Massachusetts Real Estate

                                                                                                                                                            

Original article source: Massachusetts Real Estate Blog ~ Tax breaks on home improvements

There is no question that there are far less people today that have the kind of equity in their home that they did five to ten years ago. In most areas across the country Real Estate values have dropped by a substantial margin decreasing the amount of folks who have capital gains concerns.

One of the great benefits of home ownership has been the fact that equity growth to an extent does not always get taxed.

A very important capital gains tax law went into effect in 1997 and is known as the Taxpayer Relief Act of 1997.

The current Real Estate capital gains tax law when selling your personal residence allows for an exclusion of up to $250,000 in profit if you are single and $500,000 if you are married. In order to be eligible for the tax exclusion you must have lived in your home for two of the last five years. The home must also be your personal residence and can not be considered an investment property.

If you move often or do not have substantial equity in your property then tax breaks on home improvements are not going to be much of a concern.

For those that are fortunate enough to have lived in their home for a long period of time and have built up a sizable equity position, there is good reason to keep track of what you have spent on home improvements.

By keeping track of the home improvements that have taken place in your property you are able to increase the cost basis which will decrease the amount of taxes you pay when it comes time to sell.

How do home improvement tax breaks work?

In order to figure out how to calculate your tax break from home improvements  you are going to need to figure out what your initial cost basis was when you 1st purchased your home.

This will be what you actually paid plus any closing costs such as attorney fees, transfer taxes, surveys, commissions or any inspection related charges.

You will then need to figure out all the home improvements you have made to your home since the purchase. As an example lets say you purchased your home for $400,000 including all the closing cost expenses.

Lets further assume you also have $50,000 in home improvements since you purchased including a new bath room, a finished basement, a large deck and brick patio. if you add the purchase price and improvement costs together you get an adjusted basis of $450,000.

                                                                                                                                                            

Going back to the qualifications of the capital gains tax law for Real Estate outlined above, lets assume you have met the litmus test and have lived in the home for two out of the last five years as your primary residence.

You find out you are going to be moving out of the area you are located in and sell your home for $700,000.  If you are single the tax law says you can exclude up to $250,000 in profit or gain.  Using the $700,000 sale price minus the adjusted cost basis of $450,000. You would not pay any taxes on the sale.

Here is where the tax breaks on home improvements come in. If you had not kept track of what you spent making your home better you would be paying taxes on $50,000 because that would be become what is considered profit to the IRS.

By keeping receipts on the home improvement dollars you have invested you will save $7500 0n your taxes! As of this writing the current capital gains tax rate is 15%. $50,000 x 15% = $7500. This is obviously a nice chunk of change to save just by being a little studious.

What counts as a home improvement for tax purposes?

When calculating tax breaks the one thing you don't want to do is fool around with the IRS. While you may consider every dollar you spend on your home an improvement the IRS certainly does NOT! As a matter of fact most Realtors or buyers won't either. See home improvements with the worst ROI.

According to the IRS an improvement increases the value of your home while a non-eligible repair just returns something back to it's original condition. The IRS further states that a capital improvement has to last for more than one year, add value to your home or prolong it's life.

Home improvements must also be there when you sell your home as well. For example if you spent money putting tile flooring down in your kitchen fifteen years ago and then five years ago put in new hardwood floors you can't claim both as improvements.

It is important to note that repairs do not count as improvements. Again according to the IRS, repairs are things that are done to keep up a homes condition without adding value or prolonging it's life. There are real slight differences in comparing an improvement to a repair. An example of a repair would be fixing a window pain. An improvement would be replacing a window. 

If you are unsure on whether an improvement you have made to your home can be counted or not I would recommend speaking to a qualified tax professional or look at page 9 of publication 523 which details tax issues when selling a home.

Other Real Estate articles worth a look:

• Refinancing a mortgage
• Appealing a property tax bill

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About the Author: The above Real Estate information on home improvement tax deductions was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise!

For Metrowest Massachusetts Real Estate see Massachusetts Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service Real Estate sales in the following towns in and around Metrowest Massachusetts: Hopkinton, Milford, Upton, Bellingham, Southboro, Westboro, Ashland, Holliston, Mendon, Northboro, Shrewsbury, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Framingham, Natick and Douglas MA.

