Home Improvements – Cost vs Value

When it comes to home improvements, smaller replacement projects, particularly those that enhance curb appeal, remain the most cost effective way for sellers to improve value. 

Curb Appeal

Sellers are always looking for ways to get top dollar for their listing. In an article published by REALTOR® Mag, the official magazine of the National Association of REALTORS® (USA), which discussed The Remodelling Cost vs Value Report, large-scale jobs aren’t likely to return sellers their full cost.

According to the article, simpler, lower-cost projects tend to return greater value. Replacing a front door could recoup as much as 101.8% in resale value.  First impressions are important for prospective buyers. Replacements offering greatest payback are ones most obvious to buyers when they first view homes online, such as a new garage door, new siding, or manufactured stone veneer. (Think about the impact of beautiful online photos when buyers view listings on MLS®.) Inside, kitchens offer the most remodelling bang for your buck, and are the only interior remodelling job to make the top 10. 

The amount sellers can expect to recoup from home improvements is dependent on many factors and will vary from sale to sale.  Keep home improvements inline with what is in good taste for the region and neighbourhood, and ensure the improvements are done well, in a quality workmanship-like manner.

While you can’t apply this data directly to any specific house or neighbourhood, you can use the Cost vs. Value Report as a starting point to determine what home improvements are right for you and how they can potentially improve the market position of your property.  

Below is a chart put out by the National Association of the Remodelling Industry.  Check it out to get a quick visual on the relationships between project cost, return at resale, and the joy that owners experience after a remodel.

You may also want to check out the 2016 Cost vs Value Report


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Understanding Closing Costs

Calculating Closing Costs in Nova Scotia

Closing Costs are the out of pocket expenses associated with buying a home.  It is important that you budget for these expenses as they cannot be rolled into your mortgage.  Below are examples of the typical closing costs you can expect in Nova Scotia. Understanding Closing Costs can help you plan for your new home purchase.

Deed Transfer Tax—This is a straight forward tax, set my the municipality.  In Nova Scotia, Deed Transfer Tax falls between 1% —1.5% of the purchase price.  In HRM, it is 1.5%. 

Lawyer—A lawyers role in the closing is to review all the documentation, explain it to the buyer, and handle all the transfer and disbursement of funds.  This will typically run between $800 and $1,200.

Property Tax Adjustment—This expense is largely dependent on the value of the home and where it’s located.  Many people roll their property tax into their mortgage payment, but in actual fact the municipality only collects it twice a year (end of April and October in HRM).  The instalment covers tax payers for the following six months. Therefore, when a closing falls between collection dates, the seller has already paid up until the next instalment date. To correct for this, a pro-rated amount of what property tax balance is owed by the buyer to reimburse the seller, will be calculated at the time of closing. 

Other Adjustments—If the property you are buying has oil/propane tanks or leased equipment, these could add up to additional closing costs.  If the property has oil or propane tanks, the seller typically fills these before closing. Receipts will be provided to the buyer’s lawyer.  If the buyer is taking over a lease, such as a hot water tank, there will be adjustments for that as well.

Location Certificate and/or Title insurance—The lender typically requires they get at least one of these. The former is a drawing completed by a qualified land surveyor that certifies the building is within the property boundaries and not encroaching on someone else’s land. This location certificate costs about $850, but if the seller has a fairly recent one, that can be used by the buyer for free. Title insurance is less expensive, around $450, and is an insurance policy against encroachments, zoning infractions, or title disputes. Many buyers opt for this less expensive option.

Miscellaneous—These include registering the mortgage and title, sending couriers, printing costs, etc.

I usually tell my clients to budget for an additional 2.5%—3% of the purchase price.  There are strategies to get these costs down, either through your lender or during negotiations.

Closing Cost Cheat Sheet

Closing Cost Checklist PNG

Tips to Prepare Your Home for Sale

5 Tips for Preparing your Home for Sale

You’ve decided to sell your home.  Here are 5 tips to prepare your home for sale and showcase it in the best possible light to negotiate top dollar.

  1. Declutter – I know this is a daunting task but when selling your home, less really is more…and when I say LESS, I mean LESS STUFF.  Start with something manageable like closets, and drawers, then work your way up to bigger projects.  Donate or sell items you no longer need or use, and consider renting a storage unit if there are things you just can’t part with.
  2. Depersonalize – Once you decide to sell your house, you have to start thinking of it as a marketable item.  You want potential buyers to be able to see the home in an objective light, where they can begin to picture “their things”.  Store family photos, graduate diplomas from walls, trophies and other nik-naks  from around the house.  Remember, you will be able to display all these items in your NEW home.
  3. Deep Clean – Make your house sparkle from top to bottom.  Hire someone to help you if you feel overwhelmed.  Trust me, it’s money well spent!  Clean the oven, scrub the grout, dust the baseboards, re-caulk the tub, leave no corner uncleaned.  This could be worth thousands of dollars.  If walls look beat up, repaint or at the very least wash the walls and do touch ups.  I’ve sold a lot of homes and the ones that sell quickest, and fastest, for top dollar LOOK like they have been well maintained.  This is what we call MOVE IN READY!
  4. Keep it Tidy – I know you have to live in the house while it’s for sale, but get in the habit of keeping it show ready.  It will take a little bit more effort but will save you a lot of time and stress when a Realtor® wants to show it.  By keeping it show ready you may also be able to allow short notice showings.  Remember, the more buyers through your home, the better. If you have pets, it’s best to take them with you when there is a showing.  Remove any “pet evidence” such as food dishes, cat litter, etc.  These can be turn offs to potential buyers.
  5. Do the maintenance – Now is a good time to do those minor (or even major) repairs you have been putting off.  If applicable, have the furnace cleaned, change air-filters, clean gutters, weed the flower beds, keep the lawn mowed, or driveway and walkway clear of snow, etc.  Once again, buyers feel good about buying a home that has been well cared for.