Cheryl A. O'Brien The Architect Realtor - THE SECRET OF WEALTHY HOME SELLERS

THE SECRET OF WEALTHY HOME SELLERS

Cheryl A. O'Brien The Architect Realtor

Table Of Contents

Introduction

First Steps To Home Selling

Pareto's Principle The 80/20 Rule

Creating Curb Appeal

Upgrading With ROI In Mind

Staging

UNDecorate To Sell!

How To Market Your Home

Common Seller Mistakes

10. Learn From Others' Mistakes

11. Finding Buyers

12. Be A Power Negotiator

13. The Dos And Don'ts Of Negotiating

14. Bargaining Chips

15. Why Hire An Agent?

Foreword When I ventured into my first job years ago as a Residential Architect, it did not occur to me that I was also entering the real estate industry. Having, over the years, provided countless builders in multiple states home designs that were top sellers, I now understand that I was simultaneously assisting them in the selling process. After a breakthrough to this truth, I added my Real Estate license to my resume in hopes of helping sellers like you avoid the headaches often associated with the home-selling process. I specialize in helping sellers take a mindful approach to preparing their home for sale. My strategies help a seller detach and provided a top notch presentation that supports their efforts to get top dollar for their homes in the least amount of time. Buyers are equally served by my ability to show them a home and envision creating their new dream in real time. No need to watch HGTV. I am real and here for you! I decided to share my expertise in this book. I want to help you have the best possible home-selling experience. That means I want you to: 1. Mindfully prepare your property for sale so you can detach 2. Get the most money possible for your property 3. Sell in the least amount of time. 4. Avoid the headaches most commonly associated with the home-selling process. Think of this book as my gift to you. It contains insider advice on the home-selling process to help you achieve your ultimate real estate goals, including:

• Secret strategies to sell your home for more money • Marketing techniques employed by top agents • Advice on how to appeal to today’s buyers v

• And much, much more

If, after reading through it, you want to consider hiring me to help you, I’d be more than happy to meet with you to discuss a specific plan to sell your home.

Cheryl A. O'Brien The Architect Realtor cherylobrien@kw.com (215)808-7044

ABOUT Cheryl A. O'Brien

Cheryl A. O'Brien is the Architect Realtor. Cheryl graduated in the seventh class of women from the University of Notre Dame with a Bachelor of Architecture and with Honors. As the first woman hired by a national home builder as a lead design Architect, Cheryl oversaw the design of 3,000 homes per year while at Ryland Homes East Coast Division. She jokes that she got her masters at "Ryland U", learning the art of designing homes that had mass appeal and increasing sales. She later became the Director of Product Development at Realen Homes in Pennsylvania. In one year she redesigned the company's home offerings, resulting in cost savings and increased sales. Cheryl started he own Residential Architecture firm in 1997, and remains designing homes for homebuilders and private clients. Her designs have been built in approximately 12 different states. Her work spans the market from first-time buyers to high-end luxury homes and consistently results in outstanding sales and satisfied clients. Cheryl has been a speaker at the National Homebuilders convention, a judge in multiple design award competitions and a contributing editor in Professional Builder, Builder, Sales and Marketing Ideas Magazine and been interviewed for several magazines including Realtor and Furniture Style. She has won multiple awards for her designs. As her swim mom days were winding down, she decided to expand her service to helping sellers create exceptional home presentations and helping buyers achieve their dreams of finding their perfect home by attaining her Real Estate license. Cheryl is passionate about providing outstanding service to her clients and vii

sharing her expertise about home design and adaptation to their lifestyles. Cheryl moved a lot as a child and young adult. She was born in South Bend, Indiana, and has lived in Ohio, Rome, Italy (as a student), New York, New Jersey, Maryland and Pennsylvania. She has resided on the Main Line (Philadelphia suburbs) for almost 20 years now. Cheryl was taught from a young age that if you want something in life, you have to work for it. So that’s what she has done. She is no stranger to hard work and brings this dedication to both her Architectural and Real Estate clients. Cheryl was quite adventurous in her younger adult years, learning how to snow and water ski, taking weekend 200 mile bicycle rides and enjoyed traveling as much as possible. She also enjoys theatre, opera and the orchestra. As a single mom, she relished visiting amusement parks, including multiple trips to Disney. She rode the rides, slid down the water slides, swam with the dolphins and embraced the joy of it all. She sprinkled in some ballroom dancing, weight lifting, boxing glove workouts and hiking. Her artistic side found Cheryl becoming an excellent seamstress under the tutelage of her mom (later making some awesome Halloween costumes), reveling in putting up a Macy's storefront worthy Christmas tree and befriending paint brushes and painting many walls to embellish her spaces. Cheryl aims to provide the highest level of service and takes deep pride in helping clients achieve their goals. Cheryl is a winning choice for great service with a creative touch.

