Greater San Antonio Area Real Estate BlogRecently posted or modified blog postshttps://www.blueutopiarealty.com/blog/Copyright BlueUtopiaRealty.com2022-02-22T07:21:43-07:00tag:blueutopiarealty.com,2012-09-20:12016Real Home Value Calculator: Assessed Value vs Market ValueReal Home Value Calculator: Assessed Value vs Market Value
Understanding a home’s true market value is about more than pictures, software assessments, and price-per-square-foot. Whether you’re a current homeowner thinking of selling or are house-hunting, it’s crucial you understand what factors affect home valuation. By partnering with a local market expert, sellers will avoid pricing their house out of the market (the kiss of death in real estate) and buyers will ensure they get a good deal on their next home.
So, how do you accurately calculate a home’s value? After all, the value a home is assigned by its town or county and the one it’s given when it’s listed are often dramatically different from one another. Which one is accurate and what does it all mean? Read on to learn more.
Assessed Value vs Market Value: What’s the difference?
When it comes to home value, you’ll often hear two terms, assessed value and market value.
A home’s assessed value is often the lower number of the two and is the value given by your municipality or county. Investopedia defines <a href="http://www.investopedia.com/terms/a/assessedvalue.asp">assessed value</a> as “the dollar value assigned to a property to measure applicable taxes.”1 Although property tax laws vary, assessors commonly arrive at this number by taking into account the following:
What comparable/similar homes are selling for in your area.
The value of recent improvements.
Income from renting out a room or space on the property.
How much it would cost to rebuild on the property.
A home’s market value, or Fair Market Value, is the price a buyer is willing to pay or a seller is willing to accept for a property. A skilled real estate professional will arrive at the value using a variety of metrics, including:
External characteristics, such as lot size, home style, the condition of the home, and curb appeal.
Internal characteristics, such as the number of rooms and their size, the type and condition of the heating or HVAC system, the quality, and condition of construction, the flow of the home, etc.
The sales price of comparable homes that have sold in your area.
Supply and demand; that is, how many buyers and sellers are in the area.
Location; that is, the quality and desirability of your neighborhood and other community amenities.
Why are these values often so different? An assessor<a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm"> </a><a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm">usually estimates your property’s market value</a> during a reassessment or if you make a physical change or improvement to it.2 As a result, a property may not be reassessed for many years. While your home’s market value may fluctuate with the market, your<a href="http://www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/"> </a><a href="http://www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/">home’s assessed value is more likely to remain steady</a>.3
What Determines a Home’s Value?
You’ve likely heard the motto of real estate: “Location, location, location.” This means a home’s value relies on its location. While the home and structures on the property will likely depreciate over time, the land beneath it tends to appreciate. Why? The land is in limited supply and a growing population puts increased demand on the housing supply. As a result, <a href="http://www.investopedia.com/articles/mortgages-real-estate/08/housing-appreciation.asp?lgl=myfinance-layout">values increase</a>.4
Other factors that affect your home’s value include the function and appearance of the property, how well the home and other structures are maintained, and whether the home is a lifestyle property, such as a ranch style with mountain views or beach bungalow.
Ultimately, the best indication of a home’s value is the overall supply and demand of the market. This is why we recommend you partner with a real estate professional who takes all of these factors—the assessed value, local market conditions, home features, and has physically walked through and experienced your home— into consideration to determine the most accurate market value.
How to determine if a property is comparable to yours.
Both assessed value and market value are partially determined by the sales price of similar, or comparable, homes in the area. To determine if a home is comparable to yours, look for the following characteristics:
Lot size
Square footage
Home style or similar architecture
Age
Location
While you may not find a home with the same exact characteristics as yours, you’ll likely find a few that are close. To account for any disparity, adjust the sales prices of the comparable properties. Look at the differences between your property and the one in question and determine if the differences increased or decreased the sales price and by how much. For example, if your home has two bathrooms and a similar home only has three, estimate how much that extra bathroom increased the sale price of the similar home. The<a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm"> </a><a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm">adjusted sale price</a> is the estimation of what the property would sell for if the properties were exactly the same.2
Where can you find comparable sales?
Fortunately, you can find comparable home sales in a<a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm"> </a><a href="https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm">variety of places</a>.2
Your local assessor’s office is able to provide a list of recent sales you can browse and compare or a sales history of a particular house, home style or neighborhood.
Your municipality. Many cities keep local sales information in their offices or post it online.
Online databases, such as a real estate database
Your local newspapers may offer some real estate information in the form of quarterly sales reports in the business or real estate sections of the newspaper.
Our office. We regularly do Comparable Market Analysis of homes in our local area.
How to calculate your home’s value.
By answering a few questions about your home, property and the local market, you can begin to estimate your property’s value. We’ve also included a worksheet for you below...
Home Value Questions:
When was your home last assessed?
What was its CMA assessment value?
What is your area’s average sales price?
What is your area’s average price/square foot?
Structure:
Is the architecture and exterior structure of the home consistent, superior or inferior to other homes in the area?
Does the era or genre (Modern, Victorian, Ranch, Cottage, etc.) add a premium based on current design trends?
How does the floor plan and room size proportions of the home compare to other homes on the market?
Interior Structure:
How does the kitchen compare to others on the market?
○ Updated or outdated
○ Floor plan
○ Appliance packages
How does the Master Suite compare to others on the market?
○ Size
○ First/second floor
○ Updated or outdated
○ Access to Master Bath
How does the Master Bath compare to others on the market?
○ Updated or outdated
○ Shower and bath
○ Flooring
Outside Areas:
Are there views, outdoor living areas or recreational areas?
○ Pools
○ Ponds
○ Patios
How does the landscaping and hard-scaping compare to the market? (e.g., built elements such as walkways, patios, decks, etc.)
Overall Condition of Home
What is the level of repair needed to compete with other homes?
Does the home need to be staged? How does it show?
What curb appeal projects are necessary to be consistent with others on the market?
Home Assessment Worksheet
If you want to accurately assess a home’s value, it’s crucial to know about the market activity of our local area. We can help! Give us a call to get the scoop on the local market.
2022-02-22T07:18:00-07:002022-02-22T07:21:43-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11993A Beginner’s Guide to Real Estate InvestingA Beginner’s Guide to Real Estate Investing
Despite the grim economic outlook for some industries, one sector is gaining viability -- real estate. According to the Emerging Trends in Real Estate, which was released by the Urban Land Institute earlier this year, trends such as “18-hour cities” and millennial parents increasing moving from urban areas out into the suburbs signal that real estate as an industry is gaining strength every passing day. One lending officer at a large financial institution even went so far as to say that “the next 24 months look doggone good for real estate.”
These trends mean that real estate is a smart place to make an investment and grow your wealth. A housing shortage means that flipped homes tend to sell quickly and for high prices, and an increased demand across all age groups for rental properties means that finding tenants for your buy-and-hold properties should be a breeze.
Of course, these trends also mean that the real estate market is highly competitive right now. If you want to make a foray into real estate investing, you’ll need to educate yourself and be strategic in who you work with and where you look for investment opportunities. Read on for our beginner’s guide to real estate investing.
Assemble your real estate team before you buy
Building relationships with your team will empower you to make serious offers that will more likely get accepted by sellers. Among your team members, you will want to include:
A mortgage broker or banker, who can help you get the financing for your deal
A real estate attorney to protect you by reviewing and revising contracts
An appraiser who can help you get a correct appraisal for your potential property
An accountant who is well versed in real estate investments
A good contractor, for repairs whether you’re rehabbing or buying rental property
How to find rehab or wholesale deals
You can buy properties to fix up and resell (flip) or you can buy and hold properties that you rent out for monthly cash flow.
The advantage of flipping properties is that you can end up with a good return on investment (ROI) in the short term. For example, you buy a property for $100,000 and invest $50,000 into repairs. Once it’s rehabbed, your property is valued at $200,000, and you sell it for a $50,000 profit.
This is an extremely simplified version of ROI. There are many other factors that you need to determine to see if the numbers work in your favor — that is, you’re not overpaying initially when you buy the properties or for the renovations or holding costs.
Flipping properties means that you will need to spend more time looking for fixer-uppers that may be under market value. These may be more difficult to find in a hot market with rising property prices. Beyond the actual purchase price, you will also need to factor in fixed purchase costs for inspections, closing, and lender fees.
You’ll also need to factor in holding costs. Your budget should include funds for making repairs, whether you are doing them yourself or hiring contractors. While you’re upgrading the property, you’ll need to carry mortgage payments, property taxes, utilities, and insurance.
Because of rising property values, fix-and-flip deals in good neighborhoods can be hard to find. But once you know where to find rehab opportunities, you can easily repeat the process by reinvesting proceeds from a previous flip into the next property, which can be bigger, in a more desirable neighborhood, or finished out more luxuriously, and therefore sold for more cash!
Working with the right real estate professionals will help you learn which neighborhoods to consider and determine where you should focus your search. We can help you find the right fixer-uppers that may be under market value. Also, a Realtor will have access to many properties that may not be publicly available.
Finding buy-and-hold rental properties
A buy-and-hold rental property is one that your purchase with the intent of renting it out to tenants. If you find the right long-term buy-and-hold rental property, you can earn consistent cash flow each month, which can be a great source of supplemental income.
You’ll need to carefully review the operating expenses on the property and what tenants are willing to pay for the space to know if you’ll make or lose money each month. For example, say your total costs to buy a duplex was $20,000, including down payment and closing costs. You can rent each of the units for $600. Assuming your building is 100% occupied, you’ll make $1200 per month in income. Your expenses include mortgage payments, taxes, insurance, utilities, and management fees, and you want to set aside some cash each month for capital expenditures and routine repairs. You calculate that your expenses add up to $1100 per month. Once you subtract your expenses from your income, you’ll have a positive cash flow of $100 per month.
Of course, this is a very simplified example, and it doesn’t take into account that problems will inevitably arise. Emergency roof repairs, heating system breakdowns, broken windows that need replacing, and other unexpected expenses can eat away at your profits. One of your units may be vacant for a month or more -- for example, vacancies are high in the summer months in buildings around universities -- or you could have a tenant who fails to pay their monthly rent.
The more you can anticipate problems before they happen, however, the easier it will be for you to recover from setbacks! Moreover, rent isn’t the only way to make money on a buy-and-hold property. You can also add amenities, such as coin laundry and vending machines, to increase your potential monthly income. If your property has space to add a billboard, you can earn advertising revenue from renting that space, too. And when you decide to sell, your property’s value will likely have increased both from the overall rising property values and by the improvements you made to increase the cash flow.
Once you find and invest in your rental property, you’ll need to decide how you want it managed from month to month.
Getting the right property manager
Do you want to manage your own property or hire a manager? Property management can become a full-time job. As a property manager, you’ll have to deal not only with maintenance, repairs, and tenant issues, but also with insurance, fair rental regulations, and building code compliance. So if you’re not an expert in these areas, managing your own properties may not be worth your time and effort.
Hiring a professional manager can save you headaches over the long term. While you’ll have to factor in management as a fixed expense, your property manager will likely know how to better take care of routine repairs, tenant issues, and keep your property near 100% occupancy.
Your real estate professional can refer you to reputable property management companies to help you take care of your investment.
Where should I start investing in local real estate?
Work with a knowledgeable real estate professional who knows about the different neighborhoods. We can help you find properties that will fit into your budget and your overall goals. Whether you’re seeking a duplex or multifamily property so you can maximize your rental income or whether you want a condo or single-family home to improve for resale, we can guide you to the best property to suit your needs.
Contact us to learn more about investment properties in our area. 2022-02-21T06:47:00-07:002022-02-21T06:50:07-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11974Real Estate Relocation Guide: 7 Steps to a Seamless MoveReal Estate Relocation Guide: 7 Steps to a Seamless Move
Whatever your reasons are for relocating to a new area, the process can feel overwhelming.
Whether you’re moving across town or across the country, you’ll be changing more than your address. Besides a new house, you may also be searching for new jobs, schools, doctors, restaurants, stores, service providers, and more.
Of course, you’ll need to pack, make moving arrangements, and possibly sell your old home. With so much to do, you may be wondering: Where do I start?
In this guide, we outline seven steps to help you get prepared, get organized, and get settled in your new community. Our hope is to alleviate the hassle of relocating—so you can focus on the exciting adventure ahead!
1. Gather Information
If you're unfamiliar with your new area, start by doing some research.1 Look for data on average housing prices, demographics, school rankings, and crime statistics. Search for maps that illustrate local geography, landmarks, public transportation routes, and major interstates. If you’re moving across the country, research climate and seasonal weather patterns.
Check out local newspapers and blogs for information on political issues and developments that could impact your new community. You may also want to search for online forums and Facebook Groups relevant to your new area. These can be a great place to find information, ask questions and just observe local attitudes and outlooks.
If you’re relocating for a job, find out if your new employer offers any relocation assistance. Many large corporations have a designated human resource professional to assist employees with relocation efforts, while others may contract this service out to a third party. Some employers will also cover all or a portion of your relocation and moving costs.
By gathering this information upfront, you’ll be better prepared to make informed decisions down the road.
Let us know if you’d like assistance with your information-gathering process. We have a wealth of knowledge about this area, and we keep a number of reports and statistics on file in our office. We would be happy to share information and answer any questions you may have.
2. Identify Your Ideal Neighborhoods
Once you’ve sufficiently researched your new area, you can start to identify your ideal neighborhoods.
The first step is to prioritize your “needs” and “wants.” Consider factors such as budget; commute time; quality of schools; crime rate; walkability; access to public transportation; proximity to restaurants, shopping, and place of worship; and neighborhood vibe.
If possible, visit the area in person to get a feel for the community. If you’re comfortable, strike up conversations with local residents and ask about their experiences living in the area.
Still not sure which neighborhood is the best fit for you and your family? Contact a local real estate agent for expert assistance. It’s usually the most efficient and effective way to narrow down your options.
We provide neighborhood assessments and advice as a free service if you’re relocating to our area. Or, if you’re moving out of town, we can refer you to a local agent who can help.
3. Find Your New Home (and Sell Your Old One)
Once you’ve narrowed down your list of preferred neighborhoods, it’s time to start looking for a home. If you haven’t already contacted a real estate agent, now is the time. They can search for current property listings that meet your needs, typically at no cost to you.
Create another list of “needs” and “wants,” but this time for your new home. Include your basic requirements for square footage, bedrooms, and bathrooms, but also think about what other factors are important to you and your family. An updated kitchen? A large backyard? Double sinks in the master bathroom?
Narrow your list down to your top 10 and prioritize them in order of importance.2 This will give you a good starting point to begin your home search. Unless you have an unlimited budget, don’t expect to find a home with everything on your list. But having a prioritized list can help you (and your agent) understand which home features are the most important, and which ones you may be willing to sacrifice.
If you already own a home, you’ll also need to start the process of selling it or renting it out. A real estate agent can help you evaluate your options based on current market conditions. He or she can also give you an idea of how much equity you have in your current home so you know how much you can afford to spend on your new one.
Your agent can also advise you on how to time your sale and purchase. While some buyers are able to qualify for and cover the costs of two concurrent mortgages, many are not. There are a number of options available, and a skilled agent can help you determine the best course given your circumstances.
We would love to assist you if you have plans to buy or sell a home in our area. Please contact us to schedule a free consultation so we can discuss your unique needs and devise a custom plan to make your relocation as seamless as possible. If you’re relocating outside of our area, we can help you find a trusted agent in your new city.
4. Prepare for Your Departure
While everyone considers packing a fundamental part of moving, we often overlook the emotional preparation that needs to take place. If you have children, this can be especially important. Communicate the move in an age-appropriate way, and if possible take them on a tour of your new home and neighborhood. This can alleviate some of the mystery and apprehension around the move.4
Allow yourself plenty of time to pack up your belongings. Before you start, gather supplies, including boxes, tape, tissue paper, and bubble wrap. Begin with non-essentials—such as off-season clothes or holiday decorations—and sort items into four categories: take, trash, sell and donate/give away.5
To make the unpacking process easier, be sure to label the top and sides of boxes with helpful information, including contents, room, and any special instructions. Keep a master inventory list so you can refer back to it if something goes missing.
If you will be using a moving company, start researching and pricing your options. To ensure an accurate estimate of your final cost, it’s best to have them conduct an in-person walkthrough. Make sure you’re working with a reputable company, and avoid paying a large deposit before your belongings are delivered.6
If you plan to drive to your new home, map out the route. And, if necessary, decide on overnight accommodations along the way. If driving is not a good option, you may need to have your vehicles transported and make travel arrangements for you, your family, and your pets.
Lastly, if you will be leaving friends or family behind, schedule final get-togethers before your departure. The last days before moving can be incredibly hectic, so make sure you block off some time in advance for proper goodbyes.
Looking for a reputable moving company? We are happy to provide referrals, as well as recommendations on where to procure packing supplies in our area.
5. Prepare for Your Arrival
To make your transition go smoothly, prepare for your arrival well before moving day. Depending on how long your belongings will take to arrive, you may need to arrange for temporary hotel accommodations. If you plan to move in directly, pack an “essentials box” with everything you’ll need for the first couple of nights in your new home, such as toiletries, toilet paper, towels, linens, pajamas, cell phone chargers, snacks, pet food and a change of clothes.7 This will keep you from searching through boxes after an exhausting day of moving.
Arrange in advance for your utilities to be turned on, especially essentials like water, electricity, and gas. (And while you’re at it, schedule a shut-off date for your current utilities.) Update your address on all accounts and subscriptions and arrange to have your mail forwarded through the postal service. If you have children, register them for their new school or daycare and arrange for the transfer of any necessary records.
You may want to have the house professionally cleaned before moving in. And if you plan to remodel, paint or install new flooring, it’s easier to have it done before you bring in all of your belongings.8 However, it’s not always feasible without someone you trust locally who can supervise. Another option is to keep a portion of your things in storage while you complete some of these projects.
If there are no window treatments, you may need to install some (or at least put up temporary privacy film), especially in bedrooms and bathrooms. And if appliances are missing, consider purchasing them ahead of time and arranging for delivery and installation shortly after you arrive. Just be sure to check measurements and installation instructions carefully so you aren’t stuck with an appliance that doesn’t fit or that requires costly modifications to your new home.
If you own a car, check the requirements for a driver’s license and vehicle registration in your new area and contact your insurance company to update your policy.8 If you will rely on public transportation, research options, and schedules.
If you’re relocating to our area, we can help! We offer “VIP Relocation Assistance” to all of our buyer clients. Contact us for a list of preferred hotels, utility providers, housekeepers, contractors and more!
6. Get Settled in Your New Home
While staring at an endless pile of boxes can feel daunting, you should take advantage of this opportunity to make a fresh start. By creating a plan ahead of time, you can ensure your new house is thoughtfully laid out and well organized.
If you followed our suggestion to pack an “essentials box” (see Step 5), you should have easy access to everything you’ll need to get you through the first couple of nights in your new home. This will allow you some breathing room to unpack your remaining items in a deliberate manner, instead of rushing through the process.7
If you have young children, consider unpacking their rooms first. Seeing their familiar items can help them establish a sense of comfort and normalcy during a confusing time. Then move on to any items you use on a daily basis.10
Pets can also get overwhelmed by new, unfamiliar spaces. Let them adjust to a single room first, which should include their favorite toys, treats, food and water bowl, and a litter box for cats. Once they seem comfortable, you can gradually introduce them to other rooms in the home.11
As you unpack, make a list of items that need to be purchased so you’re not making multiple trips to the store. Also, start a list of needed repairs and installations. If you have a home warranty, find out what’s covered and the process for filing a service order.
Although you may be eager to get everything unpacked, it’s important to take occasional breaks. Have some fun, relax and explore your new hometown!
Need help with unpacking, organizing, or decorating your new home? Contact us for a list of recommended professionals in our area. And when you’re ready to start exploring local “hot spots,” we’d love to fill you in on our favorite restaurants, stores, parks, and other attractions!
7. Get Involved in Your New Community
Studies show that moving can lead to feelings of loneliness and depression. People who have recently moved tend to be isolated socially, more stressed, and less likely to participate in exercise and hobbies. However, there are ways to combat these negative effects.12
First, get out and explore. In a 2016 study, recent movers were shown to spend less time on physical activities and more time on their computers, which has been proven to lead to feelings of depression and loneliness. Instead, get out of your house and investigate your new area. And if you travel on foot, you’ll gain the advantages of fresh air and exercise.12
Combat feelings of isolation by trying to meet people in your new community. Find a local interest group, take a class, join a place of worship, or volunteer for a cause. Don’t wait for friends to come knocking on your door. Instead, go out and find them.
Finally, be a good neighbor. Try to introduce yourself to your new neighbors, invite them over for coffee or dinner, and help when they need it. Once you’ve developed friendships and a support system within your new neighborhood, it will truly start to feel like home.
Want more ideas on how to get involved in your community? Contact us for a free copy of our report, “Welcome Home: 10 Tips to Turn Your Neighborhood Into a Hometown Haven.”
LET’S GET MOVING
While moving is never easy, these seven steps offer an action plan to get you started on your new adventure. To avoid getting overwhelmed, focus on one step at a time. And don’t hesitate to ask for help!
In a 2015 study, 61 percent of participants ranked moving at the top of their stress list, above divorce and starting a new job.13 But with a little preparation—and the right team of professionals to assist you—it is possible to have a positive relocation experience.
We specialize in assisting home buyers and sellers with a seamless and “less-stress” relocation. Along with our referral network of movers, handymen, housekeepers, decorators, contractors, and other service providers, we can help take the hassle and headache out of your upcoming move. Give us a call or message us to schedule a free, no-obligation consultation!
Sources:
You Move Me - <br /> <a href="https://www.youmoveme.com/us/blog/105-tips-for-a-successful-relocation">https://www.youmoveme.com/us/blog/105-tips-for-a-successful-relocation</a>
HouseLogic.com - <br /> <a href="https://www.houselogic.com/buy/house-hunting/must-have-items/">https://www.houselogic.com/buy/house-hunting/must-have-items/</a>
Livestrong - <br /> <a href="https://www.livestrong.com/article/436651-the-effects-of-sunlight-fresh-air-on-the-body/">https://www.livestrong.com/article/436651-the-effects-of-sunlight-fresh-air-on-the-body/</a>
Parents Magazine - <br /> <a href="https://www.parents.com/parenting/money/buy-a-house/make-moving-easier-on-you-and-your-kids/">https://www.parents.com/parenting/money/buy-a-house/make-moving-easier-on-you-and-your-kids/</a>
The Spruce - <br /> <a href="https://www.thespruce.com/starting-to-pack-for-your-move-2436470">https://www.thespruce.com/starting-to-pack-for-your-move-2436470</a>
Moving.com -<br /> <a href="https://www.moving.com/tips/hiring-quality-movers/">https://www.moving.com/tips/hiring-quality-movers/</a>
The Spruce - <br /> <a href="https://www.thespruce.com/unpack-your-entire-home-2435815">https://www.thespruce.com/unpack-your-entire-home-2435815</a>
HouseLogic.com -<br /> <a href="https://www.houselogic.com/buy/moving-in/before-you-move/">https://www.houselogic.com/buy/moving-in/before-you-move/</a>
HGTV - <br /> <a href="https://www.hgtv.com/design/real-estate/moving-checklist">https://www.hgtv.com/design/real-estate/moving-checklist</a>
Moving.com - <br /> <a href="https://www.moving.com/tips/how-to-unpack-and-organize-your-house/">https://www.moving.com/tips/how-to-unpack-and-organize-your-house/</a>
ASPCA - <br /> <a href="https://www.aspca.org/pet-care/general-pet-care/moving-your-pet">https://www.aspca.org/pet-care/general-pet-care/moving-your-pet</a>
Psychology Today - <br /> <a href="https://www.psychologytoday.com/us/blog/is-where-you-belong/201607/why-youre-miserable-after-move">https://www.psychologytoday.com/us/blog/is-where-you-belong/201607/why-youre-miserable-after-move</a>
The Daily Express - <br /> <a href="https://www.express.co.uk/news/uk/574171/Divorce-stressful-moving-home">https://www.express.co.uk/news/uk/574171/Divorce-stressful-moving-home</a>
2022-02-18T08:24:00-07:002022-02-18T08:28:59-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11962Renters for a Weekend or a While: What’s the Best Use of Your Investment Property?Renters for a Weekend or a While: What’s the Best Use of Your Investment Property?
The residential rental market is now the fastest-growing segment of the housing market. In the United States, the demand for single-family rentals, defined as either detached homes or townhouses, has risen 30 percent in the past three years.1 And in Canada, rental units now account for nearly one-third of the country’s homes, with particular demand for multi-family units, including apartments and condominiums.2
At the same time, the short-term, or vacation, rental market is also booming. The popularity of online marketplaces like Airbnb, HomeAway, and VRBO has helped the short-term rental market become one of the fastest-growing segments in the travel industry.3
Now, more than ever, there is an abundance of opportunity for real estate investors. But which path is best: leasing your property to a long-term tenant, or renting your property to travelers on a short-term basis?
In this post, we examine the differences between the two investment strategies and the benefits and limitations of each category.
WHY INVEST IN A RENTAL PROPERTY? The Top 5 Reasons
Before we delve into the differences between long-term and short-term rentals, let’s answer the question: “Why invest in a rental property at all?”
There are five key reasons investors choose real estate over other investment vehicles:
1. Appreciation
Appreciation is the increase in your property’s value over time. And history has proven that over an extended period, the cost of real estate continues to rise. Recessions may still occur, but in the vast majority of markets, the value of the real estate does grow over the long term.
2. Cash Flow
One of the key benefits of investing in real estate is the ability to generate steady cash flow. Rental income can be used to pay the mortgage and taxes on your investment property, as well as regular maintenance and repairs. If appropriately priced in a solid rental market, there may even be a little extra cash each month to help with your living expenses or to grow your savings.
Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase until you own the property free and clear … leaving you with residual cash flow for years to come.
3. Hedge Against Inflation
Inflation is the rate at which the general cost of goods and services rises. That means as inflation rises, the money you have sitting in a savings account will buy less tomorrow than it will today. On the other hand, the price of real estate typically matches (or often exceeds) the rate of inflation. To hedge or guard yourself against inflation, real estate can be a smart investment choice.
4. Leverage
Leverage is the use of borrowed capital to increase the potential return of an investment. You can put a relatively small amount down on a property, finance the rest of the investment with a mortgage, and then profit on the entire combined value.
5. Tax Benefits
Don’t overlook the tax benefits that can come with a real estate investment, as well. From deductions to depreciation to exemptions, there are many ways a real estate investment can save you money on taxes. Consult a tax professional to discuss your particular circumstances.
These are just a few of the many perks of investing in real estate. (For more detailed information, visit our previous post: Why Real Estate Investing Makes (Dollars and) Sense. [Link to October 2017 blog post.]) But what’s the best strategy to maximize returns on your investment property? In the next section, we explore the differences between long-term and short-term rentals.
<br />
LONG-TERM (TRADITIONAL) RENTAL MARKET
When most people think of owning a rental property, they imagine buying a home and renting it out to tenants to use as their primary residence. Traditionally, investors would use their rental property to generate an additional stream of income while benefiting from the property’s long-term appreciation in value.
In fact, that steady and predictable monthly cash flow is one of the key advantages of owning a long-term rental. And as an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.
However, there are also limitations to long-term rentals, which often come down to your ability to control the property. Perhaps the most obvious one is that you do not get to use the home or closely monitor its upkeep (this is different from a short-term rental, which we’ll share in the next section).
In addition, while you can usually generate a steady, predictable income stream with a long-term rental, you are limited in your ability to adjust rent prices based on increasing or seasonal demand. Therefore, you may end up with a lower overall return on your investment. In fact, according to data from Mashvisor, in the 10 hottest real estate markets, short-term rentals produced “significantly higher rental income” than long-term rentals.4
SHORT-TERM (VACATION) RENTAL MARKET
Short-term rentals are often referred to as vacation rentals, as more and more travelers enjoy the benefits of staying in a home while on vacation. In fact, according to Wells Fargo, vacation rentals are steadily growing and predicted to account for 21% of the worldwide accommodations market by 2020.5
Investing in a short-term rental or funding your second-home purchase by renting it out can offer many benefits. If you purchase an investment property in a top travel destination or vacation spot, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. In addition to greater control over how your property is used, you can also adjust your rental price around peak travel demand to maximize your returns.
But short-term rentals also have risks and drawbacks that may dissuade some investors. They require greater day-to-day property management, and owners are typically responsible for furnishing the property, upkeep, and utilities.
And while rental revenue can be higher, it can also be less predictable based on seasonal or consumer travel trends. For example, a lack of snowfall during ski season could mean fewer bookings and lower rental revenue that year.
In addition, laws and limitations on short-term rentals can vary by region. And in some areas, the regulations are in flux as residents and government officials adapt to a new surge in short-term rentals. So make sure you understand any existing or proposed restrictions on rentals in the area where you want to invest.
Urban centers or suburban communities may be more resistant to short-term renters, thus more likely to pass future limitations on use. To lower your risk, you may want to consider properties in resort communities that are accustomed to travelers. We can help you assess the current regulations on short-term rentals in our area. Or if you’re interested in investing in another market, we can refer you to a local agent who can help.
WHICH INVESTMENT STRATEGY IS RIGHT FOR YOU?
Now that you understand these two real estate investment options, how do you pick the right one for you? It’s helpful to start by clarifying your investment goals.
