15 Things homeowners can do to make up to 3% more on the sale of their home

I call it the “3% Rule.”

And it means that the average homeowner can potentially make up to about 3% more on their home sale.

After decades in real estate and selling hundreds of homes, I truly believe that the average homeowner can do certain things to influence the sale of their home. In my estimation, homeowners can increase their net profit by up to about 3% compared to if they DIDN’T do these things (or compared to the competition).

Of course, this isn’t an exact science. But even a 1% increase in a $300,000 home sale would equal an additional $3,000 in a home seller’s pocket. And 3% would equal a whopping $9,000 – enough extra profit to hire a moving truck and take the family on a nice vacation before you move into your next house!

Remember that while some of the items on this checklist may seem fairly insignificant – or even obvious – it’s my experience that if you do them all and do them well, you’ll get more for your home and see a higher profit. The best part is that these are all things that YOU can do – influencing your own destiny without being subject to the whims of the market, real estate agents, and buyers.

But no matter if you end up making an extra $100, $1,000, or $10,000 on the sale of your home, it’s all a net positive. So what are the things you can do to help profit a little extra – maybe be even 3% in some cases – when that “For Sale by the Alfano Group” sign goes up in your front yard?

1. Clean
Before we even list your home for sale, it’s time to roll up your sleeves because it's time to clean your house from top to bottom. A thorough pre-listing cleaning will including getting in the corners, dusty shelves, tops of cabinets, packed garage, etc. that’s often missed with regular weekly cleaning. You’ll also want to make sure to steam clean your carpets, get water spots off of mirrors and shower doors, and recaulk and re-grout in kitchens and bathrooms where it's dingy or discolored. Definitely get rid of any trace of bad odors, like must, smoke, pets, etc. Just having your home sparkling clean and looking and smelling fresh will go a long way when the first prospective buyer walks through!

2. Declutter
Once you’re done cleaning, it’s time to go through your home and remove clutter, excess items, and two-thirds of your personal effects. A decluttered, de-personalized room will look bigger and more airy for the ever-important listing photos. It will also be easy for potential buyers to envision their own personal things in the space, and that’s a great first step towards selling for a higher price to help reach the +3% goal we set.

3. Evaluate the home’s condition
Buyers will order pest inspections, home inspections, appraisals, sometimes even roof certifications, and carefully go over the disclosures you send them. What will they see? You know your house better than anyone, so if you anticipate any issues or negative items popping up during these inspections, it’s better to address them – not mid-transaction when they could potentially slow down the sale, lead the buyer to ask for a price reduction, or, even worse, have second thoughts.

Short of hiring your own home inspector, you can pay your handyman or a licensed general contractor to walk through and give you a quick but thorough assessment of your home’s condition. He or she can tell you what will most likely need to be repaired immediately before the home sale closes, what will need some TLC a year or two down the road, and even give you prices to do the necessary work. Of course, essential repairs like a leaky roof, cracks in the foundation, and inadequate heat and air systems definitely need to be addressed before we put a For Sale sign up. Taking care of these things before the buyer ever walks through will help foster their perception that the house is squeaky clean and well-maintained, and therefore more likely to offer full price or negotiate less.

4. Spend on light repairs only
Yes, we want to take care of important home repairs, and fix anything that could compromise health, safety, or cause further damage to the home. But after that, we’ll want to focus our time and resources on the repairs that will drive up your price and cost you the least, ensuring that your ROI on these repairs is through the roof.

5. Spruce up your kitchens and bathroom
There are also plenty of small repairs and fixes that focus the ever-important kitchens and bathrooms that could boost your offer price. Low-cost (sometimes even DIY) projects like painting, replacing dated lighting or fixtures, etc. in kitchens and bathrooms always strengthen your sales price because those are the rooms that buyers tend of focus on the most.

Research into listing and sale prices reveals that putting money into improving kitchens and bathrooms yields the highest ROI of any home repair, and houses that have new, modern, and updated kitchens and baths consistently sell for more than similar houses without those improvements – maybe even for up to 3% more!

6. Curb appeal
Another way you can boost your home sale profit is by dolling up your curb appeal. Even if you don’t have the time or money for expensive upgrades, you can create a great first impression for buyers just by painting your front door a bold, bright color! Step out to the street and look at what a buyer will first see as they walk up to your home for the first time. A fresh coat of paint on the front exterior of your house, planting some flowers, installing a new mailbox, putting up solar walkway lights, power washing the driveway, and doing a little landscaping don’t cost a lot but will enhance your cub appeal.

