Monthly Archives: February 2017

How Much Are Home Renovations Really Worth?

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Home renovations are commonly regarded as a way to render a property more appealing to buyers, and potentially even up the asking price. But what type of (realistic) return on investment can you expect? Due diligence with respect to research in your particular market will reveal the “true value” of popular home renovations, and help you determine if such projects are worth the effort.

Risk vs. Reward in Home Renovations

For the past 30 years, Remodeling Magazine has generated annual Cost vs. Value Reports, comparing ROI for a number of remodeling projects. A quick glance below gives insight into those most popular and the renovations rewarding the highest returns, as determined by Remodeling Magazine’s Cost vs. Value Report for 2017. (Keep in mind, the information presented here is a national average. A bathroom remodel in Boston, Massachusetts, will cost considerably more than one in Tulsa, Oklahoma, for example.)

Project                                                             Cost/Resale Value                  ROI

Popular Home Renovations

 Bathroom Remodel                                        $18,546/$12,024                    64.8%

Kitchen Remodel (minor)                              $20,830/$16,699                   80.2%

Basement Remodel                                          $71,115/$49,768                    70.0%

Wood Deck (addition)                                      $10,707/$7,652                     71.5%

Roof Replacement                                            $20,664/$14,214                   68.8%

Backyard Patio                                                   $51,985/$28,546                    54.9%

 

Renovations With the Highest Returns (Above 75.0%)

Fiberglass Attic Insulation                             $1,343/$1,446                       107.7%

Entry Door Replacement (steel)                   $1,413/$1,282                         90.7%

Manufactured Stone Veneer                          $7,851/$7,019                        89.4%

Kitchen Remodel (minor)                               $20,830/$16,699                  80.2% 

Entry Door Replacement (fiberglass)         $3,276/$2,550                        77.8%

Siding Replacement                                         $14,518/$11,093                     76.4%

Garage Door Replacement                              $1,749/$1,345                        76.9%

 

Though updating or remodeling may be crucial to selling a home, it’s always prudent to know what type of return you can expect on your investment. Maximize your ROI by committing to quality, and having a good idea of what potential buyers are looking for in their dream home.

How Has Tighter Industry Regulation Changed the Home Buying Process?

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In place for over a year now, the TILA-RESPA Integrated Disclosure (TRID) rule set forth by the Consumer Financial Protection Bureau has certainly impacted the process of buying real estate. The intent of tightening regulations within the mortgage industry was meant to streamline and simplify the process for home buyers, while reducing the paper count and confusion of residential real estate purchases in previous years.

Here’s a closer look at how stricter regulation in the mortgage industry has affected the process of buying a home.

From the Home Buyer’s Perspective

  • Changes to settlement forms. Lenders are now required to provide more detailed, thorough information surrounding the mortgage loan to home buyers prior to closing, which is largely accomplished through the Closing Disclosure Form (replacing the HUD-1). Such changes better enable consumers to understand their risks and costs associated with taking on a mortgage.
  • Enhanced awareness of mortgage terms. Though the pre-approval process is relatively the same, borrowers are now more aware of the terms of their mortgage, generating less confusion and fewer surprises at the closing table. TRID mandates that home buyers receive a copy of the Closing Disclosure Form for review at least three days prior to closing.
  • Time to settlement. With TRID, the timeframe between contract and close has increased slightly, though overall, no major impact has been experienced. In general, purchasers have fewer questions at the closing table resulting from enhanced understanding of mortgage details.

Thanks to TRID, the explanation and interpretation of often complicated mortgage information has rendered residential real estate purchasers better informed about their mortgage responsibilities. In fact, all parties involved in the real estate transaction now typically experience a congruence throughout the process, right through to the day of closing. For questions or concerns regarding real estate settlement, contact Linear Title & Escrow at (757) 340.0340 today.