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CHAPTER 1 Introduction

The largest investment most people make is their home. That makes selling a home — whether a single-family residence, duplex, or condominium — the single largest, most complex transaction a person will ever undertake. It involves new terms and concepts, financial acumen, and larger figures than normally dealt with. It is also one in which emotions may come into play to the detriment of good judgment. Surely, the seller thinks, my home where I raised my children and made so many memories is worth more than the bricks and mortar it contains. Real estate transactions involve dozens of decisions and substantial investment in the homeowners’ time, energy and money; and emotions very often lead to problems in a sales price negotiation. The home seller’s objective is to find that home shopper who cannot resist buying your property at the highest price. To do this, you need to offer potential buyers a striking home sales presentation that outshines other homes on the market. It requires making a fantastic first impression, creating an instant feeling that the prospect is traveling up the front walkway of their new home for the first time, not visiting someone else’s. It’s about falling in love at first sight, from the curb, in those initial seconds. Then falling in love all over again when they enter the home. Most sellers do not venture alone into selling their home. They find it better to have a knowledgeable real estate professional with whom they are comfortable. This book was written to provide some of that comfort without the direct sales stressors of person- to-person contact. 2

I want the prospective or active home seller to independently achieve a better understanding of the home-selling process. I’ve also provided actionable insight into how best to market your home, avoid critical mistakes, and maintain a proper focus. Let this book be your go-to resource for information, strategies, and techniques that can be put to work to sell your home quickly at the best price. Take time looking through the chapters and master the secrets of successful home sellers. For example, discover why comparable homes sell for considerably different prices. You will be introduced to my innovative "UNDecorate to Sell " strategy. This mindful approach serves to help you destroy overwhelm, emotionally detach, accessorize to elicit three specific buyer emotions to make the sale, and create a presentation to make your home have mass appeal. Be ready to sell by learning about your home’s market value, best listing price, negotiation tactics, and improvements that offer the best Return on Investment (ROI). My sincere hope is that this book will help you make the most of your time and efforts to sell your home. The process and importance of preparing your house for sale is examined: how to present to get top offers, the “80/20 rule,” along with which upgrades will make the most difference in ROI. Learn the difference between the Basics and the Finesse upgrades. Later in this book, we'll delve into marketing your home with a look at costly mistakes, avoiding those mistakes, and finding qualified buyers. Then, we'll examine the critical topic of negotiations — what to expect and how to conduct them — and finish with a look at what engaging a real estate professional brings to your real estate sale transaction. After you learn the 3

process, requirements, and tips, you will see that a knowledgeable, financially astute real estate professional can cut the time and help you raise the economic value of your transaction. Reading this book is your first step to mindfully prepare for selling your home for the best price in the shortest time. After you read it, you might want to talk with me. I stand by to assist you with a Comparative Market Analysis and/or Equity Analysis and preparing your home to create mass appeal.

CHAPTER 2 First Steps to Home Selling

Location! Location! Location! is the most crucial consideration in real estate and a major factor, if not the predominant one, in real estate pricing. Novice (and not-so-novice) home sellers alike must know the considerations that determine a home’s price. The exact same house in a major metropolitan suburb will sell for considerably more than in a smaller city's suburb. Setting the price at which to sell your home is not a simple formula, nor totally mathematical. Many elements factor into the decision. Throughout this book, you will read examples of similar and similarly situated houses that sold for very different prices, along with the reasons for the disparities. A calculated home value is not necessarily what you may believe your home is worth. Recognizing this helps avoid overpricing, a major factor that leaves homes languishing or unsold. Familiarity with the real estate terms market value, appraisal value, and assessed value can save disappointment and frustration, and allow the home seller to meaningfully engage in setting a home’s listing price. The most used definition of market value is “the most probable price a property should bring in a competitive, open market, under conditions requisite to a fair sale.” Essentially, this is a pre- negotiation opinion of what a house should bring in its local market, i.e., its geographical area, generally an area such as a suburb or neighborhood. Appraisal value is an evaluation of a property’s worth at a given point in time that is performed by a professional appraiser. 6

Appraised value is a crucial factor in loan underwriting and determines how much money may be borrowed and under what terms. For example, the Loan to Value (LTV) ratio is based on the appraised value. Where LTV is greater than 80%, the lender generally will require the borrower to buy mortgage insurance. Assessed value is the amount local or state government has designated for specific property and frequently differs from market value or appraisal value. This assessed value is used as the basis of property tax and when a property tax is levied. The assessed value of real property is not necessarily equal to the property’s market value. Approximately 60% of U.S. properties are assessed higher than their current value.

WHAT IS YOUR HOME WORTH?

The first step in selling your home is understanding the difference between value, worth, and price. Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived.

ONLINE HOME VALUATION

Online tools will provide you with a very basic estimate of your home's current value based on recent comparable home sales in your area using a comprehensive database. Note that the assessment is based on available data with no guarantee of accuracy and often uses an algorithm that simply averages comparable sales in the geographic area. Because the system doesn't understand the makeup of the area it may pull from a larger geographic area than it should. These tools might be quick and easy, but they don't take into consideration factors like neighborhood, current local trends and the condition of the property. Beware that the prices arrived upon might be highly inaccurate.

