What is Real Estate

Writen by Jeanette Joy Fisher

A study conducted in March 2006 by the Home Improvement Research Institute (HIRI) has shown that nearly half of all sellers are working on projects to make their homes more saleable. Almost two-thirds of those fix-up projects (some 61 percent) are being done before the property is on the market.

The study also found that some 12 percent of the work is being done after an offer has been made on the home, which represents an doubling since the last HIRI survey in 2004. Many brokers see this as just another indicator that the housing market is slowing down.  

The survey found that one-in-four repairs involve replacement of flooring, although the study didn't ask why the flooring was replaced. It's possible that a sizeable amount of that 25 percent of actually may involve upgrading the flooring to hardwood, tile, or new carpet.
 
A slightly lower number of repairs, some 22 percent, according to the survey, involved painting, whether interior or exterior. This could be in part because homeowners know that new paint is a relatively inexpensive way to give a home a fresh new look.
 
Exterior structural work, including new windows and siding, was next on the list, coming in at 12 percent of the repairs listed in the survey. That was followed by electrical work and exterior landscaping, which came in at 9 percent.

The reasons for spending money to upgrade before selling a home are obvious. Sellers are hoping to give their home an edge over the competition and they're hoping their efforts will bring higher offers from buyers. In the HIRI survey, one-third of all respondents said they had made the repairs to make a more favorable impression on buyers, and that's generally a sound investment. History has shown that curb appeal is a huge factor in prompting buyers to make offers. The National Association of Realtors says that half of home sales can be linked to a house's appeal from the street.
 
Sellers often made the upgrades at the suggestion of a real estate agent. In fact, some 78 percent of respondents said that their agent had recommended a repair or upgrade, although nearly 15 percent said that the repairs had been prompted by a home inspection report. Another indicator is that homeowners were slightly more apt to employ professionals to do the work in 2006 than they were in 2004, showing that they not only want the work done, but they also want it done right to give their homes a competitive edge. Professionals will generally get the work done more quickly, as well.

Homeowners are increasingly beginning to feel that they need to do something extra to attract buyers, and the HIRI figures would seem to indicate a slowing market and increasing competition for buyers. The figures would also seem to indicate that homeowners may be forced to spend more money to make their homes more attractive to a dwindling number buyers as 2006 rolls along.
 
Copyright © 2006 Jeanette J. Fisher

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