Renovate Your Home

renovate your home
Home improvements from the American Housing Survey (census.gov)

Once thought of as a supporting actor in the housing industry, home remodeling is poised to take the spotlight.  The growing fascination with home remodeling is generating new renovation trends and research. It’s time to renovate your home! If you aren’t yet thinking of remodeling your home, chances are that you will be planning a home improvement project in the next five years.

Plaut & Plaut’s conclusion to their study (Decisions to Renovate and to Move; Journal of Real Estate Research; 2010; vol. 32; p.461-484) states, “Housing renovation is an important component of housing supply, yet one often ignored both in empirical analysis and in policy discussions about housing.”  They point out that that renovating a home was becoming a “substitute for moving.”  A possible cause for the trend in 2010 was twofold.  First, many homes fell into disrepair during and after the Great Recession.  During that time, many home owners could not keep up with regular maintenance, let alone emergency repairs. And second, there was a lack of quality homes for sale immediately after the Great Recession.  As foreclosure and REO home sales subsided, many homes for sale showed signs of neglect through deferred maintenance. 

Renovate your home.

Fast forward to 2019, home sale inventory continues to be a major problem for the industry (and will likely continue into the next decade).  But home remodeling is picking up the slack to improve the nation’s home stock, as well as help increase quality home sale inventory.  However, industry experts are learning there are other reasons that home owners are remodeling instead of moving.  Trends that have been identified include seniors who are “aging in place,” and multigenerational homes. 

Although a recent Freddie Mac study identified seniors who are “aging in place” as a cause of the ongoing home sale inventory shortage, aging in place is also stimulating home remodeling!  Homeownership rates for seniors are much higher today than in past generations.  Instead of moving to retirement communities or stereotypical senior housing, older home owners are staying put and renovating their homes for comfort and style.

Multigenerational homes became popular again after the recession, when grandparents, parents and adult children pulled resources to live in one home.  The trend continues as aging parents are moving in with their children, and young adults are moving back into their parent’s homes.  Remodeling a home to accommodate several generations may require turning a basement into an apartment, adding a main level bedroom and bathroom, or possibly building an addition to the existing home.

Even home owners who decide to move are remodeling their homes.  According to NAR’s Remodeling Impact Report (nar.realtor), functionality and livability are the top reasons to renovate for a home sale.  Most home buyers want a turnkey home that is functional, comfortable and energy efficient.  Home sellers who improve their homes before selling typically sell faster and for more than those who sell their home “as-is.”

While “going green” has become a standard in home improvement, a Joint Center for Housing Studies of Harvard University (jchs.harvard.edu) publication “Healthy Home Remodeling: Consumer Trends and Contractor Preparedness” identifies healthy home remodeling as a growing trend.  Healthy home building practices are intended on maintaining the physical and emotional wellbeing of the home’s occupants by using healthier building materials, such as “low-VOC paints and formaldehyde-free woods.”

When planning to renovate your home, home improvement experts recommend: create a budget and stick to it; only hire licensed contractors; and make sure your improvements have permits.

Original article is located at https://dankrell.com/blog/2019/09/28/renovate-your-home

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Home Office Spaces

If you have a home based business or telecommute, you’re one of the millions of Americans who probably have or want a home office.  What seems to be a staple of modern living wasn’t always so. 

The home office most likely developed from the “study” that existed in the larger homes of the well-to-do.  These rooms were usually separated from the rest of the house providing privacy for the home owner to read, meet with others, and of course conduct business.  As the middle-class grew, their leisure time did too.  The two or three bedroom home was getting too small.  Home owners desired a separate designated space to read, hobby, and do other work.  The standard middle-class home grew in size and added other features, such as a family room, rec room, and the home office.  Although the home office, like other specialty rooms, lost its popularity after the Great Recession, it quickly regained popularity as the recession subsided. 

Although the room may have looked like a standard office with a desk and chair, early home offices weren’t really used as a full-time space for the home owner’s job.  Most mid-century occupations required employees to report to a place of business.  However, as technology developed, the ability to work from home increased.  According to Allied Telecom (alliedtelecom.net), Jack Niles coined the term “telecommute” in 1972 when he “remotely” worked on a NASA communication system.  Working from home gained popularity during the 1970’s energy crisis, when employers needed to reduce energy consumption and employees found they spent increasing amounts of time in rush hour traffic

Home Office
Working at home

The demand for the office space didn’t serendipitously coincide with home buyer activity, but actually increased due to changes in the Americans workforce. Additionally, the popularity of the office space can most likely be gauged by the growth of affordable technology.  The advent of home computing in the 1980’s allowed many office workers to bring their work home.  Modems allowed employees to remotely connect to their employers.  However, it wasn’t until the development of the internet and subsequently broadband that full-time telecommuting jobs and home based businesses flourished.

A home office is very important to home buyers.  According to the Q2 2018 American Institute of Architects Quarterly Home Design Trends Survey (aia.org), thirty-five percent of respondents indicated that having an office space is a trending home feature. 

