Q & A Saturday – How to Hire a Contractor?

Welcome to our Q & A Saturday video

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “How to Hire a Contractor?

Contractor - MA and NH Real Estate

In this video Shaun gives a quick overview of how to find a contractor and how to vet them out and what you need to hire one:

 

Some of the main points covered in this video are:

1)      Some ways to find contractors

2)      What you need to get from them when screening them

3)      The contract and what need to be in it

4)      Ever heard of a Lien Waiver?  If not you better learn!

 

I hope this video was helpful in learning what you need to do to find, screen and hire a contractor.  With all professions you can have some really great ones, lots of mediocre ones and unfortunately a few terrible ones that rise to the level on being criminals.  It is important to understand the best ways to screen them and to have a good contract in place to protect BOTH of you.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some good articles:

–          Verifying a MA contractor License website mentioned

–          “What’s in a Contract? Almost Everything You Need to Know About Contractor Contracts

–          “14 Killer Questions to Ask Your Contractor

–          Boston Globe article on Scammer contractor that fooled by very experienced colleague

 

 

 

(Image Credit: contractor1)

 

 

Q & A Saturday – Why Should I Sell My House “As Is”?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, landlording questions, local market questions and many others things are all fair game. 

Today’s question is “Why Should I Sell My House ‘As Is’?”

Selling A House As Is - MA and NH Real Estate

In this video Shaun gives a quick overview on reasons to sell a house “As Is”:

 

Some of the main points covered in this video are:

  1. What selling “As Is” means
  2. The costs of home renovations
  3. The return on the investment of those home renovations
  4. The hassles of living in a house that is being renovated
  5. The advantages and disadvantages of the sale process when selling “as is”

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

For more articles mentioned in the video see:

 

The Top 18 Home Improvements For Sellers

Want to get the best value for fixing your house before selling?

Masshomesale.com We Buy NH and MA Homes for Sale

Today we are listing the top renovations a seller can make to get the most bang for their buck when selling their house. The basis for this article is the Remodeling 2014 Cost vs. Value Report, which is a report put out each year by Hanley Wood to look at the Cost vs. Value of a variety of home improvement projects. Without further ado here are the 18 top home improvements and the percent return you can expect on them:

1.  New Steel Entry Door – 119%
2.  Adding a Wood Deck – 99%
3.  Adding a Stone Veneer Accent to your siding – 97.1%
4.  Garage Door Replacement – 91%
5.  Window Replacement  ~85% (vinyl slightly better than wood)
6.  Attic Bedroom – 82.8%
7.  New Vinyl Siding – 82.7%
8.  New Fiberglass Entry Door – 79.6%
9.  Adding a Composite Deck – 78.6%
10(Tie).  Minor cosmetic kitchen remodel – 76.6%
10(Tie).  Two Story Addition – 76.6% (an addition that is 2 floors, not adding a 2nd floor)
12.  Family Room Addition – 75.7%
13.  New Finish Basement – 74.1%
14.  Bathroom Remodel – 73.4%
15.  Adding a Garage – 72.2%
16.  Major Kitchen Remodel – 68.3%
17.  New Roof – 66.5%
18.  Master Suite Addition – 65.7%

The Cost vs. Value report is broken down by region and since we are interested in Eastern Massachusetts and Southern New Hampshire we looked at the “Boston” area report.  This region happens to be defined as the almost exactly our area of interest (Specifically it is for Plymouth, Norfolk, SuffolkMiddlesex and Essex counties in Massachusetts  and Hillsborough and Strafford counties in New Hampshire).

Those from other parts of New England or other areas of the country can go to www.costvsvalue.com and download the report for their specific area, region or national data. The projects and values will differ somewhat in different areas.

First major takeaway is that higher end materials do not give as a good of a return as more economical choices (Steel Door vs. Fiberglass door, Wood Deck vs. Composite Deck, Minor Kitchen Remodel vs. Major Kitchen Remodel) except for Windows (Vinyl returned 85.3% while the slightly more expensive Wood had a 84.9% return).

Other major takeaway is all but 1 job resulted in getting less back than what you put into it, with most not being close to breakeven.  When getting ready to sell your house doing any of these improvements might make your house more marketable but are very unlikely to get a higher price equivalent to the investment made in the work.  