EXAMPLE OF DIFFERING HOME VALUES

A buyer is interested in a home listed at $420,000. The online valuation determines the house is worth $440,000. Based on that estimate, the buyer offers the asking price. When a professional appraiser comes in at $400,000 and the existing tax records assess the home at $300,000, the buyer wonders why the values are so different and whether he overpaid. The home was listed at $420,000 because at that price the home would sell in a reasonable amount of time. Why would the appraised value not be whatever the buyer was willing to pay? The appraised value is the true value of the home and considers many factors, as we will cover. The assessed value is for taxes and rarely changes. It is of interest because it determines the taxes, but is not valuable in determining selling price.

PROFESSIONAL APPRAISAL

The single thing that ultimately determines the sale price of a piece of real estate is the price at which it sells. Houses are not same-priced identical cans of tuna on the grocery store shelf or shares of stock valued and traded every day on the stock exchange. Real estate appraisal (“property valuation”) is the process of developing a perspective of value for real property. This is the market value — i.e., what a willing, reasonable buyer would pay for the property to a willing, reasonable seller. Real estate transactions generally require assessments because they happen infrequently and every real property is unique in features and characteristics. An appraisal helps in various decision points. The seller can use a pre-appraisal as a basis for pricing. The buyer can use it as a gauge 8

on which to base an offer. Lenders use appraisals to know how much money to credit to their borrowers and will do their own appraisal to approve a mortgage.

The important factors in a house appraisal are:

• Dwelling type (e.g., one-story, two-story, split-level, factory-built) • Features (including design) — materials used and the kind of structure present and how they were built • Improvements made • Comparable sales • Location — type of neighborhood, zoning areas, proximity to other establishments • Age of property • Size Condition, of course, is a crucial factor in valuation. Location is also a factor; however, as property cannot change location, upgrades or improvements to a residential property often can enhance its value. A professional appraiser should be a qualified, disinterested specialist in real estate appraisals, with expertise in your region. His or her job is to determine an estimated value by inspecting the property, reviewing the initial purchase price, and weighing it against recent sales with the same purchase price.

COMPARATIVE MARKET ANALYSIS BY A REAL ESTATE PROFESSIONAL

This type of home valuation is performed by real estate professionals and more helpful than automated online offerings. It provides detailed information on each house sold in your area

over the last six months, along with the final sale price. It also includes the specifics of all the houses for sale in your area, including the asking price. These homes are your competition. The real estate professional will also answer any questions and help you price your home realistically. Along with an understanding of how the worth of a home is determined, the current market must be considered. By utilizing a professional real estate agent, you can rely on proven expertise to market your home at the best listing price. If you will be taking some time to prepare your home for sale, you can definitely get an idea from a Comparative Market Analysis at the onset of your preparations, but it will need to be repeated again once you are ready to sell as the market is always active and changing.

THE SECOND STEP (SELLING YOUR HOME FOR MORE)

Prior discussion showed that there is no calculable certainty in setting the value of a home. There can be wide differences between the seller’s assessed price, the asking or listing price (market value), and the price at which the home sells (sale price). Let’s turn to what the homeowner/seller can do to elicit offers at, or even above, the listing price in a competitive market. The seller’s time, effort, and investment are the most important parts of the process. The seller’s willingness to adequately prepare the home for presentation — and willingness to live in that pristine state for the time it takes to sell the property — will greatly affect both the sale period as well as the price at which the home sells. A market in which homes normally sell in no more than six months of listing is considered balanced or neutral, which means a good number of homeowners are selling and buyers are purchasing; therefore, neither has an upper hand. A variable, for 10

instance, like a major company entering — or moving from — the area will tip the scale toward homeowners to make a swift market or toward buyers to make a slow market. The typical selling time in a swift market might be 30 days, while that of a slow market may be up to nine months. Typically, any number below six months is considered a seller’s market.

LIVING IN A FISHBOWL

A house on the market requires keeping the home in a constant “show-ready” condition, and changes in day-to-day life are inherent in the process. Agents usually handle all requests for showing, and they will want Sellers to give them large windows of time to schedule them. A seller needs to be ready to leave and the home must be "show-ready" with short notice. If the home has been properly prepared to sell, they should expect frequent updates by phone, email and text with showing appointment scheduling messages from the listing agent. They also will likely deal with repair and reconditioning appointments and inspections. The house may be photographed for online, periodical, or brochure presentations. There are repeated showings when the home first hits the market. Keep your home in pristine showing condition for these showings.

CHILDREN (AND PETS) SHOULD BE UNSEEN, UNHEARD

Children and pets are distractions for potential buyers, affecting their experience of your home. You should plan for your children to be elsewhere, your pets crated or leashed, and no toys lying about or dog hair on the sofa. The dishes should always be done and the kitchen sparkling.

