Beat the Sluggish Market

Top 10 Ways to Beat the Sluggish Housing Market

By FrontDoor.com Published: 12/21/2007

Don't let the slow market get you down. Whether you're a home seller looking for offers, or a homebuyer facing stricter loan requirements, rev up your real estate potential with these helpful pointers from FrontDoor.com.

FOR SELLERS:

1. Give your house a makeover that adds value and keeps it up with the Joneses'. That doesn't mean you should run out and install Italian marble. But if hardwood floors are the norm in your neighborhood, replace the carpet.
10 ways to increase the value of your home

2. Use the secrets of staging experts, or hire one. Staging can be as easy as a fresh coat of paint, new cabinet hardware and strategically-placed lighting. Think of it as a creative, inexpensive facelift for your home.
How to dress your house for sale success

3. Find out what's wrong with the house and get it fixed. Don't wait until that serious buyer finds faulty wiring or a termite problem and then pulls the plug on the deal. Be proactive. Get an inspection before hitting the market.
Finding the right home inspector

4. Come up with a comprehensive home-selling strategy. Don't put an ad on Craigslist, stick a sign in the ground and call it a day. Whether you're going FSBO or using an agent, selling your home in a buyer's market requires a well thought-out plan with accurate pricing, targeted improvements and focused marketing and exposure.
How to sell your house in a buyer's market

5. Hire an aggressive, well-connected real estate agent. Find an experienced agent with a proven track record and knows how to pound the pavement. In this market, name recognition is important, so find the go-to person for buyers and their agents in your community.
Shopping for a Realtor

6. Help a buyer buy it. Offer incentives that put money in the buyer's pocket, such as buying down the interest rate, absorbing more of the closing costs or offering seller financing.
Creative financing options to sell your home

7. Consider renting or offering a lease option. Minimize the impact of two mortgages by renting your house out until you find a buyer. Or offer a lease option to a motivated buyer who doesn't have enough cash to buy a home outright.
Is rent to own right for you?

8. Make the house move-in ready. Throw in the furniture, flat-screen TV, washer/dryer, appliances, backyard jacuzzi AND the kitchen sink. The less money a buyer will have to shell out to furnish the house, the higher the perceived value.
The pros and cons of non-price terms

FOR BUYERS:

9. Use calculators and tools to evaluate your potential purchase. Be careful not to get caught up in the hype of a buyer's market. Make calculated decisions with FrontDoor.com's "Return on Investment" tool, for instance, which helps you determine your potential IRR (internal rate of return) on a property.
Determine your potential return on investment

10. Evaluate and boost your financial profile. If you're having trouble finding favorable terms or interest rates on a mortgage, make yourself more appealing to lenders by boosting your credit score.
Give your credit a not-so-extreme makeover

Four Summer Season Updates to Heat Up Your Home Value

Get the most bang for your buck when upgrading your backyard and outdoor area

By Geoff Williams, FrontDoor.com Published: 6/30/2009

If you like to entertain, you can reap the benefits now of updating your outdoor area and then later when you sell.

It's that time: barbecuing on the grill, the kids running in the sprinkler and daydreaming about fixing up the backyard. If you live in a city that isn't blessed with warm weather year-round, the summer season is probably your only chance to really enjoy and make the most of your backyard.

Chances are, your outdoor areas need some resuscitation after the winter. And while one may be wary about pouring money into a home that's declining in value, you could argue that this is the best time to fix up the backyard, especially if your family plans to use it a lot and you live in a moderate climate. Plus, nowadays, contractors aren't quite as hard to reach. Sales and deals abound. And of course, it's a great long-term investment for your home.

So if you've been thinking about making the outside of your house as comfortable and inviting as the inside, consider these tips and advice from an established Realtor and a veteran home appraiser.

Avoid spending too much on landscaping for your backyard. Keep it simple and easy to maintain.

SUMMER UPDATE #1: THE BACKYARD

The return on your investment (ROI): Surprisingly, not so good.