 

Do you have a dated house that needs a lot of home improvement work to appeal to retail buyers?  If you want to sell your house fast and hassle free in its current condition hit the “Schedule a Consultation!” button on the top right of this page to get more information.  

 

* © 2015 Hanley Wood, LLC. Complete data from the Remodeling 2015 Cost vs. Value Report can be downloaded free at www.costvsvalue.com 

 

 

A Little Something For The Ladies

Introduction:

In this business you see some interesting things.  Even in the nicest houses you can see some intersting thing.  This time you see a woman designed this bathroom to take out any chance for a common complaint they have with men. :)

Check out this short video to see what I’m talking about:

 

Do you need to sell your Massachusetts or New Hampshire house fast?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

Please share your questions and comments below.

 

 

Advantages Of Selling A Home As Is

Real Estate Pics - Selling As Is Kitchens

When someone is deciding to sell their house one of the biggest decisions to be made is what, if anything, they will do to prepare the house for the potential buyers.  Do you put a lot of money into fixing things, just put a little bit in to address the most obvious issues or do you just put it on the market as is?  There are good reasons to choose any one of these and your personal situation will need to dictate what makes the most sense.

In this article we are going to focus on the advantages of selling a home as is.

What is Selling A Home As Is?

Selling a home as is simply means that you want to sell the house in its present condition without doing any additional maintenance and repairs to it, and do not want to do any during the sale process.  Now if you did a full remodel of the house 3 years ago and have diligently maintained the house then selling “as is” is not really a big deal as there is little if any work needed in the first place.  However if the house hasn’t been updated in 30+ years like the “We Love The 80’s” house we talked about in a previous article in our home improvement series then it is a much different situation.  Even worse is if you might not be living in the house anymore and it is as the point where the place is not even inhabitable without doing significant repairs on it.

What Are The Advantages of Selling A Home As Is?

 

Renovations are Expensive!

So the most obvious advantage of selling a home as is is the fact that it is quite expensive to do significant home renovations.  In the “We Love The 80’s” house mentioned above we came up with a $73K renovation cost just to make needed repairs and make it somewhat marketable for today’s buyer.  With spending that much there were still many significant items that were not even touched.  Similarly in our next article in the series about “The Neglected Rental House” it was even worse since while the first one we assumed that while dated the home owner took some pride in the home and kept it in relatively good shape.  In the 2nd one we assumed years of hard living by several different tenants and much fewer items that could be refurbished vs. replaced.  For that example we came up with a cost of $117.5K to make it marketable.  The other jarring thing with spending that much money is that you also were only expecting to recoup about 80% and 84% respectively the money put in.  So in each of these cases you would put in around $15-20K that you have little hope of getting back just to make the place more marketable rather than selling the home as is.

There is Always More to do…

A major point also in these case studies is that there were a lot of things that were not done.  In neither case was any significant work done to the plumbing, electrical or HVAC systems.  A full replacement of any of these can easily run you into 5 figures for each.  If the property has been vacant for a long period of time and major work has to be done often you would be forced to bring these major systems up to modern code as part of the work done.  So even if you were willing to do some of the other work these could be a $30K+ wild card when doing the work.

How Will You Pay For It?

Now of course one HUGE reason for selling a home as is rather than doing these expensive repairs is simply that you can’t afford to do them and have no way to pay for them.  Unless you have a lot of cash in the bank or a lot of equity to get a significant HELOC on the house it will be very hard to for most people to come up with that kind of money to fix their house just to be able to sell it.  Some homes will be marketable on the retail market without doing the work, or much less, but others will only sell at steep discounts when the work is significant enough.

Living in a Construction Zone Is Tough!

Even if costs were not a factor for you, it is just not easy to live in a house that is going through major renovations.  I have lived though this myself and let me tell you it is not fun to not have a working kitchen for several weeks!  If you are totally redoing the bathroom in a 1 bath house how much fun do you think that will be?  Even the best most competent and anally clean contractors will not be able to keep from generating significant dust and debris pretty much every day for the duration of the project.  For the kind of major work in the case studies this could take MONTHS to complete.  This is a very big non-financial consideration to factor in when deciding on doing the renovations or when selling a home as is.

