Upgrade your investment

Make your home a more pleasant place to live, and then you can profit from it when it’s time to sell. How much to spend on renovating depends on the value of your home.

“You’ll always get your money back if you spend it in the right places,” says real estate maven Barbara Corcoran, who now dispenses advice on “The Today Show” after selling for $70 million the company she started with a $1,000 loan. Her newest book, “Nextville: Amazing Places to Live the Rest of Your Life” (Springboard Press, $24.99), is due out in April.

Home value: $250,000
Amount to lay out: $10,000 to $20,000


Cosmetic: Make minor improvements. Paint the front door and trim to make a great first impression. Do a total interior paint job in a light, pale color, but not white (too stark). Pale colors enlarge the space, and you want your place to look as spacious as possible.
Structural: Replace the door if warped, and the bell if it doesn’t work. If the roof has any flaws, fix them. Make sure there are no water marks on ceilings. People see those and assume the worst.

Landscaping: What’s closest to the house is most important. People buy light-colored houses and will pay more for them. Trim down bushes near windows and fill in any bald spots.

Home value: $500,000
Amount to lay out: $20,000 to $50,000

Cosmetic:Repaint everything. Repaint and or refurbish doors and/or hardware on the front kitchen cabinets. Resurface floors, re-carpet where necessary, and make it look like a fresh new home.

Structural: Go to a new development with homes more expensive than yours and see what the latest and greatest appliances are. Buy the least pricey one, like an oversized stainless-steel refrigerator. Do more if you have the budget.

Landscaping: Splurge a little more on the landscaping; keep things low but lush near windows.

Home value: $1 million+
Amount to lay out: $30,000 to $100,000

Cosmetic: Do a quality paint job, upgrade kitchen cabinet improvements (replace hardware, doors), refinish wood floors, re-carpet what’s worn or too fashion-forward.

Structural: Splurge on luxuries that flatter egos; improve kitchen, baths. Put in new countertops and replace appliances, even if only 3 or 4 years old. In baths, use sleek ceramic tile that looks expensive (but doesn’t have to be), free-standing tubs with water features, multi-head showers with frame-less glass enclosures and a flat-screen TV if there’s wall space.

Landscaping: Spend the rest of your budget on healthy foliage and the best landscaping you can get.

For every budget:

-Get rid of at least a third of your stuff, from knickknacks to furnishings, especially expensive objects and art. Pay to have it packed up and stored if you have to.
- Scrub your house from top to bottom. Also clean all the windows. For the best results, hire a service.

- Increase the wattage of every lamp in your home. Replace dark lampshades with light ones that let light shine through.

- Remove heavy drapes, replace all the shower curtains and buy new towels.

- Make sure all changes or improvements you make are decoratively neutral.

Home Library: Pages to Turn to For Guidance

To make sure a project will give you the returns you want, check out Remodeling Magazine’s annual Cost vs. Value Report, which features information on the 29 most popular projects (download it for free at http://www.costvsvalue.com/). And check out these tomes, which are full of ideas that will help you figure out what to do, whom to hire and how much to spend.

“Remodeling on the Money; 15 Innovative Projects Designed to Add Value to Your Home” by Alan J. Heavens (Kaplan Publishing, $19.95) Most people don’t want to take on a renovation themselves, but if you do, you should know your options, the pitfalls and what to expect. This guidebook takes an extensive look at the 15 most common home-improvement projects–from bathrooms to basements, to replacing windows and adding decks and patios. You can learn how to do everything here.

“What No One Ever Tells You About Renovating Your Home” by Alan J. Heavens (Dearborn Trade Publishing, $18.95) Consider the following:

- Contractors should not be inflexible to your requests, but often are. Why?

- Things can still go wrong with the easiest renovation-painting.

- Low-flow toilets can take two or three flushes to rid of the same waste an older, 3.5-gallon model handles in one flush. … If you’re a novice, the secrets and tricks of the trade are here on every aspect of the process, from hiring contractors to controlling your budget and schedule. If you’re a pro, this book will remind you of all the things you forgot.

