What Do Home Buyers Want?

LAST MONTH I wrote about getting the most out of your springtime remodeling choices when it's time to sell your home. Some projects make your life more comfortable and convenient, and some will also contribute to a higher selling price later.

But let's say you're going to sell in the near future and want to add some updates to further enhance the appeal of your property. What are buyers looking for in today's real estate market?

Buyers' Wish List

The National Association of Realtors recently conducted a survey of home buyers to learn just what features they look for in their search for a home.

Topping the 2013 list of features:

• Central air conditioning
• New kitchen appliances
• Large clostes
• Extra storage space

Interesting to note, more than half of home buyers undertook an improvement project within three months of their home purchase, and most of those projects were in the kitchen. Also, nearly half of all home buyers felt that a laundry room was an important feature for a property to have.

The next question to ask yourself: How much to spend to fulfill the wish list?

Keeping Up With The Joneses

On April 28, 2013, USA Today's Samuel Weigley reports in his 24/7 Wall St. column that home buyers are "willing to pay for some desirable extras, but they may not be willing to pay as much as you think."

If your soon-to-be-listed property doesn't already boast the "latest and greatest" amenities, think well on the return you'll get for the dollars you plan to spend. It's important to be competitive with the neighbor's house for sale down the street. If their kitchen has granite counter tops, new or updated cabinetry and stainless steel appliances, you would be wise to swap out your old tile counter, worn out cabinet facings and mismatched appliances for new materials and finishes to create a fresher appeal for buyers. You don't have to spend a small fortune, but you should spend smartly!

Save Those Receipts!

Don't forget: Any major improvements you make can potentially be added to your property's basis, which will help you out at tax time. Save receipts and any other project records, and/or consult your tax professional before you start a project if you have any questions or doubts about how to treat the expenses when it comes time to file.

Feel free to call me if you have any questions about the home features popular right now in Yorba Linda or other areas of Orange County!

Nanette Shapiro

(714) 924-0781

nanette.shapiro4@gmail.com

www.homesbynanette.com

Make the Most of Home Improvements

The home improvement industry invariably launches into its busiest time of year each spring. The weather is more cooperative for work outdoors, plus many homeowners are eager to spend the annual windfall from their income tax refund on needed repairs or major upgrades. Aside from making home life more comfortable and enjoyable, home improvement projects can also improve your property’s future resale value. There are a few things to consider as you build your springtime “to-do” list.

WHERE TO BEGIN?

The list of project possibilities around the house can seem endless, and deciding what should have priority can be a challenge. Should you fix the leaky faucet or add on a bathroom? Paint the peeling exterior trim or update the kitchen? Most experts would agree that repairs and maintenance projects should come first in order to keep your home habitable. After that, larger remodeling or replacement projects like a kitchen update, home office, extra bathroom or bedroom, or even a swimming pool can be considered, and preferably with an eye on future returns. Important factors in your decision include your immediate needs and wants, how long you plan to live in your home, and of course, what you can afford. If selling your home in the not-too-distant future is a possibility, then the focus should probably be on projects that can translate into a better selling price.

GET THE MOST FOR YOUR MONEY

The National Association of Realtors and Remodeling  magazine recently published the informative “Cost vs. Value Report 2013” in which a variety of home improvement projects are evaluated based on cost and return on investment (ROI). The chart here illustrates the top ten projects covered by the report. Why do these projects have such a high cost recovery? Because they tend to improve a property’s “curb appeal” and increase its perceived value in the eyes of a prospective buyer!

SAVE THOSE RECEIPTS

Remember that the cost of major home improvements (versus normal repairs and maintenance) can factor in calculating the basis of your home when it's time to sell. The basis consists of the sum of the property’s original purchase price + purchase costs + improvements + selling costs – any depreciation taken (like the home office deduction). Subtract the basis amount from the final selling price to determine your final gain or loss, and that is the amount used to calculate any capital gains tax owed from the sale. You can see why, along with your mortgage records, it’s important to keep receipts and any other paperwork related to all major improvement projects as long as you own your home.

For more information about the basis of assets, read IRS Publication 551.

Nanette Shapiro 

714-924-0781 

nanette.shapiro4@gmail.com

DRE #0143577

The information provided here is not guaranteed and you should always consult with your tax professional before making any financial decisions that could affect your tax liability.