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Displaying blog entries 21-27 of 27

If you are preparing to list your house for sale, you may be wondering if the financial reward will be worth the time, effort and money to fix up things that are in disrepair or that are dated.  The answer to that question depends on a myriad of circumstances such as the current real estate market, the condition of competing inventory and whether or not the renovations that need to be made generally provide a return on investment.

Some home buyers are looking to purchase a "fixer upper".  They are looking for properties priced to sell, perhaps because they don’t qualify for more expensive homes or maybe because they want to make a profit by fixing the home up themselves.  Most fixer buyers want to do simple repairs such as painting walls, replacing light fixtures and putting in new carpet. Only a few want to take a house down to the studs and completely redo it.  These potential buyers will want a price for the home that will allow for all the repairs, the inconvenience of doing the work, and often a bit more.  For example, if a home is worth $200,000 fixed up but needs a new roof, and the roof costs approximately $10,000, a buyer most likely will not offer $190,000 for this home.  The reason is that they can probably find a similar house that already has a new roof for $200,000 and save themselves the headache of replacing it themselves.  A buyer in this situation might offer $175,000 or less, in which case it would make more sense for the seller to replace the roof and sell it for $200,000.

It’s important to note that many buyers are looking for "turn-key" homes.  They fear having to make major repairs because they might be more costly than anticipated or other problems might be revealed.  Even if the price is right, homes listed for sale in “as is” condition might not attract as many buyers.

However, before doing major renovations, there are many things to consider.  Smart sellers will research what their home’s market value will be once improvements are made and compare it to the cost of the renovations. If an upgrade won’t provide return on the investment, it probably doesn’t make sense to do it.  Knowing the condition of your competition is helpful.  For example, if other homes for sale in your neighborhood all have modern kitchens, it might make sense to update yours.  This doesn’t mean you should tear it down and start from scratch.  Often a minor kitchen remodel will suffice.  Also, keep in mind that kitchen and bathroom remodels are known to bring the best return on investment.

Start by making a list of the things in your home that are dated or in disrepair and then prioritize.  Here is a list of 10 minimum improvements to make before putting your house on the market:

  • Patch all holes and cracks in walls and ceilings.
  • Fix all appliances and HVAC systems.
  • Repair leaky faucets.
  • Replace worn carpeting.
  • Repaint dark or marred walls in neutral colors (not white).
  • Replace broken windows.
  • Repair the roof.
  • Change dated light fixtures/ceiling fans.
  • Replace old linens/window coverings.
  • Fix any code violations.

If your real estate market is a seller’s market and homes are moving quickly, you can get by with fewer fix ups, however a home that needs repairs will still deliver a lower price.  If it’s a buyer’s market, people might not even be willing to look at homes that need repairs.  Desi  Sowers can help you understand the current market in The New River Valley so that you can make informed decisions about whether to sell your house “as is” or not. 

Negotiation 101

by Desi Sowers

It seems that negotiation has become a lost art in the world of real estate, and that’s unfortunate because the truth of the matter is, if you don’t ask…you don’t get. While sellers want the highest price and buyers want the best deal, they must meet somewhere in the middle for the deal to close. Negotiation is a vital part of selling or buying a home because it is the largest asset people own and there is a lot of money at stake. Here are some guidelines for what sellers and buyers might ask for in real estate negotiations:

  1. Price

Negotiating the best price means different things for sellers and buyers.  The seller wants the highest price and the buyer wants to pay as little as possible.  For a successful transaction, they have to compromise and come up with a price that is acceptable to both.

  1. Closing Costs

Prepaid closing costs are paid by buyers for their mortgage.  These are funds that the mortgage lender holds in escrow for expenses like taxes and insurance.  A buyer may ask a seller to cover some or all their closing costs either with a flat dollar amount or up to a percentage of what’s an allowable contribution for a lender.  If a buyer asks the seller to do this, they are likely going to pay a higher asking price.

  1. Closing Date

Sometimes sellers want to get out of a home quickly because they need the capital from that house they are selling to put toward a new real estate purchase.  The closing date will also affect they buyer’s monthly cash-flow because when a buyer closes on a house, they skip the next month’s mortgage payment, therefore they may want to negotiate to close at the beginning of a month.

