Smart Remodeling

Make your home remodeling project payfor itself – and then some

By Amanda Finch Broadfoot  |  Photos Courtesy of National Association of Home Builders

{mosimage}Home makeovers look so easy on TV. Designers sketch a few ideas on paper, bring in a crew in matching T-shirts, and presto: The house is ready for Architectural Digest.

In reality, remodeling projects are a lot more daunting to the average homeowner. Whether you’re remodeling your primary residence or an investment home, you’re likely to be overwhelmed by decisions:

Where do you begin? How do you decide how much to spend? Do you make décor choices based on what you like or what you think buyers will like? And how do you know what they will like?

“Home remodeling is the best way to protect what is for many their largest investment,” said Vince Butler, chairman of the National Association of Home  Builders’ Remodelors Council.

Home remodeling and improvements totaled a record $275 billion in 2005 – up by almost 20 percent from the previous year.

Fact is, most homes need a little touch-up before going on the market. Your home might just need cosmetic changes – new paint or carpet – or it might need an additional bedroom to compare favorably with the other properties in your neighborhood.

Picking a Project

{mosimage}How do you decide where to begin? The Remodelors Council suggests that you “keep up with the Joneses.” When searching for project ideas, it recommends looking at amenities of other homes in the neighborhood. Building an addition may not be a sound investment if yours is the first on the block, but it would be good idea to add more space to your house if yours is the smallest in the area.

On the other hand, while you may want to have the best house on the block, the return on your investment diminishes if your home becomes the most expensive in the neighborhood. For instance, if all the homes on your block have a carport, you might not recoup the cost of adding a garage.

Kitchens and bathrooms consistently are rated the best places to spend your remodeling dollars. In the trade magazine Remodeling’s survey of 2005 remodeling jobs, the average mid-range kitchen remodel cost approximately $44,000 and delivered a 91-percent return on investment at resale. The average mid-range bathroom remodel cost approximately $10,000 and delivered a 102-percent return on investment at sale time. The more you spend, the less return you’ll see. For instance, an “upscale” kitchen remodel – costing approximately $84,000 – will only reap 84 percent of its cost at resale.

Stephanie Roessler of Roessler Properties, based in the Destin area, said that while kitchens and baths also are the most popular remodeling jobs for the Emerald Coast region, her company is seeing a lot more additions being built.

“It’s probably because people aren’t selling, so they’re building on to their homes,” she said. “That makes a lot of sense when it’s not worth it to move.”

You also want to take a long, hard look at your home and decide which areas are most likely to cost you money in the eyes of a potential buyer. Those areas need to take top priority. For instance, have a termite wood-rot inspection performed and prioritize any required repairs.

Floors are a good investment – and bad floors tend to drop the value of a home quickly. If your carpets are worn, consider wood or tile floors. At the very least, install new, neutral carpet in a current style.

If you’re planning to resell your house, avoid too much customization of any individual space. Potential buyers need to be able to envision the home as they intend to live in it. A well-designed fourth bedroom could be an office, workout room or home theater, depending upon who’s looking at the space.

Also think carefully before deciding to add a swimming pool to your home. A pool attracts some potential buyers, but turns away others who do not want the liability or maintenance responsibility.

DIY or Hire a Pro?

{mosimage}As easy as they make it look on TV, the decision to do it yourself is a big one. The enthusiasm that propels you through the early stages of the project is likely to desert you if you aren’t comfortable tackling some of the more frustrating aspects of home remodeling.

Of course, this decision depends on your experience, the type of project you’re planning, and your time and tolerance for living with construction. If you’re just planning to repaint and replace some doors and fixtures, it may well be an ideal project for your free time. However, if you’re planning major electrical or plumbing work or adding a room, you’ll want to make sure your expertise matches the job. The National Association of Home Builders has a great checklist on its Web site — — to help you determine whether your are destined to do it yourself.

It doesn’t have to be an “all or nothing” scenario. You might find that there are some parts of the project that you feel comfortable doing yourself – such as building shelves or replacing the hardware on cabinetry – and you just want to bring in a pro for the trickier aspects of the job requiring more-specialized expertise, such as foundation work or installing sheetrock.

If you hire a contractor to oversee your remodeling project, the National Association of Home Builders’ Remodelors Council advises you to look for one with the Certified Graduate Remodelor (CGR) designation. This designation indicates that the contractor is well trained on the particular challenges that regularly occur on these kinds of jobs and has the expertise to deal with them.

The National Association of the Remodeling Industry (NARI, also has a searchable database of certified local contractors. Ask friends, neighbors and your local hardware store for recommendations, and speak to other people who have done work on your home, such as plumbers and gardeners.

Ready, Set, Renovate

{mosimage}Now that you’ve chosen your project and have a pretty good idea about who will be doing the work, it’s time to dig in and get started. There are a few steps you should take to ensure that your project flows smoothly.

