Top 10 Project Paybacks 
  Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.

 1. Upscale fiber cement siding (86.7%)
 2. Midrange wood deck (81.8%)
 3. Midrange vinyl siding (80.7%)
 4. Upscale foam-backed vinyl (80.4%)
 5. Midrange minor kitchen remodel (79.5%) 
 6. Upscale vinyl window replacement (79.2%)
 7. Midrange wood window replacement (77.7%)
 8. Midrange vinyl window replacement (77.2%)
 9. Upscale wood window replacement (76.5%
 10. Midrange major kitchen remodel (76.0%)

Landscape designer Michael Glassman has cooked up a recipe for guaranteed curb appeal. 

1. Add splashes of color. With every changing season, a landscape should provide a new display of colors, textures, and fragrances. "It’s best to use one or two and repeat them," Glassman says. Example: white iceberg roses that bloom in spring, summer, and fall as a backdrop; in front, a contrasting punch of purple salvia or lavender that will flower at the same time; and as an accent, a crape myrtle tree that provides changing leaf colors in fall and interesting branches come winter. 

2. Size trees and shrubs to scale. These should be planted in the right scale for the house so that they don’t block windows, doors, and other architectural features on the home’s facade. A large two-story house can handle a redwood, Chinese pistache, sycamore, or scarlet oak, but a one-story cottage is better paired with a flowering cherry, crabapple, or eastern redbud. Too many trees cast too much shadow and cause potential buyers to worry about maintenance and costs. 

3. Maintain a perfect lawn. A velvety green lawn demonstrates tender loving care, so be sure sellers’ homes don’t have brown spots. Some rocks, pebbles, boulders, drought-tolerant plants, and ornamental grasses will generate more kudos, especially in drought areas. 

4. Light up the outside. Good illumination allows buyers to see a home at night and adds drama. Sellers should use low-voltage lamps to highlight branches of specimen trees, a front door, walk, and corners of the house. But less is better. The yard shouldn’t resemble an airport runway. 

5. Let them hear the water. The sound of water appeals to buyers, and you shouldn’t just reserve this for your backyard. A small fountain accented with rocks provides a pleasant gurgling sound, blocks street noise, and is affordable. 

6. Use decorative architectural elements. A new mailbox, planted window boxes, and a low fence wrapped in potato vines add cachet, particularly during winter months when fewer plants blossom. Colors should complement the landscape and home. Just don’t overdo it: Too much can seem like kitschy lawn ornaments.

 Source: Michael Glassman, landscape designer, Michael Glassman and Associates, Sacramento, Calif., www.michaelglassman.com

Here are some of the factors that appraisers Joni L. Herndon of Real Property Analysts/Gulf Coast in Tampa, Fla., and John A. Hillas of Hulbert & Associates Inc. in Modesto, Calif., say they consider when determining value. 

• Incentives and concessions. Most of today’s buyers expect to pay the lowest possible price and still get some extras. Sellers and home builders are offering money toward closing costs, remodeling and decorating, upgrades, and association dues. The price set initially may not be the final price once concessions are factored out. Appraisers care about that final number. 

• Closing date. Forget what comparable neighborhood houses sold for a few months back. Appraisers want prices from the most recently closed transactions. “If a sale was more than 45 days ago, even 35, the price may be irrelevant,” Hillas says. 

• Condition and curb appeal. Appraisers typically find several properties with similar interior and exterior features to determine value. When markets are healthy, blemishes matter less, but when markets soften, problems—a dated kitchen or barren lawn—can reduce prices and deter buyers. “The difference in value is not just the repair costs but the time and hassle to make them. It’s better for sellers to do work in advance,” Hillas says. 

Foreclosures. Appraisers technically shouldn’t consider neighborhood foreclosures when valuing a home, since foreclosures don’t meet the Appraisal Institute’s definition of a property reasonably exposed in a competitive market, says Herndon. “But when several neighborhood homes are abandoned, it’s hard not to caution sellers that this is a troubling trend and may affect home values,” she says. 

• Changing demographics. If a house is in an up-and-coming area, the value can be expected to rise. A location that’s perceived as safe also may help attract the increasing number of single female buyers. 

• Economic clouds. If there’s an oversupply of comparable homes for sale, or if the local job market is suffering, buyers may be hesitant to invest. Hillas advises setting prices aggressively from the get-go. 

• Chemistry. It’s hard to account for those times when buyers fall in love with a house, despite a high price, poor condition, or tough economy. “Emotional attachment is a factor that can’t be predicted,” says Herndon. Hillas agrees, “It’s what makes it harder to appraise homes versus commercial buildings, where buyers care more about the bottom line.”

Why Renovation Pays 

Why are renovations holding their value better than home prices today? "When housing slows down, people stay put and renovate their house to make it more livable," says Paul Zuch, president of Capital Improvements, a designing, building, and remodeling company in Dallas. And by renovating before they sell, home owners get to enjoy the new space themselves, not just make the home more appealing to buyers. "It just makes sense," says Zuch. 

Recent renovations also make buyers’ lives easier. "Home owners who remodel their home are providing a service to future buyers," says Eileen Nelis, a broker at Savvy and Co. in Charlotte, N.C. "When buyers purchase, they don’t want to do all that painting and remodeling, and they don’t want that price tag. They may be willing to make improvements down the line, but when they purchase, they want to open the door and have everything complete. It reduces their stress." 

