September’s closed home sales slowed in the Walla Walla Valley. At month’s end, closings were 12% below last years pace. As we have reported, the slowdown in existing sales has been the result of a supply problem not diminished demand. Listing inventory, especially for homes below $400,000, remained low. September ended with 29% fewer homes listed for sale than were available in September of last year.
Lawrence Yun, NAR chief economist, says “demand continues to overwhelm supply in most of the country, and as a result, many would be buyers from earlier in the year are still in the market for a new home.” This remained true for Walla Walla. The number of pending sales – homes under contract but not yet closed – held steady with the previous month. Home prices have increased modestly. This year the median sales price has increased 4.5% over last. While we expect annual homes sales to remain a bit behind last years pace, we believe buyers will remain active as we head towards the end of the year.
September’s Listings: 300*
The month ended within 1% of the previous month’s listing total but remained 29% below the number of homes listed for sale 12 months ago.
September’s Closings: 68*
Closings fell behind the previous month’s pace by 16% and ended 29% lower than the number of sales that closed in September of last year.
September’s Median Price: $209,500*
The median price was 9% lower than the previous month and was 11% lower than the median price of homes that closed in September of last year.
Click here for September’s charts.
The debate about whether it makes more financial sense to rent or buy has been raging for decades. Advocates of buying say: When you rent, you’re essentially paying someone else’s mortgage. Buying, on the other hand, is an investment—one that can significantly increase in value every year you continue living in the home.
Fans of renting say: The extra costs associated with owning a home (interest payments on the loan, property taxes, homeowner dues, improvement/repair costs, etc.) add up. And there’s no guarantee that those expenses will be recouped when the house is sold. Instead of investing in a home, you may be better off investing your savings in stocks, bonds, and other financial securities.
According to Jed Kolko, one of the country’s most respected real estate economists, “Mortgage rates are still near long-term lows. Because prices fell so much after the housing bubble burst, and remain low relative to rents even after recent price increases, buying is still much cheaper than renting.“
But that’s a blanket statement. The right option for you depends on your personal circumstances, and your answers to the following questions:
What’s the real estate situation in your city?
Industry groups put out reports every quarter stating the average national sales price for a home, and the average monthly payment for a U.S. rental. But what really matters is what the numbers show when you dig into them on a local level.
The reports are almost always based on average for all the cities in the country. Delve into the details, and you’ll see there are some cities that fall well below that average, and some that rise far above it. The learning: When comparing housing costs, be sure to base your evaluation on what’s happening in your city and neighborhood, not the nationwide averages.
How long do you expect to live there?
If five years is the longest you can envision yourself living in one place right now, renting is probably your best bet financially. But if you think you’re ready to put down roots for as long as 10 years, chances are very good that any home you purchase will appreciate during that time even if the economy runs into some bumps along the way.
What’s the mortgage rate?
One of the other key factors to consider is the cost of your loan (the interest you’ll pay the lender). Fortunately, you now have access to some of the lowest mortgage interest rates in history, even if they increase a bit over the coming year, as many expect. According to a recent article in Forbes, “Compared to decades past, today’s rates are unprecedentedly—and artificially—low. They’re the direct result of a Federal Reserve-funded fiscal stimulus plan, better known as the third round of quantitative easing of QE3, aimed at hastening the recovery in housing and the economy as a whole.”
Can you pay a bit more?
If you can afford to pay a little extra towards your mortgage bill each month, it makes even more sense to buy. Paying $300 more per month (on a 30-year, $300,000 loan) will knock eight years off the life of the loan and reduce your final bill by more than $63,000 (that’s savings you would never see if you rented).
Will you need to make repairs or improvements?
Buying a fixer-upper may seem like a great way to get a deal on a house, but if the money you spend on the repairs is too great, your profit could be slashed when it comes time to sell. The same is true for remodeling and improvement projects. If you can only afford a home that demands major improvements, and you don’t have the skills to do much of the work yourself, it’s probably better to rent.
Do you have other ways to invest?
Many see a home purchase as an easy way to invest—a place where they can generate savings through home equity. But others say you can make more money renting an apartment and investing your savings in stocks, bonds, and other financial securities.
According to two professors studying the issue, it is possible to make more money investing in securities, however, you need to invest ALL the money you would have put towards the house (something most people can’t/won’t/don’t do). Plus, do you have the knowledge, resources and liquid cash necessary?
“We find that if people don’t invest the money, actually about 90% of the time, you’re better off buying,” says professor Eli Beracha, a co-author of the study.
Can you rent part of the house?
Here’s a twist: If you buy a house that includes a rental (space bedroom, mother-in-law unit, etc.), you could BE the landlord instead of paying the landlord. With that rental income, you could pay off the mortgage faster and contribute more to your savings. But, of course, you need to be willing to share your home with a tenant and take on the responsibilities of being a landlord.
Making your decision
To make your decision about whether to rent or buy easier, input the key financial facts regarding your situation into this Realtor.com Rent vs. Buy Calculator here. For help making sense of the results and analyzing other factors, contact me anytime.
For the last nine years, the HomeGain National Home Improvement Survey has been asking real estate professionals across the country the same question: What are the top 10 things a homeowner can do to get their home ready to sell?
And every year, the number one answer is: clean and de-clutter. In the latest survey, 99 percent of the real estate professionals queried ranked this task the most important. What’s more, they estimated that, for every dollar spent on the task, the homeowner would receive a whopping 403 percent return on their investment.
De-cluttering delivers big benefits to those who are not selling their homes, too. Studies show that living in a cluttered house is mentally stressful for the occupants and often leads to weight gain and other health problems.
So why do so many of us put off this important task? It’s hard work. It takes time. It’s physical. It’s emotional. And there are lots of decisions to make about what goes where, what gets tossed, and more. Worst of all, thinking about it makes it seem like an even bigger project than it really is—which is why experts say the best way to get started is to simply jump in.
The easy way to get started
The toughest part of getting organized is getting started. It’s too easy to say, “I’ll go through that closet later.” “I’ll get rid of those boxes later.” “I’ll donate those clothes later.”
Instead, replace “later” with “now”
Grab a couple cardboard boxes and spend 90 minutes right now organizing one part of one room (a desk in your study, for example). Once you see that it’s not nearly as tough as you imagine, and actually feels satisfying and freeing, you’ll become energized and ready to take on even bigger organizing tasks tomorrow.
Here are some tips to keep you on track
- Tackle one room at a time.
- Start with the easy stuff. Rounding up the things you know you want to toss, recycle, sell, or store.
- Finish the task you start. Don’t pull everything out of a closet, for example, and then stop for the day, leaving the mess for later. Finish organizing the closet.
- Get the whole family involved (these are important life lessons to pass along to your children).
- Let phone calls and other disruptions wait until you’re done for the day.
Deciding what to keep
- Once you make your way through the things you know you don’t want any more (broken appliances, unused gifts, outdated electronics, store returns, etc.), then it’s time to focus on the items that are useful, but don’t get used very often. Experts suggest two strategies. Choose the one that works best for you, or try using them in combination:
- The 12-month test – If you haven’t used the item in the last year, get rid of it.
- The cardboard box drill – Put items you’re not sure about in a cardboard box and set it aside. Whatever gets pulled out and used over the next two months can stay. The things that don’t get rescued should be sent packing.
How to handle keepsakes
Now for the toughest decision of all: What to do with those trophies, mementos, greeting cards, photos, kids’ art projects—and all the other things that trigger strong memories and emotional reactions.
First, go through these things and make sure they’re still things you want to keep. Some items may now remind you of a time—or a person—you want to forget.
Spend no more than 30 seconds reviewing each item. If you allow yourself to start wandering down memory lane, your organizing work will come to a screeching halt.
Take photos of items that are bulky or hard to store—especially the kids’ artwork, which tends to fall apart over time, anyway. Once you’ve captured the item in a photo, let the original go.