7. Consider having your home staged
When it comes to netting more from a home sale, the adage, "You have to spend money to make money," may apply to home staging. In fact, for higher-end and luxury home sales, enlisting the help of a professional stager is a must. It won't cost much at all but will offer huge returns when your home sells.

In fact, national statistics show that staged homes sell in an average of 13.8 days while non-staged homes sell in 30.9 days, and staged homes sell for an average 17% higher sales price, offering a 586% return on investment. Furthermore, 9 out of 10 potential buyers said they had trouble visualizing how an unfurnished home could appear if they lived in it, and 81% of buyers report that a staged home is easier to visualize the property as their future home.

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Look for part two of this blog with 8 more things homeowners can do to possibly make up to 3% more when they sell their home!

Buying for profit; 10 ways to make sure your home keeps going up in value

There’s an old adage that you don’t make money when you sell your home, but when you first buy it. While that may seem nonsensical considering the big, fat closing check you get once it sells, but in reality, the ceiling (and floor) on your profit is first decided when you buy the home. Far from guesswork, there are a host of proven characteristics that will then determine if your freshly bought house appreciates in value over the years, and to what degree.

So when buying, it’s important to consider these factors to ensure that you make your money by buying correctly, delivering the most profit on your house long-term.

Proximity to parks, schools, and other daily conveniences.

Neighborhoods with parks, jogging trails, sports fields and other recreation areas are always attractive to future homebuyers. Likewise, look around for neighborhood grocery stores, gyms, doctor’s offices and hospitals, hair salons, banks, and gas stations in the vicinity when you’re considering buying a home. Drive around in a one-mile radius from your potential new home and check out the restaurants, pubs, cafes, coffee shops, boutiques, art galleries, and other establishments that add character to the community.

But there is no factor more important for predicting future home values that the quality of schools in the area. In fact, high-rated public schools help stabilize future values since young families, so concerned parents will always want to move there and that high-demand will help bolster home values.

Location, location…and you know the rest!

It’s been repeated so often it’s a cliché, but it also happens to be just as true as ever; location is maybe THE most important factor when buying a home. In fact, where your home is can help increase its future value a lot more than what it is. So look for a quality neighborhood above all else since homes in pleasant, safe, quiet, family- neighborhoods always do well when it comes time to sell. Just walk around and you’ll be able to spot signs of pride of ownership, like well-maintained lawns, freshly painted homes, decorated front porches, and other custom homeowner improvements. If you’re able to buy a house in a mature, high-end, or luxury community, you’re almost certain to make money as the values steadily rise over the years. On the other hand, being too close to a prison, halfway house, railroad tracks, or a waste facility may bring down your values no matter how nice your home is.

The higher the ceilings, the higher the home values?

Ceilings that are taller than average always make a home look and feel airy, open, and bigger, no matter how big or small the home really is. However, making your ceilings higher isn’t something you can practically undertake once you already own the home since hiring contractors to raise your ceilings can be incredibly expensive – or impossible. Instead, look for a home with high ceilings when you’re buying, at least 6 inches or even one foot taller than standard building code in the area. You’d also be wise to avoid homes with low ceilings, giving rooms a cramped or smaller look and limiting your potential future home value.

Outdoor living spaces pay big returns

Over the last few years, outdoor living and entertainment areas have been hot commodities, and that trend is expected to continue as people look for usable spaces that allow them to have shared experiences, not just vast and empty lawns. So if you can find a house with nice sitting areas, old-fashioned wrap-around porches, gazebos, outdoor kitchens, or any number of areas to entertain and spend time with family and friends, you’re future values are in good hands.

The caveat to that is that if you’re considering buying a home with a swimming pool, built-in hot tub, or sports courts (like tennis or basketball courts), data shows that they won’t increase the value of the home. In fact, they actually may turn off a certain portion of buyers who don’t want to deal with the maintenance, liability, or expense – or just plain won’t use them.

Natural light brightens up your future home value

When you’re out looking at homes, pay attention to the amount of natural light each one receives in the main living spaces. Natural light always makes your home look bigger, more airy and open, and is flatting to any artwork or décor inside. Of course, you can just switch on light bulbs if a room is dark, but that's never the same. With good natural light, your home's worth will be easy to see when it's time for future buyers to walk through and form a first impression.

