Thinking about selling your San Fernando Valley home? Don’t put your property on the market until you’ve done everything you can to maximize your resale value.
Know your market
First you should consider the state of the real estate market. After years of stagnation, Valley home sales are on the upswing. The Southland Regional Assn. of Realtors in Van Nuys reported that Valley home prices have reached their highest level since 2008, including a whopping 29% increase over a year ago. But don't be fooled into thinking this is the same market as before the crash.
"The easy money has been made," said Ron Henderson, president of Multi Real Estate Services in West Hills. "The local real estate market is in a transition from an overheated, low-inventory market with well-funded foreign and institutional investors … to one where inventory is increasing and traditional buyers rule again, but squeezed by higher prices and interest rates."
The new Dodd-Frank mortgage regulations that come into play in early 2014 will restrict buyers' abilities to qualify for loans and constrain the real estate market further, Henderson said.
The question remains: How much – and what type of – remodeling should you put into your home before putting it on the market? In general, every dollar put into a home renovation does not command a dollar more at sale time. But when handled cost-effectively, some upgrades can be wise.
Know what buyers want
The revamps most likely to increase home value are kitchens and bathrooms. "Our most common renovation is bathrooms," said Ian Levy of Sky Renovation and New Construction in Van Nuys. "After that it's kitchens and flooring. That's where you add the most value. Inside is where it's at."
Another popular upgrade is adding a master suite with a bedroom, bathroom and closet to existing two-bedroom units to make it a three-bed, two-bath home.
"I've done a number of room additions this year," said Dave Lane of Dave Lane Construction, which renovates homes in the west Valley. "Master bedrooms, bathrooms and family rooms. Another trend is getting rid of interior walls to open up space in older homes that have a lot of little boxy rooms."
Pat "Ziggy" Zicarelli, owner of Style Realty in Tarzana and past president of the Southland Regional Assn. of Realtors, is another advocate of more space. "If you have the wherewithal to add square footage – even if it's just another bathroom – that can be very helpful."
Zicarelli is also big on curb appeal – upgrading the front yard landscaping, hardscape or house façade before selling. "A few hundred dollars' worth of touch-up paint can generate as much as $10,000 more on the sales price."
But there are differences of opinion when it comes to renovations. Some local real estate experts feel that major remodeling projects aren't cost-effective for sellers.
Know where to draw the line
Jane Peters of Power Brokers International said that, while it may be tempting to remake your kitchen or replace that worn carpet with new hardwood floors, it probably won't increase the value of your home above what you spent on the renovations.
"The kitchen and the bathroom would be the two things to remodel. But to do it to sell? No. You do it for yourself because you want to live in a nice place," Peters said. "To do it to sell, you're not going to get more than you put into it. So it's kind of pointless. Plus you're inserting your own taste in it. A lot of us have seen where a new buyer comes in and totally guts the place."
Peters recommends skipping the hassle and expense of remodeling in favor of readjusting your asking price to that of similar properties that have recently sold in your area. "Let the buyer do the remodel according to what they want and their own taste."
— Joe Yogerst, Brand Publishing Writer