Seller - Updates
SELLING YOUR HOME
What Should I Do - What to Expect - How Much Fix-Up (Re-Model or Not) To Do
What to do if your home won't sell
Seller financing can be disastrous in down market Selling home to offspring has its benefits In protest of open houses
No permits, no problem: How sellers avoid trouble Sellers, Pay Attention to Low Ball Offers Staging Tips For Quick Sales When Selling Home, Ask Buyer For At Least 5% Depost Sellers, Don't Be Difficult When Showing Home Preparing Home Owners For Showings (Part 1 of 2) Preparing Sellers for Home Showings (Part 2 of 2) 19 Questions You Must Ask A Real Estate Agent Before Listing The Geneational Housing Bubble and You Remodeling...It's What's Outside Remodel Rids Closts of Musty Smell Remodeling - Cost Vs. Recouped 2007 Cost vs. Value Project Descriptions Closing Costs to Expect Selling your home shouldn't be a stressful ordeal As Your Agent, I Will Getting the Highest Price for Your Home Recent Home Values
What to do if your home won't sell
What to do if your home won't sell
Consider lowering price, remodeling or renting it out
By Dian Hymer, Tuesday, May 27, 2008.
Inman News
Homes take longer to sell today than they did in 2005. This is due to a slow home-sale market that has resulted in a build-up of the inventory of unsold listings. Although there are exceptions, this situation is expected to continue until late 2008 or 2009 -- at least. What options do sellers have whose homes aren't selling quickly enough?
Many of the homes that aren't selling are priced too high for the current market. The median sale price of homes sold nationally in February 2008 was down 8.2 percent from a year ago, according to the National Association of Realtors. This percentage was even higher in cities like Miami and Las Vegas that were speculative hotbeds in 2004 and 2005, and now have high foreclosure rates.
Some areas are doing better than others. For example, the median sale price of homes sold in the San Francisco Bay Area in February 2007 dropped only 5 percent compared to a year ago.
There are few areas in the country where prices have actually increased during the past year. Even so, sellers often have a difficult time coming to grips with the fact that the value of their property has declined.
It has often been said that sellers are the last to know when it comes to the value of their homes. Buyers, on the other hand, are often ahead of the game. They know the market better than most sellers. They are aware of the risks involved in today's market, and they gauge the price they'll pay accordingly.
HOUSE HUNTING TIP: Sellers whose homes aren't selling should analyze the price they are asking with the help of their real estate agent.
It's useful to look at similar homes in your area that have sold recently. Why did these homes sell when yours didn't? If price is the key determinant, adjust your price accordingly, if you can.
Sellers who are unable to accept a reasonable price for their home should take it off the market and wait for a better time to sell. Letting your home sit on the market overpriced won't accomplish your goals. And, it could hinder your sales effort at a later date when you get serious about selling. You don't want to be known as an unrealistic seller.
Some listings need more than a price adjustment to sell in this market.
If modifications can be made to the property to make it more salable, consider removing the listing from the market temporarily until changes can be made. Then, adjust the price some to give the listing an entirely new look when it is re-marketed.
Finding a tenant rather than a buyer might seem like a good option for some sellers. Before taking this approach, talk with a tax advisor. The tax laws affecting single-family residences differ from those relating to income-producing properties.
One tax benefit of owning your home is that you are entitled to $250,000 of tax-free gain ($500,000 for a married couple filing jointly) when you sell. But, restrictions apply. For instance, you need to have owned and occupied your home for two of the last five years. If you were to move out of the area, with no plans of returning, this could pose problems when you decide to sell.
It can be difficult to sell a tenant-occupied property, particularly if the tenants are content to stay where they are. Also, your home might not show well with a tenant living in it. Ideally, plan on selling after the tenant has vacated.
THE CLOSING: This way you can have the property repaired, painted, cleaned and staged for sale before it goes on the market.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Seller financing can be disastrous in down market
Seller financing can be disastrous in down market
If property gets foreclosed, all money buyer put into home may be lost
By Ilyce Glink, Friday, May 9, 2008.
Co-written by Samuel J. Tamkin
Q: I am purchasing a home with a seller-financed contract. The seller still has a mortgage through the bank. I received a notice in the mail addressed to the seller that he is behind in payments and to contact them to avoid foreclosure. I left him a phone message regarding this notice, but have not had a response.
It's been two months, and now a notice was left on my door from a field inspector for the mortgage company. It appears the house is in foreclosure. Should I stop making my payments to him, since I am completely current, or should I file some type of lawsuit? Please tell me what to do.
A: Run to an attorney as fast as possible. It appears your seller is taking your money but has stopped paying his lender. If the lender forecloses on the property you may stand to lose everything you put down so far.
When you buy real estate on contract, you need to make sure any lender on the property receives prompt payment of any amounts owed under the mortgage, that the insurance on the home is paid and that the real estate taxes are paid on time. Failure to have any of these taken care of can be a disaster for both the contract seller and the contract buyer.
Your purchase contract may have some language to guide you in what you should do. You may be able to make your payments to the lender instead of making payment to the seller. But if the property is in foreclosure, you first need to find out how many months your seller is behind on the mortgage. It may be worth it to you to pay what is owed to protect your own interests in the property.
You really need a lot more information and will need to do some investigation. If you know what your seller pays on his mortgage is less than your payment to him, you might be able to make those payments. If his payments are way higher than your payments to him, you may be in a difficult spot.
There are different scenarios and you need to sit down with an attorney with as much information as you can get to try to see where you stand. You may come out OK if you caught this early enough. If your seller owes months and months of payments to the lender, you may lose the house and may end up losing what you have paid to date on the home.
Depending on the circumstances, you may be able to negotiate with the lender and if you are prepared to buy the home now, you may be able to exercise your rights under the installment contract and close on the house early.
Because installment contracts can have varying terms and provisions, it is difficult to tell you what path you should take. But an experienced attorney with extensive knowledge of real estate and lender practices is the right start.
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Selling home to offspring has its benefits
Selling home to offspring has its benefits
Upon parent's death, unpaid mortgage debt is cancelled
By Benny Kass, Thursday, May 22, 2008.
Inman News
SCIN. No, it's not the stuff that covers our body. It's a highly complex legal and financial transaction that may be of interest to elderly homeowners.
SCIN stands for "self-cancelling installment note." Let's take this example:
Your parents own their house but their financial situation makes it difficult to maintain the house. You are prepared to buy the house and rent it back to your parents, but because you currently have your own house, you are unable to qualify for another mortgage loan.
Your parents purchased the house back in the 1960s for $30,000, and it is now worth $600,000. Over the years, they have made approximately $100,000 in improvements. They are eligible for the up-to-$500,000 exclusion of gain, because they file a joint tax return and have owned and lived in the house for a very long time. When they sell the house -- to you or anyone -- they will not have to pay any capital gains tax, as $600,000 (sales price) minus $130,000 (cost basis) equals $470,000 (capital gain), which falls within the $500,000 exemption limit.
Since the house is free and clear of any mortgage, your parents are prepared to take back the entire sales price. You sign a promissory note for $600,000, and the note is secured by a deed of trust (the mortgage), which is recorded among the land records in the jurisdiction where the property is located. The note carries an interest rate of 6.25 percent, which is what commercial banks are currently charging for similar mortgage loans.