The pressure of showing to everyone even mildly interested in looking (not necessarily buying) may come from the idea that the more your home is seen, the more quickly and easily your home will sell. Many real estate agents provide their clients with dozens of homes to consider without a clear picture of what the buyer wants. Low-interest traffic can be heavy and a burden on the seller’s time, energy, and resources. However, buyer's agents generally make sure their prospects are pre-qualified and only show them homes they can afford. It is a waste of an agent's time to show the home if their buyer can't purchase it. Since a showing can take an hour or even hours out of your day, finding an interested buyer is what matters most. The home will be shown to many more uninterested buyers than interested buyers. How many times will you have to show your home? In an ideal world, your property would be shown to serious buyers only. However, many “Sunday afternoon window shoppers” exist in the real estate business; and they usually show up at Open Houses. That said, you shouldn’t waste your time trying to appeal to uninterested buyers. This is where planning, organizing, and the professional help of a qualified real estate agent enables you to handle even the most intimidating tasks without wasting efforts.

CHAPTER 3 Pareto's Principle The 80/20 Rule

“Eighty percent of results will come from just twenty percent of the action.” This is the Pareto principle, attributed to Italian economist and philosopher Vilfredo Pareto, who, in 1906, observed an intriguing correlation. He began work on the “80/ 20 rule” with the observation that 20% of the pea plants in his garden generated 80% of the healthy pea pods. This observation caused him to explore more examples of uneven distribution. He discovered that 80% of the land in Italy was owned by just 20% of the population. He investigated different industries and found that 80% of production typically came from just 20% of the companies. His findings led to the concept that 80% of results will come from 20% of the action. While it does not always come to be an exact 80/20 ratio, this imbalance is often seen in various business cases: • 20% of customers account for 80% of total profits • 20% of the most reported software bugs cause 80% of software crashes • 20% of patients account for 80% of healthcare spending

RELATING THE 80/20 RULE TO HOME SELLING

Understanding the 80/20 rule concept can save you time in selling your home. Applying the 80/20 rule, you stop trying to sell people on the entire home. Applying the rule, you can highlight

the 20% of your home’s features that make it special. The remaining 80% of your home still affects the buyer’s decision, so do not neglect it, but, in photographs and showings, feature the elements that make your home special. Keep in mind, your selling point won’t necessarily be the common features your home shares with the other properties on the market. Use your home’s unique features to grab the attention of buyers who are interested in those distinctive attributes.

THE 80/20 RULE IN ACTION: BUYERS ARE SEARCHING FOR UNIQUE FEATURES

Decide upon, improve, and spotlight the unique features of your home in marketing copy, photographs, and showings. Highlighting your distinctive aspects in marketing efforts will attract interested buyers looking for those specific features and they will be far more willing to pay the asking price. Each house will have its unique features. Here are some suggestions if you aren’t sure of yours: • Hilltop views or high vantage point, offering a spectacular view of the surrounding area • Open fields frequented by wildlife • Unobstructed views of sunrise and sunset • Patios, decks, dog runs, garden areas, and gazebos — highlight items neighboring houses don’t have, or differences in size or quality; that one vital feature could help you sell your home • Location can set a property apart, even in the same area, adding value to a home on a cul-de-sac or corner lot • A private location or lot partially concealed by trees

• A unique, shady, or larger backyard; a fenced backyard is a big selling point • Finished basement, large attic or garage, swimming pool, or anything else that makes your home stand out Following the 80/20 rule can lessen time showing to people who aren’t interested. Instead, you will be showing your home to buyers who are motivated to make a purchase. You won’t have to show as frequently. You also won’t have to sift through low-ball offers from casual shoppers. Keeping this in mind, you must take the time to uncover your home’s most attractive and unique features and improve them to their highest potential. Compare your house with others in the neighborhood to see what makes yours stand out. Work with that.

BUYER'S STORY

When Vince and Sue were shopping for a new home, Vince wanted an ocean view. They looked at many desirable properties; but not yet the right one for them. Some were overpriced and others had obstructed views. The search went on for almost a year until they found an older home a short walk from the ocean. The neglected exterior and dated interior were not encouraging, but when Vince stepped onto the third floor balcony off the owner's suite, he was sold! Any shortcoming in wall color or fixtures faded away when he took in the view. He could now see the sunrise from his bedroom window every morning.

SELLER'S STORY

When Cam and Kate listed their home, they needed a buyer who wasn't concerned that the house was on an unpaved road. Although the home was over 10 years old, the interior was

updated with fresh, neutral wall colors and carpeting to look brand new. The towering trees and established yard gave the home a welcoming appeal. The buyer had also looked at a home within miles of Cam and Kate's that had towering trees, as well as a koi pond and patio. The home was comparable in interior and exterior, but it was on a busy street. What 20% of the home caught the buyer's eye and prompted him to choose their home? The buyer loved the secluded country feel. The 1.8 acre property was surrounded by pastures, with grand oaks dotting the landscape.

