You’re not alone in your curiosity regarding home remodeling projects and the subsequent value that they may or may not add to the re-sale value of your home.  That’s why Remodeling magazine in cooperation with REALTOR® magazine produces an annual report describing the average cost recouped for 30 of the most popular home improvement projects in nine regions of the country.  This year’s study included 79 markets.

The East North Central Region which includes Michigan is not unlike the rest of the nation in that exterior projects dominate the list of highest payback improvement projects.  The number one project from the standpoint of recouping your investment dollars is siding replacement (with a 79.3% payback for fiber cement siding).  The next three projects in order are very close in their percentage of investment recouped, with minor kitchen remodels coming in at 69.1%, a wood deck seeing a 68.9% return, and new vinyl windows yielding 68.5%.

If you would like more information on how this study was conducted or city-by-city results please click through to http://www.realtor.org/rmohome_and_design/articles/2008/0812_costvsvalue_2008 for the detailed report.

As a buyer, the market could not be better today.  There are deals (and steals) out there today, of which we have not seen in nearly ten years.  Realistically, home prices in southeast Michigan are at levels roughly equivalent to those from 1999-2000.  I heard a report on the radio this morning that nationally we are at 2004 pricing. This provides truly an unbelievable opportunity for those who did not invest in real estate in the past to essentially jump back in time and take advantage of the best personal wealth builder available to most of us, a home.

I know what you’re thinking, what about the credit crunch?  It’s true, that credit may not be as readily available for any purchase, including a mortgage, today as it was a few years ago.  While the pendulum may have swung a little too far in the tightening direction recently, it’s because it had come from way too far in the loose direction in the years that proceeded.  Is it really a negative thing to think that we should be putting up a significant initial stake in the largest purchase most of us will ever make?  The bottom line is that there are still many options available for those who are looking to make a purchase.

So far this discussion has focused on the buying side of the equation.  And I know that my initial comment stated that your view point on the market depended on your role.  So I guess the natural assumption would be that if you are selling the market is not pretty.  That’s not necessarily true.  First of all, there is great deal of activity in the marketplace today. Yes, I just mentioned that prices are down from their record highs of the last few years. That said, everyone that is selling a primary residence must be moving somewhere.  For most, that means buying another home.  So the real question comes down to where and what you are buying.  If you are buying in the same general market and buying more home, you stand to do quite well in the “net” of the two transactions.  This will be the topic of my next article.

Forget about the things that you can’t change, location, size of the home, or whether or not it has a basement.  Let’s consider the location and the type of property to be equal for this discussion.  It really boils down to three things that play into the determination.  And no, it does not matter whether it is a buyer’s market or seller’s market.  In a buyers’ market each of the three things are even more critical.

First, and absolutely essential, is pricing the home right.  Your real estate professional should provide you with the necessary market information including sold comparisons, active competitive listings, and expired listings to help you determine the correct price.

The second critical factor in determining which homes sell is exposure.  If no one knows you are trying to sell your home, your chances of finding a buyer are not too good.  The more exposure you have, the more prospective buyers can consider your home as an option.  Again, your real estate professional should guide you through a well planned and comprehensive marketing plan.

The third critical component to this equation is appearance.  How well your home shows, what updates you have undertaken, and curb appeal, are all things that can push your home to the top of a buyers list, or help sell your neighbor’s home.  This is especially true in a market in which there are many listings for buyers to consider.  Even with pricing being constant, if your home stands out against the one down the street, it can make the difference between an offer and staying on the market.

Anyone that has turned on HGTV knows that home remodeling projects and staging are not a new phenomenon.  The question becomes what things make sense for attracting the buyer and represent a good return on investment.  While these specifics really should be discussed with your real estate professional with regard to your specific house, the items below are intended to provide a general direction for where to start.  See you at the closing table.

Home Preparation Basics:

Organizing

• Make every room look larger and feel neater. If a house is cluttered, buyers have trouble imagining themselves in it. By removing or storing items you don’t need, you create a roomy, comfortable feeling that will be inviting to prospective buyers. Remember, when in doubt, throw it out, sell it, or give it away!

• Cleaning makes the house easy for buyers to explore and gives the impression that it has been well cared for. Be sure every room smells as good as it looks,
  paying special attention to pet areas, nurseries and bathrooms. Some fresh paint and a one-time professional cleaning service can make your home look like new!

• Repairing eliminates buyers’ objections before they arise. If you think something is too much trouble to fix, chances are the buyers will, too.
  Buyers tend to think repairs will cost more to fix than they actually do.

• Neutralizing helps buyers see their possessions in your house and picture themselves living there. Neutral paint, decor and carpeting create a home for any lifestyle. Eliminating distracting colors and accessories allows buyers to concentrate on positive impressions.

• Dynamizing™ makes the exterior and every room of your house special. Since your house is competing with many other properties on the market,
  you need to make yours stand out and be memorable. Look through magazines and catalogs for ideas. Ask your real estate professional for the latest “must have” buyer items.