Yajnesh Rai

Home buying season heading into high gear – Central Valley Business Journal

SAN JOSE — The new year will be a seller’s market for real estate according to realtor.com.

“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory and fierce competition between buyers,” said Jonathan Smoke, chief economist for realtor.com.

Tips for buyers include being ready to buy early in the year as buyers who start their search early face less competition with nearly the same number of homes available as later in the year. Buyers should also comparison shop for mortgages, and consider a new home.

Mortgage rates are expected to reach 4.65 percent and could rise 3 percent in 2016. New homes are expected to grow more rapidly in 2016 than the supply of existing homes.

Also buyers in the Midwest or South may have more luck as more markets in those regions are expected to have higher inventories.

Home sellers should try to list during peak season to maximize their price. Prime home buying season begins in April and reaches its peak in June, according to realtor.com analysis of home sales.

Sellers should also be careful to price their house to the market. Offering incentives can also help a sale move more quickly. Also if your house is in California, price will be higher.

Sellers can see big gains in prices in the Stockton-Lodi; Bakersfield. Fresno, and San Jose-Sunnyvale-Santa Clara markets.

I thought buying a house with friends might be fun. I was wrong.

Like many working adults in our late 20s and early 30s, my friends and I are serial renters. Only 35% of Americans under the age of 35 own homes today, down from 39% at the end of 2009, according to the U.S. Census. We all talk about buying a home one day. But as the cost of renting just about everywhere soars, the road to homeownership can start to feel like a treadmill — moving fast, getting nowhere.

On a recent group trip, a friend had an idea: What if we pool our cash and buy a house together? The concept was simple enough. We’d each chip in enough for a down payment on a house somewhere we like. When we weren’t using it for the occasional group vacay, we could rent it out, creating a passive income stream evenly split among us.

It’s not uncommon for more than one person to buy a house. Couples and family members do it all the time. But we’re a group of eight individuals living in three different states who are still getting used to the whole “adulting” thing and have a hard enough time trying to organize our annual camping trip. Could our friendship — and our finances — survive it?

As of now, it’s still just a fun idea we’re toying around with. But I decided to reach out to some experts to see how it might work.  I have to admit, they didn’t exactly help allay my doubts. 

Good luck getting approved for a mortgage.

Is it possible for more than one person to apply for a mortgage loan as a group? Certainly. There are no restrictions on how many people can apply for a mortgage. However, it will be mighty difficult getting a bank to approve a group of three or more.

“Having multiple people on a loan can be tricky,” says Sebastian Rivera, a loan officer in Fairfax, Va. “Not all lenders allow more than four people to be added on a loan, and not all loan products allow this either.”

If a weak link in the group has a sub-par credit score, he or she could drive up your mortgage rate. You could drop them from the mortgage loan to get a better deal but will their name still go on the title? You’ll have to hash that out as a group, ideally with help from a real estate attorney.

But if you take out a mortgage loan, only those whose names are listed on the loan will be liable for any missed payments, says Christopher Ling, mortgage expert at Nerdwallet. If that’s the case, you’ll have to decide whose name goes on the mortgage and be sure to include language in your operating agreement that binds all owners to sharing responsibility for mortgage payments.

The ideal situation, says Craig L. Price, a New York City real estate attorney, is to leave mortgage lenders out of the picture and pay cash.

You’re going to need a seriously good real estate attorney.

If you think you can pull this off without an attorney’s help, you’re fooling yourself. There are multiple ways to structure a group home purchase, the most common of which are forming an LLC or purchasing via Tenants-in-Common agreement. If you’re purchasing the property as a group investment and don’t intend to live there, Price recommends forming an LLC. This is fairly easy to do through your state department website. One of the main benefits of an LLC is that it cuts down on each individual’s liability. For example, if you have a party and a guest is injured and decides to sue and the house is owned by an LLC, that person could only go after the assets owned by the LLC, leaving the personal assets of each individual owner protected.

As an LLC, you’d also come up with an operating agreement — guidelines that will lay out how the group will manage just about every hypothetical complication of group homeownership. This is where you decide how to split up the equity, how to finance renovations, what happens if one party wants to sell, what happens if someone gets married and wants to add their spouse to the title, etc. The downside to going the LLC route is that you can’t claim typical homeowner tax credits, like deducting mortgage interest or property taxes.