You go to closing and take title to the property. Your parents sign a lease whereby they agree to pay you a monthly rental. While this is income to you, it will most likely be offset by the various tax deductions you can get -- such as depreciation, mortgage interest, real estate tax, insurance and maintenance of the house.
Although this sounds like a routine real estate transaction, there is one unique feature. The promissory note that you signed in favor of your parents contains the following language:
In the event of the death of both of the lenders (i.e. the parents) prior to the final payment of principal and interest, the unpaid principal and interest shall be deemed cancelled and extinguished as though paid upon the death of the last lender.
This is a SCIN -- a self-cancelling installment note. Why is this such an important tool?
When a person dies, estate tax must be paid on the value of the decedent's adjusted taxable gifts. If your parents made gifts to you that exceeded the yearly gift-tax exclusion (currently $12,000 per parent), you should discuss this with your own accountant to get a clear picture of the estate-tax consequences.
A bona fide SCIN cancels the remaining obligation upon the death of the lender, so there is nothing left to be included in that decedent's gross estate, and thus no tax is owed on that cancelled debt.
Note that I used the word "bona fide." That's Latin legalese, which Black's Law Dictionary defines as "in or with good faith ... without deceit or fraud."
The Internal Revenue Service is constantly challenging the bona fides of these SCIN transactions, claiming that they are not done in good faith but are designed to avoid having the pay the estate tax.
A SCIN signed by family members is presumed to be a gift and not a bona fide transaction. But according to one federal court, "This presumption may be rebutted by an affirmative showing that there existed at the time of the transaction a real expectation of repayment and intent to enforce the collection of the indebtedness." (Costanza v. IRS, Sixth Circuit Court of Appeals, decided Feb. 19, 2003).
Space in this column does not permit me to recite all of the facts upon which the Sixth Circuit overturned the tax court and held that the SCIN was, in fact, legitimate.
Here, however, are some suggestions to assist you in rebutting the presumption:
1. The note must be secured by a valid and enforceable deed of trust, which is recorded in the appropriate land records office. The borrower would want this anyway, because mortgage interest cannot be deducted unless the mortgage (deed of trust) is recorded;
2. Go to the Internet and find out from the mortality tables what the life expectancy is for your parents. The promissory note should come due prior to that expected death. For example, if your mother's life expectancy is 22 years (based on her current age and the mortality tables), the loan should mature no later than 20 years from the date it is entered into.
3. The sales price must be market value or higher. Otherwise, even if the SCIN is held to be valid (i.e. bona fide) the IRS has the right to assess a gift tax on the difference between the sales price and the fair market price at the time the sale took place. In fact, to avoid having the IRS claim that this was really a gift, you should either increase the sales price above the market value or increase the amount of the mortgage interest rate so as to show that there was consideration for the cancellation provision. After all, if this was not a family transaction, the lender would not want the note to be cancelled without getting some premium for that.
4. Treat the entire transaction as if the parties were strangers. Have a lawyer prepare the legal documents, and go to a title attorney's office for the settlement.
5. Finally, have your parents document in writing their need and desire to have the monthly payments for their retirement years.
A SCIN can be a valuable family tool, if done properly. Otherwise, the amount of the cancellation will be considered part of the estate and will have taxable consequences.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.
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In protest of open houses
Realtor Notebook
By Teresa Boardman, Thursday, May 22, 2008.
Inman News
I don't hold open houses; I don't believe in them. There, I said it and my secret is out. What kind of Realtor am I?
When I first became a Realtor, the manager in my office told me that if I did not change my attitude about open houses I would not do well in real estate. New agents were taught to do anything -- and I really mean anything -- to get business. I held a few "opens" every weekend in those early days, and I hated doing them.
Agents in my market complain about hosting open houses. I ask them why they do them. They tell me that their clients demand it. I tell my sellers that I don't do open houses, and I explain why. I let them know that if they expect opens as part of the marketing plan, I am not the best agent for them.
Homes occasionally do sell at open houses, but most serious buyers have an agent and buy a home after a private showing. It is in the consumer's best interest to use the services of their own agent rather than buying from the seller's agent at an open house. The Realtor makes more money by getting both sides of the deal but also increases risk with dual agency, and by working with a buyer that they do not know.
We all know the reason Realtors hold open houses is to meet buyers; only a very small percentage of homes sell at opens. It is so rare that when it happens, people talk about it for years and the sale becomes part of the open house lore. As an industry, we have managed to keep the myth alive that part of selling a home is sitting in it for two hours every Sunday afternoon. Open houses were invented during a time before the Internet, when consumers had to rely on Realtors, yard signs and newspaper ads. Those days are gone, but the opens live on.
If buyers only toured homes that are open they would be greatly limiting their opportunities. There are people who do attend open houses who are not buying. It is a hobby, something to do on a Sunday afternoon.
Some agents see open houses as a customer service item for their sellers. My clients ask me to do all kinds of things to sell their homes. I gently remind them that I sell homes for a living and have a lot of experience. I am open to new ideas and advice, but I have enough experience to know that holding a house open is not going to sell the house. I don't subscribe to the theory that the customer is always right, and I don't think that customer service is about doing whatever a client asks; I think it is about selling their home for top dollar in the shortest amount of time possible.
For some agents open houses are the way to go and I would never discourage anyone from doing them. We all need to spend time prospecting and for some, sitting at an open house is a good way. In some markets, open house attendance is high.
I prospect on the Internet, and I know that not all agents are interested in spending as much time at it as I do. We each need to play to our strengths and make the best use of our time and resources if we want to run a profitable business. I run my business on the Internet and I am the Realtor who does not do open houses.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.
Boardman will speak at Real Estate Connect in San Francisco, July 23-25, 2008. Register today.
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No permits, no problem: How sellers avoid trouble
No permits, no problem: How sellers avoid trouble
When disclosing property upgrades, follow 2 key rules
By Barry Stone, Tuesday, May 20, 2008.
Inman News
Dear Barry,
Now that I'm selling my home, I'm concerned about improvements that were done without building permits. In some of your articles, you stressed the importance of disclosing nonpermitted work to buyers. But will this disclosure really protect me from liability? --JoAnna
Dear JoAnna,
We live in a sue-happy world, with no absolute protection from legal liability. Regardless of what we do, we can be sued for doing something wrong, and we can be sued for doing nothing wrong. Fortunately, we can take steps to reduce our levels of liability, but we can never eliminate that liability completely.
When selling a home, full disclosure of nonpermitted work reduces your liability, but the way that you frame those disclosures can make a critical difference. A common mistake that many sellers make is to state or imply that all work was done correctly or "according to code," even though it was done without permits. Such statements can get sellers into deep trouble.
Unless sellers are professional building inspectors, they have no idea whether improvements were done according to code. Building codes are voluminous and exhaustively complicated, and only the most informed experts are totally familiar with their intricacies. When disclosing that work was done without permits, you should state that "no guaranty is made regarding compliance with building codes." You should also recommend that buyers hire a qualified home inspector to evaluate the condition of the improvements, as well as the rest of the property. With that kind of disclosure, you should be reasonably safe from complaints after the close of escrow.
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Sellers, Pay Attention to Low Ball Offers
Sellers, pay attention to lowball offers
If home's been on market awhile, it's time to rethink strategy
By Dian Hymer, Monday, May 19, 2008.
Selling a home can be an emotional experience because most sellers have a lot more than money invested in their homes. So, it's understandable that sellers might be reluctant to respond to an offer that is for less than the asking price.
