4 Renovations Under $5,000 That Add Serious Property Value

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When it comes to adding property value to your home, you’ve probably already gone through the basic upgrades and renovations that are frequently recommended. New flooring, new roof, updated landscaping: All of these can have positive effects on your property value, but they are also expensive projects that can have a negative effect on your bottom line. And whether you’re flipping a house or just improving home value, return on investment is key.

Here are some smaller projects, all for $5,000 or less, that can help improve your property value without breaking the bank.

1. Modernize the bathroom

We all know that the bathroom, or any room with utilities, is a great place to do some upgrading when you want to add value. If your bath features an old, outdated tub/shower combo, it may be a good time to replace it with a modern fixture like a glass or tiled shower stall or a jetted tub. For an average-sized bathroom, you’ll spend between $2,800 and $4,700 updating this feature. With bathroom renovations regularly recouping 80% to 90% of their costs in home value, this simple update could easily add an extra $3,500 to $4,000 to the price of your home. Other ideas for the bathroom include new vinyl flooring, updated sink fixtures, and updated lighting. All of these together will run you less than a few thousand dollars and can help rack up another $2,000 to $5,000 on your home’s total price.

2. Invest in a small-scale kitchen remodel

The kitchen is just like the bathroom: full of fixtures that can make your house look like a million bucks. The kitchen is where a buyer inspects closely, and they’ll be able to tell if you skimped here. If new appliances aren’t in the budget, or if you’ve already upgraded those, consider stone countertops, which would run somewhere around $4,500 for an average-sized kitchen. Natural materials are often key selling points of a home, especially in the kitchen, and these minor kitchen upgrades frequently have a return on investment of up to 85%. By spending $4,000 here, you could add another $3,200 to your overall house price, and it may make the difference between a sale and a miss. Bonus: You’ll get to enjoy them in the meantime!

3. Replace your entry door

Buying a new front door is one of the best inexpensive upgrades you can make, because it has a nearly 100% return on investment. Spend a little extra on a custom, hand-carved door that will run you around $3,000, and you can tack $3,000 onto the price of your home. Additionally, the first impression to potential buyers makes every part of the house feel richer and fills the house with character that buyers are looking for.

4. Add a wooden deck

If you have an extra outdoor space, adding a small wooden deck is a great way to bump up the value of your property. Wooden decks can be installed for as little as $1,000, especially if you are handy and can do all or part of the installation yourself. The most expensive small decks are around $8,300, so it would be easy to get a great deck made of excellent material for $5,000. A few extra features like a higher privacy fence and a low-maintenance finish will mean that you could add another $4,000 to the property value.

With just a few small renovations, you can see how your property value can shoot up very quickly. While you won’t recoup 100% of your investment with every renovation, being smart about where you put your money can help add to the bigger picture, all of which can be helpful when it’s time to sell.

SOURCE: http://www.forbes.com/sites/trulia/2016/05/23/4-renovations-under-5000-that-add-serious-property-value/#45b80d973df6

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The Newlyweds’ Guide to Buying a Home

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Hey, lovebirds: If you’re newly married, you may be thinking of buying a nest together. Indeed, 35% of married Americans purchased their first home together within two years of tying the knot, according to a study by Coldwell Banker. Yet while we hear plenty about the home-buying challenges faced by unmarried couples, that doesn’t mean that marriage makes this process a walk in the park.

“A lot of factors come into play,” says Brandy Wright, a certified financial planner at Cambridge Wealth Counsel in Atlanta. So before you start swooning over Craftsman bungalows or granite countertops where you envision your bright new future, be sure to sit down and ask each other these crucial questions first.

Back in your dating days, you two probably talked about everything from where you’ve traveled to your favorite movies. But now, as newlyweds, it’s time to get serious and broach a far less romantic topic: your credit scores.

In fact, if you’re truly smart, you will have had this conversation already: Half of married couples in the U.S. say that credit scores were a make-or-break factor when choosing their mate, according to an Experian Consumer Services survey. But for other couples, credit is a taboo subject. Unfortunately, if one person’s credit score is substantially lower than the other’s, that could hinder the couple’s ability to qualify for a loan, or at least get an attractive interest rate.

