You're getting ready to sell a home and you want to get the most bang for your buck when you sell it. We have a number of recommendations for making sure you make the most profit off of your house.
The most important thing to consider is whether the house meets all of the standards for getting a loan on the house.
First is the foundation. Because without a solid foundation, the house simply can not be borrowed against. You should inspect the home's foundation carefully, and make sure there are no problems. If there are problems, you will need to spend money repairing or rehabilitating that foundation before the house can be sold on the market. This applies when the buyer is looking to get a loan for the house or not. Most appraisers will notice problems with the foundation and significantly lower the value of the house if it has foundation problems.
More difficult to see but just as important is the wiring. You should make sure the wiring is up to current standards and codes. If the home you are trying to sell is using the older two-wire wiring conventions popular before the 1970s, the bank may consider this a safety issue for the entire house. This means that the wiring would need to be completely redone in order to sell the house, and be brought up to the most current codes. In most areas, of course, this means rewiring the house to use the newer three-wire system.
These two areas absolutely must be addressed before any loan or other type of financing arrangement can be set on the house by a bank or lender. While it might be tempting to renovate a kitchen with the latest design principles and up-to-date appliances, the money spent on that kind of renovation can ever have no return on investment, when you take into account other repairs that need to be done in order to make the house qualify for financing agreements.
The next consideration is, for how much you plan to sell the house. If the house is going to be worth $ 100,000 on the market, there are certain materials and quality of materials that you should put into it compared to a $ 250,000 house. Even though each house is unique in its own way, we've found that being too unique can be a problem in and of itself. Sticking with standard colors like brown, beige, and neutral colors make homes are easier to sell.
The second most important thing to consider when remodeling is the time and effort it is going to take when undertaking a remodel. A lot of people see TV shows that are out there and think it looks fun. It usually is fun. But, it's also a lot of hard work. You can have a lot of unknowns, so you have to get all of your ducks in a row including advice from contractors and input from local realtors on pricing before you begin the process. It's really going to save you a lot of heartache down the road to spend that time up front to know what you're getting into before you get started.
Speaking of contractors. Deciding on a contractor is such an important step. Most people that lose money in the process lose it because of a poor decision with a contractor.
So, how do you pick a good contractor?
One of our favorite tips is to get involved in the local real estate group. Speak with other investors that buy and sell houses on a regular basis. The contractors they work with are experienced in remodeling for profit. Always get at least two or three contractor referrals and then personally interview each one. Be sure to ask them to produce some references of people that you can call to validate their work and if possible ask to see any remodeling that they are currently working on.
Once you have a contractor, how can you protect yourself?
Money is what drives every type of behavior by the contractor. It is important to set up a structure on how the money is paid, so that they're doing the work before they're getting paid for it. Then be sure you're signing off on the quality of their work before releasing money. A lot of the time it can be a little uncomfortable because the contractor may be asking for money you feel that they do not really deserve. You have to stick to your guns and not give them money before they deserve it. You control the money – you control the workers!
Taking this advice to heart can help keep a home renovation both fun and profitable. Failing to heed this advice, though, can generate heartache and financial loss.