If there are keepsakes you inherited from your parents or relatives that hold no sentimental value for you, it’s time to say goodbye.
Stop saving so many things for your children. No matter what they say now, your kids will most likely only be interested in a few key mementos when they’re older. Designate a single memento box for each child.
Other people’s belongings
You should not be storing anything that doesn’t belong to you and/or the other current members of your household. Give back things you’ve borrowed. Get rid of the belongings of ex-spouses, ex-boyfriends, and ex-roommates. Get tough with your adult children; your days of providing a roof for their belongings are over.
Working with a professional
A professional organizer can teach you the tricks of the trade, help you make tough decisions about what to keep and what to let go, and consult with you about the best storage systems. Hiring a professional is also a good idea if you’re having trouble getting started or sticking with it. Expect to pay around $50 to $90 per hour for this kind of help.
Some final words of advice
While you’re getting organized, do not allow yourself to buy any non-necessities. Groceries, yes. But say no to clothes, toys, electronics, sporting goods, and other feel-good purchases.
When you’re done organizing, a good rule of thumb is that for every new item brought into the house, an old one has to leave.
The average American will pack up all their belongings and move to a new house or apartment 11.4 times during their lifetime.
Many of us – especially those of us with young children and a multitude of possessions – have come to dread the moving process. Yet, there are people who have a knack for making it all look…dare we say…easy. On the day that the moving trucks arrive, everything just seems to fall into place. Everyone knows the plan. Things happen quickly.
Truth be told, those are the people who planning and organized for weeks beforehand, which is the key to a smooth move. To become one of those people, here are six suggestions:
Get Started Six Weeks Beforehand – Organizing for a whole-house move takes time. This is not something that can be rushed. Give yourself at least six weeks to prepare.
Hire a Pro to Help You Purge – If you’re like most people, you love the idea of streamlining your possessions before a big move, but you find it one of the most challenging of tasks. The solution: Hire a professional organizer. Typically, the organizer will provide coaching, support and recommendations, as well as physical help.
Develop Plans for the New Spaces – Move-in day will go much smoother if you determine ahead of time exactly where you want your furnishings to be place in the new property. Take measurements. Create a schematic. Put notes on each piece of furniture. You should even designate a space in each room where boxes can be safely stacked out of the way.
Include the Kids – If you have children, give them plenty of advance notice so they can get used to the idea of a new home. Take time to answer their questions. Visit the new home and neighborhood as a family. And finally, arrange for someone to care for your children off-site on moving day.
Arrange a Smooth Exit – While you’re surely excited about your new home, you’ll want to focus some of that energy on your current residence too.
- Renters: Plan to meet on-site with your landlord at least two weeks before your move-out date to review all the move-out processes and expectations. Ask if any of the required steps or paperwork can be completed before your final day.
- Sellers: Confer with your real estate agent about what items should/should not be left behind, how much cleaning needs to be done and more.
Set Aside the Essentials – Moving is an all-day affair – which means you won’t have time to do much unpacking before the next day dawns. Red-tag the items you’ll want to access the first day in your new space (phone charger, essential kitchen items, etc) so they can be packed in a specially marked box.
Taking the time to plan in advance can save you a lot of stress on moving day and help you start enjoying your new home as quickly as possible.
Your home is a reflection of your tastes, your lifestyle and your ambition, and many of us are regularly transforming our homes one way or another to fit our adjusting needs. Whether it is refreshing a room to fit your style, reorganizing a closet to accommodate the holiday excess, going green to save the planet and a couple of bucks or a complete renovation of your kitchen- homes take maintenance. Some projects come about on a whim, but if you have any plans to make your nest nestier here are some ideas for not getting too overwhelmed by the process- no matter how large or small the changes you want to make:
Whether it is your closets, books, pantry or your entire basement identifying the problem is the first step. Once you know where to focus your energy think about the purpose your space should fulfill, what you want it to look like and how you can keep it organized for the long-term. Sometimes getting organized is a matter of doing a little bit every day, or it is finding the right storage solution. Once you know what the problem is you can identify your steps, timeline and budget. Ultimately, getting rid of the clutter and holding onto items you love the most and use will keep your spaces easy to manage year round.
Do a little everyday
Everyone has a different method to managing home madness; some have a weekly cleaning routine, some focus room by room others pile everything in the closet until they have to deal with it. If you have a goal of getting rid of old possessions and clutter, remodeling your home office or keeping your home cleaner spend five to thirty minutes a day working to achieve your goal. Here is a good idea for keeping your home clean by doing a little every day, rather than spending your weekend playing catch up.
Beautification and Gardening
This year my big goal is to finally start our edible garden, but I have been overwhelmed by all the steps- from finding the right containers for the garden, deciding what to plant, when to start the starts, etc. Each region has different gardening challenges; the plants that thrive in Seattle are different than Spokane or San Diego so if you are planning on a garden make sure you familiarize yourself with local resources that will give you advice specific to your area. If you have any landscaping projects, keep in mind advance planning is paramount to making this affordable, timely and sustainable. If you are planning on putting your house on the market eventually, make beautification a priority and plan your exterior in a way that will increase the curb appeal of your home in the future.
Home Improvement Projects
If you have an ongoing list of home improvement projects, make sure you have the right tools in your toolbox and prioritize and plan. You don’t want to spend every weekend working on dripping faucets, so create a routine. When looking at the year ahead, think about seasonality of the projects. It is important to know when to ask for help from a professional in order to have repairs done right in the first place to avoid putting yourself at risk or the safety of your home.
If your resolution this year is to save money and the planet by reducing your carbon footprint there are projects you can do large and small. Start with an energy audit, that way you know where your energy is actually being used- you may be surprised. Easy fixes start with replacing light bulbs with CFLs and buying energy cords that limit vampire appliances to use energy when they aren’t in use. If you are replacing your old appliances with newer energy efficient models, make sure you check into recycling programs in your area. Go here for more green resolution ideas.
Whether you are doing the renovations yourself or working with a contractor, projects of scale are never easy. Make sure you plan for the inconvenience of going without a kitchen as well as the details of putting your new kitchen in place. Also, before investing in a renovation, make sure you will get a return on your investment when you resell. If you are looking to increase the value and marketability of your home check out this list before you start tearing down walls.
Downsizing is on the minds of many homeowners today. Some are ready to retire. Others want to live more simply. Many want to save money and say goodbye to home maintenance. If you can relate to any of those sentiments, ask yourself these five questions:
Have you done the math?
The financial savings that can be generated by downsizing can be significant – especially as they add up over time. Boston College Retirement Center (an independent, reliable resource) makes calculating these savings a snap. Visit SquaredAway.bc.edu and click on the calculator titled “Figure out how moving changes your finances” in the tools area of the website.
Have you researched elder-care options?
Many homeowners hold on to their current home longer than they should because their parents/parents-in-law may need to come live with them in the future. While a noble gesture, there are many excellent elder care living options available today. Often, all it takes is a tour of those facilities to realize that your loved one may actually be happier, and far better served, in a place devoted to their care and happiness.
Have you considered off-site storage?
You don’t need to immediately discard a big chunk of your belongings in order to downsize. In fact, trying to do so in one fell swoop only creates stress. Most people find it works much better to move some of their belongings into off-site storage for six months. During that time, you can gradually incorporate some of those items into your new living arrangement, and slowly figure out what to do with the others.
How do you feel about sharing costs and decision-making?
Townhomes and condominiums are popular downsizing options. But both require that you share the decision-making and expenses associated with any maintenance and improvement projects. If you’re a people-person, agree with the old adage that two heads are better than one, and you like the idea of sharing the cost/responsibility for expensive repairs, you’ll enjoy condo living. If not, this may not be the best option for you.
Have you consulted with a real estate agent?
Many homeowners don’t think to consult with a real estate agent until they’ve made the decision to downsize. This leads to guesstimating about some of the most important factors. The truth is, your real estate agent is someone you want to talk with very early in the decision-making process. Holly is glad to help.