Making home improvements can also reduce sellers’ stress by heading off that time-honored negotiating technique—pecking away at the sales price by pointing out imperfections. "If sellers have done some improvements and dressed up their property, the improvements will help sell it," says Bernard Fallon, broker at Fallon Associates Realty in Rochester, N.Y. "If sellers don’t want to improve their property, buyers will tick off the repairs and try to take them off the price." 

That doesn’t mean that every home owner should do every renovation, even in a more stable real estate market. Take Tulsa, Okla., where median home prices actually edged up slightly more than 2 percent in 2008, according to NAR. REALTORS® in Tulsa reported that, of the 30 remodeling projects surveyed, only 16 netted home owners at least 80 percent of the cost.  

"Not every neighborhood will support the additional work," says Jim Hemphill, a sales associate at Coldwell Banker Select in Tulsa, "but in older, more established neighborhoods, if you redo a kitchen or bathroom or add a master bath or bedroom, you’ll get your money out." 

Despite the value, the weak economy is likely to slow seller spending on remodeling, at least in the short term, predicts the most recent Leading Indicator of Remodeling Activity computed by the Joint Center for Housing Studies at Harvard University.  

The LIRA for the third quarter of this year estimated that owners’ spending on home improvements will decline at an annual rate of 12 percent by the second quarter of 2009, continuing a two-year downward trend. Spending is unlikely to recover until the housing market turns around, according to the Center. 

Yet, despite declines in overall remodeling dollars spent and a still shaky housing market, "people’s homes are still one of their best, most solid investments," notes Zuch. "Even though the markets have gone through some adjustments, it’s still smart to invest in your home." 

From an Architect: 6 Affordable Ways to Make Your Listings More Attractive
 

In this market, selling a house can be more challenging than ever. As a real estate professional, I’m sure you have used many ideas to help make your property look its most attractive to potential buyers. As an architect for two decades, I have suggestions and tips to maximize your potential in selling the home.

Photo Courtesy David Applebaum

Every house and every property is different, and I recognize that a “walk through” can inspire specific ideas for each property. But here are some universal suggestions that will make any house look more appealing for sale.

1.    Clean everything. Eliminate damaged and soiled items, get rid of half of the furniture and rearrange the other half, and remove any personal items. It is important to give the buyers the ability to see themselves in the property.

2.    Accent lighting. This can help make the home more attractive and accentuate the positives by highlighting the homes attributes and diminish the negatives of any setting. The key is to realize that you are playing with contrasts.

Some other lighting tips:

• A light along fabulous furnishings, an architectural element, or detail will show that element off.
• A light behind an object will frame the object in darkness and bathe what is behind it in a wash of light.
• Use highlight and contrast to make a room feel longer, higher, or warmer.
• 

  Photo Courtesy of David Applebaum

  Keep the elements that you do not want seen in darker settings, and the ones you want highlighted in light.

• Set the mood with accent lighting and candles to provide warmth and drama that will set your property apart from all others.
• Accent lighting is the easiest and most effective enhancement.

3.    Paint. This is perhaps the most common enhancement that is done to a property. Because a buyer might have their own ideas about colors, I usually do not recommend a full paint job unless the property needs it. Sometimes, a fresh coat of paint is only required in a few areas to refresh a house. I have found that the front door is a good place for new paint, as it is the first part of the house to be touched by a potential buyer.

4.    Don’t go overboard with fancy flooring. There was a time that new berber carpeting and travertine meant that the FOR SALE sign would be installed the next week. None of the buyers that I shopped with planned to keep any of those inexpensive additions. People were buying houses, not because of the new carpet and new stone, but because the market was hot. Many of my clients would have preferred to restore older tile work, choose the color and quality of carpets, and completely renovate the kitchen. None of them liked having to pay for improvements that would be replaced. The floors and surfaces should be clean and attractive, but unless there is damage, I suggest lovely area rugs that your client can take with them.

5.    Replace the hardware in the kitchen and baths. It’s a fairly inexpensive way to refresh your property. If the cabinets are in decent shape, new knobs can update a room easily. These are little details that can make a huge impact on a potential buyer. If the front door knob is in disrepair, it will be hard to get a buyer’s confidence back.

6.    Spruce up the exterior. Follow the same advice as the interior and apply it to the exterior. Make sure that everything is clean and edit the furnishings. New cushions for the outdoor furniture can immediately make the yard look more comfortable. You might need to replace the light fixtures, since the elements are usually not very kind to exterior accessories. Consider a few nice plants in lovely pots and a wind chime to heighten the outside living experience.

I hope that these suggestions will help you provide inexpensive and effective ways to help you present your client’s properties in the best way.

ABOUT THE AUTHOR: David Applebaum is an architect in Los Angeles, Calif., who has designed homes for such celebrities as Diane Keaton, Frank Sinatra, Bob Hope, Nancy McKeon, Rupert Murdoch, and Cuba Gooding Jr., in addition to numerous home owners throughout Southern California. Visit his Web site: www.davidapplebaum.com