Working With Investors:

When selling a home as is your biggest pool of buyers will often be investors.  The good thing about working with an investor is that they understand that you do not want to, or just can’t, do the repairs and they will take full responsibility for tackling those issues once they purchase the house.  They also usually can buy the house quickly and with less hang-ups since they will usually will buy the house with cash, with a loan from a private individual or institution or with a commercial mortgage that has a construction loan component all of which allows them to purchase without making certain repairs before a loan can be approved like a new homeowner would.

Are you thinking of selling a home as is in Massachusetts or Southern New Hampshire?  If so click on the “Schedule a Consultation” button and we can let you know what we do and how we can help you sell your house fast and easy.

 

Please leave your comments and questions below about selling a home as is

 

Benefits of Adding a Professionally Installed Composite Deck

  In today’s post we are happy to have our first guest poster.  In this article Mr. Smith will go over the benefits of adding a composite deck to your house.  This continues our series on home improvements and is in harmony with our recent articles, the “We Love the 80s!” house and the “Neglected Rental” house, where we examine the benefits vs. costs of fixing up a house before selling.  In that vein adding a deck is one of the best returns on investment at 81.5% for the Boston region, covering most of Eastern Massachusetts and Southern New Hampshire.

—————————————————————————————

Benefits of Adding a Professionally Installed Composite Deck

MA and NH Real Estate - Composite Decking

Want to add a beautiful, functional deck to your home to enjoy with your family and friends? Are you worried about the expense, maintenance factor, and how long it will actually last? You’re not alone. Many homeowners today are turning to composite decking materials based on many key benefits. While hardwoods like redwood and cedar make an appealing deck, that can’t compare to the durability and longevity that a quality composite deck can offer. Decks constructed with top products like TimberTech, Evergrain, and Trex are easily installed by professionals, pleasing to the eye, and have shown they can stand the test of time making them an easy choice to use in order to build the deck of your dreams.

Composite decks are simple to install

Composite material is specially designed for deck building, which means it’s super easy to install with less work. Several composite decking materials consist of tongue-and-groove style design, making assembly a breeze.

Composite decks are less expensive overall

Comparing a price list for composite decking material and wood products can be very misleading and confusing for a consumer. While the upfront expense of composites is somewhat higher, there’s virtually no cost for upkeep in terms of elbow grease or money. Composite decking is maintenance free. There’s never any need to re-stain, re-paint, or re-seal them once they’re installed. On the other hand, you may pay as much as $3 a square foot for a quality renovation each year, and much more every 12-15 years for resurfacing the entire deck. Composite decking only requires a good hosing-off occasionally and some sweeping. Most composites are stain-free as well.

Composite decks are conducive for bare feet

One of the best parts about summer is walking around outside in your bare feet. Who wants to wear shoes on a beautiful, warm sunny day? Composite decking doesn’t heat up like other decking materials no matter how hot the sun gets. Also, they’ll never splinter and cause harm to feet and hands like wood can.

Composite decks have a uniform, attractive appearance

Because composite planks are manufactured specifically for decking materials, they’re completely uniform in their appearance, free of bumpy grains or knotholes that can make restoring a wood deck quite difficult. Place your big, beautiful potted plants and outdoor furniture wherever you like. Unlike wood, they’re not needed to hide unsightly imperfections in the material. The planks never warp no matter how much rain, snow, ice, or hail Mother Nature throws at them.

Composite decks are eco-friendly

Aside from the fact that composite decking is made from recycled plastics and reclaimed wood that would otherwise end up in a landfill somewhere, composite decks never require products to preserve wood, which can ultimately leak into groundwater and soil. Installing an attractive, durable composite deck may cost a bit more upfront, but you’ll save endless hours of both time and money overall.  

Tim Smith writes for Modernize.      