Most sellers have a difficult time being objective about their homes. But, detachment is something sellers should strive for, particularly when the market favors buyers. To be a successful seller in a buyer's market, you need to be able to put yourself in the buyer's shoes. Ask yourself if you were a buyer if you would pay the price you would like to ask for your home.
In a soft market, like we are currently experiencing in many parts of the country, buyers are prone to make a low offer on any listing that doesn't receive offers from more than one buyer. The exception is when a listing is priced so competitively that a buyer recognizes a good deal and buys the property before others have a chance.
Some sellers might be inclined to inflate their asking price so that they will have room to bargain with a buyer. This is a risky strategy for serious sellers. In a buyers' market where there are a lot of homes for sale, the best listings at the best prices sell.
The listings that don't sell usually need price reductions to get them to a marketable range. If the market is trending downwards, this could mean selling for a lower price than might have been possible if the listing had been priced competitively to begin with.
HOUSE HUNTING TIP: Sellers whose homes are not competitively priced are prime targets for low offers. Even if your home is not badly priced, you could receive a lower-than-asking-price offer if market conditions are uncertain. Rather than being insulted by a low offer, sellers should view it as the beginning of a dialogue that could result in a sale.
Pay close attention to the buyer's financial capability. Gone are the days where buyers could buy a home with little or no cash down, and without verifiable income. Today's buyers are subjected to far more financial scrutiny by lenders than they were a year ago.
Ideally, buyers should be preapproved for the financing they need before they make an offer. If they are not, make sure there is a clause in the purchase contract that requires the buyers to apply for financing within a several days of acceptance.
Find out what kind of financing the buyers are applying for and which lender they intend to use. Some mortgage lenders recently failed to fund buyers' loans at the last minute. Make sure your buyers receive underwriting approval from a bona fide lender. The number of days for lender approval should also be included in the contract.
Sellers who receive an offer that is unacceptable regarding any of its terms and conditions -- not just the price -- should have their agent draft a counteroffer. Buyers and sellers often don't know in advance what price they'll accept until they're in the midst of a negotiation.
For example, a seller who bought another home before selling might accept a lower price if his house has been on the market awhile and the buyer's offer is not contingent on the sale of another property, and if the transaction will close quickly. Likewise, a buyer could agree to pay more than he thought he would if interest rates were to drop.
THE CLOSING: The counteroffer process can happen quickly or it can be long and tedious. Be prepared to explore all options before letting a negotiation fail.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Staging Tips For Quick Sales
Stimulating buyers' taste buds, noses raises chances of purchase
By Bernice Ross, Friday, May 16, 2008.
Today agents no longer sell just houses -- they sell "lifestyles." In fact, lifestyle marketing is all the rage now. If you want to sell your listings faster, today's column will show you how.
Agents and sellers have always realized the importance of making a property look its best prior to putting it on the market. Properties that are in excellent condition normally sell faster and at a higher price than those that are in poor condition. Today, having your listings "look good" is not enough. When buyers decide to purchase, they are often unaware of the subconscious triggers that motivate them to take action. In fact, the strongest buying triggers are tied to our sense of taste and smell. Thus, when you stage a property, don't settle just for making it visually appealing. Instead, tap into all five senses using multisensory marketing. Here's how to do it.
1. Visual buying
Most real estate professionals do a good job in terms of visual marketing. We post virtual tours on our Web sites, create brochures with multiple pictures, and, in most cases, present the property in the best possible fashion. This is a solid approach, as approximately 40 percent of the population is visual. In most cases, visual buyers prefer houses that are light and bright. Open floor plans with high ceilings are also desirable. To best serve your visual buyers, make sure that the house is as bright and attractive as possible. Also, have the sellers clear out as much clutter as possible. This is one time when "less is more."
2. Auditory buying
Approximately 40 percent of the population is auditory. These people process information most easily when they hear it. Sounds are extremely important to them. When another agent contacts you about showing one of your listings, find out what type of music the buyers enjoy and have it playing when the buyers view the property. If the buyers value peace and quiet, do whatever is necessary to minimize any noise within the property. If there is background noise that you can't eliminate, you may want to consider installing a small fountain. Your goal is to create an auditory background that will be perceived favorably by auditory buyers.
3. Kinesthetic buying
For those who are kinesthetic, touch and other physical sensations are the most important. It's critical that your listings are always at a comfortable temperature, no matter what time of year it is. Kinesthetic individuals love to curl up in front of a warm fireplace. In terms of staging, it's usually great to have a fire going in the fireplace, provided it's not too hot outside. Also, pillows are extremely important in conveying a relaxed atmosphere. Place plenty of extra pillows and throws on the sofas, beds and any other relaxation areas.
4. Taste buying
Frank McKinney, the most luxurious spec builder in the country, defines the "Three C's of luxury marketing as being champagne, caviar and chocolate." McKinney's niche is building houses with price tags of $30 million and up. While most agents are not going to be serving champagne and caviar at their showings, using taste can be a strong motivator in making a favorable impression. For example, on a hot day, have a variety of cold drinks available for your open-house visitors as well as some fun snacks. Hot chocolate is excellent on a cold day. The only caveat is to be sure that your buyers do not walk around the house eating and leaving a trail of crumbs that stain the carpets.
5. Aroma buying
The most often neglected and yet perhaps most powerful motivator for purchasing is scent. Aromas are one of the quickest ways to tap into the brainstem areas (i.e., the reptilian brain) that controls most buying decisions. Use this powerful motivator by baking cinnamon rolls or chocolate chip cookies. (Put the oven on 150 degrees so that you get the aroma, but not a complete baking. One agent started talking to an open-house visitor while she was baking cookies and forgot about the cookies until the oven caught on fire!) Other pleasant aromas include freshly ground coffee, fresh bread and fresh flowers. Vanilla is also a very popular scent. Also, be especially diligent in removing offensive smells. Nothing will kill a sale more quickly than a musty, stale or dirty smell.
What constitutes "home" is more than just the sticks and bricks. It's the emotional appeal that the home has to the buyer. One of the best ways to make sure that your listings are as appealing as possible is to stage your houses using a multisensory approach.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate's Discounters" and "Who's the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.
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When Selling Home, Ask Buyer For At Least 5% Depost
When Selling Home, Ask Buyer For At Least 5% Depost
Couple Faces Financial Ruin When Buyer Cancels Deal
By Benny Kass, Monday, April 28, 2008.
DEAR BENNY: We recently sold our home (in Maryland), and had a ratified contract. The homeowners association (HOA) documents were delivered and received by the buyer, and the inspection was completed. All the "i's" were dotted and "t's" crossed.
One week before closing, the buyer backed out, deciding he simply does not want our home. At this point, we have packed, scheduled movers and purchased a new home. The deposit we received is only $5,000; in a different market we could have probably requested more. The funds lost by the buyer are minimal in the grand scheme.
In our opinion, this is a breach of contract and frankly, it has caused severe financial implications for us. The proceeds from the sale were going to be used towards the down payment of our new home. Without these funds, our new monthly mortgage is quite high and we still have our current mortgage to pay. Do we have any recourse? Can we sue for breach of contract and hold the buyer liable in any fashion? By the way, the buyer's agent has not been helpful and avoids our agent's calls. --Darryl
DEAR DARRYL: It is too late for your situation, but your first mistake was to take such a low earnest money deposit. If I am representing a seller, I want the seller to give my real estate agent (or the settlement agent) a minimum of 5 percent of the purchase price. You want the buyer to put up enough money so that he or she will think twice about walking away.
