Renovation spending high, home improvement financing helps upgrade to sell
Posted on Monday, November 11, 2013 at 10:31:40 AM
Over the next few months, homeowners might spend on renovations at levels not seen since the housing boom, according to recent data from the Joint Center for Housing Studies of Harvard University. While growth may slow down in the middle of 2014, remodeling activity is expected to remain strong for the foreseeable future.
There are plenty of choices for those planning renovations, and home improvement financing can be a great way to afford the best upgrades. Recently, Home Loan Investment Bank's Brian Harvey took the time to offer several tips for individuals itching to begin a new remodeling project underway.
"Remodeling and improving your house can be a great way to increase the value of your home," said Harvey. "It can also help you gain extra space or even make it possible to stay in one place longer - but there may come a day when you might want or need to sell your home."
Home improvement financing and the right renovations could make a property more attractive for certain buyers, and raising equity is critical before listing a home on the market.
"Many homeowners are just now starting to recapture some of the equity lost in the housing collapse and long-stalled projects can now be undertaken," added Harvey. "The stronger housing market and higher home prices have afforded many homeowners the ability to obtain the means to complete these projects and to recoup their [costs] when selling. That hasn't been an option the past several years.
However, Harvey explained that not all home improvements are created equal. Instead, some will provide a boost to value while others will make it more difficult to sell.
"Certain projects add more resale value than others," he said. "The most common that have the best financial impact are no surprise. They have become the standard improvements that most homeowner's seek out."
Harvey noted that a kitchen renovation, for example, is a great way to add value. He added that this is especially true in older homes, where homebuyers enjoy seeing modern conveniences, updated features and outdoor improvements.
For many, home improvement financing may be the ideal strategy to incorporate some of those upgrades into a house, especially before selling.
"Your house makes a first impression quickly, so improving the exterior - especially the front yard with siding, landscaping, and walkways or driveways - can lure homebuyers as opposed to scaring them away. The old stand-by improvements of a new roof and replacement windows can be expensive to replace, but buyers expect these to be in good condition. This can mean that replacing these items may not dramatically increase the resale value while not replacing them can significantly decrease it."
Many buyers don't want to purchase the dirt and grime left behind by old residents. On the contrary, a well-kept, attractive home can be a major selling point.
"The majority of home buyers are either first-time homeowners or they are upgrading from their existing home," said Harvey. "When purchasing a new home they are not seeking ones that require these types of renovations. Outside of minor clean up and personalization they are expecting a move-in ready home and addressing these types of improvements can give you a leg up on other homes for sale in your area."
Prior to selling a home, owners should take the time to fix up anything that needs attention. Home improvement financing can provide the means to pull everything together, and many simple changes can result in greater equity - and more selling power.