Plenty of square footage (but not the largest home in the neighborhood)

Spacious and roomy homes with plenty of square footage are always in demand, but just how much square footage is considered big depends on the neighborhood. But no matter what, it’s never a good idea to buy one of the smallest homes on the block, as the values won't rise like it should. You can easily remodel and upgrade the condition of a house, but adding square footage is so costly and time-consuming that it's usually not worth it.

Flowing, open floor plans

Having a cavernous mansion is one thing, but it’s perhaps more important that it’s planned and laid out correctly. Call it Feng Shui or just good design sense, but single story homes with open, flowing floor plans and great room concepts always do well when it comes to resale value. You also should try to buy a home with at least 3 bedrooms and at least 2 full baths, because any smaller than that and it won’t be attractive to families and young couples that are buying and looking to grow into it. The exception to this is buying in older neighborhoods where most of the homes only have two bedrooms and one bath, for example.

An abundance of comparable homes in the area

It may seem like a good idea to buy a home that really stands out from others in your area (especially since the price tag is probably lower than others in the neighborhood), but in reality, its uniqueness will probably only hamper your future value. Maybe it’s too small, too big, has a classic Roman fountain in the front yard, or has a homemade addition, but whatever the trait that makes it different, it will have little or no comparable properties to boost its value over the years. You never want the biggest or the smallest home in the neighborhood, and this is also true for funky or unique construction, so instead look for a home that has plenty of comparables when an appraiser does their valuation.

Hardwood floors add value and never go out of style

Some things never go out of fashion, and hardwood floors are one of them. While carpet wears out and gets dingy, tile in the whole house looks cold and antiseptic, and linoleum is just, well…linoleum. But as hardwood floors age, they only get more richness and character. Even when hardwoods do start to dull and get scratched up, they’re super easy to refinish and recolor before you move in – or sell – your home.

Focus on the kitchens and bathrooms

No matter which design trends come and go, homeowners will always want big, functional and nice kitchens. These days, kitchens are perhaps the most popular room in the house, a center point for all family happenings. Therefore, well-designed and open kitchens are always a positive when it comes to resale value. The same can be said for bathrooms, with the one exception that bathrooms are must subject to the whims of current popularity that dictate what's in and what's not. But sinks, fixtures, lighting, flooring, and even tile are relatively easy to upgrade in a home, but the space and layout of a bathroom (and having enough of them!) are always fundamental for ensuring your value down the road.

The Anatomy of Today’s Homebuyer, Part 2

Who exactly is today’s homebuyer? In part one of this blog we outlined facts, statistics and data on today’s homebuyer demographics, as well as what they’re looking for and what’s motivating them.

From square footage (less) to relationship status (more single homebuyers, especially single women), what’s most important (quality of neighborhood above school system and affordability) and which amenities are hottest (walk-in closets, tech and green homes), by knowing what buyers are looking for and how they operate, we can market your home sale with maximum efficiency.

So what do today’s homebuyers really want – part two?

So what are some things that will send potential buyers running for the next listing?

56% of buyers say they’re turned off by bad or strange odors

70% of home shoppers are scared off by damp patches, stained walls and ceilings (as they should be!)

54% of potential homebuyers report that dull lighting or a lack of natural light is unattractive

25% found outdated bathrooms unappealing

15% don’t even want to walk in a cluttered room, and

14% dislike décor that is in bad taste or over the top

Agent-assisted home purchases are at an all-time high of 87 percent, while only 7 percent purchasing directly from the previous owner and 6 percent buying from the builder.

What are the pain points for homebuyers? Asked to rank the most difficult step in home buying, this is how today’s homebuyers responded:

51% Finding the right property

23% Paperwork

17% No difficult steps

14% Understanding the process

13% Getting a mortgage

13% Saving for the down payment

As we documented in part one of this blog, the vast majority of homebuyers start their search for a property online on websites or the MLS. Here are the features of real estate websites they found most valuable:

84% Found detailed information about properties

87% Found photos very useful

45% Found interactive maps very useful

42% Real estate contact information

42% virtual tours very useful

Homebuyers are increasingly concerned with the location of their neighborhood in proximity to where they work when faced with increasing commute times. According to surveys, how important is a reasonable time and cost of commute to work for today’s homebuyer?

