Real estate inventory has been tight the past year, and even as more homes are coming onto the market, potential buyers could still encounter difficulties finding their dream home. Often buyers find a property in their preferred location, but without their desired features like updated bathrooms and a kitchen with upgraded appliances. And with America’s aging housing inventory—according to the U.S. Census Bureau’s 2011 American Housing Survey, the median age of a home in America is 40 years—that’s likely to continue. What that leads to is an influx in remodeling projects and renovations, even in higher-end and luxury homes.
Real estate is a tremendous investment, and buyers want to make sure their newly purchased home—whether it’s 5 or 25 years old—matches their high standards and functions for the way they and their family live. That’s where renovations come in, and in fact, the latest Leading Indicator of Remodeling Activity (LIRA), a forecast by the Joint Center for Housing Studies (JCHS) of Harvard University, predicted Americans would spend 7.9 percent more on remodeling projects in 2014 than the previous year.
Your Real Estate Agent’s Role in Remodeling
You may assume that after you’ve bought a home, your relationship with your real estate agent will end, but your agent can be a great partner to help you settle into your home and begin making renovation decisions. Depending on the plans for your remodel, you may even have the work done before you move into your home.
You’ve been relying on your real estate agent to help you identify potential properties to buy and to show you the value in different communities and homes. Most agents see hundreds of homes every single year in your area, so they know about current design trends and features that add value to homes. Experienced agents can suggest ways to improve the homes you’ve been visiting and many can even tell you in broad terms what it might cost to remove a wall or add a sunroom or family room off the kitchen.
Every year, Remodeling and REALTOR magazines collaborate on a Cost vs. Value report that analyzes the return on investment for popular remodeling projects, comparing the cost with the potential additional resale value. While you’re more likely to make renovation choices based on your personal preferences than hard data, you should still be aware that you don’t want to “over-improve” your home, increasing its value too far above others in your neighborhood. On average, the cost-value ratio for all remodeling projects nationwide was 62.2 percent for 2015, according to the report.
Once you’ve got an idea of the renovations you want to do and whether you want to complete them all at once or one at a time, you can start identifying potential contractors. Your real estate agent should be an excellent source of recommendations for various types of contractors whose work they’ve seen in other homes or who have worked with some of their clients. Additionally, some real estate firms maintain comprehensive databases of service providers—from plumbers to general contractors—that their clients can search to find the best partner for their remodel or other projects.
Assembling Your Remodeling Team
While your primary focus may be on hiring the right contractor, you might also be looking for interior design help and information about financing your renovation. A lender can provide you details about your options, such as a Fannie Mae HomeStyle Renovation Loan that allows you to wrap your purchase and renovation costs into one mortgage. Other options include a home equity loan or a home equity line of credit.
Once you’ve established a budget and know how you’re going to finance your project, you can begin to assemble your team to tackle the work. If you plan on working with an interior designer for your home, it’s wise to bring that person into the discussion about your renovation as early as possible. Trained designers know about far more topics than fabrics and frills; in fact, many have the expertise to suggest ways to incorporate storage, organize rooms to maximize the use of space and bring in more light. You can find an interior designer through recommendations from friends or online at the American Society of Interior Designers’ website. Your real estate agent is also likely to be connected to the interior design community. Interview a few designers to discuss your project and your budget and learn how they would work with contractors during your renovation.
Your process for choosing a contractor should be similar to selecting an interior designer. Get recommendations from your real estate professional and from friends and then take the time to check their references and research their business. Discuss your priorities and your budget with each prospective contractor. You’ll need to find someone you can trust and who will provide the best possible quality of work within the parameters of your time and your spending plan. Take the time to develop a solid plan for your project and you’ll find that the entire experience is far smoother than if you frequently change your mind or your priorities after the project is underway.
If you’re getting ready for a remodel (or are thinking about purchasing a fixer-upper), contact your local Long & Foster office. Through the company’s Home Service Connections, Long & Foster agents have access to local, trusted resources, including general contractors, to help you improve your home. Additionally, if you need to finance your renovation, a representative of Prosperity Home Mortgage, LLC, can be found in most in Long & Foster offices, and the full-service mortgage banker offers a variety of loans to help with your remodeling project.