Story: John Sotomayor
And now for the news we have all been waiting five years to hear – the housing market drought is over. Well, it is on the upswing anyway and while not high enough for some, industry experts are optimistic. The market has begun to show signs of movement again, so for those ready to sell, it is time to prepare.
There are two main things to consider before you place your “for sale” sign on the front yard or call your Realtor. It must be current and stand out. Let’s face it, houses haven’t moved for the past five years, so there are many to choose from. We spoke to leading industry experts in our area to compile a list of tips to help you remodel your home, thus increasing your home’s marketability.
A Strong Foundation
First, some background on our home development experts. Mark Irvin is the president of Irvin Homes. His father started the business in Ocala in 1982. Upon retirement in 2004, Mark took over. Irvin Homes specializes in residential new construction, leaning more so on the luxury side. They also build homes in the $200,000 to $300,000 price range, in communities such as Bellechase. They have some remodeling experience, particularly as the new home market came to a standstill. Yet as anyone in the industry can tell you, the same elements sought for construction of a new home are the same for anyone wanting to remodel.
Jef Fabian is the president of Fabian Construction. Fabian Construction has been in business since 1981, specializing in custom residential. His superior residential work has brought Fabian so many requests to work on commercial property, that he created a commercial division and partnered with Chap Dinkins. It turned out to be a wise move. Through the downturn in residential building, the commercial work is what carried them, which included The Church of the Springs and All Pro Imports.
In 2006, Fabian Construction built 300 homes. In 2010, they did not get a single residential permit. In 2012, Fabian Construction built six new homes, from $400,000 to $1 million-price range.
“The good news is we are seeing prices increase and we are getting inquiries,” Fabian said. In the last month, Fabian Construction reports more inquiries than they have for the past three quarters of last year.
“The market is definitely coming up,” Fabian said. “I think with the election behind us and the people believing that the economy is growing has spurt the increase.”
“The market is bouncing back, and you can see it,” he said. The largest indicator, according to Irvin, is that the foreclosure market has “dried up” and that inventory is also drying up.
Builders look at the inventory on the market, time on the market and the average price of the home. If inventories are increasing, time on the market is getting longer and prices are falling, things are not good – for anyone. If the opposite happens – if inventories are shrinking, if time on the market is getting shorter, and prices are slowly ticking up, then the economy is coming back.
When it comes time to remodel your home for the purpose of resale, our experts agree – it is all about the kitchen, the master bathroom and curve appeal. People rarely focus on light fixtures or the kid’s bathroom tile.
“There is not much you can do to increase the value of your home because of the appraiser’s standpoint to value all elements as the same,” Irvin said. Appraisers do not give much credit for higher quality material. “But there is a lot you can do to get your home more traffic, sell faster and become more competitive.”
Fabian agreed. “They are not looking to increase value, rather to increase marketability,” he said.
Irvin added that little changes like updating your flooring, light fixtures, and more – like granite tops and stainless steel – add marketability. The latter two are must have standards these days. People just expect that.
“If they see a Formica countertop and refrigerator, then they don’t want the house,” Irvin said.
“The first thing they will do if they buy the house is fix the kitchen. From a buyer’s perspective, if they walk into a house that have those finishes, they are going to think ‘I have to get this at a good enough price, because I have to invest money to get what I want,’” Irvin said. So it has to be a deal. The other house may not have to be a deal, because it has what they want, they can move in, hang their clothes up and be done.
From that standpoint, the upgraded house is more marketable, it is going to sell and it will go quicker.
Kitchens and Baths
Definitely. That’s where people go when they want to see a modern home,said Fabian. Usually the decision is made whereby if the kitchen is nice and upgraded with stainless steel appliances and solid surface, whether it is granite or corium or saddle stone.
You can save some money if you have a good framework for the base and upper cabinets, and not have to change the entire cabinets. They could replace new door fronts.
Irvin adds a nice kitchen backsplash can go a long way. It is worth it to spend $1,000 on a backsplash that pops. It is not worth it to spend $10,000 on a sub-zero refrigerator unless you want it.
“People want stainless steel, they do not necessarily want the Ferrari of stainless steel,” Irvin said. “They just want that look.”
There is a lot you can do to remodel and/or upgrade your kitchen without spending a lot of money. “You could swap out all of your appliances to Whirlpool stainless steel package for $2,500,” Irvin said.
In the bathrooms, said Fabian, it used to be that everything had to be a china lab set in a market top. Unfortunately, it relied on the caulk, which over time would dry up allowing water to get into the countertops. An inexpensive happy medium is to go to a cultured marble top with a bowl cast in the top so that there are no chance water is going to leak. That is the same theory with a granite top, but that costs more.
“If you have kids, a solid surface top will pay off in the long run,” Fabian said.
The more modern design calls for walk-in showers over tubs. A popular one is the Roman shower with multiple showerheads.
According to Irvin, chrome faucets were considered the standard for a long time. People used to upgrade to bronze or pewter, but now people want chrome because it is clean and simple. They also want a nice under mount sink with granite countertops.
Irvin also stated that cultured marble was huge in the 1990’s. People had cultured marble showers, tubs, etc. He suggests that you can update the look with an acrylic drop-in tub with surround tile.
“When I interview a client who wants to build a new house, those are the items they focus in on. The same holds then for remodeling,” Irvin said. The rule with remodeling is to update the look so that it looks like a brand new house.
Keep your landscaping up with simple procedures. Manicure the landscaping and change the mulch out. Upturn the mulch at least once or twice a year. These two simple things are not usually thought about,according to Irvin, but yield significant results. By doing so, it gives the house that “brand new” look.