32% Not important

30% Very important

38% Somewhat important

It seems like all single buyers want two things in a home these days: central air conditioning and a house that’s wired. But according to the sex of the homebuyer, their priorities may differ from there.

Single Men:

Stainless steel and granite countertops

Cathedral ceilings

New homes

Walk-in closets

Single Women:

New kitchen appliances

En-suite master bath

Single level homes

Do buyers want condos, single-family homes, or townhouses? Well that may depend on their age group, as their area significant differences by generation.

Gen Y

84% Detached single-family homes

7% Townhouses/PUD

3% Condos

Gen X

89% Detached single-family homes

5% Townhouses/PUD

2% Condos

Younger Baby Boomers

82% Detached single-family homes

9% Townhouses/PUD

3% Condos

Older Baby Boomers

81% Detached single-family homes

5% Townhouses/PUD

5% Condos

Silent Generation

71% Detached single-family homes

8% Townhouses/PUD

10% Condos

Multi-generational housing is growing rapidly:

13% of all homes are purchased by multigenerational households.

57 million people are living in multi-generational households, double the number in 1980.

1 in 5 Younger Boomers purchases a multi-generational home.

Why are multiple generations in the same family buying a home together? Here are the top reported reasons:

24% Cost savings

23% Adult children moving back in

18% Caretaking for aging parents

10% Spending more time with aging parents

First-time buyers are lagging:

The historical norm for first-time buyers is 40%.

However, the percentage for first-time buyers is now 32%, the lowest number since 30% in 1987.

Incomes among homebuyers are rising.

The median income for homebuyers is now:

Repeat buyers $98,700

All buyers $86,100

First-time buyers $69,400

How about luxury homebuyers?

70 percent of luxury and high-end buyers say the location of their home is the most important factor.

Homes near the beach or mountains are still popular, with great views and access to leisure activities paramount, but many younger buyers are purchasing property with acreage in the country or rural settings, too.

And 54% of luxury buyers still put top priority on a chef’s kitchen when they go looking for their next home.

60 percent of affluent customers want hi-tech and wired homes, fully automated so they can control features like lights, security systems, video cameras and intercoms, climate control, TVs and music, window shades, and door locks from an iPad, remotely via a mobile app, or even with voice activation.

In fact, almost 90 percent of this demographic of luxury homebuyer said they wouldn't even consider living in a home that isn't tech-friendly.

Buyers want green and environmentally friendly homes that are also energy efficient. Two thirds of high end buyers looked for Energy Star-rated windows and doors and insulated glass, and 18 percent of those surveyed reporting that they a home's Green-LED certification was very important.

Open floor plans are more important than ever according to 39 percent of high-end buyers.

Media rooms still are in vogue, with 60 percent of respondents looking for homes that contain one, and 19 percent looking for home theaters.

Home gyms and specialty exercise rooms were an important feature for 50 percent of buyers.

28 percent of luxury homebuyers want swimming pools.

Outdoor kitchens are still a red-hot trend, with nearly half of new luxury buyers on the hunt for homes with that feature. But aside from the typical wet bar (desired by 42 percent of respondents), they’re also looking for warming drawers, sinks, and climate controlled wine, beer, and beverage fridges. 

Buyers also are looking for outdoor fireplaces and fire pits in close proximity to the swimming pool and outdoor entertainment area.

Open rooftops are being utilized as spaces for entertainment, exercise, reflection, yoga, and sunset watching, and also to create stunning rooftop gardens and green areas.

Luxury homes appeal to car aficionados with subterranean parking, high-tech automated parking, and even glass ceilings or walls so the autos are on display as you walk through other areas of the house.

They want dedicated wine cellars with precise climate controls and also dining and tasting areas to host their friends for vineyard-quality events and parties.

Super purification systems are one of the biggest new attractions in the luxury market, with filtration systems that include UV lights, humidification systems, and energy-efficient fans run to keep the air purified.

A Snapshot of the U.S. Housing Market, 2016.

We often keep you abreast on home prices and real estate trends in our local market, but we thought it would be good to present a snapshot of housing data from the entire United States. So we crunched the numbers from multiple credible sources on ten different housing factors, like home ownership, home buying & selling, jobs in housing, home building, equity & distressed homes, and more.

1. Home Ownership

In 2016, the percentage of U.S. adults that owned their home was 62.9%.

That’s a 50-year low, as we haven’t seen a home ownership rate below 62.9% since 1965.