  1. Financing Contingencies

When there is a financing contingency in place for a real estate transaction, it can tie up a seller’s property for a required 30 to 60 days.  For this reason, many buyers prefer buyers coming to the table with cash offers. If you are competing with cash buyers, you may want to figure out if you can drop the financial contingency, which will shorten the closing time line. You can do this by getting pre-approved for a home loan prior to making an offer.  Mortgage preapproval shows that your finances are in order and you can afford the home.

  1. Home Warranty

As a buyer, you can request a home warranty. As a seller, you can offer one.  This home protection plan covers things like appliances and systems such as the hot water heater or air conditioning, in the event they repair or replacement.

  1. Leaseback

The moving process is stressful and labor intensive.  Sometimes a seller will need extra time to get into their new home.  When this happens, buyers can offer a zero-cost rent-back for 30 to 90 days to persuade the seller to accept their offer over others. 

  1. Home Repairs

With a home that needs a lot of updating there comes ample opportunity for negotiation. Buyers need to consider the cost of bringing the home up to current standards and use the estimate of that cost to request a lower asking price.  The seller, on the other hand, can specify that the house is being sold “as is” and not offer any repairs.

  1. Appraisal Contingency

A seller can push for a buyer to waive the appraisal contingency, however, if for some reason the appraisal falls short of the expected amount, they need to be prepared for the amount of cash they might have to pay should the bank only be willing to lend them money based on the appraised value.

  1. Furniture

Personal property such as patio furniture, window treatments and chandeliers is all up for grabs.  If the buyer can ask for these things to be included in the contract.  Sellers need to determine what they are willing to leave behind.  And any exclusions need to be specifically listed in the contract as well.

  1. Appliances

Depending on the market, sellers don’t always leave every appliance for the buyer.  They may include the dishwasher, stove and built in microwave in the contract but not the refrigerator, washer and dryer.  Sometimes they don’t want to give everything away up front so that they can use these as items for negotiation.

  1. Inspection

When sellers waive inspection, they often find themselves with "buyer's remorse", but they can try to shorten the time frame for inspection, from ten days to five.  However, today’s lending practices and the TILA RESPA Integrated Disclosure (TRID) make this hard to do.

  1. Condo/Co-op Assessments

These are fees that are used to maintain common areas in a community. If there is an open assessment, it can become a negotiation between the buyer and seller as to who will pay for it.

 

If you are interested in buying or selling a New River Valley home, contact Desi Sowers at 540-320-1328, and discover the difference she can make during your family's move. 

 

Ten Décor Trends to Avoid in 2017

by Desi Sowers

If you are looking to update your home décor, whether to sell your house or just to give it a refreshing new look, here are ten décor trends to avoid in 2017.

Brass

While this metal can bring a shiny appeal, overuse of it may be, well, overwhelming.  If you love this look, try mixing metals and/or using them as small accent pieces.

Edison Bulbs

It seems that designers have become bored with the industrial décor theme, and old fashioned hanging bulbs are out. Instead, try retro lighting that appeals to you and fits with your home décor.

All White Rooms

2017 will leave all white rooms behind in favor of rooms in bold colors such as navy blue.  Navy is the new face of modern design and adds warmth and freshness to previously pristine, yet clinical feeling rooms.

Indigo Needs to Go

This hue has been everywhere the past few years and has worn out its welcome.  If you like this color, try using a variation of blue tones instead.

Sharp Edges

A boxy item here and there is ok, but in 2017 rounded edges and circular furniture will be making a comeback.  It’s time to “take the edge off” and create calm and comfortable spaces.

DIY Everything

If you are a crafty, creative person, there is nothing better than spending a rainy afternoon on a DIY project. But if everything in your home décor is DIY, it’s time to make a change. In 2017 easy and quick crafts are out and artisanal works that require a high skill level are in.

Brushed Metal

With the overall industrial décor trend going by the wayside, it’s time to say goodbye to burnished metals.  Warmer, shinier metals like bronze and gold will take their place.

