Minnesota renovations

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RE/MAX NORTH CENTRAL THE HOW-TO GUIDE ON MAXIMIZING YOUR HOME RENOVATION INVESTMENT. SMART RENOVATOR remax.com Outstanding Agents. Outstanding Results. No one in the world sells more real estate than RE/MAX. Each office independently owned and operated.

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http://www.remodelminnesota.com Make the right choice in your remodel-how much value is remodeling the kitchen vs remodeling the bathroom or remodeling the lower level? Maybe you should replace windows or the siding?

Transcript of Minnesota renovations

Page 1: Minnesota renovations

RE/MAXNORTHCENTRAL

THE HOW-TO GUIDE ON MAXIMIZINGYOUR HOME RENOVATIONINVESTMENT.

SMARTRENOVATOR

remax.comOutstanding Agents. Outstanding Results.No one in the world sells more real estate than RE/MAX.

Each office independently owned and operated.

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For more information, visit remax.com.

Every year, RE/MAX associates sell hundreds of thousands of homes in every size, shape and style. Infact, when you work with RE/MAX, you’re working with the experienced professionals of the world’s mostsuccessful real estate company. So, when it comes to buying and selling smarter, there’s no doubt thatwe can show you how.

But our commitment to helping you get the most out of your home begins long before that for sale signgoes in the yard. The knowledge we’ve gained from all of those home sales has now been used to developthe RE/MAX Smart Renovator Guide. It’s just one more way in which you can profit from our experience.

According to our Smart Renovator survey, the majority of Minnesota and Wisconsin homeowners (54%)would rather remodel than relocate. Most site a genuine love for their home as the primary reason, butwanting to enhance future resale value runs a close second. That’s where home renovationsusually come in.

As a homeowner, you’re likely to resell at some point in the future and will want to consider the changingcharacteristics of your neighborhood. Remember the choices you make regarding improvements candrastically influence your home’s market value. Getting the biggest return for your renovation dollarsmeans knowing what home buyers want and what choices make the most sense for your price rangeand prospective buyer.

For instance, our survey revealed the most popular projects across Minnesota and Wisconsin marketsinclude remodeling kitchens, renovating bathrooms, finishing basements, adding outdoor decks andreplacing windows. Homeowners in all markets put a gourmet kitchen near the top of their wish lists(23%). But while an equal number of Twin Cities consumers said a three-stall heated garage wouldbe their first choice for a new addition, those in Milwaukee and Madison are more likely to add amaster suite.

Our Smart Renovator program has also led to the development of the RE/MAX Return On Reno Index —a unique, proprietary guide that shows you which renovations generate the highest return on investment(ROI) based on the market in which you live. In many cases, we’ve also discovered that the relative returnon your investment can vary significantly based the scope of the project you choose and the quality ofmaterials you use.

You’re sure to notice that some renovation projects are consistent winners in all markets. Investing inkitchen and bathroom remodeling or siding and window replacement are always wise decisions. Butremember to tailor your decisions to fit the rest of your home. You’ll also want to evaluate the prospectof hiring professional help vs. the possibility of doing it yourself. More than half of all homeownersparticipating in our survey said they always or almost always tackle home improvements ontheir own — including 40% of female respondents.

Of course, the RE/MAX Smart Renovator Guide is just that: A guide. This information isn’t meant to dictateyour decision but provide a starting point for understanding the preferences of your potential buyer.Making the effort to discover which renovations will give you the best return on your investment will betime — and money — well spent.

RE/MAX SMART RENOVATORThe Survey

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Set Your Priorities. Everyone has different reasons for wanting to renovate. Sometimes it’s the simple need for a change. Other times, the motivation is more practical. Asuccessful renovation can be a dream come true, but without careful planning and management, it can be a nightmare. Before you pick up a hammer, pick up some information.

Talk to friends and neighbors. Explore all the options and remember the carpenter’s creed: Measure twice, cut once. Mistakes on paper are easy to fix. Mistakes on the job are not. Ifyou’re considering several projects, rank them in order of importance. You’ll want to fix a leaky roof before refinishing the floor beneath it.

Know What’s Possible. Every house has unique strengths and weaknesses, so you may want to hire a professional inspector or architect to advise you on what can — or should— be done. It’s the best way to avoid costly complications later. That new addition may look great on paper, but can your heating, plumbing and electrical systems service it?

