Selling Your Home This Year? 6 Reasons To Renovate Now!

Face it. Your home’s not perfect. You may keep up with general maintenance, and perhaps you’re meticulously clean. But how old is your kitchen? Do your paint colors reflect current trends? Could your living room use some updating?

When it comes to selling your home today, it’s got to be perfect, or buyers will simply move on to the next option. Doing some renovations, whether that means overhauling areas that are long overdue for a facelift or making some simple changes that freshen up the place, is typical. But if you’re thinking they can wait until you’re ready to list your home, these 6 reasons may make you rethink that plan.

1. You get to enjoy the new stuff

“A worthy update can either serve to reduce your cost of living while you remain in the home or add significant value to the home’s sale price when you decide to put it on the market,” said Scott McGillivray, a real estate investor and host of the HGTV show Income Property to US News.

But if you’re going to spend some cash on updating and renovating your place, you should at least be able to get some enjoyment out of the updates before turning the house over to someone else, right? If you’ve been waiting for 10 years for new appliances, it would be a shame to not have the opportunity to at least cook a few meals and throw a dinner party or two.


Pinterest
2. They always take longer than expected

It’s a fact of renovation. If your timeline is six weeks, it’ll take 12. At least. Giving yourself plenty of time before you’re ready to list your home will help you avoid a stressful scramble at the end when you’re trying to get it on the market.

3. There may be issues you’re unaware of

Your Realtor will point out areas that need to be addressed and recommend changes to make your home more saleable. But, getting your home ready to sell might be harder than you expect if problems like mold or termites are uncovered. Getting a jump on any big issues or anything that goes beyond the cosmetic will give you the time you need to fix the problems and hold onto your sanity.

4. They don’t have to be huge

No one said you have to take your home down to the studs. Sometimes, a light touch is all that is needed. “Start by thinking small,” said Realtor.com. “Minor cosmetic upgrades go a long way in getting more buyers through the door for a quicker sale – and time on market is key to determining what you’ll net at closing.”


Pinterest
5. You’re going to need them

You may not love the idea of having to do anything to – or spend any money on – your home, especially if you already have your eyes on a new one. But, most every home needs a little upgrading, updating, or, at least staging. You don’t want to have the one place in the neighborhood that won’t sell because potential homebuyers see a project house, without the project price.

6. You’ll get a return on your investment…if you renovate smart

Speaking of price…updated homes typically sell faster and for more money, if the updates have been done well and they’re the ones buyers are looking for. If you’re not sure which renovations to consider, take your cues from the Cost vs. Value Report, which tracks the “average cost for 29 popular remodeling projects with the value those projects retain at resale in 99 U.S. markets.” It’s a great way to look at national trends but also break down what’s trending in individual areas. “How much work you’ll need depends on your home’s value, your market, and the comps in your neighborhood,” said Realtor.com.

US News also has a great list of “popular updates that are worth the money,” including adding a backsplash in the kitchen and updating bathroom vanities.

WRITTEN BY JAYMI NACIRI

Advertisements

3 Steps To Saving For Your Dream Home

3 Steps To Saving For Your Dream Home

According to Harvard University’s “State of the Nation’s Housing” report, while more people than ever before want to own their own home, fewer feel financially ready to do so yet. Reasons range from high rents to student loan debt.

Millennials, in particular, are waiting longer to get married, start families and purchase their first home. But this is not necessarily bad news for the housing market. In fact, it could mean that the millennial generation has something to teach us all about saving consistently towards a big life goal such as owning your own home!

In this article, learn three important steps to take when you start saving for your dream home.

Step 1: Pay down your debt to clean up your credit.

Your credit score is a tricky business when it comes to saving for your first home. You have no history of carrying a mortgage, so you can’t make any real impact there. What you can do is to clean up your overall credit report so your general credit score is as healthy as possible before you apply for your mortgage loan.

According to the National Foundation for Credit Counseling (NFCC), a surprising number of Americans think they have “above average” (60 percent) to “very good” (41 percent) credit, although a full 48 percent have not seen their credit score in the past three years or ever.