Smooth and Sleek Rooms

The simplicity of a smooth and sleek room is going to be a thing of the past as we move into 2017.  This year you will want to transform your room with texture adding warmth and charm to previously “flat” rooms.

Oversized Furniture

Oversized furniture will exit in 2017 as space becomes more important in home décor. Space efficient furniture will take its place.

Chevron

Designers are now avoiding the zig zag pattern of Chevron, especially prints that have only two to three colors, which can sometimes look cheap and two-dimensional.

http://www.desisowers.com/Blog/Top-10-Remodeling-Projects-for-Adding-Value-to-Your-Home

http://www.desisowers.com/Blog/Paint-to-Live-vs-Paint-to-Sell

http://www.desisowers.com/Blog/Get-unhinged-3-ways-to-create-visually-striking-doors-in-your-home

Lucky Number 7 for First-Time Homeowners

by Desi Sowers

With the tax code constantly changing, first-time homebuyers need to educate themselves to understand year-to-year changes.  As an incentive to buy homes, the government provides tax breaks to existing and new homeowners.  Homeowners receive multiple tax deductions, tax credits and other breaks that aren’t available to those who rent.  If you bought your first home in 2016, it is smart to familiarize yourself with current homeowner tax breaks so you can take advantage of them and save some money.

  1. HOME MORTGAGE INTEREST DEDUCTION

The mortgage interest deduction is one of the largest home tax breaks and is a significant new homeowner tax credit.  It covers interest paid on loans of up to $1 million, or $500,000 if you’re married but filing a separate return. This deduction can especially benefit borrowers with new loans because interest changes on mortgages are typically steeper in the early years of the mortgage’s term. Don’t miss out on this money saving tax credit.  Your loan provider should send you a form 1098 which will show how much interest you paid the previous year.

Instructions For Home Mortgage Interest Deduction

 

  1. MORTGAGE INTEREST CREDIT

The federal government's mortgage interest credit provides another chance for first-time homebuyers to claim a tax break for the mortgage interest they paid. Unlike the mortgage interest deduction,             which reduces your taxable income, this mortgage interest credit directly counts against your tax bill, lowering what you owe.  To be eligible for this strategic tax break, a state or local government must have issued you a MORTGAGE CREDIT CERTIFICATE.  Typically, this certificate is issued when you originate your mortgage.  It tells you how much interest you can claim as a credit.  If you also claim a    mortgage interest deduction when you file your taxes, you must reduce the credit by that amount.   Mortgage Interest Credit Form

 

  1. MORTGAGE POINTS DEDUCTION

You can also deduct what you pay in points to obtain the mortgage loan in the first place. Mortgage points are prepaid interest that can help a borrower qualify for a lower interest rate over the life of the loan. How to Deduct Mortgage Points on Your Tax Return

 

  1. TAX FREE IRA WITHDRAWALS

Saving money for a down payment and closing costs is something many people have to do when buying a home. The IRS says you can pull funds from your IRA to help. You can take up to $10,000 from your IRA without penalty to buy a home, although you'll still need to pay taxes on the money. Your 401k plan does not qualify for the exception to the 10 percent penalty. How to Tap an IRA for a Home Purchase

 

  1. PROPERTY TAX DEDUCTION

Property taxes are one of the many advantageous tax breaks for first-time homebuyers. You can deduct property taxes paid during the year for which you're filing. If you purchase a home midway through the tax year, you can claim all taxes paid from the date of sale onward.  How to Claim Property Taxes

 

  1. HOME IMPROVEMENT TAX BREAKS

Improvements you make to a home can qualify for a tax break. If you use a home equity loan or other loan secured by your home to finance improvements, the loan will qualify for the same mortgage interest deductions as your main mortgage.  Home Improvements that are Tax Deductible

 

  1. HOME ENERGY TAX BREAKS

Unfortunately, two property-related home improvement tax credits have been eliminated as of Jan. 1, 2017. That means both credits will no longer apply beginning with the 2017 tax year.  They are: the Nonbusiness Energy Property Credit and the Residential Energy Property Tax Credit.  However, you can still claim these credits if you made qualifying improvements to your home during the 2016 tax year. Keep all receipts and contracts from the home improvements and use Form 5695 to file for this credit.