After succumbing to the “Great Recession” ten years ago, the stock market has made a comeback. So, does that mean you should forget about buying a new house and invest in stocks instead? The answer to that question, say experts, depends on your investing savvy, your financial discipline, your age, and your current financial situation.
The first question you need to ask yourself is, “Am I disciplined enough to invest in stocks?” According to two professors who recently studied 30 years of personal-finance performance, you need to be someone with exceptional financial discipline if you want to earn real money in the stock market. Or, you could simply buy a house.
When you buy real estate, the down payment and monthly mortgage payments force you to set aside a significant amount of your earnings on a regular basis. It’s automatic. But if you can’t summon the same discipline to invest that same amount of money in the stock market on an equally regular basis, then stocks are probably going to be a losing proposition, according to the professors’ study.
“We find that if people don't invest all the money, actually about 90% of the time, you're better off buying real estate," says Professor Eli Beracha, co-author of the study.
Other issues that make stock investing risky
Investing guru James Altucher wrote a column in The Wall St. Journal titled, “8 Reasons You Stink at Trading Stocks.” In it, he argues that most non-professionals don’t have the investing savvy required to be successful in the stock market. Here are a few telling excerpts:
- “Nine out of 10 people think they are above-average drivers. Nine out of 10 people think they are above-average investors. Both are mathematically impossible.”
- “Most people sell at the bottom and buy at the top—the opposite of what you want to do as an investor—because they let emotions get in the way of patience and strategy.”
- “It’s really hard to own stocks. It’s not just picking a stock and watching it go up 1,000%. It’s buying it and sometimes watching it go down 80% before it ends up rising 20% above your purchase price. It’s waiting. It’s patience. Psychology is at least 80% of the game. And knowing when to sell? Even harder.”
When you’re young, many financial advisors encourage investing in things like individual stocks. With a long career ahead, you have time to wait for any bad investments to turn around before you may really need the money. But once you’re a little older, with a family, and starting to focus on your financial future, that’s when advisers recommend you buy things like real estate—a conservative investment with a long history of stable, predictable earnings.
The type of loan you choose also makes a difference
If you want to both own a home and invest in stocks, consider a 30-year home loan, which will significantly reduce your monthly payments and leave you with extra money for playing the market. (Just remember the tradeoff: You’ll end up paying thousands of dollars more in interest over the life of the loan.)
If you don’t have a burning desire to play the stock market, choose a 15-year home loan. You’ll pay less interest over the life of the loan, you’ll build equity faster, and, obviously, you’ll be mortgage-free 15 years sooner.
The tax advantages of owning real estate
As a homeowner, you’re entitled to a bevy of tax benefits you don’t get as a stock investor. You can deduct your mortgage interest and property taxes from your annual tax return. Plus, depending on your circumstances, you could also get a deduction or credit for any home-office expenses, moving expenses, capital gains, any “points” used to lower your interest rate, and more.
One caveat: investing in real estate takes time
No matter what some of those reality TV programs show, buying a home should not be viewed as a get-rich-quick scheme. But if you think you’re ready to put down roots for as long as seven years, chances are very good that any home you purchase will appreciate significantly during that time (even if the economy runs into some bumps along the way).
The non-financial benefits
Of course, not all of the benefits of owning a home are financial. For most Americans, their home is a source of tremendous pride, comfort, security and freedom. Most of us also use our homes to showcase our personality, through paint colors, furnishings, landscaping, yard signs, holiday decorations and so much more.
Yes, the stock market is on an upswing currently (depending on the week), but if you want an investment with a long-term track record of consistent returns—plus tax breaks and a variety of personal perks—you may want to buy a home instead.
As sophisticated as homes are today, experts predict they’ll be far more so in the not-too-distant future— especially when it comes to their use of technology. Included are seven evolutionary trends that many expect to define the home of the future.
#1: Faster home-construction
Today, it takes somewhere between 18 months and two years to design and build your custom dream home. In the foreseeable future, experts predict that timeline will be slashed to six to nine months.
Architects will use immersion technology to not only develop plans faster, but also enable you to “walk” through a three-dimensional representation of the house and experience what it will be like to live there. Changes to the layout could be incorporated with a few clicks of the keyboard and mouse.
And, instead of delivering raw materials to the construction site and having workers cut and assemble them to match the plans, about 70 percent of the cutting and assembling work will take place in a precision-controlled factory environment. Once the foundation is ready, the pre-constructed walls, floors and roof will be delivered in “folded” sections, complete with windows, doors, fixtures, and even appliances, already installed.
#2: Alternative building materials and techniques
One of the big breakthroughs in home construction coming in the near future will be the use of steel framing in place of lumber.
Steel is not only stronger (able to withstand a 100-pound snow load, 110 mile per hour winds and significant earthquakes), it’s also far more eco-friendly than most people think (manufactured from up to 77 percent recycled materials) and much less wasteful (typical lumber framing generates 20 percent waste, while steel framing generates just two percent).
Other innovative home-building materials moving towards the mainstream include:
- Wall insulation made of mushroom roots (it grows inside the air cavity, forming an air-tight seal).
- Panels made of hemp and lime.
- Windows made from recycled wood fiber and glass.
- Recycled-glass floor and counter tiles.
- Reclaimed wood (beams and flooring re-milled and repurposed).
#3: Smaller homes with inventive layouts
The optimum home size for many Americans has been shrinking, and experts predict it will shrink more in the future. But it will feel bigger than it is because the layout will be so practical.
The driving forces behind the small-house movement (millennials purchasing their first home and baby boomers looking to downsize) aren’t interested in formal dining rooms, home offices, guest quarters and other spaces that have only one use and are only occasionally occupied. And they certainly aren’t interested in formal entries, high ceilings and three-car garages. They want an informal house layout, with flexible, adaptable spaces that can be used every day in one way or another.
Many of these homes will also feature a second master bedroom, so parents, children and grandparents can all comfortably live under one roof.
#4: Walkable neighborhoods
Even today, homebuyers are willing to give up some of their wants for a new house in order to get a location that’s within walking distance to stores, restaurants and other amenities. In the future, that trend is expected to only grow stronger.
#5: The net-zero house
For some time now, homeowners and homebuilders have both been striving to make the structures where we live more energy-efficient (green housing projects accounted for 20% of all newly built homes in 2012). But in the future, the new goal with be a net-zero home: A home that uses between 60 to 70 percent less energy than a conventional home, with the balance of its energy needs supplied by renewable technologies (solar, wind, etc.).
Essentially, these are homes that sustain themselves. While they do consume energy produced by the local utility, they also produce energy of their own, which can be sold back to the utility through a “net metering” program, offsetting the energy purchased.
#6 High-tech features
The technology revolution that’s transformed our phones, computers and TVs is going to push further into our homes in the not-too-distant future.
- Compact robots (similar to the Roomba vacuum) that will clean windows and more.
- Video feeds inside the oven that will allow you to use your phone to check on what’s cooking.
- Faucet sensors that detect bacteria in food.
- Blinds that will automatically open and close depending on the time of day, your habits and the amount of sun streaming through the windows.
- Refrigerators that will monitor quantities, track expiration dates, provide recipes, display family photos, access the Web, play music, and more.
- Washers and dryers that can be operated remotely.
- Appliances that will recognize your spoken commands.
- Heating and cooling systems that automatically adapt to your movements and can predict your wants.
#7: A higher level of security
In the future, home will continue to be a place where we want to feel safe and secure. To accomplish that, you can expect:
- Sensors that can alert you to water and gas leaks.
- Facial recognition technology that can automatically determine whether someone on your property is a friend or foe.
- A smart recognition system that will open the garage door, turn off the security system, unlock the doors and turn on the interior lights when it senses your car approaching.
- The capability to create the illusion that you’re home and moving about the property when you’re actually someplace else.