If all you want to do is purchase a home with friends and co-own equity, there’s another option: Tenants in Common. A TIC agreement essentially stipulates that these people own this home, this is what share each individual owns, and it allows each person to decide who will inherit their shares when they pass away. Under a TIC set-up, at least one individual can claim homeowner tax deductions and divide the savings among the group.

Our Economist’s Top Tips for Selling a Home in 2016 – Real Estate News and Advice – realtor.com

If you’re planning to sell your house this year, well, you’re in luck.

“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory, and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®.

But you could still make missteps on the way to the bank. Yes, your house will likely sell, but when? Remember, time is money.

“For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly,” Smoke says.

Smoke and his team analyzed market trends to distill their best advice for homeowners looking to sell in 2016. Follow these tips to get the most out of your home sale.

Price your home to the market

“What Realtors® tell me over and over again, and from the analysis that I’ve seen historically, the most important thing is getting the price right,” Smoke says.

 

In 2016, prices are expected to increase nationally 3% year over year. Local price changes are anticipated to be more dramatic, with markets such as Stockton, CA, and Las Vegas, NV, expected to increase by 10%. But that doesn’t mean those stats are true of your town, or your neighborhood.

“Making the error of going for a price that’s well above the market price is a recipe for being let down and potentially not selling the home at all,” he adds. A home that sits on the market eventually will turn off buyers, who will suspect that something is wrong with it.

Sellers who work with a local Realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.

List during peak season

Unlike buyers, who want to minimize competition, sellers benefit from demand. Prime home-buying season begins in April and reaches its peak in June, according to realtor.com analysis of home sales. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.

Offer incentives

This one seems counterintuitive, given what we’ve said about a seller’s market, but hear us out. Last year—the best for U.S. home sales in nearly a decade—37% of all sellers offered incentives to attract buyers.

“The nature of this market is that you’re going to have more first-time buyers, who are more dependent on financing,” Smoke says. Getting a loan is one thing; coming up with a chunk of cash for closing costs, on top of the down payment, is another.

“If you’re a seller and you’re able to offer some money toward closing costs, you’re actually making it easier on that buyer, and they might be more willing to give you the full asking price,” Smoke explains. You could end up with a faster sale and more profit.

Best place to sell a home: California

This isn’t really actionable advice since if you don’t already own a home there you won’t be selling one, but FYI: California markets are accelerating past the already strong national averages and showing extremely favorable conditions for sellers.

Robust job growth, increasing prices, and limited inventory have sellers ready for big gains in the greater metro areas of Stockton, Bakersfield, Fresno, and San Jose. Once you’ve sold, though, you may not be able to afford to buy again in the area—we’d suggest looking in the Midwest or South.

So You Wanna Buy a House? Step 2: The Down Payment – Real Estate News and Advice – realtor.com

Scratching together a down payment is probably the most daunting hurdle to buying a home—and there are boatloads of them! But that’s why we’ve launched our 2016 Home-Buying Guide, a series of articles giving you the critical intel you need to buy your own house, step by step. This is the perfect time to start your search in earnest.

This week, we’ll unlock the secret to amassing a mountain of cash for the down payment.

Yeah, you already know that Rome wasn’t built in a day. The same holds true for building a down payment. It takes time. But as long as you grease the gears early (like now), you’ll barely notice you’re saving until—boom!— one day in the foreseeable future you’ll be sitting on a pile of money that could pave the way to homeownership … maybe even in time for peak home-buying season this summer.

Sound good? Good. Here’s how to get started.

Trim those quiet, unnecessary expenses

OK, let’s shift those preconceived notions. Contrary to popular belief, saving for a home isn’t mostly about grueling sacrifice—e.g., holing up in your apartment under a bare light bulb, eating ramen, and piggybacking off your neighbors’ Wi-Fi.