 

Do you need to sell your Massachusetts or New Hampshire house fast?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

 

The Cost Benefit Analysis of Fixing Up Your House Before Selling – Case #2 The Rental House

Rental Real Estate - Needs Kitchen Remodel This is our 2nd case study looking at potential issues with a house and if it is worth fixing these issues before trying to sell.  The basis for the analysis is the Remodeling 2014 Cost vs. Value Report, which is a report put out each year by Hanley Wood to look at the Cost vs. Value of a variety of home improvement projects.  In this article we’ll be looking to see what the average costs of these home improvements for a house that is in “rough” shape and what home values these repairs might bring. The Cost vs. Value report is broken down by region and since we are interested in Eastern Massachusetts and Southern New Hampshire we will look at the “Boston” area report.  This region happens to be defined as the almost exact area of interest noted (Specifically it is for Bristol, Plymouth, Norfolk, Suffolk, Middlesex and Essex counties in Massachusetts and Hillsborough and Strafford counties in New Hampshire). In this fictitious case study we will examine a house in need of substantial home improvements in order to make it ready for the retail market.  The conclusions drawn here is most likely be different than if the house was in pretty good shape and market ready, but the sellers want to try to maximize the home value and sell it faster.

Case #2:  The Neglected Rental House

This is a pretty common type of property.  Maybe the owner bought it as an investment but has grown weary of the grind involved with managing the place.  Or maybe they never wanted to be a landlord but got caught in the market crash and had to rent it since they could now sell it for what they owed.  They could also have become an “accidental landlord” for other reason as well. What often happens in these cases is that the new landlord has very little incentive to do many home improvements, repairs and upgrades that will modernize the house even if it means pulling in top rental rates and improving the home’s value.  Say one spends $12,000 on various cosmetic home improvement items (as in nothing that safety or basic habitability of the house) but would allow them to get an extra $100/month in rent.  Well one does not need to be a Math Wiz to see it will take 10 full years just to get that home improvement investment back with the high rents.  The real kicker there is that in 10 years those home improvements will be old and dated again and not command the higher rates!  For this type of reason many rentals have very old and dated features since changing them has little to do with keeping the place clean, safe and generally functional.  I am working on the assumption that the owner DOES take those things seriously and is not a slum lord. Okay first let’s define what criteria to use as the mindset when deciding what renovations to do.  We will use the same as our previous case study on the “We Love the 80’s!” house, which is to appeal to modern buyers and will allow the sellers to get close to the best home value in a reasonable amount of time (which we will say is less than 60 days on market or 90-110 days from original listing until closing the sale).  For this type of house we will do a minor kitchen remodel, a bathroom renovation (Assuming a 1 bathroom house), replace or refinish all the flooring, replacing the old siding with new vinyl siding, total window replacement and 2 new exterior doors.

The Kitchen Remodel:

They always say that the kitchen is one of the most important rooms to sell a house, and that saying does seem to ring true.  If you have a very dated of very cheap rental level kitchen then you will be able to sell your house even close to average home values for other similar homes in your area.  For this case we are doing what the report has defined as a major kitchen remodel.  While in some cases you will keep the existing cabinets and just refurbish them often in a long term rental besides being dated the cabinets can be in very poor condition, additionally we will remove the old counters with a new “granite style” laminate, replacing all appliances with low/medium grade new ones (For the quoted pricing you should be able to get stainless steel) and remove the linoleum or vinyl and put down low end ceramic tile flooring and add decent quality fixtures throughout.   The average cost for this type of kitchen design is $64,078 and you get back on average $53,319, or about 83.2%.

The Bathroom Renovation:

Aside from the kitchen the bathrooms are the next place it is generally agreed upon as the best place to spend on home improvement upgrades to sell your house.  Same as the kitchen, few buyers want to pay retail price for a place with a cheap outdated bathroom.  Since the space is small and since we are assuming low end and old fixtures we will assume a full gut for the bathroom renovation.  What will go back in isn’t going to be fancy but the bathroom ideas here will include a new tub with modest tile surround, a modern vanity with solid surface counter, new medicine cabinet and toilet, fresh paint and tile floor probably the same as the kitchen design to save on some material costs.  Average cost for this home improvement project is $19,980 and you recoup about $14,219 or 71.2%.

