Ten Ways to Raise the Value of Your Home

by Betsy Shiffman, Forbes.com

As the real estate market softens, what can homeowners do to still get the best price for their homes? According to the U.S. Census Bureau, with 1.2 million homes for sale in the United States in the first quarter of 2003, a 4% increase over the same quarter last year, the competition among sellers is stiff. So how do homeowners give their properties an edge?

One way is to increase the value of their home. In some cases, that could mean spending significant money to put in a swimming pool or tennis court, but there are also less expensive ways to make one’s home more attractive—without jacking up the appraised value or property tax bill. A fresh coat of paint or a revarnished floor will go a long way toward impressing prospective buyers without having to take out a home improvement loan.

Homeowners may want to consult with their real estate agent or other experts when they put their home on the market. A home could be in mint condition—in the owner’s eyes, at least—but owners may be surprised at what they hadn’t thought about. For example, Bruce Taylor, president of ERA Key Realty Services in Milford, Mass., suggests that sellers be aware of unpleasant or unusual odors before showing a home. It came as a shock to one Massachusetts family when Taylor advised them to immediately stop using pungent Asian spices in their food if they had any hope of selling their house.

“It’s critical to attack home odors immediately,” Taylor says. “Whether the odors are from animals or from food, it’s the first thing people notice when they walk into a house, and it can completely change the way a house is perceived. And when you’re living there, you don’t smell it.”

Taylor’s client family was initially taken aback by his demand, but when they sold their house while other neighborhood houses lingered on the market, they couldn’t complain. In the scheme of things, it was a small sacrifice to make, and it allowed them to successfully sell their home at the price they wanted.

Marketers have all kinds of theories about which colors or scents put consumers in the mood to buy. In the case of home sales, cosmetic changes rather than major renovations can make a huge difference in the sales price. Taylor has seen some houses sell at $15,000 below an asking price, and they may remain on the market for months, not because there were major problems with the house but because the home may not have been presented well enough to sell.

The real estate brokers we spoke with use a general rule of thumb: The average cost to make a repair could cost the seller double during price negotiations if it’s not attended to or first disclosed. For example, a leaky roof may cost $2,000 to repair, but if the leak is not fixed by the owner or is first discovered during an inspection, it could make a $4,000 difference in the final sales price.
“A small investment can offer a large economic return,” says Dorcas Helfant of Coldwell Banker Professional, Realtors in Virginia Beach, Va. “It’s not about what you are comfortable with in your home; it’s about whether or not future home buyers can imagine themselves living their comfortably. A $4,000 to $5,000 investment in new carpet may make a $10,000 difference in the sales price.”

Furthermore, if a home’s appearance rubs brokers the wrong way, it may not get shown, and once a house lingers on the market for too long, it becomes stigmatized, decreasing the chances of its selling at the asking price.

“Once the house has been on the market for a period of time, the owner may want to go through the house and redecorate and make repairs,” Taylor says, “but then they may have to put out new marketing materials and a special announcement suggesting the home has been repositioned in the market. But that might have to be accompanied by a price reduction.”

When it comes to major remodeling jobs, the entire cost of renovations are rarely recouped in the sales price. For example, Remodeling magazine’s annual cost versus value report, which looks at how much of the costs of remodeling projects are recouped in the sales price, found that on a national average, the most cost-effective remodeling jobs were bathroom additions and second-story additions. In both cases, home owners saw 94% of costs recouped.

More functional renovations, such as high-end window replacements and roof replacements, weren’t money suckers, but in the end they didn’t offer as significant returns.

Straight from the experts, here are ten things you can do, starting with the front curb, that are guaranteed to enhance your home’s value.


1. The Curb

The first thing home buyers see is the outside of your home. In rural or suburban areas, home sellers need to make sure the shrubs are trimmed, the lawn is mowed and the landscape is neatly manicured. “Don’t expect the buyer to imagine new shrubbery or flowering plants. You could get fresh mulch and flowers which isn’t a huge cost,” says Kathleen Kuhn, a president and chief executive of HouseMaster, a Boundbrook, N.J., home-inspection organization. “And it gives a good first impression.” Sellers may want to replace the front door or add a fresh coat of paint to the existing door. Also, you can’t overestimate the importance of neutral colors. If sellers choose to have the exterior repainted, they should make sure it’s a neutral, inoffensive color.


