally attracted to the home, it will not sell. Buyers buy on emotion, not logic. You’ll want lots of people to say or think, “Wow! This is nice! I would like to live here!”
3. Lots of light. For maximum effect, turn every light on, even on a sunny day. Open all window shades. Clean your draperies and curtains. Make sure your windows are spotlessly clean. Let the sun in and keep those lights on. Leaving all your lights on for two hours costs only 23 cents, and makes your home look larger and more spacious.
4. Weekly open houses. You can’t expect to sell a house quickly at the top price unless you get lots of buyers inside to see it. There are more than 1,000 homes competing with yours for attention. Your home must be exposed to buyers regularly and repeatedly to get a fast sale at the full price. Weekly home showings are the key to the success of my Hotline Tour of Homes, giving my clients fast, full-priced sales.
5. Constant exposure. Your home won’t sell unless buyers know about it. To get top dollar, be sure to have your home repeatedly exposed to qualified, ready-to-buy buyers. Some brokers charge you a discount commission, then don’t advertise your home. This is a mistake. The $500 or $1,000 you save in commission is more than offset by a sale price of $4,000 or $10,000 less than what you would have received if your home had been properly marketed. Remember, buyers can’t know about your home unless you or your buyer has a marketing plan to ensure that your home is brought to the attention of home buyers.
6. Non-traditional advertising. 83% of buyers looking for a home in the $110,000 to $200,000 price range are first-time home buyers. Many first-time home buyers don’t even know they can afford a home. They don’t know that owning a home costs less than renting. They think that they need 20% for a down payment, plus closing costs!If your home is in the first-time homebuyer price range, a substantial portion of your marketing dollars should be aimed directly at first-time homebuyers. This means advertising and marketing in areas other than the “Homes for Sale” classifieds or Sunday Open Houses in the Statesman Journal
7. Education. First-time homebuyers are more likely to pay top dollar for your home. If your home is in the first-time homebuyer price range, make sure that your marketing program shows first-time buyers the benefits of home ownership and how affordable your home is. Design a marketing plan to get first-time home buyers to see the inside of your home.
8. Multiple signs. Many home buyers don’t even see traditional “for sale” signs, because they aren’t actively thinking of buying. They often don’t realize that they can afford a much nicer home. The strategy of an additional sign in the yard shatters the “advertising protection armor” that every consumer wears. Five years of testing by the Burk Team of John L. Scott, in Salem, Oregon has proven that a second bright-yellow sign, hand-lettered, will result in more inquiries, more showings, a quicker sale, and a 3% to 5% higher price for your home.
9. Aggressive Target Marketing. Lots of buyers will buy your home for less than it’s worth. The secret in getting top dollar is to find a buyer who is perfectly “matched” to your home. Right now, there are at least ten buyers who would love to own your home, can afford it, and would pay a fair asking price… if only they knew about it! Some of these buyers may not even be thinking of buying yet, but if they knew about your home would love it! It takes a lot more than just a sign in the yard and an ad in the paper to market a home effectively. Aggressive target marketing will find those buyers!
10. Create urgency. The Rule of Full Price states that if a buyer feels the asking price is fair, and has sufficient sense of urgency, he will pay the full asking price. Example: My weekly showings of my listings to more than one buyer at a time creates a feeling of urgency. Prospective buyers feel an “auction effect” because of other buyers showing interest in your home at the same time. I have found that the more buyers I can show your home to at the very same time, the higher the feeling of urgency. The auction effect causes people to become more excited and enthused about your home, thereby creating a sense of competition and urgency which results in full price sales for 96.5% of my clients.

This report has been prepared by Dana & Alan Burk of John L. Scott – Salem

A note from Dana & Alan Burk:

We are not salesmen, we are marketers of homes.

As a free service, we are happy to prepare a Marketing Plan for your home. This Marketing Plan comes to you free of charge, and without obligation. We’ll show you the most cost-effective places to advertise. We’ll show you how to slash your ad costs, while at the same time tripling your ad response. We’ll actually prepare ads for you that cost very little to run, and obtain results far out of proportion to anything else you could try.

This Marketing Plan is yours to use even if you sell your home yourself or list with another broker. It comes with “no strings attached” and absolutely no selling.

Why do we do this? Because we’ve found that helping people like you market their homes for no obligation brings us even more business. When we help you, you will tell your friends and associates about us. That brings more business to us than we could ever attain by “selling.” It’s all part of our personal philosophy of helping, rather than selling. We believe (and have experienced) that the more people we help, the more business that comes our way.

So, please, feel free to call us without any commitment or obligation. You can call me 24-hours a day at (503) 409-5861 or (503) 551-4688.