Exterior Maintenance:

We are going to lump the siding, windows and doors in this one category of home improvement projects.  We’ll talk about each separately and the project costs for each from the report, but for the sake of space won’t give each its own section.  While exterior maintenance and curb appeal are very important and can cause buyers to not even go into the house to see your new expensive kitchen design and bathroom ideas, it is something that is very common to be neglected in rental houses and can really affect the home values. Let’s assume that it is old clapboard siding with a fair amount of damaged pieces and chipped and peeling paint throughout.  It isn’t in such bad shape that major repairs are needed for safety or structural reasons but it is in bad enough shape that it will be much harder to scrape and paint then to do vinyl siding over it after any basic maintenance is done.  We will assume basic vinyl siding and not higher end materials that can increase the cost.  The average cost for this home improvement project is $13,231 and you should be able to get back $12,461, or about 94.2%.  Not that this is for 1250sqft of vinyl siding, if you have more of less the numbers will shift. The windows are old but not falling apart.  Single pane and wood, not energy efficient and not what anyone will want to see if a house that they are looking to buy at full home value.  All the existing windows will be replaced with typical vinyl replacement windows.  Window replacement is fairly simple so not much more detail here.  The average cost for this home improvement job is $11,439 and you will be able to get back $9,795, or about 85.6%.  Similar to above this is for replacing 10 standard windows.  If you have more or less, or odd sized ones, it will shift the cost. Finally we will replace the front and side door since they will likely be dinged up and faded at best.  They may still be structurally fine, but will look that much worse with the window replacement and new vinyl siding.  This is also a relatively inexpensive home improvement project so it needs to be done with the rest of the exterior renovation work.  The average cost is $1,294 but since there will be 2 replaced we will just assume we will double it.  So total costs here will be $2,588 and the doubled amount expected to get back is $2,400 or 92.8%. Our exterior renovation work has cost a total of $27,258 of which we expect to recoup $24,656 which is 90.5%.

Other Home Improvement Repairs:

The Cost vs. Value report only covers a limited number of home improvement projects so many minor things are not included.  Among these things are new flooring and painting, which are items that will need to be done.  The house we described had redoing the flooring as a major project to be completed, and well you ALWAYS do interior painting if you are trying to improve the home value for resale.  Since we don’t have official data for this section I will assume that you get 100% of your costs back. Some of these home improvement projects you might actually get a little more than you pay (Like painting) but others you might get far less, so we will just assume you just back your investment on it all to be conservative.

Flooring Replacement:

Let’s assume a 3 bed room house and we will put carpet in those bedrooms.  We will assume there is hardwood in the living room and other areas (other than the kitchen design and bathroom designs, where the flooring is included in those home improvement costs) and is in good enough shape they can be sanded and refinished.  For the carpet we will assume something like 550sqft of carpet which we can say will run about $1,800 for that job.  For the hardwood if you find a good person and they aren’t in bad shape $3.50/sqft if a safe guess and let’s say there is 700sqft for a total of $2,450.  That gives us a total cost for new flooring of $4,250

Painting:

As alluded to in the intro of this section you can’t do all this other work and have old paint on the rest of the house.  The kitchen and bathroom will be painted as part of their renovations already so that only makes not painting the rest of the house that much more obvious.  Since those two rooms have that included in their costs I’ll say you can probably spend as little as $2,000 if we assume that the existing sheetrock needs minimal repairs and prep to be painted.

What DIDN’T We Do?:

So you did a lot of work to your house to increase the home value!  However there are several other home improvement projects that were not done that are worth mentioning. One major item we did not do on the outside was the roof.  We will assume that there are no issues with the roof and while it is older it still can have a few years left in its useful life expectancy.  A savvy buyer will discount for this, but many will not worry as long as it has some life in it. Similarly we did not touch the boiler.  The current one is old but not old enough that failure is imminent.  It is in the 15 year old range.  This won’t be a selling point to a buyer, but if it is working properly you can probably get away without doing anything to it as it should have a good 5-10 years left on its life.  However I would seriously consider spending a couple hundred bucks to have it serviced to show it is working as expected. None of the plumbing or electrical (Beyond want was needed in the new kitchen remodel and bathroom design) were touched.  Assuming they were updated at some point we will try to let those ride.  However with the amount of work that is being down the inspectors would likely demand that those items are brought up to code if they are not.  This could cost several thousand dollars each if that were the case.

