Our first installment of Home Projects 101: A how-to guide for people who are unsure about projects
You recently bought a house. For the first time, you have the ability to change anything you want about the space you live in which is liberating, but also overwhelming. All you can see is projects.
You have no idea how much anything should cost or who to call for which project. It’s easy to spend endless hours Googling “how much should a kitchen renovation cost?” and “who do I call to install marble countertops?” and “are marble countertops worth the investment?” only to find yourself with more questions than answers.
Sound familiar? We want to help.
In this post we will cover:
- What local expert advice is good for, and what it’s not
- Why finding good data to inform home projects used to be impossible
- How Realm can help you become a knowledgeable homeowner
What local expert advice is good for, and what it’s not
One of the things that is challenging as a new homeowner is discerning between good advice and bad advice. You are reliant on all kinds of professionals that you have no prior experience with – from contractors to realtors to mortgage brokers. Although most of these people are well intentioned, they all come at it from their own lens. As one of our customers aptly summed up:
“Whenever we talk to contractors or our realtor, or even our parents, people who are well-meaning in our lives, everyone kind of has their own agenda in terms of what they think you should tackle first and where you should put your money.”
That’s not to say that local expert advice is bad. In fact, it can be quite useful, especially when paired with unbiased data & analysis.
Use local experts for
- Cosmetic trends — what types of curb appeal are paying off in the local area
- Implementation advice — how to design & execute a renovation project without going crazy
- Project timelines —how long a project will take to complete given the specifics of the plans and vendor availability in your market
Use Realm’s unbiased data for
- Home value trends — which attributes of a home drives value up or down in your neighborhood
- Project ROI — estimates for how much a medium- to large-scale renovation will impact your home value
- Fair project pricing — expectations on what a project should cost in your area based on local labor & material costs
Why finding good data to inform home projects used to be impossible
In order to provide an accurate estimate of how much a project will cost you and how it will impact your home value, it’s necessary to understand the current state of your home, the cost of labor & materials in your area, and what’s happening with homes & recent projects nearby. This has traditionally been challenging for two reasons:
1. Data is non-standardized, hard to collect, and privately held.
Real estate data is challenging to aggregate for the average person and even for the average company for many reasons, a few of those being:
- Local government offices: each city and sometimes county has different rules and processes for collecting public real estate data including your tax assessed home value, building permits for construction projects, and
- Fragmented contractor networks: over 700,000 construction firms set pricing on renovation projects, meaning quotes come in many different formats and
- Multiple Listing Service (MLS): the gold mine of real estate data is only available to licensed real estate agents (aka it’s not open to the public)
2. Every home & neighborhood has its own unique characteristics
Unlike the stock market which balances out supply and demand at a global scale, real estate is a localized market. Building styles, techniques and codes have changed over time. Understanding these factors can significantly change the cost of the same project from one house to another. To properly assess what attributes of a home drive up value, it’s critical to understand the market at a micro level.
Using data to answer this question used to be impossible. 20 years ago, advanced data science techniques didn’t exist. 10 years ago, things like natural language processing and boosted tree models were just getting off the ground. We won’t bore you with the details, but it’s safe to say that the advances made in geospatial data science, image processing techniques, and neural network models have changed the game.
We’ve spent the last 2 years aggregating hundreds of unique data points for each home, including things like recent building permits filed, buildable square feet, bedroom / bathroom ratio, and quality of appliances. Through partnerships with public and private data providers as well as through our own manual data collections efforts, we’ve built the first centralized real estate database that houses all the information required to give homeowners like you access to quality data.
But that’s enough about data science — how does this help you?
How Realm can help you become a knowledgeable homeowner
Realm’s mission is to democratize access to all the real estate data that professional investors have had access to for decades.
That’s why we made our property plan free to all single-family homeowners across the US (view a demo). Start by entering your address and creating a free account. Then, add and customize projects to see your property-specific ROI estimates for each one.
There’s personal value in making your space more liveable and financial value in the resulting increase in home value. Ultimately, how you trade off between those two dimensions is totally up to you and our goal is to ensure you have the data ahead of time to be able to confidently make those trade offs
The data is only one part of the solution, however. We know that navigating which professionals are needed for various projects and figuring out how to find quality, reliable professionals at a fair price are tedious parts of becoming a homeowner.
Over the next several weeks, we will be releasing a new series: Home Projects 101: A how-to guide for people who are unsure about projects. This series will help you become a more confident & savvy homeowner as you navigate renovation projects & maintenance on your home:
Part 1: Who does what in the home economy
- Before the project
- During the project
- Ongoing repairs & maintenance
Part 2: How to prepare to source & select a home professional
- General contractor
- Refinancing lender
Anything else you want us to cover? Let us know in the comments below.
Published by Realm
Get more out of your biggest asset: your home. Realm shows you what your home could be worth & how to access more of its potential value. View more posts