If your goal is to generate steady, predictable income with less time and effort spent on property management, then a long-term rental maybe your best option. Also, if you prefer a less-risky investment with more reliable (but possibly lower) returns, then you may be more comfortable with a long-term rental.
On the other hand, if your goal is to purchase a vacation or second home that you’ll use, and you want to defray some (or all) of the expense, then a short-term rental may be a good option for you. Similarly, if you’re open to taking on more risk and revenue volatility for the possibility of greater investment returns, then a short-term rental may better suit your spirit as an investor.
But sometimes the decision isn’t always so clear-cut. If your goal is to purchase a future retirement home now to hedge against inflation, rising real estate prices, and interest rates, then both long- and short-term rentals could be suitable options. In this case, you’ll want to consider other factors like location, market demand, property type, and risk tolerance.
HERE OR ELSEWHERE … WE CAN HELP
If you’re looking to make a real estate investment—whether it’s a primary residence, investment property, vacation home, or future retirement home—give us a call. We’ll help you determine the best course of action and share insights and resources to help you make an informed decision. And if your plans include buying outside of our area, we can refer you to a local agent who can help. Contact us to schedule a free consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.
Sources:
USA Today – <br /> <a href="https://www.usatoday.com/story/money/personalfinance/real-estate/2017/11/11/renting-homes-overtaking-housing-market-heres-why/845474001/">https://www.usatoday.com/story/money/personalfinance/real-estate/2017/11/11/renting-homes-overtaking-housing-market-heres-why/845474001/</a>
The Globe and Mail – <br /> <a href="https://www.theglobeandmail.com/real-estate/the-market/article-demand-for-rental-housing-in-canada-now-outpacing-home-ownership/">https://www.theglobeandmail.com/real-estate/the-market/article-demand-for-rental-housing-in-canada-now-outpacing-home-ownership/</a>
Phocuswright – <br /> <a href="https://www.phocuswright.com/Travel-Research/Research-Updates/2017/US-Private-Accommodation-Market-to-Reach-36B-by-2018">https://www.phocuswright.com/Travel-Research/Research-Updates/2017/US-Private-Accommodation-Market-to-Reach-36B-by-2018</a>
Rented.com – <br /> <a href="https://www.rented.com/vacation-rental-best-practices-blog/do-long-term-rentals-or-short-term-rentals-provide-better-investment-returns/">https://www.rented.com/vacation-rental-best-practices-blog/do-long-term-rentals-or-short-term-rentals-provide-better-investment-returns/</a>
Turnkey Vacation Rentals – <br /> <a href="https://blog.turnkeyvr.com/short-term-vs-long-term-vacation-rental-properties/">https://blog.turnkeyvr.com/short-term-vs-long-term-vacation-rental-properties/</a>
2022-02-17T07:27:00-07:002022-02-17T07:32:10-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11952Are You Covered? A Homeowner’s Insurance GuideAre You Covered? A Homeowner’s Insurance Guide
No one likes to think about disasters. Severe weather, fire, theft—or even a seemingly small issue like a broken pipe—can wreak havoc on your home and result in thousands of dollars in damages. Fortunately, a good homeowners insurance policy can offer you peace of mind that you and your family will be financially protected if disaster strikes.
A homeowners insurance policy covers your home—as well as the belongings in it—in case of theft, accidental damage, or certain natural disasters. In fact, most financial institutions require that you purchase homeowners insurance before they issue a mortgage. While coverage varies, most policies also help to protect you from liability should someone outside your household become injured on your property. And that liability coverage is often extended to include damage you (or anyone living in your household) may do to someone else’s property.1
With all the protection offered, it’s equally important to understand what a home insurance policy does NOT cover. For example, homeowners insurance won’t pay to repair malfunctioning systems and appliances within your home. And terms vary, but standard policies typically exclude coverage related to floods, earthquakes, slow leaks, power failure, neglect, aging, faulty repairs or construction materials, and acts of war.2
Homeowners Insurance Covers Things Like:
Structure
Roof
Windows
Furniture/Personal Belongings
Liability for Non-Residents Injured on Property
Liability for Damage or Injury Caused by You or Your Pets
Most Standard Policies DON’T Cover:
Malfunctioning Systems & Appliances
Floods
Earthquakes
Slow Leaks
Power Failures
Neglect or Aging
Faulty Repairs
Acts of War
NARROWING THE COVERAGE GAP
So how do you minimize your risk when so many potential issues are excluded from a standard homeowner’s policy? Many insurers offer supplemental coverage options that can be tacked on to a basic policy. We explore this further in the section below on “7 Tips for Purchasing Homeowners Insurance.”
Some homeowners also choose to purchase a home warranty, which covers many of the systems and appliances in your home that are NOT covered by homeowner’s insurance. Home warranties are separate from homeowner’s insurance, so if interested you’ll need to seek out a policy through a dedicated provider.
While terms vary, a home warranty will often pay to repair or replace components of your HVAC, electrical, plumbing, and some appliances that fail due to age or typical wear and tear. Unlike homeowner’s insurance, home warranties aren’t required by mortgage companies. But many homeowners like the added financial protection and peace of mind that home warranties provide.3
Keep in mind, if you do purchase a home warranty, you will still be responsible for paying a service fee, or deductible, every time you use it. And you will be limited to using service providers who are contracted through your home warranty company.
7 TIPS FOR PURCHASING HOMEOWNERS INSURANCE
Whether you’re shopping for a new policy on your first home or you’re considering switching providers on an existing policy, it’s important to do your research beforehand. Not all insurance policies—or providers—are created equal. A little due diligence can save you time, money, and hassle in the long run.
Prioritize Service and Value
When choosing an insurance provider, ask around for recommendations. Check with neighbors, friends, and family members, particularly those who have filed an insurance claim in the past. Find out if they had a positive or negative experience. Read online reviews. Ask your real estate agent for a referral to a reputable insurance broker who can help you compare your options.
Don’t just choose the cheapest policy. Instead, search for one that offers excellent client service and provides the best coverage for the cost.
Choose the Right Level of Coverage
Your policy limits should be high enough to cover the cost of rebuilding your home. Don’t make the common mistake of insuring your home for the price you paid for it. The cost to rebuild could be higher or lower, depending on the value of your land, your home’s unique features, market factors, new building codes, and local construction costs.4
Also, consider whether you need a higher level of liability insurance to protect your assets. If your investments and savings exceed the liability limits in your policy, you may need to purchase an excess liability or umbrella policy.
Ultimately, you should make sure your coverage is adequate to mitigate your losses—but don’t pay for excess insurance you don’t need.
Inquire About Additional Coverage
Ask your insurance agent about additional coverage options that can help close any gaps you have in your policy.
For example, if you’re in a flood or earthquake-prone area, experts strongly recommend that you add those coverages to your policy. In fact, flooding is the most frequently occurring natural hazard, and a significant percentage of insurance payouts are for homes outside “flood zones,” or areas known to be at risk of flooding. So even if your home is not technically located in a flood zone, you may want to add flood coverage to your policy, just in case.5
Expensive jewelry, furs, collectibles, or artwork may not be fully insured by a standard policy. Ask about raising your limits for any items of particular value, or check with a specialty insurer about a separate policy for such items.
Decide on “Replacement Cost” or “Actual Cash Value”
Insurers can use a variety of methods to determine how much they will pay to reimburse you for a loss, but the two most common are “replacement cost” or “actual cash value.”
If your seven-year-old sofa is damaged in a fire, replacement cost coverage will pay you the cost to purchase a new, comparable sofa at today’s prices. Actual cash value coverage will pay you for the depreciated value of the sofa you lost—so what you would pay to buy a seven-year-old sofa rather than a new one.6
While a replacement cost coverage policy will result in a bigger payoff if you suffer a loss, it will probably require a larger annual premium. Compare both options to find out which is the better fit for you.
Consider a Higher Deductible
A deductible is the amount of money you are responsible for paying on a loss before your insurance company will pay a claim. Opting for a higher deductible can reduce your premiums.
Note that in some cases, your insurance policy may have a separate or higher deductible for certain kinds of claims, such as those caused by floods, windstorms, hail, or earthquakes.
While a higher deductible can save you money on your premiums, opt for one that is still affordable given your current financial situation.
Try Bundling Your Coverage
Combining your home, automobile, and other policies under one insurer can often result in a significant discount. And some insurers offer additional benefits, such as a single deductible if property insured by multiple policies is damaged. For instance, if a fire destroys your home and your car, you may only have to pay the higher of the two deductibles. Bundling can also make payment and renewal of your policies more convenient.7
<br /> However, bundling isn't always the best or least expensive option. In some cases, you may find better coverage options, service, and/or pricing if you split your policies between multiple insurers. So be sure to consider all of your options before making a final decision.
Reassess Your Policy Each Year
Even if you’ve done all your due diligence before purchasing a homeowners insurance policy, don’t set your annual renewal on autopilot. Instead, when it comes time to renew, take some time to consider factors that have changed over the past year.
For example, have you made any home improvements that would require you to raise your coverage limits? Have you made any security or safety improvements that qualify you for a discount on your premiums? 8
Has there been a shift in market conditions that would make it more or less expensive to rebuild your home now? If so, you may need to adjust your coverage levels accordingly.
If you’ve made any changes to how you use your home, you may need to adjust your policy, as well. For example, if you’ve started a home-based business or occasionally rent out your home on a home-sharing site, you may not be fully covered by your existing policy.9
Finally, consider any changes to your financial situation that may require increased liability coverage limits. If you’ve grown your investments or inherited property, it may be time to purchase additional coverage to protect your expanding asset base.
MINIMIZE RISK, MAXIMIZE VALUE
Now that you understand the basics of homeowners insurance, you should be ready to start shopping for a policy that best fits your needs and budget. Your goal should be to minimize your risk while maximizing the value your policy provides.
While you never want to leave yourself without a safety net should disaster strike, you also don’t want to overpay for insurance you don’t need (and will hopefully rarely use). Aim to strike a balance that will provide you with adequate protection at an affordable price.
NEED MORE GUIDANCE? WE CAN HELP
If you’re in the market to purchase homeowners insurance or a home warranty, give us a call! We get a lot of feedback from clients on the best (and worst) providers and are happy to share what we know.
We can also put you in touch with a trusted insurance professional who can answer your questions and help you find the best policy to meet your needs.
The above references an opinion and is for informational purposes only. It is not intended to be financial or insurance advice. Consult the appropriate professionals for advice regarding your individual needs.
Sources:
Insurance Information Institute -<br /> <a href="https://www.iii.org/article/what-covered-standard-homeowners-policy">https://www.iii.org/article/what-covered-standard-homeowners-policy</a>
Insure.com - <br /> <a href="https://www.insure.com/home-insurance/exclusions.html">https://www.insure.com/home-insurance/exclusions.html</a>
American Home Shield - <br /> <a href="https://www.ahs.com/home-matters/cost-savers/whats-the-difference-homeowners-insurance-vs-home-warranty">https://www.ahs.com/home-matters/cost-savers/whats-the-difference-homeowners-insurance-vs-home-warranty</a>
Insurance Information Institute - <br /> <a href="https://www.iii.org/article/how-much-homeowners-insurance-do-you-need">https://www.iii.org/article/how-much-homeowners-insurance-do-you-need</a>
Realtor.com - <br /> <a href="https://www.realtor.com/advice/buy/buying-home-insurance/">https://www.realtor.com/advice/buy/buying-home-insurance</a>
Texas Department of Insurance - <br /> <a href="http://www.helpinsure.com/home/documents/acvvsreplace.pdf">http://www.helpinsure.com/home/documents/acvvsreplace.pdf</a>
Insure.com - <br /> <a href="https://www.insure.com/home-insurance-faq/bundle-insurance-policies.html">https://www.insure.com/home-insurance-faq/bundle-insurance-policies.html</a>
National Association of Insurance Commissioners - <br /> <a href="https://www.insureuonline.org/consumer_homeowners_ten_tips.htm">https://www.insureuonline.org/consumer_homeowners_ten_tips.htm</a>
HomeAway - <br /> <a href="https://help.homeaway.com/articles/Do-I-need-a-special-vacation-rental-insurance-policy-for-my-property">https://help.homeaway.com/articles/Do-I-need-a-special-vacation-rental-insurance-policy-for-my-property</a>
2022-02-16T08:28:00-07:002022-02-16T08:32:06-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11932The Consumer’s Guide to Hiring an Amazing Real Estate Agent
The Consumer’s Guide to Hiring an Amazing Real Estate Agent
When you’re buying or selling a home, it’s crucial to work with a qualified real estate agent. Not just a professional, but an amazing agent and a market expert. So how do you ensure you’re hiring an amazing real estate agent?
There are currently more than two million real estate professionals in North America.1,2 With so many options to choose from, how does a prospective home buyer or seller choose the right agent or broker? According to the National Association of Realtors®, trust and reputation are the top deciding factors consumers use when hiring an agent.3
But how do you measure trust and reputation ... and what criteria can be used to help you make your decision?
In this guide, we've outlined the top attributes that amazing agents possess, as well as the questions you can ask to make sure you’re working with the right market expert to achieve your real estate goals.
5 ATTRIBUTES OF AN AMAZING AGENT
As we mentioned above, not all real estate professionals are the same. And it’s easy to be overwhelmed by the options and information about working with real estate professionals to buy or sell your home. In fact, many real estate markets are oversaturated with agents.
To help you understand what makes top agents and market experts stand apart from the competition, the following are five key attributes of an amazing agent:
1. A Pricing Specialist
If an agent has a real estate license, they know the basics of the transaction process. They know what goes into buying and selling a home. However, there’s a difference between knowing the process and navigating it for an ideal result. This ideal result often means buying or selling a home for the best price.
For buyers, amazing agents have a strong understanding of market trends, competition, and how to make your offer attractive to sellers. They can help you identify and secure a deal to ensure you get the home you want, within your desired budget.
If you’re selling a home, market experts have experience pricing homes optimally for the market and creating pricing plans to minimize the time spent selling the home. This will help you sell for your desired price, and avoid costs like additional mortgage and utility payments.
Takeaway: Whether buying or selling a home, pricing can be tricky. Market experts can help navigate best-possible pricing strategies, and also secure the home you want within your budget.
2. An Effective Time Manager
It’s common to underestimate the amount of time it takes to buy or sell your home. The average real estate agent may not be utilizing the latest tools and technology to make the transaction easier and more cost-effective for their clients. Market experts have tools and strategies at their disposal to minimize the amount of time you spend on the process.
For sellers, market experts can make sure you only deal with qualified buyers, not the “window shoppers” who can waste your time. We also utilize the latest marketing practices to advertise and price your home effectively, ensuring it gets sold quickly.
When looking to buy a home, inexperienced agents may waste your time by showing you homes that are not a good fit for you. A market expert knows how to prioritize your needs and wants to find you the ideal home within your budget. They also know how to spot “red flags” and can steer you away from homes that are likely to turn up major issues in a real estate inspection, saving you time and money.
In addition, well-networked Realtors can gain access to the hottest listings before many websites do. Their extensive professional networks can help identify “pre-list” homes before they’re officially on the market. This can be invaluable in a highly-competitive real estate market.
Takeaway: Even a well-intentioned agent may not have the skills, tools, or technology to make the experience easy for you. There are lots of hidden activities that may take up unexpected time, and a market expert will save you time and energy.
3. A Market Insider
While most agents can pull market stats about a neighborhood, community, or city, they may not understand important trends or developments that would affect your transaction. These can include the state of the school district, issues with a homeowner association, new businesses in the area, zoning rules, or trends in home prices.
Market experts live and breathe local real estate and know the trigger points for buying and selling in this market. We also stay current on effective marketing and negotiation practices, resulting in our track record of success.
For sellers, we understand what features of your home and neighborhood are assets in the selling process. And for buyers, we share a deep understanding of market factors, including school and neighborhood quality, crime statistics, speed of sales, and more.
Takeaway: Getting relevant and specific market knowledge can be difficult and time-consuming, which is why many real estate agents don’t have it. Whether you’re buying or selling a home, an experienced real estate agent is often the best source of information about a city, neighborhood, or even street … we’re literally conducting market research every day.
4. A Strong Negotiator
Amazing agents truly set themselves apart in their ability to negotiate. Unfortunately, a large portion of agents doesn’t commit their full time to increase this key skill.
Real estate negotiations can be challenging, even for seasoned professionals. It takes skill, experience, and knowledge of how to fight for your client’s best interests. While any agent can enter negotiations to buy or sell a home, they may not know the effective strategies to exit those negotiations with the result you want.
Experienced Realtors focus on negotiation as a key skill. We understand what to do before entering negotiations (establishing the upper hand to set up the best outcome), as well as during the process (when to offer or accept concessions).
Takeaway: Many agents can feel the stress of the negotiation process, and may agree to the terms of the buyer/seller. Working with a market expert will help ensure you get the best deal, not just the fastest deal.
5. An Effective Closer
Closing a deal fast is often a good thing. For buyers, it means you found the home you wanted quickly. For sellers, it often means you can avoid the added expenses of mortgage and utility payments, and maximize the value of your home sale.
However, an agent solely focused on speed can make decisions that aren’t in your best interests. Top real estate professionals know how to not only achieve your real estate goals quickly but in the right way to avoid potential pitfalls.
Just like negotiations, the paperwork and process of closing a real estate transaction are complicated. And they can be overwhelming for the average agent who hasn’t handled a lot of transactions. Sales contracts, property disclosures, occupancy agreements, and even lead paint records need to be executed with precision. Your agent not only needs to be familiar with these but also stay current on any changes in requirements or regulations.
Market experts have a strong understanding of real estate contracts, timelines, clauses, and contingencies within the closing process. In fact, avoiding pitfalls during the closing process is where many sellers find an experienced Realtor is a huge asset.
Takeaway: Many agents don’t have a firm understanding of contracts. Because a real estate transaction often involves a significant investment, even a small mistake can mean serious trouble. With that in mind, it’s often best, and most responsible, to work with a true market expert.
5 QUESTIONS TO ASK YOUR REAL ESTATE AGENT
So how do you know if you’re working with an amazing agent?
The first step would be to “shop around.” Many people work with the first agent they come across without a firm understanding of their level of experience. It’s always a good idea to interview a number of agents before selecting one. If you’ve gotten referrals from people you trust, then you may only need to interview 2-3 agents.
However, it can be tough to know what to ask in the interview process. Here are some questions that can help you qualify as the best agent to help you achieve your real estate goals:
1. Can you send me some information about yourself?
Look for professionalism and consistency. What are their professional accomplishments? Also, try to identify how they approach their work. Look for a business person who has a strategy and solid support system. If they’re a newer agent, ask about their team’s dynamic and accomplishments.
2. How long have you been in real estate?
The average Realtor has 10 years of experience4. But while longevity is important, even more telling are the number of transactions they have closed or been involved in. So feel free to also ask: “How many homes have you sold in this area?”
3. What will you do to keep me informed?
Do you want daily or weekly reports from your agent? Will the agent be able to meet these expectations? Determine how much communication you want, and then find an agent who will give you the attention and time you want and deserve.
4. Can you provide me with further resources I may need?
From market reports and pricing trends to school performance and crime statistics, top agents have resources at their disposal. In addition, market experts have built strong relationships with their extended team of professionals, and can often get expedient service or be able to “cash in a favor” for you should a need arise.
5. Seller only: Can you share with me your plan to market my property? Many agents will simply put your home in the MLS and wait for it to sell. An amazing agent should have a detailed plan of how to get your home exposure on social media, to their local networks, and more.
GET STARTED
Now that you’re armed with the 5 Attributes of Amazing Agents and the Top Questions to ensure you work with the best possible real estate agent, you’re ready to start interviewing agents.
We’d love an opportunity to win your business. Schedule a free consultation with us to find out how true market experts can help you achieve your real estate goals!
Sources:
National Association of REALTORS – <a href="https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics">https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics</a>
Financial Post – <a href="http://business.financialpost.com/personal-finance/mortgages-real-estate/canada-housing-bubble-agents/wcm/b49d4e3a-bd8d-4d1c-9566-bd3d80c8e23a">http://business.financialpost.com/personal-finance/mortgages-real-estate/canada-housing-bubble-agents/wcm/b49d4e3a-bd8d-4d1c-9566-bd3d80c8e23a</a>
National Association of REALTORS –
<a href="https://www.nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers">https://www.nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers</a>
National Association of REALTORS – <a href="https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics">https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics</a>
2022-02-15T07:09:00-07:002022-02-15T07:13:25-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11918The Compound Effect: Building Your Household’s WealthThe Compound Effect: Building Your Household’s Wealth
Wealth is within reach for many people; however, <a href="http://www.bankrate.com/finance/financial-literacy/do-you-think-you-will-be-rich-one-day-1.aspx">according to a recent study</a>, 63 percent of Americans said it’s not likely they’ll become rich.1 While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice, and good financial sense. Here are a few ways to build your household’s wealth.
Let Compound Interest Work for You
Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.
Tap into Your Home Appreciation
<a href="https://www.pulsenomics.com/Q4_2016_HPE_Survey.php">Experts expect</a> home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.2 If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.3 If you’re curious about the value of your home, give us a call!
Build Equity in Your Home
One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one <a href="http://economistsoutlook.blogs.realtor.org/2014/09/08/net-worth-of-homeowners-vs-renters/">study</a>, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.4 Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one <a href="http://www.mortgage-info.com/mortgage-calculators/equitygrowthcalculator.aspx">here</a>.
Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.
Build Equity Faster in Your Home
Mortgage Term
30 Years
15 Years
Loan amount
$118,000
$118,00
Months to pay
360
180
Annual percentage rate
4.0%
3.0%
Monthly payment
$563
$815
Total interest
$84,806
$28,680
Interest savings
-
$56,126
Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future
Pay Down Your Mortgage…or Not
Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt-free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.
If you decide to pay off your mortgage sooner, here are a few ways to do so:
1. Pay more money at the beginning of your amortization period and apply it to your principal.
2. If you receive a tax refund or other windfall, apply it toward your principal.
3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.
4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.
5. If you are locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.
Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.
Purchase Investment Property
Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.5 While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.
The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.
There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest, and more. If you’re thinking of purchasing an investment property, talk to your tax professional to get the details.
Achieve More Wealth by Creating Financial Goals
Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.
1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years, and in 20 years?
2. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.
3. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.
Your Budget
Income
Earned
$
Investments
+ $
Total Income
= $
Daily Expenses
- $
Monthly Bills
- $
Total Available for Investment
=
To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer those savings into your accounts.
It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home, or are thinking of renovating, we have you covered. Give us a call and we’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.2022-02-14T10:13:00-07:002022-02-14T10:28:38-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:118805 Reasons to Sell Before the Selling Season Picks Up5 Reasons to Sell Before the Selling Season Picks Up
A common thought in real estate is never to list your home in the winter offseason. Perpetuated by industry experts, agents, and repeat sellers alike, this saying encourages many would-be sellers to wait until the spring peak to list their homes. However,<a href="http://time.com/money/4083196/winter-home-sale-tips/"> </a>studies show that homes listed in the winter offseason not only sell faster than those in the spring, but sellers also net more above their asking price at this time.1 Don’t wait until spring to sell. If you’ve been thinking of selling your home, here are five compelling reasons to list now.
1. Take advantage of low inventory. Since most sellers are waiting until spring to list, local inventory falls during the offseason. However, there are still motivated buyers who are ready to move now and don’t want to wait that long to purchase a home. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time they did because “it was just the right time.”2 These eager buyers may flock to your home. You may not need to try as hard to make your home stand out in the sea of other similar homes. With less competition, more buyers, some of whom may have otherwise overlooked your home if you listed during the peak, will express an interest to buy. While you’ll likely have fewer showings in the offseason, buyers who do visit will be more serious about writing an offer. Your home will likely sell faster than it would have during the peak season.
2. Set a higher listing price. Homes sold during the offseason sell at a higher price, on average than those sold during the spring and summer peak. There are many reasons for this. First, motivated buyers are willing to pay closer to the asking price for a home. Second, homes are more likely to be priced right and reflect the economics of not only the local market but the neighborhood as well. Often, homes listed during the peak may be priced to compete with other homes in the area and neighborhood. Sellers may be pressured to sell for less than the list price in order to encourage buyers to choose their home out of the others on the market.
3. You’ll receive more attention. While our team always strives to give you the personal attention you deserve, when you list during the offseason, we’re able to work more closely with you to ensure your home is prepared for its debut on the market. We can also take more time to answer your questions, address your concerns and prepare you and your home for the sale.
Additionally, if you’d like to hire a tradesperson to handle routine maintenance or undertake a minor home renovation before you list, you may be able to take advantage of flexible scheduling and cheaper rates. Many of these professionals experience a winter offseason as well and will be able to focus their time and attention on you and your project.
4. Easier to maintain curb appeal. Curb appeal is intended to attract buyers who are just driving by as well as those who saw your home online and wanted to see it in person. It sets the stage for what interested buyers can expect when they step foot in the home during a showing or open house. If you list your home during the peak of the selling season, you may exhaust your time energy maintaining curb appeal. You’ll likely spend most of your free time mowing the lawn, weeding, trimming shrubs and hedges, planting flowers in pots and in flowerbeds, pulling spent blooms, and watering it all to ensure it looks lush and healthy on a daily basis. After all, a lush landscape will attract potential buyers and set your home apart from other similar homes in the area.
The offseason eliminates the pressure to maintain a picture-perfect front landscape. Since most grass, shrubs, and plants go dormant at this time of year, you’ll have less to maintain. If you live in an area that experiences a traditional winter, your landscape will be covered with snow. Even if you live in a milder climate, you may not have to mow as often, if at all. It’s still important to ensure your exterior appears well-tended, so make sure your walkway and front porch remains free of snow, ice, and debris.
5. Tap into the life changes of buyers. Many buyers receive employee raises and bonuses at the end of the year. If they’ve been saving to buy a home, this extra money may allow them to reach their goal for a down payment and put them on the path to becoming a homeowner. Additionally, companies often hire new employees and relocate current ones during the first quarter of the year, creating a strong demand for housing. If you live in an area that’s home to a large company or has a strong corporate presence, this may be the perfect time to list.
Thinking of Listing in the Offseason? 3 Things to Do Before You List
Get your home ready to list by following these tips.
1. Schedule maintenance. Buyers, especially first-time buyers, want a home they can move into right away; they don’t want to repair the roof or the furnace or replace windows with blown thermal seals before they move in. Do the scheduled maintenance and make repairs before you list your home for sale.
In some cases, it may help to have an inspector do a pre-inspection of your home. A pre-inspection will make you aware of any major, potentially deal-killing, issues that will have to be addressed before you list. It also gives you an idea of minor issues that a potential seller may want to be repaired. Overall, it helps you to accurately price your home and may protect you from claims a buyer might make later.3
2. Create light. Balance out the lack of natural light outdoors by turning the lights on inside. Since people naturally tend to buy emotionally, turning on the lights helps create a sense of warmth and coziness. Light a fire in the fireplace, if you have one, fill your home with the scents of the season, such as vanilla or fresh baked cookies, and put a throw blanket on your sofa.
If you plan to paint the interior of your home before you list, consider an off-white shade to create consistency throughout your home and make the space feel larger and brighter. If you have photos of your garden or the home’s exterior in the spring or summer, display them so interested buyers can get a glimpse of what the home looks like in other seasons.
3. Give your home a thorough cleaning. Cleaning puts your home in its best light. Clean and polish all the horizontal surfaces of your home, including countertops, window sills, and baseboards; have the curtains dry cleaned or otherwise laundered; wash windows, glass doors, and their tracks; vacuum carpeting and polish all wood surfaces, including the floor.
Additionally, this is a great time to pack any personal items and family photos as well as sort through your belongings and donate items you no longer use. This not only eliminates any clutter, but it also gives you less to pack and move when you sell.
If you’re thinking of selling, give us a call! We’d love to help you position your home to sell in our market.2022-02-10T07:45:00-07:002022-02-10T07:49:30-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11873Shut Down Home Intruders With These 7 Safety StrategiesShut Down Home Intruders With These 7 Safety Strategies
According to the FBI, more than one million burglaries are committed in the United States each year, with victims suffering an estimated $3 billion in combined property losses.1 Fortunately, there are some proven tactics you can use to decrease your likelihood of a home invasion.
Most burglars won’t go to extreme lengths to enter a residence. They are looking for easy access with minimal risk. A monitored security system can be an effective deterrent—homes without one are 300% more likely to be burglarized—but it isn’t the only way to protect your property.2 The strategies below can help to maximize your home’s security and minimize your chances of being targeted by intruders.
Thinking about listing your home? We have some additional recommendations for you. Contact us to find out the procedures we use to keep our clients and their property safe and secure during the buying and selling process.
Check Your Doors and Windows
According to home security company ADT, the most common entry point for a burglar is an unlocked front door (34%) followed by a first-floor window (23%) or back door (22%).3 So securing these points of entry is essential.
Evaluate the condition of your doors and locks.
A steel door is generally considered the strongest, but many homeowners prefer the look of wood. Whatever material you choose, make sure it has a solid core and pair it with a Grade 1 or 2 deadbolt lock with a reinforced strike plate.4
Add window locks and security film.
Aftermarket window locks are an easy and inexpensive upgrade that can provide an additional layer of protection for your home. Choose a lock that is compatible with your window frame material and a style that is appropriate for the window type. And consider using a specialty film on windows that are adjacent to a door. Security film holds shattered glass in place, making the windows more difficult to penetrate.5
Landscape for Security
When it comes to outdoor landscaping, many of us think about maintenance and curb appeal. But the choices we make can impact our home’s security, as well. Thieves target homes that they can enter and exit without being detected. Here are a few tweaks that can make your property less appealing to potential intruders.
