When you begin to consider remodeling or home improvements, homeowners should consider the return on investment(ROI) or recouping of their costs. Many updates are preformed simply because the homeowner desires that upgraded kitchen or bathroom. It is important to remember that many, if not most, updates are not great ROI, because they are more for personal reasons rather than a cost vs. value.
“It can be a daunting task to even decide on what home improvement projects to undertake, let alone to physically tackle and complete them,” says National Association of Realtors (NAR) President Chris Polychron. “Realtors know what buyers are looking for during their search, and curb appeal is and always will be important. That explains why Realtors once again rated exterior projects as some of the most attractive and valuable for homeowners.”
Seeing these reports now for many years in a row I have noticed one update that always stands above the rest in terms of cost vs value; the steel entry door. According to Realtors, a new steel entry door returns about 101.8% of its costs upon resale compared to 96.6% last year. For my sellers and marketing the property to future home buyers we always start at the curb first and front entry way next. These areas are two of the most important areas to focus. Why, because first impressions do matter and the entrance to every home being marketed for sale should be warm and inviting. If you cannot afford to replace the front door, then we suggest a good painting and replacing all door hardware for that fresh and clean look.
The good news is the steel entry door is consistently the least expensive project in the report.
Rounding out the top 10 projects in terms of cost recouped:
- Manufactured stone veneer (92.2 percent)
- Garage door replacement – midrange project (88.5 percent)
- Siding replacement with fiber cement (84.3 percent)
- Garage door replacement – upscale project (82.5 percent)
- Vinyl siding replacement (80.7 percent)
- Wood deck addition (80.5 percent)
- Minor kitchen remodel (79.3 percent)
- Wood window replacement (78.8 percent)
- Foam-backed vinyl siding replacement (77.6 percent)
© 2015 Florida Realtors® http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=2&id=317926
What does this mean?
Well Lawrence Yun, NAR’s Chief Economist predicts an approximate 7% rise in existing home sales for 2015. The key will be a strengthening economy and job growth. Yun sees more first-time buyers entering the market as well in 2015 with expected new mortgage products, low down payments and PMI(private Mortgage Insurance.) He warns if interest rise this year it could add hurdles to buyers and sellers. Many sellers have locked in such low interest rates over the past few years they may be very reluctant to commit to a much higher future rate. Yun’s preliminary analysis of sale in 2014 appeared to by around 4.94 million, which is about 3% below 2013. However the median existing sales price increased 5.6% from 2013 to 2014.
Watch this video for more information on the economy and housing market:
Source: National Association of REALTORS® ; http://realtormag.realtor.org/daily-news/2015/01/08/nar-home-sales-only-going-up-from-here?om_rid=AAEWoH&om_mid=_BUrvNWB8$sIYZV&om_ntype=RMODaily
Did you know? Experian became the first credit reporting agency to add on-time rental payments to its database. Rental payment data being added to credit files can potentially help renters become homeowners and we can only hope the other credit agencies will follow suit. For many Americans establishing credit can be difficult because many credit card companies and retail stores are not approving credit applications as easily as in past years. Potential buyers are now going to see they will have a credit score and hopefully help them achieve a lower risk category too, Experian says. “Consumer financing rapidly changed during the economic upheaval, and regulatory changes forced lenders to tighten the standards for the underwriting process,” says Genevieve Juillard, president of Experian Consumer Information Services. “This excluded many Americans from the opportunity to attain credit due to a limited or no credit history. Residents who pay their rent on time month after month should be rewarded and not overlooked simply because they rent instead of own the place they call home.”
Experian recently conducted an analysis to determine how the new rental information has aided consumers’ credit files. The study shows that the addition of rental history on a subprime mortgage moved the participant up at least one higher(or less risk) by the addition of the newly added field. What does this mean for potential buyer? It means more affordable credit and additional credit opportunities.
To read more about the lead being taken by Experian click here>>>>>>Experian-rentbureau-credit-for-rent-analysis
“Real difficulties can be overcome; it is only the imaginary ones that are unconquerable.”
– Theodore Newton Vail U.S. telephone industrialist
Are You Thinking About Trying to Sell Your Home via Short Sale or Considering Walking Away?