 

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 24 years.

As of July 1, 2010 any home that is serviced by an oil fired heating system in Massachusetts must comply with a new law that requires home owners to upgrade their system equipment to prevent leaks. The new legislation is designed to prevent leaks from pipes and equipment that connect to your furnace.

The new law is addressed in Chapter 458 of the Acts of 2008. The two biggest provisions of the law change include the following:

• The installation of either an oil safety valve or an oil supply line with a protective sleeve on systems that do not already have these devices in place.

• Insurance companies that provide home owners insurance policies must offer coverage for oil tank leaks from heating systems that use oil.

What is important to note is that most home owners policies do not currently include coverage for oil leaks leaving home owners to fend for themselves with costly clean up bills. The new law makes it mandatory for insurance companies to offer coverage, however it is up to the individual home owner to purchase this optional insurance. Implementation of the insurance coverage will also start as of July 1, 2010.

Who must take action?

Homeowners of one to four unit dwellings that are heated with oil must already have or install an oil safety value or an oil supply line with a protective sleeve. Installation of these parts must be completed by a licensed oil burner technician.

If your home was built prior to January 1 1990, you are more than likely already in compliance with the new law because state fire codes were changed to require these parts on new installations at that time.

 

Who is exempt?

Homeowners are not required to comply with these leak prevention steps if the oil burner is

• Located above the oil storage tank and the entire oil line is connected to and above the top of the tank.
• An oil safety valve or oil supply line with protective sleeve was installed on or after January 1, 1990 and
• The changes are in compliance with the oil burning equipment regulations. The copy of the oil burner permit from the local fire department may be used to demonstrate you are in compliance.

                                                                                                                                                     

Complying with this new law is a no brainer! The cost of cleaning up an oil spill is very expensive. The cost of making this upgrade is very cheap. We are talking about a few hundred dollars to make these upgrades. Why take a chance and be left with a bill that could cripple you financially!

If you are unfortunate enough to have a leak and it reaches the soil beneath your home then a clean up is going to be necessary to bring your property back into compliance with state environmental standards. If the leak is severe enough and it impacts your neighbors or the local ground water supply the bill is going to be astronomical.

In Massachusetts, reports indicate that there are a few hundred spills a year. If you have a spill the cost for clean up on the low end is going to be $15000 to $20,000 dollars. A high end clean up can easily get into the hundreds of thousands! Who would ever want to deal with this kind of nightmare when it is so easy to avoid? I know if I owned a home that was built prior that 1990 I would not want to even think about such a catastrophe. I would make darn sure I was compliant right away!

 

 

What Kind of Insurance is available to home owners?

In order to be eligible for coverage you must make sure that your home is either compliant or exempt from the new law.

The insurance will provide "1st party coverage" of at least $50,000 to cover the expenses of cleaning up a leak to soils, indoor air, or other environmental media from a home heating system at the residence itself and also reimbursement for personal property damage.

Secondly you must provide for "third party coverage" of at least $200,000 for dealing with any problems that occurred as a direct result of the leak for damage off of the property. This could be a near by home or the local ground water. The insurance coverage will also include costs for legal fees subject to a deductible not to exceed $1000 per claim.

*** The key point to remember with the Massachusetts Oil Heating and Insurance law is that an an upgrade is more than likely be necessay only if your home was built prior to 1990.

A special thanks goes out to Rory Warren of Warren Home Inspections who made me aware that this new law would be going into effect. Rory mentioned there is some talk about asking home inspectors to police homeowners who are not compliant with the law at the time of a home inspection.

From a home inspectors perspective, I am sure they will not be too thrilled to carry the burden of this task.

If you are thinking of selling your home in Massachusetts one other law that is going into effect in Massachusetts concerning home safety is the Massachusetts Smoke Detector Law. You can read the complete article on the law by clicking the link. The basics of the new regulations is that as of April 5, 2010 you will be required when selling a home to have certain kinds of smoke detectors.

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About the Author: The above Real Estate information on Massachusetts oil heating upgrading and insurance law was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise!