“Knowing your credit scores before you meet with a lender is crucial,” says Wright. Doing so will also give you the opportunity to work on repairing any credit issues before you apply for a mortgage. You can also get a free copy of your full report at AnnualCreditReport.com, although for the exact score you’ll need to pay a small fee. Or check with your credit card company; many offer free access to scores.

Where would you like to live in five years?

Your future goals will affect which type of home—and loan—is right for you. For instance, if you’re planning to stay put for the foreseeable future, then a 30-year mortgage with a fixed interest rate may make the most sense, since this means your interest rate (and monthly payment) remains constant over the life of the loan.

On the other hand, if you’re planning to move within a few years—say, to a larger home to raise a family or move closer to your in-laws—then you should consider other options. For instance, an adjustable-rate mortgage offers a lower interest rate than a fixed mortgage for an initial period of time, such as three to seven years. After that point, it can adjust up or down based on market indexes.

Will one of us stay home to raise the kids?

Fine, you’ve just gotten hitched, so why rush the discussion about kids? Because this question will affect your family’s income, which is the cornerstone for determining how much home you can afford. A good rule of thumb: “Your mortgage expenses should be no more than 30% of your take-home income,” advises Wright. (Use realtor.com’s Home Affordability Calculator to assess your buying power.)

But keep in mind, you could be paying off that mortgage for 30 years, so you should not only tally how much your family makes now, but also what you anticipate your salary to be in the future. What happens if and when you have kids, and one of you wants to stay home to raise them? That could slash your income in half. So when anticipating how much of a mortgage to get, play it safe. Just because you get pre-approved for $1 million doesn’t mean you should buy a $1 million house.

What happens to the home if our marriage hits the rocks?

Although this is a happy time in your relationship, you need to consider all possible outcomes for your marriage. Translation: If you get hit with death or divorce, you’ll need to work out how to divide your assets.

There are several types of homeownership to choose from when purchasing property with your spouse. The most common is joint tenancy, where each person holds equal interest in the property. Its distinguishing factor is that in the event one spouse dies, that person’s interest in the property automatically conveys to the surviving spouse (also know as “right of survivorship”).

Meanwhile, under tenancy in common, each spouse has a distinct, separately transferable interest in the property. This might be a sensible form of ownership if one spouse makes a higher percentage of the down payment or monthly mortgage payments and wants to guard his or her investment in the event of a divorce. Fine, it’s not exactly an upbeat discussion, but you never know what could happen once the honeymoon’s over, so to speak.

Source: http://www.realtor.com/advice/buy/newlyweds-guide-to-home-buying/

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4 Tips For Paring Down Your Stuff Prior to Moving

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If you’re planning a move, you may have an overwhelming urge to throw all your possessions into cardboard boxes, tape them shut and think, “I’ll deal with this after moving!”

We get it. But before you start dumping drawers into boxes willy-nilly, we implore you: Declutter first.

There’s no better time to get rid of unnecessary stuff than right before a move. You’re in the right mindset—you’re open to change.

Plus, you have to go though everything already, and if you follow through, you’ll start life at your new home with less junk and a stronger connection to the items you decided to hold onto before moving.

Sounds great, but how do you do it? We recently gave a best-selling book—“The Life-Changing Magic of Tidying Up,” by Marie Kondo—a read.

The book isn’t necessarily about moving; it’s more about how to live a less cluttered, happier life. But many of the suggestions Kondo offers are invaluable to those brave souls about to pack up their possessions and begin anew.

Here are four tips from Kondo’s book we found for downsizing before a move.

1. Category by Category

Think about your past attempts to tidy up or simplify your physical space. Odds are you went about it room by room. Rookie mistake!

Kondo subscribes to the theory you should instead go category by category. For example, if you keep some dinner plates in the kitchen and others in the dining room, put them all together in one place before going through them and deciding what to keep. Same for clothes, books, athletic equipment and so on throughout the house.

Don’t focus on what you’re discarding. Rather, focus on the things you are choosing to keep: This makes the process feel more positive.

2. Handle Everything

Kondo suggests touching everything you own in order to determine if you truly want and need it.