Of course, home design has changed through the years. Besides allocating a room for a home work space, technology has had a hand in redefining the office space.  The home office has transformed from the dedicated room to do actual work, to a “home tech flex space” that may contain a desk, printer, and router, while Wi-Fi allows the home owner to roam the home (even outside).  It’s not uncommon to see your neighbor on their deck working on their laptop.

Finding a home that fits your lifestyle is essential.  If you’re a home buyer who telecommutes or has a home based business, you want a home office.  Unfortunately, you know that housing inventory is low, and homes with this feature are further limited.  To help with your search, consider homes that have flexible spaces that can be used as your office.  Also, because there are many home renovation loan programs, including loans with streamlined options, you might consider homes that have the potential to expand for a home office.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/08/11/home-office-spaces/

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Home buyer preferences

home buyer preferences
Trendy renovations (infographic from nar.realtor)

Homes can vary along a spectrum of many factors.  Size, style, location, are just the basic differences and are generally used by home buyers in their home search.  However, even similar homes in the same neighborhood can differ depending on the homes’ features.  Home buyer preferences and trends toward home features is usually the reason for price differences on similar neighborhood homes. This truth was validated by a study conducted by the National Association of Home Builders (How Features of a Home Impact Its Price; nahb.org; November 30, 2004).  If you’re selling this spring, consider home buyers preferences and current home buyer trends.

In past columns, I talked about how most home buyers in the current housing market want a turn-key home.  And that still holds true.  Home buyers still prefer to buy a new home.  However, buying a recently updated/renovated home is the next best thing.  Generally, homes with new kitchens, bathrooms, and flooring get multiple offers and sell very quickly.  Alas, updating and renovating a home takes time and money.  Discuss with your listing agent how making (or not making) updates and renovations affect your sale price. You may have to adjust your pricing expectations accordingly.

So, what tops the list of home buyer preferences? The National Association of Home Builders latest “Trends in Home Buyer Preferences” (nahb.org) indicates that the kitchen is a prime area of focus.  Current kitchen trends include a strong preference to either “traditional” or contemporary style cabinets.  The styling would depend on the kitchen overall (consulting with a design center would be helpful).  Additionally, water filtration has also become a desirable feature.  If not already installed, water filtration can be added when replacing a refrigerator, as it is now a common function of modern refrigerators.

In today’s growing awareness of environment and sustainability, it’s a given that home buyer preferences show a strong preference toward energy efficiency.  When updating, consider Energy Star (energystar.gov) certified appliances.  Energy Star appliances typically use 50 percent less energy than standard models.  Additionally, consider having an energy audit prior to listing your home.  The energy audit will reveal the home’s energy efficiency.  It will also highlight where improvements are recommended.  The report itself is useful to the home buyer, even if you don’t follow all the recommendations. 

New flooring is also important to home buyers.  The preference towards wood flooring has always been strong.  However, be aware that there are differences in quality of flooring products, as well as workmanship of installers.  Even if you purchase top quality hardwood, poor installation can actually negatively impact the sale price.  If you’re installing wood, tile or similar flooring, hire an MHIC licensed flooring contractor.  Your flooring contractor can also help with trendy flooring options.

As a home seller, you certainly consider your home as being special.  And you probably spent a good amount of money on customizing your home over the years.  However, a problem many home sellers encounter is that over customization and personalization can negatively affect the home sale price.  The truth is that home buyers have preferences too, and their preferences may not reflect yours. 

Home buyer preferences and trends are constantly changing.  Your listing agent should be able to help understand how current home buyer preferences and trends impact your home sale.  Additionally, consulting with a home staging or interior design professional can assist you with deciding on making relevant updates to your home.

Original published at https://dankrell.com/blog/2019/04/27/home-buyer-preferences

By Dan Krell
Copyright © 2019.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Occam’s razor home selling

Occam's razor and selling a home
Staging is one of the four basics of home selling. (infographic from nar.realtor)

Many home owners are preparing to sell their homes this year.  And in doing so, home sellers are looking for new and exciting ways to sell their homes fast and for top dollar.  But the reality is that selling a home is not rocket science.  There really isn’t a secret trick or approach to selling a home.  Rather, it’s more like magic, where properly performed fundamental tasks can set the stage for a satisfying experience. If you don’t know how Occam’s razor (or what it is) can help you get the most from your home sale, pay close attention.

Unfortunately, it’s a human trait seek a complex solution to a simple question.  In other words, applying Occam’s razer to your home sale can save you time and allow you to get out of your own way.  Occam’s razer is a tool that is often used to figure out solutions and devise scientific theories.  It has become popularized as the “keep it simple stupid” method.  However, Susan Borowski’s history and explanation of Occam’s razor, written for the American Association for the Advancement of Science, gives it teeth (The Origin and Popular Use of Occam’s Razor; aaas.org; June 12, 2012).  Borowski states, “Occam’s razor doesn’t necessarily go with the simplest theory, whether it’s right or wrong; it is not an example of simplicity for simplicity’s sake. It merely tries to cut through the clutter to find the best theory based on the best scientific principles and knowledge at the time.”