So clearly, this is where you need to start. The best way to differentiate yourself from your competition (other people who are trying to convince a direct lender to give them a mortgage loan) is to pay down your debt, clear up any disputes on your credit report and, in so doing, boost your credit score so you can qualify for the best mortgage at the lowest interest rates.

Step 2: Separate and automate your savings.

Saving money is never going to be the easiest goal you attempt. In fact, according to The Atlantic, one of the chief reasons that nearly half of all Americans have little or no emergency savings to fall back on is taking on too much mortgage debt.

So here is a clear area where you should proceed with caution. First, save. Then, buy a home. The best approach to make saving as painless as possible for you is to automate your savings. You can do this by setting up direct deposit on your paycheck and then regular auto-drafts into a savings account reserved just for dream home savings. This way, you never even touch those funds and feel tempted to spend them instead.

Step 3: Downsize to upsize.

Finally, one effective change many adults today are making to save more towards their dream home is to downsize while they save. This can mean anything from moving to a smaller apartment to getting rid of your cable television subscription. Also, you must continually remind yourself why you have downsized in order for this step to work well.

But the key to making downsizing work to serve your greater goals is to make sure you deposit every cent of what you save into your dream home fund. Referring back to Step 2 here, the easiest way to do this is to calculate for yourself exactly what you are saving by paying less rent, giving up cable, etc., and then setting up a monthly auto draft in that amount to deposit directly into your dream home savings account.

By following these three steps, you can make tangible financial progress in saving to buy your dream home. If you can save 20 percent towards a downpayment, you can avoid paying expensive Private Mortgage Insurance (PMI) and you may even qualify for a lower interest rate. Scrimping and saving is never fun or easy, but it will be worth it when your realtor hands you that brand-new set of house keys!

 

WRITTEN BY DAMIEN JUSTUS

Hiring a Handyman When Selling Your Home

As you get ready to sell your home, you may discover the need to make numerous repairs and updates. But when do you have the time? Most jobs you can do yourself, but others require a little more skill. Maybe it’s time to consider hiring a handyman.

According to Angie’s List, hiring a handyman can prevent waste and overcharging, as the handyman will only charge you for hours worked. Plus they keep their rates low with low overhead and by not having to pay other workers.

A handyman is someone who can handle small painting and carpentry jobs that can be completed quickly. He typically works alone, charges by the hour plus materials, and in some states is required to be licensed and carry insurance.

If you think you’re going to more extensive work, you should consider a contractor. A contractor differs from a handyman by taking larger jobs that require going behind walls, or tearing out and rebuilding areas. Contractors supervise specialized tradespeople such as plumbers, electricians, and craftsmen.

Before you hire a handyman or a contractor, make a list of the jobs you need done. If your list is composed mostly of repairs and some updating like painting, a handyman should suit your needs.

To hire the right person for the job, do the following:

1. Get recommendations from family, friends, or your real estate professional. She may know an individual or company that specializes in “make-ready,” a room-by-room clean-up, touch-up and fix-up. You can also contact sites such as HomeAdvisoror Angie’s List, to hire workmen.

2. Interview several handymen before making your decision. Make sure the handyman you hire has the experience and equipment to do the jobs you need and is willing to guarantee the work.

3. You want someone you’ll feel comfortable having around your family and in your home. Hire only personnel who are bonded and insured.

4. Inspect the work while it’s in progress and when it’s finished. Most professionals want to do a good job out of pride of workmanship. Handymen also rely heavily on referrals, so if you’re pleased, you’ll recommend the handyman to your family and friends.

What you don’t want to do is leave small repairs undone. Home buyers notice if maintenance has been ignored, and may conclude the home needs greater repair than it actually does.

WRITTEN BY REALTY TIMES STAFF

Breaking Down The 50 Worst Cities To Live In

People looking to buy a new home or potentially relocate to a new city or state spend a lot of time checking out the “best of” lists to find out where the jobs, families, amenities, quality schools, and strong home values are. But have you considered the worst places to live?