This is no pipe dream
Many of these products, processes and strategies are already in use. Some are still being tested. And others are only in the incubator stage. But in the not-too-distant future, experts believe they’ll all be available to homeowners across the country.
How can you make your home more attractive to potential buyers? The answer is with some “home staging." According to the Wall Street Journal, implementing some basic interior design techniques can not only speed up the sale of your home but also increase your final selling price.
It all comes down to highlighting your home's strengths, downplaying its weaknesses, and making it more appealing to the largest pool of prospective buyers. Staging an empty house is also important to help buyers visualize how the spaces would be used, and to give the home warmth and character.
Cohesiveness Is Key
Make the inside match the outside. For example, if the exterior architectural style of your house is Victorian or Craftsman Bungalow, the interior should be primarily outfitted with furniture styles from essentially the same era. Prospective buyers who like the exterior style of your home are going to expect something similar when they step inside. If the two styles don’t agree or at least complement each other, there is likely going to be an immediate disconnect for the buyer. Contact your agent to help determine the architectural style of your home and what makes it unique.
There is always room for flexibility. Not all your furnishings need to match, and even the primary furnishings do not need to be an exact match to the architectural style of your home. To create cohesion, you simply need to reflect the overall look-and-feel of the exterior.
The Role of Personal Expression
Every home is a personal expression of its owner. But when you become a seller, you’ll want to deemphasize much of the décor that makes a place uniquely yours and instead look for ways to make it appeal to your target market. Keep in mind, your target market is made up of the group of people most likely to be interested in a home like yours—which is something your agent can help you determine.
Your Goal: Neutralize and Brighten
Since personal style differs from person to person, a good strategy to sell your home is to “neutralize” the design of your interior. A truly neutral interior design allows people touring the house to easily imagine their own belongings in the space—and to envision how some simple changes would make it uniquely their own.
In short, you want to downplay your own personal expression, while making it easy for others to mentally project their own sense of style on the space. Ideas include:
- Paint over any bold wall colors with something more neutral, like a light beige, a warm gray, or a soft brown. The old advice used to be, “paint everything white,” but often that creates too sterile of an environment, while dark colors can make a room look small, even a bit dirty. Muted tones and soft colors work best.
- Consider removing wallpaper if it’s a bold or busy design.
- Replace heavy, dark curtains with neutral-colored shear versions; this will soften the hard edges around windows while letting in lots of natural light.
- Turn on lamps, and if necessary, install lighting fixtures to brighten any dark spaces — especially the entry area.
- Make sure everything is extremely clean. You may even want to hire professionals to give your home a thorough deep clean. Remember, the kitchen and bathrooms are by far the two most important rooms in a house when selling, so ongoing maintenance is important.
The Importance of De-Cluttering
Above all, make sure every room—including closets and the garage—is clutter-free. Family photos, personal memorabilia, and collectibles should be boxed up. Closets, shelves, and other storage areas should be mostly empty. Work benches should be free of tools and projects. Clear the kitchen counters, store non-necessary cookware, and remove all those magnets from the refrigerator door.
The same goes for furniture. If removing a chair, a lamp, a table, or other furnishings will make a particular space look larger or more inviting, then by all means do it.
You don’t want your home to appear cold, un-loved, or unlived-in, but you do want to remove distractions and provide prospective buyers with a blank canvas of sorts. Plus, de-cluttering your home now will make it that much easier to pack when it comes time to move.
Where to Start
Contact me for advice on how to most effectively stage your home or for a recommendation on a professional stager. While the simple interior design techniques outlined above may seem more like common sense than marketing magic, you’d be surprised at how many homeowners routinely overlook them. And the results are clear: staging your house to make it more appealing to your target buyer is often all it takes to speed the sale and boost the price.
I am often asked, “Which is the better buy, a newer or older home?” My answer: It all depends on your needs and personal preferences. I decided to put together a list of the six biggest differences between newer and older homes:
Surprisingly, one of the biggest factors in choosing a new home isn’t the property itself, but rather the surrounding neighborhood. While new homes occasionally spring up in established communities, most are built in new developments. The settings are quite different, each with their own unique benefits.
Older neighborhoods often feature tree-lined streets; larger property lots; a wide array of architectural styles; easy walking access to mass transportation, restaurants and local shops; and more established relationships among neighbors.
New developments are better known for wider streets and quiet cul-de-sacs; controlled development; fewer aboveground utilities; more parks; and often newer public facilities (schools, libraries, pools, etc.). There are typically more children in newer communities, as well.
Consider your daily work commute, too. While not always true, older neighborhoods tend to be closer to major employment centers, mass transportation and multiple car routes (neighborhood arterials, highways and freeways).
Design and layout
If you like Victorian, Craftsman or Cape Cod style homes, it used to be that you would have to buy an older home from the appropriate era. But with new-home builders now offering modern takes on those classic designs, that’s no longer the case. There are even modern log homes available.
Have you given much thought to your floor plans? If you have your heart set on a family room, an entertainment kitchen, a home office and walk-in closets, you’ll likely want to buy a newer home—or plan to do some heavy remodeling of an older home. Unless they’ve already been remodeled, most older homes feature more basic layouts.
If you have a specific home-décor style in mind, you’ll want to take that into consideration, as well. Professional designers say it’s best if the style and era of your furnishings match the style and era of your house. But if you are willing to adapt, then the options are wide open.
Materials and craftsmanship
Homes built before material and labor costs spiked in the late 1950s have a reputation for higher-grade lumber and old-world craftsmanship (hardwood floors, old-growth timber supports, ornate siding, artistic molding, etc.).
However, newer homes have the benefit of modern materials and more advanced building codes (copper or polyurethane plumbing, better insulation, double-pane windows, modern electrical wiring, earthquake/ windstorm supports, etc.).
The condition of a home for sale is always a top consideration for any buyer. However, age is a factor here, as well. For example, if the exterior of a newer home needs repainting, it’s a relatively easy task to determine the cost. But if it’s a home built before the 1970s, you have to also consider the fact that the underlying paint is most likely lead0based, and that the wood siding may have rot or other structural issues that need to be addressed before it can be recoated.
On the flip side, the mechanicals in older homes (lights, heating systems, sump pump, etc.) tend to be better built and last longer.
One of the great things about older homes is that they usually come with mature tress and bushes already in place. Buyers of new homes may have to wait years for ornamental trees, fruit trees, roses, ferns, cacti and other long-term vegetation to fill in a yard, create shade, provide privacy, and develop into an inviting outdoor space. However, maybe you’re one of the many homeowners who prefer the wide-open, low-maintenance benefits of a lightly planted yard.
Like it or not, most of us are extremely dependent on our cars for daily transportation. And here again, you’ll find a big difference between newer and older homes. Newer homes almost always feature ample off-street parking: usually a two-care garage and a wide driveway. An older home, depending on just how old it is, may not offer a garage—and if it does, there’s often only enough space for one car. For people who don’t feel comfortable leaving their car on the street, this alone can be a determining factor.
Finalizing your decision
While the differences between older and newer homes are striking, there’s certainly no right or wrong answer. It is a matter of personal taste, and what is available in your desired area. To quickly determine which direction your taste trends, use the information above to make a list of your most desired features, then categorize those according to the type of house in which they’re most likely to be found. The results can often be telling.
If you have questions about newer versus older homes, or are looking for an agent in the Walla Walla area, please contact me.
In addition to providing shelter and comfort, our home is often our single greatest asset. And it’s important that we protect that precious investment. Most homeowners realize the importance of homeowners insurance in safeguarding the value of a home. However, what they may not know is that about two-thirds of all homeowners are under-insured. According to a national survey, the average homeowner has enough insurance to rebuild only about 80% of his or her house.
What a standard homeowners policy covers
A standard homeowner’s insurance policy typically covers your home, your belongings, injury or property damage to others, and living expenses if you are unable to live in your home temporarily because of an insured disaster.
