Home Improvements that Improve the Value of your Home with Lindsay Williams and Cody Sustakoski
Recording: Welcome to the “What Matters Most” podcast, presented by First United Bank & Trust. That’s My Bank. Visit us today at mybank.com.
Eric: Hello and welcome to “What Matters Most,” the podcast all about finances, community, savings, and security for you, your family, and your business. This podcast is brought to you by the helpful folks at My Bank First United Bank & Trust. I’m your host, Eric Nutter, and in today’s episode of “What Matters Most” is “Home Improvements that Improve the Value of Your Home.” And I’m joined today with Lindsay Williams, broker in Morgantown, West Virginia, from Berkshire Hathaway HomeServices Touchdown Home Pros Realty. And I’m also joined by Cody Sustakoski, residential loan originator in First United’s mortgage area. Hey, Cody. Hey, Lindsay. How’s it going?
Lindsay: Good. How are you?
Eric: I’m doing very well. Thank you for joining me today. I really appreciate it.
Lindsay: You’re welcome. Glad to be here.
Cody: Thanks for having me back.
Eric: All right, so, Lindsay, first of all, before we get started, this is going to be the first in a three-part series where we’re gonna talk a little bit about some different things. This time of year is…a lot of people are thinking about either buying or selling a home. And so I wanted to talk a little bit about some tips and tricks, some different things that people may be thinking about or maybe that they aren’t thinking about that they should be. And so we wanted to have you on. But before we get started, tell us a little bit about yourself and your company that you’re with.
Lindsay: So as you said, I’m the broker and owner of Berkshire Hathaway HomeServices Touchdown Home Pros Realty, and we are an independently owned and operated entity in North Central West Virginia, located in Morgantown. We take real estate on a different level or try to, where community and the relationships we build is what’s primary for us. The means to an end is actually the selling real estate or helping put buyers in their home. But we wanna be that forever brand, the forever agency. So first-time home buyer, the empty nester, and all the stages in between, that’s what’s important, to be there. Not the type to grab our check and bounce and never talk to them again. So definitely, team is important to us, and helping people get situated with their American Dream in North Central West Virginia.
Eric: Love it, love it. Thank you so much again for joining us. So as I mentioned, what we wanna talk today about is home improvements that actually make a difference in the value of your home. And so we can go a couple different ways in this, but why don’t we start with things that do add value to your home?
Lindsay: So it’s really funny, when we go in and talk to sellers who are getting ready to put their home on the market, we wanna walk through and let them know what we see buyers are looking for and looking at. And one of the biggest things that we find standing in people’s way are the deferred maintenance items that they’re just not doing. So the furnace filter isn’t being replaced. There’s a forest growing in the gutters.
Eric: Right. So general upkeep of the house.
Lindsay: Yeah, general upkeep that you should be doing, right? All the light bulbs need to be changed and working. And if there is a cabinet in the kitchen that’s a little wonky, tighten the hinges. So little things like that actually add great value and cost just a little bit of the homeowner’s time. So many people think to get their house on the market, they have to dump a ton of money in, right?
Eric: Renovate the kitchen, right?
Lindsay: Like, the kitchen has to be redone. The bathroom has to be redone. We need all new fixtures and hardware. If you go change all your hinges and your doorknobs and the stop plates, you have a ton of money and metal that you just put in your home. Are you going to see that on the reverse? Probably not. So, you know, people get excited to finish their basement. They get excited to upgrade or do changes to their kitchen. They love changing their bath and getting that spa-like retreat. For the love of all that’s holy, if you’re listening, do that at the beginning when you move in so you will have…
Eric: So you can enjoy it.
Lindsay: …the chance to enjoy it. Otherwise, you’re putting all of this money, which generally is a taste-specific choice, into a product that you aren’t getting to enjoy. And it’s…
Cody: I’m glad you’re saying this now as I’m…
Lindsay: Redoing your basement?
Cody: …personally finishing my…I literally just changed doorknobs yesterday, so…
Lindsay: You’re late, a day late and a dollar short, surely.
Cody: Yeah, yeah. I wish [crosstalk 00:04:48] yesterday.
Lindsay: So, you know, when we look at a dollar-for-dollar return, so many people, when we go in, they’re like, “But we put $7,000 in the kitchen.” Well, in what way? You changed the countertops. That’s amazing. You painted the cabinets or added an island or you changed the flooring. All of that is wonderful, but it’s not a dollar-to-dollar exchange. So we can’t say you purchased your house at $100,000, and you put $25,000 in it, and that was 5 years ago, so we’re going to appreciate at this rate, so…
Cody: You mean this isn’t one of those home renovation shows you watch on TV where you put $30,000 in and you get $300,000 out?
Eric: Yeah. It seems like every time they do anything…
Lindsay: Right. I mean, real life…
Cody: This is reality.