Take clothes, for example. Kondo believes it best to remove all your clothes from your closet and dresser, physically hold them and decide one-by-one if you want to keep each item.

You might be tempted to just flip through your shirts as they hang in your closet. According to Kondo, that’s a no-no. You have to get everything out of its place to determine if you want it—and if it truly brings you joy.

3. Find the Joy

This is a little touchy feely, but bear with us: Kondo believes that a possession either “sparks joy,” or it doesn’t.

It’s all about keeping the items that do offer that spark and getting rid of everything that doesn’t. Kondo uses books as an example: Does being surrounded by books you’ve never read bring you joy? Maybe not.

Of course, the standard doesn’t work for each and every item in a household. A plunger isn’t likely to “spark joy”—but having one around is still a good idea.

4. Make Moving an Event

Most people believe tidying is something you need to work at, something that requires upkeep. However, Kondo writes that if you’re constantly tidying up, you’re probably doing it wrong.

Instead of doing a little tidying up here and a little there whenever you have time, make your clean-up an event—something you spend a weekend doing with friends and family.

Painful? Maybe. But you’re more likely to experience a significant and long-lasting change. Of course, you’ll still need to put stuff away (unless you have a butler), but the effort will be minimal.

In short, think of Kondo’s method as a marathon that ends rather than daily sprints that go on and on and on.

SOURCE: http://www.realtor.com/advice/4-tips-paring-down-stuff-prior-moving/

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The Ultimate Open House Checklist: Every Other Room

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If you’ve been following our Open House Checklist series, you’re probably well on your way toward converting your home into a high-profit-margin asset that generates a furious all-cash bidding war. (We can all dream, can’t we?) So far, we’ve shown you how to stage your master bedroom, bathroom, kitchen, and dining room—the shining stars of the home. Today, we turn the spotlight on the supporting players, from the mudroom to the attic.

Show off your foyer. If you have one, be sure to stage it. Install coat hooks for guests, provide a bench for removing shoes, and set the tone with something fresh—a potted orchid, a vase of flowers, or a table with bottles of water. This room is for receiving guests. Be sure it makes everyone feel welcome.

No mud in the mudroom. The mudroom, sometimes called an enclosed back porch, should always be staged to show how organized life here can be. Add hooks to the wall to hang wet coats, and cubbies to hold stinky running shoes. Place a colorful outdoor rug to catch dirt and grime before entering the house. Liven up the room with a fresh coat of paint. While we encourage neutral colors elsewhere, this is the place to have fun. The mudroom craves color!

Create a dreamy laundry room. First of all, I’m jealous! Laundry rooms are one of the most desirable rooms in a house. Don’t believe me? Take a look at Pinterest. Across the country, we’re fantasizing about organized shelves, quartz countertops for folding clothes, and a place to house a professional steamer. Take a cue from these boards and trick out your laundry room: paint the walls, stock the shelves, display perfectly folded towels. Like the old saying goes, if you got it, flaunt it!

Reimagine the basement. Unfinished basements are the blank canvases of real estate. While you might use your basement solely for storing off-season clothes or old toys and keepsakes, just remember: It can be so much more. Get a good contractor to estimate the cost of finishing the space as a TV room or a lower-level master suite. Show buyers what they can expect.

Declutter the garage. No one expects your garage to look like Jay Leno’s, but it should be accessible. There’s no need to stage it—just declutter it to make sure buyers can get in.

An office in the attic. If the attic is unfinished, show it to your agent, who can envision its highest potential. Maybe, with a minimal investment, it could be a new master suite or home office. That’s a selling point that should be pointed out to potential buyers.

Check the crawl space. Of course we know no one is going into your crawl space at an open house. At least, we hope not. But this often ignored space is important to the overall health of your home. If you have the funds, encapsulate it.  At least have a professional check it for foundation issues, infestations, or trapped animals. You don’t want any surprises, and neither do buyers!

Relax on the porch. There’s a movement to bring porches back to new-home design. If you’re lucky enough to have one, stage it to welcome buyers. Place an outdoor rug, a few colorful lanterns, and a comfy chair next to a table with a pitcher of lemonade. Buyers will remember the house with the lemonade!

