How to Amp Up The Resale Value of Your Home

Whether you’re putting your home on the market this year or in the next five years, it is a smart decision to start building your home’s resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.

Small Maintenance and Repairs

If you think that home maintenance on the weekends waste your time and energy, think again. The small chores you do around your home prevents it from losing value. Neglecting small maintenance and repairs causes 10% of your home’s value to walk out your door and slip through your windows. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000.

A study conducted by researchers at the University of Connecticut and Syracuse University shows that regular maintenance boosts your home value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance actually slows down your rate of depreciation. Furthermore, because homebuyers generally notice any repairs needed upon buying a new home, proactive maintenance lets the homebuyer know that he or she will not have to spend extra money to maintain the basics. This makes your home more attractive, and thus more likely to get higher priced offers.

Maintaining the basics can cost you little money and certainly some effort, but there’s a way to accomplish this very important activity smartly. This article by HouseLogic, for example, shows you how to keep home maintenance below $300 a year. Planning ahead will also help make maintaining your home easier. Most professional appraisers and real estate agents recommend a proactive maintenance schedule that includes:

Keeping enough cash on hand to replace systems and materials
Creating and following a maintenance schedule
Planning a room redo every year
Keeping a notebook of all your maintenance and repairs

Landscaping

The Virginia Cooperative Extension at Virginia Tech published a study that shows landscaping can increase a home’s value by 15%. The study claims that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. Particular landscape elements add different value. For instance, landscape design can increase your home’s value by 42%, plant size can increase your home’s value by 32%, and diversity in plants can increase your home’s value by 22%.

Replace Entrance Doors

If your entry doors are wood, consider switching them out for either fiberglass or steel doors. Steel doors add style and architectural interest to your home while improving security; you can add a deadbolt and electronic keypads to keep out intruders. Unlike wood doors, steel doors do not rot or splinter.

Alternatively, fiberglass doors can be designed to look like wood doors and give your home a modern look. Fiberglass doors conserve more energy than steel doors.

Pricewise, a steel door will cost you $1,335 with a 91% return on investment whereas a fiberglass door will cost you $3,126 with an 82.3% return on investment.

Garage Door Replacement

At first, you might not think that your garage door increases the value of your home. However, your garage door distinguishes your home from the other homes on your block. As the largest entryway of a house, garage doors get noticed first because they’re the focal point of your home. If you want to quickly increase the resale value of your home, you need to make the most of this space.

Some interesting things being done with garage doors include:

Increased Size: Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
Bold Colors: Bright and bold colors now can complement the color of your home, or you can build a concept around the color of your home.
Faux Wood: You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
Windows: Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it’s no longer a dark space.

More importantly, a garage door replacement will cost you $1,652 and add $1,512 to the value of your home; that’s a return on your investment of 91.5%.

Fiberglass Attic Insulation

While energy efficiency is still not the sexiest selling point of your home, installing fiberglass attic insulation saves energy and garners a big payback on your investment. According to Remodeling Magazine’s 2016 Cost vs. Value top trends report, fiberglass attic insulation gained the top return on investment among the 30 projects in this year’s report. Using Remodel/Max as the cost source, a fiberglass attic insulation project cost $1,268 nationwide. Real estate professionals surveyed estimated that the work would boost the price of a home at resale, within a year of its completion, by $1,482. That’s a 116.9% return on investment.

Replacing Windows

Replacing your windows is another way to save energy and increase your home’s resale value. Replacing your old windows with energy saving models will beautify your home, keep it comfortable, and ease the workload of your HVAC system. According to HGTV, you’ll see a reduction in your utility bill by 7% to 15%. However, if you’re selling your home, you could expect a 60% to 70% recoupment of your investment. The two types of replacement windows that fetch the best return are vinyl and wood.

Remodeling Your Kitchen

Kitchen remodeling can get expensive, but small renovations can make your home more buyer friendly. Changing your kitchen’s texture and color using a matte finish and neutral colors such as putty or grey enhances your home’s resale value. Because matte finishes have transitional qualities, your potential homebuyer can easily match his or her stainless steel or black and white appliances. Also, refinishing cabinetry, or switching to Energy Star™ appliances provide comfort you like and pizazz buyers adore.

Flow is important to any interior design of a home. If you feel that your kitchen hinders a good flow, change it. A small investment to knock out a non-structural wall or remove a kitchen island creates space and provides flow that buyers love.

A minor kitchen remodel can cost you $20,122 while putting $16,716 of resale value into your home; that’s an 83% payback on the project. If you want to do a major kitchen model, this can cost you about $60,000 and put about $39,000 of resale value into your home, which is only about a 65% payback on the project. Therefore, consider a minor kitchen remodel first.

Bathroom Addition or Remodel

Likewise, carefully consider adding a bathroom or remodeling your bathroom. Switching out your frosted glass shower doors for glass doors, cleaning the grout, replacing the shower and floor tiles, switching out your sink or toilet, or replacing your sink and shower fixtures can cost you little money.