You know, those cities where the home prices so far exceed the national average you need the income of a small, oil-rich country to afford to buy there?

Or one whose real estate market and/or job market is stagnant, or worse?

Or one with a crime rate that is enough to scare off (literally!) potential buyers?

There are also lists that outline where not to buy for these and various other reasons, like this one from 24/7 Wall St. that whittled down 550 cities into a scroll of “America’s 50 Worst Cities To Live In.” Their methodology was based on data “in nine major categories: crime, demographics, economy, education, environment, health, housing, infrastructure, and leisure.”

Many of the cities on the list are expected – places like Detroit that have been hard-hit by the economy and show few signs of recovery (more on that below). But, you might be surprised by the No. 1 city on their list of: Miami.


Miami Herald
“No city in the United States is worse to live in than Miami,” they said. “The city’s median home value of $245,000 is well above the national median of $181,200. However, with a median household income of only $31,917 a year, well below the national median of $53,657, most of these homes are either out of reach or a financial burden on most Miami residents.”

Unlike the images of seaside mansions and bikinied beachgoers that may spring to mind when you think of Miami, it turns out the city is not all glitz and glamour, thanks to a mindboggling disparity between the tippy-top of the city’s wealthy…and everyone else.

“According to recently released research from the nonprofit think tank the Economic Policy Institute, the top 1% of earners in the Miami metro area make about $2 million annually, 45 times greater than the average income of the other 99% of earners,” they said. “This earnings gap makes the metro area nearly the most unequal of any U.S. city.” The city’s crime rate is also a factor, with a “disproportionately large portion of Miami residents likely (to) experience” violent crime. The “rate of 1,060 incidents per 100,000 people is several times higher than the national rate.”

Second on the list, the aforementioned Detroit, whose problems have been well-documented. Low home values and a high poverty level, not to mention the city’s bankruptcy in 2013, make progress a challenge. But the high crime rate and educational issues might be the most upsetting factors.

“Although it’s hard to pick out the city’s biggest problem, crime is a worthy contender,” said Area Vibes, who named Detroit No. 1 on their list of worst cities. “A criminality rate that’s 155% above the national average will have residents huddled in their homes after dark. Detroit’s struggles extend to the classroom, with a bare 70% of area residents graduating from high school.”

Detroit was also No. 3 on Neighborhood Scout’s website of the Most Dangerous Cities. This site breaks out crime rates by violent and personal, and then further breaks down the data by type – a useful tool for those who want specific info related to cities they might be considering. East St. Louis, MI was No. 1 on their list of Most Dangerous Cities.


MLive
The rest of the “worst” according to 24/7 Wall St. include:

3. Patterson, NJ – “Like many American industrial cities, Paterson’s economy is no longer prospering as it once was,” they said. “More than 30% of the area’s residents live in poverty, nearly double the national poverty rate.”

4. Hawthorne, CA – “The poverty rate is not as high as in some other cities on the list, but the home values that are just astronomical make it near impossible for many of Hawthorne’s residents to afford a home,” said Cities Journal. “It should also be pointed out that Hawthorne is a very polluted city where the air is hazardous about 15 percent of the year. The national median is about 6 percent.”

5. Fall River, MA – “The median household income in Fall River is only $35,037, just roughly half the income a typical Massachusetts household earns and about $18,500 less than the income the typical American household earns,” said 24/7 Wall St.

6. Birmingham, AL – Low home values, low incomes and a poverty rate of 30.5% – almost double the rate across the country – put Birmingham on the list.

7. Memphis, TN – Despite its deep musical roots, Memphis has experienced hard times of late. About a third of those in the city are living in poverty and violent crime is nearly five times higher than the national rate.

8. Flint, MI – The city of Flint, Michigan “has seen more than its fair share of struggles in the past few years, said Business Insider. “It’s known as one of the most dangerous cities in America, and the poverty that afflicts the city is part of the reason its residents have been exposed to such dangerous levels of lead,” which led to a state of emergencyin the city. Flint has the second – highest poverty rate of any city in the U.S., at approximately 40%.

