Category Archives: Real Estate

Not All Home Improvements will Help Your Homes Property Value

Chairs on patio and porch at luxury hotel

If you want to prepare your home in thoughts of selling in the near future or making the right choices for resale even further down the road, think twice about doing the following home improvements:

1) TURNING YOUR GARAGE INTO A MAN CAVE – Believe it or not, that awesome hide-away for the kids or the football game can hurt the value if you are loosing your garage. It did happen to one of my sellers in the past. First they took away the garage for more living space (even though they left the door in). This change took away value mostly because it no longer conformed to the neighborhood even though the living space increased. The garage was in the basement and sometimes below grade finished living space does not always get a return on its cost (according to an appraiser I know). This property took a hit on the appraised value and my clients actually had to lower the price for the buyer to cover it. Not to mention the price hit but not having a garage is less attractive to buyers. So so many people want a garage, especially in Pennsylvania.

2) INSTALLING A DECK OR PATIO (This is something that you are better of doing) – If all your neighbors have a deck and you don’t that is typically a reason for the appraiser to give you a hit in value. You don’t confirm to the neighborhood comps. Who does not love outdoor space, anyway? I had a house that had trouble selling and I can tell you a buyer bought the neighbors listing because it was cheaper and had a deck. It was the same square footage. Ouch!

3) DONT REMOVE OR COMBINE BEDROOMS – If you have gone from 4 to 3 and have the same space, keep in mind you would be comparing to 3 bedroom homes which are typically lower in price thus loosing value. Square footage does not always matter. It has been my experience that buyers want a 4 bedroom rather than a 3. Alway keep that extra bedroom if you have it. It will generally give you more value.

4) DONT REMOVE CLOSETS – If you can make more or make a walk-in closet. If you remove a closet, the room may not always be considered a bedroom. Women today have so many clothes, and even some of those men do. Closets are always a perk!

5) REMOVE WALLPAPER – Wallpaper may not decrease the value on an appraisal but it will make the buyers walk 99 percent of the time and the home harder to sell. Wall paper is an immediate check list for work and it is a bear to get off no matter how you do it. It is very hard to change and get to the popular neutral colors . I have literally had people refuse to go into a house because the every wall in the home was wallpapered. There have been sellers that have issued credits to have wallpaper removed and have removed it all. Be wise.

6) POUR A NEW FRONT WALK – I have sold new construction homes and one builder in particular gives the buyer temporary pavers to start for the front walk way. The pavers can look nice if they are cared for. After a couple of years they often need to be reset and adjusted if you are keeping them. I asked an appraiser if the value increased if the seller poured new walk way for $5000. The answer was no. There is still a walk way just made of something else or replaced with different material. If it was a high end finish then maybe an increase in value.

Talk to your real estate agent before you do anything major if you are even considering moving. You will be glad you did.

What is a Short Sale?

SP_EWP_029-300LA short sale is when the lien holder bank takes less than the debit owed on the property. Often times better than a foreclosure (but not always). When a homeowner can no longer pay their mortgage for reasons such as job loss, divorce, health status or death of an adult family member, or even a job transfer with the housing market not baring a sale price to cover what is owed on the property. These are the same reasons you run into foreclosures.

The seller usually has to call the bank and request to go through this process. This can be before the home is listed or while it is listed. The home owner often times has to prove hardship and explain reasons for needing to do this.

A short sale will effect your credit, but from what I have been told from mortgage lenders that I work with is that a foreclosure hits your credit worse and for a longer time than a short sale. Many sellers want to get the challenging situation behind them. Often times you can recover quicker in a few years and go on to re-purchase a new home if you get things cleared up and work on your credit.

In the transactions that I have processed, the some of the banks often want to get 85% of the appraised value at minimum for the home. There is also a lot of paper work for the sellers and the buyers need to be patient. I have had short sales take 6 weeks and even up to 5-6 months. The processing time can depend on the co-operation of the buyers and sellers and even the bank processes. The larger the bank the more red tape.

If a seller is going into bankruptcy, it is advised to speak to your lawyer. Often times, a short sale is not worth the effort if the property is going to be included in a bankruptcy.

If you are considering a short sale, you need an agent that has the patience to work through the process with you. One of the nice things about the short sale process is that some banks have actually paid my seller’s to close as a short sale rather than let the home go into foreclosure. It was not the case with all situations and all amounts were different. So the bank is rewarding the seller to avoid foreclosure.

Change Flooring on a Budget

Today buyers are really paying attention to the flooring in homes. You would not believe how many buyers want to rip out all the carpet (even if it is nicer carpet). I had one buyer who was able to replace all the flooring in their home and it looked amazing. But not all buyers can afford this, especially first time home buyers.

So I was searching around and found some great options if you have vinyl or linoleum or even a beat up floor that needs refinished but really is at the ends of its life.  There may be this fabulous estate but very dated, you want it but don’t have the money to change out (right now) that old vinyl that is in great shape but from the 70’s or 80’s.   Why not try paint? It sounds crazy but check out this article, I came across.

 

 

New Changes for Home Buyers

Yesterday I was at a meeting regarding new changes in the home buying industry. There is a lot to know for all parties involved in the process and starting October 3, 2015 (unless it is delayed again), there will be new waiting periods in the buyers paperwork for the mortgage due to the requirement to re-disclose new or updated information to the consumer.

The CFPB (Consumer Financial Protection Bureau), has initiated new waiting periods to protect the consumer/home buyer. If a loan is originated before October 3, 2015, it will fall under the current rules.

So basically why is this important? Because it can affect your closing date. This is really MY main concern for both my buyers and sellers. I will tell you that if you have all your life’s belongings in a truck and you are thinking you are driving it right over to the next house, hmmm, maybe not. This can and does happen now (on occasion for various reasons) but the risk from what I am seeing may be higher.

Ok, my point is if you are buying a home after October 3, 2015, (and you are not paying cash) you need to have good people working with you can keeping up on paper work. Buyers and sellers also need to diligently participate with the process. A buyer needs to get info and paper work to the lender as soon as possible. Do everything they tell you to do and what they tell you NOT to do. ( Don’t go buy new furniture on your credit card before you close or anything else large for that matter like a new car – it will change your debt to income ratio if you are right on the edge – just don’t do it!) You can buy the furniture or whatever after you close. Your credit and employment is checked again before closing.

So one of the things that can trigger a re-disclosure: If the fees to the buyer changes more than 1/8 of a percent at a certain point, it can trigger a re-disclosure. If this re-disclosure is with in 3 days of closing, hmmm, your are not closing on your scheduled date. This is one example of a re-disclosure scenario. Now I was also told that all banks do not do 3 days some may make it as late as 7 days. If the buyer does not have access to email then it will be the later time period.

One of the lenders that I work with is trying to make this process as smooth as possible for the buyers and everyone involved.

Attached are a few videos to explains some of the process. If you have bought a home before, then you may be familiar with terms and paper work that is mentioned already. If not you will be seeing it, if you are buying a home. Make sure you surround yourself with good, efficient, and knowledgeable people. You will be fine.

I do not necessarily endorse the companies providing information in this video.  The buyer is free to choose their own lender and closing/title company.  These video were made with the original deadline date of August 1, 2015 which has since been delayed to October 3, 2015 of of this blog entry.