The policy likely pays to repair or rebuild your home if it is damaged or destroyed by disasters, such as fire or lighting. Your belongings, such as furniture and clothing, are also insured against these types of disasters, as well as theft. Some risks, such as flooding or acts of war, are routinely excluded from homeowner policies.
Other coverage in a standard homeowner’s policy typically includes the legal costs for injury or property damage that you or family members, including your pets, cause to other people. For example, if someone is injured on your property and decides to sue, the insurance would cover the cost of defending you in court and any damages you may have to pay. Policies also provide medical coverage in the event someone other than your family is injured in your home.
If your home is seriously damaged and needs to be rebuilt, a standard policy will usually cover hotel bills, restaurant meals and other living expenses incurred while you are temporarily relocated.
How much insurance do you need?
Homeowners should review their policy each year to make sure they have sufficient coverage for their home. The three questions to ask yourself are:
- Do I have enough insurance to protect my assets?
- Do I have enough insurance to rebuild my home?
- Do I have enough insurance to replace all my possessions?
Here’s some more information that will help you determine how much insurance is enough to meet your needs and ensure that your home will be sufficiently protected.
Protect your assets
Make sure you have enough liability insurance to protect your assets in case of a lawsuit due to injury or property damage. Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability coverage. With the increasingly higher costs of litigation and monetary compensation, many homeowners now purchase $300,000 or more in liability protection. If that sounds like a lot, consider that the average dog bite claim is about $20,000. Talk with your insurance agent about the best coverage for your situation.
Rebuild your home
You need enough insurance to finance the cost of rebuilding your home at current construction costs, which vary by area. Don’t confuse the amount of coverage you need with the market value of your home. You’re not insuring the land your home is built on, which makes up a significant portion of the overall value of your property. In pricey markets such as San Francisco, land costs account for over 75 percent of a home’s value.
The average policy is designed to cover the cost of rebuilding your home using today’s standard building materials and techniques. If you have an unusual, historical or custom-built home, you may want to contact a specialty insurer to ensure that you have sufficient coverage to replicate any special architectural elements. Those with older homes should consider additions to the policy that pay the cost of rebuilding their home to meet new building codes.
Finally, if you’ve done any recent remodeling, make sure your insurance reflects the increased value of your home.
Remember that a standard policy does not pay for damage caused by a flood or earthquake. Special coverage is needed to protect against these incidents. Your insurance company can let you know if your area is flood or earthquake prone. The cost of coverage depends on your home’s location and corresponding risk.
Replacing your valuables
If something happens to your home, chances are the things inside will be damaged or destroyed as well. Your coverage depends on the type of policy you have. A cost value policy pays the cost to replace your belongings minus depreciation. A replacement cost policy reimburses you for the cost to replace the item.
There are limits on the losses that can be claimed for expensive items, such as artwork, jewelry, and collectables. You can get additional coverage for these types of items by purchasing supplemental premiums.
To determine if you have enough insurance, you need to have a good handle on the value of your personal items. Create a detailed home inventory file that keeps track of the items in your home and the cost to replace them.
Create a home inventory file
It takes time to inventory your possessions, but it’s time well spent. The little bit of extra preparation can also keep your mind at ease. The best method for creating a home inventory list is to go through each room of your home and individually record the items of significant value. Simple inventory lists are available online. You can also sweep through each room with a video or digital camera and document each of your belongings. Your home inventory file should include the following items:
- Item description and quantity
- Manufacturer or brand name
- Serial number or model number
- Where the item was purchased
- Receipt or other proof of purchase \Photocopies of any appraisals, along with the name and address of the appraiser
- Date of purchase (or age)
- Current value
- Replacement cost
- Pay special attention to highly valuable items such as electronics, artwork, jewelry, and collectibles.
Storing your home inventory list
Make sure your inventory list and images will be safe incase your home is damaged or destroyed. Store them in a safe deposit box, at the home of a friend or relative, or on an online Web storage site. Some insurance companies provide online storage for digital files. (Storing them on your home computer does you no good if your computer is stolen or damaged). Once you have an inventory file set up, be sure to update it as you make new purchases.
We invest a lot in our homes, so it’s important we take the necessary measures to safeguard it against financial and emotional loss in the wake of a disaster.
One area of the real estate market that is thriving right now is rental property.
All indications suggest that the rental market will continue to improve because of low vacancy rates and rising rents. In fact, the demand for rentals is predicted to far exceed supply through 2017, with 4.5 million new renters expected to enter the market in the next five years.
What to consider before buying a rental
Being a landlord has its challenges. The recession took a toll on rental prices for a few years and any future economic downturns could do the same. Once the job market returns to normal, there’s a strong possibility that more people will choose to move from rentals into homes of their own. And the demand for rental properties could become oversaturated at some point, resulting in an investment bubble of its own.
What’s more, while the income from a rental property can be significant, it can take at least five years before you’re making much more than what you need just to cover the mortgage and expenses. In other words, the return on your investment doesn’t happen overnight.
However, in the long run, if you select the right property, it could turn out to be one of your best investment decisions ever—especially since rental real estate provides more tax benefits than almost any other investment.
Tax deductions for the taking
One of the greatest things about owning rental properties is the fact that you’re able to deduct so many of the associated expenses, including a sizeable portion of your monthly mortgage payment.
The commissions and fees paid to obtain your mortgage are not deductable, but the mortgage interest you pay each month is, including any money you pay into an escrow account to cover taxes and insurance. Whatever your mortgage company reports as interest on your 1098 form at the end of each year can likely be deducted.
For example, you may be eligible to deduct credit card interest for goods and services used in a rental activity, repairs made to the building, travel related to your rental (local or long distance), expenses related to home office or workshop devoted to your rental, the wages of anyone you hire to work on the building, damages to your rental property, associated insurance premiums, and fees you pay for legal and professional services. However, as is the case with any transaction of this type, be sure to consult your attorney or accountant for detailed tax information.
What to look for
As with any real estate investment, the location of the property and its overall condition are both key. But with rental properties, there are some other, unique factors you’ll also want to consider.
Look for a building with separate utilities (water, electric, and gas, etc.) for each rental unit. This will make it far easier to legally charge for the fair use of what can be a very costly monthly expense.
If your property is one of the few rentals in the neighborhood, there will be less competition for interested renters.
Rentals that are near popular public transportation options and/or major freeways (without being so close that noise is an issue) are usually easier to rent—and demand more money.
Properties with small yards and fewer plantings are far easier and less expensive to manage.
Not only is off-street parking a desirable feature (people with nice cars usually don’t like to park on the street), it’s also a requirement for rental properties in some communities.
How to start your search
Unlike homes, rental properties do not typically have a visible ‘for-sale’ sign standing out front (as landlords don’t want to irritate, bring attention to their current renters, or turn off any prospective renters). Therefore, if you are interested in a rental property, your best option is to call me to schedule an appointment to discuss your investment goals and identify what opportunities currently exist in the market place.
If you are looking around your home and thinking to yourself that it’s time to de-clutter, the summer months provide an ideal time to hold a garage sale. But if that sounds like too big of an undertaking, there are other options available to you thanks to popular resale sites like eBay and Craigslist. And if even that sounds like too much effort, you might also consider donating lightly used items to charity or sending them off to the dump. Here are some questions to help you decide which method is best for you.
How much stuff do you have? Are you liquidating your space of large furniture items, a large quantity or quality items, or do you have a small pile of electronics?
If you have yards worth of stuff to get rid of, you definitely want to consider a garage sale. Getting rid of multiple items on Craig’s list can be time consuming, and shipping items sold on eBay can be expensive and eat into your profits. On the other hand, if your items are easily shippable or you have a small enough quantity to take quality photos and post online, then you can save time by using eBay or Craig’s list – and potentially make more money too.
What type of stuff am I getting rid of? Is it worth anything?