“Architectural Inspiration” by Richard Skinulis & Peter Christopher (The Boston Mills Press, $79.95) What should you use on your floors, walls, ceilings and countertops? What about lighting, hardware, cabinets and plumbing fixtures? You can learn about all of them in great detail in this hefty, comprehensive, gorgeously illustrated tome that delivers what its tagline promises: “styles, details & sources.” Save yourself the time of running from store to store or surfing the Web blind; this is one of the most thorough and well-researched source books on products and materials on the market.

© 2008, Chicago Tribune.
Distributed by McClatchy-Tribune Information Services.

Tips: Exterior upgrades pay off

When It Comes to Remodeling, It’s What’s Outside That Counts, Realtors® Report

WASHINGTON, December 03, 2007 - Many buyers judge a house by its exterior, or so it seems from the results of the 2007 Remodeling Cost vs. Value Report. Three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades.

The most profitable project on the national level was upscale siding replacement, recouping 88 percent of costs upon resale. Wood deck additions and wood window replacements also returned more than 80 percent of costs, at 85 percent and 81 percent, respectively. On a national average, the only interior project to return more than 80 percent of remodeling costs this year was a minor kitchen remodel, returning 83 percent of project costs at resale.



“The results of this year’s Cost vs. Value report underscore the importance of curb appeal in the buyer’s eye,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “Realtors® know what attracts buyers in their local markets and can help your house put its best façade forward, so to speak – it’s another way Realtors® add value to the real estate transaction.”

The 2007 Remodeling Cost vs. Value Report compares construction costs with resale values for 29 midrange and upscale remodeling projects comprising additions, remodels and replacements in 60 markets across the country. Data are provided for nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 10th consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine, as Realtors® provided their insight into local markets and buyer home preferences within those markets.

Four new projects were added this year: the aforementioned wood deck addition, a back-up power generator, and both a midrange and upscale garage addition. Nationally, the back-up power generator only returned 58 percent of the investment on resale, although the return was highest in the West South Central region, which comprises Arkansas, Louisiana, Oklahoma, and Texas, at 68 percent. Buyers in the Pacific region of Alaska, California, Hawaii, Oregon and Washington value their garages: The midrange garage addition returned nearly 70 percent nationally but 88 percent in this region, while the upscale garage addition returned approximately 65 percent nationally but 78 percent in this area.

Homeowners in the Pacific region could also expect to see some of the highest percentages of remodeling expenses returned at resale, with 13 of the 29 projects returning 90 percent or higher of project costs. Homeowners in the East North Central region of Illinois, Indiana, Michigan, Ohio and Wisconsin might expect some of the lowest returns; only one project – upscale fiber cement siding – returned more than 80 percent upon resale (82 percent of costs recouped), while nine projects returned less than 60 percent of project costs.

The least profitable projects were a back-up power generator, sunroom addition, and home office remodel. The back-up power generator returned the lowest percentage of initial cost in the East North Central, New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont), Pacific, and West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) regions.

Sunrooms are least popular in the East South Central (Alabama, Kentucky, Mississippi and Tennessee), Mountain (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico and Wyoming), and West South Central regions. Home office remodels return the lowest percentage of project costs in the Middle Atlantic (New Jersey, New York and Pennsylvania) and South Atlantic (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia) regions.

Gaylord explained that the resale value of any given remodeling project depends on a variety of factors. “When considering a remodeling project, particularly with an eye toward resale, it’s important to evaluate your home’s current condition, how the project will change the existing space in your home, as well as how your remodeled home will compare to other homes in your community,” said Gaylord.

“For example, using a breakfast nook to expand the kitchen seems like a good use of space, but using the same space to add a first-floor bathroom in an older home that doesn’t have one will draw more buyers,” Gaylord said. “Realtors® see hundreds, if not thousands, of homes every year with their buyer clients and can provide valuable insight into what projects and improvements will make a difference with buyers in your area.”

Results of the report are summarized in the December 2007 issue of REALTOR® Magazine. To read the full project descriptions, access national and regional project data, and download a free PDF containing data for any of the 60 cities covered by the report, visit http://www.costvsvalue.com/. “Cost vs. Value” is a registered trademark of Hanley Wood, LLC.

For more information, contact:
Stephanie Singer, 202/383-1050, ssinger@realtors.org