Increase visibility from the street.
A privacy hedge may keep out nosy neighbors, but it can also welcome thieves—so trim overgrown trees and shrubs that obstruct the view of your property. According to police officers, they offer an ideal environment for criminals to hide.6
Place thorny bushes and noisy gravel below windows.
Don’t eliminate shrubbery altogether, though. Certain hedges can actually offer a deterrent to robbers. Plant thorny rose bushes or sharp-leaved holly beneath your first-story windows for both beauty and protection. Add some loose gravel that crunches when disturbed.
Light Your Exterior
When it’s dark outside, criminals don’t need to rely on overgrown shrubbery to hide. Luckily, a well-designed outdoor lighting system can make your home both safer and more attractive.
Install landscape lighting.
Eliminate pockets of darkness around your yard and home’s perimeter with strategically placed outdoor lights. Use a combination of flood, spot, well, and pathway lights to add interest and highlight natural and architectural details.
Use motion-activated security lights to startle intruders.
The soft glow of landscape lighting isn’t always enough to dissuade a determined intruder. But a motion-activated security light may stop him in his tracks. And if you choose a Wi-Fi-connected smart version, you can receive notifications on your phone when there’s movement on your property.
Make It Look Like You’re Home
Motion-activated lights aren’t the only way to make an intruder think you’re at home. New technology has made it increasingly possible to monitor your home while you’re away. This is especially important since most burglaries take place on weekdays between 10 am and 3 pm, when many of us are at work or school.2
Turn on your TV and leave a car in the driveway.
A survey of convicted burglars revealed that the majority avoid breaking into homes if they can hear the television or if there’s a vehicle parked in the driveway.7 If you’re away from home, try connecting your TV to a timer or smart plug. And when you travel, leave your car out or ask a neighbor to park theirs in your driveway.
Install a video doorbell.
In that same survey, every respondent said they would knock or ring the doorbell before breaking into a home. A video doorbell not only alerts you to the presence of a visitor, but it also enables you to see, hear, and talk with them remotely from your smartphone—so they’ll never know you’re gone.
Keep Valuables Out of Sight
Few home invasions are conducted by criminal masterminds. In fact, a survey of convicted offenders found that only 12% planned their robberies in advance, while the majority acted spontaneously.8 That’s one of the reasons security experts caution against placing valuables where they are visible from the outside.9
Check sightlines from your doors and windows.
Don’t tempt robbers with a clear view of the most commonly stolen items, which are cash (think purses and wallets), jewelry, electronics, firearms, and drugs (both illegal and prescription).6 Take a walk around your property to make sure none of these items are easily visible.
Secure valuables in a safe.
Consider the possessions that are on display inside your home, as well. It’s always a good idea to lock up firearms, sensitive documents, and expensive or irreplaceable items when you have housekeepers or other service providers on your property.
Highlight Your Security Measures
While it’s prudent to hide your valuables, it’s equally important to advertise your home’s security features. In surveys, convicted burglars admit to avoiding homes with obvious protective measures in place.7,8
Install outdoor cameras.
Security cameras are the most common home protection device and for good reason.10 Not only do they help prevent crime (burglars are known to avoid them), they can offer peace of mind for homeowners who want to sneak a peek at their property while away.11 And if you do experience a break-in, security camera footage can help police identify your intruder.
Post warning signs.
Security system placards and beware-of-dog signs are also shown to be effective deterrents.8 Of course, you should back up your threats with a noisy alarm and loud barking dog for maximum impact.
Limit What You Share on Social Media
Social media platforms can be a great way to stay connected with friends and family, but it’s easy to reveal more than you’ve intended. Be thoughtful about what you’re posting—and who has access.
Delay posting photos or travel updates.
It can be tempting to upload a concert selfie or pictures from your beach vacation. But these types of photos scream: “My house is unoccupied!” Try to wait until you’ve returned home to share the photos on social media.
Set privacy restrictions on your accounts.
Think twice about connecting with strangers or casual acquaintances on social media. If you enjoy sharing family updates and personal photos, it’s safer to limit your followers to those you truly know and trust.
YOUR HOME IS SAFE WITH US
We take home security seriously. That’s why we have screening procedures in place to keep our clients and their homes safe when they are for sale. We also remind our buyers to change the locks before they move into their new homes and provide referrals to locksmiths and home security companies that can help. To learn more about our procedures and how you can stay safe during the buying and selling process, contact us to schedule a free consultation!
Sources:
Federal Bureau of Investigation -<br /> <a href="https://ucr.fbi.gov/crime-in-the-u.s/2019/crime-in-the-u.s.-2019/topic-pages/burglary">https://ucr.fbi.gov/crime-in-the-u.s/2019/crime-in-the-u.s.-2019/topic-pages/burglary</a>
Bankrate -<br /> <a href="https://www.bankrate.com/insurance/homeowners-insurance/house-burglary-statistics">https://www.bankrate.com/insurance/homeowners-insurance/house-burglary-statistics/</a>
ADT -<br /> <a href="https://www.adt.com/resources/how-do-burglars-break-into-houses">https://www.adt.com/resources/how-do-burglars-break-into-houses</a>
National Crime Prevention Council -<br /> <a href="https://www.ncpc.org/wp-content/uploads/2017/11/locking-your-home-reva-1-pdf.pdf">https://www.ncpc.org/wp-content/uploads/2017/11/locking-your-home-reva-1-pdf.pdf</a>
SafeWise -<br /> <a href="https://www.safewise.com/blog/10-simple-ways-to-secure-your-new-home/">https://www.safewise.com/blog/10-simple-ways-to-secure-your-new-home/</a>
Forbes -<br /> <a href="https://www.forbes.com/sites/houzz/2014/03/20/how-your-landscaping-can-keep-burglars-away/?sh=2a8addf27429">https://www.forbes.com/sites/houzz/2014/03/20/how-your-landscaping-can-keep-burglars-away/?sh=2a8addf27429</a>
KGW News -<br /> <a href="https://www.kgw.com/article/news/investigations/86-burglars-say-how-they-break-into-homes/283-344213396">https://www.kgw.com/article/news/investigations/86-burglars-say-how-they-break-into-homes/283-344213396</a>
Science Daily -<br /> <a href="https://www.sciencedaily.com/releases/2013/05/130516160916.htm">https://www.sciencedaily.com/releases/2013/05/130516160916.htm</a>
Security.org -<br /> <a href="https://www.security.org/home-security-systems/home-invasion-protection/">https://www.security.org/home-security-systems/home-invasion-protection/</a>
SafeWise -<br /> <a href="https://www.safewise.com/resources/security-stats-facts/">https://www.safewise.com/resources/security-stats-facts/</a>
The Guardian -<br /> <a href="https://www.theguardian.com/business/2017/aug/18/former-burglars-barking-dogs-cctv-best-deterrent">https://www.theguardian.com/business/2017/aug/18/former-burglars-barking-dogs-cctv-best-deterrent</a>
2022-02-09T09:34:00-07:002022-02-09T09:39:31-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:118245 Secrets Buyers and Sellers Must Know About Virtual Home ToursFor years now, virtual home tours have helped real estate buyers far and wide find the perfect home. From long-distance military personnel being relocated to investors expanding their portfolio to homeowners looking for a vacation getaway, this technology makes finding a house that’s a bit out of driving distance much easier. And for real estate agents, virtual tours have been a useful way to help buyers with their home search and to assist sellers in creatively marketing their listings.
Because of the pandemic, virtual home showing options recently experienced a huge spike in popularity. One survey found that nearly 33% of recent home tour requests were for virtual tours, as compared to just 2% pre-pandemic.1 And it’s easy to see why.
Buyers want to quickly find their next safe haven, one that may need to serve as their office, gym, and even classroom for months to come. And sellers want to limit the number of strangers in their homes, yet still have the ability to reach enough potential buyers to get the best offer on their property.
Virtual home tours are the popular thing right now, but that doesn’t automatically mean they’re the only option for your home buying or selling experience. In this post, we’ll reveal five important secrets behind the virtual real estate scene. Read on to learn how they impact today’s home buyers and sellers.
SECRET #1: Virtual Tours Have Evolved
Lots of real estate professionals who had never used virtual tours before we're forced to quickly adapt when the pandemic struck. Because of restrictions on time and resources, not everyone is able to create what would have been deemed a “virtual tour” last year. So instead, we’ve expanded the definition of the phrase by creating innovative new ways to show homes while keeping our clients safe and socially distanced. Here are some terms you might come across as you explore homes with virtual tours.
Traditional virtual tours use 360° Photos, which are images that allow you to see all angles of space. These are what allow virtual tour viewers to look up, down, and all around the interior and exterior shots of a home. Using a software program, 360° photos can be stitched together to create a digital model that looks like a dollhouse. This is called a 3D Tour. Sometimes agents will also add Virtual Staging, which decorates rooms with digital furniture and accents like wallpaper or paint.
Traditional virtual tours allow you to click to move from room to room in the home, but Online Walkthroughs feature the actual act of walking around. Either the seller or the agent (depending on factors such as time and safety requirements) will create a video by holding their camera or smartphone and simply moving through the home.
Online Walkthroughs can be filmed in advance or happen live. If they are living, they can also be referred to as Virtual Showings or Online Open Houses. A Virtual Showing is often a scheduled, one-on-one event that mimics an in-person tour of the home, in which the agent and viewer start at the exterior and move their way through the property. If your agent offers to FaceTime or Skype you from a home you’re interested in, for example, that would be a type of Virtual Showing. In contrast, an Online Open House is more freeform, allowing more viewers to pop in and out of a group video call on apps such as Facebook or Zoom.
SECRET #2: Virtual Doesn’t Mean Impersonal
All these styles of virtual tours showcase the property’s details better than static photos ever could. But for purchase as intimate as your next home, details like a new refrigerator or the size of the master closet aren’t the only deciding factors. Luckily, virtual tours are exceptional tools for personal connection.
As a prospective buyer, virtual tours give you a feel for the property, inside and out, so you can easily picture yourself in the space and decide if the home’s flow and features work for your lifestyle. Live video walkthroughs with the real estate agent will give you insights on those crucial non-visual aspects, like creaky floors, super-fast internet speed, and neighborhood dynamics. Plus, you’ll be able to ask questions and get an insider’s perspective on what’s so great about the home.
For sellers, if your agent recommends using a virtual tour to market your home, you could attract more buyers.2 And you can be sure that those interested buyers are still getting the up-close and personal look inside your home that will inspire their strongest offers.
SECRET #3: Virtual Is Just The First Step To Safe Home Sales
Even as government restrictions begin to ease in some areas, virtual tours are still recommended as a safer way to buy and sell real estate.3 Buyers don’t have to worry about exposure to anyone who previously visited the property, and sellers cut down on the foot traffic in their homes. Some data even suggest that virtual tours keep agents safer as well since they’re hosting fewer in-person showings and open houses.4
But despite the variety of virtual tours available, some buyers will still need to visit a home themselves in order to feel confident enough to submit an offer. In this situation, listing agents and sellers will work together to come up with a procedure that ensures everyone feels safe and comfortable. Some recommendations include requiring interested buyers to present a pre-qualification letter, conducting tours only by appointment and with essential parties, and asking buyers to self-disclose whether they have COVID-19 or exhibit any symptoms.3
On the day of the in-person tour, agents might ask buyers to remain in their vehicle until they arrive at the property and to wear protective gear such as face coverings and gloves. Many will provide hand sanitizer and will ask buyers to refrain from touching any surfaces in the home. Instead, the agent (or seller, prior to the buyers’ arrival) will turn on lights, open doors, and pull back curtains. Then, after everyone has left, the agent will return the home to its original state and disinfect it as needed.3
SECRET #4: The Speed of Closing Depends on Your Goals
Though maybe not literally, virtual tours are opening doors for both buyers and sellers in terms of options available to them. In 2019, buyers viewed an average of 10 homes over a period of 10 weeks before submitting an offer.5 But thanks to an increased prevalence of virtual tours saving them driving time, they’re able to peek inside that number of homes in a much shorter period to make their final choice.
With all this viewing activity, it makes sense that sellers whose listings feature virtual tours are receiving more offers on their properties. According to one study, virtual tours can add between two and three percent to the sales price of a home, in part because increased buyer interest has made sellers feel confident waiting for the exact right offer.2
So if you’re a buyer luxuriating in viewing homes from your couch, just remember that you’re not alone in your search. Your competition is virtually viewing the same properties you are, so it’s still important to work with your real estate agent to quickly submit a strong offer when you find the home of your dreams. And for sellers, if a speedy sale is important to you, carefully weigh that against the temptation to entertain more and more offers, which can keep your home on the market up to six percent longer.2 Your agent can help you decide the right strategy for your priorities.
SECRET #5: Virtual May Not Always Be the Right Choice
Creating, editing, uploading, and marketing virtual tours for a listing can be pricey. Packages through popular 3D imaging platforms like Matterport and Immoviewers can cost hundreds of dollars on their own.6 Virtual staging will further bloat a listing’s marketing budget, and then there are the advertising dollars needed. Even seemingly inexpensive options like video call walkthroughs still require time and energy on behalf of both the seller and agent.
These costs mean that a full virtual tour package might not always be the right choice for sellers. When you talk to your agent about marketing your home, it may be that an elaborate virtual tour, showing, and open house just doesn’t make sense. It could be that your potential buyers may not resonate with that type of marketing, that the investment-to-return ratio isn’t in your favor, or that there are more effective ways to get your listing seen by qualified buyers.
Buyers, you may notice that some listings within your search parameters don’t offer virtual tours. That’s because those for-sale homes might not have needed a full virtual marketing package to entice buyers to submit offers, or those homes are better marketed through more traditional tactics. Don’t close the door on your dream home because it doesn’t have virtual events and features. Stay open-minded so you can consider the wealth of home options that fit your lifestyle, needs, and budget.
OUR VIRTUAL HOME TOURS IN YOUR FUTURE?
As technology develops, it will become easier and cheaper to create virtual tours. Coupled with the high demand for them, this means that virtual tour options are likely not only here to stay, but will continue to grow into a common addition to listings.
If buying or selling a home is on your mind, we’d be happy to discuss how virtual tours can play a part in your real estate experience. Reach out to us today for help finding local homes for sale that have virtual tours, or to chat about if adding a virtual tour to your upcoming listing is the right fit.
Sources:
Rocket Mortgage - <a href="https://www.rocketmortgage.com/learn/evolution-of-home-showings-during-covid-19">https://www.rocketmortgage.com/learn/evolution-of-home-showings-during-covid-19</a>
Radio Iowa -<a href="https://www.radioiowa.com/2020/07/28/trying-to-sell-a-house-ui-study-finds-virtual-tours-will-bring-more/"> https://www.radioiowa.com/2020/07/28/trying-to-sell-a-house-ui-study-finds-virtual-tours-will-bring-more/</a>
NAR Showing Guidance During Reopening - <a href="https://cdn.nar.realtor/sites/default/files/documents/Showing-Guidance-During-COVID-05-14-2020.pdf">https://cdn.nar.realtor/sites/default/files/documents/Showing-Guidance-During-COVID-05-14-2020.pdf</a>
NAR 2020 Member Safety Report - <a href="https://cdn.nar.realtor/sites/default/files/documents/2020-member-safety-report-08-31-2020.pdf">https://cdn.nar.realtor/sites/default/files/documents/2020-member-safety-report-08-31-2020.pdf</a>
NAR 2019 Profile of Home Buyers and Sellers - <a href="https://cdn.nar.realtor/sites/default/files/documents/2019-profile-of-home-buyers-and-sellers-highlights-11-21-2019.pdf">https://cdn.nar.realtor/sites/default/files/documents/2019-profile-of-home-buyers-and-sellers-highlights-11-21-2019.pdf</a>
Realtor.com - <a href="https://www.realtor.com/advice/sell/how-to-host-virtual-home-tours-almost-as-good-as-the-real-thing/">https://www.realtor.com/advice/sell/how-to-host-virtual-home-tours-almost-as-good-as-the-real-thing/</a>
2022-02-07T07:21:00-07:002022-02-07T07:27:10-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:1180420 Ways to Save Money and Stretch Your Household Budget20 Ways to Save Money and Stretch Your Household Budget
These days, it seems like everyone’s looking for ways to cut costs and stretch their income further. Fortunately, there are some simple steps you can take to reduce your household expenses without making radical changes to your standard of living. When combined, these small adjustments can add up to significant savings each month.
Here are 20 things you can start doing today to lower your bills, secure better deals, and begin working toward your financial goals.
1. Refinance Your Mortgage - For prime borrowers, mortgage rates are at or near historic lows. Depending on your current mortgage rate and the terms you choose, refinancing could save you a sizable amount on your monthly payments. There are fees and closing costs associated with refinancing, so you’ll need to talk to your lender to find out if refinancing is a good option for you.
2. Evaluate Your Insurance Policies - If it’s been a while since you priced home or auto insurance, it may be worthwhile to do some comparison shopping. Get quotes from at least three insurers or independent agents. Try bundling your policies to see if there’s a discount. And inquire about raising your deductible, which should lower your premium.1
3. Bundle Cable, Phone, and Internet - You can also save money by bundling your cable, phone, and internet services together. Shop around to see who is willing to give you the best deal. If switching is too much of a hassle, ask your current provider to match or beat their competitor’s offer.
4. Better Yet, Cut the Cord on Cable - In many cases, you can save even more if you cancel your cable subscription altogether. An antenna should give you access to the major stations, and many of your favorite shows are probably available on-demand through a less expensive streaming service subscription.
5. Revisit Your Wireless Plan - You can often save by switching from a big brand to an independent, low-cost carrier. If that’s not feasible, ask your current provider for a better deal or consider downgrading to a cheaper plan.
6. Adjust Your Thermostat - Turning your thermostat up or down a few degrees can have a noticeable impact on your monthly heating and cooling costs. To maximize efficiency, change your filters regularly, and make sure your windows and doors are well insulated.
7. Use Less Hot Water - After heating and cooling, hot water accounts for the second-largest energy expense in most homes.2 To cut back, repair any leaks or dripping faucets, install low-flow fixtures, only run your dishwasher when full, and wash clothes in cold water when possible.
8. Lower Overall Water Consumption - To decrease your water usage, take shorter showers, and turn off the sink while you brush your teeth and wash your hands. If you don’t have a low-flow toilet, retrofit your current one with a toilet tank bank or fill cycle diverter. And irrigate your lawn in the morning or evening to minimize evaporation.3
9. Conserve Electricity - Save electricity by shutting off your computer at night and installing energy-efficient LED light bulbs. You can minimize standby or “vampire” power drain by utilizing power strips and unplugging idle appliances.4
10. Purchase a Home Warranty - While there is an upfront cost, a home warranty can provide some protection and peace of mind when it comes to unexpected home repair costs. Most plans provide coverage for major systems (like electrical, plumbing, and HVAC) and appliances (such as your dishwasher, stove, or refrigerator).
11. Outsource Less - From lawn care to grocery shopping to minor home repairs, we pay people to do a lot of things our parents and grandparents did themselves. To save money, try cutting back on the frequency of these services or taking some of them on yourself.
12. Prepare Your Own Meals - It costs nearly five times more to have a meal delivered than it does to cook it at home.5 And home cooking doesn’t just save money; it’s healthier, cuts down on calorie consumption, and can offer a fun activity for families to do together.
13. Plan Your Menu in Advance - Meal planning is deciding before you shop what you and your family will eat for breakfast, lunch, and dinner. It can help you lower your overall food bill, eliminate waste, and minimize impulse purchases. When possible, buy produce that is in season, and utilize nutrient-rich but inexpensive protein sources like eggs, beans, ground turkey, and canned tuna.
14. Plant a Garden - You can save even more on produce by growing it yourself. If you have space in your yard, start-up costs are relatively minimal. Gardening can be a rewarding and enjoyable (not to mention delicious) hobby for the whole family. And it could save you around $600 per year at the grocery store!6
15. Review Memberships and Subscriptions - Are you paying for services and subscriptions you no longer need, want, or can utilize? Determine if there are any that you should suspend or cancel.
16. Give Homemade Gifts - Who wouldn’t appreciate a scratch birthday cake or tin of cookies? And if you enjoy crafting, Pinterest and Instagram are full of inspiring ideas. Show your recipient how much you care with a homemade gift from the heart.
17. Minimize Your Debt Payments - The best way to reduce a debt payment is to pay down the balance. But if that’s not an option right now, try to negotiate a better interest rate. If you have a good credit score, you may be able to qualify for a balance transfer to a 0% or low-interest rate credit card. Keep in mind, the rate may expire after a certain period—so be sure to read the fine print.
18. Get a Cash-back Credit Card - If you regularly pay your credit card balance in full, a cash-back credit card can be a good way to earn a little money back each month. However, they often come with high-interest rates and fees if you carry a balance. Commit to only using it for purchases you can afford.
19. Ask for Deals and Discounts - It may feel awkward at first, but becoming a master haggler can save you a lot of money. Many companies are willing to negotiate under the right circumstances. Always inquire about special promotions or incentives. See if they are able to price match (or beat) their competitors. And if an item is slightly defective or nearing its expiration date, ask for a discount.
20. Track Your Household Budget - One of the most effective ways to reduce household expenses is to set a budget—and stick to it. A budget can help you see where your money is going and identify areas where you can cut back. By setting reasonable limits, you’ll be able to reach your financial goals faster.
Want more help getting a handle on your finances? Use the budget worksheet below to track income and expenses—and start working towards your financial goals today! Please reach out to me for a downloadable version.
HOUSEHOLD BUDGET WORKSHEET
Expected
Actual
Difference
HOUSING
Mortgage/taxes/insurance or Rent
Utilities (electricity, water, gas, trash)
Phone, internet, cable
Home maintenance and repairs
FOOD
Groceries
Restaurants
TRANSPORTATION
Car payment/insurance
Gas, maintenance, repairs
OTHER
Health insurance
Clothing and personal care
Childcare
Entertainment
Gifts and charitable contributions
Savings, retirement, college fund
INCOME
Salary/wages
Tips and other
MONTHLY TOTALS
Total Actual Income
Total Actual Expenses
ADDITIONAL SAVINGS
WE’RE HERE TO HELP
We would love to help you meet your financial goals. Whether you want to refinance your mortgage, save up for a down payment, or simply find lower-cost alternatives for home repairs, maintenance, or utilities, we are happy to provide our insights and referrals. And if you have plans to buy or sell a home this year, we can discuss the steps you should be taking to financially prepare. Contact us today to schedule a free consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
Sources:
Insurance Information Institute -<br /> <a href="https://www.iii.org/article/twelve-ways-to-lower-your-homeowners-insurance-costs">https://www.iii.org/article/twelve-ways-to-lower-your-homeowners-insurance-costs</a>
Department of Energy -<br /> <a href="https://www.energy.gov/energysaver/water-heating/reduce-hot-water-use-energy-savings">https://www.energy.gov/energysaver/water-heating/reduce-hot-water-use-energy-savings</a>
Money Crashers -<br /> <a href="https://www.moneycrashers.com/ways-conserve-water/">https://www.moneycrashers.com/ways-conserve-water/</a>
Harvard University -<br /> <a href="https://green.harvard.edu/tools-resources/poster/top-5-steps-reduce-your-energy-consumption">https://green.harvard.edu/tools-resources/poster/top-5-steps-reduce-your-energy-consumption</a>
Forbes -<br /> <a href="https://www.forbes.com/sites/priceonomics/2018/07/10/heres-how-much-money-do-you-save-by-cooking-at-home/#2c53b2f35e54">https://www.forbes.com/sites/priceonomics/2018/07/10/heres-how-much-money-do-you-save-by-cooking-at-home/#2c53b2f35e54</a>
Money -<br /> <a href="https://money.com/gardening-grocery-savings/">https://money.com/gardening-grocery-savings/</a>
2022-02-04T07:28:00-07:002022-02-04T07:41:36-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:117698 Popular Home Design Features for 20228 Popular Home Design Features for 2022
There’s a lot to consider when selling your home, from the market and appraisals to where you’ll go next. Don’t forget, however, that design is also a key factor. It’s often one of the first things buyers notice when they walk into a home, and it’s also a detail that you, as a seller, can easily control.
According to Realtor.com’s 2022 housing market forecast, home for-sale inventory will increase from last year, as will the projected number of overall sales.1 This means, if you’re looking to sell in the near future, now is the time to consider how you can stand out.
Updating your home design is one way to do that. Changes like new security features or upgraded siding can add value to your home now and be highlighted when you market it for sale later. To get the most out of your updates, focus on these popular home design features that will wow buyers in 2022.
Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate a property, give us a call. We can help you realize your vision and maximize the impact of your investment.
Eco-Friendly Fixtures
Millennials account for the largest share of current homebuyers, according to the National Association of Realtors.2 Sustainable living tops the list of priorities for this generation. A recent Deloitte survey found that nearly one-third of millennials initiate or deepen their consumer investment in products or services that help the environment—this also includes the houses they choose to live in.3
Here are a few eco-friendly design features that will be attractive to these millennial buyers in 2022. Bonus, they can net a significant return on investment (ROI) for you, as a seller, too.
Energy-Efficient Windows: Heat gain or loss from low-performance windows drives 25–30 percent of home heating and cooling costs, according to Energy.gov.4 Therefore, energy-efficient windows can help homeowners save money.
Low-Flow Water Fixtures: According to the EPA, replacing your shower head with one that’s labeled with WaterSense can save four gallons of water with each shower.5 Doing the same with your faucet can save 700 gallons per year. This leads to cost savings and environmental support.
Native Landscaping: According to the American Society of Landscape Architects, 58 percent of members report increased client demand for native trees and plants as a means to combat biodiversity loss from climate change..6 Enhance the eco-friendly appeal of your home with some native plants in the front yard.
Wellness Retreat Nooks
The pandemic has had a significant impact on mental health. For example, in an effort to prioritize mental health, many people are relocating to quieter, more peaceful homes, with 22 percent of city dwellers planning a move to less congested residential areas, according to the Home Improvement Research Institute’s (HIRI) 2021 Insights Summit.7
However, no matter where you live, you can still intrigue buyers by jumping on this trend. At-home wellness amenities, which were once viewed as luxuries, are now on many homeowners’ must-have lists. Indoor spaces that function as a retreat for wellness and self-care have become extremely popular, according to HIRI.
Improve your quality of life in your home with reading nooks, spa-inspired bathrooms, and exercise or meditation spaces. Even if your house doesn’t have the square footage to section off an entire room for relaxation, making simple tweaks to natural light, air purifiers, and indoor plants can help you feel better in your home now while enabling future buyers to see the opportunity for their own space.
Calming Paint Colors
Paint colors that produce a calming atmosphere will also be a key selling point in 2022. Soft earth tones and natural hues will prevail this year, including various shades of blue, green, brown, and beige. Recent research suggests steering clear of trendy paint colors in favor of a more classic palette to bring the feel of nature indoors in a subtle and soothing way.8
In fact, the same research found that buyers are often willing to pay an extra $4,698 for a house with a light blue bathroom or an extra $1,491 for a house with a dark blue bedroom. Another crowd-pleasing hue to refresh the walls with is BEHR’s 2022 paint color of the year, known as Breezeway.9
This shade of green with silver undertones was created to mimic sea glass. As the BEHR website describes it, Breezeway “evokes feelings of coolness and peace, while representing a desire to move forward and discover newfound passions.”
Home Safety Features
Buyers want peace of mind more now than ever before. According to a 2021 survey from the American Institute of Architects, members report seeing an increase in the popularity of these home safety features10:
Emergency backup power generation
Accommodations for multiple generations
Wider accessible doorways and hallways
Home security monitoring equipment
Interior ramps and home elevator features
Consider how you can build home safety features like these into the design of your home to enhance your quality of life now and attract more buyers later. For example, you could install a backup generator in the garage and sell it with the house or update your major doorways to be wider.
Before making an investment in expensive home safety upgrades, contact us. We can help you determine what will deliver the greatest ROI for your location and goals.
Designated Work Spaces
It may come as no surprise that after the pandemic, 63 percent of homebuyers want their next house to feature room for a designated office, according to the National Association of Home Builders.11 In addition, 70 percent of these buyers want the office to be at least 100 square feet (or a 10x10 room).
If you can, consider turning a bedroom or a den into a work-from-home office. When designing the space, make it both functional and aesthetically pleasing. Position a desk near the window for natural light, install a bookshelf unit, arrange a few succulents on the work surface, and hang a few framed posters or a cork bulletin board on the wall. You want the space to foster productivity as well as be a place in your home you enjoy spending time.
When you get ready to sell, we can help you highlight your designated workspace. Given the high demand for this design feature, it can help you interest more buyers and attract more competitive offers—if marketed creatively.
Luxury Kitchen Retouches
The kitchen has always been a main focal point of interior design, and that’s no different in 2022. Families will always need this space to come together in their own homes.
This year’s buyers want a kitchen with new upgrades and retouches, but you don’t have to renovate the entire kitchen to make an impact. If you’re not sure where to start, here are a few tips on how to create a kitchen that buyers will love without spending too much money on renovations:
Repaint the kitchen, keeping the calm and nature-inspired colors in mind that are most popular right now. Taking a kitchen from dark to light by painting cabinets and walls can make all the difference.
Update the hardware. These kitchen “accessories” stand out and add personality to an otherwise standard kitchen.
