Dr. James F. Molinelli
Architect, ARDO Contracting, Columbia, Md.
For years I used sections of the Cost vs. Value Report to confirm for homeowners what they could expect as minimums and norms for increased home value. However, since the downturn, people are back to the “I don’t want to push far past the top of the neighborhood’s price range” attitude.
Now I use Cost vs. Value to show them that the key projects they are considering will absolutely add value to their home and, in a potential sale, will make their home more attractive to a buyer than comparable houses.
It also shows them the portion of the investment they are making that gets amortized over the time they are in the home. It’s the “this is what I really pay per day to enjoy the benefits of my new ... project.”
When understood in this fashion, and from a dispassionate outside source, people are comforted about their investment/remodeling plans, the value they will receive upon sale in the future, and the real cost of the day-to-day improvement in their lifestyle at home. They are no longer throwing money at the house and expecting insane increases in value to pay for any frivolous projects.
This information, to a sound mind, is enough comfort to pull the trigger on a project and maybe even spend more on a little larger project than they first considered.
Owner, Crimson Design & Construction, Naperville, Ill.
Five years ago everything was instant payback. You put in money and got it back instantly. Cost vs. Value was a selling feature. I don’t think it spells out that way anymore. We’re less likely to pull out the report.
In some ways [the Cost vs. Value Report] reinforces [homeowner] fears, and we don’t want that. We want to do the project. If they see they only get a 60% return, then they panic. When it was a 85% to 90% return and we could show them that in only one year the project will pay for itself, it helped us with sales.
Now it leads to a different conversation. We ask about how long they plan to stay in the home and how they should do the project more for themselves than for resale. It also depends on the type of client and what they want. With a highly analytical person who wants facts and figures, even if the numbers are low, you might be better off showing [the report] to them.
President, Morey Construction, Signal Hill, Calif.
We used to use the payback part of the report to help justify the investment. Now we talk about that part of the report with the acknowledgement that this should not be the deciding factor on making the investment, which leads us to talking about the owners staying in the home for a longer period of time and that being a better focus — how the home could fit their lifestyle rather than doing something based on investment value.
They usually can see the merit in this, as they can’t sell their home and get what they need out of it and buy something that they don’t have to update. We also point to [the Cost vs. Value Report] more often than we used to when people just want a basic project cost. Our customer pool is smaller, but we still want to help people who want a starting point from a third-party source.