A blooming balcony. Glam it up! Show off the Weber grill, a bistro table and chairs, potted plants, or a Potted garden. Even in the coldest locales (like Chicago), balconies are high priorities for buyers.

Brighten the hallways. Make them bright. Replace lightbulbs, paint the walls (a neutral color!), and generally keep people interested  as they walk from one room to the next.

Check the staircase. If the railing is loose, tighten it. Remember, lots of people will be walking through your house—it’s a liability issue.

Don’t stress about the kids’ room. We know it’s hard enough to get your kids to clean their rooms, so we’re not asking that they clean it for every open house and showing. Buyers understand that kids will be kids and few people actually live like the princesses featured in this Wall Street Journal article. Here’s a compromise: Clean it, organize it, and stage it for the professional photos your agent will arrange. But for the open house, just tell your kids to make their beds.

SOURCE: http://www.realtor.com/advice/sell/open-house-checklist-minor-rooms/

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3 Reasons Why It’s a Great Time for Sellers

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Rising home prices, demand from home buyers, and less competition is making 2015 a stellar year to sell for many U.S. home owners across the country, says Daren Blomquist, RealtyTrac’s vice president.

1. Stronger demand coming from buyers: Sellers in many markets are seeing stronger demand from a larger pool of buyers, including first-time buyers, boomerang buyers (previous owners who lost their home to foreclosure), as well as traditional owner-occupant buyers. Particularly of note lately, the number of buyers using Federal Housing Administration – typically low down payment loans often used by first-time home buyers – is on the rise, accounting for 23 percent of all single-family home and condo sales with financing in the second half of 2015. That marks the highest share since the first quarter of 2013, according to RealtyTrac’s Midyear 2015 U.S. Home Sales report.

2. Home prices are skyrocketing: Single-family home and condo sellers in the first half of this year sold for an average of 13 percent above their original purchase price. “So far in 2015, [sellers] are realizing the biggest gains in home price appreciation since 2007,” Blomquist says. “In June, sellers sold for above estimated market value on average for the first time in nearly two years.” Median sales prices of existing-homes pushed above the previous 2006 peak to a record high in June, the National Association of REALTORS® reported this week. The median existing-home price for all housing types was $236,400 in June – surpassing the peak median sales price set in July 2006 at $230,400.

3. Sellers have less competition: Inventories of for-sale homes remains tight, which has forced buyers to have to compete for the limited supply. Distressed sales –properties in the foreclosure process or bank-owned – accounted for 8 percent of all single-family and condo sales in June, the lowest monthly share since January 2011. In 2011, the share of distressed sales had reached a monthly peak of nearly 46 percent of all single-family and condo sales.

Source: “2015 Great Year to Sell,” RealtyTrac (July 22, 2015)
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So, You Started a Bidding War. How Do You Pick the Best Offer?

Someone is very pleased to have some cash.

The housing market is on the rebound, home prices are rising, and, for the first time in nearly a decade, two or more offers at the same time is a common occurrence.

It’s a good problem to have if you’re a seller. But before you lean back in your chair and daydream of the piles of money you’ll be sleeping on, there’s one more thing to think about: Now that you started that bidding war, how, exactly, do you choose the best offer?

The best strategy is to play offers against one another and take the highest price, right?

Wrong! While money is a major consideration, real estate agents are counseling their clients to look at a variety of factors when entertaining multiple offers.

“People are prone to get excited when they have an offer they like,” said Andrew Sohn of Coldwell Banker in Evaston, IL. “But you have to look behind the cover of the book, so to speak. The price is on the front page. It’s the first thing people see, but you can’t judge the book by its cover.”

Contingencies, closing dates, and all-cash offers, oh my!

For instance, try looking for the most appealing (proposed) closing date and whether the bidders are willing to waive contingencies such as inspection, attorney review, and mortgage approval, said Stuart A. Schwartz of @properties, also in Evanston. By waiving their contingencies, buyers have fewer “outs” and a deal is more likely to sail through the process, he said.

And if one or more of the bidders asks for a contingency to keep the deal on hold until his or her property sells, that’s an easy buyer to eliminate from consideration, Schwartz said.

