This document summarizes key findings from the National Association of Realtors 2007 survey of home buyers' preferences. Some of the main points covered include: - The most desired home features among buyers were walk-in closets and central air conditioning. - Repeat buyers placed more emphasis on features like fireplaces, finished basements, and large garages than first-time buyers. - Within 3 months of buying, half of buyers remodeled their kitchens. - Oversized garages saw the biggest increase in popularity from 2004-2007.

1. Fixing Up Your House to Sell – Session 2 Mike Ford Licensed Home Improvements Contractor Licensed Real Estate Salesperson (703) 589-3848

2. What Buyers Want Highlights from the NATIONAL ASSOCIATION OF REALTORS® 2007 Profile of Buyers' Home Features Preferences

3. 3 What single home feature do buyers say they want most in a new home? Walk-in closet in master bedroom Central air conditioning Backyard Fully finished basement

4. 4 What’s the median size of homes purchased between late 2005 and early 2007? 2,230 square feet 1,840 square feet 1,450 square feet 1,000 square feet

5. 5 Repeat buyers tend to be choosier than first-time buyers. In particular, repeat buyers place much more emphasis on these home features: Fireplaces and air filtration systems Bay windows and finished basements Oversized garages and master bedroom walk-in closets Backyards and proximity to entertainment

6. 6 Within three months after buying a home, nearly half of all buyers remodeled or made improvements to which part of the house? Master Bathroom Backyard Kitchen Home office

7. 7 Which home feature saw the biggest jump in buyer popularity since 2004, when NAR conducted its previous buyer preference survey? High-speed Internet access Media room Eat-in kitchen Oversized garage

8. 8 What three features did buyers say they’d be most willing to pay extra for in a home? Proximity to work, a wooded lot, and a backyard or play area Whirlpool baths, proximity to schools, and a deck A corner lot, a lawn sprinkler system, and high-end kitchen appliances Central air conditioning, walk-in closets, and hardwood floors

9. 9 A home’s energy efficiency is most important to which segment of buyers? Repeat buyers Second-home buyers New-home buyers First-time buyers

10. 10 Where do first-time home buyers tend to purchase a home? Rural area City or urban area Suburb or subdivision Small town

11. 11 What’s the most common type of home purchased? Single level Split level Two levels Three levels

12. 12 What did new-home buyers most wish their home had more of? Storage Bedrooms Kitchen space Bathrooms

13. 13 What single home feature do buyers say they want most in a new home? Walk-in closet in master bedroom Central air conditioning Backyard Fully finished basement

14. 14 What’s the median size of homes purchased between late 2005 and early 2007? 2,230 square feet 1,840 square feet 1,450 square feet 1,000 square feet

15. 15 Repeat buyers tend to be choosier than first-time buyers. In particular, repeat buyers place much more emphasis on these home features: Fireplaces and air filtration systems Bay windows and finished basements Oversized garages and master bedroom walk-in closets Backyards and proximity to entertainment

16. 16 Within three months after buying a home, nearly half of all buyers remodeled or made improvements to which part of the house? Master Bathroom Backyard Kitchen Home office

17. 5/25/2011Mike Ford (703) 589-3848 17 Which home feature saw the biggest jump in buyer popularity since 2004, when NAR conducted its previous buyer preference survey? High-speed Internet access Media room Eat-in kitchen Oversized garage

18. 5/25/2011Mike Ford (703) 589-3848 18 What three features did buyers say they’d be most willing to pay extra for in a home? Proximity to work, a wooded lot, and a backyard or play area Whirlpool baths, proximity to schools, and a deck A corner lot, a lawn sprinkler system, and high-end kitchen appliances Central air conditioning, walk-in closets, and hardwood floors

19. 5/25/2011Mike Ford (703) 589-3848 19 A home’s energy efficiency is most important to which segment of buyers? Repeat buyers Second-home buyers New-home buyers First-time buyers

20. 5/25/2011Mike Ford (703) 589-3848 20 Where do first-time home buyers tend to purchase a home? Rural area City or urban area Suburb or subdivision Small town

21. 5/25/2011Mike Ford (703) 589-3848 21 What’s the most common type of home purchased? Single level Split level Two levels Three levels

22. 5/25/2011Mike Ford (703) 589-3848 22 What did new-home buyers most wish their home had more of? Storage Bedrooms Kitchen space Bathrooms

23. What Buyers Want Highlights from the NATIONAL ASSOCIATION OF REALTORS® 2007 Profile of Buyers' Home Features Preferences

24. 5/25/2011Mike Ford (703) 589-3848 24 National Association of Realtors Survey Home buyers were asked about 75 features and room types to assess the importance of each Buyers who didn’t get a feature they desired in the home they purchased, were asked how much extra they would have been willing to pay to get it The survey examined home improvement or remodeling projects undertaken by recent buyers The survey is based on 2,530 responses from buyers who purchased a home in between late 2006 and early 2007 The sample was obtained from Experian, a firm that maintains an extensive database of recent home buyers derived from county records