Final Costs vs. Rewards:

For all the home improvement work described here the expected bill for it all is a staggering $117,566 with an expected return of $98,444.  This is only an 83.7% return on that investment.  Hopefully another benefit will be that the house will sell much faster at the appropriate price point. Being able to sell faster is a benefit past the direct monetary considerations, but what are the drawbacks.  One thing is since it was a rental unit it will be vacant for at least a couple months during the work. Then once it is done if your goal is to sell to an owner occupant you probably aren’t going to get new tenants which will bring your holding costs up even more.  Best case with a quick retail sale that doesn’t have any real issues will still take a minimum of 30 days to close (This would require that there was an offer accepted the first day on market and no hang-ups leading up until the closing, both of these are pretty unlikely).  The biggest of the potential drawbacks is… What if you don’t have $117K to do the home improvement work???? If you don’t and you put it on the market you will have to discount the home value by possibly more than the $98K of home improvement value you would have added.  Most retail buyers won’t even consider a place that needs that much work.  Even those looking for a fixer upper will want to get a place for at the most the value after the repairs less those cost to do them so you will likely need to discount the home value more like $110-120K to start and hope someone likes the location or the “bones” of the building.  Most likely you will have to drop the price and/or wait several months to be able to sell it. While selling to an investor is not right for everyone one, someone with rental house with a lot of deferred maintenance is a very good candidate for it.  Do you have a dated house that needs a lot of home improvement work to appeal to retail buyers?  If you want to sell your house fast and hassle free in its current condition hit the “Schedule a Consultation!” button on the top right of this page to get more information.  

 

 

* © 2014 Hanley Wood, LLC. Complete data from the Remodeling 2014 Cost vs. Value Report can be downloaded free at www.costvsvalue.com    

The Cost Benefit Analysis of Fixing Up Your House Before Selling

Crappy Old Kitchen

Each year Hanley Wood puts of a report looking at the Cost vs. Value of a variety of home improvement projects.  In this article we will look at the Remodeling 2014 Cost vs. Value Report to see what the average costs of fixing a home that is in “rough” shape and what value these repairs might bring.

The report is broken down by region so since we are interested in Eastern MA and Southern NH this is based off the “Boston” area report.  Note that this region is defined as the almost exact area of interest noted above (Specifically it is for Bristol, Plymouth, Norfolk, Suffolk, Middlesex and Essex counties in Massachusetts  and Hillsborough and Strafford counties in New Hampshire).

We will look at a fictitious case study of a house in need of major work to make it appealing to the retail market.  The conclusions based on this will likely not be the same as someone with a house that is more or less market ready and they want to try to boost the value and make it more appealing so it might sell faster.

Case #1:  We Love The 80’s!

This is a common type of house, the one that was redone in the 1970s or 1980s and has some of those unique period features that are no longer desirable.  Kitchens and bathrooms are funky pink or green colors, carpets are big shag, copious wood paneling throughout etc.  In addition to the cosmetic issues little has been done with the structure or systems in this 25-30+ year timeframe.

So let’s think of what will need to be done to make this house appealing to buyers and will allow the sellers to get close to market value in any reasonable amount of time (let’s say less than 60 days on market or 90-110 days from list to close).  For this type of house we will do a minor kitchen remodel, a bathroom remodel (I’ll assume the fairly common 1 bath room house we see in the area), replace any carpeting, new sheet rock and fresh paint and replacing the roof.

The Roof:

We’ll say it is about 28 years old.  No major issues with it yet but it is at the end of its useful life and there are some obvious issues like you can see many shingles curling up and while no big leaks there are water marks on some of the ceilings indicating water penetration in some areas.  According to the report the average cost of a roof replacement is $25,138 and the resale value captured is only $19,372 or about 77.1% of your costs.  However few buyers will be interested in a house that will need a new roof very shortly.

The Kitchen:

The kitchen is one of the rooms that sell a house.  If you have a 70s/80s kitchen then you will have a hard time selling your house for anything close to average retail price of similar homes.  In this case we will only do what is defined as a minor kitchen remodel.  In this case you will keep the existing cabinets and just replace or refinish the doors and add new modern hardware, remove the stained and dinged up pink counters with a new “granite style” laminate, replace appliances with low/medium grade new ones (You can probably splurge on stainless steel) and remove the linoleum and put down low end ceramic tile flooring.  You will also update the sink and faucet and some light fixtures with cheap but modern styles.  The average cost for this is $22,175 and you get back on average $19,438, or about 87.7%.

