What would be the five easy fixes to find the REO diamond in the rough?
Five easy fixes to find the “REO diamond in the rough” can be found using the same principles Richard Gere used in “Pretty Woman” to polish and refine the beautiful, but “unfinished” escort (Julia Roberts) he hired to accompany him to business functions. The transformation was remarkable, accomplished mainly by cosmetics and clothing.
The facelift in appearance to Julia’s outer shell changed her entire image and people’s perception immediately from embarrassment to pride. Similarly in homes, cosmetic improvements can add substantial value to a home’s value through increased visual appeal (a.k.a. curb appeal). Let’s face it: We are in a “done for you” phase in our fast-paced society and unless you’re a rehabber, flipper or handyman, most people want to move in and get settled immediately without the hassles of project management and weekend “fix-it” honey do lists.
Frankly, there are many “diamonds in the rough” that merely need some love and affection (a.k.a focused attention) to regain their self-esteem in the marketplace, mainly of which being cosmetics, which can be accomplished through simple clean up and minor updating.
The top five easy fixes that can really bring out that “REO diamond in the rough” in my opinion are:
- Interior (neutralize and brighten)
- You may love chartreuse, but you must appeal to the masses, not personal favorites
- Use neutral colors that brighten things up and make the rooms look bigger
- Dark = smaller/cramped
- Light = bigger/roomy
- b. Exterior (deferred maintenance vs. curb appeal)
- Worn out paint is a “deferred maintenance” item that doesn’t necessarily “add value”
- Fresh paint can be crucial to the curb appeal and first impression of value from a prospective buyer
- This alone can add thousands to the mental “perceived value” to any would-be buyer
2. Yard clean up/landscaping
- Clear out debris/trash
- Update landscaping
- Add “cheery” flowers
- Mow lawn and get it “green”
- Fill in missing rocks if desert landscaping
3. Update fixtures/appliances
- Update Kitchen cabinet handles
- Update grungy dated stoves and dishwashers
- Update light fixtures
- Update bathroom / kitchen faucets
- Update carpet (at minimum a fresh shampoo)
- Update tile – clean/degrease grout, replace or carpet over
- Wood – clean, replace or carpet over for fresh look
5. Front door
- Update front door
- Creating a good first impression is critical
- Weather-beaten doors speak negatively
There’s a host of minor other items you can do to enhance the appeal and some major items that may need to be taken care of that will perceptually annihilate the value of the home. For example, the roof. Replacing the roof does not necessarily add value, as it is a “deferred maintenance” item that when repaired merely brings you back to status quo on the value meter. However, argumentatively, if you have a shabby looking worn out roof staring buyers in the face, you may get dinged thousands more than the cost of the roof just from ruining that ever important first impression that immediately stigmatizes (or enhances) the value of the property in the minds of the prospective buyer (or tenant).
Costs vs. value resource
An excellent resource I have found answers the consistent question arising from Sellers and homeowners about what improvements or repairs should or should not be done to improve the value of their home when preparing to market or remodel their home is “Remodeling” magazine’s “Costs vs. Value Tool.”
It compares data with their annual report on the relationship between remodeling costs and resale value. You can compare national and regional averages for 33 to 35 popular remodeling projects and you can also download a .pdf with project data for any one of 80 United States cities.
Individual city data for the projects include:
• City job costs
• City resale value
• City cost recouped
• City/region comparison
• City/national comparison
It’s a nice tool to measure what you can expect to recoup on those repairs and improvements you are considering. By the way, according to Webster’s Dictionary, the term “diamond in the rough” was first used in 1785 and is defined as: “One having exceptionally good qualities or the potential for greatness but lacking polish and refinement.”
All that said, with the right improvements, repairs and enhancements that polish and refine your property, you will likely find you have brought that “diamond in the rough” into “Pretty Woman” status without spending an arm and leg to do it.
Interesting sidenote: The United Kingdom-based Phrase Finder/Phrase Dictionary has an interesting definition of the phrase, “diamond in the rough.” It states, “Someone who is basically good hearted, but lacking social graces and respect for the law. This term is often used to describe people on the edge of the criminal fraternity who, while they may not commit serious crimes themselves, probably know people who do.”