For Metrowest Massachusetts Real Estate and homes see Massachusetts Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in and around Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Northboro, Shrewsbury, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Framingham and Douglas MA.

Click here to view Bill Gassett's Real Estate profile.

 

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Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 24 years.

                      Cost V.S Value For Remodeling New England Homes 2009

 

Every year Remodeling Magazine does a great report on what you can expect to see as a return on your investment for various projects around the home. The report does an analysis between a specific projects cost and what you can expect as the resale value or what you would re-coup when selling.

This year was no different as Remodeling Magazine sought out Realtors across 80 Metropolitan areas around the United States.

I was fortunate enough to be one of the Realtors interviewed for the article by Jim Corey. Here is an excerpt from the story which discusses how properties that are in turn-key condition fair much better in the current Real Estate environment.

"What is high up on that list is move-in condition. In a booming real estate market, marginal locations move because buyers are willing to invest the time and money into customizing. They think of the investment as part of the long-term cost of the transaction. In lean times, the opposite psychology holds sway. Marginally maintained houses get house Hunter's short shrift."

Bill Gassett ought to know. The Hopkinton, Massachusetts market where he has sold homes for 25 years hit its pricing peak in 2005 and is down about 25% since that time.

“The houses that get most significantly hurt by the market,” Gassett says, “are the ones that haven’t been cared for.”

You can see the full article at Curb Appeal is King. I would like to thank Jim Corey again for the opportunity to be interviewed as getting quoted in a National magazine is always nice:)

Topping the list in 2009's cost v.s value report were items that were most practical. Given the state of the economy people seemed to be more frugal with their money and invested in more of the necessities. Interestingly enough seven out of the top 10 value-yielding projects of the 33 projects ranked by Realtors in this year’s Cost vs. Value Report were exterior projects!

In the charts below you are going to see cost v.s value data for the New England region for both mid level and upscale projects. Some areas of the country will see a difference is in the value recouped for certain projects.

One of the biggest reasons for the popularity of exterior replacements is energy efficiency and tax credits!  Introduced this year was the American Recovery and Reinvestment Act tax credit which is available for energy efficiency upgrades, including qualified roof and window replacements. That has helped boost homeowners including buyers and sellers awareness of such improvements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You will notice below that none of the upscale projects for 2009 had a positive return v.s 2008.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Looking over the data it is safe to say that other than some of the exterior projects shown, kitchen and baths tend to be very good places to invest your money in a home. Just remember even in these high return places you will not be getting back a 100% or more return!

As a Realtor selling homes all over the Metrowest Massachusetts area for the past twenty four years it is amazing how often I meet sellers who believe there is a one for one return on every dollar they invest in their homes. Some even believe it is more. 

The most common things I hear are "how can my home only be worth X when I just spent $60,000 on my new basement" or "I just added this swimming pool for $50,000 my home has to be worth more."

In these examples people believe you can just tack on the amount you spend to the existing value of your home. Well maybe in Florida if you invest $50,000 in a pool you will get it back completely. Here in Massachusetts you would be lucky to get a small percentage of it back.

One of the best ways to think about home improvements is not so much the exact dollar you will recoup but your own personal enjoyment from these items. When it comes time to sell, there are plenty of buyers that will appreciate the improvements you have made if they are tasteful and fit what the general population is looking for.

Now more than ever if you are going to be selling your home it makes sense to put money in places that are going to improve the general appearance of your property. Buyers are very unforgiving today and the homes that are in less than stellar condition are the ones that get punished the most.

If you are thinking of selling your home be sure to read the top ten mistakes to avoid when selling a Massachusetts home. The article gives pointers on such things as staging, taking care of necessary repairs, along with a host of other issues that you can prepare for.

 

*** According to the survey home owners recouped an average of 63.8 percent of their investment in 33 different home improvement projects, according to REALTORS® who responded to the survey. The expected cost recoup was generally down from previous years in line with the drop in home prices nationally. The return on home owners investment in remodeling projects has declined an average of 3.5 percentage points between 2008 and 2009. That’s down from the 2.7 point drop between 2007 and 2008 and much less than the 5.5 point drop between 2006 and 2007 and the 10.5 point drop from 2005 to 2006.

Click here to see Best remodeling projects cost v.s value 2008.