CHAPTER 4 Creating Curb Appeal

Someone once said, “a stunning first impression is not the same thing as love at first sight. But surely it is an invitation to consider the matter.” This could not be truer than in selling a home. First impressions matter. Sometimes they are everything. Nothing sets the tone of a relationship or encourages a transaction more than first impressions. So, always consider what a potential homebuyer may think as he or she drives up to your property for the very first time. Think of “curb appeal” as the home seller’s shop window. Like picking a lunch place on a busy avenue in a tourist spot, it’s either the outside presentation, or, as we saw in the 80/20 rule discussion, some particular feature that brings in the customers. For most lunch seekers, it is the way the place looks (“curb appeal”), and to others, the soups and sandwiches they serve (specific desired feature). You do not have a lot of time to establish a curb appeal relationship with a prospective homebuyer. Whether cruising the web to view online photos from across the country, or cruising by your home in the family SUV on a Sunday afternoon outing, home shoppers will decide at a glance whether they want to see more. “We buy ugly houses” is a sign often seen nailed to electric poles. Rehabbers look for ugly houses so that they can pay the least amount possible; homebuyers looking for a deal — not a “basement bargain” — they do not want an unattractive home.

Creating curb appeal is essential to attracting interest in your home. How your home looks from the road is so persuasive that a well-prepared house may catch the attention of buyers who did not find the written description particularly compelling. Likewise, a neglected house can cause a buyer previously excited by the description to cruise right on by. Try this. Go out into your street and look — I mean really look — at your home, and see if you can spot any imperfections. Is it appealing, pristine, and well-kept, or are there necessary repairs that you have been putting off? After you’ve lived in a home for a long while, you’re not likely to examine it objectively. Listen to suggestions from real estate experts, your friends and/ or potential home buyers about how you can make your house show better. Then, take a drive around your neighborhood and surrounding area and see which homes for sale appeal to you and note why. Well-tended houses with trimmed bushes, groomed lawns, attractive landscaping, and a “grand entrance” (discussed shortly) will be more impressive than homes with an unkempt walkway, uncut grass, and a paint-peeling front door. The outside appearance of a property needs to be an invitation to come inside. Potential homebuyers are drawn to welcoming entries and uncluttered yards. They are unlikely to be attracted to a home with dead shrubbery and a weather-worn exterior. It is no stretch to think a buyer will believe the home is neglected on the inside as well. Look at your home as a prospect would. Drive up to the curb and take inventory of everything that needs attention. Low-cost investments like power washing the house and concrete, repainting trim, and adding landscaping give your house more curb appeal. Simple improvements like weeding, trimming, and window washing can improve the appearance of a home with 19

little to no expense. Repair and repainting are costlier, but often well worth the expense. The goal here is to get more money for your home. Homebuyers generally aren’t interested in a home that needs work, unless you want to sell below market value. Look around your yard, and make a written list of everything that could be improved: • Shrubs trimmed, flower gardens tended, walkways tidy, and beds weeded • No trash, trash cans, lawn clippings, branches, or general mess in the yard • All outside fixtures and components (door and yard lights, garage door, porch rails); functioning properly and looking their best • Outdoor features, such as patio furniture or the deck, updated with staining or painting Make all major and minor improvements to update the exterior. There might be a long list of things to do. It takes hard work to get a home ready to sell. Anyone can put a house on the market, but not everyone sells quickly or with great profits. Then, await the prospective buyers who will be drawn to the inside of your home when they see how beautiful it is from your curb!

CREATING A GRAND ENTRANCE

As I mentioned earlier, an important part of curb appeal is the home’s “grand entrance” — the portal to even the most modest house. You want to create a sense of a great place to come home to. Impressing the home shopper at the front door is a vital part 20

of the home sale. This means more than putting out a welcome mat and potted plants. You want prospective buyers to feel welcome, safe, and secure when they open the door. The doorknob is the first point-of-touch on a home. Security is important to homebuyers. A flimsy lock or handle on the front door will make potential homebuyers uncomfortable, and they may not even know why. Replace a worn or loose entry handset. Consider replacing the door handle with a heavy-duty deadbolt and knob combination. This investment of less than $200 will make your home more visibly and practically secure, and everyone wants to be secure in their home. The front door is a focal point; make it impressive. Freshen it up and add a dash of color. Choose a paint that complements the color of your home. Replace an old, worn wooden door with a steel door. Add a decorative address plaque if you don't already have one.

SOME OTHER CONSIDERATIONS IN CREATING GREAT CURB APPEAL:

• Symmetry appeals to the eye and is easy to accomplish. Lopsided landscaping or unevenly trimmed bushes will detract from the curb appeal; the overall appearance of the home needs balance. • The mailbox should complement your home. If it is worn, dated, or unsightly, replace it. This doesn’t cost much and is worthwhile. • Use outdoor lighting to add to landscaping appeal as well as a perceived safety feature. • Flower boxes and raised flower beds add instant color.