 

http://www.desisowers.com/Blog/Real-Estate-Myths-Dont-Let-Them-Fool-You

http://www.desisowers.com/Blog/Mortgage-Information

http://www.desisowers.com/Blog/Top-10-Remodeling-Projects-for-Adding-Value-to-Your-Home

Protect Your Home from Fire: Four Surprising Fire Hazards

by Desi Sowers

It is estimated by The National Fire Protection Association that over 47,000 home fires reported to fire departments are caused by some kind of electrical failure as a trigger to ignition.  But there are some other unusual ways that fires can start that we should all be aware of.

Dishwashers

While you may be aware that overheating dryers or ovens can cause fires, you might think dishwashers are safe because they have water. And water puts out fires…right? Wrong!  Dishwasher fires can be caused by liquids coming into contact with the machine’s wires.  Serious damage can occur when fires are ignited in dishwashers.  According to a 25 year veteran of the New York City Fire Department, any appliance that powers a motor, heating element, or both always has a higher risk for fire - and dishwashers are a common example.  He advises that they never be turned on when going to sleep or leaving the home.

Jars and other glass objects

According to survivalists, one of the best ways to start a fire is to use a piece of glass to refract sunlight onto dry wood.  Without proper care, that same scientific process can happen on your own kitchen table.  In 2015 a fire broke out in a southwest London home because of sun rays reflecting through an empty Nutella jar, the Associated Press reported.  While it may seem to be an freakish way for a fire to start, the fire brigade’s investigative unit confirmed that the glass jar was to blame.  The chances of this happening in your home are slim, but it is important to remember to never store flammable liquids like gasoline, cleaning fluids, paint thinners and even cooking oils in glass jars that you intend to leave out in the sunlight.  Metal cans for commercial-use flammable liquids and plastic containers for things such as cooking oils are safer options.

Rodents

Small rodents like squirrels and rats like to burrow into your attic insulation in cold weather and chew anything they can get their teeth on, including rubber covered electrical lines.  Unfortunately, if electrical wires become exposed dud to their protective insulation being compromised, there is a likelihood of igniting a flame.  The key to preventing this from happening is to keep the critters out to begin with. Before winter season, make sure all vents are covered, holes are patched and cracks are sealed.

Laptops

If you have ever had your laptop computer in your, well, lap for an extended period of time, you know that they get hot.  Because of this, it is a bad idea to leave one sitting on a flammable surface such as bedding, furniture or carpet.  But the real culprit behind laptop fires is the lithium in the batteries.  A poorly made battery can overheat and burst into flames.  Recently the Samsung Galaxy Note 7 smartphones were recalled because they were catching on fire and it was the lithium batteries that were the problem.  Any device powered by lithium ion batteries should be shut off when not in use and stored away from any flammable items.

 

More hidden home fire hazards  HERE!

http://www.desisowers.com/Blog/Home-Maintenance-for-Winter

http://www.desisowers.com/Blog/12-Simple-Home-Repairs-to-Lift-You-Out-of-Winters-Funk

The Upside to Downsizing

by Desi Sowers

Have you recently become an empty nester with a home spacious enough for a large family?  Maybe it’s time to consider downsizing.  There are numerous perks to downsizing to a smaller home:

  • Saving money.  You will not only save on your monthly mortgage payment in a smaller home, you will also save money on frivolous living.  One of the advantages of downsizing your home is that you can stop wasting money on furniture, and home décor that are used to fill space rather than to fulfill a function.  Filling a smaller space will allow you to prioritize what items are important and necessary for you.
  • Less stress.  After working hard all week to pay the bills, it’s no fun to have to spend your weekend doing chores.  A smaller home equals fewer chores and less upkeep. This will free up time for leisure activities for enjoyment and relaxation.
  • Save energy. If you live in a large home, you know that energy costs can be expensive.  Smaller homes will not only save you money on heating, cooling and water costs, it will also allow you to reduce your carbon footprint.
  • Free time for travel.  With additional disposable income and less upkeep needed, a smaller home will afford you the time and cash for travel and adventure.  Weekend getaways or even long trips are less of a hassle now that you don’t have to worry about being house-poor.
  • A new beginning. Downsizing can be the beginning of a new chapter in your life.  If being an empty nester has you feeling down, a lifestyle change might be just what you need to start focusing on how you want to spend your time, money and energy. 