Lindsay: …HDTV doesn’t happen around here. And my favorite is when you see the people who are on these shows and they’re like, “I am a rock collector, and I do…
Eric: And my budget is $1 million.
Lindsay: Right. $1.6 million. And I’m a stay-at-home mom. Baloney. But people watch those. I tend to find that people always ask me, “What’s your favorite HDTV show?” No, I don’t. I HDTV on my normal life. I don’t really do much DIY watching myself personally. But when you do watch them, it is a misconception that it’s a dollar-for-dollar exchange, whereas most of the time, what’s going to make the most impact to get your house ready is to make it look like you actually have room in your closets. It’s a time to, you know… We’re headed into the spring market. Do you need that super fuzzy wool sweater right now? And we’re in West Virginia, so maybe, right? But not exactly right this moment, so go ahead and pack that up. Move it to the side. Make your closet look as big as possible. Go through your kitchen. What are you not using? Take some stuff out of your cabinets. If you have that one junk drawer that always gets stuck because you got so much stuff in it or the cabinet you open that things fall out of, it’s time to pack some of those things up. That will have a bigger impact on a buyer being attracted to your home, being able to see their things in the home.
Eric: Right. And that makes sense. I mean, it’s perception of the potential buyers.
Cody: I literally just wrote that word down.
Eric: Yeah. Are there other things… So everything you’ve talked about now is sort of perceptive and small enhancements. Are there actual improvements, like it’s better to put money into kitchen enhancements versus basement, for example, or are there rules of thumb like that?
Lindsay: So people get super excited about their women lair or their man cave or their whatever the basement is, right? And they love to have that place to descend down into. It’s funny. You have a house with a bonus room above the garage? Most men are like, “It’s not the same.”
Eric: We’ve gotta go down.
Lindsay: You’ve gotta do steps. It’s just a different direction depending on… Yeah, whatever. But when you’re looking at those basement finishes, the price per square foot to finish a basement is about the same price per square foot it would be to just build the house, right? I mean, your cost of the build is not much different. Unfortunately, the majority of time you are mostly undergrade, right? You’re actually underground. You’re in the basement. And even if you have a walk-out basement or a basement with natural light and windows, if any part of you… I had an appraiser tell me one time, “If I stand in your basement with a yardstick at my belly button, and I pretend like that’s a line directly across to the wall, if I turn 360 degrees, if any part of that stick would touch dirt, this doesn’t count.” So no bedrooms, no bathrooms. Now he’s not the norm, but you don’t know what appraiser you’re getting. So when you put, you know, $150 a square foot into your basement, you’re maybe getting $25 a square foot out on your price. Okay? So are you happy with that in-home theater that you put down there that has the screen and the projector and the cool chairs and the things? Live there and use it. Okay? Because you’re not…
Eric: Get your money’s worth.
Lindsay: …going to get that dollar-for-dollar out of it. And so many people think that they are, you know.
Eric: Yeah, this is gonna turn into a therapy session for Cody basement finisher over here.
Lindsay: I keep looking at his face saying, “Oh.”
Cody: We’re enjoying it.
Eric: All right, well, so, okay, so we’ve talked about some things that add value. What about things that do not add value? And maybe those are…we’ve already talked about some of that to the degree of, you know, your basement. Are there other things that you see homeowners wanting to do that they should probably shy away from?
Lindsay: The things that are super trendy. Stay off trend, okay? Like, do we love gray kitchens? Sure, right now we love gray kitchens. Do people… Cody is like, “Seriously?”
Cody: Do you wanna see the color of the floor I just put down in the kitchen?
Lindsay: Of course, it’s gray. Navy blue, that’s a thing right now, navy blue kitchens or forest green cabinet kitchens, like an actual color, that’s great, but do we remember when super stark white kitchens were really popular, or natural oak kitchens? So those trends tend to come in and out. So when you go super trendy and you put that navy blue cabinet in your kitchen, and you put the gold-looking poles and the gold faucet at the kitchen, how long is that going to stay on trend? And Cody just spent how much money yesterday taking all the brass out of his house, right? Now we’re putting gold back in. It doesn’t look much different, friends. So, you know, when you’re looking…
Cody: Way to go.
Lindsay: Right? So when you’re looking at the home improvement projects, if you’re looking to sell, you want to do something that’s going to appeal to the mass, not be Sherwin-Williams trend color of the year, because that changes every year.
Eric: Now does that advice stay true regardless of when you plan to sell? Like, if you intend to sell in the shorter term than, you know, 5, 10 years from now, does that advice change?