This is an easy, inexpensive way to enhance curb appeal. • Spruce up the landscaping. Eliminating weeds and adding fresh mulch can really make a difference and shows homeowner care and maintenance. • Consider enhancing architectural appeal by adding molding to the tops and sides of the doorway or around windows. (I can definitely give you suggestions!) • Keep shutters and trim in excellent shape. Repainting them adds to the attractiveness. Fence gates, arbors, and fencing panels should be clean and fresh. • Clean downspouts and gutters. Repaint or touch up to eliminate rust spots. • Ensure the walkway to the front door is clear and approachable. Stacked hoses and unruly landscaping interfere with home shoppers walking up and diminish the inviting look. • Try a fresh coat of exterior paint; faded or chipping paint, siding, or trim will always detract from curb appeal. If exterior paint is good, ensure door and window trim are too. This simple upgrade is well worth the cost. • Power washing the house, walkways, and driveway can be almost as effective as repainting, at a much lower cost. Power washers are easily rented from hardware stores. • Adding some stone or stone veneer accents to the face of the home is an inexpensive way to instantly update your home, if it complements the design. • Add a “smart” doorbell. Eight of 10 home doorbells are outdated or not working, so if you invest $200 in a doorbell equipped with a camera and speaker, you will gain the approval of home shoppers who are looking for security measures.

Curb appeal is one of the most essential elements in selling your home quickly and successfully. You can create interest in your home before buyers even step out of the car, even if they didn’t think they were looking for a home like yours. If you put money into cleaning up the outside of your home, buyers will be far more likely to want to see the inside. Your home’s curb appeal draws buyers in, maintains their interest, and sets your home apart from the competition. Remember that unless you are willing to lower your home’s price well below market value, prospective homebuyers typically won’t want to take on a major renovation project.

CHAPTER 5 Upgrading with ROI in Mind

The condition of the home is the one and only thing you can control to affect the sale of your home. You won't be moving the location and unless you do a major addition, the square footage and rooms are set. This and the next two chapters provide the most important information to elevate your home 's desirability to elicit top dollar. It may be very easy to get caught up in the glamour of an HGTV show that reveals the before and amazing transformational after, with claims of making huge profits, but that is not what we are going to discuss here. They are usually major full home renovations. This book is addressed to people who do not need a major overhaul to sell. However, if you need to do significant renovations, as an Architect and a Realtor I can assist you in completing your project. Making upgrades can be as easy as replacing the handset on your front door and freshening up the paint job, or as daunting as remodeling an entire kitchen or master bath. The question always is, what home improvements give the best return on the remodeling dollar?

THE TWO CATEGORIES OF UPGRADING

Category One is the BASICS. Every listed home should meet the basic expectations of safety and being sound. This includes major and minor "checks" on your property. Category Two is the FINESSE. Although having the fanciest kitchen in town may get you buyers, it may not be worth 24

renovating to grab their attention.

Return on Investment (ROI) is generally claimed to be less than 100% in real estate, so the rule of thumb is “less is more.” However, the fact is that you MUST cover the BASICS to be competitive in the market and not risk a low offer. Covering the basics allows you to price competitively in the market. If you go for upgrading for FINESSE, you may very well not get an equitable ROI. These decisions must be made carefully and take into consideration your time, expenses and delay in getting the home to market.

STARTING WITH THE BASICS

Every listed home should meet the basic expectations of any buyer. It should have a sound roof, functioning gutters and downspouts, foundation without cracks, functioning heating and/or air-conditioning system, solid subflooring, and safe and secure electrical wiring. Where there are finance-mandated home inspections, any shortcomings may be required to be remedied to get buyer financing approval.

MECHANICAL MAINTENANCE IS A MUST

It is easy to get wrapped up in the more eye-pleasing aspects of preparing a home to sell. However, the upkeep of all the more mundane aspects of the home cannot be overlooked.

These mechanical features require consideration:

• Electrical boxes and wiring • Natural gas lines • Plumbing • Central heating and air-conditioning

If these components are old, outdated, or not working correctly, the home’s appeal is lowered, as is the eventual sale price. According to the National Association of Realtors®, 65% of homebuyers surveyed wanted to be sure their new home had a working central air system. If you don't have central air and comparable homes do, you may want to consider this upgrade. People want to purchase a home that reflects their aesthetic tastes and lifestyles, but primarily want one that is safe and sound. Faulty electrical systems do not provide a feeling of safety. Leaky plumbing arouses concerns of mold infestation and sewage problems. These areas can require extensive work and they are extremely important. Overlook them in the preparation stage, and you run the risk of trouble later with inspections and appraisals. You may need to provide a "Sellers Disclosure" when selling your home. It will specifically ask you when the mechanical systems were checked and when upgrades were implemented. So, you should may consider do the following: • Have a certified plumber inspect the entire water system for leaks. Check the well and septic field, if applicable. • Hire an electrician to check the wiring. • Call an HVAC company and have technicians perform a thorough service checkup. • Contact the natural gas supplier and have them double- check the mechanics of your tank and lines. • Make any and all recommendations for safety in the home. You should be diligent in your efforts to insure the home is sound and honest on disclosing the dates and descriptions of the upgrades as required. Certified inspection reports and upgrades 26

to mechanical systems can be a great selling tool.