Adding a bathroom can get expensive, but it can reduce congestion during hectic times and provide your guests with a bathroom. Consult with your real estate agent or a local appraiser before deciding whether a full remodel or addition is right for your situation. While a bathroom remodel will cost you about $18,000 with a return on investment of about 66%, a bathroom addition will cost you about $42,000 with a return on investment of about 56%. Therefore, it’s best do your due diligence before working on your bathroom.

Your Needs and Buyers’ Wants

On that note, if you need to renovate your home, be sure to consider how those changes will affect its appeal to future buyers. Knowing design trends will give you the opportunity to make changes to your home based on where your needs and your potential buyer’s desires intersect, thus increasing your property’s resale value drastically.

Designers and design websites provide great ideas when you’re brainstorming home renovations. Keep in mind as you research, however, that you don’t want to sacrifice your needs for a comfortable home just for the sake of what you think a future buyer will want!

Therefore, before you begin making any changes to your home, consult your real estate agent. Real estate agents, because we are constantly working with new buyer clients, have insider insight into what home buyers are looking for now and in the future. We’ll be able to help you make smart choices when remodeling or renovating your home.

If you think you might want to remodel or renovate your home in the near future, or if you are just curious about other ways you can increase its resale value, please reach out to me!

Top Ten Team!

The results are in – Karen Cannon, Realtors is an Atlanta Board of Realtors Top Ten Team for 2015. We want to thank all of our friends and clients for helping us achieve such great success! The Northside Neighbor has a featured article announcing the achievement. Keep an eye out for more announcements and news.

Home Buying Strategies Used By the Pros

Thinking about buying a home? Since it’s likely the single biggest investment you will ever make, being prepared will help you make a smarter purchase decision. Don’t make an offer until you read and understand these real estate insider tips.

Know your buying power

What is buying power? It is the combination of how much you can realistically pay for a home and your credit-worthiness. You’ll need money saved for the down payment — which is typically between 10% – 20% of the price — as well as cash for closing costs, such as transfer tax, PMI, title insurance, and legal fees. For ongoing mortgage and maintenance, your monthly obligation shouldn’t be more than 36% of your monthly gross income.

A good credit score is usually 720 or above. A loan professional can help you figure out your buying power and give you a clearer idea of if your score is in the ‘good’ range. Have them check your score for you so that you don’t inadvertently lower your score by checking it yourself. You want to clean up your credit as soon as you can, and definitely before you get a mortgage pre-approval.

Don’t try to time the market

Even within a city’s limits, there can be micro markets that are increasing or decreasing in value. A knowledgeable buyer’s agent can provide you with a buyer’s market analysis report, outlining which neighborhoods are still up and coming — with potential for increased property value — versus those that have peaked with inflated home prices.

There’s never a perfect time to buy a home, even if you’re in a hot market. It can take a while to know what you like, and you may need to see 10 or more houses before you decide. Another good reason to be patient: you might find a better deal. Look for expired listings, which may offer more price flexibility and accept a lower-than-list offer. Don’t bother with FSBO (for sale by owner) listings though — since they’re not represented by a professional, they are often overpriced.

Be ready to make a stand-out offer

If you love it, make the offer. Otherwise, that dream home may disappear faster than you think, and especially if you’re buying in a hot market. Have your buying agent contact the listing agent before you submit an offer so that they can decide what’s important to include in the offer. If you’re serious about putting in an offer, you want to increase the chances that it’s accepted.

Show that you’re serious about the purchase by creating a buyer’s offer packet. It should include your lender’s preapproval letter, a screenshot of your down payment money in your bank account, and comps that support the rationalization of the offer you are presenting.

Once you’re in the negotiation process, have the inspection conducted before it’s too late to back out of a deal. If there are any major structural issues, you may be able to make the seller repair them as a contingency to your offer. Minor issues that you can repair on your own may be points for negotiating a lower offer.

Work with a professional for insider exclusives

If you’re thinking about buying a home soon, or even in the near future, let me know the details. I may have just what you’re looking for in an exclusive listing not available to the general public – so get in touch today!

Mortgage Rates Drop Again

Existing-Home Sales and Prices Climb

As we head into the busy spring home-selling season, home buyers will be happy to know that mortgage rates are back on the decline. The same can’t be said of home prices, though, which continue to rise.

Freddie Mac’s just-released weekly survey of lenders shows little change in the following average rates for the most popular home loan terms:

30-year fixed-rate mortgages averaged 3.62% with an average 0.6 point for the week ending Feb. 18, 2016. A year ago, the rate averaged 3.80%.
15-year fixed rates averaged 2.93% with an average 0.5 point. The same term priced at 3.07% a year ago.
5-year adjustable-rate mortgages priced at 2.79% with an average 0.5 point. Last year at this time, the same ARM averaged 2.99%.

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“Since the beginning of 2016, 30-year rates have fallen almost 40 basis points, helping housing markets sustain their momentum into this year. ” Sean Becketti, chief economist for Freddie Mac, said in a release.

In the meantime, rising home prices put a damper on home loan activity, according to the Mortgage Bankers Association weekly report. Overall, mortgage loan applications dropped 4.3% from one week earlier, with an 8% slip in refis in contrast to previous weeks of gains.

Purchase applications were down 4%, but are still 27% higher than the same week one year ago.