The Value of Repairs, Improvements and Additions to Your Home

Anyone who has owned a home for any length of time can attest to the ongoing maintenance required to keep a home in good condition, not to mention the time and expense involved in updating and improving. Over those years, it’s not unusual for some of the “little maintenance jobs” to have been overlooked or even forgotten. As a result, features and systems in homes vary considerably in age and condition. In many cases, the fact that these features have not been replaced or improved can present a substantial negative when it’s time to sell.

The purpose of this report is to separate the different types of home maintenance and improvement tasks that you may encounter, and how they may affect the market value of your home. The nature of the task will in large part determine the return-on-investment potential you can expect, but never underestimate the importance of aesthetics. The details of any project can make or break it. A poor execution can leave an expensive project looking shoddy, and a great execution can make an inexpensive one look great. The return-on-investment potential can be divided into three categories:

1. Repairs/Routine Maintenance: Fixing or replacing those items or areas of the home that have fallen below the standard level of acceptability in today’s real estate market. Replacing rotten boards on soffits, or tuck pointing the bricks on the chimney that have eroded through are both examples of repairs. Repairs should be considered routine maintenance – those things required by you, the homeowner, to keep your home in good condition.

Additional areas in this category include furnace, roof, driveway, siding, tuck pointing, and even new windows. These repairs will usually return only a fraction of their cost if you sold your home immediately after completing one or more of these projects. But, if you do not make these kinds of repairs, they may cost you even more money if they become an issue down the road during negotiation with a buyer. A home requiring many repairs would likely be viewed as a “fixer-upper,” often selling for far less than other homes of the same size.

2. Improvements: Updating kitchens, baths, painting, replacing older carpeting, adding premium roof shingles, replacing an asphalt driveway with concrete, or replacing a concrete driveway with paver bricks are examples of improvements. The return-on-investment potential for these projects can vary from 25% (concrete driveway) to well over 500% (painting). Updating kitchens and baths has a reputation of returning a high percentage of the investment, but don’t “over-expect.” There are not many new $20,000 kitchens that add anywhere near $20,000 to the home’s value. Expecting a buyer to pay retail price for a kitchen or bath that you designed, selected and enjoyed is unrealistic. Like a car, the minute you take it home, its value is reduced.
3. Additions: Additions are improvements with added square footage or functionality. Room additions, adding a second bath, and replacing a one-car garage with a two-car garage are all examples of additions. Care must be taken with these projects. They can be very expensive, and often require time for the home to appreciate and absorb the expense. Due to the expense of such projects, return on investment will likely be poor upon completion of the project, but will increase as the home has an opportunity to “appreciate” into it.

A good rule of thumb is to avoid such projects unless you plan to stay in the home a minimum of three to five years after completing large, expensive projects. If you plan on doing much of the work yourself, or have friends in the trades that can save you money, you may fare better and ultimately recoup more of your cost. Keep in mind that the finished product must look professional if you expect maximum return on investment. It is important to know that any addition, improvement or even repair can be very subjective. If a simple repair makes a substantial visual improvement, then it will likely be worth much more than the investment. Inversely, if an expensive family room addition is built onto a home but doesn’t “flow” with the home or varies from conventional standards for such a room, its value can be greatly diminished in terms of return on investment. In other words, “The best addition is an addition that doesn’t look like an addition.”

You will occasionally see a newspaper or magazine article quote the return-on-investment percentages that you can expect from various home improvement projects. In theory, these figures are wonderful, but theory and reality are often strangers. These estimates can vary greatly from one corner of the U.S. to another. Knowing the reasonable market value of your home prior to your proposed project is a good place to start. This cannot be determined by simply keeping your eye on the home sales published in the newspaper, or by making a reasonable assumption. Remember that similar homes can vary greatly in condition and appearance, resulting in wide ranges in market value. A close comparison of your home to neighboring homes like yours that have sold in the recent past is the best way to determine your home’s current value. This is where a Realtor can be invaluable. The Realtor should be familiar with your area’s homes, both inside and out. A “Before & After” evaluation of your home will give you both the current, reasonable market value of your home as well as an estimate of your home’s value after the proposed addition. This will, of course, be a speculation, but may shed additional light on the entire project.

A good question to ask yourself when making improvements is, “Will this project give me more than I have now?” If yes, then the project has the potential for a good return on investment. If the answer is, “It won’t give me more, but it will be better, nicer, etc.,” then be careful not to over-expect.

Try to fight off the urge to buy top-of-the-line fixtures. As a rule, anything you spend above the “slightly above average” price range should be spent for your own personal enjoyment. Excessive luxury adds little value (except in ultra-expensive homes).

