Television shows like Flip That House are intriguing, but sometimes misleading. What you don’t see is the background research that makes it a certainty the remodeled house will sell, and sell at a high enough price to make a profit on the owner’s investment. From watching such shows, homeowners may mistakenly believe that when they decide to remodel their home, the sky’s the limit. They think they’ll recoup their investment from even the most extravagant remodeling projects. Nothing could be further from the truth.
If you’re remodeling your home strictly for your own pleasure and needs and plan to stay in your home, by all means, create the home of your dreams. You’re probably not worried about getting your money back when you sell. But if you only expect to live in your home for a few years, you don’t want to overprice your home with expensive remodeling projects that are beyond the neighborhood norm.
Before starting a remodeling project, plan carefully and you’ll avoid the possible pitfalls.
- Don’t over-improve your home. Remodeling projects should be compatible with neighborhood competition if you want to get your money back at resale. Visit a few open houses to see what you’re competing against. Concentrate on improvements that most buyers want, like bathroom and kitchen remodels or finishing the basement. Realize that updates the home buyer can’t see, like new wiring or plumbing, may be necessary but are unlikely to add to your home’s resale price.
- Do your homework. Read magazine and newspaper articles and talk to friends and neighbors who have tackled the same project. Page through project books and start collecting pictures of what you want to do. You’ll find helpful books at the library, bookstores and home improvement centers. Go down to the home improvement center and talk to the staff. You’ll find them knowledgeable and helpful. Many offer project planning and management services and some even have classes for do-it-yourselfers.
- Know when to call in the pros. Remodeling projects often require adjustments to your home’s electrical, plumbing, heating/cooling or other systems. Such improvements may require permits and will have to meet building codes. Hire licensed professionals in these areas to insure the work is done properly. You may want to hire a general contractor to oversee the project and manage those areas best left to the pros. He’ll have the experience to properly estimate the costs and the resources to ensure quality professionals are hired.
- Keep a close eye on your wallet. Talk to other homeowners to find out what similar projects cost. For work you plan to hire out, get three written quotes to make sure everyone’s in the same ballpark. Remember, you get what you pay for. A quote that seems too good to be true probably is. And don’t hire a contractor on a handshake, pay more than 30% up front for material purchases, or pay in cash without a receipt. You won’t be able to deduct undocumented expenses from your house basis when you sell. (The IRS frowns on that.) When you determine your a budget, add 10% for contingencies and don’t allow yourself to be persuaded into purchasing unnecessary and expensive extras.
- Make a plan and stick to it. Once you’ve decided on a remodelling project and budget, make a work plan and stick to it. Don’t let a spouse or neighbor or contractor talk you into something you don’t need or out of something you really want. Indecision and last-minute changes eat up time and money and will frustrate your family. Talk to your contractor and come up with a workable strategy for living in your home during construction. For instance, if you’re remodeling a bathroom, you’ll want to make sure the plumber is scheduled ahead of the tile crew to avoid costly delays. And you’ll definitely want to make sure the plumber is scheduled early so you’re without water (and toilet and shower facilities) for a minimum number of hours.
If you’re contemplating a remodeling project, give veteran realtor John Day a call. If you live in Maryland or the Washington DC metro area, he can give you some practical advice on what buyers in your community are looking for. When you’re ready to sell your remodeled home, you’ll want to call John again so you get the best price possible on your investment. Visit John Day’s website to read his valuable Tips for Sellers. If you’re selling or buying a home in Maryland or the Washington DC area, John Day is your key to success.