I will assume from your question that the buyer is in default. In many states, (including Maryland), when a buyer enters into a contract to buy a condominium or a house in a homeowners association, the buyer has a fixed number of days in which to review the association's legal documents and back out of the contract.
Basically, you have three alternatives: (1) You can keep the $5,000 earnest money deposit, although your sales contract may require you to split it with the real estate agents; (2) you can sue your buyer for damages (If the house subsequently sells for $10,000 less than the original contract price, this would be the amount of your damages, plus any costs you incurred to carry the house until it finally sells); or (3) sue the buyer for specific performance. That means that you file a lawsuit against the buyer and ask the judge to force the buyer to go to closing.
You should consult a local attorney who should provide you guidance. Keep in mind that litigation is time-consuming, expensive and uncertain.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.
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Sellers, Don't Be Difficult When Showing Home
Sellers, Don't Be Difficult When Showing Home
Tips on Decluttering, Accommodating Buyers, Staying Sane
By Dian Hymer, Monday, April 28, 2008.
Selling a home while you're living in it can be trying during any market. Today's sellers are generally looking at a longer marketing time than was the case a few years ago. Appropriate pricing for this changing market can shorten the misery. So can taking a few precautions.
The houses that look the best are the ones that get serious attention from buyers. Preparing a house for sale is more important than ever. Keeping it in pristine condition can be a challenge, particularly for sellers with small children and pets.
One benefit of decluttering your home before you try to sell it is that you'll have less to clean up before a showing. Some sellers find it helpful to keep everyday essentials like toothbrushes and children's favorite toys in plastic tubs. These can be hidden in a closet, under a sink or under a bed and brought out when the public is not around. Before showings, the tubs can be quickly filled and stashed away.
Your house should look its best when a prospective buyer comes through, so set up a showing procedure that requires agents to call in advance to let you know when they're coming. This way, you'll have time to straighten up the house before it's shown.
HOUSE HUNTING TIP: Don't be too restrictive with showings. It's difficult to sell a house that can't be shown. You need to strike a balance between accommodating buyers and saving your sanity. If a buyer wants to come on short notice, at a time that's inconvenient, ask if it's possible to reschedule. But keep in mind that some of the best buyers are relocating from elsewhere and may not have much flexibility in their schedule.
Most experienced real estate agents advise sellers to leave their home when it's being shown to prospective buyers. Sellers should also be absent during open houses. The reason for this is that a seller's presence can stifle a showing.
Buyers need to critically examine a property before they can decide to buy it or not. This is an important part of the sale process. It's difficult for most buyers to talk frankly with their agent about a listing if the seller is home.
There will be times when leaving the house is out of the question. In such cases, make yourself scarce. Take a walk in the neighborhood; take the dog with you; or work in your home office. Don't follow the buyers around your house pointing out attractive features. Leave this work to the agents.
Even though you may enjoy entertaining, try to keep home life simple while your house is on the market. Don't plan big events and children's sleepovers at your home. Taking the family out for dinner can provide a nice break, especially if buyers want to see your house after work.
Agents should not show up unannounced if the showing instructions in the Multiple Listing Service (MLS) indicate that agents are to call the sellers before showing the house. However, if this happens more than once or twice, one option is to ask your agent to remove the lock box and leave it with you to put out when an agent makes an appointment. You don't need to let an agent in who hasn't followed the MLS instructions.
THE CLOSING: For some properties, and in some areas, it's appropriate for the listing agent to show the property to buyers and their agents. However, this can restrict showings. The buyers will not only need to coordinate their schedules with their agents' schedules, they also need to find a time that works for the listing agent.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Remodel Rids Closts of Musty Smell
Remodel rids closet of musty smell
Tips on Removing Plaster, Installing Insulation Adding Drywall
By Bill and Kevin Burnett, Wednesday, March 19, 2008.
Q: Our 1920s bungalow has a small front closet that is punched out from the wall of the house so that the box of the closet extends past the exterior walls. This leaves the three walls and floor in direct contact with the outside damp air. We use this as a coat closet, but because of the outside dampness and lack of insulation in the lath-and-plaster walls, clothes get musty.
The closet is very small, so simply adding a layer of insulation on top of the walls would make the closet prohibitively small. I was thinking of removing the lath and plaster, adding insulation between the studs, then putting up drywall with a vapor barrier. If I get particularly inspired, I may add cedar paneling. What would you suggest?
A: Your instincts are right on. Insulating the walls will go a long way toward warming up your closet and eliminating the musty smell. But since you've started, and you're going to make a mess anyway, why not go for the whole enchilada and insulate the floors and the ceilings, too? It's not that much more work and the job will be done right.
The first step is to strip all the lath and plaster off the interior walls and ceiling. A claw hammer and a flat bar are the only tools you'll need for this part of the job.
We suggest you leave the baseboards and door casing in place. Ripping off the case and base adds unnecessary work. Leaving it maintains the original character of this part of the house.
To demo lath-and-plaster walls and ceilings, it's easiest to crack the plaster with the hammer and scrape it off the lath with a flat bar. Wear a mask and go easy when near interior walls. You don't want to put cracks in your entryway, meaning more patching and painting.
Once all of the plaster is off the walls and ceiling, shovel it into a garbage can and send it off to the landfill. Next, use the flat bar to carefully remove the lath, exposing the stud bays. If a piece of lath is buried halfway behind the baseboard, leave it alone. Score the lath that extends behind the door casing with a utility knife and break it off. This is the perfect time to add or update any electrical wiring that may be in the closet.
With the ceiling joists and the stud bays open, install the insulation. Use a paper- or foil-faced insulation and place the vapor barrier toward the inside of the closet. Conventional practice is to apply vapor barriers toward the warmer air of conditioned spaces. We assume the wall studs are about 3 1/2 inches thick, so R-11 batts are what's needed. For the ceiling joists you probably can go a little heavier, depending on the space available. R-19 batt insulation with a thickness of 6 inches should do the job. At any rate, the batts should fill the stud and joist bays and should not be compressed.
We've found that interior plaster is generally 3/8 inch thick and applied over 3/8-inch wooden lath for a total thickness of 3/4 inches. Although using 1/2-inch drywall for the ceiling is perfectly acceptable, it won't work on the walls. To reproduce the 3/4-inch wall thickness, nail pieces of lath vertically to the studs and apply 3/8-inch drywall to finish the walls.
Tape, texture and paint the walls, and you're done, unless you decide to face the closet with cedar. In that case, tape and one coat of mud will do as a base for the cedar paneling.
Because the bottom of the closet is cantilevered out the side of the house, we suggest you also consider insulating between the floor joists.
From underneath the house, install batt insulation with the vapor barrier toward the conditioned air of the closet. Nail or screw a piece of plywood to the floor joists to cover the insulation. Before you install the plywood, drill two 1-inch holes in the plywood at each joist bay to allow for ventilation and cover the holes on the inside of the plywood with screen mesh. That will keep critters from taking up residence in the insulation.
By Bill and Kevin Burnett, Wednesday, March 19, 2008
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Preparing Home Owners For Showings (Part 1 of 2)
Real Estate Sales Strategies.That Work
Preparing For Home Showings (Part 1 of 2)
Be Ready to Show at All Times
Sellers should be aware that same-day and even last-minute requests for showings are common, so a seller with a "24-hour notice to show" stipulation often cuts himself out of a good chunk of today’s buying market. The only standard hefty lag time that should be necessary is when you must give ample notice to a tenant – usually as stipulated in the lease agreement or as included in your state’s laws.