A point that cannot be overstressed is neutral decorating. If you have plans of selling someday, keep things simple. White, off-white, or light beige are the paint and appliance colors to use. Benjamin Moore Navajo White is the most widely recommended brand and color of paint. Kitchens and baths fall under the same white/beige rule. If replacing wood cabinets, the wood should be light or natural in color. Painting wooden cabinets is a popular and inexpensive alternative (white/off-white).

Be careful with bold colors. Magazines are filled with many beautiful kitchens and baths that use bold colors effectively, but most of those homes are very expensive, where decorator touches are expected. New carpeting should also be light and neutral. If you have hardwood floors, consider exposing them or partially covering them with area rugs.

Keep wallpaper to a minimum. Painted walls can easily be repainted if the buyer doesn’t like your colors, but wallpaper is tedious and time-consuming to remove.

Ask your friends and family what they think of your project (and ask them to be honest with you). You may not agree with them, but it’s their opinion and worth noting. The person who someday buys your home will also have an opinion uninfluenced by your opinion. If you’ve spent many hours working out your plan, you will quickly become biased. Also, architects, builders or service people may have an inflated opinion of how much value their service or product will add. Opinions from disinterested third parties, if considered, can help keep your thinking realistic.

Over-improving your home can also be risky. Your home’s value is affected by the price of surrounding homes. Turning your home into the biggest and best home in the neighborhood will usually result in a lower sale price than if it were nestled among other similar homes.

Of course, with something as personal as a home, exceptions exist. Many unusual improvement plans have a surprisingly good effect on the home. Other, seemingly mainstream projects fall short of their intended effect and yield a less-than-expected result. Your preconstruction research and homework will still be your best bet for home improvement success.

– Courtesy of Alan & Dana Burk, John L. Scott Real Estate, Salem, OR

How Do Sellers Price Their Homes And How Much Should I Offer?

We’re often asked by our clients, “How much under the listing price should we offer?” This is an excellent question. The answer is difficult. There are four basic ways that sellers price their homes.

1. Ridiculously Overpriced!

These sellers have listened to a real estate consultant over-inflate the value of their home in an effort to obtain the listing. There’s a natural tendency on the part of sellers to list with the real estate consultant who gives them the highest promise. Some real estate agents give the seller a high “value” in an effort to obtain the listing.

These homes can be 10 to 20% overpriced. These sellers may need a “dose of reality” for a few months
before they begin to realize that their home is way overpriced as compared to others in the area.

The longer an overpriced home is for sale, the more likely we can get the seller to face reality and sell at a fair price.

2. A Little Overpriced…

Perhaps 75% of all homes for sale are priced in this range.
These sellers fall into two categories:

o Those who feel their home is worth every penny of their asking price.

o Those who want to leave a little “negotiating” room. These homes can be four to 10% overpriced.

3. Priced At Fair Market Value…

These sellers have carefully and realistically studied other homes for sale. They’ve priced their homes very competitively. These homes usually sell within four weeks at or very near the listed price.

In an active market, timing is everything.

In the good old days, you might have the luxury of viewing a home several times – even dragging your relatives to see it – before you actually made an offer.

“He/she who hesitates is lost” aptly explains buyers who dally when making a buying decision today.
4. Priced Below Fair Market Value…

These homes are priced below value. Perhaps the seller wants a fast sale.

Perhaps the real estate consultant recommended too low a price.

These homes usually sell within seven to 10 days, at or above the listed price.

There usually are competing offers in this situation, and you may need to make your first offer your best offer.

Position Homes to Sell In Todays Market

The first 30 days are the most critical when selling a home, reinforcing the importance of compelling marketing and pricing.

Within 30 days, 20-30% of homes sell
In the second month, 8-11% sell
3-6 months see 7% of homes sell,
declining to 2%
After six months, 40-70% will not sell

Homes in the “more affordable” price ranges and closer to the job centers have a higher percentage chance of selling.

There are five things to keep in mind when selling a home. The key is to maximize these items in a manner that showcases the home and attracts the best possible price.
1. House Right The overall condition of the home should be decluttered, clean, and organized at all times.

2. Yard RightYards and walkways should always be well maintained (mowed, trimmed, swept).

3. Price RightThe key to a successful sale lies in correctly pricing the home from day one.

4. Marketing RightCompelling marketing is centered around the internet and enhanced by signage, flyers, and networking.

5. The Right Real Estate ConsultantMarket knowledge, personalized service, and negotiating skills.

The Bottom Line: be “Seller Ready” from day one.
© 2011 This office is independently owned and operated.