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We recently purchased our first home and before we go overboard with updates and upgrades, I was hoping to get feedback from local realtors. We have an older home in a "niche" market, so we want to ensure we get it right with improvements.
Although our buyer's agent helped us get a great deal, she doesn't really know enough about our neighborhood to give the best advice. I noticed three specific brokers (each with many realtor unde them) do the majority of the business in our neighborhood.
Would it be out of line to contact the brokers/realtors who really know the market in our neighborhood to see what improvements they would recommend? I don't want to waste anyone's time, as we're not planning on selling for two years, but when it comes time to list the home, we'd certainly consider using an agent with whom we'd dealt prior.
I guess the other option is to go to open houses, but I feel sketchy since I have no intention of buying another home right now, and am embarassed to identify myself as a "looky-loo." Do realtors mind people going just to look?
I don't know what the RE etiquette is on this subject, so I'm hoping to get some advice. Thank you in advance.
I guess the other option is to go to open houses, but I feel sketchy since I have no intention of buying another home right now, and am embarassed to identify myself as a "looky-loo." Do realtors mind people going just to look?
I don't mind--esp if the you are honest up front ("I just want to take a look...I live in the neighborhood.") You just never know what might come from that. You will (hopefully) leave with my card and knowledge of my current listing. Then a few days later, you tell someone else you saw it, etc, etc. Or, you stop in and we start a conversation that may become a business relationship over the next few years. Who loses?
well as far as what to update/upgrade, for the outside i would: replace the roof (if it's at the end or near end of life expectancy), windows (if need to be changed), pave driveway, siding and landscaping. Inside typically would be kitchen, bathrooms, floors, electrical (if outdated), furnace (if past it's prime), water heater, plumbing (if outdated). that's about all i can think of. question if you just purchased it why are you planning to put it on the market in 2 years? i'm curious.
I'm not a realtor but I am an expert at overimproving property. Unless you are really fortunate, the value of your home is going down right now.
By all means do necessary maintenence. That's imperative. But think really hard before you put money in improvements. If it's something you really want and will use, great. Just don't count on it increasing the value of your home. Chances are your home will be worth what the others in your neighborhood are worth. It will be hard to get more for your house no matter what you do to it.
The best improvements for money return are kitchens and bathrooms. If you are lucky and do a great job, you might get 40% back. Adding bathrooms and bedrooms increase the square footage but the construction costs are much higher.
All those shows on TV are just wishful thinking now. The market has totally changed. Best of luck!
It would not be out of line. Not every agent will be interested in helping, but many will if you explain up front that you just bought the house, plan to make smart improvements and then possibly move up in a couple of years (at which time you'll certainly consider listing the house with them). Try to find a particular agent who farms your neighborhood. He or she will have the most up-to-date knowledge about the homes that are going to be your eventual competition so s/he'll be able to tell you the level of finish you need to shoot for and how much is too much. Almost every neighborhood has an agent who actually lives there. That's usually a great person to ask for advice.
I'm not a realtor but I am an expert at overimproving property. Unless you are really fortunate, the value of your home is going down right now.
By all means do necessary maintenence. That's imperative. But think really hard before you put money in improvements. If it's something you really want and will use, great. Just don't count on it increasing the value of your home. Chances are your home will be worth what the others in your neighborhood are worth. It will be hard to get more for your house no matter what you do to it.
The best improvements for money return are kitchens and bathrooms. If you are lucky and do a great job, you might get 40% back. Adding bathrooms and bedrooms increase the square footage but the construction costs are much higher.
All those shows on TV are just wishful thinking now. The market has totally changed. Best of luck!
All real estate is local. There are certainly markets that are going down but there are also markets that are remaining stable and some are even going up. Smart improvements are often an excellent way to increase the value of your home. You're wise to ask a neighborhood agent because they can give you detailed information about YOUR market and not make broad generalizations based on the national real estate market. Don't believe that a 40% return is the best you can do. There are plenty of small improvements that can boost your bottom line. And, of course, without knowing anything about your house and neighborhood no one can give you specific advice about what would be the best course of action.
Certainly feel free to ask but also don't be upset if some decline. Our time is what is valuable and limited. I'll spare a few minutes for potential future client but don't be upset if you get turned down. It's possible we just don't have the time to work for free, or that we don't want to put ourself on the hook legally by recommending certain things and then down the road fads change (i.e. not getting your money back out.)