Lindsay: I mean, you’re going to enjoy it. So I’m not saying to always finish things with the idea of selling it because, truthfully, in 5 to 10 years, it’s going to be outdated enough that you should really do some kitchen renovation again. So we find that a lot with homeowners in, you know, some of the nicer, bigger subdivisions, and they still call it the new subdivision. Well, it was new in 1998. And, friends, I’m sorry, but that was over 20 years ago now, right? So you haven’t redone your kitchen. You got a new refrigerator, that’s great, but it’s…
Eric: That doesn’t count.
Lindsay: That doesn’t count, you know. It’s an appliance that we just kind of need. So, you know, using something for 5 to 10 years is great, but you’re still going to have to change the color. One of the cheapest things you can do is paint. Now I don’t say to stay away from color, and for anyone who’s been in my house, there’s nothing that has stood through COVID in my house and not been painted, including my dog who walked by the wall when it was wet. So I paint, and I use color. That’s my personality. I like color. I like bright colors. That’s not everyone’s thing. They come into my house and they’re like, “Oh, gosh.” So if we say neutralize, neutralize. Wallpaper’s back on trend. Who’s taking off wallpaper? Yuck.
Eric: Yeah, it’s not fun.
Lindsay: You know, I used to tell my kids, “If you like Buzz Lightyear, you better like him when you’re 20 because it’s never coming down, you know.” But in the grand scheme of things, paint’s a pretty inexpensive fix and change, and having the holes filled from where you’ve had things hanging, and depersonalizing. It’s not to say make it weird. You know, you still live there, so when you’re showing the house, you can still have photos and things that are attractive to you that you like, your treasures. I always say, you know, “Oh, I love this treasure you have,” or, “This is a wonderful treasure.” You can still have those in display that most people can see past. But if we go into a house and it looks like you’ve taken a bag of Skittles and flicked them in the rooms and been like, “Yup, this will do here, this will do here,” that’s not really the best photos and it doesn’t show your house in the best light. But if you like that thing, if you want orange burst orange, have at it. Just know you might need to neutralize that a little…
Eric: When the time comes to sell.
Lindsay: …when the time comes, yeah.
Eric: And is that when…maybe somebody who’s listening who hasn’t gone through the sale process at this point, is that something that a realtor will help them with and give the advice to, “You should probably neutralize this?”
Lindsay: Yeah, for sure. And I think this is another topic, or will come up in another topic, too, but working with a realtor, this is the largest monetary transaction you’re going to do probably in your life. And the hope is until you do it again with the realtor you used, right? So you want to have a relationship with someone where you feel comfortable with them. You feel as though they are actually not just telling you what you wanna hear. That doesn’t do me any good. I mean, if I go into a house and I’m like, “Mm, that’s a color,” like, that’s a choice you made, you know, I might love it, but I need to be open and honest with those people and say, “This really…you should probably consider neutralizing this. With the color of your trim, you probably wanna go warm or cool.” You can go to Sherwin-Williams or you can go to Lowe’s. You can go to Bear, wherever you wanna go, Benjamin Moore, it doesn’t matter. Go somewhere and say, “I need a cool tone this or a warm tone this.” No one wants to paint their trim and doors, let’s be honest, right? So I need to tell people upfront, and my team is trained to do this as well. How I say, we’re not here to make friends. We’re here to make lasting relationships, and if we don’t tell you what we know has to be done to adequately sell your house…
Cody: You’re not doing the job.
Lindsay: …we’re not doing our job. We’re just gonna make people mad at us along the way. It doesn’t do us any good.
Eric: So let’s shift gears just a little bit. Cody, talk to us a little bit about from the financing end of things. Where does the bankers step in in this scenario of, you know, improving the value of your home? What’s that look like?
Cody: Oh, sure. I mean, it’s, you know, not uncommon, obviously, that someone wants to do improvement, who maybe doesn’t have the liquid cash to do so. And, obviously, you know, pulling from a retirement account to improve your home is most likely not advisable. So, you know, there are options as far as pulling from the equity of the home, be it through… You know, right now we’re doing a lot of cash out refinances where, you know, somebody’s maybe in a higher interest rate, but they have the equity. So when we go to refinance their home, it’s kind of a double whammy where, hey, not only are we gonna lower your interest rate, but we can give you the cash out to do this kind of thing. And then there’s offered options such as like a home equity line of credit or a home equity loan. There’s a lot of different options out there and available, and obviously, you know, you’re taking that money and investing it back into that asset. So it’s certainly a good opportunity to explore.
Lindsay: Can I have a, like, unsolicited comment there?
Eric: Of course.