“It’s about a lifestyle change,” says Travis Sickle, a financial adviser with Sickle Hunter Financial Advisors in Tampa, FL. A more sustainable strategy, he says, is to pinpoint your silent money siphons that you barely notice. Odds are you could try some of the following cost-cutting measures without feeling the pinch:

• Replace your $250 monthly cable service with a $10 Netflix standard streaming account, and you’ll save $2,880 per year.
• Cut that languishing gym membership—at $50 per month, you’d save $600 a year. Go running instead!

• Packing lunch will save you about $60 a month—or $720 a year.
• Bike to work. For a 10-mile commute, biking can save you around $5 a day, according to Kiplinger—or $1,250 a year.
• Start a coin jar. Saving all your loose change can have a big impact—up to $700, according to financial blogger J.D. Roth.
• Turning down your thermostat just 3 degrees could shave almost 10% off your electrical bill, netting you $20 a month on a $200 bill, or $240 a year.
• Curb those dinners and drinks out at restaurants, which can quickly add up. If you typically shell out $40 three times a week, reduce that to one evening a week, and you’ll save $80—or $4,160 per year. (Bonus: It’ll make those times you do indulge more special!)

 

And if you and your significant other team up and try all of the above, that would amount to $10,550 per person, or $21,100 in one year’s time. Just remember that when you’re thinking of ordering a second glass of artisanal craft beer.

Open a dedicated account

If you don’t have a savings account, now’s the time to open one. A checking account is great for daily expenses, but when it comes to saving money—well, they don’t call them savings accounts for nothing. You’ll earn interest on your balance, plus there’s a lot to be said for the mental benefit of having a specific place to stash your down payment. While interest rates haven’t been very impressive in recent years (though, you’ll be grateful for that when it comes time to get a mortgage), it’s still great to have a dedicated account where you can see how you’re progressing toward your goal.

Financial planner Bob Forrest of Mutual of Omaha points out that CDs and money market accounts offer higher gains than savings. You’ll need a larger minimum balance than for a regular savings account, but your goal is to make it grow, not shrink, right? If you’re using a CD, just make sure you don’t withdraw the money before the time is up or else you’ll face some stiff penalties.

Automate your savings

If you’re struggling to put enough money away because of the constant temptations to blow your paycheck, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts—if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank, setting up automatic withdrawals from your checking to savings account that will force you to keep spending in check.

Tap into your IRA

Another great place to stash your cash? A traditional or Roth IRA, says Forrest. In addition to being a tax-friendly retirement vehicle, it allows you to withdraw up to $10,000 for a home. While withdrawals from a traditional IRA will be taxed, a Roth IRA you’ve owned for more than five years won’t be taxed at all, as long as you’re a first-time home buyer. Just be careful with this method, though, as you will be denting your retirement funds. But combined with other savings, it can quickly add some heft to your growing nest egg.

Check out down payment assistance programs

Depending on the city and state you live in, you may be eligible for down payment assistance programs, which provide money to help people buy a home. Go to Down Payment Resource to find programs you might be eligible for. Most offer up to $15,000, typically in the form of a grant or low-interest loan. Most require your income to be below the area median. But even if you make more, do your research—there are programs that provide funds for higher-income households.

Once your down payment is on a roll, it’s time to start looking for a home—and to do that, you’ll need to determine exactly how much house you can afford. Tune in next week for deets.

6 Things You Should Never Say When You’re Selling Your Home – Real Estate News and Advice – realtor.com

You know that expression about loose lips sinking ships? It holds true for selling your home as well. Sure, there are some things you have to disclose to buyers—such as if your home has lead paint or is located in a flood zone. But there’s plenty more you might volunteer when you would be truly better off keeping your mouth strategically shut.

Yesterday, we revealed the things buyers should never say to sellers. Today, we share some things that sellers should never let slip to buyers, or the agents representing them.

To help hone your “less is more” attitude when it comes to talking with prospective buyers, here are a few doozies that agents recommend never, ever saying.

‘Our house is in perfect condition’

Your home is your castle, and in your eyes it may seem perfect—but don’t make claims that aren’t true, says Cara Ameer, a Realtor® with Coldwell Banker.

“The home inspection may reveal otherwise, and, as a seller, you don’t want to wind up putting your foot in your mouth,” she explains. Bottom line: “There simply is no such thing as ‘perfect condition.’ Every house, whether it is brand new or a resale, has something that needs to be fixed, adjusted, replaced, or improved upon.”