9. Cleveland, OH – At just $24,701 a year, Cleveland’s median household income is the second lowest in the country, and its 39.2% poverty rate the fifth highest.

10. Gary IN – “Gary was called the murder capital of the world in the 1990s, but violent crime is down dramatically in Gary in recent years,” said Forbeson their list of Most Miserable Cities. Still, the city is “plagued by high foreclosures and migration out of the city.”

In fact, 24/7 Wall St. reports that, “Gary’s population is shrinking faster than that of any other U.S. city. The number of people that call Gary home has dropped by 26.7% in the last decade and by 25.5% in the last five years. A declining population is not especially surprising given the city’s bleak economic conditions.”

WRITTEN BY JAYMI NACIRI

How To Sell Your Home In 2017

It’s 2017. Now what? Yes, the new year is typically a time for hope and renewal and for those who are looking to sell – and simultaneously buy – a home, it can represent a fresh start. But this year, political and social realities are giving some would-be home sellers pause.

Thankfully, the real estate market continues to show real strength, with many housing experts projecting home sales prices and inventory to rise in 2017, replacing doubts with consumer confidence.

“Housing prices rose nationally by around 6% in 2016, but the expected increase in 2017 ranges from 3% to 5%,” said 24/7 Wall St. “With inventory of existing homes at historic lows and a rise in interest rates thanks to the Federal Reserve, housing inventory for 2017 is almost certain to rise. For prospective sellers that means that if you were planning to sell your home this year, it’s time to get cracking.”

If you’re thinking about selling this year, these tips will help.

Be patient

Sales have been swift in many parts of the country for several years now. That can make sellers who don’t get offers on day one feel antsy. Despite some ultra-competitive markets where multiple offers and offer-asking-price sales skew the national numbers, across the country, the average days on market of a home for sale is 50.

Price it right

You may be tempted to price your home at the top of the market – or set a new top if you’re in an especially desirable area and if inventory is low. But overpriced homes don’t sell, which is probably why your real estate agent is recommending a lower listing price.


padrerealestate.com
If you’re insistent about your price, don’t be surprised if you get zero bites or the nibbles you do get are far below what you’re asking. Your agent’s pricing strategy will be based on market conditions and designed to get you the most money in the least amount of time. What it won’t be based on: What you owe on the home, what you think it’s worth based on your own estimation, or what you need to get out of it to buy your dream home.

Don’t be afraid to loan shop

If you’re selling your home to buy another, like most people, you might be concerned about rising mortgage rates. Rates are still near historic lows despite The Fed raising interest rates at the end of 2016 and indicating that further increases are in store for this year.

“Because the mortgage rate makes a big difference in how much you’ll pay for your home, it makes financial sense to shop around for the lowest rate you can qualify for,” said Investopedia. But many people don’t look beyond the first offer. According to a mortgage borrowers survey, “Almost half of borrowers seriously consider only a single lender or broker before deciding where to apply,” and “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal,” said the Consumer Financial Protection Bureau.

Asking your real estate agent for a few different trusted referrals could make a big difference. “Getting an interest rate of 4.0% instead of 4.5% translates into approximately $60 savings per month,” they said. “Over the first five years, you would save about $3,500 in mortgage payments. In addition, the lower interest rate means that you’d pay off an additional $1,400 in principal in the first five years, even while making lower payments.”


whiteorchidinteriors.com
Make sure your home is clean and lean

It’s more important than ever to make sure your home is as close to perfect as possible before you put it on the market. Unless your agent is planning to market the home as a “project,” it needs to be spotless. You’d be surprised how much better your home can look just by applying some simple staging secrets.