Lindsay: Cody just said you’re taking that asset or that money and reinvesting it back into that asset. So when you sell it, you should get that money back. We find sellers often are taking that equity line of credit or they’re taking the cash out refi to get them out of a backward situation they found themself in. We can’t fix that as realtors. So if you don’t take that money out and put it back into your asset, into your investment, if you’re using it to pay off a credit card or using it to take a trip to Bora Bora, that’s great. We hope you had fun. But, generally, the market is not going to allow us to recap that equity, and people get really mad about it. And, generally, when you’re taking those loans out, you’re utilizing that home as the collateral for that adventure. And it’s amazing how many people don’t have super amazing lenders helping them like Cody. Like, you can’t sell your house and not pay off the line of credit. Surprise, you know. You gotta pay that out. And a lot of times our sellers are like, “We didn’t know that.” Or we get close to closing and they realize that the $15,000 they thought they were gonna have in proceeds, they don’t because they had to pay a $20,000 debt that was tied to that. So…and we don’t find that out until real close to the end, so.
Eric: Yeah. And, you know, fortunately, there are limitations on how much we can lend, you know, I call it lendable equity, in a home. We’re never gonna…well, I’m not gonna say never because there were times and there probably are places that will go up to 100% of the value of your home. But, generally, you know, especially doing cash out, we leave a significant pillow there to prevent you from, you know, really backing yourself into a situation. And it is important to have the conversation, you know, what are your goals? Because I’m not gonna say it doesn’t always make sense to roll in credit card debt. But I’m always gonna make you think about do you really wanna take that credit card debt and pay it over the next 30 years? No. So you need to accelerate your payment to… Yeah, and again, again, it’s just every situation is different, right, and everybody’s got their own goals and to each their own. And it’s just important that we look at the short term and the long term anytime we’re doing something like this, and making sure that you have experts involved to tell you how to properly reinvest that money and what to do.
And that actually brings me to a question for you, Lindsay, are you aware of any resources that anybody can utilize to really kind of check and see what they can do or where to invest their money in their home if they’re doing improvements?
Lindsay: For sure. There are… I mean, Google’s everyone’s friend, right?
Eric: Well, sure.
Lindsay: So Google knows everything. What does Google not know? If you search, there is a company called Pillar to Post, and they look at national averages. And what they do is they say, nationally, if you did a midrange upgrade on a kitchen, you can expect a 45% or a 65% return on that investment. So it’s looking at those national averages to point you in the direction of where your money is going to be best served, and they come out with that report every single year. They update the numbers, and it’s really something that not everyone knows about, and it’s a shame. It’s the public thing that’s just sitting out there on the internet waiting to be found, right? But looking at that to say, “Do I think this is a mid grade or a low grade kitchen remodel I want to do?” And it tells you this is what’s involved in that. Like, low grade, you’re just changing your countertops. Or whatever that may be. To look at that and to say, “Okay, nationally, people who did this kind of remodel or change last year saw this much return.” And a lot of times it’s a light bulb moment of, “Mm, maybe I don’t need that theater room, you know.” So, definitely, there’s those resources out there, for sure.
Eric: Love it, love it. And going back to one of the points that, Cody, I think you mentioned that I think this episode has illustrated is the advantage of talking to experts that you have at your disposal. So when working with a realtor and your banker, together you can kind of get a good result or a better result overall, and so that you better understand your options, how to deal with your particular and unique situation. And that’s something we advocate here at First United and something that I know that together, you two, obviously, work together really well with many of our clients. So I appreciate having you both on. Lindsay, if someone is listening and they want to learn more, want to…maybe they’re looking to sell and they wanna have your advice on which rooms to neutralize, that they have Skittled… I like that idea of the Skittle color.
Lindsay: The Skittles? I bought a house like that one.
Eric: Did you?
Eric: So what’s the best way they can get the support they need?
Lindsay: I would love for anyone to reach out to myself, anyone on my team. We are super visible on Facebook at bhhstdhomepros.com. Dotcom. Seriously? Just not dotcom. It’s Facebook. Or bhhstouchdownhp.com. Easy to reach either way. Phone number’s 304-322-4101. Always will get a voice, will never get voicemail, and it doesn’t matter what hour. I say that to my team. Sometimes it’s like, “Yo, it’s 11:00. I’ll call you back in the morning.” But you’ll always get a warm, friendly voice no matter what.
Eric: Awesome. Thank you again, Lindsay. Cody, for you, again, thanks for joining us for this first of three-part series. If anyone has any mortgage needs and wants to reach out, what’s the best way they can get the support they need?
Cody: The best way, I mean, obviously, you can reach out to me directly, but all of the lenders of First United have our contact information listed on our website, which is mybank.com. You can click through and find either a local office, depending on what you’re looking for, or, obviously, all the mortgage lender originators are also listed on there with all of our direct contact information.
Eric: Excellent. Well, that brings us to the end of our show. You can always find more episodes by visiting mybank.com/podcast, or find us on your favorite podcast app. You can also always leave feedback, ask questions, or request a topic for us to discuss by sending an email to firstname.lastname@example.org. Thanks again for listening. We’ll be back next week with more helpful content. But until then, we wish you the best in focusing on what matters most to you.
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