In other words, focus on the tried and true fundamentals of selling a home.  Anything above and beyond may not necessarily help to sell the home faster or for more money, but could help make the process more enjoyable.  That in mind, let’s consider these four basic concepts:

First, consider the condition of your home.  Do you have deferred maintenance issues?  Does your home need a makeover?  Homes that get top dollar are “turnkey.”  Many home buyers are willing to compete and pay more for recently upgraded and renovated homes.  Selling a home with deferred maintenance or lacking recent updates can not only turn off many home buyers, but can encourage low-ball offers.  A pre-listing home inspection can help you identify maintenance issues.  Also, consider consulting with a design professional to help you understand which updates (if any) are necessary to help your home sale.

Next, work on the home’s presentation to give it a clean and spacious feel.  Decluttering is one of those tasks that can be overwhelming, but it’s importance cannot be overstated.  Decluttering will force you to decide which items to keep in the home.  Additionally, staging your home can help balance space, furniture and décor.  This can help home buyers envision living in the home.

Deciding on a list price is often a conundrum.  Although enticing, don’t be seduced by the agent who tells you the highest sales price without understanding their rationale.  The housing market can turn on a dime.  If your home isn’t priced correctly, it can languish on the market.  There are many aspects that go into deciding a price, so work with a respected seasoned agent to go through the market details and scenarios. 

Finally, when the home is ready to list, how is it to be marketed?  Today’s MLS listing syndication takes advantage of the fact that most home buyers actively search homes on the internet. Don’t rely on gimmicks that promise activity on your listing.  A complete marketing plan will take into account the factors we discussed here, and apply strategies to attract motivated home buyers.

Original published at https://dankrell.com/blog/2019/01/12/occams-razor-home-selling/

By Dan Krell. Copyright © 2019.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Home sale renovations

home sale renovations
Interior Home Sale Renovations (infographic from nar.realtor)

According to the National Association of Realtors (nar.realtor), the average time a homeowner stays in their home is ten years.  This is higher than the seven-year average prior to the great recession (but is less than the thirteen-year average immediately following the recession).  Needless to say, many homeowners are approaching (or have exceeded) their ten-year stint, and are likely selling their home during the spring and will likely be doing home sale renovations.

Any home sale preparation in today’s housing market should include some home sale renovations.  If you haven’t replaced the home’s systems (such as the roof or HVAC) while you lived in your home, there’s a good chance that they are approaching or have exceeded their average life expectancy.

Additionally, the décor and fixtures in your home are likely outdated.  The home sellers who make the mistake of not updating or renovating before they list inevitably face home inspection issues.  They ultimately find that the home takes longer to sell at a reduced price.

Let’s face it, remodeling can be expensive and overwhelming, especially when it’s for home sale renovations.  According to the NAR’s 2017 Remodeling Impact Report, about $340 billion was spent on remodeling projects in 2015.  Although a majority of homeowners would remodel their home themselves, thirty-five percent would prefer to move instead of remodeling their home.

The Report cited functionality and livability as the top reasons for home sale renovations.  It’s a no-brainer that home buyers prefer homes that are functional, comfortable, and sustainable.  Aesthetics is not enough for a home to be appealing to today’s home buyer, it has to fit their life style.  Additionally, home buyers want efficient systems in their new homes that can help save on utility costs.

Home sale renovations should focus on functionality and livability

What projects will get buyers who will pay top dollar into your home?  It should be no surprise that the number one interior project, listed by the 2017 Remodeling Impact Report, is a complete kitchen renovation.  Other essential interior projects include renovating bathrooms, installing new wood flooring, creating a new master suite, replacing the HVAC system, and finishing a basement or attic.

It also shouldn’t be a surprise that the Report listed replacing the roof as the top exterior project. Other exterior projects in high demand include new windows, new garage door, new siding, and installing a new front door.

If you want to add value to your home, even if it’s not for home sale renovations, check the 2018 Cost vs. Value report (costvsvalue.com).  The report can give you insight to which remodeling projects are the most popular, and estimates how much of the cost you can potentially reclaim when you sell your home.

There’s no doubt that renovating your home can be expensive.  Although the costs of home sale renovations can tempt you to cut corners, don’t.  Cutting corners on renovation projects can actually cost you more.  You may have to repair, or even re-do the project if not finished adequately.  Home buyers are savvy, and can spot low quality materials and poor workmanship.

Also, make sure to get permits when required.  If the home buyer doesn’t ask you, the home inspector will likely recommend that the home buyer check for permits.

Although many homeowners don’t mind a DIY project, many hire home improvement professionals.  When hiring home improvement professionals, check with the Maryland Home Improvement Commission (dllr.state.md.us/license/mhic) to ensure they are licensed contractors.  You should also ask for proof of their insurance, including Workman’s Comp insurance, in case there is an accident on your property while completing the project.

If you hire a contractor who will accept payment when the house sells, read your contract carefully and thoroughly. Do your due diligence.  There may be provisions in your contract that you may not be aware of, such as added costs, charging interest, and setting/lowering the sale price.

Original article is published at https://dankrell.com/blog/2018/11/17/home-sale-renovations

By Dan Krell. Copyright © 2018.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.