By Filomena M. Thompson
Short sales and remodeling … NOT a good idea! If your client is unfortunate to have to sell their home as a short sale, the last thing she'll want to do is make any home improvements.
Short sales are named as such because the seller has to sell his home for less than what he owes the lender and the lender has to approve the offer that is received. If the lender refuses to process the sale of the property as a short sale it will go to foreclosure.
Making any remodeling improvements to the home will likely make no difference in the lender approving the short sale. What's more, if your client doesn't have the money to stay in the home, how can he possibly have money to remodel?
If your client is not in a short sale situation and would like to make a few improvements before putting it on the market, then go for it. Contact an ethical, reliable contractor from the National Association of Remodeling Industry (NARI) network and make those improvements.
Also, check out the 2008 Cost vs. Value report to see what remodeling jobs will get you the most bang for your buck (e.g. exterior remodeling projects — such as siding, windows, and decks — offered the most recovery of your remodeling dollars in the 2008 survey).
In this market you may end up spending too much and not receiving full value for all the upgrades, updates, etc. that you have just spent all that money on. So improve with caution!
ABOUT THE AUTHOR: Filomena M. Thompson is executive director of the National Association of the Remodeling Industry’s Mid-Maryland and Greater Baltimore chapters and a real estate practitioner with RE/MAX Results in Frederick, Md.