By FPA member Joe Pitzl, CFP®
Last Updated: March 15, 2012
Your home is not just where your heart is; it's also where a great deal of your net worth might lie. To be sure, most financial planners would suggest that your home is what's called a use asset and not something that should be viewed the same way you view your 401(k) or Individual Retirement Account (IRA). Still, it's an asset that must be protected.
Now truth be told, there is no surefire way to know where the housing market is heading from here, but homeowners that are looking to sell can do a number of inexpensive things to give your home a facelift.
Improve your curb appeal. Your yard, landscaping and exterior are the first things people notice when they drive up to your home. Since first impressions can often change a person's perception almost instantly, this area must not be overlooked. Make sure the beds around the house are not overflowing into the lawn. A well-manicured lawn, clean walkway and neatly-trimmed shrubs and bushes can go a long way toward a positive first impression. Retaining walls are a simple and inexpensive solution for awkward terrain and tend to provide nice eye appeal.
Update your lighting. If your home still has old, dim, inefficient lighting throughout the home, consider replacing the fixtures with newer, brighter and more energy efficient lighting. Bright lighting makes an area appear bigger and more open.
Give your kitchen a facelift. The kitchen is often the make-or-break room in the house for homebuyers. If your kitchen is outdated, there are a variety of ways to improve the appearance without breaking the bank. Replacing the old faucets and cabinet door handles is a simple way to give the room a quick facelift. Matching appliances is a difference-maker in the buyers mind since it produces a more unified appearance. Again, the lighting in this room is critical since it is the main gathering point in most homes.
For those with deeper pockets, consider refacing (not replacing) the kitchen cabinets. Many companies will remove the doors of the existing cabinets, sand and repaint the boxes and put on new cabinet doors at a fraction of the cost of replacing the cabinets. For the do-it-yourself folks, this option may appeal as a larger project on your own. Additionally, replacing or updating the countertops will go a long way toward modernizing the kitchen space.
Update your bathrooms. For many, bathrooms represent another make-or-break room in the house. If your shower and bath walls are looking glum, replace any cracked or chipped tiles with new ones and consider regrouting the tile. Many companies now make full tub and/or shower surrounds that lie over the top of the exiting unit and cost much less than retiling or replacing the tub.
Similarly, consider updating old bathroom floors with vinyl tiles or a full sheet of vinyl that can lay right on top of the existing floor. Replacing the old vanity and countertop with a pedestal sink will add much needed space to a small bathroom and something as simple as a new toilet seat will add appeal.
Clean the carpets. While it may not be prudent to re-carpet wall-to-wall (many homebuyers may prefer to select their own carpet), professional carpet cleaning is an inexpensive and worthwhile way to give your floors a boost. On worn carpet, use area rugs to give a cleaner and a more well-kept appearance.
Clean up the neighborhood. Your neighborhood appearance will also be a factor in the selling process. If there is an unoccupied home on your block, for example, consider organizing a neighborhood watch for the home. Take turns cleaning up the yard and cutting the grass to keep up the appearance that someone is living there. An obviously abandoned home on your block can have a severe negative impact on your home's value.
Finally, be patient in the selling process. If you can avoid buying a new home before selling yours, absolutely wait. There are a large number of buyers in the market today looking to low-ball desperate sellers at below-market prices. You can avoid becoming a desperate seller by making sure you aren't making payments on two homes.