It is easy to sit back and dream up all the wonderful things that would make your home more comfortable, attractive, and valuable. However, when it comes time to write the checks you might realize that you might not really need the custom cabinets or enclosed porch. Here are some tips that will help you renovate your home on a lighter budget:

• Set priorities. There are bound to be some new features that you feel are more critical. Make sure that you take care of these first and that you do not wipe out your budget on less important tasks.
• Rethink the scale of your remodel. Is it possible to achieve a similar effect by simply changing fixtures and repainting?
• Avoid costly construction tasks. Save money by working within the existing exterior walls and roof. Plan bathrooms and kitchens where they can share major drains, vents, and supply pipes.
• Protect yourself from cost overruns by hiring only qualified, reliable professionals, and be sure to detail every aspect of the work to be done in a written agreement.
• Get great-looking results by creatively using moderately priced materials. Look for less expensive materials and fixtures that will allow you to achieve great results without breaking the bank.
• Don't overimprove. Make sure that the renovations you are doing fit with the style of your home and with your neighborhood. This will ensure that you maximize the return on your renovation investment

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005

Lawrence Yun, NAR chief economist, expected an improvement. "Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates," he said. "First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86 percent in May from a record low 4.81 percent in April; the rate was 6.04 percent in May 2008. Last week, Freddie Mac reported the 30-year fixed at 5.38 percent; data collection began in 1971

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said appraisals and the tax credit are key issues. "To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist," he said. "In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August."

Source: The National Association of Realtors®