Once a house gets tagged difficult to show by agents, you won't receive as many calls to show it. It’s just basic human nature: we want to do something when we want to do it; showing houses to our buyers in no exception. Even more to the point, buyers want to go looking when they want to, not when the seller is willing to let them.
If sellers choose to make showings difficult, be sure to tell them now that it will cut down on showings -- and fewer showings equal fewer potential buyers. And that means, of course, fewer offers.
Keep it FlexibleExplain to your home sellers that most agents do try to arrive within the scheduled showing time, but sometimes it just isn't possible. They may get stuck in traffic, or the buyer may have been late in arriving at the agent’s office, or the house they saw prior to your showing took longer than expected. It happens, and sometimes it simply happens too late to be fixed by a phone call.
That’s why you should encourage sellers to stay away from home a little longer than they think is necessary, just to make sure they don't interrupt a showing in progress. There are very good reasons why virtually everyone in our business agrees that sellers should not be at home during a showing.
Sellers Who Want to Be Present
This is nearly always a bad idea. Sellers think agents and buyers won't be able to find everything, that they must be there to point out important features. Truthfully, most just want to be present to see the buyers’ reaction firsthand.
Sellers should be aware that, at the very least, buyers feel uncomfortable when the owners are present, and that it can actually kill a sale. Buyers often won't even open closet or cabinet doors when the seller is home, and when they cannot view a house comfortably, they'll hurry up and move on to the next one. That kind of experience is just not conducive to falling in love with the house.
Sellers want to talk, and not just about the house. You never know when a buyer will be turned off by the mood of the seller, or by a statement the seller makes. Buyers are there to look at the house, not chit chat about hobbies or the weather or worse -- politics and other controversial topics. There have even been times when sellers blurt out the features of the home that they’ve always disliked. Obviously, that can’t be good!
If sellers must be home during a showing – and there are some times when that is just necessary -- counsel them to go outside or stay put in one location, not tag along with the agent and buyers as they move from room to room.
By: Janet Wickell, www.realestate.about.com
Preparing Sellers for Home Showings (Part 2 of 2)
Real Estate Sales Strategies.That Work
Preparing Sellers for Home Showings (Part 2 of 2)
Sellers Who Want You To Be Present for All Showings
If you're selling a large estate or a complicated property, it might be the norm to plan on being present for all showings by other agents, but it's not necessary or smart for you to spend your time that way if the listing is your typical house.
Explain that other agents generally feel uncomfortable with the listing agent hanging around, listening to and participating in conversations with potential buyers. If the other agent is representing the buyers as a buyer's agent, he or she won't be free to have open discussions about the house in front of you. The reason? There may be information about the buyers that they won’t want you to know, including the level of their purchasing motivation in general and their attraction to your listing in particular.
There's another negative that may be more important: busy agents don't have time to work around your schedule. Requiring the listing agent to be present for all showings is another way to give the house that “difficult to show†reputation.
Another important issue has to do with the potential for theft. If your sellers are worried about the security of their small but valuable items, they should store them away. Packing up collections and small personal items is part of the process they should have already gone through to prepare the house for showings, anyway.
Pets Must Be Controlled
Pets should really be out of the house during showings, especially large dogs, since many people are understandably afraid of them. A gruff, threatening bark coming from inside the house is enough to make some home buyers turn around at the front door. In fact, hiding or removing all evidence of the animal â€" its feeding bowl, toys, and bed, for example â€" is also a good idea. For some people, just the idea that an animal lives in the home is a problem.
If there are pet odors -- a real turn-off for many potential buyers -- talking with your seller about the subject can be tricky, because most people are not aware of odors in their own home. You may need to conjure up your best tactful mode to deal with that subject, but it must, of course, be dealt with. Your sellers don't want buyers to remember their home as the house that smelled badly.
Gaining Seller Cooperation
Share all this showing information in a Did you know this about buyers? tone, rather than simply telling a seller what he must do. Explaining why these steps are important helps sellers realize that it's in their best interests to comply with your advice.
Consider putting your showing advice on paper in an easy-to-read format that you provide as a standard part of your listing package. Give the seller a day or so to digest the information, then ask if he has any questions about the information.
Show that you respect the seller's opinions by asking what he thinks are the home's best features, then spotlight those features in a flyer or brochure that can be left on a table for prospective buyers.
Sellers usually just want to help. It's up to you to figure out a way to give them a role in the sales process, one that is truly helpful and that won't have a negative impact on showings.
By: Janet Wickell, www.realestate.about.com
19 Questions You Must Ask A Real Estate Agent Before Listing
WARNING: Do not sign a listing with any agent until you know
"19 Questions You Must Ask A Real Estate Agent Before You List Your Home!"
Brad Bramer, Associate Broker RE/MAX Elite
The decision to sell your home is a big one. Once you've decided to sell, you are confronted with a whole list of choices. The first is whether to attempt to sell it on your own or list with a real estate agent.
If you're like most people, you don't have the time or expertise to handle it yourself so you'll want to hire an agent. After all, nearly 90% of all homes are sold by real estate agents!
If you are considering hiring a real estate agent, this report will help you with your next big decision:
Which real estate agent should you hire?
Don't fall into the trap of thinking that all real estate agents are the same. Many sellers have painfully discovered that there is a vast difference among agents. Picking the right agent can mean the difference between a smooth transaction and a nightmare that can foul up all your plans and cost you thousands of dollars.
You may have a couple of agents in mind, possibly ones that work your area, or that were referred to you. If not, ask your friends and neighbors for recommendations, or go to the supermarket and pick up some of the free real estate publications from the racks and look through them for agents that seem to be on the ball.
DO NOT make the mistake of listing with the first agent who comes along without finding out some critical information first!
Here are the questions you should ask each agent:
Question 1
How long have you been selling real estate?
This will give you an idea of how much experience the agent has. You may not want to list your home with an agent who just got their real estate license last month. There is a tremendous amount of turnover in the real estate sales business, especially in the first two years. Some new agents are sharp, but in general, an agent with several years experience under their belt may be best able to serve you.
Question 2
What is your average sales price?
You want an agent that routinely sells homes like yours. Agents usually tend to work in certain price ranges. For example, if your home was worth $110,000, you wouldnt want to list with an agent who primarily sells homes in the $500,000 range (or vice versa). That agents clientele typically would not be interested in your home.
Question 3
"Do you have a list of homes you have sold in the past six months, past year, your career?"
Look for an agent who is active in your area and price range. Also look for an agent that sells at least a few homes each month. An agent that is actively selling will be sharper and more practiced, more familiar with the market, and better prepared to represent and advise you.
Question 4
What is the average time to sell a home in this area?
This is also commonly referred to as days on market. A good agent should know this information without even having to think about it. This information can serve as a guide in setting a rough schedule for your move.
Question 5
"What is the average time for your listings to sell?"
An agent with a solid marketing plan should sell their listings faster than the market average. This will also indicate how knowledgeable the agent is about pricing, because homes that arent priced properly will take much longer to sell (if they sell at all).
Question 6
What percentage of the homes listed for sale actually sell in this area?Again this question is one that a sharp agent will readily know. The answer will also tell you a lot about the market conditions in your area. For example, if only 30% of the homes put on the market successfully sell, youll know that youre in a very competitive market.