Your house is a collection of components that interact continuously. You’ll need to understand how these factors are interrelated before you can upgrade effectively. Remember thatbuilding codes and local by-laws may also limit what and how you renovate. There’s nothing worse than discovering the project you’ve painstakingly planned is actually prohibited.

Do The Math. Can you really afford to renovate? To answer, you’ll need aclear idea of the costs involved. Get quotes from at least two reputable

contractors, architects or suppliers. Explain exactly what you want to do anddiscuss various options. Then take the most reasonable quote and add 10 to 15percent for unexpected costs. Discuss the financial implications of the projectwith your real estate agent, banker or financial adviser. If you need financing,you may be able to renegotiate your mortgage or apply for a personal loan. Youmay even be eligible for assistance, as some utilities and municipal governmentsoffer incentive programs for energy-efficiency upgrades.

Pick Your Partners. Many homeowners decide to make their own renovationsand doing it yourself can save money. But there are other costs to consider.

Are you prepared to draw up your own plans, get your own permits and scheduleinspections? How much time can you spend away from your job, your family andyour other commitments? Can you be as efficient or skilled as those who do thisevery day? You may feel comfortable painting a room, but specialized tasksthat involve wiring, plumbing or heating are usually best left to professionals.In fact, some municipalities may require certain kinds of work to be done bycertified professionals. There’s also the question of equipment. If you don’t ownthe tools, you’ll have to buy or rent them. If you run into problems, who will youcall? Most people find that contracting work often works out best. But choosingthe right renovator is key. Our list of Top Ten Contractor Questions will help youget a head start.

Get It In Writing. Always get a written contract describing the work to bedone, what it will cost and how payments will be made. Never agree to

anything before you have it in writing. Without an agreement on paper, there’slittle you can do about poor or incomplete work. You risk being charged morethan you expected, and it’s unlikely you’ll get any warranty or after-sales service.Professional contractors always provide customers with a clearly written contract.Once signed, it’s legally binding. So make sure that what you sign describesexactly what you want. Most client-renovator disputes occur because there wasno contract or because the contract was vague or incomplete. If you have anydoubts or questions about the contract, have your lawyer review it before yousign. If your renovator refuses to accept a written contract, get another renovator.

Inspect As You Go. Most renovation experiences are happy ones, but don’t assume that things are going according to plan just because you have a contract and rapportwith your renovator. Stay on top of your project to prevent minor errors from becoming major problems. If you have a disagreement, be reasonable. Go over the contract and

listen carefully to the renovator’s explanation. If you’re still not satisfied, get a second opinion from a recognized home inspector or an architect before taking further action.As the work winds down, make sure that it’s been done to your satisfaction. Never make the final payment or sign any document releasing the renovator from further responsibilityuntil all deficiencies are corrected. Then, once the project is finished and life returns to normal, you can sit back and enjoy the results.

Adapted from the 2006 CMHC Online Guide.

RENOVATION REVELATIONSSix Suggestions for Successful Home Improvements

How long have you been in business?

What types of work are you licensed to perform? What is your license number?

What type of work do you specialize in?

Have you done similar jobs before? Any references?

Will you use your own crew or subcontract?

Will you provide a written estimate and contract?

What kind of work schedule will you follow? Do you guarantee on-time completion?

How and when do you provide clean up?

What kind of warranty do you provide? What does it cover?

Do you carry workers’ comp and insurance?

TOP 10 CONTRACTOR QUESTIONS

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The Victorian looked fabulous. The owner had poured thousands into refinishing the hardwood floors,replastering the walls and updating the kitchen. What she hadn’t done was fix the home’s foundation,floor joists or beams. “As I entered the dining room, a hutch that was 20 feet away was shaking,”says home inspector Rick Jarrett. His inspection saved his client from having to spend tens ofthousands of dollars excavating the foundation and repairing the damage.

If you’re looking for a house, you’ve probably seen your share of ill-conceived rehabs. What’sharder to spot are the remodels that look great on the surface, but ignore or try to hide serious flaws.Here’s what to look for so you can avoid the biggest money pits and winnow down candidatesbefore you hire an inspector.

Fundamentally UnsoundUnless you have X-ray vision, you can’t peer inside walls, floors and ceilings to see if a home isfundamentally sound. But you can look at the home’s surfaces for some real clues about what’sgoing on underneath:

• Cracks in walls, ceilings, floors or foundation. Any foundation crack should be cause for concern. Wide cracks elsewhere may also be a sign of trouble.