Update light fixtures to bring in more light while also adding a fresh look and feel to the space.
Unique Accent Walls
In a recent interview with the National Association of Realtors, Brian Santos, the director of education for Fresh Coat Painters, explains that bold, unique accent walls are trendy right now.12 An accent wall gives a home character while maintaining the calming feel of natural- and neutral-colored walls.
Santos also explains that this is part of a design aesthetic that draws inspiration from the Roaring Twenties, and it’s likely to remain a sought-after home feature in 2022. Here are some bold colors to consider for your home’s accent walls:
Solid black
The jewel or metallic tones
Textured wallpaper
Painted ceilings
Built-in shelves
If you’re planning to sell in the next year, talk to us before adding an accent wall. Depending on your target buyer, it may be a design feature that actually hurts your home’s value. We can run a free Comparative Market Analysis on your home to help you understand what would resell best in your neighborhood.
Exterior Siding Updates
A new exterior siding refresh is one of the most affordable renovation projects you can do to help increase a home’s resale value. The average cost is just $12 per square foot, but higher-end material options can push costs closer to $50 per square foot.13 What’s more, there are many siding materials available, from fiber-cement, brick, and wood to vinyl, metal, and stone.
While all these options can infuse the exterior with character and add curb appeal, fiber-cement and vinyl deliver the highest ROI. In fact, according to a 2021 Cost vs. Value Report, a vinyl siding replacement can boost resale value by $11,315 (68.3 percent cost recoup), and a fiber-cement siding replacement can boost resale value by $13,618 (69.4 percent cost recoup).14
Give your home this simple, affordable, and attractive facelift before putting it on the market. If you’re not sure how to get started yourself, our team can connect you with a trusted vendor to guide you through the process.
Keep These Home Design Features on Your Radar in 2022
These design features can infuse personality into your home while helping to close the deal if you plan to sell in 2022. The average buyer knows just what they’re looking for in a space they plan to call home, so with some investment and foresight, you can give your house an edge over the competition—and boost resale value in the process.
However, you don’t need to make all these changes to attract more buyers. We can help you determine which design features you should add to your home by sharing insights and tips on how to maximize the return on your investment. We can also run a Comparative Market Analysis on your home to find out how it compares to others in the area, which will help us decide what changes need to be made. Contact us to schedule a free consultation!
Sources:
Realtor - <br /> <a href="https://www.realtor.com/research/2022-national-housing-forecast/">https://www.realtor.com/research/2022-national-housing-forecast/</a>
National Association of Realtors - <br /> <a href="https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends">https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends</a>
Deloitte - <br /> <a href="https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf">https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf</a>
Energy.gov - <br /> <a href="https://www.energy.gov/energysaver/update-or-replace-windows">https://www.energy.gov/energysaver/update-or-replace-windows</a>
EPA.gov - <br /> <a href="https://www.epa.gov/watersense/about-watersense">https://www.epa.gov/watersense/about-watersense</a>
American Society of Landscape Architects - <br /> <a href="https://www.asla.org/NewsReleaseDetails.aspx?id=60427">https://www.asla.org/NewsReleaseDetails.aspx?id=60427</a>
Home Improvement Research Institute - <br /> <a href="https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao">https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao</a>
Zillow - <br /> <a href="http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected">http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected</a>
Behr - <br /> <a href="https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/">https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/</a>
American Institute of Architects - <br /> <a href="http://info.aia.org/AIArchitect/2021/0910/aia-interactive/index.html">http://info.aia.org/AIArchitect/2021/0910/aia-interactive/index.html#</a>
National Association of Home Builders - <br /> ​​<a href="https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-what-home-buyers-really-want-march-2021.pdf?_ga=2.188050984.1824982414.1639512139-1247360189.1639512139">https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-what-home-buyers-really-want-march-2021.pdf?_ga=2.188050984.1824982414.1639512139-1247360189.1639512139</a>
National Association of Realtors - <br /> <a href="https://www.nar.realtor/blogs/styled-staged-sold/hot-home-trend-the-accent-wall-is-back">https://www.nar.realtor/blogs/styled-staged-sold/hot-home-trend-the-accent-wall-is-back</a>
Forbes - <br /> <a href="https://www.forbes.com/advisor/home-improvement/how-much-does-siding-cost-to-install/">https://www.forbes.com/advisor/home-improvement/how-much-does-siding-cost-to-install/</a>
Remodeling Magazine - <br /> <a href="https://www.remodeling.hw.net/cost-vs-value/2021/">https://www.remodeling.hw.net/cost-vs-value/2021/</a>
2022-02-02T07:25:00-07:002022-02-02T07:29:25-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11737Move-Up vs. Second Home: Which One Is Right For You?Move-Up vs. Second Home: Which One Is Right For You?
The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.
According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).1
And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. In fact, a recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.2
But not everyone is permanently sold on suburban or rural life. Instead, some are choosing to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence and are eager for a change of scenery after spending so much time at home.
If you’re feeling cramped in your current space, you’ve probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let’s explore each option to help you determine which one is right for you.
WHY CHOOSE A MOVE-UP HOME?
A move-up home is typically a larger or nicer home. It’s a great choice for families or individuals who simply need more space, a better location, or want features their current home doesn’t offer—like an inground pool, a different floor plan, or a dedicated home office.
Most move-up buyers choose to sell their current home and use the proceeds as a downpayment on their next one. If you’re struggling with a lack of functional or outdoor space in your current home, a move-up home can greatly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.3,4
To learn more about mortgage rates, contact us for a free copy of our recent report! <br /> “Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers”
One major benefit of choosing a move-up home is that you can typically afford a nicer place if you spend your entire budget on one property. However, if you’re longing for that vacation vibe, a second home may be a better choice for you.
WHY CHOOSE A SECOND HOME?
Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.5 And with air travel on hold for many families, some are channeling their vacation budgets into vacation homes that can be utilized throughout the year.
A second home can also be a good option if you’re preparing for retirement. By purchasing your retirement home now, you can lock in a low-interest rate, start paying down the mortgage and begin enjoying the perks of retirement living while you’re still fit and active. Plus, it’s easier to qualify for a mortgage while you’re employed, although you may be charged a slightly higher interest rate than on a primary home loan.6
One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. However, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property’s true income potential.
WHICH ONE IS RIGHT FOR ME?
You may read this and think: I’d really like both a move-up home AND a second home! But if you’re dealing with a limited budget (aren’t we all?), you’ll probably need to make a choice. These three tactics can help you decide which option is right for you.
Determine Your Time and Financial Budget
You may meet the bank’s qualifications to purchase a home, but do you have the time, energy, and financial resources to maintain it? This is an important question to ask yourself, no matter what type of home you choose.
Most buyers realize that a second home will mean double mortgages, utilities, taxes, and insurance. But consider all the extra time and expense that goes into maintaining two properties. Two lawns to mow. Two houses to clean. Two sets of systems and appliances can malfunction. Second homes aren’t always a vacation. Make sure you’re prepared for the labor and carrying costs that go into maintaining another residence.
Of course, some move-up homes require more work than a second home. For example, if your move-up option is a major fixer-upper, you’ll probably invest more energy and capital than you would on a small vacation condo by the beach. Have an honest discussion about how much time and money you want to spend on your new property. Would a move-up home or a second home be a better fit given your parameters?
Rank Your Priorities
If you’re still undecided, make a wish list of the characteristics you’d like in your new home. Then rank each item from most to least important. This exercise can help you determine your “must-have” features—and which ones you may need to sacrifice or delay. Here’s a sample to help you get started:
#
FEATURE
Dedicated home office
Extra bedroom
Pool
Walk to the beach
Big backyard
Close to friends and family
Short commute to the office
Investment potential
Explore Your Options
Once you’ve determined your parameters and priorities, it’s time to begin your home search.
If you’re still not sure whether a move-up home or a second home is right for you, we can help.
Contact us to schedule a free consultation. We’ll discuss your options and help you assess the pros and cons of each, given your unique circumstances.
We can also send you property listings for both move-up homes and second homes within your budget so you can better envision each scenario. Sometimes, viewing listings of homes that meet your criteria can make the decision clear.
LET’S GET MOVING
Whether you’re ready to make a move or need help weighing your options, we’d love to help. We can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, we can refer you to an agent in your dream locale. Contact us today to schedule a free, no-obligation consultation!
Sources:
Zillow -<br /> <a href="https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/">https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/</a>
The Harris Poll -<br /> <a href="https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/">https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/</a>
MarketWatch -<br /> <a href="https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13">https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13</a>
Toronto Star -<br /> <a href="https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html">https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html</a>
Kiplinger -<br /> <a href="https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home">https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home</a>
The Press-Enterprise -<br /> <a href="https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/">https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/</a>
2022-01-31T08:07:00-07:002022-01-31T08:11:20-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11733Top 10 Myths That Trip Up First-Time Home BuyersTop 10 Myths That Trip Up First-Time Home Buyers
If you’re thinking about buying a home, you’ve probably received your share of advice from family and friends. Add to that the constant stream of TV shows, news segments, and social media posts that over-simplify the home buying process for easy entertainment.
With so much information to sift through, it can be tough to distinguish fact from fiction. That’s why we’re revealing the truth behind some of the most common home buyer myths and misconceptions.
Buying a home is a big decision, but it doesn’t have to be a scary one. If you arm yourself with knowledge and a qualified team of support professionals, you’ll be well equipped to make the right choices for your family and financial future.
DON’T FALL FOR THESE COMMON HOME BUYER MYTHS
Myth #1: You need a 20% down payment.
Plenty of buyers in purchasing homes with down payments that are much less than 20% of the total cost of the property. Today, you can buy a home with as little as 3-5% down.
There are multiple programs out there that allow you to have a lower down payment, and a lender or mortgage broker can talk you through which option is the best for you. Since you’re putting less money down, you’re a riskier borrower to your lender than people who put down a full 20%. Because of this, you will most likely need to pay mortgage insurance as part of your monthly payment.
Myth #2: Real estate agents are expensive.
Your agent is with you every step of the way throughout your home buying journey, and he or she spends countless hours working on your behalf. It sounds like having an agent is expensive, right? Well, not for you. Buyers usually don’t pay a real estate agent’s commission. Your agent’s fee is paid for at closing by the seller of the home you’re buying.1 The seller knows to factor this cost into the property’s total purchase price.
Myth #3: Don’t call a real estate agent until you're ready to buy.
The earlier you bring in an agent to help with the purchasing process, the better. Even if you’re in the very early stages of casually browsing Zillow, a real estate professional can be a huge help.
They can create a search for you in the Multiple Listing Service (MLS), so you get notifications for every house that meets your criteria as soon as it hits the market. The MLS is typically more up-to-date than popular home search sites like Zillow and Trulia. Setting up a search a few months before you’re considering buying gives you a good idea of what’s out there in your town that’s in your budget. Reviewing the MLS and speaking with an agent as soon as possible can help you set realistic expectations for when you actually start the house-hunting process.
Myth #4: Fixer-uppers are more budget-friendly.
We’ve all watched the shows on HGTV that encourage people to go after fixer-uppers because they’re more affordable and allow buyers to eventually renovate the home to include everything on their wishlist. But, this isn’t always the case.
Sometimes, homes that need a lot of work also require a lot of money. Big renovations, like add-ons, a total kitchen remodel or installing a pool, take a lot longer than it looks on TV. If you’re really interested in a fixer-upper, ask your agent to show you a mix of newer homes and older homes. If you fall in love with an older home that needs a lot of work, get some quotes from contractors before you buy so you know the real cost of the renovations and see if you can work them into your budget.
Myth #5: Your only upfront cost is your down payment.
Your down payment is big, but it isn’t the only money you’ll spend during the home buying process. At closing, you’ll pay your down payment, but you’ll also bring closing costs to the table. Closing costs are typically anywhere from 2-4% of the total purchase price of the home.2 This amount includes the cost for items like homeowners insurance, title fees, and more.
You’ll also need to pay for an inspection before closing, which usually costs a few hundred dollars. This price will be higher or lower based on the size of your new property. Your lender will also require an appraisal. An appraiser will come in and inspect the home to determine how much it’s worth. Depending on your lender, you may have to pay this when the appraisal is conducted or it might be rolled into your closing costs.
Myth #6: You need a high credit score to buy a house.
You don’t need perfect credit to buy the perfect home. There are loans out there that buyers with lower credit scores can qualify for. These are good options for people who have had credit issues in the past, but some of them come with additional fees you will need to pay. Speak to a few local lenders or mortgage brokers to talk through which options might be best for you.
Myth #7: You can't qualify for a mortgage if you're still paying off student loans.
While some buyers may feel more comfortable paying off their existing debts before taking the leap into homeownership, it’s not a requirement. When you’re applying for a mortgage, the lender takes a close look at your debt-to-income ratio.3 If you want to calculate this on your own, add up all of your monthly debt payments and divide those by your monthly income. When you’re lender does this, they’re trying to make sure that you will be able to afford your monthly mortgage payments along with your other existing payments. If your income is high enough to allow you to make all of these payments each month, having a student loan will most likely not stop you from getting a mortgage.
Myth #8: You should base your budget on what your lender approves.
How much house you qualify for and how much you can afford are two totally different numbers. When you prequalify for a mortgage, your lender will look at your income, debt, assets, credit score, and financial history to determine how much money you might qualify for.4 For some people, this number might be much higher than you thought because lenders tend to approve for the highest amount they think you can afford. But that doesn’t mean that’s how much you should borrow.
Instead, figure out how much house you can actually afford. <a href="https://www.bankrate.com/calculators/mortgages/how-much-money-can-i-borrow.aspx">An online mortgage calculator</a> can be a good first step in determining this number. We recommend thinking about what you want your monthly payment to be as a starting point. And remember to include your principal, interest, taxes, and, insurance. You should also think about ownership expenses that aren’t part of your monthly payment, like HOA dues and maintenance.
Myth #9: It's all about location.
You’ve heard the phrase. Location, location, location is basically the real estate industry’s motto, but we’ll let you in on a little-known secret: It’s not always true. Yes, location is great to consider when it comes to school districts and commute times, but you also need to think about how the home will function for you and/or your family’s lifestyle. If a family of five is choosing between a one-bedroom condo in the bustling city center and a 4-bedroom home out in the suburbs, the latter is probably the best, most functional choice for them. Also, by buying in a less sought-after neighborhood, your property taxes will most likely be much lower!
Obviously, you might still want to choose an area with great resale potential, and this is something that your agent can speak to you about. They’re an expert in your city and are constantly monitoring buying and selling trends.
Myth #10: If you look hard enough, you'll find a home that checks every box on your wishlist.
You’ve seen that famous house hunting show. And while we have our suspicions about how real it is, the one thing they get right is that almost every buyer needs to compromise on something. Yes, the perfect house that meets every item on your wishlist is probably out there, but it’s also probably double or triple your budget.
A long wishlist can be a great starting point for figuring out what you want and don’t want, but we recommend narrowing that wishlist down to the top five things that are important to you in order of priority. We also recommend noting on your wishlist what your absolute deal breakers are, like “must have a yard for our dog,” and noting what you can live without, like “heated bathroom floors.”
This is a great list to discuss when you first start talking to an agent. A good real estate agent will be able to look at your list and find properties that might work for you. By coming to that first meeting with realistic expectations and knowledge about home buying rather than a bunch of myths heard here and there, you’ll be able to start the process off on the right foot and be in your new house in no time.
WE’RE HERE TO HELP
Whether you’re a first-time buyer or a seasoned homeowner, there’s no reason to go through the home buying process without an advocate on your side. We’re here to answer your questions and do the hard work for you, so you can spend your time dreaming about your new home. Call us today to schedule a free, no-obligation consultation.2022-01-28T08:56:00-07:002022-01-28T09:15:03-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11712Take Advantage of Your Home Equity: A Homeowner’s GuideTake Advantage of Your Home Equity: A Homeowner’s Guide
Homeownership offers many advantages over renting, including a stable living environment, predictable monthly payments, and the freedom to make modifications. Neighborhoods with high rates of homeownership have less crime and more civic engagement. Additionally, studies show that homeowners are happier and healthier than renters, and their children do better in school.1
But one of the biggest perks of homeownership is the opportunity to build wealth over time. Researchers at the Urban Institute found that homeownership is financially beneficial for most families,2 and a recent study showed that the median net worth of homeowners can be up to 80 times greater than that of renters in some areas.3
So how does purchasing a home help you build wealth? And what steps should you take to maximize the potential of your investment? Find out how to harness the power of home equity for a secure financial future.
WHAT IS HOME EQUITY?
Home equity is the difference between what your home is worth and the amount you owe on your mortgage. So, for example, if your home would currently sell for $250,000, and the remaining balance on your mortgage is $200,000, then you have $50,000 in home equity.
$250,000 (Home’s Market Value)
- $200,000 (Mortgage Balance)
______________________________
$50,000 (Home Equity)
The equity in your home is considered a non-liquid asset. It’s your money; but rather than sitting in a bank account, it’s providing you with a place to live. And when you factor in the potential of appreciation, an investment in real estate will likely offer a better return than any savings account available today.
HOW DOES HOME EQUITY BUILD WEALTH?
A mortgage payment is a type of “forced savings” for home buyers. When you make a mortgage payment each month, a portion of the money goes towards interest on your loan, and the remaining part goes towards paying off your principal, or loan balance. That means the amount of money you owe the bank is reduced every month. As your loan balance goes down, your home equity goes up.
Additionally, unlike other assets that you borrow money to purchase, the value of your home generally increases, or appreciates, over time. For example, when you pay off your car loan after five or seven years, you will own it outright. But if you try to sell it, the car will be worth much less than when you bought it. However, when you purchase a home, its value typically rises over time. So when you sell it, not only will you have grown your equity through your monthly mortgage payments, but in most cases, your home’s market value will be higher than what you originally paid. And even if you only put down 10% at the time of purchase—or pay off just a small portion of your mortgage—you get to keep 100% of the property’s appreciated value. That’s the wealth-building power of real estate.
WHAT CAN I DO TO GROW MY HOME’S EQUITY FASTER?
Now that you understand the benefits of building equity, you may wonder how you can speed up your rate of growth. There are two basic ways to increase the equity in your home:
1) Pay down your mortgage.
We shared earlier that your home’s equity goes up as your mortgage balance goes down. So paying down your mortgage is one way to increase the equity in your home.
Some homeowners do this by adding a little extra to their payment each month, making one additional mortgage payment per year, or making a lump-sum payment when extra money becomes available—like an annual bonus, gift, or inheritance.
Before making any extra payments, however, be sure to check with your mortgage lender about the specific terms of your loan. Some mortgages have prepayment penalties. And it’s important to ensure that if you do make additional payments, the money will be applied to your loan principal.
Another option to pay off your mortgage faster is to decrease your amortization period. For example, if you can afford the larger monthly payments, you might consider refinancing from a 30-year or 25-year mortgage to a 15-year mortgage. Not only will you grow your home equity faster, but you could also save a bundle in interest over the life of your loan.
2) Raise your home’s market value.
Boosting the market value of your property is another way to grow your home equity. While many factors that contribute to your property’s appreciation are out of your control (e.g. demographic trends or the strength of the economy) there are things you can do to increase what it’s worth.
For example, many homeowners enjoy do-it-yourself projects that can add value at a relatively low cost. Others choose to invest in larger, strategic upgrades. Keep in mind, you won’t necessarily get back every dollar you invest in your home. In fact, according to Remodeling Magazine’s latest Cost vs. Value Report, the remodeling project with the highest return on investment is a garage door replacement, which costs about $3600 and is expected to recoup 97.5% at resale. In contrast, upscale kitchen remodels—which can cost around $130,000—average less than a 60% return on investment.4
Of course, keeping up with routine maintenance is the most important thing you can do to protect your property’s value. Neglecting to maintain your home’s structure and systems could have a negative impact on its value—therefore reducing your home equity. So be sure to stay on top of recommended maintenance and repairs.
HOW DO I ACCESS MY HOME EQUITY IF I NEED IT?
When you put your money into a checking or savings account, it’s easy to make a withdrawal when needed. However, tapping into your home equity is a little more complicated.
The primary way homeowners access their equity is by selling their homes. Many sellers will use their equity as a downpayment on a new home. Or some homeowners may choose to downsize and use the equity to supplement their income or retirement savings.
But what if you want to access the equity in your home while you’re still living in it? Maybe you want to finance a home renovation, consolidate debt, or pay for college. To do that, you will need to take out a loan using your home equity as collateral.
There are several ways to borrow against your home equity, depending on your needs and qualifications:5
1) Second Mortgage - A second mortgage, also known as a home equity loan, is structured similarly to a primary mortgage. You borrow a lump-sum amount, which you are responsible for paying back—with interest—over a set period of time. Most second mortgages have a fixed interest rate and provide the borrower with a predictable monthly payment. Keep in mind, if you take out a home equity loan, you will be making monthly payments on both your primary and secondary mortgages, so budget accordingly.
2) Cash-Out Refinance - With a cash-out refinance, you refinance your primary mortgage for a higher amount than you currently owe. Then you pay off your original mortgage and keep the difference as cash. This option may be preferable to a second mortgage if you have a high-interest rate on your current mortgage or prefer to make just one payment per month.
3) Home Equity Line of Credit (HELOC) - A home equity line of credit, or HELOC, is a revolving line of credit, similar to a credit card. It allows you to draw out money as you need it instead of taking out a lump sum all at once. A HELOC may come with a checkbook or debit card to enable easy access to funds. You will only need to make payments on the amount of money that has been drawn. Similar to a credit card, the interest rate on a HELOC is variable, so your payment each month could change depending on how much you borrow and how interest rates fluctuate.
4) Reverse Mortgage - A reverse mortgage enables qualifying seniors to borrow against the equity in their home to supplement their retirement funds. In most cases, the loan (plus interest) doesn’t need to be repaid until the homeowners sell, move, or are deceased.6
Tapping into your home equity may be a good option for some homeowners, but it’s important to do your research first. In some cases, another type of loan or financing method may offer a lower interest rate or better terms to fit your needs. And it’s important to remember that defaulting on a home equity loan could result in foreclosure. Ask us for a referral to a lender or financial adviser to find out if a home equity loan is right for you.
WE’RE HERE TO HELP YOU
Wherever you are in the equity-growing process, we can help. We work with buyers to find the perfect home to begin their wealth-building journey. We also offer free assistance to existing homeowners who want to know their home’s current market value to refinance or secure a home equity loan. And when you’re ready to sell, we can help you get top dollar to maximize your equity stake. Contact us today to schedule a complimentary consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
Sources:
National Association of Realtors -<br /> <a href="https://www.nar.realtor/blogs/economists-outlook/highlights-from-social-benefits-of-homeownership-and-stable-housing">https://www.nar.realtor/blogs/economists-outlook/highlights-from-social-benefits-of-homeownership-and-stable-housing</a>
Urban Institute - <br /> <a href="https://www.urban.org/urban-wire/homeownership-still-financially-better-renting">https://www.urban.org/urban-wire/homeownership-still-financially-better-renting</a>
Census Bureau -<br /> <a href="https://www.census.gov/library/stories/2019/08/gaps-in-wealth-americans-by-household-type.html">https://www.census.gov/library/stories/2019/08/gaps-in-wealth-americans-by-household-type.html</a>
Remodeling Magazine -<br /> <a href="https://www.remodeling.hw.net/cost-vs-value/2019/">https://www.remodeling.hw.net/cost-vs-value/2019/</a>
Investopedia -<br /> <a href="https://www.investopedia.com/mortgage/heloc/home-equity/">https://www.investopedia.com/mortgage/heloc/home-equity/</a>
Bankrate -<br /> <a href="https://www.bankrate.com/mortgage/reverse-mortgage-guide/">https://www.bankrate.com/mortgage/reverse-mortgage-guide/</a>
2022-01-26T08:31:00-07:002022-01-26T08:35:12-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11685Will Your Remodel Pay Off? The Best (and Worst) Ways to Spend Your BudgetWill Your Remodel Pay Off? The Best (and Worst) <br /> Ways to Spend Your Budget
Most new homeowners have something about their property that they want to change. And as family needs and design trends shift over time, many will eventually choose to remodel. Some homeowners make updates to their property before listing it to maximize their potential sales revenue.
Whatever your reasons are for taking on a home improvement project, it’s wise to consider how the money you invest will impact your home’s value.
We’ve taken a look at six popular home renovations and identified those that—on average—have the best and worst returns on investment. So before you lift a hammer or hire a contractor, take a look at this list and see if your remodeling efforts will reward you when it comes time to sell.
RENOVATIONS THAT PAY OFF
These three common home improvement projects not only add function and style to your home but also offer a strong return on investment. Making strategic upgrades to your property will help you increase its value over time.
Minor Kitchen Remodel
The kitchen is often referred to as the “heart of the home,” and for good reason. Traditionally used for preparing food, it has morphed into so much more. Many of us now eat our family meals in the kitchen, it serves as a favorite spot for homework and kids’ art projects, and it’s the place guests tend to gather when we host events.
Because we spend so much time in our kitchens, it’s natural that we will eventually want to make updates and upgrades to better suit our needs and changing style preferences.
Luckily, a minor kitchen remodel is one of the best investments you can make in your home. According to Remodeling Magazine’s annual Cost vs. Value Report, it has an average 80.5% return on investment.1
The key to making a kitchen remodel pay off is to keep it modest in scale. Spend too much on custom or high-end selections, and you are less likely to recoup your investment. Instead, make an effort to keep your existing layout if it works for you and your family. Paint or reface cabinets instead of replacing them. Update countertops with low-maintenance quartz and swap out old light fixtures with modern alternatives. Replace outdated appliances with energy-efficient models. The average cost for a minor kitchen remodel is $22,500, and it’s likely to recoup more than $18,000 at resale.1
Wood Deck Addition
A deck addition is a popular way to extend and enhance the use of your outdoor space. It’s the perfect spot for grilling, dining alfresco, and entertaining. In fact, 81% of surveyed homeowners said they have a greater desire to be home since completing a deck addition.2
For a 16 x 20-foot wood deck, you can expect to spend around $13,000. Fortunately, the money you invest offers an average return of 76%.1
Decks made of composite material are a popular alternative these days, as they don’t require the regular sanding and staining that wood decks need. However, at an average cost of $19,000 for a 16 x 20-foot composite deck, they are significantly more expensive. Plus, the expected return on investment is only 69%.1 Still, if you plan to hire someone to provide regular maintenance to a wood deck, then a composite deck may offer cost savings over time.
Siding Replacement
Everyone knows good curb appeal is important when selling your home. And while it may not be the most exciting way to spend your remodeling budget, new siding can make a big impression on buyers … and your selling price.
Your home’s exterior is one of the first things buyers see when they view your home. It sets the tone for what they are going to see inside. It also gives an impression of how well the property has been maintained. Worn, peeling or rotted siding can be a major red flag for buyers.
Replacing 1,250 square feet of siding costs around $16,000 and will net you an average of 76% at resale.1
For an even greater impact, consider replacing a portion of your siding with a manufactured stone veneer. It can have a dramatic effect on the visual appeal of your home. A 300 square foot area will run you around $8,900, but you can expect to see a nearly 95% return when it comes time to sell.1
RENOVATIONS WITH WEAK RETURNS
These three popular remodeling projects are homeowner favorites. However, don’t expect to see a high rate of return at resale. Instead, consider them an investment in your current quality of life. Just make sure you’ll be living in the home long enough to make them worthwhile.
Major Kitchen Remodel
If there’s one room the majority of homeowners dream about making over, it’s their kitchen. From custom cabinetry to high-end appliances, the possibilities are endless. But those dreams can come at a cost.
An upscale kitchen remodels with high-end cabinetry and countertops, commercial-grade appliances, and designer features can cost upwards of $130,000. And unfortunately, you’ll only get back around 60% at resale. Even a mid-range kitchen remodel that includes new semi-custom wood cabinets, laminate countertops, and energy-efficient appliances could run you around $66,000 and net you a mere 62% at resale.1
Of course, an outdated or non-functional kitchen could turn buyers off from your home completely … and keep you from enjoying it yourself! So if your kitchen needs a major remodel, you shouldn’t necessarily scrap your plans. Just go in with the realization that you may only get back a fraction of what you invest. Then you can decide which upgrades are worth the splurge.
In-ground Pool
Few additions deliver more entertainment or enjoyment than an in-ground pool. It brings families and friends together, provides a break from the summer heat, and offers a fun and convenient way to stay fit. Plus, you’ll be the envy of your neighbors! But before you dive into a pool addition, consider whether the benefits outweigh the (substantial) costs.
The average expense to install a standard 18 x 36-foot in-ground pool is $57,500. And the estimated return at resale is only 43%.2 In addition to the installation cost, plan to spend money each year on maintenance, repairs, and additional insurance.
However, 92% of surveyed homeowners said they “have a greater desire to be home” since installing a pool, and 83% have “an increased sense of enjoyment when they are at home.” For you and your family, the perks of a pool may be priceless.2
Master Suite Addition
If you own a house built before the 1980s, there’s a good chance it lacks a master suite, which is a feature that has become commonplace in most newly constructed homes.3
Master bedrooms have evolved from a simple place to sleep into a homeowner’s retreat—often featuring a sitting area, his-and-hers walk-in closets, and an attached bathroom with double vanities, a soaking tub, and a walk-in shower.
And master suite additions have become increasingly popular—both in homes that lack one as well as those with aging owners who can no longer accommodate stairs to an upper-level bedroom.