Question 7
What percentage of your listings actually sell?A good agent should be considerably better than average on this. While no agent ever sells 100% of the listings that they take, this can be an indication of how knowledgeable they are on pricing, their ability to adapt to changes in the market, and how well they communicate with their clients.
Question 8
What is your list price to sales price ratio?This is expressed as a percentage. For example, if the agents ratio is 94%, this would mean that on average, a home listed by the agent for $100,000 would sell for $94,000. Compare this ratio to the average for your area. You can obtain this and other information by calling your local realty board.
Question 9
"Do you have personal assistants and other support staff working for you?"
Some agents employ an assistant or staff. This often means better service, and it can be an indication that the agent treats selling real estate as a serious business. By employing someone to handle the small details, the agent may be able to devote more time to serving your needs.
However, be sure you know up front how much involvement you can expect directly from your agent, and how much is usually handled by someone else. It may be fine that most of your interaction after the listing is with an assistant or other staff member as long as you are kept apprised of exactly what is being done to get your home sold, and have good lines of communication.
Question 10
Do you have a list of references that I could call?
Many top agents will provide you with this without your even asking. Remember, you are interviewing someone for the job of handling one of your biggest assets. Do not hesitate to check them out thoroughly.
Question 11
What is your marketing plan for my home?
Have the agent explain step-by-step exactly what they plan to do to find qualified buyers for your home. Every agent will put your home in the MLS system and throw a sign in the yard. Look for an agent that utilizes aggressive and innovative marketing techniques to give you an advantage over the competition.
Question 12
How much commission do you charge?As a rule, commissions are not fixed and are negotiable by law. You want to get the best deal you can, but be careful. Most top agents are very reluctant to cut their commission much. Beware of an agent that agrees to a big up front reduction in their commission it probably means that they dont plan on spending much time or effort on selling your home in the first place. A good agent can be worth every penny that you pay them.
Question 13
What asking price do you recommend for my home?The agent should be prepared to suggest a price or price range for your home, and explain to you exactly how they came up with it. They should have a computerized market analysis of homes similar to yours that are available, under contract, and recently closed. Watch the agent carefully here, this is an area where you can really gauge their experience and ability.
Question 14
How long is the listing contract?The listing agreement should specify a beginning and ending date. There is no set rule here, it depends on the average time to sell in your area. Unless the agent has a compelling reason why your sale should take longer, the average time to sell in your area plus a month or two should be adequate. The agent deserves a fair shake, so be sure to give them enough time to get the job done.
Question 15 How much will I net at closing?
A competent agent should be able to quickly complete a net sheet to determine what your net proceeds will be at closing after all of the costs of selling and your mortgage (if any) have been deducted. This is another area where youll want to watch the agent closely. An experienced agent should be able to do this in minutes and confidently explain what all of the costs associated with selling are.
Question 16
How will you keep me informed?Clear communication between yourself and the agent is critical for a smooth transaction. The agent should have a system for keeping you abreast of the progress of your sale, be it by phone call, letter, fax, etc. The agent or a competent assistant should be available to you at all reasonable hours and should have a pager or cellular telephone.
Question 17
Will you advise me on preparing and staging the home?A home that is properly prepared and staged will always sell faster and at a higher price. The agent should provide you with tips and suggestions on how to accomplish this. A good agent will give you honest recommendations, even at the risk of offending you.
Question 18
What if I am not satisfied?
Even though you do your homework, it is possible that you will list with an agent that drops the ball on handling your home. The top agents, the ones who provide quality service and are confident about it, will usually offer you a guarantee. Many will agree to cancel the listing contract if a problem arises and you are not happy. Just make sure to be fair with the agent and give them the benefit of the doubt.
Question 19
Do you have any questions for me?
Beware of an agent that doesn't have some questions for you as well. A sharp agent will begin by asking you a series of questions in order to fully understand your situation. Only then can they advise you on the best course of action to take.
Taking the time to do a little research before you sign a listing agreement can save you many hours of frustration and many thousands of dollars. Take your time, and make an informed decision!
Remodeling - Cost Vs. Recouped
When It Comes time to Remodeling - Cost vs. Recouped
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The Geneational Housing Bubble and You
The Generational Housing Bubble and You
By: www.rismedia.com
The Recent Housing Price Bubble Has Caused Concern
The recent housing price bubble has caused concern, with the post-2000 increase in house prices keeping the younger generation out of the housing market, particularly in California and Hawaii, Nevada, Florida and the east coast states from Maryland north. Yet in context, these increases are merely one facet of a larger transition on the horizon.
What is the generational housing bubble?
The massive Baby Boomer population (78 million) is poised to enter elderly years after four decades of surging through the housing market. The elderly sell many more homes than they buy, and in the next decade the relatively smaller younger generation may not absorb all the homes released by the Baby Boomers sell-off.
The younger generation is not only smaller but its purchasing power has been eroded by the rapid increase in house prices in the recent boom. This surplus of potential home sellers is expected to create a prolonged buyers market, a sharp reversal from recent decades-and will likely cause prices to soften and decline.
Newly estimated data reported in this article show that roughly 2% of people of all ages younger than 70 sell homes each year, but the selling rate climbs far higher after age 75. Meanwhile, the percent buying homes peaks at a much younger age -- 30 to 34 (3.6%) -- before declining steadily into older ages.
After three decades of relative stability, the ratio of seniors to working age adults nationwide will increase by a total of 67% in the next two decades (2010 to 2030). After 2010 the leading edge of the 78M strong boomer population will pass age 65 and growth among the elderly population will substantially exceed that of younger adults, an unprecedented social and economic development that is expected to impact every state in the U.S.
How will it affect the states?
There are important differences between the states in the ages at which residents become net home sellers rather than buyers. The six earliest (where sellers dominate before age 60) are New York; Connecticut; New Jersey; Massachusetts; Illinois; Alaska. The latest (who sell on average after the age of 74) are Florida; Arizona; Nevada.
The study forecasts the time when the total number of annual sellers of all ages begins to outnumber the buyers, based on the growing number of seniors relative to younger adults, and applying typical per capita home buying rates at each age in each state.
States where sellers will dominate before 2015: New York; Connecticut; Massachusetts; Pennsylvania; West Virginia; North Dakota; Hawaii.
States where sellers become surplus between 2016 -- 2020: New Jersey; Rhode Island; Ohio; Iowa; Nebraska; Louisiana
A further 16 states, led by California and Illinois, develop a surplus of sellers in the 2020s.
Finally, another 21 states reach a position of surplus sellers after 2030 -- including most of the Southern and Western states.
Consequences for the housing market
Experts believe that the market shift could begin as early as 2010, as the leading edge of the baby boom generation moves past the age of 65. As the number of sellers in the market begins to outnumber the buyers, it's likely to lead to a drop in the housing market. It could mean:
- A collapse in home equity -- for half the families in America, home equity amounts to more than half their net worth (this is especially important for the working class and most of the middle class).
- Young adults could get a bargain if they can wait long enough for prices to bottom out; but by waiting for the best price they could exacerbate the problem.
- Many communities could acquire an excess of vacant and unsold properties, or they could be converted to rental units pending sale.
- Property values will be assessed downward and this will diminish tax revenues available for municipal services.