Keep reports and paperwork for issues that may arise with a buyer's inspection, or if they are requested. Some sellers leave these reports in the home for the new owner as a courtesy, so they know who to call if issues arise. I have often heard that hiring a certified inspector to do a full inspection of the home prior to selling is a great marketing tool. I strongly disagree. An inspector's job is to find every single little "fault" and you may find yourself "correcting" things that are just part of the normal upkeep of owning a home. I assure you that there are more than enough big issues to handle without getting an inspection report that calls out that the toilet handle is not perfect! More importantly, if you do have the inspection, than you have to disclose it! If you have mechanical issues and decide to sell your home “as is,” it may be necessary to negotiate with the buyer.

REPLACING APPLIANCES

New appliances undoubtedly make an impact on buyers. The National Association of Realtors® conducted a survey of buyers and found that:

• Buyers were usually “interested” or “somewhat interested” in buying a home that featured new appliances.

• Roughly 17% of respondents preferred stainless steel. • The most important factor: that appliances were available in the home. • Most buyers who were unable to get their sought-after appliances said they would have been willing to pay, on average, nearly $2,000 more for them. 27

Potential buyers want appliances included and will pay more for them, especially if they are new or in excellent condition. The reason is simple. The cost of the appliances is now bundled into their mortgage, in lieu of an out of pocket expense that may be challenging after just making the big down payment! If new appliances are out of reach, offer immaculately clean and fully functioning existing ones.

UPDATING HARDWARE

Carefully inspect your bathroom and kitchen hardware. If it is unsightly or worn, it’s best to replace it. Put yourself in a buyer’s shoes. Your home will potentially be their new home. Old, worn- out fixtures are not going to speak to them the way nice, new shiny hardware will. Since hardware is touched, not just viewed, it is especially important to pay attention to this! If you have broken or worn-out hardware, it’s best to replace the entire set. If your knobs, pulls, handles, or hinges are not broken, you need not replace them. Get that fresh look simply by thoroughly washing, sanding, and painting them with spray paint made specifically for kitchen and bath hardware, making it cost- effective.

Check these hardware items closely and replace, as needed:

• Towel bars • Toilet paper holder • Door handles • Dated light fixtures • Toilet seats - new is good!

The goal is to touch up your home nicely without excessive spending. The internet has a wealth of do-it-yourself videos that can help you update your fixtures if your budget is limited.

LET THERE BE LIGHT

Whether natural or artificial, bringing in light is one of the most effective ways to show off your home. It is one of the basics to selling. Using light to enhance your home’s appeal can make a difference. Harsh light is unflattering, even to the best furnishings and features. Dim lighting gives everything in the house a dingy feel. Assessing the lighting in each area of your home will give you a quick idea where to bring in more light. Rooms with abundant windows greatly benefit from natural light, as your home will usually be seen during the day. Supplemental light is necessary for rooms with smaller windows or little natural light coming in. Increase the wattage of light bulbs in your lamps to improve artificial light. As a rule of thumb, there should be 100 watts per 50 square feet of space. There are three kinds of lighting. General lighting or overhead is typically ambient. The pendant light is good for tasks like food preparation or reading. Accent lights are usually lamps on tables or mounted on walls. You can use all three to bring out the best your home has to offer. Key areas, such as foyers, can set the stage by impressing buyers with a dramatic light source. If you do not have an abundance of natural light coming in, a chandelier-type light works if your ceilings are high. Otherwise, wall sconces are impressive in smaller spaces. Battery operated sconces are a great addition without requiring electrical work. Do not buy new fixtures for 29

style if you can update existing ones with a new shade or better bulbs. The goal is to make sure each area of the home is effectively lit. Kitchen and bathrooms are pivotal rooms. These two areas can make or break a sale. The combination of ambient, natural, and pendant light can bring out the best in your kitchen space. Mounting track lighting underneath cabinets gives the counters a chance to shine aesthetically and functionally. There are many options to buy under-counter LED, battery operated lights that are easily mounted. Make sure the light over the sink area is sufficient and working properly. If you have a hood over the stove, install clear bulbs to ensure the brightest light. Lighting in the bathroom needs to be intense without being harsh. Soft lighting enhances any part of the house you want to highlight. Avoid harsh lighting in the bedrooms, as well. Lamps strategically placed will give the bedrooms a peaceful, restful feel. The closet light should be bright, though.

FLOORING PLAN

Although you want to avoid home shoppers looking down on your home, they will be looking down at what is under their feet. Your home’s value can be downgraded by the buyer if your floors are in bad shape. On the flip side, if your home’s flooring is well done and in excellent condition, buyers will be more willing to pay more for it. Maximizing profit without compromising investment dollars is the goal, but if flooring and carpeting are not in salable shape, you need to take inventory. There is no point in spending money unnecessarily if the improvements do not add significant value or help the home sell quickly; however, there are options that don’t 30

break the budget.