But what’s the typical return at resale? Unfortunately, a master suite addition offers one of the lowest returns of any remodeling project. With a median cost of $125,000, most sellers will only recoup around 52% of their investment. Nevertheless, in a survey of homeowners, the majority were satisfied with their decision to add a master suite, giving it a “Joy Score” of 10 out of 10.4
WEIGHING COST VS. BENEFIT
It’s always wise to enter into a remodeling project with knowledge of how it will impact your home’s value. In most cases, upscale or highly-customized upgrades are less likely to offer a high rate of return. That said, home renovations that improve your quality of life and enhance your enjoyment may be worthwhile no matter the cost.
GET A CUSTOMIZED ANALYSIS OF YOUR PROJECT
We’ve been talking averages. But the truth is, the actual return you can expect on a home improvement project will vary depending on your particular home and neighborhood. If you have plans to remodel, call or send us the details. We’d be happy to conduct a free analysis to determine how the renovations will impact the value of your home!
Sources:
2019 Cost vs. Value Report -<br /> <a href="https://www.remodeling.hw.net/cost-vs-value/2019/">https://www.remodeling.hw.net/cost-vs-value/2019/</a>
NAR’ Remodeling Impact Report - <a href="https://www.nar.realtor/sites/default/files/documents/2018-05-remodeling-impact-outdoor-features-05-23-2018.pdf">https://www.nar.realtor/sites/default/files/documents/2018-05-remodeling-impact-outdoor-features-05-23-2018.pdf</a>
Zillow -<br /> <a href="https://www.zillow.com/blog/evolution-of-the-master-bedroom-48286/">https://www.zillow.com/blog/evolution-of-the-master-bedroom-48286/</a>
House Logic -<br /> <a href="https://www.houselogic.com/by-room/bedroom-closet/master-suite-addition-return-investment/">https://www.houselogic.com/by-room/bedroom-closet/master-suite-addition-return-investment/</a>
2022-01-24T09:12:00-07:002022-01-24T09:18:04-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11641How to Avoid the Top 8 Home Inspection MistakesHow to Avoid the Top 8 Home Inspection Mistakes<br /> <br />
It’s easy to get swept up in the excitement of buying a home. Once you’ve had an offer accepted on your dream house, you’ll probably be anxious to move in. However, before you make a significant financial commitment, it’s best to know exactly what you’re buying.
When you hire a home inspector, you get a professional, in-depth examination of the property’s structures and systems. It’s a worthwhile investment that can save you money in the long run, either by warning you away from a bad purchase or by providing a list of deficiencies you can use to negotiate with the sellers.
The inspector’s report will also list minor repairs that, if made, will help to maintain your home over the long term. Additionally, a good inspector can often predict the standard life expectancy of your roof, HVAC, and other big-ticket items so you can start planning for their eventual replacement.
However, many buyers make mistakes during the inspection process that cost them time and money and lead to unnecessary stress. Avoid these eight common buyer blunders to minimize your risk, protect your investment, and give yourself peace of mind and confidence in your new home purchase.
MISTAKE 1: Skip Your Inspection
Many buyers rely on their home inspector to point out issues with the property. However, by conducting your visual assessment before you submit an offer, you can factor expected expenses into the offer price. Or, if you suspect major problems, you may choose to move on to a different property altogether.
Examine the walls and ceilings. Are there suspicious cracks, which could point to a foundation issue? Any discoloration? Yellow spots can indicate water damage, while black spots are typically mold. If there’s a basement, look for powdery white deposits along the walls and slab, which can result from water seepage.1
To assess the plumbing, start by turning on a bathroom sink or tub, then flushing the toilet. Check for a drop in water pressure or a gurgling sound coming from the pipes. You can also try running the water in sinks and tubs for several minutes to test for drainage issues. Peak underneath sinks to spot signs of leaks or drain pipes that go into the floor instead of the wall.<br />
Look for fogged or drafty windows, which may need replacing. Examine the roof for signs of cupped, curled, or cracked shingles. Check siding, decks, and other wooden structures for evidence of rot.
Overall, does the home appear to be well maintained? Unless it’s a highly-competitive seller’s market, consider the overall condition of the property BEFORE you submit an offer. Work with your real estate agent to factor in repairs and updates you know you’ll need to make when you determine your offer price.
MISTAKE 2: Hire the Cheapest Inspector
We all love to save money, but not all inspectors are created equal. Before you hire one, do a little research. You may even want to start shopping for an inspector before you complete your home search. Inspection periods are typically short, so it never hurts to be prepared.
You can start by asking around for recommendations. Check with friends and family members, as well as your real estate agent. Then contact at least two or three inspectors so you can compare not only price but also levels of experience and service.
Ask about their background, years of experience, and the number of inspections they have completed. Verify their certifications and credentials, and make sure they carry the proper insurance.
Find out what is (and what isn’t) covered in the inspection and if they utilize the latest technology. Ask to see a sample report so you can compare the style and level of detail provided. Finally, make sure you feel confident in the inspector’s abilities and comfortable asking him/her questions.
MISTAKE 3: Miss Attending the Inspection
Make every effort to be on-site during the inspection. Buyers who aren’t present during their inspection miss out on a great opportunity to gather valuable information about their new home.
If can attend the inspection, don’t spend all your time picking out paint colors or chatting with your new neighbors. Instead, use your time there to shadow the inspector. It’s the perfect chance to find out where everything is located, ask questions, and see first-hand what repairs and updates may be needed.<br />
Of course, if you do choose to tag along with your inspector, exercise good judgment. Don’t get in the way, become a distraction, or do anything to jeopardize your (or the inspector’s) safety.
If you can’t make it to the inspection, ask if you can schedule a time to meet in person or speak by phone to go over the report in detail. It will allow you to ask questions or request clarification about issues in the report you don’t fully understand.
MISTAKE 4: Skim Over the Report
Inspection reports can be long and tedious, and it can be tempting to skim over them. However, buyers who do this risk missing crucial information.
Instead, you should read over the report carefully, so you don’t miss anything significant. Now is the time to address any areas of concern. You have a limited window of time to request repairs or negotiate the selling price, so don’t squander it.
Your inspector may also flag some minor items that you wouldn’t typically expect a seller to fix. However, ignoring these small issues can sometimes lead to bigger problems down the road. Make sure you read everything in the report so you can take future action if needed.
MISTAKE 5: Avoid Asking Questions
Some buyers are too embarrassed to ask questions when there’s something in the inspection report they don’t understand. Afraid they might look foolish, they avoid asking questions and end up uninformed about important issues that could impact their home purchase.
The reality is, questions are expected. You hired your inspector for their professional expertise, so don’t be shy about tapping into it. For example, you might ask:
Would you get this issue fixed in your own home?
How urgent is it?
What could happen if I don’t fix it?
Is this a simple issue I could fix myself?
What type of professional should I call?
Can you estimate how much it would cost to make this repair?
How much longer would you expect this system/structure/appliance to last?
What maintenance steps would you recommend?
Don’t bother asking your inspector if you should buy the property, because he/she won’t be able to answer that question for you. Instead, use the information provided to make an informed decision. A skilled real estate agent can help you determine the best path.
MISTAKE 6: Expect a Perfect Report
Some buyers get scared off by a lengthy inspection report. But with around 1600 items on an inspector’s checklist, you shouldn’t be surprised if yours uncover a large number of deficiencies. The key is to understand which problems require simple fixes, and which ones will require extensive (and costly) repairs.
Your real estate agent can help you decide if and how to approach the sellers about making repairs or reducing the price. Whatever you do, try to focus on the major issues identified in the inspector’s report, and don’t expect the sellers to address every minor item on the list. They will be more receptive if they perceive your requests to be reasonable.
MISTAKE 7: Forgo Additional Testing
There are times when an agent or inspector will recommend bringing in a specialist to evaluate a potential issue. For example, they may suggest testing for mold or consulting with a roofing expert.
Some buyers get spooked by the possibility of a “red flag” and decide to jump ship. Or, in their haste to close or desire to save money, they choose to ignore the recommendation for additional testing altogether.
Don’t make these potentially costly mistakes. In some cases, the specialist will offer a free evaluation that takes minimal time to schedule. And if not, the small investment you make could provide you with peace of mind or save you a fortune in future repairs.
MISTAKE 8: Skip Re-inspection of Repairs
Most buyers request receipts to prove that repairs have been correctly completed. However, it’s always prudent to go a step further and have negotiated repairs re-evaluated by your inspector or another qualified professional, even if there’s an additional charge.<br />
While the majority of sellers are forthcoming, some will try to save money by cutting corners, hiring unlicensed technicians, or doing the work themselves. A re-inspection will help ensure the repairs are completed properly now, so you aren’t paying to redo them later.
To avoid having to go back to the sellers, be specific when requesting repairs. Identify the problem, how repairs should be completed, who should complete the work, and how the repairs will be verified.<br />
Some buyers prefer to avoid this step altogether by completing the work themselves. They either request that the seller fund the repairs or reduce the selling price accordingly. Whichever path you choose, protect yourself and your investment by ensuring the work is done properly.
WE CAN HELP
A home inspection can reduce your risk and save you money over the long term. But to maximize its effectiveness, it must be done properly. Avoid these eight common home inspection mistakes to safeguard your investment.
While these are some of the most common missteps, countless others can trip up home buyers, cost them time and money, and cause undue stress. Fortunately, we have the skills and experience to help you avoid the potential pitfalls.
If you’re in the market to buy a home, we can help you navigate the inspection and all the other steps in the buying process … typically at no cost to you! Tap into our expertise to make the right decisions for your real estate purchase. Contact us today to schedule a free consultation!
2022-01-21T13:04:00-07:002022-01-21T13:28:10-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11622What’s Your Home Buying Power?What’s Your Home Buying Power?
If you’re in the market for a new home or investment property, one of the first questions you’ll probably ask is, “What can we afford?” Many buyers become so caught up in how much they can afford that they don’t realize their total buying power—that is, the total amount of purchasing potential they actually have.
Buying Power Defined
Your buying power is comprised of the total amount of money you have available each month for a mortgage payment. This means the money you have each month after fixed bills and expenses. Any money you’ve saved for a down payment, the proceeds from the sale of your current home, if applicable, and the amount of money you’re qualified to borrow all impact your buying power as well. When you take all of this into account, you may find you are able to purchase a larger home or a home in a more desirable neighborhood, or you might realize you should be looking for homes in a lower price range.
What About Housing Affordability?
<a href="https://www.nar.realtor/topics/housing-affordability-index/methodology">Housing affordability</a> is a metric used by real estate experts to assess whether or not the average family earning an average wage could qualify for a mortgage on the average home.1 Although this figure is essential to creating a comprehensive overview of the real estate market, it’s not a factor you should consider in your home search. What may be considered affordable to you based on your income and other factors may be different than what’s affordable to the average buyer.
Why Buying Power Matters
A common misunderstanding is that a home’s list price determines whether or not you can purchase it. Although it’s important to look at the price tag, it’s essential to consider what your monthly payment will be if you own the home. After all, the purchase price doesn’t include the housing-related expenses, such as annual property taxes, homeowner insurance, associated monthly fees, and any maintenance or repairs. Figuring out the payment will prevent you from overestimating or underestimating your buying power. After all, you’ll live with your monthly payment, not the sales price.
Once you have clarity on your buying power, you’ll be able to buy the home you want, instead of settling for a home because you feel it’s the only one you can afford. It will also prevent you from becoming “house poor,” a common term for someone who’s put all their money toward the down payment, leaving them nothing left over for fees outside of their monthly house payment. Both scenarios can negatively impact the lifestyle you want to live. Understanding your buying power can help you get the home you want without sacrificing the lifestyle you desire.
If you haven’t sold your current home yet, a Comparative Market Assessment (CMA) will give you a general idea of how much you may get for your home based on what other homes have sold for in your area. Contact our team for a FREE CMA!
Calculating Your Buying Power
You might be wondering, “How do I know what my buying power is?” Buying power is calculated by adding the money you’ve saved for a down payment and/or the money you made from selling your home (minus fees and mortgage payoff) to all of your sources of income and investments that could be used to make your monthly payment. Make sure to include your monthly pay, commissions or tips, dividends from investments, payments from rental properties, or other monthly income you receive as well as the loan amount you’re willing to finance and qualify for.
Most lenders advised buyers to spend no more than<a href="https://www.moneyunder30.com/percentage-income-mortgage-payments"> </a><a href="https://www.moneyunder30.com/percentage-income-mortgage-payments">35 to 45 percent</a> of their pretax income on housing, meaning all your income and sources of revenue prior to paying taxes. Make sure you factor in not only your mortgage payment but also property tax and home insurance to the cost of housing.2 However, other financial experts advise spending no more than a very conservative 25 percent of your after-tax income on your housing expenses.2 Whether you plan to spend the average, play it conservatively, or split the difference is up to you.
Traditionally, mortgage lenders have targeted the ideal housing expense amount to be a ratio of 28 percent or less.3
However, these figures bring up an important point: you don’t have to spend all of your savings and available monthly income on a mortgage payment. It’s important to set money aside for regular home maintenance, unexpected repairs, and monthly fees, such as a condominium or homeowners association fee. While the above ratios are commonly accepted, a lender will look at your total financial picture when they decide how much they’re willing to lend. It may be tempting to take out a large loan in order to purchase the home of your dreams, but keep in mind the less money you have to borrow, the stronger your buying power may be.
4 Things That Impact Buying Power
1. Credit score. A great score can help you lock into a lower interest rate.
2. Debt-to-income ratio. The lower the ratio, the better risk you may be to lenders as long as you have an established credit history.
3. Assets, including the documentation of where the money for the purchase is coming from and the mix of your investments.
4. Down payment. The more you’re able to put down, the less you will have to borrow. With a down payment of 20 percent or more, you won’t have to purchase private mortgage insurance (PMI) and you may also be able to negotiate a lower interest rate.
How to Save for a Down Payment
If you’re thinking of buying a home one day, one of the first steps to take is to start saving for a down payment. Here are some tips to make saving easier.
First-time buyers:
1. Set a savings goal. One way to figure out how much to save is to use the average sales price for homes that are similar to what you want and figure out your target down payment percentage. For example, if homes are selling for $200,000 in your area and you want to put 20 percent down, you’ll have to save $40,000. Set a goal to save that amount within a specific time frame; just keep in mind the longer you save, the more the average selling price will change. Although the majority of buyers saved for six months or less, 29 percent of all buyers (and 31 percent of first-time buyers) saved for more than two years for a down payment.4
2. Cut back on expenses. Review your monthly expenses and look for ways to save. Twenty-nine percent of buyers cut spending on non-essentials items and 22 percent cut spending on entertainment while they were saving for a home.4 Think about items you can live without or cut back on temporarily while you’re saving.
3. Look for ways to boost your income. Get a side job or sell items online or at a garage sale to increase your income in a short amount of time. Be sure to save any windfalls you get, including your annual income tax refund or work bonuses.
4. Check out home-buying programs. Your state, county, or local government may offer special programs, such as grants, for first-time buyers to use.
5. Ask your family. Thirteen percent of all buyers, and 24 percent of first-time buyers, were given money from family or friends to use toward the down payment of their home.4
Repeat buyers:
More than 52 percent of repeat buyers used the proceeds from the sale of their primary residence toward the down payment on their next home.4 Similarly, 76 percent tapped into their savings accounts.4 If you’re thinking of buying another home, here are more ways to save more money, in addition to the tips listed above:
1. Rent a room. If you have an income flat (or mother-in-law unit) attached to your home, rent it out and channel the income into a high-interest savings account.
2. Make your money work for you. If you don’t plan to buy for at least five years, invest it and let the compound interest work for you. Discuss this option with your financial planner or broker to see if this is ideal for you and your goals.
3. Tap into your 401(k). If you have a 401(k) plan, you may be allowed to borrow a portion of it, the lessor of up to $50,000 or half of its value, for your down payment. Remember, it’s a loan so you’ll have to pay it back. If you leave or lose your job before you’ve repaid the loan, you’ll have between 60 to 90 days to repay the balance or face stiff taxes and penalties.
If you want to buy an investment property
Whether you’re buying a second home or a rental property, here are a couple of tips to save for a down payment.
1. Tap into your equity. If you’ve paid off or paid down your mortgage on your primary home, you may be able to tap into your equity to purchase another property. Contact your lender to learn more about a HELOC or home equity loan.
2. Get a partner. Find a friend or relative who’s willing to purchase property with you. Typically, you’ll split the costs and profits equally. Just make sure to work with an attorney to create a partnership agreement to fit your situation.
Work Out Your Buying Potential
What’s your buying potential? Fill out this worksheet to get an estimate.
Housing Expense Ratio:
1. Monthly income before taxes
$
2. Multiply line 1 by 0.28
X 0.28
3. Monthly mortgage payment (PITI) should not exceed this amount
= $
4. Monthly income before taxes
$
5. Multiply line 4 by 0.36
X 0.36
6. Total monthly payments on all debts (including mortgage) should not exceed this amount
= $
7. Subtract the total monthly payments on all outstanding debts (e.g., car loans, credit cards, student loans, etc.)
- $
8. The monthly mortgage payment should not exceed this amount
$
9. Look at line 3 and line 8. The lower figure is an estimate of the maximum mortgage payment in consideration of your income and debts.
$
10. Multiply line 9 by 0.80
X 0.80
11. This equals a portion of your mortgage payment that is the principal and interest only
$
12. Use the table below to see the size of the loan you may be able to obtain with this monthly mortgage payment.
Source: Iowa State University Extension, What is your house-buying power?
Monthly Payment on 30-Year Fixed-Rate Mortgage
Loan amount
3%
3.5%
4%
4.5%
5%
5.5%
6%
$50,000
211
225
239
253
268
284
300
$75,000
316
337
358
380
402
426
450
$100,000
421
449
477
506
536
568
600
$150,000
632
674
716
759
804
852
900
$200,000
842
898
954
1012
1072
1136
1200
$250,000
1052
1123
1193
1265
1340
1420
1500
$300,000
1263
1347
1431
1518
1608
1704
1800
Didn’t see your desired loan amount? Use the table below to estimate your monthly payment (principal and interest) per $1,000 of your loan. To figure out an estimated loan payment, multiply the factor by the number of thousands in the amount of your mortgage.
For example, if you intend to borrow $400,000, with a loan term of 30 years at 4% interest, multiply 4.77x 400 = $1908 per month.
Interest Rate
15-Year Term
30-Year Term
Monthly Payment
Monthly Payment
3%
6.90
4.21
3.5%
7.14
4.49
4%
7.39
4.77
4.5%
7.64
5.06
5%
7.90
5.36
5.5%
8.18
5.68
6%
8.44
6.00
Source: HSH.com<a href="http://www.hsh.com/mopaytable-print.html"> </a><a href="http://www.hsh.com/mopaytable-print.html">http://www.hsh.com/mopaytable-print.html</a>)
Don’t forget to factor in property taxes and insurance. These are often added to your principal and interest of your mortgage payment—the money used to pay down the balance of your loan and the charge for borrowing the money. Since these numbers vary, contact your county assessor’s office for the current property tax rate and your insurer for a home insurance quote. Once you have these figures, divide each by 12 to estimate how much they’ll add to the above payment amounts.
Do you want a clearer picture of your buying power? Would you like to see what kind of homes you can get with your buying power? Give us a call!
Sources: 1. National Association of REALTORS<a href="https://www.nar.realtor/topics/housing-affordability-index/methodology"> </a><a href="https://www.nar.realtor/topics/housing-affordability-index/methodology">https://www.nar.realtor/topics/housing-affordability-index/methodology</a>
2. Moneyunder30.com<a href="https://www.moneyunder30.com/percentage-income-mortgage-payments"> </a><a href="https://www.moneyunder30.com/percentage-income-mortgage-payments">https://www.moneyunder30.com/percentage-income-mortgage-payments</a>
3. Credit.com<a href="https://www.credit.com/loans/mortgage-questions/how-to-determine-your-monthly-housing-budget/"> </a><a href="https://www.credit.com/loans/mortgage-questions/how-to-determine-your-monthly-housing-budget/">https://www.credit.com/loans/mortgage-questions/how-to-determine-your-monthly-housing-budget/</a>
4. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers
5. Iowa State University Extension, What is your house-buying power? <a href="https://store.extension.iastate.edu/product/pm1460-pdf">https://store.extension.iastate.edu/product/pm1460-pdf</a>
6. HSH.com<a href="http://www.hsh.com/mopaytable-print.html"> </a><a href="http://www.hsh.com/mopaytable-print.html">http://www.hsh.com/mopaytable-print.html</a>
2022-01-20T07:58:00-07:002022-01-20T08:04:27-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11550HOUSE CARE CALENDAR: A Seasonal Guide to Maintaining Your HomeHOUSE CARE CALENDAR:<br /> A Seasonal Guide to Maintaining Your Home
From summer vacations to winter holidays, it seems each season offers the perfect excuse to put off our to-do list. But be careful, homeowners: neglecting your home’s maintenance could put your personal safety—and one of your largest financial investments—at serious risk.
In no time at all, small problems can lead to extensive and expensive repairs. And even if you avoid a catastrophe, those minor issues can still have a big impact. Properties that are not well maintained can lose 10 percent (or more) of their appraised value.1
<br /> The good news is, by dedicating a few hours each season to properly maintaining your home, you can ensure a safe living environment for you and your family ... and actually increase the value of your home by one percent annually!1 You just need to know where and how to spend your time.<br /> <br /> Use the following checklist as a guide to maintaining your home and lawn throughout the year. It's applicable for all climates, so please share it with friends and family members who you think could benefit, no matter where their home is located.
Spring
After a long, cold winter, many of us look forward to a fresh start in the spring. Wash away the winter grime, open the windows, and prepare your home for warmer weather and backyard barbecues.
Inside
❏ Conduct Annual Spring Cleaning
Be sure to tackle those areas that may have gone neglected—such as your blinds, baseboards and fan blades—as well as appliances, including your refrigerator, dishwasher, oven and range hood. Clear out clutter and clothes you no longer wear, and toss old and expired food and medications.
❏ Shut Down Heating System<br /> Depending on the type of heating system you have, you may need to shut your system down when not in use. Check the manufacturer’s instructions for proper procedures.
❏ Tune Up A/C
If your home has central air conditioning, schedule an annual tune-up with your HVAC technician. If you have a portable or window unit, be sure to follow the manufacturer's instructions for proper maintenance.2
❏ Check Plumbing
It’s a good idea to periodically check your plumbing to spot any leaks or maintenance issues. Look for evidence of leaks—such as water stains on the ceiling—and check for dripping faucets or running toilets that need to be addressed. Inspect your hot water heater for sediment build up. Check your sump pump (if you have one) to ensure it’s working properly.3
❏ Inspect Smoke Alarm and Carbon Monoxide Detectors
Check that your smoke and carbon monoxide detectors are functioning properly. Batteries should be replaced every six months, so change them now and again in the fall. Follow the manufacturer’s instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer’s recommendation.4
Outside
❏ Inspect Perimeter of Home
Walk around your house and look for any signs of damage or wear and tear that should be addressed. Are there cracks in the foundation? Peeling paint? Loose or missing roof shingles? Decide to make needed repairs yourself or hire a contractor.
❏ Clean Home’s Exterior
Wash windows and clean and replace screens if they were removed during the winter months. For the home’s facade, it’s generally advisable to use the gentlest method that is effective. A simple garden hose will work in most cases.5
❏ Clean Gutters and Downspouts
Gutters and downspouts should be cleaned at least twice a year. Neglected gutters can cause water damage to a home, so make sure yours are clean and free of debris. If your gutters have screens, you may be able to decrease the frequency of cleanings, but they should still be checked periodically.6
❏ Rake Leaves
Gently rake your lawn to remove leaves and debris. Too many leaves can cause an excessive layer of thatch, which can damage the roots of your lawn. They can also harbor disease-causing organisms and insects.7 However, take care because overly vigorous raking can damage new grass shoots.
❏ Seed or Sod Lawn<br /> If you have bare spots, spring is a good time to seed or lay new sod so you can enjoy a beautiful lawn throughout the remainder of the year. The peak summer heat can be too harsh for a new lawn. If you miss this window, early fall is another good time to plant.8
❏ Apply a Pre-Emergent Herbicide
While a healthy lawn is the best deterrent for weeds, some homeowners choose to use a pre-emergent herbicide in the spring to minimize weeds. When applied at the right time, it can be effective in preventing weeds from germinating. However, a pre-emergent herbicide will also prevent grass seeds from germinating, so only use it if you don’t plan to seed or sod in the spring.
❏ Plant Flowers
After a long winter, planting annuals and spring perennials is a great way to brighten up your garden. It’s also a good time to prune existing flowers and shrubs and remove and compost any dead plants.
❏ Mulch Beds<br /> A layer of fresh mulch helps to suppress weeds, retain moisture and moderate soil temperature. However, be sure to strip away old mulch at least every three years to prevent excessive buildup.9
❏ Fertilize Lawn<br /> Depending on your grass type, an application of fertilizer in the spring may help promote new leaf and root growth, keep your lawn healthy, and reduce weeds.10
❏ Tune Up Lawn Mower
Send your lawn mower out for a professional tune-up and to have the blades sharpened before the mowing season starts.11
❏ Inspect Sprinkler System<br /> If you have a sprinkler system, check that it’s working properly and make repairs as needed.
❏ Check the Deck
If you have a deck or patio, inspect it for signs of damage or deterioration that may have occurred over the winter. Then clean it thoroughly and apply a fresh coat of stain if needed.
❏ Prepare Pool
If you own a pool, warmer weather signals the start of pool season. Be sure to follow best practices for your particular pool to ensure proper maintenance and safety.
Summer
Summer is generally the time to relax and enjoy your home, but a little time devoted to maintenance will help ensure it looks great and runs efficiently throughout the season.
Inside
❏ Adjust Ceiling Fans
Make sure they are set to run counter-clockwise in the summer to push air down and create a cooling breeze. Utilizing fans instead of your air conditioner, when possible, will help minimize your utility bills.
❏ Clean A/C Filters
Be sure to clean or replace your filters monthly, particularly if you’re running your air conditioner often.
❏ Clear Dryer Vent
Help cut down on summer utility bills by cleaning your laundry dryer vent at least once a year. Not only will it help cut down on drying times, a neglected dryer poses a serious fire hazard.
❏ Check Weather Stripping
If you’re running your air conditioner in the summer, you’ll want to keep the cold air inside and hot air outside. Check weather stripping around doors and windows to ensure a good seal.
Outside
❏ Mow Lawn Regularly
Your lawn will probably need regular mowing in the summer. Adjust your mower height to the highest setting, as taller grass helps shade the soil to prevent drought and weeds.
❏ Water Early in the Morning
Ensure your lawn and garden get plenty of water during the hot summer months. Experts generally recommend watering in the early morning to minimize evaporation, but be mindful of any watering restrictions in your area, which may limit the time and/or days you are allowed to water.
❏ Weed Weekly
To prevent weeds from taking over your garden and ruining your home’s valuable curb appeal, make a habit of pulling weeds at least once per week.
❏ Exterminate Pests
Remove any standing water and piles of leaves and debris. Inspect your lawn and perimeter of your home for signs of an invasion. If necessary, call a professional exterminator for assistance.
Fall
Fall ushers in another busy season of home maintenance as you prepare your home for the winter weather ahead.
Inside
❏ Have Heater Serviced
To ensure safety and efficiency, it’s a good idea to have your heating system serviced and inspected before you run it for the first time.
❏ Shut Down A/C for the Winter
If you have central air conditioning, you can have it serviced at the same time as your furnace. If you have a portable or window unit, ensure it’s properly sealed or remove it and store it for the winter.
❏ Inspect Chimney
Fire safety experts recommend that you have your chimney inspected annually and cleaned periodically. Complete this task before you start using your fireplace or furnace.
❏ Seal Windows and Doors
Check windows and doors for drafts and caulk or add weatherstripping where necessary.
❏ Check Smoke Alarm and Carbon Monoxide Detectors
If you checked your smoke and carbon monoxide detectors in the spring, they are due for another inspection. Batteries should be replaced every six months, so it’s time to replace them again. Follow the manufacturer’s instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer’s recommendation.3
Outside
❏ Plant Fall Flowers, Grass and Shrubs<br /> Fall is a great time to plant perennials, trees, shrubs, cool-season vegetables and bulbs that will bloom in the spring.12 It’s also a good time to reseed or sod your lawn.
❏ Rake or Mow Leaves
Once the leaves start falling, it’s time to pull out your rake. A thick layer of leaves left on your grass can lead to an unhealthy lawn. Or, rather than raking, use a mulching mower to create a natural fertilizer for your lawn.
❏ Apply Fall Fertilizer
If you choose not to use a mulching mower, a fall fertilizer is usually recommended. For best results, aerate your lawn before applying the fertilizer.13
❏ Inspect Gutters and Roof
Inspect your gutters and downspouts and make needed repairs. Check the roof for any broken or loose tiles. Remove fallen leaves and debris.
❏ Shut Down Sprinkler System
If you have a sprinkler system, drain any remaining water and shut it down to prevent damage from freezing temperatures over the winter.
❏ Close Pool
If you have a pool, it’s time to clean and close it up before the winter.
Winter
While it can be tempting to ignore home maintenance issues in the winter, snow and freezing temperatures can do major damage if left untreated. Follow these steps to ensure your house survives the winter months.
Inside
❏ Maintain Heating System
Check and change filters on your heating system, per the manufacturer's instructions. If you have a boiler, monitor the water level.