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About the Author: The above Real Estate information on  best remodeling projects cost V.S value for New England 2009 was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise!

For Metrowest Massachusetts Real Estate and homes see Massachusetts Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

 

Subscribe in a reader

 

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 24 years.

Recently, I sold a home in Medway Massachusetts where the previous owner had a couple of cats. When showing this home to my buyer clients, there was a very strong odor present.

We figured it was the cat box and that the cats may have gone to the bathroom on the carpets at one point or another. The buyers figured that with the cat boxes gone and the carpets cleaned the home would be odor free.

Unfortunately, this carpet cleaning did not do the trick and the cat odor remained. The buyers gave me a call and asked me if I had any words of wisdom.

My 1st thought was getting an ozone machine. In my experience an ozone system is one of the best methods to remove pet odors. An ozone generator will not only remove pet odors but other troublesome odors caused by mold and mildew, fire, water damage and others. Ozone is considered "natures deodorant" and can get rid of many types of nasty smells.

There are a few types of ozone generators. The most common types are UV and Corona Discharge. The UV generator is generally recognized as the better of the two versions. The biggest difference between the two is that the UV ozone generator has a more stable ozone output. The Corona discharge unit can be effected by the humidity levels in the home. The ozone that is made from a UV ozone generator is cleaner because it does not produce any nitric acids. The smell is also considered better than ozone produced by a Corona discharge model.

It is possible that some very minor odor problems can be taken care of by a home owner who purchases their own portable ozone generator and moves it room to room to room. In most cases, however, a professional would need to take care of the odor issue.

When the odor problem is severe a professional will do what is known as a "shock treatment". A shock treatment will introduce a highly concentrated burst of ozone into a larger area. When a shock treatment is done people, pets, and even plants can not remain as the ozone in such high quantities can be a health hazard.                                                                                                                                            

It should be noted that there is some controversy over the effectiveness of ozone as an odor remover. The Environmental Protection Agency (EPA) actually goes out of there way to dispel some of the beliefs that ozone removes odors. The information provided below is taken from the EPA'S website regarding ozone.

"There is evidence to show that at concentrations that do not exceed public health standards, ozone is not    effective at removing many odor-causing chemicals."

• "In an experiment designed to produce formaldehyde concentrations representative of an embalming studio, where formaldehyde is the main odor producer, ozone showed no effect in reducing formaldehyde concentration (Esswein and Boeniger, 1994). Other experiments suggest that body odor may be masked by the smell of ozone but is not removed by ozone (Witheridge and Yaglou, 1939). Ozone is not considered useful for odor removal in building ventilation systems (ASHRAE, 1989)."

 
• "While there are few scientific studies to support the claim that ozone effectively removes odors, it is plausible that some odorous chemicals will react with ozone. For example, in some experiments, ozone appeared to react readily with certain chemicals, including some chemicals that contribute to the smell of new carpet (Weschler, 1992b; Zhang and Lioy, 1994). Ozone is also believed to react with acrolein, one of the many odorous and irritating chemicals found in secondhand tobacco smoke (US EPA, 1995)."                                                                                                                                                                                                                                                                   

Ok so maybe ozone generators don't remove the smell of dead people or formaldehyde. Hope I don't ever have to deal with that one!

In my experience, I have seen ozone work as an effective treatment of pet and other common household odors.

While anyone can go to the store and buy an ozone generator, there are health consequences worth noting. 

According to the EPA, fairly low amounts of ozone can cause chest pain, coughing, shortness of breath, and, throat irritation.

Ozone may also worsen chronic respiratory diseases such as asthma and decrease the body's ability to fight respiratory infections.

People vary widely in the health effects to ozone. Healthy people, as well as those with respiratory issues, can experience breathing problems when introduced to an environment with ozone.

Bottom line if you have an issues that you have not been able to solve with other cleaning methods you may want to consult with a professional who deals with ozone treatments as a method of odor removal.

Thinking of selling your home in Metrowest Massachusetts? Here are a couple of articles to help get your home prepared for the market.