“That is a very inexpensive thing that someone can do to give the house better curve appeal, and potential buyers will feel better when they drive up,” supports Fabian.
Irvin added that the front door is the first thing they see when they enter the house. If they do not fall in love with the entrance, they may be instantly turned off to everything else they see. So if they enter a bright blue front door that may be all they remember. Go with contemporary, soothing colors.
If the house color is out of date, paint it. Adding some stone detail to the outside of the house will really add attraction so that it stands out from the other houses.
It has been said when you sell your home, never add additions or a pool because you will never get your money back.
“I would agree with pools, but with additions, it depends,” Irvin said. “To try to increase your value on your home, if you add on to your home chances are if you just make a small addition, you are not going to get much value out of that. I would not recommend that.”
According to Irvin, if a client is simply adding a 14 x 14 one bedroom onto the house, costs are not spread out as much. When builders price a 3,000 square foot home, they tell the client we can do it for $120 a foot. The reason it is that low is because the builder spreads out the cost over 3,000 square feet.
“If you shrink that down to one small room, the costs are not spread out so the cost per foot to add that room to the house is significantly higher, maybe $160 per foot,” Irvin said.
Many people are pulling out carpet, putting hard woods, laminates or tile down, Fabian said. Regarding hardwood flooring, there are a few things you must concern yourself with, such as the effect of wear and tear over time. People with pets should be forewarned that claws could scratch a hardwood floor. If water leaks under the wood, such as from a leaky icemaker, it will buckle.
“Hardwood floors are beautiful, but there are certain nuances on maintenance that may not be suitable for every household,” Fabian said.
They now have laminate floors that are so well done, you cannot tell fake from real. It is easy to replace and very forgiving on wear and tear. You can put a good ceramic tile down for $25 per square foot. Wood would cost $7.50 per square foot. Carpet will absorb noise.
Irvin adds that if you have one of the older homes downtown, with ceramic tile 6 x 6, that will not appeal to many buyers. If you put in an 18 x 18 or 20 x 20 porcelain tile, those could be cost effective. You can get them very inexpensively that look like stone that will increase your marketability. The time to do it is now, before the price of tile goes up again.
It is one of those things that does not increase your value. According to Irvin, it is purely a maintenance thing. The average roof, even with 30-year shingles, will go 25 years. So if you have a roof that is 20 – 25 years old, take advantage of the lower prices that are available right now, he advised. Those will go up. It already has since Jan. 1, and is expected to rise significantly.
Fabian offers another solution. You can clean a roof with a solution of 50 percent chlorine and 50 percent water to clean off the mildew off the roof. You can spray it to clean it so your roof will look new rather than replace it. If it is buckling and curling then it is time to replace the roof, but that is a very big expense.
According to Fabian, putting in a pool is more for the homeowner rather than resale. The wisdom is – if you do that, you are cutting off part of the market. If you plan to sell your house, and you put in a pool, someone who doesn’t want a pool will not consider your home. Anyone could put in a pool whenever they want. It is much harder to remove a pool. Otherwise, if you want to live in your house for five or six years then go ahead and put in the lagoon pool you always wanted for your own enjoyment.
Irvin is a pool builder also and loves building pools for people. However, it is unfortunate that pools are not appraised highly. He recently built a $90,000 lagoon pool, with all sorts of rock formations and waterfalls. But come appraisal time, the appraiser gave the pool the same value as another pool that costs $30,000. While it will increase your marketability, because it is a much nicer pool, it will not increase your value in an appraiser’s standpoint. Now, the buyer may spend an additional $10,000 for the house than another house in the same market because it has a nicer pool, but when you go to get your loan you may run into challenges with the appraiser.
Unless it is old or antiquated, most people do not upgrade the lighting for resale purposes, Fabian said. If they are remodeling for themselves, then they may wish to modernize it.
Irvin adds that it is always a struggle to make sure you are not over improving your home. You could go out and buy a $6,000 chandelier and may get $1,000 of value out of that. You have to be smart about what you do. Instead, spend $500 on a similar chandelier that has enough pop to it. To Irvin, lighting is something that you could spend a little bit of money on and get a good effect.
Most people don’t think of it, but it makes a difference. According to Fabian, closet design companies are on the rise because of the trend to remodel organized closet space. People prefer cabinets in the closet. You can have slides and jewelry cases.
Fabian advises that if you are going to stay in your house, then insulation should be considered on a cost-value analysis. If a client spends $5,000 and it will take him 10 years to recoup it, but he will only live there three then it is not money well spent. For those who want it, Fabian suggests a product called Icynene foam insulation – sprayed on foam that goes on the top corner of the truss. It is a phenomenal product that produces huge energy savings.
Irvin advised that if you love your home and plan to stay in it, now is the time – because the market is recovering – to update your home. You will get the best deals you can make right now. Especially to do the things you really wanted to do, but are putting off…
“You may not get the return on your investment today, but as the market recovers you will get it and you will be more marketable down the road,” Irvin said. Your remodeled home will be quicker to sell than the seller who did not remodel. Consider this – in five years, the prices to remodel will be significantly higher. From that standpoint alone, it is wise to get ahead in the home market race.
Be smart about your investment. Don’t sink $30,000 into remodeling and expect to get $30,000 back in return. For the homeowner whose home is valued at $200,000, it is wise to invest $10,000 in remodeling. It is safe to say that in that price range, improving the kitchen, master bath and curve appeal will allow you to sell the $200,000 home for $210,000. You didn’t make any money by doing so, but you sold your home before someone else did.