❏ Tune Up Generator
If you own a portable generator, follow the manufacturer’s instructions for proper maintenance. Make sure it’s working before you need it, and stock up on supplies like fuel, oil and filters.
❏ Prevent Frozen Pipes
Make sure pipes are well insulated, and keep your heat set to a minimum of 55 degrees when you’re away. If pipes are prone to freezing, leave faucets dripping slightly overnight or when away from home. You may also want to open cabinet doors beneath sinks to let in heat.
Outside
❏ Drain and Shut Off Outdoor Faucets
Before the first freeze, drain and shut off outdoor faucets. Place an insulated cover over exposed faucets, and store hoses for the winter.
❏ Remove Window Screens
Removing screens from your windows allows more light in to brighten and warm your home during the dark, cold winter months. Snow can also get trapped between screens and windows, causing damage to window frames and sills.
❏ Service Snowblower
Don’t wait until the first snowstorm of the season to make sure your snowblower is in good working order. Check the manufacturer’s instructions for maintenance or have it serviced by a professional.
❏ Stock Up on Ice Melt
Keep plenty of ice melt, or rock salt, on hand in preparation for winter weather. Look for brands that will keep kids and pets safe without doing damage to your walkway or yard.
❏ Watch Out for Ice Dams
Ice dams are thick ridges of solid ice that can build up along the eaves of your house. They can do major damage to gutters, shingles and siding. Heated cables installed prior to the first winter storm can help.14
❏ Check for Snow Buildup on Trees
Snow can cause tree limbs to break, which can be especially dangerous if they are near your home. Use a broom to periodically remove excess snow.15
While this checklist should not be considered a complete list of your home’s maintenance needs, it can serve as a general seasonal guide. Systems, structures and fixtures will need to be repaired and replaced from time-to-time, as well. The good news is, the investment you make in maintaining your home now will pay off dividends over time.
Keep a record of all your maintenance, repairs and upgrades for future reference, along with receipts. Not only will it help jog your memory, it can make a big impact on buyers when it comes time to sell your home … and potentially result in a higher selling price.
Sources:
HouseLogic.com – <br /> <a href="https://www.houselogic.com/organize-maintain/home-maintenance-tips/value-home-maintenance/">https://www.houselogic.com/organize-maintain/home-maintenance-tips/value-home-maintenance/</a>
Home Advisor – <br /> <a href="https://www.homeadvisor.com/r/servicing-your-air-conditioner/">https://www.homeadvisor.com/r/servicing-your-air-conditioner/</a>
Keyes & Sons Plumbing and Heating – <br /> <a href="http://keyes-plumbing.com/things-to-check-in-spring/">http://keyes-plumbing.com/things-to-check-in-spring/</a>
Allstate Insurance Blog – <br /> <a href="https://blog.allstate.com/test-smoke-detectors/">https://blog.allstate.com/test-smoke-detectors/</a>
Houzz – <br /> <a href="https://www.houzz.com/ideabooks/17268616/list/how-to-wash-your-house">https://www.houzz.com/ideabooks/17268616/list/how-to-wash-your-house</a>
Angie’s List – <br /> <a href="https://www.angieslist.com/articles/why-gutter-cleaning-so-important.htm">https://www.angieslist.com/articles/why-gutter-cleaning-so-important.htm</a>
Angie’s List – <br /> <a href="https://www.angieslist.com/articles/what-thatch-and-how-does-it-impact-my-lawn.htm">https://www.angieslist.com/articles/what-thatch-and-how-does-it-impact-my-lawn.htm</a>
HGTV – <br /> <a href="http://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/lawns/top-spring-lawn-care-tips-pictures">http://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/lawns/top-spring-lawn-care-tips-pictures</a>
This Old House – <br /> <a href="https://www.thisoldhouse.com/more/may-mulching">https://www.thisoldhouse.com/more/may-mulching</a>
Lowes – <br /> <a href="https://www.lowes.com/projects/lawn-and-garden/fertilize-your-lawn/project">https://www.lowes.com/projects/lawn-and-garden/fertilize-your-lawn/project</a>
The New York Times – <br /> <a href="https://www.nytimes.com/guides/realestate/home-maintenance-checklist">https://www.nytimes.com/guides/realestate/home-maintenance-checklist</a>
Better Homes and Gardens Magazine – <br /> <a href="https://www.bhg.com/gardening/yard/garden-care/what-to-plant-in-the-fall/">https://www.bhg.com/gardening/yard/garden-care/what-to-plant-in-the-fall/</a>
The Spruce – <br /> <a href="https://www.thespruce.com/late-fall-fertilizing-2152976">https://www.thespruce.com/late-fall-fertilizing-2152976</a>
This Old House – <br /> <a href="https://www.thisoldhouse.com/how-to/how-to-get-rid-ice-dams">https://www.thisoldhouse.com/how-to/how-to-get-rid-ice-dams</a>
Houzz – <br /> <a href="https://www.houzz.com/ideabooks/55572864/list/your-winter-home-maintenance-checklist">https://www.houzz.com/ideabooks/55572864/list/your-winter-home-maintenance-checklist</a>
2022-01-18T07:16:00-07:002022-01-18T07:21:10-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11530The Home Equity PlaybookThe Home Equity Playbook
What is Home Equity?
Home equity seems to be a very simple calculation — the total amount of mortgages owed is subtracted from the current market value of a home. Here is a simple example:
Current Home Market Value $325,000
Existing Mortgage $225,000
Homeowner Equity $100,000
One side of the equation is well defined, and it is found on the monthly mortgage statement, the loan balance. The other side is less obvious — the current market value of the property.
As a homeowner, your down payment purchases your initial equity, and your monthly (or additional) principal payments increase your equity. In strong real estate markets and in-demand locations, equity can increase quite rapidly as the property value increases, but the inverse can also happen — too much available inventory and market down-cycles can lead to falling home values and a reduction in homeowner equity.
It can be difficult to put an accurate value on something that you have emotional and monetary vesting in. It is safe to say that most people think their home is worth more than then it is.
Homeowners can make savvy assessments about their home’s current market value by following the sales of similar properties in the neighborhood but should stay away from websites such as Zillow and Trulia, which provide inaccurate and outdated estimates. The most accurate measurement requires a comparative market analysis from a real estate professional or having the home professionally appraised. But, the bottom line — your home is worth as much as someone is willing to pay for it.
Creating Value is in Your Hands
Maintaining the condition of a home is vitally important to retaining and increasing value. Homes are judged against their peers: how they compare to similar homes in the neighborhood. Another way to retain value is to not over upgrade since it is rare to ever recoup the money spent if you exceed neighborhood value. Keep up the landscaping and do the little things to add curb appeal.
Putting Home Equity to Work
Home equity represents the largest single asset of millions of people, and because it represents so much of an individual’s net worth, it must be treated with respect. Home equity is not a liquid asset until a property is sold, or it is borrowed against.
There are two types of loans that tap into homeowner equity as collateral.
Home Equity Loans
Many home equity plans set a fixed period during which the person can borrow money, such as 10 years. At the end of this “draw period,” the person may be allowed to renew the credit line. If the plan does not allow renewals, the homeowner will not be able to borrow additional money once the period has ended. Some plans may call for payment in full of any outstanding balance at the end of the period. Others may allow repayment over a fixed period, for example, of 10 years.
A home equity loan, sometimes called a second mortgage, usually has a fixed rate and a set time to pay it back, generally with equal monthly payments.
Home Equity Line of Credit
A home equity line of credit is similar to a credit card. The lender sets a maximum amount you can borrow, and you can draw money as you need it, though many home equity lines of credit require an initial draw. The interest rate varies daily and is usually prime plus a set number, but the required payment is usually interest only. Once the loan has been paid down, the payment is reduced, and it can be paid off and initiated as many times as a homeowner requires.
How Much Equity can be Accessed?
Since the financial institution is lending money and using a home as collateral, they will not lend 100% of the home’s equity. The bank does not want to take the risk that if the house price drops, they would be carrying a loan for more than its market value. Therefore, most banks will allow a qualified homeowners to borrow approximately 80% of their equity.
It’s Important to Use Your Home Equity Wisely
Because it is likely the biggest asset most people have, losing your home equity is hard to overcome. It must be used in prudent ways, and the payments against the loan must be affordable. Using equity money to make the loan payment is only acceptable for a short-term solution.
There is a number of good reasons to use money from a home equity loan… and some really bad ones. First, let’s cover smart uses.
1. Invest in Your Home
The best way to use the money is to create more equity in the home. Among the very best returns on your investment (ROI) include kitchen and bathroom remodel, adding square footage or an extra bath, enhancing curb appeal, and repairing/keeping the existing structure sound. Making prudent investments in your home is a wonderful win-win: you enjoy the upgrades and the repairs can add value to the home.
2. Invest in your Children’s Education
Using your home equity to finance a child’s higher education may be the greatest payoff of all. Not only is the rate much lower than a student loan, but it is also an investment in the child’s future.
3. Supplement Retirement Needs
Older homeowners spent their working lives paying down their mortgages. At retirement, when monthly income is reduced, a home equity loan could pay for a dream vacation or an unexpected major expense.
4. Augment the Impending Sale of a Home
If you’re planning to sell soon, a home equity line of credit may be the best way to finance improvements, and you can pay it off entirely when you sell. Investing wisely in upgrades and repairs may even reap a profit on your investment.
Here are some examples of some not very wise choices.
Adding luxury amenities like a swimming pool, a hot spa, lavish landscaping, expensive appliances, and exotic countertops and flooring rarely pay off.
Purchasing a car or boat or most any personal luxury items is a poor use of the funds since these items quickly depreciate in value.
Also, stay away from using money on risk-heavy investments. Financing stock purchases, start-up businesses, and paying routine bills is not financially smart. If you cannot afford to purchase those items with available funds, using equity from your home means they should not be in your budget.
You should treat a home equity loan as an investment and not as extra cash when making financial decisions. If your intended use of the money doesn't pay you back in some way, it's not the best use of your valuable equity.
We Are Happy to Assist You
If you would like an assessment of the market value of your home and the current equity you can access, give us a call for comparative market analysis.2022-01-13T07:25:00-07:002022-01-13T07:29:56-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11514How to Amp Up The Resale Value of Your HomeHow to Amp Up The Resale Value of Your Home
Whether you're putting your home on the market this year or in the next five years, it is a smart decision to start building your home's resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.
Small Maintenance and Repairs
If you think that home maintenance on the weekends wastes your time and energy, think again. The small chores you do around your home prevent it from losing value. Neglecting small maintenance and repairs causes 10% of your home's value to walk out your door and slip through your windows. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000.
A <a href="http://isiarticles.com/bundles/Article/pre/pdf/7097.pdf">study</a> conducted by researchers at the University of Connecticut and Syracuse University shows that regular maintenance boosts your home value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance slows down your rate of depreciation. Furthermore, because homebuyers generally notice any repairs needed upon buying a new home, proactive maintenance lets the homebuyer know that he or she will not have to spend extra money to maintain the basics. This makes your home more attractive, and thus more likely to get higher-priced offers.
Maintaining the basics can cost you little money and certainly some effort, but there’s a way to accomplish this very important activity smartly. This article by <a href="http://www.houselogic.com/home-advice/maintenance-repair/how-to-keep-home-maintenance-costs-under-300/">HouseLogic</a>, for example, shows you how to keep home maintenance below $300 a year. Planning will also help make maintaining your home easier. Most professional appraisers and real estate agents recommend a proactive maintenance schedule that includes:
Keeping enough cash on hand to replace systems and materials
Creating and following a maintenance schedule
Planning a room redo every year
Keeping a notebook of all your maintenance and repairs
Landscaping
The Virginia Cooperative Extension at <a href="http://pubs.ext.vt.edu/426/426-087/426-087_pdf.pdf">Virginia Tech</a> published a study that shows landscaping can increase a home's value by 15%. The study claims that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. Particular landscape elements add different values. For instance, landscape design can increase your home's value by 42%, plant size can increase your home's value by 32%, and diversity in plants can increase your home's value by 22%.
Replace Entrance Doors
If your entry doors are wood, consider switching them out for either fiberglass or steel doors. Steel doors add style and architectural interest to your home while improving security; you can add a deadbolt and electronic keypads to keep out intruders. Unlike wood doors, steel doors do not rot or splinter.
Alternatively, fiberglass doors can be designed to look like wood doors and give your home a modern look. Fiberglass doors conserve more energy than steel doors.
Pricewise, a steel door will cost you $1,335 with a 91% return on investment whereas a fiberglass door will cost you $3,126 with an 82.3% return on investment.
Garage Door Replacement
At first, you might not think that your garage door increases the value of your home. However, your garage door distinguishes your home from the other homes on your block. As the largest entryway of a house, garage doors get noticed first because they're the focal point of your home. If you want to quickly increase the resale value of your home, you need to make the most of this space.
Some interesting things being done with garage doors include:
Increased Size: Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
Bold Colors: Bright and bold colors now can complement the color of your home, or you can build a concept around the color of your home.
Faux Wood: You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
Windows: Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it's no longer a dark space.
More importantly, a garage door replacement will cost you $1,652 and add $1,512 to the value of your home; that's a return on your investment of 91.5%.
Fiberglass Attic Insulation
While energy efficiency is still not the sexiest selling point of your home, installing fiberglass attic insulation saves energy and garners a big payback on your investment. According to Remodeling Magazine's 2016 Cost vs. Value <a href="http://www.remodeling.hw.net/cost-vs-value/2016/trends">top trends </a>report, fiberglass attic insulation gained the top return on investment among the 30 projects in this year's report. Using Remodel/Max as the cost source, a fiberglass attic insulation project costs $1,268 nationwide. Real estate professionals surveyed estimated that the work would boost the price of a home at resale, within a year of its completion, by $1,482. That's a 116.9% return on investment.
Replacing Windows
Replacing your windows is another way to save energy and increase your home's resale value. Replacing your old windows with energy-saving models will beautify your home, keep it comfortable, and ease the workload of your HVAC system. According to <a href="http://www.hgtv.com/remodel/mechanical-systems/windows-that-work-with-your-wallet">HGTV</a>, you'll see a reduction in your utility bill by 7% to 15%. However, if you're selling your home, you could expect a 60% to 70% recoupment of your investment. The two types of replacement windows that <a href="http://www.remodeling.hw.net/cost-vs-value/2016/">fetch the best return</a> are vinyl and wood.
Remodeling Your Kitchen
Kitchen remodeling can get expensive, but small renovations can make your home more buyer-friendly. Changing your kitchen's texture and color using a matte finish and neutral colors such as putty or grey enhances your home's resale value. Because matte finishes have transitional qualities, your potential homebuyer can easily match his or her stainless steel or black and white appliances. Also, refinishing cabinetry, or switching to Energy Star™ appliances provide the comfort you like and pizazz buyers adore.
Flow is important to any interior design of a home. If you feel that your kitchen hinders a good flow, change it. A small investment to knock out a non-structural wall or remove a kitchen island creates space and provides flow that buyers love.
A minor kitchen remodel can cost you $20,122 while putting $16,716 of resale value into your home; that's an 83% payback on the project. If you want to do a major kitchen model, this can cost you about $60,000 and put about $39,000 of resale value into your home, which is only about a 65% payback on the project. Therefore, consider a minor kitchen remodel first.
Bathroom Addition or Remodel
Likewise, carefully consider adding a bathroom or remodeling your bathroom. Switching out your frosted glass shower doors for glass doors, cleaning the grout, replacing the shower and floor tiles, switching out your sink or toilet, or replacing your sink and shower fixtures can cost you little money.
Adding a bathroom can get expensive, but it can reduce congestion during hectic times and provide your guests with a bathroom. Consult with your real estate agent or a local appraiser before deciding whether a full remodel or addition is right for your situation. While a bathroom remodels will cost you about $18,000 with a return on investment of about 66%, a bathroom addition will cost you about $42,000 with a return on investment of about 56%. Therefore, it's best to do your due diligence before working on your bathroom.
Your Needs and Buyers' Wants
On that note, if you need to renovate your home, be sure to consider how those changes will affect its appeal to future buyers. Knowing design trends will allow you to make changes to your home based on where your needs and your potential buyer's desires intersect, thus increasing your property's resale value drastically.
Designers and design websites provide great ideas when you’re brainstorming home renovations. Keep in mind as you research, however, that you don’t want to sacrifice your needs for a comfortable home just for the sake of what you think a future buyer will want!
Therefore, before you begin making any changes to your home, consult your real estate agent. Real estate agents, because we are constantly working with new buyer clients, have insider insight into what home buyers are looking for now and in the future. We’ll be able to help you make smart choices when remodeling or renovating your home.
If you think you might want to remodel or renovate your home shortly, or if you are just curious about other ways you can increase its resale value, please reach out to me! 2022-01-11T08:03:00-07:002022-01-11T08:07:50-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11507Should You Buy a New or Existing Home? Should You Buy a New or Existing Home?
Maybe your dream home has the intricate details that you usually find only in older construction - wainscoting and crown molding in the interior, the front porch with a swing, an older tree shading the back yard, and the white picket fence.
Or maybe your dream home has all the conveniences of modern living - open floor plan in the living and dining spaces, large windows, connected, “smart” appliances and security systems, and minimalist design elements.
Whether you go for a brand new construction or an existing home, both types of properties have their pros and cons when it comes to purchasing. What type of home is right for you will depend on which factors are most important for your lifestyle.
Build your dream home with new construction
If you’re making a home purchase that’s still in the pre-construction phase, you may be able to customize many of the details. Many home builders will give you the option to add design elements that will give you the exact dream home you desire. If it’s a new subdivision, you may even be able to pick which lot you like best.
Very early in the building process, you may have more room to customize. For example, if the walls aren’t complete, you may be able to add extra outlets in each of the rooms or custom wiring for surround sound in the media room. Perhaps you could move the laundry room to the top floor instead of the basement. You might be able to get a separate mudroom entrance.
Later in the building process, you may be able to add marble countertops, an island, and custom cabinets in the kitchen. Your master bathroom could be upgraded with a steam shower, spa tub, and European fixtures. You will want to check with the builder to understand which features are included, and which ones are extra.
New homes save money with fewer repairs and more efficiency
Once your home is complete, all you’ll need to do is move in. New appliances will be under warranty for a few years if they need repairs, and will likely work well for several years without needing fixes. Often, new construction is under a builder’s warranty, so any repairs needed in the first year should be covered.
New homes often contain energy-efficient and green appliances, like high-efficiency stoves, refrigerators, washing machines, heaters, or air conditioning units. These energy-saving appliances, along with good insulation and energy-efficient windows, will help you save money on monthly utility bills.
New homes also often use new building materials that require less maintenance — for example, using composite siding instead of wood, which doesn’t need annual repainting. You won’t need to spend as much to maintain your new home.
If you customized it during pre-construction, you won’t need to spend any money on renovations or upgrades for several more years. You can just enjoy it and not worry about saving for major home repairs.
What you need to do to make a good new home purchase
Before you put in your offer, do some research on the builder. Do they have a good reputation? What else have they built? Did their other new properties have issues such as poor construction or unfinished details?
You like the model home, but will you like where it’s situated? After you look at the home itself, come back to the neighborhood to see what it’s like at different times of the day. Walk around during the day and in the evening, and see how you like the area.
Brand new communities usually attract similar types of buyers—urban professionals, couples, or young families, for example. These will be your neighbors, so you’ll want to make sure that you want to be part of this new, homogeneous community.
You may also need to be flexible with your move-in date. Builders will only be able to let you move in if they can meet their construction schedule. If the wiring is delayed, the walls can’t be finished. And because there are so many construction tasks that are dependent on the completion of prior tasks, schedules tend to slip.
Get more variety and established neighborhoods with an existing home
Existing homes are those that have generally been built and lived in between the 1920s and 1970s. With existing homes, you will get more variety in home styles, as different types of construction have gone in and out of style throughout the decades. Within one neighborhood, you may be able to find a mix of different styles like Victorian, modern Tudor cottages, tract style, ranch or split-ranch, or contemporary homes.
Existing homes are situated in established neighborhoods, which may have more amenities nearby that a new home in a brand new subdivision may not have. Your new neighborhood may have restaurants, cafes, and boutiques within walking distance.
You might also have access to more supermarkets, dry cleaners, discount stores, and gas stations nearby. An established neighborhood might have a nice park, running path, or playground for the kids to enjoy. You might also be closer to a library or the post office.
Resale homes can be a less expensive purchase
If you’re considering a resale home, you may be able to get into a beautiful, unique property at a lower purchase price than a new home.
There are many more resale homes available than there are new homes — according to the<a href="https://www.nahb.org/"> </a><a href="https://www.nahb.org/">National Association of Homebuilders</a>, about 10 times as many. With such a large pool to buy from, the market for resales can be more competitive. You may have more room to negotiate the selling price of the home. With a brand-new construction, you won’t likely be able to have the same kind of negotiating power.
Before putting a home on the market, sellers often make home renovations or remodel parts of their homes to make them more attractive to buyers and to be able to potentially increase the list price. If the resale home has a brand new, modern kitchen, an updated bathroom, or even a new roof or upgraded windows, you could end up getting a home that’s comparable to new construction without having to pay the potential more expensive new-home list price.
Existing homes have already been inspected at least once on the last sale, so you will know about any potential structural problems or repairs that have been made on the home. Knowing the track record on your potential home will help you avoid purchase mistakes—you’re much less likely to end up with a property that has a rotting roof, dangerous electrical wiring, or a crumbling foundation. With a new home, you could end up with incomplete construction or major issues that you didn’t know about because they weren’t yet documented.
What you need to do to make a good resale purchase
Before you go too far down the road to a purchase, you can protect your purchase by first having the home inspected. A good home inspector will document all flaws, no matter how small they appear. If the inspector finds any major problems, like foundation cracks or leaky roofs, you may be able to counter offer and get the seller to either fix it or reduce the selling price.
Even if the inspection doesn’t uncover any major issues, you will need to expect the unexpected. Older homes will eventually need replacement appliances, a new air conditioning unit, or a plumbing repair. As long as you know that before you buy a resale home, you can plan for surprise repairs.
With an older home, you may want to eventually remodel parts of it. Will you be happy living in your house while you’re doing major work in the living room or the kitchen? If you know that it would disrupt your lifestyle too much, you may want to consider whether you really want to buy an older property.
Whether you choose to buy a new home or an existing home, the best way to get started is to speak with your trusted real estate professional. We will have access to both new properties and resale homes that may fit your goals and will know which neighborhoods will serve your needs. 2022-01-10T07:29:00-07:002022-01-10T07:37:40-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11487Serious About Selling? 5 Steps to Make Your Home the Best on the BlockSerious About Selling? 5 Steps to Make Your Home <br /> the Best on the Block
We all want to be good neighbors. But when it comes to selling your home, it’s not just about “keeping up with the Joneses.” It’s about outshining them at every opportunity!
If you’re looking to sell your home fast and for the most money possible, you’ll need a strategy to set it apart from all the other listings competing for buyers in your area. That’s why we’ve outlined our proven, five-step plan for serious sellers.
Use these five tactics to help your listing get noticed, win over buyers, and net a higher sales price than your neighbors!
STEP 1: Stage Your Home to Show Its Full Potential
The average seller will do the minimum to prepare their home for the market: clean and declutter, fix anything that’s broken, mow the lawn. And while those tasks are essential, today’s buyers want more than just a clean house and tidy yard. When they dream of buying a new home, they envision a designer house with modern finishes. Help them see your property’s full potential by staging it.
Home staging is one of the hottest trends in real estate—because it works! According to the Real Estate Staging Association, homes that are professionally staged spend 73% less time on the market.1
So what exactly is staging? In a broad sense, staging is the act of preparing your home for the market. The goal is to highlight your home’s strengths, minimize any deficiencies, and help buyers envision themselves living in the space. When staging a home, you might rearrange the furniture to make a room feel larger or remove heavy curtains to make it appear brighter.
Some sellers choose to hire a professional home stager, who has specialized training and experience, to maximize the appeal of their home to the largest number of potential buyers. Others may opt to do it themselves, using guidance from their agent.
We can help you determine the appropriate budget and effort required to push your home ahead of the competition in your neighborhood. The good news is, an investment in staging pays off. A 2018 survey found that 85% of staged homes sold for 6-25% more than their unstaged neighbor's homes.2
STEP 2: Draw Buyers in with High-Quality Listing Photos
You only have one chance to make a first impression with potential buyers. And many buyers will view photos of a listing before they decide whether or not to visit it in person. In fact, 87% of buyers find photos “very useful” in their home search.3 Poor-quality or amateur-looking listing photos could keep buyers from ever stepping through your door.
Since good photography plays such an important role in getting your property noticed, we only work with the top local professionals to photograph our listings. But we don’t just rely on their photography skills when it comes to showcasing your home.
We go the extra mile to ensure your listing photos showcase the true essence of your home. We’re always on-site during the photoshoot to help the photographer capture the best angles and lighting, and to let them know about unique or compelling selling features that they should photograph. The extra effort pays off in the end. In fact, listings with high-quality photography sell 32% faster than the competition … and often for more money!4
STEP 3: Price It Properly From the Start
Even in a strong real estate market, there are homes that will sit unsold for months on end. This can be the “kiss of death” in real estate, as buyers tend to imagine that there must be something wrong with the property, even if it’s not the case.
But why are those houses still on the market in the first place? It’s because they are often priced too high.
Every buyer has a budget. And most will be viewing listings within a particular price range. If your property is overpriced, it can’t properly compete with the other houses they’re viewing that are priced correctly. This means it’ll sit on the market until you’re eventually forced to drop the price.
Alternatively, if you price your home aggressively, it can be among the nicest homes that buyers have seen within their budget. This can lead to emotionally-attached buyers, who are often willing to pay a premium or settle for fewer seller concessions. And in certain markets, it can lead to a multiple-offer situation or bidding war. The end result? More money in your pocket.
We can help you determine the ideal listing price for your home in the current market. Pricing it properly, in the beginning, is the best way to ensure a fast and profitable sale.
STEP 4: Put on a Good Show at Each Showing
Once buyers are interested enough to schedule a visit, it’s crucial that you put on a good show at each show.
The first step is to make your home readily available—and often on short notice—for buyers to see it. A missed showing is a missed opportunity to sell your home. If you set too many restrictions on when it’s available to view, busy buyers will simply skip over your listing and move on to the next one.
Part of making your home available means keeping it relatively show-ready as long as it’s on the market. Most of us don’t live picture-perfect lives, and our homes reflect the day-to-day reality of our busy (and sometimes messy) families. But a little extra effort spent keeping your home clean, fresh-smelling, and ready for buyers will help it sell faster … which means you can get back to your regular routine as quickly as possible!
STEP 5: Use a Proven Promotion Plan
Most agents are still marketing their listings as they did 20 years ago … put a sign in the yard, but the listing in the MLS, and pray that it sells. Yet, we know that 93% of buyers search for real estate listings online.3
That’s why we invest in the latest training and technology—to ensure your listing appears in the places where buyers are most likely to look. Our dual-level promotion strategy includes both pre-launch activities designed to seed the marketplace and post-listing activities to ensure your home stays top-of-mind with potential buyers.
By utilizing online and social marketing platforms to connect with consumers and offline channels to connect with local real estate agents, your property gets maximum exposure to prospective buyers.
LET’S GET MOVING
Are you thinking about listing your home? Get a head start on your competition! Contact us for a copy of our Home Seller’s Guide, which offers a complete guide to the home selling process. Or call us to schedule a free no-commitment consultation. We’d love to put together a custom plan to maximize the sales potential of your property!
Sources:
Real Estate Staging Association - <a href="https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548">https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548</a>
Home Staging Resources - <br /> <a href="https://www.homestagingresources.com/2018-home-staging-statistics/">https://www.homestagingresources.com/2018-home-staging-statistics/</a>
National Association of Realtors -<br /> <a href="https://www.nar.realtor/sites/default/files/documents/2018-real-estate-in-a-digital-world-12-12-2018.pdf">https://www.nar.realtor/sites/default/files/documents/2018-real-estate-in-a-digital-world-12-12-2018.pdf</a>
RIS Media -<br /> <a href="https://rismedia.com/2018/12/12/shocking-stats-importance-photography-real-estate/">https://rismedia.com/2018/12/12/shocking-stats-importance-photography-real-estate/</a>
2022-01-07T06:19:00-07:002022-01-07T06:22:33-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11477Top 6 Home Organization Upgrades that “Spark Joy” for Buyers
Top 6 Home Organization Upgrades that “Spark Joy” for Buyers
Thanks to Marie Kondo and her hit Netflix series “Tidying Up,” home organization is a hot topic right now. Marie encourages her viewers to minimize their possessions and keep only those items that “spark joy.”
With recently welcoming the new year, now is the perfect time to do some cleaning and add organizational systems to your own home. Not only will you clear out clutter, but your efforts can also actually increase the value of your home.
Ready to give it a try? Here are six home organization ideas that will “spark joy” for you and your property value.<br />
Boost Bathroom Storage Capacity
When was the last time you cleaned out your bathroom cupboards? If it’s been a while, remove everything and take a look at each item. Toss any old or expired products—keep only what you actually use.
If your vanity has drawers, add drawer organizers, so you have a dedicated space for smaller items, like makeup and jewelry. For deep cabinets, install roll-out shelves or baskets to maximize the use of space.