Low cost home improvements when selling a home

Preparing your Massachusetts home for the Spring selling season

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About the Author: The above Real Estate information on Removing odors in your home with ozone was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Realtor. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

 

Subscribe in a reader

 

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

It is no secret that energy prices have been high all year but thankfully have dropped quite a bit as we head into the Winter months. There are of course plenty of things you can do to save additional $$$ and conserve energy this Winter. Some are fairly obvious and easy.                                                                                      

Here are some of the easiest energy saving tips for your home:                                                                                                                                                                                           

Turn back the thermostat - Kind of a no brainer but here is my suggestion...Upgrade to a programmable    thermostat and set the temperature down during the time when you are not home. For me it is easy because I am at work selling Real Estate all day.

The temperature in my home automatically goes down to 60 degrees at 11 p.m at night and stays that way until 5 p.m the next day when I get home. So between 5 p.m and 11 p.m when I am usually around the temperature moves up to a comfortable 70 degrees.

As an additional thought if you have a multi zone system I would also suggest that you may want to keep the area of your home where you sleep a little bit warmer than the rest of the home. For example if you have forced hot air and your bedrooms are on the 2nd floor there is no sense in keeping the downstairs the same temperature as the bedroom area. Have your thermostat set to go down at night on the 1st floor.

Close the fireplace damper - This is one that I often forget about. There is quite a bit of heat that can get lost going up and out the chimney.

Give your heating system a tune up - Proper maintenance is vital to keeping your heating system running most efficiently. Make sure that you have your heating system cleaned and inspected at least once a year, especially if you are using oil as a fuel source. During the heating season make sure that the filters are changed once a month.

Fill the gaps with weather stripping and caulking - make sure all your doors and windows are tight. Just the other day I noticed a draft coming from the interior door leading to the garage. I had not noticed that the weather stripping was missing. You can pick up an item like this at Home Depot or Lowe's for under ten dollars. If you have a home with older windows make sure you caulk and gaps. Using the locks also provides for a tighter and less draft resistant fix.

Window air conditioners - If you home is not cooled by central air and you are using a window air conditioner make sure that all the gaps between the window and exterior have been filled. This is a notorious problem for air penetration.

Add additional insulation to the home - Add additional insulation to your attic, basement and outside walls. This can be done either with insulation batts or with blown in cellulose.

Keep furniture away from vents - If you have furniture blocking your vents you will drastically cut the efficiency of the heating system. In one of the rooms in my home I happen to have long draperies. This can be a problem as well if they are not tied back. Keeping your drapes away from blocking the vents is an important consideration.

Keep the vents clean - Make sure you keep your baseboard, radiators and registers dust and dirt free. This will not only have a drag on efficiency but who wants to breath crummy air. If you have a forced hot air system over the years it is easy to accumulate dust and debris. If you live in the Metrowest Massachusetts area and need a duct cleaning I would recommend Duct Z. They are a national outfit and may be located near you as well.

Seal your duct work - If you have FHA (forced hot air) make sure the ducts are properly sealed. Over time the tape used to seal openings and joints can start to open or even fall off.

Unplug appliances not in use - Guys I know this one is difficult but if money is real tight I would suggest unplugging the beer fridge in the basement or garage. Having an extra refrigerator is a big drain on energy consumption. Things like extra televisions and other household appliances that do not get use often should also get unplugged. These appliances although are not being used still drain energy and cost you money. The term often used to describe this is "leaking energy". Look at the electrical meter on your house before and after doing this and see what I mean.

Clean the refrigerator coils - Once a year you should vacuum or clean the fridge coils especially if you have a pet. Dirt, dust and pet hair on the coils will impede air flow and make the heat transfer less efficient forcing the appliance to work harder. It is estimated that dirty coils can cut the energy use by 6%. This would save around 15$ per year on an older fridge.

Turn off bath fans - After taking a shower make sure the bath fan does not stay on longer than necessary. This is an opportunity for heat to get sucked out of a home.

Turn down water heater temperature - In most homes the water temperature set on a water heater is between 130-145 degrees. Setting the temp back to 120 is more than enough for a hot shower. It is estimated that a 10 degree temperature reduction can reduce water heating costs by 5%. Lowering the temperature by 20 degrees could save the average family around 50$ per year.