Our diminished home ownership rates aren’t a function of the recession, as only three years ago in 2013, 65.2 % of families owned their primary residence.

2. Home Selling

The average person selling their home is 54 years old, has a median household income of $104,100, and has lived in their current house for 9 years.

89% of home sellers use a real estate agent to assist them in the sale.

To put that in context, in 2001 only 69% of home buyers used a real estate agent.

Currently, sellers are closing on their home transactions at 98% of their original list price.

Although 43% of home sellers report reducing their listing price at least once.

The average home is on market for 30 days or less before entering escrow.

72% of home sellers would “definitely” use their real estate agent again.

3. Home Buying

First-time buyers make up about one-third (32%) of all current home purchases.

The median first-time buyer is now 31 years old, compared to a median age of 54 for repeat buyers.

The median first-time buyer has a household income of $69,400, compared to a median household income of $98,700 for repeat buyers.

The average home purchased these days is 1,900 square feet in size, contains three bedrooms and two bathrooms, and was built in 1991.

           

Buyers who used a mortgage loan typically financed 90% of their home price.

78% of home byers say that neighborhood is more important than the size of a home when buying, and 57% would sacrifice yard size if it meant they’d have a shorter commute to work.

Home buyers were willing to pay a higher dollar value for waterfront property than anything else.

The home characteristic that is rated as the highest value

Within their first three months of owning their home, 53% of home buyers do some sort of home improvement project, with a typically cost of $4,550.

4. Housing Units

There are approximately 134.7 million housing units in the United States.

About 115 million of those are occupied.

Almost 100 million U.S. homes have air conditioning (central or window unit), compared to only 68% that had AC in 1993.

5. Jobs in Housing

As of May 2016, 2.6 million trade contractors made a living in residential building.

But employment among residential home builders and construction contractors is still 25% below the peak in 2006.

Every time a single-family home is built in the U.S., it creates an average of 2.97 jobs, measured by enough work to keep one worker employed for a year.

Housing is one of the largest sectors of employment for Americans, with an estimated 1.7 million people receiving a paycheck for real estate, leasing, or rental housing work.

6. Home Sales

5,250,000 existing homes sold in 2015.

Last year, 510,000 newly constructed homes were sold.

As of June of 2016, we’re on track for 5,570,000 existing home sales this year.

The U.S. median sale price for existing homes is now $239,700.

That number is higher than the 2005/2006 peak of housing prices, but well below the sale price during that period if we adjust for inflation.

7. Home Building

In the 30 years from 1970 to 2000, housing starts on single-family homes averaged almost 1.1 million per year.

As of May of this year, the average is only 764,000 housing starts.

U.S. private sector construction spending has totaled $18.8 billion in the last twelve months.

Ranked by revenue, the Pulte Group is the largest homebuilder in the U.S., with $416,819 million in homes built to date.

The average price of a new home for sale is now $292,200.

8. Equity and Distressed Sales

As of the end of Q1 of 2016, 6,703,857 million homeowners were still underwater in their homes.

However, that’s much lower than the astounding 17 million homeowners that were underwater during the worst of the housing crisis and recession in 2009.

As of June 2016, there were 912,872 homes in some stage of foreclosure (default, auction or bank owned).

That’s down 6% from May 2016 and 19% less than June of 2015.

The average foreclosed home now sells for $121,824.

With rising home values padding equity, it’s expected that by the end of 2016 the number of underwater homeowners in the U.S. will be down to 5 million.

9. Home Dimensions

Builders are now constructing larger homes than in past decades. From 1999 to 2015, the number of new, the number of new homes 4,000 square feet or more increased by 22%.

During that same period, single-family homes under 1,400 square feet fell by 75%.

In 1999, only 17% of homes were larger than 3,000 square feet or more, while 31% of homes sold in 2015 were 3,000 square feet or larger.

In 2015, homes smaller than 2,400 square feet made up 21% of the new construction market, while 37% of new homes had less than 2,400 square feet in 1999.

10. Renting

About 35% of the U.S. population lives in a rental property as opposed to owning their home, which adds up to more than 110 million people, or 43 million households.

35% of renters live in single-family homes, compared to 18% that live in 2-4 unit properties, 42% that live in properties with 5 or more units, and 5% of all renters living in mobile housing.

Gauging by their 52% rent-to-income ratio, rents in New York City are the most expensive in the U.S.

The median asking price for renting an apartment in the U.S. is $1,381 per month.