• Sloping, bouncy or spongy floors. All homes settle over time, but sloping that’s accompanied by significant, recent wall and ceiling cracking should be a concern.

• Doors or windows that don’t open freely. This could be due to settling, foundation problems orpoor construction. In any case, it may indicate costly repairs are needed.

• Wide open spaces. Remodelers often combine smaller rooms into larger spaces, but doing socan undermine the stability of a house if the remodeler removes a load-bearing wall.

Shocking DevelopmentsHome inspector Jim Gibbs checks out a lot of homes for real estate investors, and he’s seen plentyof truly shocking remodels. “The biggest problem I see is in the electrical,” Gibbs says. The remodelersare “not doing anything near code.” Some of the most common problems:

• Failing to update wiring when adding rooms or circuits.• Making dangerous connections that aren’t up to code.• Failing to add enough circuits to cope with today’s households.

For instance, it’s not uncommon for kitchen remodelers to spend a fortune on countertops andappliances while skimping on the electrical. You can see if there’s a problem by simply turning ona lot of appliances at once and watching what blows. Or you can take a look at the electrical panel.

“If they’ve had a major remodel and the circuit breaker panel doesn’t look new,” says Gibbs,“you need to be suspicious.”

Adapted from the MSN Real Estate feature by Liz Pulliam Weston

Courtesy of MSN Money online. Copyright 2006.

CAN YOU AVOID A HOMEIMPROVEMENT NIGHTMARE?Find out by taking the NARI Remodeling Quizavailable from your RE/MAX agent.

RENOVATION RED ALERTHow To Spot A Shabby Remodel

The Big Cover-UpMost states require sellers to disclose serious defectsin their homes, but some still try to cover up water, fireor other damage with a coat of paint. Jarrett’s becomeso accustomed to this particular dodge that he getssuspicious if he smells a fresh coat of paint in an areathat’s vulnerable to water problems — such as abasement. One way to spot fire or insect damage is bypushing on the wood to see if it’s spongy or scrapingup some of the paint (in an inconspicuous place) to seewhat’s underneath. But water damage may take a littlemore detective work:

• Do you see watermarks on the foundation?• Does the ground slope toward the house?• Does it smell or feel damp under the house?

What if your prospective home passes all these tests?You might be tempted to save money by forgoing aprofessional inspection, particularly in a white-hotmarket where other bidders are waiving this step. Resistthat impulse. There are still plenty of less obvious signs,visible only to professional eyes, that a home has trouble.Think of it as cheap insurance: A few hundred dollarsspent now could save you a fortune later.

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Exclusively from RE/MAX, the Smart Renovator Return on Reno Index is a simple tool designed to help you get the most value out of every renovating dollar youspend. We took a look at the various renovations homeowners commonly perform and then reported the return on investment (ROI) based on a variety of criteria —including the value of the home, the value of similar homes in the neighborhood, the availability of homes in the area, the rate at which property values are risingand common expectations of consumers in that market . We learned “down to the dollar” what different renovations deliver. But we also discovered that therelative return on investment changes based on project scope, scale and materials.

RE/MAX RETURN ON RENO INDEX

Sources: National Association of Realtors-Realtor.Org-Realtor Magazine, Cost vs. Value Report, 2006; MSN Real Estate, 2006; CMHC, 2004-2006; RE/MAX.CA, 2004.Special thanks to Hanley-Wood LLC for the production of original reports.

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

KITCHEN REMODEL Midrange Materials

ROI

85.6%

74.5%

83.4%

70.2%

80.4%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

FAMILY ROOM ADDITION

ROI

70.3%

63.0%

67.7%

61.3%

71.5%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

WINDOW REPLACEMENT

ROI

96.6%

70.3%

81.2%

76.5%

83.7%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

BATHROOM REMODEL Midrange Materials

ROI

78.4%

79.0%

87.7%

73.3%

84.9%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

BASEMENT REMODEL

ROI

66.5%

66.1%

77.0%

65.6%

78.8%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

MASTER SUITE ADDITION Midrange Materials

ROI

80.3%

61.1%

69.0%

62.6%

72.6%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

SIDING REPLACEMENT

ROI

92.9%

83.3%

93.5%

80.9%

87.2%

REGIONNational AverageMidwest AverageMinneapolis-St Paul, MNMilwaukee-Racine, WIMadison, WI

ROOFING REPLACEMENT

ROI

65.6%

55.4%

66.8%

60.4%

73.9%