Uncle Sam is still giving homeowners until Dec. 31st 2012, to go through the short sale or foreclosure without tax consequences-AS LONG AS THE LENDER RELEASES THE DEBT. But on January 1, 2013 the rules change: The amount the lender forgives, for either short sale or foreclosure, on primary residence will be taxable on federal income taxes.
Example: If a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: THE BANKS MUST OFFICIALLY SIGN OFF IN WRITING BEFORE DEC. 31, 2012
Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent, said Nick Jovanovich, a board certified tax attorney in Fort Lauderdale, FL..
Homeowners should decided sooner than later this year to begin whichever process they chose to avoid the tax law changes coming in 2013. Short sales can takes months to years depending on lender, type of mortgage, market activity and many other variables. Contact a local REALTOR for more information on the services they can provide to assist in your decision.
Some major lenders are offering quicker short sale programs as an alternative to foreclosure. Owners benefit from reduced documentation and smoother processing.
In some cases, owners may be eligible for cash incentives from a couple thousand dollars to upwards of $30,000.
“Until Next Time”
These are all great questions and the answers can vary depending on your location. Comparable sales are sold homes similar/comparable to yours. The trick is to find the closest match; including, but not limited too, location (same subdivision would be ideal or within certain radius of miles), home type (single family residential, waterfront, farm, acreage, etc.), upgrades(pool, oversized garage/workshop), sale date (in todays current market we only look at the previous 3 months).
Comparable sales can be found much easier with the accessibility of the Internet. But, you do need to know where to go. Marion County Property Appraisers has tons of great information @ http://www.pa.marion.fl.us/ including property details, assessed values, legal descriptions, links to court filed document, and so much more right at your fingertips. The coolest part is the spatial mapping data where you can check school & flood zones, utilities, elected officials, previous sales, Sheriff locations and on and on and on. OK WAIT! I got off track, the comparable sales for an area can be found with the above mentioned mapping, and then researching each sale and property carefully. After the data is collected I create a Comparable Market Analysis making adjustments for the differences in each comparable property. You will be left with an Adjusted Recommended Sales Price.
visit “zillow.com” for what they call their “Zestimate”. Beware, the “Zestimate” should only be used for general information purposes and other tools should be used in determining your ideal listing price. The website has some great information about many neighborhood features including schools, sales trends, homes for sale, etc. www.zillow.com
Pricing of your home should not be taken lightly! It may be best for a seller to view comparable properties for sale in the area before deciding on list price. When selling your home there are 2 choices, #1 is living in Fantasy Land and #2 in Reality land. The fantasy is you can ask anything you want for your home; the reality is, what is a ready, willing, and able buyer willing to pay for your home? More importantly, if an appraisal or bank financing is needed will the comparable homes in the area support your contract price. I always say, “THE PROOF IS IN THE NUMBERS!”
Comparable Market Analysis are always “FREE of Charge” with me. Contact me today for more details.
Tips for Buying Foreclosure / REO Properties
BE INFORMED!!! BE PREPARED!!! BE READY!!!
Being informed about the process. Finding a REALTOR with experience in working with buyers on these type of properties can provide a wealth of information. Many REO properties will bring multiple offers in a short period of time. The benefit of a quick market analysis and consultation during negotiations can make all of the difference in a successful transaction.
Being prepared is probably the simplest. If you are paying cash you will need a recent letter form your bank stating “proof of funds” and if you are financing the property you will need a pre-qualification letter. The bank/ asset manager will not accept an offer without one of these items. Be ready to look frequently at great priced/location properties. Maybe reading contract and necessary paperwork prior to signing.
Be ready to act when the time comes. Inexpensive Foreclosure/REO properties have created a huge demand with first time home buyers and investors driving the market. Most desirable properties are only on the market a few days and receive multiple offers during that period. A buyer can expect to pay more than the current list price in many foreclosure and REO sales.
Remember with Foreclosure / REO properties finding the right property is only maybe 25% of the battle. The other 75% is Offer, Negotiating, Final Signatures, Loan Approval, Inspections, Surveys, Title work and several other task to make it work. HAPPY HOUSE HUNTING!