For Home Sellers
For Sellers - Mistakes Sellers Make
- Basing your asking price on future needs or emotion rather than market value. How much you paid, how much you invested in your home, or how much you need to buy another home does not determine todays market value. Over priced homes take longer to sell and eventually net the seller less money.
- Get lazy when it comes to Staging your home. First impressions are the most important. Experience shows that for every $100 in repairs that your home needs, a buyer will deduct $300-$500 off their offer. Clean and de-clutter. Over stuffed closets and cabinets will make Buyers think they are too small for their things also. Follow your Realtors advice.
- Choose the agent for the wrong reasons: Listing with the agent that tells you what you want to hear, your desired price, the agent that works for the largest company, and the agent who lives around the corner. You need to choose the agent with the best marketing plan, who will give you feedback on showings, continuous marketing updates, who is technologically connected and has a track record.
- Not really understanding Real Estate contracts regarding the listing agreement and sales contract. The contract that you will sign when selling your home is legally binding. Small items that are neglected or time lines that are not met in a contract can wind up costing you thousands of dollars. Contracts are eight pages long, plus the required Financing Addendum, plus an assortment of 32 additional addendum that may be required if various circumstances occur. Real estate law is complex. Rely on a professional to advise you and save you money in the long run.
- Know whom your listing agent represents. Since January of 1996, the Texas Real Estate Commission has required that agents work as a Sellers Agent, a Buyers Agent, or as Intermediary. Be sure your listing agent can explain these fiduciary duties to you.
How Much Is That Improvement Worth?
When thinking about making home improvements, you need to calculate the recovery you can expect when selling your house. Its important to realize there are some improvements that should be made for your enjoyment, but do not expect to retrieve your investment. You cannot add cosmetic (drapes, wallpaper, etc.) features to your home, selected for your style and color, then expect a buyer to pay the original cost. If you are going to make improvements, consider the basic appraisal value of the addition to a buyer.
Estimated Recovery Value (%)
Adding a second story $50,000-$100,000 80-100
Adding a pool $30,000-$50,000 50-75
Adding a new room $20,000-$50,000 50-100
Remodel the kitchen $20,000-$40,000 80-125
Adding a new bathroom $15,000-$25,000 80-125
Building a garage $10,000-$20,000 80-100
Adding a patio, deck $ 3,000-$ 8,000 75-100
Other improvements like upgrading attic insulation, enclosing a porch, adding a fireplace, fence, landscaping, sprinkler system will bring you 10%-30% return on you dollar investment. If you convert a garage into a room, the space is a very arbitrary evaluation addition. It is however, an approximate $10,000 deduction from an appraisal because of the lack of a garage.
*Cost will vary depending on area, labor cost, material cost and the size of the improvement.
Green Building is a broad term that encompasses a number of movements, including the drive for better indoor air quality and the use of environmentally friendly building design and materials. A significant percentage of consumers will pay more for an environmentally friendly home. Richard Morgan, manager of The Austin Energy Green Building Program, the oldest residential program in the country, estimates 23% of new-construction starts last year in the area that his program serves were green.
Even Congress is motivated toward Green. The Energy Policy Act of 2005 encourages energy efficiency with tax credits to those who make green improvements to their homes in 2006 and 2007. Fannie Maes energyefficient mortgage program, available on loans under $359,650, lets borrowers qualify for a bigger loan than they might otherwise and allow energy improvements to be financed up to 15% of the appraised value of the existing home and up to 5% equity credit on new construction. Check with your lender for information on energy efficient mortgages.
Some examples of remodeling projects that would qualify Green: Install a gas fireplace in an addition, such as a den or sunroom, replace appliances with Energy Star-rated versions, invest in new, more efficient heating and cooling systems, seal leaks and save more than 10% on energy bills, install double-glazed windows with low-emission glass that allows maximum light while keeping out heat and cold, plant strategic trees for shade, paint your exterior a light color.
Whats the cost of eco-friendly living? Building Green may cost you up to 2%-5% more to build, but the energy savings appear immediately. Examples of Green Building are: Stepped up insulation such as spray foam, a home design to respond to its site orientation means you can install smaller, more efficient, and less expensive furnace and AC units, radiant barriers in the roof, and a light colored roof. Peter Pfeiffer, Austin green architect, says, Green-built homes dont have to cost so much more, they just have to be better thought out. Homes built by todays green standards are likely to capture greater value at resale. Think about it, you might want to Go Green, whether you are remodeling or building.
For more information go to www.ci.austin.tx.us/greenbuilder.com