Planning for change
The coming generational transition in the housing market will upset the historic balance of buyers and sellers and demands action from state and local governments to reduce the impacts. They can:
- Monitor new construction and unsold inventory to prevent overbuilding
- Plan services and community designs to retain aging residents as long as possible, slowing their departure from the broader community
- Plan services to attract young households, such as better day care and schools, and more appealing amenities
- Attract new immigrants, who already account for 40% of US growth in homeownership this decade
- Invest in the economic capacity of youth through higher education and job training -- young adults with college degrees are more likely than those with high school degrees to become home owners, and they pay an average 64% higher price when better educated.
The impact of the aging boomer population will affect not only housing prices but transportation, land use and community development. It demands a response from urban planners and local officials that acknowledges the need to transform urban environments, and soon. Because this is a nationwide problem affecting a broad swath of the citizenry and poses potential negative effects on the U.S. economy, the federal government should also assist in these solutions.
Aging and home ownership trends
A widely reported study by Mankiw and Weil (1989) predicted a 47% decline in house prices during the 1990s, based largely on their modeling of declining demand as baby boomers aged -- an expectation that home investments would peak and decline after age 45. However, baby boomer demand for housing has instead grown into their 50s and house prices have doubled.
It has since been proven that home ownership rates rise with age and do not generally peak until after age 65. John Pitkin’s (1990) study of elderly homeownership was especially notable for showing how most variation in homeownership among older age cohorts over time is explained by demographic factors and inertia from prior decades, while current economic factors add small but significant effects at the margin.
Housing price changes and home ownership
In recent years, abnormally low mortgage rates have helped to inflate housing prices. This has encouraged even more home buying. In what might seem a paradox, when market fundamentals drive housing prices up, word of mouth and the fear that rising prices will make future purchases unaffordable amplify the trend. As a result, the number of buyers in the market increases to include both speculators and young adults accelerating their entry into homeownership.
This short-term housing bubble is now bursting in most of the U.S. Many analysts expect prices to decline through 2009 before beginning recovery. However, the eventual recovery in some states will be prevented by the downturn of the generational bubble that has been newly identified in this study.
By: www.rismedia.com
Remodeling...It's What's Outside
Remodeling...It's What's Outside
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Stephanie Singer, 202/383-1050, ssinger@realtors.org |
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When It Comes to Remodeling, It’s What’s Outside That Counts, Realtors® Report |
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WASHINGTON, December 03, 2007 - Many buyers judge a house by its exterior, or so it seems from the results of the 2007 Remodeling Cost vs. Value Report. Three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades. The most profitable project on the national level was upscale siding replacement, recouping 88 percent of costs upon resale. Wood deck additions and wood window replacements also returned more than 80 percent of costs, at 85 percent and 81 percent, respectively. On a national average, the only interior project to return more than 80 percent of remodeling costs this year was a minor kitchen remodel, returning 83 percent of project costs at resale. “The results of this year’s Cost vs. Value report underscore the importance of curb appeal in the buyer’s eye,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “Realtors® know what attracts buyers in their local markets and can help your house put its best façade forward, so to speak – it’s another way Realtors® add value to the real estate transaction.” The 2007 Remodeling Cost vs. Value Report compares construction costs with resale values for 29 midrange and upscale remodeling projects comprising additions, remodels and replacements in 60 markets across the country. Data are provided for nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 10th consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine, as Realtors® provided their insight into local markets and buyer home preferences within those markets. Four new projects were added this year: the aforementioned wood deck addition, a back-up power generator, and both a midrange and upscale garage addition. Nationally, the back-up power generator only returned 58 percent of the investment on resale, although the return was highest in the West South Central region, which comprises Arkansas, Louisiana, Oklahoma, and Texas, at 68 percent. Buyers in the Pacific region of Alaska, California, Hawaii, Oregon and Washington value their garages: The midrange garage addition returned nearly 70 percent nationally but 88 percent in this region, while the upscale garage addition returned approximately 65 percent nationally but 78 percent in this area.
Homeowners in the Pacific region could also expect to see some of the highest percentages of remodeling expenses returned at resale, with 13 of the 29 projects returning 90 percent or higher of project costs. Homeowners in the East North Central region of Illinois, Indiana, Michigan, Ohio and Wisconsin might expect some of the lowest returns; only one project – upscale fiber cement siding – returned more than 80 percent upon resale (82 percent of costs recouped), while nine projects returned less than 60 percent of project costs. The least profitable projects were a back-up power generator, sunroom addition, and home office remodel. The back-up power generator returned the lowest percentage of initial cost in the East North Central, New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont), Pacific, and West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) regions. Sunrooms are least popular in the East South Central (Alabama, Kentucky, Mississippi and Tennessee), Mountain (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico and Wyoming), and West South Central regions. Home office remodels return the lowest percentage of project costs in the Middle Atlantic (New Jersey, New York and Pennsylvania) and South Atlantic (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia) regions. Gaylord explained that the resale value of any given remodeling project depends on a variety of factors. “When considering a remodeling project, particularly with an eye toward resale, it’s important to evaluate your home’s current condition, how the project will change the existing space in your home, as well as how your remodeled home will compare to other homes in your community,” said Gaylord. “For example, using a breakfast nook to expand the kitchen seems like a good use of space, but using the same space to add a first-floor bathroom in an older home that doesn’t have one will draw more buyers,” Gaylord said. “Realtors® see hundreds, if not thousands, of homes every year with their buyer clients and can provide valuable insight into what projects and improvements will make a difference with buyers in your area.”
Results of the report are summarized in the December 2007 issue of REALTOR® Magazine. To read the full project descriptions, access national and regional project data, and download a free PDF containing data for any of the 60 cities covered by the report, visit www.costvsvalue.com. “Cost vs. Value” is a registered trademark of Hanley Wood, LLC. Hanley Wood, LLC, is the premier media company serving housing and construction. Through four operating divisions, the company produces award-winning magazines and Web sites, marquee trade shows and events, rich data, and custom marketing solutions. The company also is North America’s leading provider of home plans. Founded in 1976, Hanley Wood is a $240 million company owned by JPMorgan Partners, LLC, a private equity affiliate of JPMorgan Chase & Co. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. ### |
2007 Cost vs. Value Project Descriptions
2007 Cost vs. Value Project Descriptions
Attic Bedroom Remodel Back-Up Power Generator Basement Remodel Bathroom Addition Bathroom Addition - Upscale Bathroom Remodel Bathroom Remodel - Upscale Deck Addition -Wood Deck Addition -Composite Family Room Addition Garage Addition Garage Addition -- Upscale Home Office Remodel Minor Kitchen Remodel Major Kitchen Remodel
Convert unfinished attic space to a 15-by-15-foot bedroom and a 5-by-7-foot bath with shower. Include a 15-foot shed dormer, four new windows, and closet space under the eaves. Insulate and finish ceiling and walls. Carpet floor. Extend existing HVAC to new space; provide electrical wiring and lighting to code. Retain existing stairs, but add rail and baluster around stairwell.
Install Guardian or similar electrical back-up system with capacity for providing 70 amps of emergency power in two 240-volt circuits and six 120-volt circuits. Assume existing LP gas supply. Include generator mounted on 2x4 concrete or composite pad; automatic transfer switch, load center; exterior disconnect, and grounding rod. Include 30 feet of conduit and electrical cable for generator connections; grounded cable for circuits; 5 feet of flexible fuel line for connection to existing rigid gas supply line; and automotive-type storage battery.