Visit all the homes in the neighborhood that you can, not just those on the retail market...make friends; have a progressive block party; scope out your future competition.
If you were planning to live in the home for 8-10 years, make the improvements and enjoy them. If you move in two years, you won't get a return on your investment. Who knows how soon the granite counter tops, stainless steel, hardwood, and soaker tubs of today will be out of date?
One of the other posters said do the maintenance only which is very good advice. Those two years will go fast. Save your dollars and before you plan to sell, have a home inspection and cure any latent defects. After that, if you have money left over, you can do some cosmetic improvements or offer it as incentive to the next buyer.
Oh yeah, I'm pretty certain the highest rate of return on an improvement is from adding square footage.
Quote:
Originally Posted by Linzybean
We recently purchased our first home and before we go overboard with updates and upgrades, I was hoping to get feedback from local realtors. We have an older home in a "niche" market, so we want to ensure we get it right with improvements.
Although our buyer's agent helped us get a great deal, she doesn't really know enough about our neighborhood to give the best advice. I noticed three specific brokers (each with many realtor unde them) do the majority of the business in our neighborhood.
Would it be out of line to contact the brokers/realtors who really know the market in our neighborhood to see what improvements they would recommend? I don't want to waste anyone's time, as we're not planning on selling for two years, but when it comes time to list the home, we'd certainly consider using an agent with whom we'd dealt prior.
I guess the other option is to go to open houses, but I feel sketchy since I have no intention of buying another home right now, and am embarassed to identify myself as a "looky-loo." Do realtors mind people going just to look?
I don't know what the RE etiquette is on this subject, so I'm hoping to get some advice. Thank you in advance.
Last edited by TampaKaren; 10-26-2007 at 06:26 PM..
I appreciate all the responses! Nearly everyone had helpful advice.
I basically just wondered what the etiquette was regarding contacting realtors, because just as I don't want people wasting my time (nor do I want to work for free), I don't want to waste a realtor's time. I'm not looking for decorating advice, but for neighborhood-specific things. Beyond the common sense updates!
CYNMKOLOHE:
I think I will go ahead and go to a few open houses, but will let the realtors know immediately I live in the neighborhood and want to get ideas. If they don't want me there, the worst they can say is no! But you're right about the referrals, particularly as we have lots of friends who are buying first homes or moving up from condos. Plus when it is time to sell/look for a another home, I'll definitely remember the agents who were professional/thoughtful enough to help when they didn't have anything to gain.
Like I said, we're in a niche market and not only are homes staying on the market only 90 days (in many cases, far less, as the stats are slightly skewed), but the homes are also selling for 98.7 percent of listing price. That's not to say the market will never turn, but real estate in our area is pretty steady, so I'm not going to fret about my home depreciating. It's just a chance you take. But like I said, I don't want to go overboard improving. Smart improvements are what we're looking to make!
I don't think it's all doom and gloom in real estate! We purchased our home the day after it came on the market and got a great deal because we put down a lot of earnest money and closed in two weeks.
We were also willing to put in sweat equity, which it seems many people aren't. I don't get all the first-time buyers who expect 2500 sq. ft, stainless, granite, and basically everything to be model-home perfect...all for under $250k! I roll my eyes when people complain about paint colors. Painting isn't fun, but I guess that's part of the reason we got a good deal. People don't want to do the work! We've added new siding, a new roof, updated electrical, painted interior, landscaped and refinished hardwood floors in addition to tons of other things. We've done a lot of work ourselves. We're working on refinishing all of the original woodwork as well. Even with all of our expenditures on improvements added to the purchase price, the lowest comps are $33k higher (for homes withut renovated kitchens/baths). We're basically just restoring it, right down to somewhat neutral, supposedly historically accurate paint colors. We're trying to stay away from all trends except stainless. We had to purchase new appliances anyway, so we spent a little extra for the stainless...as people expect it now, and we figured for a few hundred extra, it might help with resale.
I wrote we plan to stay for two years...that's more an estimate. For tax purposes, we can't stay less than two years, but for starting a family, we likely won't stay more than 5 years. Nothing's written in stone, so we'll just have to evaluate the market when we start thinking we need more space. Plus husband's income will triple as he has been in prof. school!
Well, thanks again, and I'll be hitting some open houses soon!
You sound like an exceptionally smart homeowner/investor. Everything you've done sounds absolutely spot on. I have an idea that you're going to do VERY well on your investment when you're ready to sell.
Best of luck!
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