What Should I Do To Increase The Value Of My Home?

[Jeff Hunt]

Ok, I live in Warren, MI (zip is 48089). It is a city on the northern border of Detroit. My house was built in 1947 & is a Bungalo that has approx. 900 sq. ft of livable space. It has a 4' crawlspace & a full attic. I bought it 5 years ago for $30,000 & houses around me now are going for mid $80,000 to mid $90,000. I'm looking at selling the house soon, but I have some questions of what to put my money into before I sell it...Here are some of the things I'm looking at doing...

-New electrical...IMHO, this has to be done. Right now, the entire house (except for the laundry room) is ran off of one 20 amp screw in fuse. The fusebox resides inside one of my kitchen cabnits. It is not safe, so I would like to upgrade it buy moving the service to my laundre room & putting in a breaker box.

-New furnace...This is a tough one. Right now, I have 2 gravity fed floor furnace units that hang from the floor into the crawlspace. The grates on these things are approx. 2' x 4'. Now, these units work fine, but having these things are old & probobly not very efficiant (they do kick out the heat though). Replacing them means removal of the old units, an electrical upgrade (already mentioned), instalation of new furnace, instalation of all new ductwork, and new carpeting (discussed next). I have had quotes for this job that ran from $6,000 up to $9,000. I am just wondering if I would get that money out of the house if I decided to do it.

-New Carpeting...This is another must I believe. My carpeting right now is shot to ####. One way or another, it needs to be replaced & I would like to do this soon. The problem comes in where if I replace the carpet right now, I will have to cut it around the two big heating grates. If I do that, I would have to get new carpet again if I later decided to put in the new furnace, since I would not be using those grates.

-New vinal siding...Right now, My house has a sort of grey shingle type deal on the outside. While it's not ugly, it's not particulary attractive either. I have no idea how much vinal siding would cost & I wonder again if I could get the money back out when I sell.

On the plus side. the house has new windows, new gas stove, new plumbing and a remodeled bathroom. What is your take on the situation?

 

[Randy Beigh]

Jeff

I'm no contractor, but will try to answer your questions.

The wiring, while old, is legal. But, I assume it will not allow for the modern things like a new heating system. Therefore, it sounds reasonable that it be replaced.

The heating, at least for this area, is as much a financing issue as anything. Most lenders that I have dealt with want permanent heating in every room in the house. It sounds like you are not ducted, so the current system requires you to leave doors open and most lenders would not accept this. A new, much more efficient system sounds in order.

New carpeting sounds like a good plan. Should will make the home more livable.

Vinyl siding is an option. What are your neighbors that are selling the homes in the 80-90K range doing? There is little doubt that the siding will not give dollar for dollar for what the siding cost. But, it may help in selling the home. Not having seen the home, this question is difficult to answer. Check out the neighbors.

After you do all this work, you may not want to move as you will have a new home.

 

[Dan Leggett]

Jeff, welcome to the forum.

Try to identify which real estate broker's sign goes up the most and comes down the quickest. They can give you input on which features the purchasers are recognizing as being the most attractive.

Once you know what features need to be addressed, pay a competent appraiser to assist you in a cost/benefit analysis. The fee will be higher than a normal appraisal fee but could very well keep your from spending big bucks unneccessarily or sufferring an extended marketing period (time=money).

Stay loyal to the broker who gave you the initial input and list with them. You may find that on personal taste issues such as carpet it would be more beneficial to offer an allowance instead of installing carpet that the best prospect doesn't like.

There are no definite answers to your situation but hopefully this will help in your decision process.

 

[Jeff Hunt]

Thank you for the help. I will try to post pictures of the place soon to give you an idea. I have schedules a Centuary 21 agent to come out & look at the house to give me an Idea of if I can even sell the place as is.

 

[tommcsherry]

Check this out:

http://www.realtor.org/rmomag.NSF/pages/co...3b?OpenDocument

 

[hal380]

Hi Jeff;

I think most here would agree that many improvements made do not "Pay for themselves" in the short term.

Perhaps the best way to go about this analysis is to do the following:

1. Get a walk through by the Realtor and make a list of changes/improvements
2. Get Real Quotes from legitimate contractors to do the work
3. Hire an appraiser to do an appraisal with two values 1 value "As Is" the other value "As Repaired"

Total cost for the above should not exceed $500.00

Once you have the cost of repairs and the difference in the 2 values it will be easy to make your decision.

Don't make the mistake many do in not allowing for your entrepreneurial profit.
If it is worth $40K now and you will spend $20K to renovate, don't consider selling it for 60K With these numbers you should sell for $75K minimum. If you end up trading dollars you would be better off selling now and get on with your life. Consider the risks during your holding period. This risk is real and should be covered in your thinking.

Hope this helps


Hal

 

[Jeff Hunt]

Well I got a realitor out & basicly she said that I should sell the house as is, considering the fact of it's age & location. I can see where she is comming from, so now we are looking to put it up for sale. My wife is very excited & has started looking for houses for us, but I told her that we need to get this one sold first. We already got a preaproval statement from the bank for $175,000 so what are my next steps?

 

[hal380]

Hi Jeff

Try real hard not to max out on the house you buy.

Reason?

The house market now is fairly hot, and prices are high due to low interest rates.
The house you can buy @ 6% interest is not the house you can sell when interest is @ 7.25. Don't be Upside Down on your mortgage.

The house you sell today, you sell at a premium and the house you buy you buy at a premium. Since you are selling a small house and buying a larger house you are getting a small premium and paying a large premium.

I realize not much help, but keep these ideas in mind.

Hal

 

[Dee Dee]

WHAT HAL SAID!

And if that $175,000 qualification figure is based on using an adjustable rate mortgage, then avoid it like the plague if you don't have a good amount of cash stashed! Remember....mortgage brokers want you to qualify for the highest dollar figure possible because their commission is based on your loan amount. It doesn't affect them at all if after the deal is closed the rates adjust up and you suddenly find it difficult to make your mortgage payments.

Also keep in mind that the cost of having a bigger home will probably increase from what you have now. Higher heating bills, water bills if you are metered, higher taxes....all have to be factored into what your monthly housing expenses will be.

Best of luck in selling your home and finding a new one that will suit you well!

 

[Restrain]

Here's some suggestions:

Rent a storage building and put a lot of your stuff in it. Clutter turns off buyers. You shouldn't need it very long, so it's not a big expense. Get back to minimals.

Clean up the yard, keep the bushes trimmed, etc.

Try to make the home odor-neutral. If you have a cat/cat odor, you need to do something about that. If you have dogs, do you have someone that can keep them while your house is on the market? Showing a home where the dog is continually barking can turn off a buyer.

A clean kitchen is a big plus, including a real cleaning of the oven.

Don't overdo on scented candles, incense, etc. Actually, fresh-baked chocolate cookies on the table add a very homey scent to the home. Builders in show-homes do this all the time and it works.

Finally, get your realtor to take you around to some homes that the realtor feels shows well and get some ideas of how to get your home ready to show. Little things can make a lot of difference. There's a program on HGTV that shows how homes can be changed a little bit to make them sell.

Good luck.

Roger Strahan, Realtor/Appraiser