Face Value How to increase home equity and get more bang for your buck.

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Looking to sell your house this fall? It’s time to talk home equity. You’ve probably heard the phrase a hundred times, but it’s often unclear what it really means—or what you need to do to change it.

“Home equity is the value in your home that’s net of debt,” says David Fitzell, senior vice president of mortgage lending at Howard Bank. “If you had a $200,000 house price valuation, then you had a $150,000 mortgage balance, you’d have $50,000 in equity.”

Whether content with the current number or not, homeowners looking to sell can take certain helpful steps to increase value. First on the list? Renovation.

“I think to do this successfully—if you’re trying to increase equity—you’ve got to first look at the comparable [properties] in your neighborhood,” says Fitzell. “You want to make sure you’re not over-improving your property.”

Fitzell also advises homeowners to consult a realtor early on: “Knowing your market is always a great starting point.”

But it’s how to improve equity—without overspending—that can leave homeowners stumped.

“That’s the million-dollar question—sometimes literally. What is the best way to utilize one’s creativity and checkbook to improve the equity in your asset?” says Karen Hubble Bisbee, managing partner of Hubble Bisbee Group of Long & Foster/ Christie’s International Real Estate.

It might be initially appealing to add a luxury addition or room—like a pool or a sunroom—but Dave Lunden, president of the Timberlake Design/Build, discourages going in that direction.

“Kitchens and bathrooms are big. When you’re looking to make your home more attractive for a resale those are the big-ticket items. Those tend to be the biggest bang for your buck,” Lunden says.

A bathroom renovation or revamp can cost as little as $10,000 to $15,000. Master baths fall closer to $25,000. Kitchens—which can vary widely given the scope of options—tend to fall between $30,000 and $50,000. “Over time, you’re going to get that money back,” Lunden says.

Hubble Bisbee agrees, adding lighting to the mix: “Light sells houses.”

“If I had to categorize return on investment I would say: kitchens first, bathrooms second and lighting third. It’s huge,” she adds.

When renovating rooms, Lunden advises clients to steer clear of trendy options. “In the past year or so, gray cabinets have become very popular. And you just have to ask yourself, ‘Am I going to be happy with this five or 10 years out?’”

Basements are another room that, when finished and well-maintained, can create a ton of selling power.

“They are the heart of the home. It has your plumbing, your heating and your hot water—the very expensive components in the house,” explains Hubble Bisbee.

An aspect of home improvement that does not have to be costly is curb appeal. Hubble Bisbee and Fitzell agree that a manicured lawn, maintained planters and a generally well-kept presentation from the property’s front can make a world of difference in terms of marketability.

“You never get a second chance to make a great first impression,” says Hubble Bisbee.

Homeowners can also cut costs in simply decluttering their spaces.

“Less is more. You want people to perceive the volume of the space,” says Hubble Bisbee.

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