Upgrading your home, excerpts from the WSJ

A little cut and paste from the May 15, 2008 WSJ article titled "Will Upgrading Your Home Help You Sell It?...................The resale value of improvements in general is sliding, according to experts. In a departure from recent trends, homeowners are getting the best payback from relatively mundane improvements, such as sprucing up the exterior of their house or putting in new windows. Remodeling activity peaked in 2006 before slowing last year. And it is expected to fall 4.8% this year, according to a report by the Harvard Joint Center for Housing Studies released last month. Since many homeowners remodel using borrowed money, tighter credit means it's also harder for many homeowners to afford big projects. Even though housing prices are slumping, construction prices have continued to climb. That means adding that new bath will cost more, even as it contributes less to the resale value. Home improvements that help a property stand out in a glut of newly built houses and foreclosed properties are most likely to pay off now, as are those that make a house lower-maintenance or more energy-efficient. Some elaborate remodels, though, may actually make your home harder to sell. Lenders are nixing higher-than-normal appraisals, and that many buyers are looking for a deal. Even if someone wanted to pay extra, they would have a hard time financing the house unless they have a lot of cash. Inferior remodeling work may be worse than none at all. Cheap cabinets and poor workmanship won't fool buyers as they might have a few years ago, when many had to make snap decisions about buying a house. "Make the outside of the house look really great so that people fall in love between getting out of the car and the front door. That is money that is worth spending."