‘It’s been on the market for X…’

Never, ever discuss how long the home has been on the market with prospective buyers, says Pam Santoro, a Realtor with Berkshire Hathaway HomeServices. This info is often listed and available on the home’s information sheet, but bringing it up—especially if the home has been available for eons—can send sellers the wrong message. No one wants to buy a white elephant—and, if they do, it’s probably because they think they’ll be getting it dirt-cheap.

‘We’ve never had a problem with…’

If you’re hoping to move quickly, you may be tempted to tell a few little white lies. So you never had a problem with weird neighbors, eh? Or flooded basements? Or vengeance-seeking poltergeists? Realtors agree that your mistruths—however insignificant they might seem—could come back to you with teeth.

“You’re setting yourself up for potential liability,” explains Ameer. “You may not even be aware of the problem at first, but it could  translate into an embarrassing moment upon inspection.” So come clean with what you know and admit what you don’t.

‘We always wanted to fix/renovate that, but…’

Tempted to mention, “We always thought about knocking this wall down and opening the space for more light?” How about “We planned on renovating this bathroom but ran out of cash”? Mum’s the word when it comes to fixes you intended to address. Nobody cares about good intentions.

“When sellers point out things they might change, this only alerts the buyer of more upcoming costs for them,” says Maryjo Shockley, a Realtor with Keller Williams. Who knows? Your buyers may not even want to knock down that wall or redo the bathroom. So why plant those ideas, along with those dollar signs?

‘We spent a ton of money on X, Y, and Z’

Just because you love the Brazilian koa wood flooring you installed throughout the first floor, that doesn’t mean prospective buyers will be willing to shell out for it.

“The buyer doesn’t care whether you spent $10,000 or $100,000 on your kitchen,” says Ameer. “They are only going to offer what they feel the home is worth in relation to area comparable sales.” So, save your breath, or else you’ll risk sounding like you’re trying too hard to justify your price. Desperation isn’t cool.

‘I’m not taking less than X amount for my home’

When it comes time to sell, it makes sense that you want top dollar. We get it! But at the same time, it’s important to be realistic and open to offers within a reasonable range.

​Deciding to Sell Your Home; 2016 Seller’s Checklist – Madison NJ News – TAPinto

Deciding to sell your home is a crucial decision and the selling process can be overwhelming. You need an agent who is going to help you sell your home quickly, easily and profitably.

Start planning early.

Weed out your current possessions. Throw out, give away, or sell the things that you don’t want to move at a yard sale. 

Start packing early.

Anything that you are sure you will not be using before moving day should get boxed. 

Get your children on board, have older children sort thru their “treasures”.

Identify your home’s flaws or problems. Sellers are obligated to disclose any major problems or flaws in the structure or property, including things like dry rot, termites, asbestos, or a mold issue.  There is really no upside to trying to hide problems anyway since most buyers will have the home inspected before closing. Two major concerns to buyers today are fireplaces and mold. Have your fireplace cleaned and serviced by a professional prior to listing. Check your attic and cellar for mold by smell and sight. Have remediated by a professional prior to Listing. 

Get the house in “showcase” condition.

Small cosmetic touches can increase your home’s value by thousands. (See Improvement suggestions below.) 

Decide what goes and what stays.Before you list your home, you need to decide what will be included in the sale. If you want to take your washer and dryer with you, tell serious buyers before negotiations start. List your exclusions and tell your realtor. If your dining room chandelier is an exclusion and heirloom,  it is better to replace now .

The following is a list of suggested exterior improvements;

• Painting: Touch up your house’s exterior paint before you put it on the market. Paint and/or clean the front door. New Hardware is an inexpensive change that sets the tone of a cared for home.

• Lawn: Keep your lawn freshly mowed and neatly trimmed. Clear debris from the lawn and the border of your home. 

• Sidewalks: Sweep your sidewalks daily. 

• Shrubbery: Remove or replace any dead or dying trees, hedges, or shrubs; prune anything that looks unsightly or overgrown. 