Listen to your agent’s advice

Staging may only be the beginning of what your home requires to get it sold, and your agent’s advice will be critical to getting it where it needs to be. “Sure, you no doubt know more about your home than anyone else. But your real estate agent knows more about how to sell it,” said Realtor.com. “And your agent may make some suggestions you might not like to hear. It’s tempting to take offense or just ignore this advice, but if you do, you could risk seeing your house sit on the market and grow stale.”

Be careful of over improvements

Getting your home in great shape may mean making some improvements, updates, and upgrades. But be careful not to go too far.

“Dying to install new kitchen cabinets or retile your master bath? Home sellers often assume any upgrades they make to their home will pay them back in full once they sell, but that’s rarely the case,” said Realtor.com. “On average you will recoup just about 64% of the money you spend on renovations once you sell—and certain improvements can actually work against you if they’re unusual or undesirable in your market, Jason Shepherd, co-founder of Atlas Real Estate Group, told them.

WRITTEN BY JAYMI NACIRI

Room For 2: First-time Home Buying Tips For Newlyweds

Buying or selling a house is more stressful than getting divorced, going bankrupt or getting fired, according to a survey of 2,000 adults by EstatesDirect.com. If you’re feeling overwhelmed by home buying with your loved one, you’re not alone. Figuring out how to merge your lifestyles, budgets and expectations can be difficult, but doesn’t have to be a negative experience. Turn home buying as a newlywed into an empowering experience that symbolizes your rock solid foundation and partnership. Here are some actionable tips to get started and take control of your home purchase.

Choose the Right Neighborhood for Your Budget

Kick off your home-buying search by exploring neighborhoods that fit your lifestyle and budget. Remember to look beyond what your mortgage and home insurance will cost. Utilities, car payments, student loans, food, furniture, credit card debt and any other fixed expenses should be factored into your budget. Don’t forget to add in costs for annual repairs, as well as just some fun money to actually enjoy your home.

Take a look at the neighborhoods that appeal to you from how long your commute will be to the available recreation. Outdoor lovers and hiking enthusiasts will have completely different criteria than someone who loves the downtown nightlife, and either option will affect your budget.

Right-Size Your Life

Buying your first home as newlyweds is full of hope and excitement of the years to come. Soon you start thinking about how it could be your forever home and hold all the children and guests of your dreams. But in reality, any home you purchase should be right-sized for your current life or the not so distant future.

For example, purchasing a home for the five kids you want is expensive with a lot of upkeep and overhead. You may decide to put off having children for several years or change plans. Instead, focus on the home you need for the next five or six years that can comfortably accommodate the two of you. An extra room for guests, a new baby or an home office can add the needed flexibility to your new home.

Stay Proactive About Safety

Some couples may choose a less than desirable neighborhood to offset mortgage costs. That may work well for your finances, but shouldn’t compromise your safety. Meanwhile, couples moving into safe neighborhoods with little crime activity can lead to complacency. It’s always imperative to protect your home and personal safety regardless of your environment.

Start by installing a security camera system where you can monitor your home from the office, on the road or from your own bedroom. For example, Lorex Technology offers Wi-Fi home security cameraswith two-way audio and night vision, as well as complete outdoor security camera systems. Joining your neighborhood watchor online community groups can help monitor for suspicious activity.

Keep Communication Open

Home maintenance, upkeep and ongoing chores can quickly create ripples in a marriageand impact your relationship. Keep the lines of communications open and set expectations early. Divide up who is doing what and become a reliable partner who sticks to their end of the bargain. It’s also crucial to allow for flexibility.

Your partner’s demands at work could exponentially increase, or you may find you loathe the chore you signed-up for. Talk it out and support each other through the ups and downs of maintaining a home together. Don’t let your home become an albatross. At the end of the day, you want your home to be a safe haven for love and communication.

WRITTEN BY REALTY TIMES STAFF

Can You Trust Zillow’s Home Price Zestimate? In a Word: No.

I got an email from Zillow last week. Seems my house has gone up in value another $2,000+ dollars in the past 30 days. And it’s going to rise another 3.5% in the next year, according to their Zestimate®. Fab!