Finish the lower level of a house to create a 20-by-30-foot entertaining area with wet bar and a 5-by-8-foot full bath; construct 24 LF of finished partition to enclose mechanical area. Walls and ceilings are painted drywall throughout; exterior walls are insulated; painted trim throughout. Include five six-panel factory-painted hardboard doors with passage locksets. Electrical wiring to code. Main room: Include 15 recessed ceiling light fixtures and 3 surface-mounted light fixtures, and a snap-together laminate flooring system.
Bathroom: Include standard white toilet, vanity with cultured marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, vanity light fixture, recessed medicine cabinet, towel and paper-holder hardware.
Bar area: Include 10 LF of raised-panel oak cabinets with laminate countertops, stainless steel bar sink, single-lever bar faucet, under-counter refrigerator, and vinyl floor tile.
Add a full 6-by-8-foot bath over a crawl space with poured concrete walls. Include cultured-marble vanity top with molded sink; standard chrome faucets; 30-by-60-inch white fiberglass tub/shower with ceramic tile surround; single-lever temperature and pressure-balanced faucet; white low-profile toilet; general and spot lighting; electrical wiring to code; mirrored medicine cabinet; linen storage closet or cabinet; vinyl wallpaper; painted trim; and ceramic tile floor.
Add a new 100 SF master bath to existing master bedroom over a crawl space. Include 42-by-42-inch neo-angle shower with ceramic tile walls with accent strip, recessed shower caddy, body spray fixtures, and frameless glass enclosure. Include a customized whirlpool tub; stone countertop with two sinks; two mirrored medicine cabinets with lighting; a compartmentalized commode area with one-piece toilet; and a humidistat-controlled exhaust fan. Use all color fixtures. Use larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding. Add general and spot lighting including waterproof shower fixture. Cabinetry shall include a custom drawer base and wall cabinets for a built-in look. Extend HVAC system, and include electric in-floor heating and heated towel bars.
Update an existing 5-by-7-foot bathroom. Replace all fixtures to include 30-by-60-inch porcelain-on-steel tub with 4x4-inch ceramic tile surround; new single-lever temperature and pressure-balanced shower control; standard white toilet; solid-surface vanity counter with integral sink; recessed medicine cabinet with light; ceramic tile floor; vinyl wallpaper.
Expand an existing 35-square-foot bathroom to 100 square feet within existing house footprint. Relocate all fixtures. Include 42-by-42-inch neo-angle shower with ceramic tile walls with accent strip, recessed shower caddy, body spray fixtures, and frameless glass enclosure. Include a customized whirlpool tub; stone countertop with two sinks; two mirrored medicine cabinets with lighting; a compartmentalized commode area with one-piece toilet; and a humidistat-controlled exhaust fan. Use all color fixtures. Use larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding. Add general and spot lighting including waterproof shower fixture. Cabinetry shall include a custom drawer base and wall cabinets for a built-in look. Extend HVAC system, and include electric in-floor heating and heated towel bars.
Add a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers. Install pressure-treated deck boards in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing system using pressure-treated wood posts, railings, and balusters.
Add a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers. Install composite deck material in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing using a matching system made of the same composite as the decking material.
In a style appropriate to the existing house, add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with fiberglass insulation, pre-finished hardwood floor, and 180 square feet of glazing including windows, atrium-style exterior doors, and two operable skylights. Tie into existing HVAC. Add electrical system to code, including 12 recessed ceiling lights.
Construct a 26x26-foot free-standing two-car garage, including footings and slab-on-grade foundation, 2x4 wood frame with OSB structural sheathing, and gable truss roof at 6/12 pitch. Install 25-year asphalt shingle roofing with galvanized metal flashing; vinyl siding and trim. Install 5 double-hung 30x48-inch vinyl windows; one 30/68exterior door with half-glass and lockset; and two composite 9x8 overhead doors with motorized openers. Include 100-amp breaker at main house panel and 50 Lf of trench buried conduit to feed new electrical sub-panel. Provide electrical wiring for openers; 3-way switching for fluorescent ceiling fixtures over each bay; 3-way switching for 2 exterior spotlights; outlets to code. Interior wall, floors, and ceilings remain unfinished.
For the same mid-range two-car garage, add interior wall finish using moisture resistant drywall on ceiling and three walls. At rear wall install modular storage systems, including wall panels, upper and lower storage cabinets with work surfaces, and required task lighting. Trim all window and doors and provide base molding at perimeter; paint all trim, ceiling, and walls. Finish cement floor with color, slip-resistant epoxy sealer.
Convert an existing 12-by-12-foot room to a home office. Install custom cabinets to include 20 linear feet of laminate desktop, computer workstation, and wall cabinet storage. Rewire room for computer, fax machine, and other electronic equipment, as well as cable and telephone lines. Include drywall interior, painted trim, and commercial-grade carpeting.
In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new raised-panel wood doors and drawers, including new hardware. Replace wall oven and cooktop with new energy-efficient models. Replace laminate countertops; install mid-priced sink and faucet. Repaint trim, add wall covering, and remove and replace resilient flooring.
Update an outmoded 200-square-foot kitchen with a functional layout of 30 linear feet of semi-custom wood cabinets, including a 3-by-5-foot island; laminate countertops; and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal, and custom lighting. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
Selling your home shouldn't be a stressful ordeal
Selling Your Home Shouldn't Be A Stressful Ordeal
Making The Smart Move
Making the smart move of choosing a REALTOR® is your first step to ensuring that your investment in your home pays off. My services and experience allow you to focus on your move while I manage your home sale from our initial consultation to the closing deal, and beyond. I pride myself on repeat business and hope you'll come to understand why.
What I will do for you
Recent Home Sales
Getting the highest price
Closing Costs
As Your Agent, I Will:
- Complete a comparative market analysis that will compare your home's value to that of your neighbors.
- Compile a comprehensive plan detailing all the efforts I will employ to sell your home, including Internet and local media.
- Present your home to as many qualified buyers as possible getting your home maximum exposure.
- Help you stage your home and generate curb appeal to ensure you get the highest price.
- Assist with obtaining offers and help you in negotiating the best deal as smoothly as possible.
- Help you find your next home and answer all of your questions about the local market area, including schools, neighborhoods, the local economy, and more.
Recent Home Sales
What Are Homes Selling For On Your Street?
What are homes selling for on your street? Feel free to contact me to find out what neighborhood homes are selling for, free of charge, or to receive a more detailed analysis of the value of your home.
Getting the Highest Price for Your Home
Getting The Highest Price For Your Home
Curb Appeal is Key
Curb appeal is key and could make a difference whether people stop and take a flyer, or drive right by. Here are a few tips to increase the curb appeal of your home. Staging your home is important. Many buyers will stay in your home longer if it's staged appropriately. I have compiled some ideas to present your home in the most effective manner.
Closing Costs to Expect
- Title insurance fees depend on the sales price of the home.
- Broker's commission is a full-service fee and will cost anywhere between 5% to 7%.
- Local property transfer tax, county transfer tax, state transfer tax, and state capital gains tax are the charges that you'll pay for the privilege of selling your home. Credit to the buyer of unpaid real estate taxes for the prior or current year are variable and depend on when you close and when your taxes are due.
- FHA fees and costs are all fees are now negotiable between an FHA buyer and seller.
- Home inspections fees are in some circumstances paid for by the seller and include pest, radon and other inspections.
- Miscellaneous fees can accrue from correcting problems noticed during the home inspection.