And don’t forget about the walls! Mount open shelves to store towels. If you’re short on storage space, a cabinet over the toilet can offer additional room for supplies. These inexpensive additions can make your morning routine a little easier while giving your bathroom a more custom feel. And on average, minor bathroom remodeling projects like these see a 102% return at resale.1
<br />Upgrade Your Laundry Room
Sort through the items in your laundry room and throw away or donate anything you no longer need or use. If you’ve been holding onto a collection of old washcloths and single socks, it’s time to say goodbye. Then give your laundry room an upgrade with some customized organizational features.
A mix of open cubbies and cabinets with doors will give you plenty of options for storing detergents and supplies. If you have space, a divided hamper or set of laundry baskets can provide a place to sort your clothes before washing. Install a hanging rod or drying rack for delicates and a flat work surface for ironing and folding clothes. With a few simple tweaks, you can turn this chore into a score!
<br />Fully Utilize Your Basement or Attic
Basements and attics can easily become a dumping ground for clutter. If that’s the case in your home, you know what to do!
Once you’ve conducted a thorough clean-out, think about how you can better utilize the space to meet your family’s needs. Install cabinets and a table so you can use the area as a craft room. Or you could turn it into a game room with a media center and ping-pong table. Investing in your basement will not only add function for your family but also the average basement remodel can see up to a 70% return on investment when it’s time to sell.2
If you have an attic, consider adding a cedar closet to store your off-season clothing. The cedar lining will keep your clothes free from moths and smelling fresh year-round.3 Turning your attic into a more usable space will pay off down the road, too. A finished attic sees an estimated 60% return on investment.2<br />
Customize Your Closets
Cleaning out the closet is a chore most of us dread, but by now, you’re a pro! Get rid of the clothes and shoes that don’t fit you, are uncomfortable to wear, or that no longer “spark joy.”
Then it’s organizing time. So where do you start? You’ll want to create a designated space for each type of clothing: high hanging rods for dresses and long jackets, lower rods for skirts and shirts, and shelves for folded items like jeans. And accessories need a place to go, too. Add racks for your shoes, drawers for jewelry, hooks for hats, and shelves or racks for handbags.
A well-equipped closet can be a major draw for buyers—the average return on a closet remodel is 57%.4 But more importantly, it’ll improve your day-to-day life. Surveyed homeowners gave their closet remodel a “Joy Score” of 10 out of 10, higher than kitchen or bath upgrades.5
<br />Install Built-in Bookcases and Cabinets
Built-in furniture adds functionality and storage to a room while giving your home a high-end look. Built-in bookcases can turn an empty room into an office. Custom cabinets can be used in a living room to display media equipment while providing hidden storage for DVDs, board games, and family albums.
When designing any built-in feature, remember not to go too custom. A design that only fits your tastes or belongings could turn off future buyers. Instead, select standard sizes and classic finishes to appeal to a broad range of buyers when it comes time to sell.
Equip Your Garage
If you can no longer fit your car in your garage, it may be time for a clean-out. Similar to an attic or basement, the garage can quickly become overrun with clutter. A thorough cleaning will help you assess which items are worth keeping.
When adding organizational systems to your garage, start with a small rack to store yard tools and larger racks for bikes and sports equipment. Overhead racks are a great place to put seasonal items and bulky luggage. A workbench against a wall lined with pegboard and hooks creates a dedicated space to use and store tools. If you have children or pets, add a cabinet with a lock. This will give you a place to securely store harsh chemicals and sharp tools. With a little effort, you’ll be pulling in your car (and buyers) in no time!
<br />SPRING INTO ACTION
If you’re searching for service providers to help with your spring cleaning or home organization efforts, let us know! We can connect you with our trusted network of local home improvement professionals. We can also help you determine which organizational upgrades will add the most value to your home. Call us today, and let us know how we can help!
Sources:
HGTV -<br /><a href="https://www.hgtv.com/design/real-estate/top-home-updates-that-pay-off-pictures">https://www.hgtv.com/design/real-estate/top-home-updates-that-pay-off-pictures</a>
Nationwide -<br /><a href="https://blog.nationwide.com/valuable-home-improvements/">https://blog.nationwide.com/valuable-home-improvements/</a>
HGTV -<br /><a href="https://www.hgtv.com/remodel/interior-remodel/maximum-home-value-storage-projects--attic">https://www.hgtv.com/remodel/interior-remodel/maximum-home-value-storage-projects--attic</a>
The Closet Doctor - <a href="https://www.closet-doctor.com/news/what-is-the-return-on-investment-on-closet-organizers">https://www.closet-doctor.com/news/what-is-the-return-on-investment-on-closet-organizers</a>
NAR Remodeling Impact Survey -<br /><a href="https://www.nar.realtor/sites/default/files/documents/2017-remodeling-impact-09-28-2017.pdf">https://www.nar.realtor/sites/default/files/documents/2017-remodeling-impact-09-28-2017.pdf</a>
[modal-footer]<br />Close<br />[/modal-footer]2022-01-06T14:12:00-07:002022-01-06T14:17:03-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:114475 Steps to Finding Your Next Home5 Steps to Finding Your Next Home
Whether you’re a first-time buyer or a seasoned homeowner, shopping for a new home can feel daunting. In fact, 56% of buyers said that “finding the right property” was the most difficult step in the home buying process.1
Buying a home is a significant commitment of both time and money. And a home purchase has the power to improve both your current quality of life and your future financial security, so the stakes are high.
Follow these five steps—and complete the corresponding worksheet offered below—to assess your priorities, streamline your search, and choose your next home with confidence.
STEP 1: Set Your Goals and Priorities
The first step to finding your ideal home is determining WHY you want to move. Do you need more space? Access to better schools? Less maintenance? Or are you tired of throwing money away on rent when you could be building equity? Pinpointing the reasons why you want to move can help you assess your priorities for your home search.
Don’t forget to think about how your circumstances might change over the next few years. Do you expect to switch jobs? Have more children? Get a pet? A good rule of thumb is to choose a house that will meet your family’s needs for at least the next five to seven years.2 Be sure to set your goals accordingly.
STEP 2: Determine Your Budget
Many financial professionals recommend following the “28/36 Rule” to determine how much you can afford to spend on a home. The rule states that you should spend no more than 28% of your gross monthly income on housing expenses (e.g., mortgage, taxes, insurance) and a maximum of 36% of your gross monthly income on your total debt obligations (i.e., housing expenses PLUS any other debt obligations, like car loans, student loans, credit card debt, etc.).3
Of course, the 28/36 rule only provides a rough guideline. Getting pre-qualified or pre-approved for a mortgage BEFORE you begin shopping for homes will give you a much more accurate idea of how much you can borrow. Add your pre-approved mortgage amount to your downpayment to find out your maximum purchasing potential.
STEP 3: Choose a Location
When it comes to real estate, WHERE you choose to buy is just as important as WHAT you choose to buy.
Do you prefer a rural, urban, or suburban setting? How long of a commute are you willing to make? Which neighborhoods feed into your favorite schools? These decisions will impact your day-to-day life while you live in the home.
Another important factor to consider is how the area is likely to appreciate over time. Choosing the right neighborhood can raise the profit potential of your home when it comes time to sell. Look for communities that are well maintained with high home-ownership rates, low crime rates, and access to good schools, desired retail establishments, and top employers.4
STEP 4: Decide Which Features You Need (and Want) in a Home
Start with the basics, like your ideal number of bedrooms, bathrooms, and square footage. Do you prefer a one-story or two-story layout? Do you want a swimming pool?
Keep in mind, you may not find a home with all of your “wants,” or even all of your “needs” … at least not at a price you can afford. The reality is, most of us have to make a few compromises when it comes to buying a home.
Some buyers will opt for a longer commute to get a larger, newer home in the suburbs. Others will sacrifice hardwood floors or an updated kitchen so that their kids can attend their desired school.
If you’re faced with a tough choice about how or what to compromise in your home search, return to STEP 1. What were your original goals and motivations for moving? Reminding yourself of your true priorities can often provide the clarity that you need.
STEP 5: Meet with a Real Estate Agent
A good real estate agent can remove much of the stress and uncertainty from the home search process. From setting goals to securing a loan to selecting the best neighborhood to meet your needs, we will be there to assist you every step of the way.
And no one has more access to home listings, past sales data, or market statistics than a professional agent. We can set up a customized search that alerts you as soon as a new listing you might like goes live. Better yet, we get notified about many of the hottest homes even BEFORE they hit the market.
You might guess that the VIP service we provide is very expensive. Well, the good news is, we can represent you throughout the entire home buying process at NO COST to you. It’s true; the home seller pays a buyer agent’s fee at closing. So you can benefit from our time, experience, and expertise without paying a dime. It’s no wonder 87% of buyers choose to purchase their home with the help of an agent.1
And although we’ve listed it here as STEP 5, the reality is, it’s never too early (or too late) to contact an agent about buying a home. Whether you plan to buy today, next month, or next year, there are steps you can (and should) be taking to prepare for your purchase.
Call us today to schedule a free consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
Sources:
NAR 2019 Home Buyers & Sellers Generational Trends Report -<br /> <a href="https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf">https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf</a>
Architectural Digest -<br /> <a href="https://www.architecturaldigest.com/story/this-is-how-long-you-should-live-in-your-house-before-selling-it">https://www.architecturaldigest.com/story/this-is-how-long-you-should-live-in-your-house-before-selling-it</a>
Investopedia -<br /> <a href="https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp">https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp</a>
Money Talks News -<br /> <a href="https://www.moneytalksnews.com/20-clues-youre-buying-home-the-right-neighborhood/">https://www.moneytalksnews.com/20-clues-youre-buying-home-the-right-neighborhood/</a>
2022-01-05T08:37:00-07:002022-01-05T08:41:10-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:11439A Return to ‘Normal’? The State of Real Estate in 2022A Return to ‘Normal’? The State of Real Estate in 2022
Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.1
However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.2 While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.
So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.
MORTGAGE RATES WILL CREEP UP
Most economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.3
Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021.4
The Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year. "Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher," said Mike Fratantoni, chief economist for the Mortgage Bankers Association at their 2001 Annual Convention & Expo in October.5
However, it’s important to keep in mind that even a 4% mortgage rate is low when compared to historical standards. According to industry trade blog The Mortgage Reports, “Between 1971 and December 2020, 30-year mortgage rates averaged 7.89%.”6
What does it mean for you? Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.
THE MARKET WILL BECOME MORE BALANCED
In 2021, we experienced one of the most competitive real estate markets ever. Fears about the virus and a shift to remote work triggered a huge uptick in demand. At the same time, many existing homeowners delayed their plans to sell, and supply and labor shortages hindered new construction.
This led to an extreme market imbalance that benefitted sellers and frustrated buyers. According to George Ratiu, director of economic research at Realtor.com, “Prices and sellers reached for the moon [last] year. It looks like we are now about to move back to earth.”7
Data from Realtor.com released in November showed that listing price reductions had more than doubled since February 2021. And the average days on market (an indicator of how long it takes a home to sell) have been slowly creeping up since June.7
What’s causing this change in market dynamics? The real estate market typically slows down in the fall and winter. But economists also suspect a fundamental shift in supply and demand.
At the National Association of Realtors’ annual conference last November, the group’s chief economist, Lawrence Yun, told attendees that he expects increased supply to come from an uptick in new construction—which is already underway—and an end to the mortgage forbearance program. “With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said.8
Demand is also predicted to wane slightly in the coming year. Rising mortgage rates and record-high prices have made homeownership unaffordable for a growing number of Americans. And in a recent Reuters poll, nearly 80% of property analysts said they expect housing affordability to worsen over the next several years.9
What does it mean for you? If you struggled to buy a home last year, there may be some relief on the horizon. Increased supply and softening demand could make it easier to finally secure the home of your dreams. If you’re a seller, it’s still a great time to cash out your big equity gains! And with more inventory on the market, you’ll have an easier time finding your next home. Reach out for a free consultation so we can discuss your specific needs and goals.
HOME PRICES ARE LIKELY TO KEEP CLIMBING, BUT AT A SLOWER PACE
Nationally, home prices rose an estimated 16.8% in 2021.8 But the average rate of appreciation is expected to slow down in 2022.
Danielle Hale, the chief economist at Realtor.com, told Yahoo! News, “Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak of 17.2% in April to just 8.6% in October.”10
But experts disagree about how much more property values can continue to climb this year. Goldman Sachs predicts that home prices will rise by 13.5%, while Fannie Mae and Freddie Mac are forecasting a 7.9% and 7% rate of appreciation, respectively.2
However, not all analysts are as bullish. The National Association of Realtors predicts a 2.8% rate of appreciation for existing homes and 4.4% for new homes, while the Mortgage Bankers Association expects the average home price to decrease by 2.5% by the end of the year.10,2
According to Hale, “With prices near all-time highs and mortgage rates expected to rise, we expect this slowdown in prices to continue.”10
What does it mean for you? If you’re a buyer who has been waiting on the sidelines for home prices to drop, you may be out of luck. Even if home prices dip slightly (and most economists expect them to rise) any savings are likely to be offset by higher mortgage rates. The good news is that decreased competition means more choice and less likelihood of a bidding war. We can help you get the most for your money in today’s market.
RENTS WILL CONTINUE TO RISE
Along with home, gasoline, and used vehicle prices, rent prices rose dramatically last year. According to CoreLogic, in September, rents for single-family homes were up 10.2% nationally year over year.11 And economists at Realtor.com expect them to climb another 7.1% in 2022.12
“Homes are expensive now...but for most people, the comparison that is most important is how that cost of homeownership is going to compare to the cost of renting,” Zillow Senior Economist Jeff Tucker told CNBC on November.13
Tucker also pointed out that rent is less predictable than a mortgage—and more likely to go up along with inflation.13
Real assets, like real estate, are often used as a hedge against inflation. That’s because property values typically rise with inflation.14 And when a homeowner takes out a mortgage, they lock in a set housing payment for the next 30 years.
In contrast, renters are at the mercy of the market—and they don’t gain any of the benefits of homeownership, like tax deductions, equity, or appreciation.
George Ratiu of Realtor.com told CNBC that he advises buyers to consider their budget and time frame. If they plan to stay in the home for at least three to five years, he believes it often makes sense to buy.13
Fortunately, it’s shaping up to be a better year for buyers. “I think 2022 has the promise of providing less competition, a lot more homes to choose from, and, as a result, a lot more approachable prices,” Ratiu said.13
What does it mean for you? Both property and rent prices are expected to continue rising. But when you purchase a home with a fixed-rate mortgage, you can rest assured knowing that your monthly mortgage payment will never go up. Whether you’re a first-time homebuyer or a real estate investor, we can help you make the most of today’s real estate market.
WE’RE HERE TO GUIDE YOU
While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.
If you’re considering buying or selling a home in 2022, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.
Sources:
Fortune -<br /> <a href="https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/">https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/</a>
Fortune -<br /> <a href="https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/">https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/</a>
Freddie Mac -<br /> <a href="https://www.google.com/url?q=http://www.freddiemac.com/pmms/pmms30.html&sa=D&source=docs&ust=1638967830220000&usg=AOvVaw0aD3U0D9M-QZg6IJ9RxDDz">http://www.freddiemac.com/pmms/pmms30.html</a>
Freddie Mac - <a href="https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and">https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and</a>
Mortgage Bankers Association -<br /> <a href="https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022">https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022</a>
The Mortgage Reports -<br /> <a href="https://themortgagereports.com/61853/30-year-mortgage-rates-chart">https://themortgagereports.com/61853/30-year-mortgage-rates-chart</a>
Realtor.com -<br /> <a href="https://www.realtor.com/news/trends/has-housing-market-peaked/">https://www.realtor.com/news/trends/has-housing-market-peaked/</a>
National Association of Realtors -<br /> <a href="https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022">https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022</a>
Reuters -<br /> <a href="https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/">https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/</a>
Yahoo! News -<br /> <a href="https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html">https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html</a>
CNBC -<br /> <a href="https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html">https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html</a>
Realtor.com -<br /> <a href="https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/">https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/</a>
CNBC -<br /> <a href="https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html">https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html</a>
Money -<br /> <a href="https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/">https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/</a>
2022-01-04T07:15:00-07:002022-01-04T07:22:46-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:1108320 Unique Home Gifts for Every Person on Your ListEvery year, it seems the holidays sneak up on us—and every year, that brings with it the dreaded last-minute gift panic. Finding a present that hits all the right notes can be surprisingly stressful, even when it comes to people you’ve known for years.
But have no fear! We’ve lined up a list of unique gifts for every “type” on your list. And since we work in real estate, they’re all centered around home life. From the coffee snob to the sports enthusiast, these presents are the perfect way to bring beauty, function or a touch of whimsy to your loved one’s home this holiday season.
FOR THOSE WHO ARE ALWAYS IN THE KITCHEN
We all know someone whose kitchen is their happy place—but once all the basics are covered, it can be hard to find the perfect present. These gifts will be a treat for the chef, baker, or food lover on your list, no matter how well equipped they are.
1. The Coffee Snob
<a href="https://www.amazon.com/dp/B000I1WP7W">Glass Pour-Over Coffeemaker</a> - $36
Have a java lover on your list who just can’t get their brew right at home? This high-end pour-over system makes a smooth brew that can even be refrigerated and reheated so your recipient can enjoy a perfect cup at any time.
2. The Foodie
<a href="https://www.uncommongoods.com/product/shiitake-mushroom-log-kit">Shiitake Mushroom Log Kit</a> - $30
Help your favorite gourmand create restaurant-quality meals with this kit that allows them to grow delicious mushrooms right in their cupboard. All they’ll need to do is soak the wood and put it in a cool place, then wait a few weeks, and voila—mushrooms! Best of all, they can keep growing mushrooms on the same log for years.
3. The Baker
<a href="https://www.williams-sonoma.com/products/vintage-etched-cake-stand/">Vintage Etched Cake Stand</a> - $60
If you’re lucky enough to have a fabulous home baker on your list, give a gift that reflects the joy their treats bring to others. This lovely glass cake stand is the platform that a beautifully decorated dessert deserves.
4. The Tea Aficionado
<a href="https://www.amazon.com/Teabloom-Teapot-Gift-Set-Removable/dp/B074M7M1BX/">Flowering Tea Set</a> - $25
Your favorite tea lover may have tried all of the herbal blends out there, but we bet they haven’t seen tea like this. This set contains two “blossoms” of tea leaves hand-sewn around flowers that bloom when you place them in the included glass teapot and add hot water.
FOR THOSE WHO WOULD RATHER BE IN THE BACKYARD
For many of us, time outdoors is the ultimate source of rejuvenation. The nature-lover on your list is sure to appreciate these presents that help them maximize that joy in their daily lives.
5. The Gardener
<a href="https://www.potterybarn.com/products/burgon-and-ball-striped-garden-tool-bag/">Striped Garden Tote Bag</a> - $37
Dedicated gardeners all need a great bag to carry their gear. This tote is attractive and sturdy and will help them keep their home’s exterior beautiful and welcoming.
6. The Flower Lover
<a href="https://bouqs.com/subscriptions">Monthly Flower Subscription</a> - starting at $40/month
If your loved one prefers to enjoy their flora without all the work, a delivery of farm-fresh flowers is sure to surprise and delight. And you can keep the joy blossoming year-round with a monthly or bi-monthly subscription.
7. The Environmentalist
<a href="https://www.amazon.com/Final-Straw-Collapsible-Stainless-Reusable/dp/B07ZS2QZVV/">Collapsible Metal Straw</a> - $20
Know someone who is trying to bring less plastic into their home? This reusable metal straw means they’ll never have to buy a box of plastic straws again. And since it collapses into a tiny carrying case, they can use it at home or on the go.
8. The Outdoor Adventurer
<a href="https://www.amazon.com/dp/B07FDXDB3W">Solar Phone Charger</a> - $29
Have a camper or adventurer on your list? This solar-powered phone charger, which comes with a built-in flashlight and compass, is a must-have. It will also make a great addition to their home emergency kit.
FOR THOSE WITH THEIR NOSE TO GRINDSTONE
Like it or not, most of us spend a good chunk of our lives working—whether at a job or on projects and chores around the house. These gifts are designed to make that work a bit easier and more enjoyable.
9. The Remote Worker
<a href="https://www.amazon.com/LapGear-Office-Mouse-Phone-Holder/dp/B07N9JMSW6/">Home Office Lap Desk</a> - $35
Working at home can be great—in part because you can work from anywhere in the house. The remote worker on your list will appreciate this lap desk with a built-in mouse pad and phone slot, which will allow them to work comfortably from the couch or the bed without overheating their computer.
10. The Back-to-The-Office Worker
<a href="https://www.amazon.com/Premium-Bento-Lunch-Modern-Colors/dp/B017QBK7ZI">Bento Lunch Box</a> - $27
If your loved one is heading back to the office, it doesn’t mean they have to give up the healthy habit of a home-cooked meal. Send them to work with this stylish lunch box packed full of nutritious food.
11. The Do-It-Yourselfer
<a href="https://www.amazon.com/Bosch-GLM-20-Compact-Distance/dp/B01CG97GR2/">65ft Laser Distance Measure</a> - $50
The handy person on your list can say goodbye to unwieldy tape measures with this nifty device. It’s perfect for DIY projects up to 65 feet.
12. The Clean Freak
<a href="https://www.amazon.com/dp/B00144I3ZU/">Portable Sanitizing Travel Wand</a> - $60
In the COVID-19 era, we’ve all become a little germaphobic. This UV wand kills viruses and bacteria in seconds without any wiping or washing required. It’s perfect for disinfecting shoes, computer keyboards, and more!
FOR THOSE MOST PASSIONATE ABOUT THEIR HOBBIES
Of course, there’s a lot more to life than work. If you’re gifting a friend or family member who really lights up when they talk about their hobbies, we’ve got you covered.
13. The Sports Enthusiast
<a href="https://www.uncommongoods.com/product/hockey-stick-bbq-set">Hockey Stick BBQ Set</a> - $45
Looking for a gift for the sports enthusiast in your life that isn’t another jersey? These BBQ tools made from repurposed hockey sticks are a great pick. Perfect for cooking up food to watch with the game!
14. The Bookworm
<a href="https://www.amazon.com/dp/1441304827">The Book Lover’s Journal</a> - $13
Know someone who loves to curl up on the couch with a good book? This journal will help the book-lover on your list keep track of what they’ve read, as well as their ever-growing “to-read” list.
15. The Runner
<a href="https://www.uncommongoods.com/product/marathon-map-hydration-bottles">Marathon Map Hydration Bottles</a> - $36
Help the runner you love to stay hydrated (and motivated) with a water bottle inscribed with their favorite race route. It’s perfect for runs around the neighborhood or just toting around the house.
16. The Tourist
<a href="https://www.tumi.com/p/just-in-case-backpack-01100401041/">Travel Backpack</a> - $100
Make it easy for the travel lover on your list to bring back souvenirs. This lightweight backpack folds flat so it’s easy to pack but sturdy enough to carry their new treasures all the way home.
FOR THOSE WHO PUT FAMILY FIRST
For many of us, the greatest joy in life comes from our relationship with our family. Help your recipient strengthen and celebrate those all-important connections with these thoughtful gifts.
17. The New Parent
<a href="https://www.amazon.com/dp/B087YR85NZ">4-in-1 Baby Food Maker</a> - $155
It’s hard to know what to buy for new parents once their registry is cleared out, but if they’re interested in making baby food at home, this tool is a must-have. It makes the process, from steaming to mixing, fast and easy.
18. The Genealogy Fan
<a href="https://www.ancestry.com/cs/offers/bundle">DNA Kit</a> - $99
Know someone interested in reconnecting with their ancestral home? This DNA kit can help them trace their geographical heritage and uncover their family history.
19. The Pet Person
<a href="https://gopupsocks.com/product/custom-socks/">Custom Printed Socks</a> - $25
Is your friend’s pet their favorite family member? These adorable socks are sure to put a smile on their face as they cozy up on the couch with their fur baby. And since you can feature up to four pets on each pair of socks, no one needs to feel left out.
20. The Documentarian
<a href="https://www.apple.com/shop/product/HPEB2VC/B/fujifilm-instax-mini-link-printer">Mini Link Printer</a> - $100
We all have that relative who snaps a million photos at every family event. Help them capture each precious moment with this unique gadget that essentially transforms a smartphone into a Polaroid camera. It makes it easy to customize and print out snapshots to display around the house or insert into a scrapbook for posterity.
READY TO GIVE YOURSELF THE ULTIMATE GIFT?
We want to be your real estate consultants through every season of life. So please don’t hesitate to reach out with questions or to ask for recommendations or referrals any time of year. And when you’re ready to give yourself the gift of a new home, contact us to talk about your options. From finding the right neighborhood to identifying the amenities that will make the biggest difference to your quality of life, we’re always eager to help.
2021-12-09T07:07:00-07:002021-12-09T07:12:06-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:10646New Build or Existing Home: Which is Right For You?New Build or Existing Home: Which One Is Right for You?
Homebuyers today are facing a huge dilemma. There simply aren’t enough homes for sale.1
Nationwide, there were 1.27 million active listings in September, down 13% from the previous year. According to the National Association of Realtors, that’s about 2.4 months of inventory, which is far less than the six months that is generally needed to strike a healthy balance between supply and demand.2
Given the limited number of available properties, if you’re a buyer in today’s market, you may need to expand your search to include both new construction and resale homes. But it can feel a little like comparing apples to oranges.
Let’s take a closer look at some of the factors you should take into account when choosing between a new build or an existing home.
TIMEFRAME
How quickly do you want (or need) to move into your next home? Your timeframe can be a determining factor when it comes to choosing between a new build or resale.
New Build
If you opt for new construction, you may be surprised by how long you have to wait to get the keys to your new digs. Currently, many home builders are dealing with unique challenges brought on by the COVID-19 pandemic, including rising costs, labor and material shortages, and shipping delays. While historically it took around five to six months to build a home, many builders are now reporting construction timelines closer to a year or more.3
These issues have led some builders to cancel contracts or raise the price on unsuspecting homebuyers long after agreements were signed. Unfortunately, this scenario can throw a major wrench in your moving plans and significantly delay your timeline.
To minimize these types of surprises, it’s crucial to have a real estate agent represent you in a new home purchase. We can help negotiate better contract terms and advise you about the potential risks involved.
Existing Home
If you're in a hurry to move into your next residence, then you may want to stick to shopping for an existing home.
You can typically move into a resale home as soon as you've closed the deal. The average time it takes to close a home purchase is around 51 days, but it can vary based on loan type and market activity.4
If you need to move even sooner, it’s sometimes possible to close faster, especially if you’re a cash buyer. In fact, many sellers prefer a quick closing, so it can give you an advantage in a competitive market.
LOCATION
From commute to construction to amenities, there’s a lot to consider when choosing your next neighborhood.
New Build
With a brand-new home, you're more likely to move into a neighborhood that's located on the edge of town and is still undergoing development.5 This could mean a longer commute and ongoing construction for some time.
However, new developments can also offer a lot of amenities that appeal to modern homebuyers. Water features, hike-and-bike trails, tot lots, and dog parks are just a few of the enhancements we’re seeing pop up in master-planned communities across the country. And some feature new schools and their own urban-like centers with restaurants, retail, and office space.6
Existing Home
An existing home is more likely to be located close to town in a neighborhood with mature trees, established schools, and a deeply-rooted community. As a result, you may find the neighborhood's trajectory to be more predictable than an up-and-coming area.
But the amenities may be lacking and the infrastructure dated when compared to newer communities. And while some homebuyers love the charm and eclectic feel of an older neighborhood, others prefer the sleek and cohesive look of a newer development.
MAINTENANCE
Are you a DIY enthusiast, or do you prefer a low-maintenance lifestyle? Set realistic expectations about how much time, effort, and money you want to devote to maintaining your next home.
When you build a home, everything is brand new. Therefore, in the first few years at least, you can expect less required maintenance and repairs. A 2019 survey found that millennials' homebuying regrets often came down to maintenance issues, rather than other concerns.7 So if you would rather spend your weekends exploring your new neighborhood than fixing a leaky faucet, you may be happier buying a turnkey build.
That doesn't mean, though, that a new home will be entirely maintenance-free. In fact, depending on the builder, you could find yourself repairing more than you expected. Some home builders have reputations for shoddy construction and subpar materials, so it's important to choose one with a solid reputation. We can help you identify the quality builders in our area.
Existing Home
No matter how good a deal you got when you purchased it, you could come to regret buying an older home if it costs you heavily in unexpected maintenance and repairs. According to HomeAdvisor's yearly True Cost report, home renovations have grown more expensive in recent years. For example, installing a new HVAC system could cost you $5,371 on average. And you can expect to pay nearly double that amount ($9,375) for a new roof.8
Fortunately, there are ways to prepare for these large expenditures. We always recommend that our buyers hire a certified home inspector, whether they buy a new or existing home. Once we have the inspector’s report, we can negotiate with the seller on your behalf for reasonable repairs or concessions.
ENVIRONMENTAL IMPACT
On a quest for greener living? If so, there are several factors to consider when deciding on your next home.
New Build
There’s a growing demand for energy-efficient housing, and many builders are rising to the challenge. Nearly 1 in 4 homes built in 2020 received a HERS (Home Energy Rating System) Index Rating by the Residential Energy Services Network. A HERS rating provides an index score that compares the newly-built home to those that were standard in 2006. The more energy-efficient the home is, the lower the score it receives.11
The average home rated in 2020 was 42% more efficient than those built in 2006 and 72% more efficient than a typical home built in the 1970s.11 So if energy efficiency is a top priority, a new home with a low HERS rating may be a good choice. You can also look for one that’s ENERGY STAR Certified, which means it meets a series of strict efficiency guidelines set by the Environmental Protection Agency. In 2020, only 7.9% of homes built in the U.S. received this designation.12
Existing Home
Of course, a basic tenant of sustainable living is: reduce, reuse, recycle. And since a resale home already exists, it automatically comes with a lower carbon footprint. Research has also shown that remodeling or retrofitting an older home is often greener than building one from scratch.13
With some energy-conservation effort and strategic upgrades, environmentally-conscious consumers can feel good about buying an existing home, as well.