Sellers should also know how much earnest money each bidder is offering, Schwartz said. Earnest Money isn’t a down payment, but it is money held by the real estate agent that provides “skin in the game” to guard against a buyer walking away from the deal at the last minute.

Also, while you might be dismissing a higher offer, remember that cash is still king.

“Whether or not it’s a cash deal would be a factor,” Schwartz said. “You’re not waiting on a loan [approval], and it may or may not be subject to appraisal.

“There’s no formula,” Schwartz added. “You sit down and go through the terms carefully and figure out what offer works best for you.”

Buyers should also examine a bidder’s financing––how stable it is and where it’s coming from, Sohn said.

“If you’ve got an offer that’s $5,000 more, but it’s from an out-of-state lender you’ve never heard of, those are shaky table legs,” Sohn said. “If you’ve got someone with a cash offer, with no contingencies, but the price is a little lower, you might be wiser to take a lower offer.”

All the offers are so similar—how do I choose?

If there are two or more offers that are roughly equivalent, a seller can respond to more than one buyer. But a seller should be transparent about the time frame and ask for what’s commonly called a “best and highest” offer. It can be tempting to keep that bidding war going, but remember—a war can be a turnoff for potential buyers.

“To negotiate in good faith, you shouldn’t sit on offers too long,” Schwartz said. “You could tell someone who made an offer on a Saturday morning that we’re not going to respond until Monday. But be upfront about the fact that it’s because you have showings over the weekend.”

Giving everyone a deadline narrows the focus and gives everyone the chance to strengthen their offer, Sohn said.

“Some people seem to think that real estate is like eBay: You can go with your offer of $800,000 from Buyer A, go to Buyer B and play it off like an auction,” he said. “There is nothing illegal about doing that, but it’s very frowned upon. It’s not considered ethical.

“If you give everyone an even playing field,” Sohn added, “that’s the best practice.”

SOURCE: http://www.realtor.com/advice/sell/choose-the-best-offer-in-bidding-war/

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What Does an Appraiser Do?

An appraiser checks out the exterior of a house.

When you’re considering buying a house, there are two sides to the story: the seller’s asking price and the actual value of the property. This is where an appraiser steps in.

What is the job of an appraiser?

An appraiser’s job is to determine the current value of a property. Most of the work is done on-site where the appraiser will:

  • Conduct a room-by-room walk-through to determine interior condition.
  • Walk the length of the property to determine exterior condition.
  • Evaluate any amenities such as a swimming pool, finished basement, or built-in bar.
  • Note any health or safety code violations.
  • Record the layout of the property.

Off-site, the appraiser may also evaluate the current real estate market in the neighborhood to help determine the value of the property.

How do you know if an appraiser is qualified?

Typically, your lender will choose an appraiser. The appraiser should be state-licensed or have other certification. If the appraiser is a member of a professional organization such as the Appraisal Foundation, he or she most likely will adhere to certain ethics codes and rules of conduct. However, not all states require certification, so do some research before you start.

Who hires the appraiser?

Usually, the lender or financing organization will hire the appraiser. Because it’s in the best interest for the lender to get a good appraisal, the lender will have a list of reputable appraisers whom they have hired in the past.

Who pays?

The loan agreement normally contains a set value for the appraisal of property. Whoever takes out the loan pays for the appraisal, unless the contract specifies otherwise. Then the buyer pays the fee in the closing costs. If a seller is motivated, he may pay for the appraisal himself to back his asking price, which benefits the buyer by reducing closing costs.

The lender may not adjust the fee after hiring the appraiser. Expect an average range of $300 to $600 depending on the size, property value, and location. Different appraisal report types take various amounts of effort, which may affect the price.

How long does it take?

One or two hours is the average time spent for most appraisals of property. You should most likely receive the report in three to seven business days on average. The amount of time it takes can depend on the type of report, size of property, and other factors.

What are the benefits?

Think of the appraisal as an investment of your time, money, and effort. It is important to know what your house is worth, and it will help you get your loan approval. Hopefully, this step and the rest of the house-buying process will go smoothly.

SOURCE: http://www.realtor.com/advice/buy/what-does-an-appraiser-do/

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