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Remodeling: For Love or Money?

July 23, 2012

Every year, reports come out telling homeowners what type of improvements have the best return on investment. But do homeowners care? Are they making changes to kitchens, bathrooms, or finishing basements to add to their resale value or to transform their home into a personal oasis, regardless of the financial impact?

 A 2012 study by Houzz has the surprising answer. 86% of those surveyed choose style over equity! Their main reason for remodeling is to improve the look and the function of their space. Interestingly, just 47% responded that their project was done with a goal of improving home value.

 “We expected that in this economy Americans’ highest priority would be increasing home value, but instead we found people are focused on pleasing themselves, not the next owner,” said Liza Hausman, vice president of marketing for Houzz, an online hub for remodeling information and inspiration.

 Although the survey didn’t directly ask the respondents why they are prioritizing comfort over finances, one possible reason is many families realize they won’t be moving anytime soon, so some of the amenities they look for in a new house are being added to their existing house instead. In other words, they’re settling in for the long haul. In fact, 40% of those homeowners said they will do some type of remodeling in the next two years, and 74% plan to redecorate.

 So where is the opportunity for real estate professionals? Some builders have refocused their marketing on the home remodeling expertise they offer and finding new customers. For real estate agents and brokers, your relationships and knowledge of contractors can make you an excellent resource for your current and past clients, a fact that will continue to build your credibility and reputation, making you top-of-mind when the housing market recovers.  Plus, you may also have the chance to tell these homeowners about move-in ready homes in their price range that already have the things on their wish list and won’t require weeks or months of construction, dust, and inconvenience!

 Talk to us today to find out what type of loan programs might be available to homeowners who are remodeling and how you can best reach out to them.

From Loan Officer Lou King

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