Repairing and thoroughly cleaning the floors are the least expensive ways, so start with those. Take stock by examining all floors. Move furniture out of the way and make notes regarding condition, stains, or blemishes. Write down what needs to be replaced, cleaned, or repaired. Carpets can be steam cleaned to eliminate stains and odors. If the carpets are path-worn and dull, you can replace them easily with new carpet or other kinds of flooring with a reasonable ROI. Laminate floors can be cosmetically fixed with repair kits found at home improvement stores. Hardwood flooring can be refinished if the wood is worn or water damaged. If the floors are in reasonably good shape but a bit dirty, you can have them professionally cleaned and buffed. Seek the advice of a flooring professional because real wood floors add a level of quality to a home that laminate floors cannot match.

TWO ENERGY-SAVING UPGRADES TO LOWER UTILITY BILLS

More and more buyers are looking for homes that reduce consumption and save them money on utility expenses. Here are two options that can make your home more energy efficient. • Install an energy-saving smart thermostat (less than $300) that saves on utility bills. • Install solar vents ($500-$700) in the attic space that help expel hot air during summer months.

DECIDING ON THE FINNESSE

This is a far more complicated decision than can be fully handled in a book, as it must be evaluated on a case by case basis. So, as I will be able to provide some general guidance, the potential ROI on renovations must be studied in the context of a Comparative Market Analysis. Do not forget to consider the intangibles of the time, displacement from your home and frustrations that are inherent in major renovations. It is important to understand that the market value of a home is determined by the prices of comparable homes recently sold in the area. Extensive remodeling to sell the home or to increase the value may not pay off. The property needs to be up to the standards of neighboring homes, so while the kitchen should be comparable to others, spending $50,000 to remodel a kitchen in an area where comparable homes recently sold for $950,000 will not immediately increase the home’s value to $1 million. While it may be a helpful selling feature, it may not return dollar-for- dollar value. Many buyers are looking for move in ready homes. If you have a quality kitchen but it is not up to today's trends, then it can be a waste of money trying to guess a buyer's style with a full renovation. At best, you can renovate to current trends, which may or may not be for all buyers. If you have laminate countertops in an otherwise solid functioning kitchen, then adding granite or quartz countertops is a good decision. Your focus should be on the appliances and the basics, as we covered, in presenting your kitchen as move in ready. When making upgrades to kitchen and bath, be aware of what constitutes a substantial investment. The key is to consider the mass appeal for the sake of resale value. Let's say one homeowner 32

decided to add a backsplash, updated the appliances and refinished the oak flooring. Total cost was $15,000. The seller kept the price comparable to sales in the area and ended up selling for $50,000 more than the asking price because interested buyers started a bidding war! The Lesson here? You do not need to bust your budget to sell your home, but you do want to have mass appeal. Kitchens are pivotal in home appeal.

MAKING A CASE FOR SPACE

We humans tend to accumulate an abundance of possessions and need space to store it. According to the National Association of Realtors®, most homebuyers would have preferred improved and greater closet space, as well as other storage options. Consider these statistics showing what buyers are looking for in a home:

• 93% wanted a laundry room • 90% wanted a bathroom linen closet • 86% wanted garage storage • 85% wanted a walk-in kitchen pantry

The fact is that storage is a plus, even if you do not have those features. Give buyers great storage, and you’ve won their hearts. If you can add new closets to your home easily, do so. Building a simple closet isn’t difficult if you are moderately handy. If you’re selling an older home, where closet space is typically minimal, this will help! If your rooms are already small, you might not want to take any square footage away from them. Existing closets can be updated to maximize the space at hand. If you don’t have the skills, or the funds to hire someone to build new space, consider investing in closet organizers to make the 33

most of what space you have. For instance:

• You can easily design your custom closet kit online with a storage solution company. • Your standard home superstore or hardware store often has exactly what you need in an inexpensive, prefabricated form. • Organizers won’t enlarge your closets, but maximizing vertical and horizontal space makes the closet feel larger. Look for any place you can provide attractive and inexpensive storage space. Make sure your improvements are tasteful, and you will benefit from increased storage solutions. Evaluate and enhance clothes closets, linen closets, laundry rooms, basement and attics for maximizing storage. Updating your home with ROI in mind is the best approach when preparing your home for sale. Look over this recent list of what buyers want in a home. Don't stress if you don't have things on this list! Just use it to compare what you have in yours, and upgrade accordingly, without surpassing the price point for comparable homes in your area.

FEATURES MOST HOMEBUYERS WANT

• Energy Star-rated appliances — 94% • Laundry room — 93% • Energy Star rating for the whole home — 91% • Exhaust fan in bathroom — 90% • Exterior lighting — 90% • Bathroom linen closet — 90% • Energy Star-rated windows — 89% • Ceiling fans — 88%

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