http://www.desisowers.com/Blog/Space-Planners

http://www.desisowers.com/Blog/Pulaski-County-Home-Sales-January-2017

http://www.desisowers.com/Blog/Increasing-Your-Down-Payment

If you are interested in buying or selling a New River Valley home, contact Desi Sowers at 540-320-1328, and discover the difference she can make during your family's move. 

Real Estate Myths – Don’t Let Them Fool You

by Desi Sowers

Whether you are buying or selling a home for the first time or you are a seasoned veteran of buying/selling real estate, chances are you think you have the knowledge needed to navigate the process based on what you have read or heard from friends and family. Unfortunately there are a plethora of myths circulating about buying and selling houses that have become prevalent, but just aren’t true.  The pitfall of believing everything you hear or read is that real estate myths can hurt you where it counts…in the wallet.  Here are eight common ones that can cause home buyers/sellers to make unnecessary mistakes:

 

  • Set your home price higher than what you expect to get.
    Setting your asking price too high, may actually net you a lower price.  That’s because many shoppers and their real estate agents will not look at houses that are priced above market value. While it’s true that you can lower your price if you have not gotten offers in the first few weeks, “Buyers are highly suspicious of houses that have sat on the market for more than three weeks,” says Nela Richardson, chief economist for the brokerage Redfin.

 

  • You can get a better deal as a buyer if you don’t use a real estate agent.

This is a false assumption. When a house is listed with an agent, the total sales commission is already built into the price.  If the buyer doesn’t use and agent, that just means the selling agent will get the entire commission.

 

  • You can save money selling your home yourself.

While it is possible to successfully sell your home on your own, there is a great deal of work that goes into it. You must know how to get the home listed online, market it to prospective buyers, negotiate the contract and deal with any issues that arise during the inspection or loan application phases.  In addition, buyers will expect a significant discount, so what you might save on real estate commission may not be as much as you thought it would be.

 

  • The market will only go up.

Over the years, homebuyers and sellers have experienced a time of increasing home values, then a sharp decline due to the economy and then an upturn where values increase again.  But many people believe the market only goes up.  You need to be aware that prices can fall dramatically.

 

  • You should renovate your kitchen and bathroom before you sell.

If your kitchen and bathroom are in working order, an extensive remodel could be a mistake. Potential buyers might not like what you’ve done with the place, but they don’t want to change something that has just been renovated.  You are better off adjusting your price accordingly.

 

  • You’ll earn back what you spend on renovations.

Repairing things like your heating system, air conditioner or roof may help your home to sell faster, but you probably will not recoup what you spend. Per Remodeling Magazine’s 2017 cost-vs-value report, the only renovation that is likely to net you as much as you spent is adding fiberglass attic insulation. You will likely only get back 65.3% on a full kitchen renovation. And redoing your bathroom might get you 59.1%.

 

  • All the properties listed in the multiple listing service show up online.

Your agent must choose to let the listings show up online. Most do, but it’s a good idea to verify that yours will.

 

  • Open houses sell properties.

Homes rarely sell to buyers who have visited them during open houses.  Agents like to have open houses because it helps them to find additional potential customers.  If you and your agent opt not to have an open house, it probably won’t chances of selling.  On the other hand, having a broker’s open house for other agents might be worthwhile.

 

Additional Reading

http://www.desisowers.com/Blog/Knowing-When-Youre-Ready

http://www.desisowers.com/Blog/The-Best-Chance-For-Selling-Your-New-River-Valley-VA-Home

 

If you are interested in buying or selling a New River Valley home, contact Desi Sowers at 540-320-1328, and discover the difference she can make during your family's move. 

Displaying blog entries 21-27 of 27

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