If you have large furniture or unique/valuable pieces it may be worth the time to take some quality photos and try to sell these items on Craigslist first. Generally Craigslist works as “first come, first serve” so be prepared to respond to inquiries quickly. If you have small items that have some value, you may want to consider eBay. You reach a much larger audience through eBay which can result in a greater financial return.
How much time do I have?
Garage/yard sales are by far the most time intensive of your options. If you choose to hold a garage sale, you will likely need to dedicate at least three days for prep, clean-up, and the sale itself. All items should be cleaned up, priced, and neatly displayed for sale. Signage should be prominently placed around your neighborhood. You can also place an ad in your local classifieds or on Craigslist to attract a larger crowd.
Will your home/community accommodate a Garage Sale?
Garage and yard sales are generally held at a single-family residence. If you live in an apartment or condo, you may want to consider alternatives due to limited public space. You may also want to consider your community traffic. If you live on a quiet street, you may not get enough customers to generate sales.
Can you enhance a sale by joining with neighbors, friends and family?
Some communities hold an annual neighborhood garage sale, encouraging all neighbors to participate on the same day. This increases your ability to market the event and attract a larger audience.
Most of us tend to think of air pollution as something that occurs outdoors where car exhaust and factory fumes proliferate, but there’s such a thing as indoor air pollution, too. Since the 1950s, the number of synthetic chemicals used in products for the home has increased drastically, while at the same time, homes have become much tighter and better insulated. As a result, the EPA estimates that indoor pollutants today are anywhere from five to 70 times higher than pollutants in outside air.
Luckily, there are many ways to reduce indoor air pollution. We all know that buying organic and natural home materials and cleaning supplies can improve the air quality in our homes, but there are several other measures you can take as well.
How pollutants get into our homes
Potentially toxic ingredients are found in many materials throughout the home, and they leach out into the air as Volatile Organic Compounds, or VOCs. If you open a can of paint, you can probably smell those VOCs. The “new car smell” is another example of this. The smell seems to dissipate after a while, but VOCs can actually “off-gas” for a long time, even after a noticeable smell is gone.
We all know to use paint and glue in a well-ventilated room, but there are many other materials that don’t come with that warning. For instance, there are chemicals, such as formaldehyde, in the resin used to make most cabinets and plywood particle board. It’s also in wall paneling and closet shelves, and in certain wood finishes used on cabinets and furniture. The problems aren’t just with wood, either. Fabrics—everything from draperies to upholstery, bedding, and carpets—are a potent source of VOCs.
The good news about VOCs is that they do dissipate with time. For that reason, the highest levels of VOCs are usually found in new homes or remodels. If you are concerned about VOCs, there are several products you can buy that are either low- or no-VOC. You can also have your home professionally tested.
How to reduce VOCs in your home
Make smart choices in building materials.
- For floors, use tile or solid wood—hardwood, bamboo, or cork – instead of composites.
- Instead of using pressed particle board or indoor plywood, choose solid wood or outdoor-quality plywood that uses a less toxic form of formaldehyde.
- Choose low-VOC or VOC-free paints and finishes.
Purify the air that’s there.
Make sure your rooms have adequate ventilation, and air out newly renovated or refurnished areas for at least a week, if possible.
- Clean ductwork and furnace filters regularly.
- Install air cleaners if needed.
- Use only environmentally responsible cleaning chemicals.
- Plants can help clean the air: good nonpoisonous options include bamboo palm, lady palm, parlor palm, and moth orchids.
- Air out freshly dry-cleaned clothes or choose a “green” cleaner.
Fight the carpet demons.
- Choose “Green Label” carpeting or a natural fiber such as wool or sisal.
- Use nails instead of glue to secure carpet.
- Install carpet LAST after completing painting, wall coverings and other high-VOC processes.
- Air out newly carpeted areas before using.
- Use a HEPA vacuum or a central vac system that vents outdoors.
- Clean up water leaks fast.
- Use dehumidifiers, if necessary, to keep humidity below 60 percent.
- Don’t carpet rooms that stay damp.
- Insulate pipes, crawl spaces, and windows to eliminate condensation.
- Kill mold before it gets a grip with one-half cup of bleach per gallon of water.
I hope this information is helpful. If you would like to learn more about VOCs and indoor air quality, please visit the EPA here.
More than 80 percent of Americans say they want an outdoor living space where they can relax and entertain. And it’s no wonder why. Outdoor spaces extend your livable space, add visual interest, and increase not only your quality of life, but also the overall value of your home. (In some cases, the increase in your home's value can cover most or all of the cost to create the new space.) Here are some options to consider:
Decks are still the most popular outdoor living spaces, not only because they work so well for entertaining and relaxing, but also because they have the highest return on investment (see the Tips column for data).
Surprisingly, wood decks (made of cedar or pine) are actually the better financial investment, because building with Trex or other popular composite products costs considerably more, yet doesn’t increase the home’s value by as much.
Expanding and reconfiguring your current deck is another option that’s popular today. The contractor will typically remove the old face boards, extend the underlying structure, and then put down the new decking. This is also an opportunity to add built-in furniture, privacy screens, even plumbing and electricity.
Running a close second to decks – in both popularity and investment return – are patios. With a patio, you can relax and entertain at ground level, which can afford more privacy in urban areas, and allows you to be more engaged with the surrounding plants and landscaping.
Typically made of brick, concrete, or stone, a patio also comes with far fewer maintenance and repair issues than a deck. Plus, patios are generally easier and less disruptive to construct – which is why they’re often about 30 percent less expensive to have professionally built.
For those who want even more privacy, as well as shelter from the sun and protection from mosquitoes and other pests, there’s the gazebo. Available with walls or as an open-air design, with screening or not, these modestly sized, affordable backyard structures can be built from scratch or purchased as a kit (for assembly by a do-it-yourselfer or a professional).
Popular in the Midwest for decades, gazebos have made their way west as homeowners here have discovered how nice and easy they are for creating a shaded spot for reading, relaxing, and backyard gatherings.
People tend to gather naturally in the kitchen. And when the kitchen is outdoors, it creates an ideal opportunity to mix, mingle and interact in the open air. Other reasons why cooking outdoors makes so much sense: less kitchen cleanup, the house stays cooler during the summer, and grilled food just tastes better.
Some may think an outdoor kitchen is only for cooks who host large parties, but homeowners who go this route say they’re more of an extension of the home, and great for daily use.
Designs for outdoor kitchens range from the simple (a grill, limited counter and cabinet space, and maybe a prep sink) to truly independent entities with a refrigerator, an elaborate grill, warming oven, freestanding island with storage space, rolling cart stations, and even a dishwasher. Depending on how elaborate your design, you may be able to list it as a second kitchen when selling your house.
SIX PLANNING SUGGESTIONS
- Before meeting with contractors, gather photos of designs and ideas that you like; this will make it much easier to communicate your ideas.
- Make sure the materials you plan to use, as well as the overall size of the structure, will be harmonious with your home’s current look and feel.
- Give serious consideration to a roof – which will likely add significantly to the cost, but will also provide much-needed shade on hot days and protection from rain and inclement weather. In fact, to ensure things are structurally sound and architecturally appealing, start with the design for the roof first, then set your sights on the roof supports and structure below.
- Incorporate lighting into your design, which will extend its usability into the evening and throughout the seasons.
- Consider convenience, comfort, and longevity when choosing materials. For example, a floor made of dirt or stepping stones may last forever, but one made of wood or concrete is much easier to clean and arrange furniture upon.
If you’re eager to live a healthier lifestyle and reconnect with family and friends, as most people are today, it’s time to consider an outdoor living space.
Adding on to your current home may be your best bet if you’re short on space, but you don’t want to move or can’t find another house in the area with all the qualities you’re seeking. It’s also an attractive option if the house you have is lacking just one significant element (a family room, another bedroom, a larger kitchen, a separate apartment, etc.).