Existing-home sales, home prices climb

A shortage of housing inventory is pushing home prices and sales to new heights, but the upward climb isn’t necessarily a good thing for homebuyers.

According to the National Association of Realtors, existing-home sales in January climbed slightly — 0.4% — to a seasonally adjusted annual rate of 5.47 million. That’s the highest annual rate since July 2015. While that’s good news for the market, homebuyers are feeling the pressure of inventory shortages, which helped push the median existing-home price up to $213,800, an 8.2% increase over January 2015.

Lawrence Yun, NAR chief economist, says that the housing market is off to a strong start this year, but a slowdown in new-home construction, as well as a lack of existing homes for sale in many markets, has the potential to keep pushing prices higher.

“The spring buying season is right around the corner, and current supply levels aren’t even close to what’s needed to accommodate the subsequent growth in housing demand,” Yun said in a release. “Home prices ascending near or above double-digit appreciation aren’t healthy — especially considering the fact that household income and wages are barely rising.”

To complicate things a bit more, new-home sales fell 9.2% in January to a seasonally adjusted annual rate of 494,000, according to the U.S. Commerce Department. A 32.1% drop in new sales in the West (where homes are typically more expensive) was the driving force behind the plunge, followed closely by losses in the Midwest.

With a stall in new housing starts during these cold winter months, homebuyers might find it difficult to get into a newly built home or resale without some fierce competition. And despite mortgage rates staying below 4%, more homebuyers might be priced out of the market as housing prices continue to rise.

This article originally appeared on NerdWallet.

Seasonality in Real Estate

How Weather and the Time of Year Affect Housing!

Weather and the time of year have a big impact housing activity, and in every housing market there are times of the year when fewer homes sell. For most, that time of year coincides with the winter months, and in much of the U.S., that’s the case right now.

But no matter where you live, it’s important to know how seasonality affects the housing market. So let’s look at the current housing numbers, how seasonality affects them, and what it means for you if you’re looking to buy or sell.

With few homes available, sellers are in pole position

Last year, limited inventory dominated the headlines for the real estate industry, and that trend looks to continue this year. According to the National Association of Realtors (NAR), inventory dropped 12.3 percent from November to December, falling to 3.8 percent lower than December 2014. That equated to just a 3.9-month supply of homes.

Generally speaking, a 6-month supply of homes (meaning it would take six months at the current sales pace to sell all the homes on the market) represents a balanced market, one in which there are enough homes to meet demand. For much of 2015, inventory remained well below a 6-month supply, and will likely remain so for 2016.

Why is inventory so constrained? Part of the sharp drop in December is due to the seasonal slow down in many states. Cold weather and holidays keep many buyers out of the market and many sellers waiting for demand to pick back up. Additionally, new home construction came to a standstill when the housing market crashed, so there are fewer new homes available. Existing home inventory is low as well. A combination of factors, such as locked-in low interest rates and a sense that home prices will continue to increase, are keeping current homeowners from listing their homes.

If you’re thinking of selling, this market is very much a seller’s market. When inventory is scarce, buyers are forced to compete over the few homes for sale. Homes are selling faster, and in many markets bidding wars drive home prices up well above asking. At the very least, you’ll be in a strong negotiating position.

Economic Conditions and Home Affordability Continue to Sideline Buyers

For buyers, the market is tough, and the low number of first-time buyers illustrates just how tough it is. In a separate study conducted by NAR, first-time homebuyers in 2015 made up the lowest share of the market in nearly three decades.

Many factors are keeping first-time home buyers sidelined. Despite a strengthening economy and job growth, wages have remained relatively stagnant. At the same time, rent prices have skyrocketed and continue to rise. Combined, these factors are preventing millennials from saving enough for a significant down payment.

At the same time, home affordability continues to suffer. Home prices have risen quickly over the last three and half years, again outpacing wage and job growth. Prices are expected to rise more modestly this year, somewhere around 4 to 5 percent.

These factors combined with limited inventory are making it difficult for buyers to find the home they want at a price they can afford. However, if you’re thinking of buying, it is important to start looking sooner rather than later…

Mortgage Rates & Increasing Finance Accessibility

In February, mortgage rates remain near record lows. According to Freddie Mac’s Mortgage Survey, the average mortgage rate for a 30-yr FRM was just 3.65%. Despite tough market conditions, these rates present an excellent opportunity if you’re thinking of buying.

In a piece of good news for buyers, it should be easier to get financing in 2016. Fannie Mae’s fourth quarter 2015 Mortgage Lender Sentiment Survey™ shows that lenders expect to ease mortgage credit standards for GSE-eligible loans and government loans over the next three months, opening the door for more buyers to get financing.

If You’re Thinking of Buying, Act Sooner Rather Than Later

If you’re thinking of buying a home, it’s important to act sooner rather than later. As the year goes on, affordability will continue to suffer. With home prices expected to increased around 4 to 5 percent this year and mortgage rates expected to rise to around 4.5 percent, the longer you wait to buy, the less home you’ll be able to afford. Even small increases in mortgage rates and home prices can have a large impact on your future monthly mortgage payment!