Except that it’s just speculation. When it comes to Zillow’s Zestimates, you have to take the numbers with a grain of salt. Make that a big shake of salt, right over your shoulder. And maybe a stiff drink. And a frank conversation with your real estate agent.

“Shoppers, sellers and buyers routinely quote Zestimates to realty agents – and to one another – as gauges of market value,” said the Los Angeles Times. “If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000. Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are ‘the bane of my existence.'”

Are faulty Zillow estimates irritating, dangerous, somewhere in the middle? It all depends on your personal situation. A real estate investor, a seller in a high-end neighborhood, or an obsessive real estate watcher (ahem) may be able to brush off a $15,000 error. But for many people across the country, the word of Zillow might as well be the word of God. So, yeah, dangerous.

Price errors

Errors in sales prices are one of the issues Investopedia pointed outin its look at Zillow’s Zestimates.


spoty
“Zillow factors the date and price of the last sale into its estimate, and in some areas, these data make up a big part of the figure. If this information is inaccurate, it can throw off the Zestimate,” they said. “And since comparable sales also affect a home’s Zestimate, a mistake in one home’s sales price record can affect the Zestimates of other homes in the area. The Zestimate also takes into account actual property taxes paid, exceptions to tax assessments and other publicly available property tax data. Tax assessor’s property values can be inaccurate, though. The tax assessor’s database might have a mistake related to a property’s basic information, causing the assessed value to be too high or too low.”

In June, Zillow’s much-maligned (by industry experts, anyway) Zestimates got an upgrade with a new algorithm. Zillow CEO Spencer Rascoff has famously called his company’s price estimates, “a good starting point” and copped to a median error rate of approximately 8%. With their new algorithm, they say it’s dropped to 6.1%.


Marketwatch
John Wake, an economist and real estate agent from Real Estate Decoded, applied Zillow’s updated 6.1% margin of error to “Zillow’s own estimate of the median sale price in the U.S. in May 2016 of $229,737 and got a typical error of $14,000. He then took a sample city, Denver – a city in which estimates are actually more accurate than average” – and found “the error spread in 2016 is a lot tighter and more focused on the bullseye of the actual sales price,” but that “their Zestimates are scattershot.”

In his example, “a Denver home has a fair market value of $300,000. According to Zillow’s Zestimate Accuracy Table, 10% of their Zestimate prices were off by more than 20% from the actual sale prices. Half of that 10% are Zestimates that are too high by 20% or more, and half are Zestimates that are too low by 20% or more. That means you have a 5% chance Zillow will give you a Zestimate of $360,000 OR MORE, and a 5% chance Zillow will give you a Zestimate of $240,00 OR LESS. Yikes!”

Missing data

It gets even more complicated without all the data that gets fed into Zillow’s algorithm. Limit the available info and the margin for error grows.

That same email I received included a couple of new listings and info on recent sold homes in the area. Notice anything interesting about these recent sales?

Yep, no sales prices. Texas is one of about a dozen states without a mandatory price disclosure law, which makes property appraisals challenging and which makes it even more difficult for Zillow to come up with an accurate Zestimate since it eliminates one of their key data points.

In the case of my home, they’re a good $11,000–15,000 high on their sales price estimate. And that’s based on my direct knowledge of sales prices in my neighborhood—not list prices, not tax assessments, and not assumed sales prices based on trends.

Which brings up another issue that leads to inaccurate estimates. In many neighborhoods, sales trends and prices vary street to street. But Zillow’s estimates are a one-size-fits-all program. In my masterplan, the building of high-density units on the southern edge of the community a few years back took a bite out of the value of homes on the perimeter streets. Sales of homes with a first-floor master also get a bump here.

And then there’s the fact that this community is also split between two elementary schools. Zillow wouldn’t know which one buyers prefer and wouldn’t account for a difference in sales price between two otherwise comparable homes. But, people who live here would, and so would the local real estate agents.

Which only reinforces the importance of working with one, BTW.

WRITTEN BY    JAYMI NACIRI