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Archive for June, 2010

Here is a short little lesson on Negotiations. No.. It’s not shoving your offer down someone’s throat.. To illustrate I will tell you a little story.. Here goes … Tom Brady (I used to use Tiger Woods as the example, but he is not allowed to go near other women anymore…lol) and Rachael Ray were sitting around the kitchen during the football off season and began to discuss one lonely orange that was on the table. Both Tom and Rachael wanted the orange for themselves and began “negotiating” over who should get the orange. In fact, these two friends got into a heated argument but finally reached an agreement after making “low ball” and meaningless offers to each other. The agreement was to cut the orange in half and share it.
After they cut the orange, Tom peeled his orange, threw the peels into the trash and ate his orange (his model wife wants him to eat healthy..lol). Rachael, who was working on a new cooking recipe doesn’t like to eat oranges so she threw out her half of the orange fruit part into the garbage and kept the orange peel to cook with. So here we are with a half of an orange (Peel and fruit) in the garage….hhhhhhmmmm.
Moral of the story… had Tom and Rachael taken the time to find out the needs and viewpoints of the other side they could have each essentially had the whole orange. That is called a win-win. Next time you are negotiating with someone, take the time to find out what THEY want. If you do that, you will get more of what YOU want.

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When I am out doing appraisals or consulting a homeowner at a listing appointment, I often get asked what kinds of home improvements add value. They will ask me if I think it makes financial sense to add a particular feature to their house. Here are my thoughts on some of the common questions I receive.
First of all, the best way to increase the value your home is to make any needed repairs or fix a problem in your house. For every dollar you spent repairing or fixing a problem, you will receive 3 to 5 dollars in return. Now that’s a return on investment!!!! As an example, let’s say your roof is older, and needs replacing. Do you realize that most potential buyers will discount their offer on your home by MORE than the cost of repairs to account for the risk, time and inconvenience associated with having to complete the roof themselves? If a roof will cost $5,000 to replace, a buyer will discount their offer price by $10,000 or more. Therefore, isn’t it common sense that by you “investing” $5,000 in your house, you will get a return of $10,000 on that investment? This is the case for most items that need replacement such as heating system, septic system etc. If your house needs painting and it will cost you $6,000, be happy to know that after painting the house, you will get ALL the money back and more. So the #1 rule is…. Fix what is defective, broken, funky or creates a problem.
After everything is fixed, what kind of features add the most value? A deck, a finished attic, a garage? I will list some of the items that I feel add the most. Before, I do that, I do want to make this point. If you are going to live in your home for years and are thinking of adding something major (i.e. Porch, addition etc) and enjoy it for 10 years, isn’t it safe to say you got “value of out it”. Having said that, here are Jack Lavoie’s “resale value enhancers” (Editorial here. I don’t care about the myths and practices of most appraisers and bank guidelines. I base my opinion on 20 years of experience valuing homes in the Greater Manchester and Southern New Hampshire areas).

Minor “Quality” Upgrades” – By adding molding, ceilings fans, upgraded lighting fixtures, quality vanities etc you make the house appear to be of better quality on the surface. Buyers are visual and the very basic upgrades will improve the perception of the houses quality through the buyer’s eyes
Minor Kitchen Makeover – If the cabinets are solid and modern, keep them. If they are solid, but dingy, then paint them. Replace countertops, add a nice big sink and attractive faucets and install new appliances. Tile in the kitchen gives an average kitchen an expensive look. Nice, matching appliances (stainless steel is hot now) completed the kitchen
Adding a 3rd Bedroom – If your home has less than three bedrooms, adding a bedroom will add significant value. Despite what conventional wisdom says, adding a 3rd bedroom in the basement (if there is no logical spot on the main levels) does add value provided it bright, airy, has windows and is of good quality.
Adding a finished basement– Finishing the basement is the most inexpensive way to add living space (hey, the walls, floor and ceiling is already there…lol). Compare that to having to build an addition. Sometimes adding a family room in the basement can really change the functionality of the home.
Adding a 2nd bath – If your house is a 2-story home and has only one bath, then adding a bath will greatly enhance the value. If you have an upscale home, adding a master bath with increase value.
Landscaping/Curb Appeal – YES!!!!! Landscaping makes a difference. Ok, I truly admit that appraisers, banks etc traditionally don’t place much value on landscaping when doing bank appraisals, but I can tell you personally from showing houses and “flipping” houses that curb appeal matters BIGTIME!!!! At a minimum, the there should be some well maintained plants, flowers and shrubs. Bark mulch is also great. The yard needs to be clear of debris, clutter and junk. Outbuildings are fine if well maintained…if not tear them town. Value is determined by the buyer (yes… us appraisers only provide an OPINION of value. If buyers “think” a house is more valuable due to having more curb appeal…then guess what… IT IS!!!
Paint – The single best improvement you can add to your house. The most bang for your buck! If you have a wood exterior keep it freshly painted in 3 colors 1) the body of the house 2) The trim and 3) an accent color for shutters and doors.
Of course, the actual impact of these or other improvements will vary on each house. If you would like an unbiased opinion or analysis of your proposed improvements, don’t hesitate to contact me.
Last point… Never OVERIMPROVE the property. That means, don’t add features that are excessive the neighborhood.
If you have questions of this topic feel free to contact me at jacklavoie@comast.net

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