Survey Shows How Sellers Spend Their Money

A new study by the Home Improvement Research Institute shows how money is being spent to get a house ready for sale.
By: Al Heavens: Realty Times
We've got a couple of weeks left in National Remodeling Month, so it seems appropriate and timely that we check into this year's home improvement trends.

For that, we turn to a study funded by the National Hardware Show and conducted in March by the Home Improvement Research Institute of Tampa, Fla.

The study, which involved 1,200 new and existing homebuyers, and was released last week at the Hardware Show in Las Vegas, found that almost 50 percent of those selling houses work on projects to get them ready for sale.

This jibes with findings of a study conducted by the institute two years ago, according to its managing director, Fred Miller.

The vast majority of work - 61 percent of it - is being done before the property goes on the market, and an increasing amount of it in the 30 days before it is listed.

Still, 12 percent of the work is being done after an offer has been made, twice that of the 2004 survey and probably reflecting the slowing market and the accommodations real estate agents suggest sellers should make to buyers.

Almost 25 percent of this work involves replacing flooring, although Miller said the data don't suggest the reasoning - whether more upscale hardwoods or ceramic or quarry tile are replacing vinyl.

Painting accounts for 22 percent of the work done to get the house ready for market. Most real estate agents suggest painting as a relatively inexpensive way to freshen up rooms.

Electrical work and landscaping are each at 9 percent, and exterior structural changes - windows and siding - accounted for 12 percent.

"Most people who responded to the survey said these projects improve the value of their houses," Miller said.

Why spend the money at the last minute?

Almost one-third of those responding to the survey replied, "To make a good impression." Curb appeal sells almost 50 percent of houses generally, according to survey after survey by the National Association of Realtors, but in a slowing market, your house has to look better than the five others for sale on your street to get someone out of the car and up to your front door.

The renewed importance of curb appeal likely accounts for the increase in landscaping work (5 percent in 2004), since, together with painting, it's a relatively inexpensive way to spruce up a home's exterior.

Most suggestions for change came from real estate agents (78 percent), although Miller emphasized that data for this category came from "a small base." Almost 15 percent of the sample said that the work was recommended in the home inspection report.

Fewer sellers in 2006 than 2004 made the changes "to make the houses look more modern," perhaps an indication that a lot of existing-home buyers either like original touches or prefer making changes themselves.

About the same percentage (22 in 2006 versus 24 in 2004) spent money to repair unsightly areas, while 17 percent did it to "fix something not working," 8 percent to pass inspection and 7 percent to neutralize decor.

In a slowing market in which people are concerned about selling quickly with a chance of selling for more, fixing things and passing inspection are becoming more important considerations.

While the male head of the household leads in initiating projects for getting the house ready for sale, Miller said that there has been an increase in joint decisions on these projects since 2004.

Miller said there had been a slight shift from sellers doing the work themselves to using a professional between 2004 and 2006.

He said the possible reason for the shift has less to do with the unwillingness of homeowners to do their own work and more with getting it done quickly so the house can get on the market faster and ahead of the competition.

Only 53 percent of sellers were doing the work themselves in 2006, compared with 59 percent in 2004, according to the study.

Use of professionals increased to 43 percent in 2006 from 37 percent in 2004. A small percentage (3 percent in 2006, 4 percent in 2004) did these projects jointly.

The 2006 study was conducted between Feb. 28 and April 2, and the sample was doubled from the one in 2004, with 597 respondents buying new houses and 600 buying existing ones, Miller said.

All interviews were conducted by telephone, and all of those interviewed had purchased a house within the last year, Miller said.