Low flow shower heads - Install low flow shower heads to conserve heated water. Also keeping the time in the shower down also helps.

Wrap the water heater  - You can buy a water heater wrap at most hardware stores or Home Depot for around 25$. The blanket will pay for itself in a year and offer saving after that. According to the Department of Energy this will save the average household around 4-9% of their annual total water heating costs (around 12$-48$ for most homes.)

Purchase energy star products - Energy Star Products are much more efficient and designed to save energy. For example an Energy Star fridge uses about 20% less energy than a standard refrigerator. Over time the saving can add up.                                                                                                               

Open shades and curtains  - Opening shades and curtains on the South side of the home is something that will give you a little something extra on those sunny days with a solar effect. Remember to close them at night to help keep the heat inside.         

Interested in getting an Energy Star Audit on your home? Visit the Energy Star Audit website to get an evaluation done on your home. This could really help you save some $$$.

Here is a state by state Energy Star directory to find out if Home Performance with Energy Star is offered near you.

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The above information on energy saving tips for the Winter months was provided by Bill Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile

 

 

 

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Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 22 years.

The annual Cost V.S Value report for home additions and remodeling projects has been released by Realtor Magazine for 2008. If you are thinking of adding an addition or renovating your home in Massachusetts this is an excellent guide that will at least give you a ballpark on what you can expect for a return on your investment.

"NATIONAL ASSOCIATION OF REALTORS® statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners’ investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling’s 2008–2009 Cost vs. Value Report."

 

Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects.

 

Top 10 Project Paybacks 

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

1. Upscale fiber cement siding (86.7%)

2. Midrange wood deck (81.8%)

3. Midrange vinyl siding (80.7%)

4. Upscale foam-backed vinyl (80.4%)

5. Midrange minor kitchen remodel (79.5%) 

6. Upscale vinyl window replacement (79.2%)

7. Midrange wood window replacement (77.7%)

8. Midrange vinyl window replacement (77.2%)

9. Upscale wood window replacement (76.5%)

10. Midrange major kitchen remodel (76.0%)

 

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Over the many years that I have been selling homes in the Metrowest Massachusetts area it has struck me how often homeowners believe there is a 100% payback on the money they spend on their homes.

Some of the most common things I hear are " how can my home only be worth X when I just spent $60,000 on my new basement" or " I just added this swimming pool for $45,000 my home has to be worth more."

It is quite common for folks to put there list of improvements together add it all up and expect that they can add that onto the value of their home. Many fail to recognize that it is very rare to get a one to one return on the dollar. The items mentioned in the Realtor Magazine report are the best improvements you can make dollar for dollar and none of them come close to a 100% return.

There are other improvements that I know from experience return very little money to a home seller. For example, if you are unfortunate enough to find yourself in a position where you have to replace your Title V Septic system in Massachusetts, you know you will be outlaying a hefty sum of money for a new one.

The typical septic system replacement can run anywhere from $10,000 to $50,000 or more! Well guess what you can be darn sure that if that happens, you will not be getting a buyer to pay you back for putting it in. Buyers just don't care...they expect the toilets to flush. You will be lucky is you get a buyer to give you 10% to 20% of the cost.

In fact this is one of the reasons I always tell my clients to get their Title V Septic inspection done early. A surprise like this is never fun!

Other projects like repaving the driveway or adding additional landscape usually do not offer a high return unless the prior condition was absolutely terrible and the homes price point really warrants it.

Sometimes making home improvements are more about your own personal enjoyment and use and not so much what you will recoup when it comes time to sell you home.

There are plenty of buyers that will appreciate the improvements you have made if they are tasteful and fit what the general population is looking for. In fact when you are faced with a challenging Real Estate market, the homes that get punished the most are the ones that are in less than great shape. Home buyers today have too many options and don't have to settle.

In the article I wrote detailing the top ten mistakes to avoid when selling your Massachusetts home two of the items covered centered around staging properly and neglecting necessary repairs.

When selling your home sometimes even though you do not get a direct monetary benefit from an improvement you increase the saleability of your home which in the long run causes it to sell quicker. We all know that time equals money:)

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The above information on the best remodeling projects cost v.s. value for your home was provided by Bill Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

 

 

 

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