25. 5/25/2011Mike Ford (703) 589-3848 25 What was Important while searching for a home? It was “very important” to find a home with:

26. 5/25/2011Mike Ford (703) 589-3848 26 Oversized Garages are The New Big Thing With Buyers The most significant change between the previous & current survey in what buyers consider very important is oversized garages (up 16 points) Hardwood floors, granite countertops, and cable-readiness follow

27. 5/25/2011Mike Ford (703) 589-3848 27 Change in Preferences in Time It was “very important” to find a home with:

28. 5/25/2011Mike Ford (703) 589-3848 28 Age Makes the Biggest Difference in What Buyers Want Walk-in closets for older buyers Back yards for younger buyers

29. 5/25/2011Mike Ford (703) 589-3848 29 Examples of Differences in Desired Features by Age of the Buyers The 2007 NAR Profile of Buyers' Home Features Preferences

30. 5/25/2011Mike Ford (703) 589-3848 30 Energy Efficiency is Most Important to New-Home Buyers As buyers age, this becomes more important

31. 5/25/2011Mike Ford (703) 589-3848 31 How Important was a Home’s Energy Efficiency When Searching for a Home? Age of Home Buyer: The 2007 NAR Profile of Buyers' Home Features Preferences

32. 5/25/2011Mike Ford (703) 589-3848 32 Bigger and Younger From 2004 to 2007, the size of the typical home purchased increased by about 100 square feet The median age of homes purchased decreased from 15 to 12 years

33. 5/25/2011Mike Ford (703) 589-3848 33 Characteristics of Homes Purchased The 2007 NAR Profile of Buyers' Home Features Preferences

34. 5/25/2011Mike Ford (703) 589-3848 34 Detached and Suburban Over four-fifths of homes purchased are detached single-family homes More than half are located in the suburbs

35. 5/25/2011Mike Ford (703) 589-3848 35 Type and Location of Homes Purchased The 2007 NAR Profile of Buyers' Home Features Preferences

36. 5/25/2011Mike Ford (703) 589-3848 36 From the Closing Table to the Home Improvement Store Sixty percent of buyers undertook home improvement projects immediately after the home purchase Median amount spent on home improvement or remodeling projects undertaken within three months of the purchase was $4,350

37. 5/25/2011Mike Ford (703) 589-3848 37 Who Did Home Improvement Projects Within Three Months of Purchase? Buyers who purchased homes aged: The 2007 NAR Profile of Buyers' Home Features Preferences

38. 38 Which Home Improvement or Remodeling Projects? Rooms where improvements were undertaken: Features added or replaced: 5/25/2011Mike Ford (703) 589-3848 The 2007 NAR Profile of Buyers' Home Features Preferences

39. 5/25/2011Mike Ford (703) 589-3848 39 Very Important Home Features on the Rise

40. 5/25/2011Mike Ford (703) 589-3848 40 Where Buyers will Pay for Key Features

41. 5/25/2011Mike Ford (703) 589-3848 41 Improvement Justification When you consider its value at resale, a home improvement project costs only 20 cents to 25 cents on the dollar. The other 75 cents to 80 cents spent on a project goes directly back into the home through increased value — not to mention increased owner enjoyment. Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University.

42. 5/25/2011Mike Ford (703) 589-3848 42 What to Expect to Pay for the Improvements Kitchens Countertops Bathrooms Flooring Painting Decks Landscaping Maintenance

43. 5/25/2011Mike Ford (703) 589-3848 43 Kitchens Basic improvements to your kitchen could be the key to getting your house sold. For most buyers, the kitchen is the heart of the house. Paint the walls and update the floor if necessary. Replace old cabinet hardware — a low-cost improvement that makes a big difference in appearance. Be sure to go with a classic design and, if possible, use high quality materials. Replace dingy-looking or dated cabinets.

44. 44 Kitchen Cabinet Refacing Expect to pay $130 to $150 per opening. This means every single opening in your kitchen... doors, drawer fronts and false fronts. Each door is an opening. The average price for materials and labor, runs anywhere from $4,000 to $8,000 depending on door style, wood species, stain choice, and decorative trims.

45. 45 The Downside to Cabinet Refacing Limited to existing layout Materials limitations - There generally are three finish options: plastic laminates, rigid thermofoils (RTF) and wood veneer. Other conditions that rule out refacing include existing cabinets that are beginning to fall apart or aren't well built to begin with; metal cabinets that are rusting; and larger structural issues, like floors that have settled and left cabinets out of kilter.