On the other hand, even a modest addition can turn into a major construction project, with architects and contractors to manage, construction workers traipsing through your home, hammers pounding, and sawdust everywhere. And although new additions can be a very good investment, the cost per-square-foot is typically more than building a new home, and much more than buying a larger existing home.
Define your needs
To determine if an addition makes sense for your particular situation, start by defining exactly what it is you want and need. By focusing on core needs, you won’t get carried away with a wish list that can push the project out of reach financially.
If it’s a matter of needing more space, be specific. For example, instead of just jotting down “more kitchen space,” figure out just how much more space is going to make the difference, e.g., “150 square feet of floor space and six additional feet of counter space.”
If the addition will be for aging parents, consult with their doctors or an age-in-place expert to define exactly what they’ll require for living conditions, both now and over the next five to ten years.
Types of additions
Bump-out addition—“Bumping out” one of more walls to make a first floor room slightly larger is something most homeowners think about at one time or another. However, when you consider the work required, and the limited amount of space created, it often figures to be one of your most expensive approaches.
First floor addition—Adding a whole new room (or rooms) to the first floor of your home is one of the most common ways to add a family room, apartment or sunroom. But this approach can also take away yard space.
Dormer addition—For homes with steep rooflines, adding an upper floor dormer may be all that’s needed to transform an awkward space with limited headroom. The cost is affordable and, when done well, a dormer can also improve the curb-appeal of your house.
Second-story addition—For homes without an upper floor, adding a second story can double the size of the house without reducing surrounding yard space.
Garage addition—Building above the garage is ideal for a space that requires more privacy, such as a rentable apartment, a teen’s bedroom, guest bedroom, guest quarters, or a family bonus room.
You’ll need a building permit to construct an addition—which will require professional blueprints. Your local building department will not only want to make sure that the addition adheres to the latest building codes, but also ensure it isn’t too tall for the neighborhood or positioned too close to the property line. Some building departments will also want to ask your neighbors for their input before giving you the go-ahead.
Requirements for a legal apartment
While the idea of having a renter that provides an additional stream of revenue may be enticing, the realities of building and renting a legal add-on apartment can be sobering. Among the things you’ll need to consider:
Special permitting—Some communities don’t like the idea of “mother-in-law” units and therefore have regulations against it, or zone-approval requirements.
Separate utilities—In many cities, you can’t charge a tenant for heat, electricity, and water unless utilities are separated from the rest of the house (and separately controlled by the tenant).
ADU Requirements—When building an “accessory dwelling unit” (the formal name for a second dwelling located on a property where a primary residence already exists), building codes often contain special requirements regarding emergency exists, windows, ceiling height, off-street parking spaces, the location of main entrances, the number of bedrooms, and more.
In addition, renters have special rights while landlords have added responsibilities. You’ll need to learn those rights and responsibilities and be prepared to adhere to them.
The cost to construct an addition depends on a wide variety of factors, such as the quality of materials used, the laborers doing the work, the type of addition and its size, the age of your house and its current condition. For ballpark purposes, however, you can figure on spending about $200 per square food if your home is located in a more expensive real estate area, or about $100 per food in a lower-priced market.
You might be wondering how much of that money might the project return if you were to sell the home a couple years later? The answer to that question depends on the aforementioned details; but the average “recoup” rate for a family-room addition is typically more than 80 percent.
The bottom line
While you should certainly research the existing-home marketplace before hiring an architect to map out the plans, building an addition onto your current home can be a great way to expand your living quarters, customize your home, and remain in the same neighborhood.
There are a number of things that can trigger the decision to remodel or move to a new home. Perhaps you have outgrown your current space, you might be tired of struggling with ancient plumbing or wiring systems, or maybe your home just feels out of date. The question is: Should you stay or should you go? Choosing whether to remodel or move involves looking at a number of factors. Here are some things to consider when making your decision.
Five reasons to move:
1. Your current location just isn’t working.
Unruly neighbors, a miserable commute, or a less-than-desirable school district—these are factors you cannot change. If your current location is detracting from your overall quality of life, it’s time to consider moving. If you’re just ready for a change, that’s a good reason, too. Some people are simply tired of their old homes and want to move on.
2. Your home is already one of the nicest in the neighborhood.
Regardless of the improvements you might make, location largely limits the amount of money you can get for your home when you sell. A general rule of thumb for remodeling is to make sure that you don’t over-improve your home for the neighborhood. If your property is already the most valuable house on the block, additional upgrades usually won’t pay off in return on investment at selling time.
3. There is a good chance you will move soon anyway.
If your likelihood of moving in the next two years is high, remodeling probably isn’t your best choice. There’s no reason to go through the hassle and expense of remodeling and not be able to enjoy it. It may be better to move now to get the house you want.
4. You need to make too many improvements to meet your needs.
This is particularly an issue with growing families. What was cozy for a young couple may be totally inadequate when you add small children. Increasing the space to make your home workable may cost more than moving to another house. In addition, lot size, building codes, and neighborhood covenants may restrict what you can do. Once you’ve outlined the remodeling upgrades that you’d like, a real estate agent can help you determine what kind of home you could buy for the same investment.
5. You don’t like remodeling.
Remodeling is disruptive. It may be the inconvenience of loosing the use of a bathroom for a week, or it can mean moving out altogether for a couple of months. Remodeling also requires making a lot of decisions. You have to be able to visualize new walls and floor plans, decide how large you want windows to be, and where to situate doors. Then there is choosing from hundreds of flooring, countertop, and fixture options. Some people love this. If you’re not one of them, it is probably easier to buy a house that has the features you want already in place.
Five reasons to remodel:
1. You love your neighborhood.
You can walk to the park, you have lots of close friends nearby, and the guy at the espresso stand knows you by name. There are features of a neighborhood, whether it’s tree-lined streets or annual community celebrations, that you just can’t re-create somewhere else. If you love where you live, that’s a good reason to stay.
2. You like your current home’s floor plan.
The general layout of your home either works for you or it doesn’t. If you enjoy the configuration and overall feeling of your current home, there’s a good chance it can be turned into a dream home. The combination of special features you really value, such as morning sun or a special view, may be hard to replicate in a new home.
3. You’ve got a great yard.
Yards in older neighborhoods often have features you cannot find in newer developments, including large lots, mature trees, and established landscaping. Even if you find a new home with a large lot, it takes considerable time and expense to create a fully landscaped yard.
4. You can get exactly the home you want.
Remodeling allows you to create a home tailored exactly to your lifestyle. You have control over the look and feel of everything, from the color of the walls to the finish on the cabinets. Consider also that most people who buy a new home spend up to 30 percent of the value of their new house fixing it up the way they want.
5. It may make better financial sense.
In some cases, remodeling might be cheaper than selling. A contractor can give you an estimate of what it would cost to make the improvements you’re considering. A real estate agent can give you prices of comparable homes with those same features. But remember that while remodeling projects add to the value of your home, most don’t fully recover their costs when you sell.
Remodel or move checklist:
Here are some questions to ask when deciding whether to move or remodel.
1. How much money can you afford to spend?
2. How long do you plan to live in your current home?
3. How do you feel about your current location?
4. Do you like the general floor plan of your current house?
5. Will the remodeling you’re considering offer a good return on investment?
6. Can you get more house for the money in another location that you like?
7. Are you willing to live in your house during a remodeling project?
8. If not, do you have the resources to live elsewhere while you’re remodeling?
If you have questions about whether remodeling or selling is a wise investment, contact me. I can help.
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars – not because they’re dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for 8 percent less than average).
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities – especially those that make lots of noise or produces noxious odors.
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Some communities have a wealth of quality public services available to them – including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
There’s nothing more exciting, rewarding, and fulfilling than buying a home. However, it’s a complex transaction, and there are a number of steps along the path that can confuse, betwixt, and befuddle even the most seasoned buyers and sellers.
