Equity – do we dare even dream that our homes will have equity when we go to sell? Yes, the time has come! Prices seem to have hit bottom and are on the way back up. So what can we do to accelerate the building of equity in our homes? Two major things- make additional payments to reduce the principal balance which will result in reducing the amount of interest you pay over the life of the loan and reduce the time you pay on the loan. Alicia is covering the best way to do that below. The second way to build equity is to make improvements to your home that you can enjoy while you are still in it and will also be advantageous in resale.
The tricky part is figuring out what improvements to make and how much to improve. If you look at the Cost vs Value for Denver 2013, in no case do you recoup 100% of the cost of the update. However, I am not sure I agree with this report. I believe that if your home needs the updates and you are cautious with the expenditures you will get your money back and your home will sell much quicker. Plus you get to enjoy it in the meantime! One of the top dollar returning items on the report are new windows. All of you know how excited I get when we walk into a home with new windows! Keep in mind this improvement will help on resale but will also save you money on energy costs while you still own the home.
I think where caution may be warranted is in the selection of materials used to do the upgrades. We all know that kitchens and baths are the most important rooms to keep up to date. However you need to watch what is going on in your general neighborhood and keep your overall area value in mind. Are others remodeling? What are sales prices doing? You may love quartz that is $200.00 a square foot but is that the best choice for your kitchen given the neighborhood value range.
Another issue is your hold time on the home. If this is your forever home, then maybe you splurge on the granite you love. If this is for the next 5-7 years, then we need to make sure you will come out okay on the sale of your home. The goal is to achieve the balance between having quality upgrades that will help the home sell faster and for more money and getting most if not all of your investment back in your pocket.
I am happy to help you with this process. As an agent who works with many buyers and sellers, I hear what is most important to people in a home. In addition, I can pull the sales comps of your neighborhood and see what is happening with the values. Then we can walk through your home and put together a realistic game plan. So please give me a call and let’s get something scheduled! Also you can email me and I will happily send you a copy of the National Cost versus Value Study for the Denver/Mountain region.