46. 46 Kitchen – Midrange Major Remodel The average amount spent on a midrange update in the U.S. is $58,897.00. Resale Value - $43,456 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

47. Kitchen – Midrange Major Remodel Update 200-square-foot kitchen 30 linear feet of semi-custom wood cabinets 3-by-5-foot island Laminate countertops Standard double-tub stainless-steel sink with standard single-lever faucet Energy efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal Custom lighting Resilient flooring Painted walls, trim, and ceiling. 47 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

48. 48 Kitchen – Upscale Major Remodel The average amount spent on a major kitchen-remodeling job in the U.S. is $115,436. Resale Value - $69,048 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

49. Kitchen – Upscale Major Remodel Update outmoded 200-square-foot kitchen 30 linear feet of top-of-the-line custom cherry cabinets with built-in sliding shelves and other interior accessories Stone countertops Imported ceramic- or glass tile backsplash Built-in refrigerator, cooktop, and 36-inch commercial grade range and vent hood; built-in warming drawer, trash compactor, and built-in combination microwave and convection oven High-end undermount sink with designer faucets Built-in water filtration system General and task lighting including low-voltage undercabinet lights Cork flooring, cherry trim. 49 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

50. 5/25/2011Mike Ford (703) 589-3848 50 Countertop Types Type Price Per Square Foot

51. 5/25/2011Mike Ford (703) 589-3848 51 Countertop Types

52. 52 Bathroom – Midrange Major Remodel A midrange full-bath remodeling job in the U.S. has an average price tag of $17,167. Resale Value - $12,052 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

53. Bathroom – Midrange Major Remodel Update an existing 5-by-7-foot bathroom Replace all fixtures 30-by-60 inch porcelain-on-steel tub 4-by-4-inch ceramic tile surround Single-lever temperature and pressure-balanced shower control Standard white toilet Solid-surface vanity counter with integral sink Recessed medicine cabinet with light Ceramic tile floor 53 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

54. Bathroom – Upscale Major Remodel 54 The average amount spent on a major upscale bathroom remodeling job in the U.S. is $55,398. Resale Value - $32,547 Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

55. 55 Bathroom – Upscale Major Remodel Expand an existing 35-square-foot bathroom to 100 square feet within existing house footprint. Relocate all fixtures 42-by-42-inch neo-angle shower Ceramic tile walls with accent strip Recessed shower caddy Body-spray fixtures Frameless glass enclosure Customized whirlpool tub Stone countertop with two sinks; two mirrored medicine cabinets with lighting Compartmentalized commode area with one-piece toilet Humidistat controlled exhaust fan Color fixtures Larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding General and spot lighting including waterproof shower fixture Custom drawer base and wall cabinets for a built-in look Extend HVAC system Electric in-floor heating and heated towel bars. Source: Remodeling 2010–11 Cost vs. Value Report (www.costvsvalue.com)

56. 5/25/2011Mike Ford (703) 589-3848 56 Flooring

57. 5/25/2011Mike Ford (703) 589-3848 57 Paint For most exterior paint jobs, labor makes up about 75-85% of the cost of painting your house, while actual paint and supplies makes up only 15-25%. Do not skimp on paint quality when choosing your paint. Paying a few extra bucks per gallon might add $200 to the total job, but if your paint lasts for 8 years instead of 4 years, that is a pretty minor expense to incur.

58. 5/25/2011Mike Ford (703) 589-3848 58 Paint Costs typically average $1,500-$3,000 for an average single-story, three-bedroom home, but easily run $3,000-$5,500 or more for a multi-story or multi-level larger house.

59. 5/25/2011Mike Ford (703) 589-3848 59 Inexpensive Tip #6 Adding crown molding, wainscoting and coffered ceilings can have an immediate impact on your home. Replacing baseboard, casing and chair rail can have a dramatic effect as well.

60. 5/25/2011Mike Ford (703) 589-3848 60 Decks Installing a deck may be the most cost-efficient way to add square footage to your house, and of all the outdoor home improvements except painting, it may be the most reliable value. Deck additions average $14,728

61. 5/25/2011Mike Ford (703) 589-3848 61 New Space As a rule, improvements that increase the functional space of a home hold their value longer than ones that just make a house look better. It's also significantly cheaper than adding an addition to your home. Converting an attic into a bedroom, for example, usually costs about $35,960

62. 5/25/2011Mike Ford (703) 589-3848 62 Basement Turning your basement into a room for socializing will set you back, on average, $56,724

63. 5/25/2011Mike Ford (703) 589-3848 63 Landscaping Fancy gardens — which will require time and money to tend — usually won't add to the offering price. In general, landscaping is for your own enjoyment. It may be a $40,000 investment, but it will not add $40,000 to the value of your house. The same goes for expensive fences and stone walls. They look nice, but buyers don't pay up for them.

64. 5/25/2011Mike Ford (703) 589-3848 64 Home Maintenance It may not be all that enjoyable, but it's the basic improvements that may have the greatest return on your home's value. "You could have a beautiful new kitchen, but if your roof is leaking, you have a real problem. So if you're thinking of putting your house on the market in the next year or so, be sure to tackle any problems with the home's structure or mechanical systems before you, say, install that hot tub you've always dreamed of.