Why not so good: It's not that you want to have crab grass or that part of the backyard should look like an area where lawn mowers and cars go to die. That's obviously going to scare buyers away and could lower the price.

But as Brendan DeSimone, a Realtor in the San Francisco area, observes, "Landscaping is variable and not utilitarian like a deck or kitchen or living room."

In other words, yes, flowers are pretty, but any buyer with a brown thumb knows that a few months under their care and that breathtaking garden you spent hundreds or thousands of dollars maintaining may wind up being worth about 30 cents.

What you should focus on with your landscaping: Concentrate on "keeping up with the Joneses, not beating them," suggests Sam Lai, a prominent Seattle real estate appraiser. "In beating them, you'd win bragging rights, but you'd lose money."

That said, Lai does favor spending a small fortune on your landscaping if it's important to you and your quality of life -- just not if you're looking to make the money back.

The resale value of an outdoor kitchen or outdoor living room is best in high-end suburban neighborhoods.

SUMMER UPDATES #2 AND #3: OUTDOOR KITCHEN AND OUTDOOR LIVING ROOM

Your ROI: Very good.

Why very good: Well, who wouldn't want a home with a barbecue pit or high-end grill (assuming you're going to leave it behind)? And the thought of departing your outdoor kitchen and walking a few feet to your outdoor living room so you can lounge on comfortable chairs and eat at a table in your backyard, using furniture far above a lawn chair and a rickety card table -- well, that's appealing, too.

As for costs, it really depends on your tastes and what your budget is. Spend a thousand, and you can probably get a reasonable grill and maybe a table and chairs with the umbrella over it. But if you're really going to do it right and go for a little luxury, it would be easy to spend closer to $10,000 and beyond.

DeSimone says this is a great investment "especially valuable in suburbs where people have larger backyards and pools. An outdoor kitchen or outdoor living room can serve as a buffer between the real indoors and the rest of the yard. If you have kids in the pool or guests enjoying sitting out in the yard, you don't have to keep going in and out to serve food or drinks."

But Lai warns, "There's the risk of over-improvement if your market doesn't support such high-end amenities." So if you're in a middle class neighborhood and you just don't see these outdoor kitchens and living rooms, go ahead and create them if they're important to you. Just know that the resale value is going to be much higher in the most elite neighborhoods where a buyer isn't going to think twice about adding another $5,000, $10,000, $20,000 or more to the cost of the house.

In fact, Lai says that in some of the million-dollar-plus neighborhoods, investing $100,000 in your backyard could yield a 200 percent profit "if you were starting with a functionally obsolete backyard."

What to focus on when you're building: You want your outdoor rooms to look inviting and hopefully in character with the neighborhood, not to mention the house. And while it's kind of obvious, any furniture should be as weather-resistant as possible.

Adding a deck offers the best return on investment for your backyard.

SUMMER UPDATE #4: THE DECK

Your ROI: Excellent

Why excellent: People simply love decks and compared to, say, a swimming pool (average cost: $15,000), they're relatively cheap (figure about $2,000-$5,000 or more, depending on where you live in the country and what you're looking for).

As DeSimone raves, "A deck is easy to build, brings the outdoors in and is instantly valuable." Lai agrees, calling it "probably the most dependable investment a consumer can make to their backyard."

What to focus on when you're building: Like the outdoor rooms, you want your deck to fit in with the character of the house. It should look like the original home builder constructed it and not as if it was some hasty add-on.

And don't forget about the lighting, cautions Lai. Think compact fluorescent bulbs and LED lighting, which are very energy-efficient. You might even want to go with solar-powered lights. From an energy standpoint, says Lai, "Every bulb makes a big difference, really, and this can help pay that deck project much faster."

It's also something that customers are expecting, says Lai, and so once again, investing in energy-efficient lighting can pay off when you do sell it. Of course, if you really go all out and revamp your backyard, you may just never want to sell your house.

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