The Bathroom:

After the kitchen the bathroom is always the next place they say will sell your house.  Similar to the statement about the kitchen above, few buyers want to pay retail price for a place with one outdated bathroom.  In this case the space is small enough and it is often just as costly to work around something worth keeping we will just assume a full gut.  Nothing to fancy going back but a new tub with modest tile surround, a new modern vanity with solid surface counter, new medicine cabinet and toilet, fresh paint and tile floor likely with the same tile as the kitchen to save a little on material costs.  Average cost for this project is $19,980 and you recoup about $14,219 or 71.2%.

Other Repairs:

The report only covers so many projects and many minor things such as sheet rocking, new flooring and painting are not included.  However in the house we described many of these items will be critical to appeal to retail buyers and to get the price you want after putting in all the money for the major work.  For this section I will assume that you get 100% of your costs back.  Some of these things you might actually get a little more than you pay but others you might get far less so we will just assume you just back your investment on it all to be conservative.

Carpet Replacement:

Let’s assume a 3 bed room house that only has carpet in those bedrooms.  We will assume there is hardwood in the living room that are decent enough to not have to refinish, just polish for minimal cost as a DIY project.  Guess something like 550sqft of carpet so let’s say about $1,800 for that job.

Sheetrock:

The wood paneling is a big turnoff.  Alone it won’t kill the deal for a large number of buyers (but will for many) but they won’t pay as much.  This will be highly variable based on the exact size of the house and how much of it has the paneling.  In this case I’ll assume it is mostly contained to the living room and dining areas and that the existing sheetrock is in decent shape.  The best idea is often to just go over the panels with very thin 1/8-1/4″ sheetrock and not risk seeing what issues might be behind the walls if removed.  Taking an optimistic estimate I’d say you are looking at around $2,000.

Painting:

You can’t do all this other work and have old paint on the rest of the house.  And of course the new sheetrock has to be painted (which will make not painting the rest stick out that much more) and the kitchen and bathrooms will be painted as part of their remodels.  Since those two rooms have that included in their costs I’ll say you can probably spend as little as $2,000 if you make the same assumption as above that the places with existing sheetrock needs minimal repairs and prep to be painted.

What DIDN’T We Do?:

So you did a lot of work to your house!  However there are several things that were not done that are worth mentioning.

  • The boiler died about 12 years ago and you replaced it then.  The current one is old but not old enough that failure is imminent.  It won’t be a plus to a buyer but if it is working you can probably get away with it okay (You may want to spend a couple hundred bucks to have it serviced to show it is working fine).
  • The windows are 20+ years old but they are vinyl and not old single pane wood with broken pulleys.  Again it is not a selling point, but no need to replace them if there aren’t any issues.
  • The exterior siding is vinyl and in good shape still.  The color isn’t anything crazy so that isn’t a worthwhile expense in this situation either.  If it is a dirty looking, especially if it is a lighter color, it might be worth getting a power wash just to make it shine.  You can rent one for minimal cost and do it yourself in an afternoon most likely.

Final Costs vs. Rewards:

So the estimated bill for all the work you did to this house is a whopping $73,093 with an expected return of $58,829.  This is only an 80.5% return on that investment.  What it will hopefully do for you is let the place sell much faster at the appropriate price point.

That is a benefit beyond the money but what are the drawbacks.  One thing is you will be living in a construction zone for at least a couple months during the work.  Even with a quick retail sale that has few hitches if will take a minimum of 30 days to sell it (Offer accepted the first day on market and not a single hang-up leading up until the closing, both unlikely).  Of course the big one is – What if you don’t have $73K to do the work????

If you don’t and you put it on the retail market you will have to discount the place much more than the $59K of value you would have added.  Most retail buyers won’t even consider a place that needs that much work.  Even those looking for a fixer upper will want to buy the place at most the value after the repairs less the costs of the repairs, so you will need to price it at the $73K less to start, and hope someone likes it.  Most likely you will have to drop the price and/or wait several months to be able to sell it.

While selling to an investor is not right for everyone one, someone with the 80s house is a very good candidate.  Do you have a dated house that needs a lot of work to appeal to retail buyers?  If you want to sell your house fast and hassle free in its current condition hit the “Schedule a Consultation!” button on the top right of this page to get more information.

 

*Remodeling 2014 Cost vs. Value Report © 2014 Hanley Wood, LLC. Complete data from the Remodeling 2014 Cost vs. Value Report can be downloaded free at www.costvsvalue.com