DESIGN
Open floor plan? Kitchen island? High ceilings? Must-have design features could drive your decision to build or buy resale.
New Build
With a new home, you can bet that everything will look shiny and perfect when you move in. Builders tend to put a lot of emphasis on visual details and follow the latest design trends. For example, newly-built homes are likely to feature an open floor plan, central kitchen island, and 9+ foot ceilings, which are must-haves for many modern buyers. They are also unlikely to feature carpet on the main level or laminate countertops, both of which have lost mass appeal.14
However, some buyers complain of the cookie-cutter feel of new homes since they are often built with a similar aesthetic. That doesn't mean, though, that you can't incorporate your own style. We can help you negotiate custom features and upgrades to personalize the space and make it feel like your own.
Existing Home
In some of the most coveted neighborhoods, an older home with classic styling and character can be highly sought after. But unless the previous homeowners have invested in tasteful updates, an existing home is also more likely to look dated.
While some buyers prefer the traditional look and character of an older home, others crave something more modern. If that’s the case, we can help you find a resale home that leaves enough room in your budget to renovate it to your liking.
WHICHEVER PATH YOU CHOOSE, WE CAN HELP
When it comes to choosing between a new build or an existing home, there’s no one-size-fits-all answer. There are numerous factors to consider, and you may have to make some compromises along the way. But the homebuying process doesn’t have to feel overwhelming.
We’re here to help. And in many cases, our homebuyer guidance and expertise are available at no cost to you! That’s because the home seller or home builder may compensate us with a commission at closing.
Some new-construction homebuyers make the mistake of visiting a builder’s sales office or even purchasing a home without their own real estate representative. But keep in mind, the builder’s agent or “sales consultant” has their best interests in mind—not yours.
We are knowledgeable about both the new construction and resale home options in our area, and we can help you make an informed decision, negotiate a fair price, and avoid mistakes that can cost you time and money. So give us a call today to schedule a free, no-obligation consultation—and let’s start searching for your next home!
Sources:
1. Reuters -<br /><a href="https://www.reuters.com/world/us/us-existing-home-sales-fall-august-inventory-declines-2021-09-22/">https://www.reuters.com/world/us/us-existing-home-sales-fall-august-inventory-declines-2021-09-22/</a>
2. National Association of Realtors -<br /><a href="https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september">https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september</a>
3. KFVS 12 -<br /><a href="https://www.kfvs12.com/2021/09/22/covid-19-pandemic-affects-delivery-rate-building-materials/">https://www.kfvs12.com/2021/09/22/covid-19-pandemic-affects-delivery-rate-building-materials/</a>
4. Rocket Mortgage -<br /><a href="https://www.rocketmortgage.com/learn/time-to-close-on-a-house">https://www.rocketmortgage.com/learn/time-to-close-on-a-house</a>
5. Real Assets Adviser -<br /><a href="https://irei.com/publications/article/master-planned-communities-changing-u-s-housing-trends-favor-investors-can-benefit/">https://irei.com/publications/article/master-planned-communities-changing-u-s-housing-trends-favor-investors-can-benefit/</a>
6. Builder Online -<br /><a href="https://www.builderonline.com/land/development/5-master-plan-trends-home-buyers-gravitate-toward-today_o">https://www.builderonline.com/land/development/5-master-plan-trends-home-buyers-gravitate-toward-today_o</a>
7. Bankrate -<br /><a href="https://www.bankrate.com/real-estate/homebuyer-regret-survey-may-2021/">https://www.bankrate.com/real-estate/homebuyer-regret-survey-may-2021/</a>
8. Home Advisor -<br /><a href="https://www.homeadvisor.com/r/true-cost-report/">https://www.homeadvisor.com/r/true-cost-report/</a>
9. Roofing Calculator -<br /><a href="https://roofingcalculator.com/news/how-long-do-roofs-last">https://roofingcalculator.com/news/how-long-do-roofs-last</a>
10. Plumbing and Mechanical Engineer -<br /><a href="https://www.pmengineer.com/articles/94873-evaluating-life-cycle-cost-of-various-hvac-systems">https://www.pmengineer.com/articles/94873</a>
11. National Association of Home Builders -<br /><a href="https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/">https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/</a>
12. EnergyStar -<br /><a href="https://www.energystar.gov/newhomes/energy_star_certified_new_homes_market_share">https://www.energystar.gov/newhomes/energy_star_certified_new_homes_market_share</a>
13. Advanced Materials Research - <a href="https://www.researchgate.net/publication/271358381_Comparative_Study_of_New_Construction_and_Renovation_Project_Based_on_Carbon_Emission">https://www.researchgate.net/publication/271358381_Comparative_Study_of_New_Construction_and_Renovation_Project_Based_on_Carbon_Emission</a>
14. National Association of Home Builders -<br /><a href="https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/">https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/</a>2021-11-02T06:45:00-07:002021-11-02T06:56:36-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:105059 Tips for Buying and Selling Your Home at the Same Time9 Tips for Buying and Selling Your Home at the Same Time
Selling your home when you still need to shop for a new one can feel daunting to even the most seasoned homeowner––especially when the demand for new homes keeps rising, but the supply feels like it's dwindling.¹ You're not alone either if you're already feeling drained by the complex logistics of trying to sell and buy a new home all at once.
Searching for a new home can be exciting, but many homebuyers admit that it can also be stressful, especially if you live in an unpredictable market with plenty of competitors. Unfortunately, waiting out a competitive housing market isn’t always the best idea either since listings are expected to remain limited in the most coveted neighborhoods for some time.²
That doesn't mean, though, that you should just throw up your hands and give up on moving altogether. In fact, as a current homeowner, you could be in a better position than most to capitalize on a seller’s market and make a smooth transition from your old home to a new one.
We can help you prepare for the road ahead and answer any questions you have about the real estate market. For example, here are some of the most frequent concerns we hear from clients who are trying to buy and sell at the same time.
“WHAT WILL I DO IF I SELL MY HOUSE BEFORE I CAN BUY A NEW ONE?”
This is an understandable concern for many sellers since the competitive real estate market makes it tough to plan ahead and predict when you'll be able to move into your next home. But chances are, you will still have plenty of options if you do sell your home quickly. It may just take some creativity and compromise.
Here are some ideas to make sure you're in the best possible position when you decide to list your home:
Tip #1: Flex your muscles as a seller.
In a competitive market, buyers may be willing to make significant concessions in order to get the home they want. In some cases, a buyer may agree to a lease-back that allows the seller to continue living in the home after closing for a set period of time and negotiated fee.
This can be a great option for sellers who need to tap into their home equity for a downpayment or who aren’t logistically ready to move into their next home. However, many lenders limit the duration of a lease-back to 60 days, and there are liability issues to consider before entering into an agreement. A contract and security deposit should be in place in case of any property damage or unexpected repairs that may be needed during the lease-back period.³
Tip #2: Open your mind to short-term housing options.
While it can be a hassle to move out of your old home before you’re ready to move into your new one, it’s a common scenario. If you’re lucky enough to have family or generous friends who offer to take you in, that may be ideal. If not, you’ll need to find temporary housing. Check out furnished apartments, vacation rentals and month-to-month leases. If space is an issue, consider putting some of your furniture and possessions in storage.
You may even find that a short-term rental arrangement can offer you an opportunity to get to know your new neighborhood better—and lead to a more informed decision about your upcoming purchase.
Tip #3: Embrace the idea of selling now and buying later.
Instead of stressing about timing your home sale and purchase perfectly, consider making a plan to focus on one at a time. Selling before you’re ready to buy your next home can offer a lot of advantages.
For one, you’ll have cash on hand from the sale of your current home. This will put you in a much better position when it comes to buying your next home. From budgeting to mortgage approval to submitting a competitive offer, cash is king. And by focusing on one step at a time, you can alleviate some of the pressure and uncertainty.
“WHAT IF I GET STUCK WITH TWO MORTGAGES AT THE SAME TIME?”
This is one of the most common concerns that we hear from buyers who are selling a home while shopping for a new one, and it’s realistic to expect at least some overlap in mortgages. To make sure you don't get into a situation where you are carrying dual mortgages for longer than you can afford, examine your budget and calculate the maximum number of months you can afford to pay both.⁴
If you simply can’t afford to carry both mortgages at once, then selling before you buy may be your best option. (See Tip #3 above.) But if you have some flexibility in your budget, it is possible to manage both a home sale and purchase simultaneously. Here are some steps you can take to help streamline the process:
Tip #4: As you get ready to sell, simplify.
You can condense your sales timeline if you only focus on the home renovations and tasks that matter most for selling your home quickly. For example, clean and declutter all of your common areas, refresh your outdoor paint and curb appeal, and fix any outstanding maintenance issues as quickly as possible.
But don't drain unnecessary time and money into pricey renovations and major home projects that could quickly bog you down for an unpredictable amount of time. We can advise you on the repairs and upgrades that are worth your time and investment.
Tip #5: Prep your paperwork.
You'll also save valuable time by filing as much paperwork as possible early in the process. For example, if you know you'll need a mortgage to buy your next home, get pre-approved right away so that you can shorten the amount of time it takes to process your loan.
Similarly, set your home sale up for a fast and smooth transition by pulling together any relevant documentation about your current home, including appliance warranties, renovation permits, and repair records. That way, you're ready to provide quick answers to buyers' questions should they arise.
Tip #6: Ask us about other contingencies that can be included in your contracts.
Part of our job as agents is to negotiate on your behalf and help you win favorable terms. For example, it’s possible to add a contingency to your purchase offer that lets you cancel the contract if you haven't sold your previous home.
This tactic could backfire, though, if you're competing with other buyers. We can discuss the pros and cons of these types of tactics and what’s realistic given the current market dynamics.
“WHAT IF I MESS UP MY TIMING OR BURN OUT FROM ALL THE STRESS?”
When you're in the pressure cooker of a home sale or have been shopping for a home for a while in a competitive market, it's easy to get carried away by stress and emotions. To make sure you're in the right headspace for your homebuying and selling journey, take the time to slow down, breathe and delegate as much as possible. In addition:
Tip #7: Relax and accept that compromise is inevitable
Rather than worry about getting every detail right with your housing search and home sale, trust that things will work out eventually––even if it doesn't look like your Plan A or even your Plan B or Plan C. Perfecting every detail with your home decor or timing your home sale perfectly isn't necessary for a successful home sale and compromise will almost always be necessary. Luckily, if you've got a good team of professionals, you can relax knowing that others have your back and are monitoring the details behind the scenes.
Tip #8: Don't worry too much if your path is straying from convention
Remember that rules-of-thumb and home-buying trends are just that: they are estimates, not facts. So if your home search or sale isn't going exactly like your neighbor’s, it doesn't mean that you are doomed to fail.
It's possible, for example, that seasonality trends may affect sales in your neighborhood. So a delayed sale in the summer or fall could affect your journey––but not necessarily. According to the National Association of Realtors, the housing market tends to be more competitive during the summer and less competitive during the winter.⁵ But it's not a hard and fast rule, and every real estate transaction is different. That's why it's important to talk to a local agent about your specific situation.
Tip #9: Enlist help early.
Which leads us to our final tip: If possible, call us early in the process. We'll not only provide you with key guidance on what you should do ahead of time to prepare your current home for sale, we'll also help you narrow down your list of must-haves and wants for your next one. That way, you'll be prepared to act quickly and confidently when it’s time to list your house or make an offer on a new one.
It's our job to guide you and advocate on your behalf. So don't be afraid to lean on us throughout the process. We’re here to ease your burden and make your move as seamless and stress-free as possible.
BOTTOMLINE: COLLABORATE WITH A REAL ESTATE PROFESSIONAL TO GET TAILORED ADVICE THAT WORKS FOR YOU
Buying and selling a home at the same time is challenging. But it doesn't have to be a nightmare, and it can even be fun. The key is to educate yourself about the market and prepare yourself for multiple scenarios. One of the best and easiest ways to do so is to partner with a knowledgeable and trustworthy agent.
A good agent will not only help you evaluate your situation, we will also provide you with honest and individually tailored advice that addresses your unique needs and challenges. Depending on your circumstances, now may be a great time to sell your home and buy a new one. But a thorough assessment may instead show you that you're better off pausing your search for a while longer.
Contact us for a free consultation so that we can help you review your options and decide the best way forward.
Sources:
1. Board of Governors of the Federal Reserve System, FEDS Notes - <a href="https://www.federalreserve.gov/econres/notes/feds-notes/housing-market-tightness-during-covid-19-increased-demand-or-reduced-supply-20210708.htm">https://www.federalreserve.gov/econres/notes/feds-notes/housing-market-tightness-during-covid-19-increased-demand-or-reduced-supply-20210708.htm</a>
2. Federal Reserve Bank of St. Louis, FRED Economic Data -<a href="https://fred.stlouisfed.org/series/MSPUS"> </a><a href="https://fred.stlouisfed.org/series/MSPUS">https://fred.stlouisfed.org/series/MSPUS</a>
3. Realtor.com - <a href="https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement/">https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement/</a>
4. Bankrate.com - <a href="https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/">https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/</a>
5. National Association of REALTORS - <a href="https://www.nar.realtor/blogs/economists-outlook/seasonality-in-the-housing-market">https://www.nar.realtor/blogs/economists-outlook/seasonality-in-the-housing-market</a>
2021-10-20T06:15:00-07:002021-10-20T13:09:08-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7528Seller's or Buyer's Market?2020-09-18T10:07:00-07:002020-09-18T10:28:09-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7455Add Value To Your Home With These 9 DIY Improvements<img src="https://assets.site-static.com/userfiles/2303/image/DIY.jpg" width="700" height="400" />
Whether you’re prepping your house to go on the market or looking for ways to maximize its long-term appreciation, these nine home improvement projects are great ways to add function, beauty, and real value to your home.
The best part is, once you’ve secured the materials, most of these renovations can be completed over the course of a weekend. And they don’t require a lot of specialized skills or experience. So grab your toolbox, then get ready to boost your home’s appeal AND investment potential!
1. Spruce Up Your Landscaping
Landscaping improvements can increase a home’s value by 10-12%.[1] But which outdoor features do buyers care about most? According to a survey of Realtors, a healthy lawn is at the top of their list. If your lawn is lacking, overseeding or laying new sod can be a worthwhile investment—with an expected return of 417% and 143% respectively.[1]
Planting flowers is another great way to enhance your home’s curb appeal. And if you choose a perennial variety, your blooms should return year after year. For an even longer-term impact, consider planting a tree. According to the Council of Tree and Landscape Appraisers, a mature tree can add up to $10,000 to the value of your home.[2]
2. Clean The Exterior
When it comes to making your house shine, a sparkling facade can be just as important as a clean interior. Real estate professionals estimate that washing the outside of a house can add as much as $15,000 to its sales price.[3]
A rented pressure washer from your local home improvement store can help you remove built-up dirt and grime from your home’s exterior, walkway, and driveway. Just be sure to read the instructions carefully—and only use it on surfaces that can withstand the intensity. When in doubt, a scrub brush and bucket of sudsy water will often do the trick.
3. Add A Fresh Coat Of Paint
New paint can have a big impact on both the appearance and value of a property. In fact, it’s one of the most effective ways to revitalize a home’s exterior, update its interior, and make it appear larger and brighter. The best part? Painting is relatively easy and inexpensive!
To get the maximum return at resale, stick with a modern but neutral color palette that will appeal to a broad range of buyers. According to a recent survey of home design experts, cool neutrals are a safe bet when it comes to interior paint. And respondents chose white and gray as the best exterior paint colors to use when selling a home.[4] However, it’s important to consider a property’s architecture, existing fixtures, and regional design preferences, as well.
4. Install Smart Home Technology
In a recent survey, 78% of real estate professionals said their buyer clients were willing to pay more for a home with smart technology features.[5] The most requested smart devices? Thermostats (77%), smoke detectors (75%), home security cameras (66%), and locks (63%).[6]
The good news is, many of these gadgets are fairly easy to install. And some of them, including smart thermostats and light bulbs, will pay for themselves over time by making your home more energy efficient. In fact, many manufacturers report that smart thermostats can cut back on heating and cooling costs by 10-20%.[7]
If you already own a smart speaker, like Amazon Alexa or Google Home, choose devices that will pair with your existing technology. This will enable you to create a truly integrated (and in many cases voice-activated) smart home experience.
5. Modernize Your Window Treatments
Smart—or motorized—blinds are also growing in popularity, and several manufacturers make models you can order and install on your own. But they’re not the only way to modernize your window treatments.
If you have old aluminum blinds, consider replacing them with plantation shutters, which are energy efficient, durable, and have strong buyer appeal.[8] Roman and roller shades are another stylish alternative, and they come in a variety of colors and fabrics, which you can personalize to meet your design and privacy preferences.
Fortunately, upgrading your blinds has gotten easier and less expensive in recent years. There are a number of retailers that specialize in affordable window coverings that are simple to measure and hang yourself.
6. Replace Outdated Fixtures
Drastically transform the look and feel of your home by swapping out dingy and dated fixtures for contemporary alternatives. Start by assessing your current light fixtures, faucets, cabinet hardware, door knobs, and even switch plates. Then prioritize replacing those that are particularly outdated or in highly-visible areas, such as your entryway or kitchen.
Even if your home is fairly new, consider trading your builder-grade fixtures for higher-end options to give it a more upscale appearance. And forget the old rule about sticking to one metal tone throughout your property. According to designers, mixing metal finishes can add interest and character to a space.[9]
7. Upgrade Your Bathroom Mirror
Minor bathroom remodels offer one of the best returns on investment, with a $1.71 increase in home value for every $1 you spend.[10] We’ve already explored several improvements you can make to your bathroom: new paint, fixtures, and hardware. Now complete the look by upgrading your vanity’s mirror.
Before you purchase a new mirror, examine your existing one to see how it is attached to the wall. Some vanity mirrors are glued to the wall and difficult to remove without shattering the glass or damaging the sheetrock behind it.[11]
If you prefer to keep your existing mirror, you can paint the frame—or add one if it’s currently frameless. There are several online retailers that will send you the frame components cut to your specifications, which you can assemble and mount yourself. Much like a work of art, your vanity mirror serves as a focal point for your bathroom, so let your creativity shine through!
8. Shampoo Your Carpet
Carpet is notorious for trapping dust, dirt, and allergens. It’s one of the reasons that most buyers prefer hard surface flooring.[12] But if you love your carpet, or you’re not ready to invest in an alternative, make an effort to keep it clean and odor-free.
To properly maintain your carpet, you should vacuum it weekly. Experts also recommend a deep shampoo at least every two years.[13] Fortunately, this is a cheap and easy DIY project you can knock out in about 20 minutes per room. According to Consumer Reports, you can rent a machine and purchase cleaning fluid and supplies for around $90. With an average return on your investment of 169%, it’s well worth the effort and expense.[14]
9. Customize Your Closet
Real estate professionals estimate that a closet remodel can add $2500 to a home’s selling price. And while a professional renovation can cost upwards of $6000, there are many high-quality DIY closet systems you can customize and install yourself.[15]
Experts recommend taking a thorough inventory of your wardrobe and accessories before you get started. Make sure frequently-worn pieces are easy to reach, and store seasonal and seldom-used items on high shelves. Place shoe racks near the closet entrance so they are easy to access.[16] A little planning can go a long way toward building a closet that you (and your future buyers!) will love.
GET A COMPLIMENTARY ANALYSIS OF YOUR PROJECT
We’ve been talking averages. But the truth is, the actual impact of a home improvement project will vary depending on your particular home and neighborhood. Before you get started, contact us to schedule a free, virtual consultation. We can help you determine which upgrades will offer the greatest return on your effort and investment.
Sources:
1. <a href="https://www.homelight.com/blog/improve-curb-appeal-landscaping/">HomeLight</a>
2. <a href="https://www.realtor.com/advice/home-improvement/landscape-renovations-that-pay-off/">National Association of Realtors</a>
3. <a href="https://www.houselogic.com/save-money-add-value/add-value-to-your-home/adding-curb-appeal-value-to-home/">HouseLogic.com</a>
4. <a href="https://www.fixr.com/blog/2020/01/14/paint-color-trends-in-2020/">Fixr</a>
5. <a href="https://blog.coldwellbanker.com/wp-content/uploads/2018/01/CES2018-Smart-Homes-An-Emerging-Real-Estate-Opportunity.pdf">T3 Sixty</a>
6. <a href="https://www.consumerreports.org/smart-home/smart-home-tech-upgrades-to-help-sell-your-house/">Consumer Reports</a>
7. <a href="https://www.aceee.org/sites/default/files/publications/researchreports/a1801.pdf">American Council for Energy Efficient Economy</a>
8. <a href="https://www.forbes.com/sites/trulia/2016/07/05/10-upgrades-under-1000-that-increase-home-values-2/%2347b0d3162e60">Forbes</a>
9. <a href="https://www.insider.com/home-design-rules-you-should-be-breaking-2020-1">Insider</a>
10.<a href="https://www.zillow.com/sellers-guide/roi-for-bathroom-remodel/">Zillow</a>
11. <a href="https://www.lowes.com/n/how-to/remove-a-bathroom-mirror">Lowes</a>
12.<a href="https://www.homelight.com/blog/what-flooring-increases-home-value/">HomeLight</a>
13.<a href="https://www.angieslist.com/articles/how-often-should-i-clean-my-carpets.htm">Angie’s List</a>
14.<a href="https://www.homelight.com/blog/projects-that-increase-home-value/">HomeLight</a>
15.<a href="https://www.nar.realtor/research-and-statistics/research-reports/remodeling-impact">National Association of Realtors</a>
16.<a href="https://www.easyclosets.com/tips-ideas/2016/10/02/how-to-plan-your-walk-in-closet/">EasyClosets</a>
2020-08-28T16:52:00-07:002020-08-28T19:30:22-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7292Common Things to Look Out for Before Buying Your Dream Home<img src="https://assets.site-static.com/userfiles/2303/image/3-questions-to-ask-before-buying-your-dream-home.jpg" alt="Common Things to Look Out for Before Buying Your Dream Home" title="Common Things to Look Out for Before Buying Your Dream Home" height="410" width="750" />
It is easy to become overwhelmed when you enter the home buying market. Friends, family, colleagues, and even acquaintances will give you their opinions if you are a first time home buyer. While most of them are looking out for your best interest, they are not fully aware of what is happening in the housing market.
It is important for you to be prepared and have your own questions ready. No matter what other opinions you are getting, you are the one buying the home and your comfort level will help make your final decision. Here are three important questions to ask before you purchase a home.
1. Why am I Buying a Home?
Regardless of the finances, it is important to think about what made you want to buy a home in the first place. Usually the reasons don’t have to do with money. Instead, home buyers are focused on how the house will impact their family in the future. A study done by the Joint Center for House Studies at Harvard found there are four reasons people buy a home. Those reasons include schools for your children, a safe environment, more room for your family to grow, and control of your own space.
These factors are the most common reasons people look to buy a new home. When you ask yourself why you are looking to purchase a home, do any of those factors come up? Spend time with your spouse or family members who are involved in this decision and determine why you want a home in the first place. Creating this list will help when searching for a home and can help your real estate agent find the best home for your needs.
2. What is the Trend with Home Values?
Our current economy and housing market is strong. That means home values and mortgage rates are increasing. If you are looking to purchase a home but want to stay within a budget, it may be in your best interest to move quickly. It is forecasted for these trends to continue in an upward motion, causing home values to continue to increase.
3. What About Current Mortgage Rates?
The ticket price is not the only thing you should be concerned with when purchasing a home. Mortgage rates are always changing and can have a huge impact on your monthly payments. Current trends show mortgage rates are rising. This is something to consider if you are debating the right time to purchase a home, since the rates may be even higher down the road.
Bottom Line
You and your family are the only ones who can determine the right time to purchase your dream home. It is important to decide exactly why you want a new home for your family and decide on a budget that will be comfortable moving forward. This budget may affect the amount of time you have to search for a home, since home prices and mortgage rates are increasing. 2020-07-10T14:43:00-07:002020-07-10T14:45:30-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7291Will Increasing Mortgage Rates Impact Home Prices?<img src="https://assets.site-static.com/userfiles/2303/image/mortgage-rate-projections.jpg" alt="Will Increasing Mortgage Rates Impact Home Prices? " title="Will Increasing Mortgage Rates Impact Home Prices? " height="410" width="750" />
There has been some discussion recently on home prices in relation to mortgage rates. Some believe if there is a rapid rise of mortgage rates, home prices should decrease. Logically it makes the most sense for the price of the house to drop when interest rates are rising, but this is not always the case.
This theory of home prices decreasing is typically discussed by future home buyers. As a buyer you would like to think if you are paying higher rates on your mortgage, you should be able to see a decrease in cost somewhere else. Unfortunately, these rates are rising because the economy is in better shape. As the economy succeeds, incomes rise, rates go up, as well as the price of the home.
A recent study by the John Burns Real Estate Consulting found mortgage rates have very little impact on the cost of the home. The housing market and price increases are affected by things like job growth in the area and rising wages. Coincidentally, these same factors are causing the rise in the mortgage rates since people can afford to take out more.
Bottom Line
As the economy progresses and strengthens, mortgage rates and home prices will fluctuate. It is a misconception as rates increase, home prices will decrease. Advances in the economy have shown that rates and home prices are more likely to increase together.2020-07-10T14:43:00-07:002020-07-10T14:45:26-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7294Is Getting a Home Mortgage Still Too Difficult?<img src="https://assets.site-static.com/userfiles/2303/image/getting-a-home-mortgage.jpg" alt="Is Getting a Home Mortgage Still Too Difficult?" title="Is Getting a Home Mortgage Still Too Difficult?" height="410" width="750" />
Potential homebuyers are always cautioned to be aware of mortgage lending standards and the difficulty they might face when trying to obtain a mortgage. Credit availability is expanding, making it easier to get a mortgage now than it was a year ago. The market is still tight however, and homebuyers should be prepared to shop around until they find a lender who is offering something that will meet the needs of their family.
Mortgage lending companies have high standards so it is important to make sure you and anyone else who will be included on the mortgage have their credit in check. The mortgage market is strict because lenders do not want to be put in a situation where they are forced to repurchase loans that are not paid on. They also do not want to end up in a litigation situation due to loan issues.
What Has Happened to the Number of Mortgages?
Due to the strict nature and requirements of the lending companies, the number of mortgages given out has significantly dropped. A report by the Housing Financial Policy Center at the Urban Institute showed that about 6.3 million fewer mortgages were given out between 2009 and 2015. The reasons behind this statistic are strict regulations and policies. These mortgages would have been granted if the lending standards where more reasonable.
Mortgage companies rely on calculations to determine if a home buyer will become delinquent on their payment. They will not give you a loan if you are too much of a risk for them. Credit history has a huge impact on this decision since lenders can see how often you pay back your debts. The history they receive is extensive. This view into your financial past causes lenders to take less risk when lending to you for your mortgage.
The Effect on the Economy
The housing market is recovering at a slower pace than it should since less potential homebuyers are being offered loans. While the market is still recovering with positive trends, fewer buyers can create a strain on other economic factors like home goods or construction jobs. Bottom Line
After the housing market boom and bust, mortgage lenders became stricter in their lending standards. It is not impossible to get a mortgage loan, but it can still be difficult for potential home buyers. Stay on top of your credit and make sure you and anyone else who is applying are in a good financial position so you can be approved for a loan. It is important to research different companies and their requirements to ensure success in getting a mortgage.2020-07-10T14:43:00-07:002020-07-10T14:45:22-07:00Jesse Lopeztag:blueutopiarealty.com,2012-09-20:7293Why You Should Consider Selling in the Winter<img src="https://assets.site-static.com/userfiles/2303/image/selling-in-the-winter-attracts-serious-buyers.jpg" alt="Selling In Winter Attracts Serious Buyers" title="Selling In Winter Attracts Serious Buyers" height="410" width="750" />
The season you sell your home can have an impact on how much you get for your home and how quickly it sells. The season that has the most success in selling homes is spring. This is a good time of year for families moving to new school districts and is also more convenient weather for moving. Because of this trend, most people will recommend waiting to list your home until after the winter is over. Avoiding the winter is a huge misconception in the housing industry and can cause homeowners to miss out on opportunities.
Selling in the winter can give you a few advantages. There will be fewer houses on the market since most people assume winter is a bad time to sell. This gives your home more attention. Potential buyers are always looking no matter the time of year. Keeping your house on the market in the winter might bring the right buyer to your door. Real estate agents also tend to be less busy during these months and commit more time to getting your home sold.
Studies have shown winter buyers are buying because they need to move right away either for a relocation or personal situation. They will want to close quickly and allow for a much smoother sale.
Bottom Line
If you need to sell your home right away, or have some time but want to see what is out there, consider listing in the winter. Most homeowners who are going to sell will list their home in the spring, making for a competitive market. The winter allows buyers who are in a hurry to move consider your home and sell for more money than you would have in the spring.2020-07-10T14:43:00-07:002020-07-10T14:45:34-07:00Jesse Lopez