Make sure you look into zoning regulations before you start a remodeling project. The local planning office and/or your housing association will be able to tell you which renovations are permissible, as well as which permits you will need.

Once you know which projects will offer the greatest return on investment, you can make a more informed decision about how much you are willing to invest in your investment. Most people finance their remodeling projects by borrowing against the equity in their older home – an attractive option because the interest on these loans can be tax-deductible.

Make sure your budget is detailed, including all the materials, labor costs, permitting fees, etc., that you anticipate. If you have hired an expert to manage or complete the job, make sure that he or she provides you with this kind of detailed budget, and go over each line item to ensure that you understand how your money is being spent. The NARI suggest that you set aside about 10 percent to 20 percent of your total budget for unexpected costs and miscalculations.

“Pick out everything ahead of time,” recommended Stephanie Roessler. “As you get to the end of the project, you’ll just be ready to get your house back. If you then have to go and order your faucets and fixtures, it can hold everything up.”

At Roessler Properties, clients are provided with a selection sheet to help guide them through the process of picking out everything needed for the project.

As you go through your line-item budget, one way to stretch your finances, suggested by the National Association of the Remodeling Industry, is to consider how labor-intensive some design features might be. For instance, laying a ceramic tile mosaic backsplash would be costly compared to a backsplash laid with conventional-sized tiles.

Develop a schedule for your project – but leave room for flexibility. Weather problems and other delays can throw off your timing, so try not to schedule your finish date too close to the holidays or other major events.

Maximizing Your Resale Value

MAKE SURE THE CONTRACT with your professional remodeler includes:

• Contractor name, address, telephone and license numbers • A list of what the contractor will and will not do – for example, the tasks you have chosen to do, such as painting or demolition

• A dated copy of all drawings and diagrams. If changes need to be made during the project, record them in these documents and have both parties initial and date them.

• Start and finish dates

• The times work will start and finish and the days that workers will be at your home

• How change orders will be handled

• A warranty for one year

• A statement of how the contract can be canceled

• Any agreements that were made orally should appear in the contract

Ultimately, you want your renovations to reap big rewards in the resale. Even if you have done the majority of the remodeling yourself, you should bring in a professional real estate agent to prepare your home for potential buyers. He or she will know how to present each room in the best light, and can make additional suggestions about small “fixes” that will improve your home’s chances of a successful sale.

Sometimes your home or condo just needs a facelift instead of a major remodel. And even if you completely remodel your kitchen, there may be other rooms in your house that just need a little TLC. A few small, inexpensive touches can make a big difference in a buyer’s overall perception of your home.

For instance, if you aren’t prepared to remodel your bathroom, at least replace the old shower curtain with something new and bright. One of the least expensive, yet most effective, ways to prepare your house for the market is to repaint it  – inside and out. Paint or replace a room’s trim or add crown molding, suggested Sandestin Real Estate agent Deborah Hale, if the design and style of the house accommodates it. Remember: When choosing paint and design styles and colors, neutral is best.

Hale also recommends replacing electrical switch plates in a home.

“Over the years, they get grungy or painted over,” she said.

And speaking of brightening a room, check all your light bulbs, Hale said, and replace any that are burned out.

Your front door makes the first impression on potential buyers. Replace any doors that have been damaged over the years, said Hale, and/or install new door handles for an updated look.

Don’t forget the front yard. Be sure that siding, paint, landscaping and other outside areas are acceptable. Plant a few flowers. If the trim around the windows and doors is peeling, paint it. Repair cracks to the sidewalk and/or driveway.

Odor is a major issue with buyers.

“If you smoke or allow others to smoke, the home will be much harder to sell,” Hale said.

If there’s a smoker in your house, consider professional cleaning, including carpets, to get rid of all smoke odors.

“And if you smoke, smoke outside while the house is on the market,” Hale added.

Do you have pets inside? Pet owners often are unaware of the fact that people who don’t have pets  – or worse, have allergies  – are far more sensitive to pet odors. And the odor issue extends to “perfumes” as well. Just because you like the overwhelming scent of cinnamon potpourri, that doesn’t mean your potential buyer will. Go for a neutral scent indoors.

While nobody is perfectly neat all the time, you must be mindful to keep your house clean and ready to be shown at any moment.

“There’s nothing more off-putting than sinks or tubs that are grungy,” Hale said.

Keep countertops and bathrooms clean and shiny, and clean all your windows to maximize the light in your home.

Eliminate most of your family’s personal items from a home you plan to sell, because you want the buyers to be able to picture themselves there. Clean off countertops to give the illusion of more space.

Finally, celebrate your successful remodel and polish with a day out of the house – and plan your celebration for the day that your real estate agent schedules your first open house. Give your buyers a chance to imagine themselves relaxing in your living room, cooking in your newly remodeled kitchen or barbecuing in the back yard.

Meanwhile, you can be out hunting for your next dream house.