01/25/2012Do you sense a revival of the real estate market in your area? Has good news on recent home sales convinced you to put your home on the market this coming spring?
If so, housing experts urge you to begin soon to prepare your place for the big show. Besides the core improvements you can do yourself -- like purging clutter and in-depth cleaning -- real estate experts say you should identify all the tasks that need to be done by contractors.
"Too many owners are lulled into thinking they don't need to change anything before selling. They're either cheap, lazy or just don't realize all the work that should be done," says Sid Davis, a veteran real estate broker and author of "Home Makeovers That Sell."
He estimates that currently only about 10 percent of homes entering the market have had all the repairs and improvements necessary to maximize their selling potential. Yet even small defects can hamper a good sale, he says.
"Whether it's a little peeling paint, a leaky faucet or a malfunctioning doorbell ... buyers see these little issues and assume your place is in bad shape overall," Davis says.
Most buyers now hire home inspectors who will discover unresolved problems, making this an even more critical issue.
"Suppose the inspector finds out your roof is shot. Chances are good your buyers won't even ask you to replace the roof. They could just walk away from the deal and never look back," Davis says.
Can you count on your listing agent to highlight all the work your house needs before it goes on the market? Not necessarily. Davis contends that many agents fear that if they're frank about a home's problems they could lose business.
Also, as he notes, you can't count on an agent to catch hard-to-identify problems, such as major plumbing problems or electrical deficiencies.
Eric Tyson, a personal finance specialist and co-author of "House Selling for Dummies," recommends that all prospective home sellers line up a "pre-inspection" of their place before the For Sale sign goes up.
He says it's far better for you to discover the problem -- like a faulty air-conditioning unit -- before potential buyers do.
"Whether your issues are small or large, you don't want to give your buyers reasons to question the integrity of your house. That's like going in for a job interview with a ketchup stain on your shirt and expecting the employer to hire you," Tyson says.
To locate a reputable home inspector, he suggests you call the inspector who checked your place before you bought it. Or go to the American Society of Home Inspectors (www.ashi.org).
Here are a few other pointers for home sellers:
Create a list of prospective contractors to do your work.
Many people find locating contractors onerous. But R. Dodge Woodson, author of "Tips & Traps When Hiring a Contractor," advises against using the Yellow Pages or online advertising for this purpose.
A more reliable approach, he says, is to seek out recommendations from friends or office colleagues who've had work done on their own homes.
Besides those in your immediate circle, Tyson recommends you request contractors' names through local real estate agents.
Yet another recommended method is an online consumer rating service, such as Angie's List (www.angieslist.com). For a monthly fee, this company provides reviews on service providers throughout the nation.
Scout out names from your own neighborhood.
"Through the grapevine in your neck of the woods you can pick up the names of people who do excellent work. You can also rule out those who do lousy work," Davis says.
One novel way of getting referrals from nearby residents is to throw a neighborhood party and ask all who attend to bring along the name of at least one contractor they like.
"Pass out a flyer with the party invitation and attach a questionnaire for referrals. Then promise everyone who contributes a name or two that you'll send them a listing of all the names you've compiled after the party is over," Davis says.
Seek out multiple bids.
Woodson, who has worked much of his career as a licensed plumber and who also ran a home improvement business, strongly recommends that homeowners obtain five estimates for any major work -- particularly for any job worth more than $5,000.
Why five estimates? Because experience has taught Woodson that consumers need a range of bids to gain perspective.
Once you have all your estimates lined up, Woodson suggests you eliminate anyone charging 20 percent above or below the median -- if they work too cheaply, there's a good possibility that they could be cutting corners.
Obviously, gathering five estimates can be time- consuming. But given the current high level of unemployment, homeowners need to be especially cautious to avoid inexperienced or unskilled contractors, Woodson says.
Check a contractor's work by visiting sites of their previous work.
After you've narrowed the field with a comparison of price estimates, you might think your next step is to ask for photos of completed work that could be sent to you by email. But Woodson deems this a "pointless exercise."
"Anyone can just take pictures off the Internet. That doesn't prove anything," Woodson says.
To get a better sense of a contractor's work, ask to visit businesses or other sites where that firm is now working or where it has recently completed jobs.
"If a contractor won't give you references you can go visit, you've got to wonder what they're hiding," Woodson says.