How can you avoid those potential pitfalls and common mistakes? Look to your real estate professional for advice and keep these guidelines in mind:
#1 Review your credit reports ahead of time
Review your credit report a few months before you begin your house hunt, and you'll have time to ensure the facts are correct, and be able to dispute mistakes before a mortgage lender checks your credit. Get a copy of your credit report from Experian, Equifax, and TransUnion. Why all three? Because, if the scores differ, the bank will typically use the lowest one. Alert the credit bureaus if you see any mistakes, fix any problems you discover, and don’t apply for any new credit until after your home loan closes.
#2 Get pre-approved
Before getting serious about your hunt for a new house, you’ll want to choose a lender and get pre-approved for a mortgage (not just pre-qualified—which is a cursory review of your finances—but pre-approved for a loan of a specific amount). Pre-approval lets sellers know you're serious. Most importantly, pre-approval will help you determine exactly how much you can comfortably afford to spend.
#3 Know what you want
You and your real estate agent should both be clear about the house you want to buy. Put it in writing. First, make a list of all the features and amenities you really want. Then, number each item and prioritize them. Now, divide the list into must-haves and really-wants. A good place to start is the “HUD Wish List,” which is available online for free at hud.gov/buying/wishlist.pdf
#4 Account for hidden costs
In addition to the purchase price of the home, there are additional costs you need to take into consideration, such as closing costs, appraisal fees, and escrow fees. Once you find a prospective home, you’ll want to:
- Get estimates for any repairs or remodeling it may need.
- Estimate how much it will cost to maintain (gas, electric, utilities, etc.).
- Determine how much you’ll pay in taxes monthly and/or annually.
- Learn whether there are any homeowner or development dues associated with the property.
#5 Get an inspection
Buying a home is emotionally charged—which can make it difficult for buyers to see the house for what it truly is. That’s why you need impartial third parties who can help you logically analyze the condition of the property. Your agent is there to advise you, but you also need a home inspector to assess any hidden flaws, structural damage or faulty systems.
#6 Evaluate the neighborhood and location
When house hunting, it’s easy to become overly focused on the number of bedrooms and bathrooms, the condition of the home and its amenities while overlooking the subtleties of the surrounding neighborhood. Take time to check crime reports, school options, churches and shopping. If schools are a key factor, do more than simply research the statistics; speak with the principal(s) and chat with the parents waiting outside.
#1 Avoid becoming emotional or sentimental about the sale
Once you decide to sell your house, it's time to strip out the emotion and look at it as a commodity in a business transaction. If you start reminiscing about all the good times you had and the hard work you invested, it will only make it that much harder to successfully price, prepare, and market the home.
#2 Fix problems (or price accordingly)
Homes with deferred maintenance and repair issues can take far longer to sell and can be subject to last-minute sale-cancellations. These homes also often sell for less than their legitimate market value. If you simply can’t afford to address critical issues, be prepared to work with your agent to price and market your home accordingly.
#3 Don’t overprice your home (and/or refuse to negotiate)
Getting top dollar is the dream of every seller. But it’s essential that you let the market dictate that price, not your emotions or financial situation. Allow your agent to research and prepare a market analysis that factors in the value of similar homes in the area, and trust those results.
#4 Use quality photos
The vast majority of prospective buyers today search for homes online first. In order to make a good first impression, you need a wealth of high-quality photos of your home and surrounding grounds. You may also need to consider professional staging in order to position your home in the best possible light for prospective buyers.
The process of buying or selling a home can have plenty of twists and turns, but with some smart decision making, you can avoid the most common mistakes and pitfalls.
For many people, a home inspection is a hurdle that has to be overcome during the process of buying or selling a home. But, in fact, it can be a useful tool for buyers, sellers or anyone who plans to get the greatest possible value from their home.
Find out if the house you are selling has “issues”
When you’re selling a house, a pre-sale inspection can be particularly useful. By uncovering any potential problems your house may have, an inspection can give you an opportunity to address them before your first prospective buyer arrives.
According to Bill Richardson, president of the American Society of Home Inspectors (ASHI), “More and more, sellers are obtaining pre-sale inspections. This simple step can allow for better planning and lower expenses in making repairs, add value to the home, and help speed up the process and likelihood of an offer.”
In any market, a pre-sale inspection can give your home a competitive edge. Potential buyers are likely to find the kind of detailed information an inspection provides reassuring—and are encouraged to give your home a closer look.
Get to know a house before you buy it
A home is a major investment and, for many people, the greatest financial asset they have. With so much at stake, it makes sense to do what you can to protect your financial interest. Getting an inspection is a smart, simple way to do just that.
When you make a written offer on a home, insist that the offer provide that your contract is contingent on a home inspection conducted by a qualified inspector. You’ll have to pay for the inspection yourself, but an investment of a few hundred dollars could save you thousands of dollars and years of headaches. If you’re satisfied with the results of the inspection and are assured that the home you’re purchasing is in good shape, you can proceed with your transaction, confident that you are making a smart purchase.
When does a home inspection make sense?
In addition to routine maintenance and pre-sale inspections, there are a number of circumstances in which a home inspection could greatly benefit a homeowner. If you are not sure, here are a few simple questions to ask yourself:
- Was your home inspected when you bought it? If not, an inspection would be beneficial even if your home was a new construction at sale.
- Are you an older homeowner who plans to stay in your home? If so, it makes sense to hire a professional who can inspect difficult-to-reach areas and point out maintenance of safety issues.
- Do you have a baby on the way or small children? An inspection can alert you to any potential safety issues that could possibly affect a growing family, such as mold, lead or structural problems. If mold or lead is present, be sure to rely on technicians or labs with specialized training in dealing with these conditions.
- Are you buying a home that’s under construction? You may want to hire an inspector early on and schedule phased inspections to protect your interest and ensure that the quality of construction meets your expectations.
What doesn’t your home inspection cover?
For a variety of reasons, some homes will require specialty inspections that are not covered by a typical home inspection. A specialty inspection might include such items as your home’s sewer scope, septic system, geotechnical conditions (for homes perched on steep sloes or where there are concerns regarding soil stability) or underground oil storage tank. If you have any questions about whether or not your home needs a specialty inspection, talk to your real estate agent.
Hire a professional
If you decide to hire a home inspector, be sure they’re licensed in your state. They should be able to provide you with their license number, which you can use to verify their status with the appropriate government agency. It’s also helpful to ask for recommendations from friends and family members. Even among licensed and qualified home inspectors, there can be a difference in knowledge, performance and communication skills, so learn what you can before your hire a home inspector to ensure that you get the detailed inspection that you want.
What to ask your home inspector
Ask the right questions to make sure you are hiring the right professional for the job.
- What does your inspection cover?
- Insist that you get this information in writing. Then make sure that it’s in compliance with state requirements and includes the items you want inspected.
- How long have you been in the business?
- Ask for referrals, especially with newer inspectors.
- Are you experienced in residential inspections?
- Residential inspection in a unique discipline with specific challenges, so it’s important to make sure the inspector is experienced in this area.
- Do you make repairs or make improvements based on inspection?
- Some states and/or professional associations allow the inspector to perform repair work on problems uncovered in an inspection. If you’re considering engaging your inspector to do repairs, be sure to get referrals.
- How long will the inspection take?
- A typical single-family dwelling takes two to three hours.
- How much will it cost?
- Costs can vary depending upon a variety of things, such as the square footage, age, and foundation of the house.
- What type of report will you provide and when will I get it?
- Ask to see samples to make sure you understand his or her reporting style. Also make sure the timeline works for you.
- Can I be there for the inspection?
- This could be a valuable learning opportunity. If your inspector refuses, this should raise a red flag.
- Are you a member of a professional home inspector association? What other credentials do you hold?
- Ask to see their membership ID; it provides some assurance.
- Do you keep your skills up to date through continuing education?
An inspector’s interest in continuing education shows a genuine commitment to performing at the highest level. It’s especially important with older homes or homes with unique elements.