2. The Bathroom

Real estate brokers say the two most important rooms in the home are the kitchen and the bathroom. According to Remodeling magazine’s annual cost versus value report, home owners who undertook major bathroom-remodeling jobs saw between 88% and 91% of their costs recouped. Beyond major renovations, brokers say that simply replacing towel racks, light fixtures or the sink can make a major difference to potential buyers.


3. The Kitchen

The most important thing to buyers about the kitchen, say brokers, is that it appears spacious. If, for example, your kitchen counter is full of appliances, you may choose to leave one or two appliances there, but the rest have to go. Lend them to friends, put them in storage; it doesn’t matter how you get rid of them as long as they’re not visible. “The kitchens and the bathrooms often sell the house,” says Bruce Taylor of ERA Key Realty Service. “Structural problems could block a sale, but the kitchen and the bathrooms alone could sell it.”


4. Clutter

“I’ve recommended some people move half their furniture and belongings out of the house,” says Bruce Taylor. “The house is much more sellable the less stuff there is in it. Clutter is an easy thing to attack. The goal is to make the house look like a model home.” It’s hard for homeowners to imagine living without their personal or sentimental belongings, but the idea is to make the home as unemotional or personal as possible so that potential buyers can imagine themselves living there.


5. Cleanliness

It goes without saying: Mold, mildew, leaks, stains or any evidence of dirt are unappealing and will do little to whet home buyers’ appetites. Spending a few hundred dollars on a top-to-bottom cleaning is a small investment to make when thousands of dollars are at stake in the selling price. Also a fresh paint job (with neutral colors) is almost a prerequisite for listed homes.


6. Landscape

“Some of the best returns homeowners can get are in landscaping,” says Dorcas Helfant of Coldwell Banker Professional, Realtors. “If you already have a basic attractive yard, you can spend a few hundred dollars refreshing it, and it makes all the difference.” Helfant offers the example of one family whose back yard had a deck and was reasonably attractive but in a horrible state of disrepair since it hadn’t been touched for ten years. They spent a few hundred dollars power-washing and re-staining the deck and the house sold immediately. “The people who bought the house could see themselves living there without a hassle, and that’s what sells,” says Helfant.


7. Light

Patricia Rizzo, a project manager at the Lighting Research Center (part of the Rensselaer Polytechnic Institute in Troy, N.Y.) says that in general, older people are more sensitive to glare than younger people, and many people prefer indirect lighting over direct lighting. “People often prefer lights to be tucked away, so that the light source is masked. Nice warm colors are also appealing,” she says. Also advisable: On darker days, leave the lights on and the curtains open.


8. Smells/Pets

You may love your dog, but that doesn’t mean future owners need to be reminded of its presence. Pet smells, cigarette smells and food smells tend to linger. If after a major cleaning and carpet washing, particular smells haven’t been eliminated, spending a few thousand dollars on floor replacements will more than pay for themselves in the sales price.


9. Repairs

The biggest concern for most home buyers is the roof, according to brokers. “If your roof is 5-10 years old, you may be OK. But a roof that’s 17-plus years old may be a problem,” says Bruce Taylor. “If there are any deferred maintenance issues, buyers may run away. Even if they love the house.” What to do? “The more problems the buyer finds, the more they are going to want to negotiate the price down,” says Kathleen Kuhn of HouseMaster. “Buyers tend to want two times the cost of the repair off the price. The more you do yourself, the more economical it is.”


10. Personal Touches

Any unique touches in your home — a flaming red dining room or an indoor tree house — may have been important and sentimental to you and your family, but future buyers may not find such touches equally enchanting. Real estate brokers suggest that sellers take unique or conspicuous items out of the house. “Relocation services companies often offer home purchase plans, where they buy executives’ homes and sell it for them in order to expedite the move, and they often sell those houses twice as fast as the original homeowners,” says Kathleen Kuhn. “The reason is that they are very unemotional about the home. They come in, paint the house neutral, do some landscaping and put it back on the market. It’s just a product to them.”