• Flowers: Filling flower beds with seasonal flowers is an inexpensive way to add color and charm to your property. Mulch your gardens.

• Repairs: Be sure that all gutters and downspouts are in place and clean. Replace missing roof shingles and broken or cracked windows.

The following is a list of suggested interior improvements;

• Clean, scrub, and polish: Keep your stove, oven, refrigerator, microwave, and other appliances spotlessly clean inside and out. 

• Clean all carpeting. Polish wood floors and vinyl flooring. Clean walls, doors, and woodwork. 

• Eliminate odors: Buyers will notice strong smells as soon as they walk through your front door. Eliminate smoke, mildew, and pet odors. 

• Fix drippy faucets and running toilets: If any of your sinks or bathtubs drain slowly, unclog them. 

• Get rid of clutter: Keep clutter off of kitchen counters and dirty dishes out of the sink. Straighten all closets. 

• Make cosmetic improvements: Painting is not’t expensive if you do it yourself, but be careful when selecting interior colors. Avoid cherry red, canary yellow, emerald green, and other bold colors with strong visual impact. Make sure hinges and knobs are tightened and doors close properly.  

• Replace all carpeting that is stained, matted or generally appears worn .

• Replace all appliances not in working order. 

The following is a list of suggested staging tips; 

• Kitchen: Aromas from fragrant goodies like freshly baked gingerbread or just-brewed coffee bring back wonderful memories of home. 

• Bathrooms: Always have fresh towels in bathrooms. Buy new shower curtains; old ones are usually spotted with mildew. Put new soap in the soap dishes. 

• Clear everything off your refrigerator: Most folks use magnets or tape to stick everything from vacation snapshots and finger-painting masterpieces. 

• Comfort: Keep your house warm in the winter and cool in the summer. A house that’s too hot or too cold is not’t inviting.

• Lemons or Apples in a bowl depending on season replaces interior fresh flowers which are difficult to keep ”fresh”.

• Seasonal potted flowers on front and rear porches is a wonderful touch.

Hire a Realtor early in the process. Together we can make an overwhelming task, light work!

How to get clients to prepare for sale by cleaning out their pad | Inman

Several factors strongly affect the sale price of a home: market conditions, competitors and neighborhood location, just to name a few. Although some of these key components lie outside of an agent’s control, one of the few things you can do to increase the perceived value of a home is to ensure each nook and cranny is scrubbed clean until it sparkles.

Every prospective buyer is on the lookout for a home that has the makings of a great bargain. Here’s a visual checklist exploring why you should pay attention to property cleanliness.

How to Save Thousands During the Home-Buying Process — The Motley Fool

During the home-buying process, when it comes time to apply for a mortgage, the vast majority of Americans choose a 30-year fixed-rate loan, and it’s easy to understand why. After all, you can afford a larger home and keep your payments relatively low with a longer loan term. However, there are some pretty compelling reasons to consider a 15-year mortgage for your next home, and the numbers behind the shorter loan term may surprise you.

Reasons to consider a 15-year mortgage
There are several benefits to using a 15-year mortgage, including…

Lower interest rate: 15-year mortgage interest rates are significantly lower than what you can get for a 30-year. As of this writing, the national average rate for a 15-year mortgage was 3.24%, well below the 4.01% you can expect from a 30-year loan.

Less interest: Not only is the interest rate lower on a 15-year mortgage, but the faster amortization schedule means you’ll pay a lot less interest over time than you would on a 30-year. Based on today’s interest rates, here’s the difference it would make on a $200,000 loan.

Build equity faster: Because more of your payment goes toward the principal, a 15-year mortgage allows you to quickly build equity in your home. At the current mortgage rates, just 30% of your first payment on a 30-year loan is applied toward the principal, with the other 70% going toward interest. However, 62% of your first payment on a 15-year loan is principal repayment. And the difference gets even wider as time goes on.

Drawbacks to keep in mind
The most obvious drawback is that your monthly payment on a 15-year mortgage will be higher than a 30-year mortgage payment on the same home. If you buy a home and obtain a $200,000 mortgage, you can expect to pay about $450 more per month on a 15-year mortgage than a 30-year.

Another drawback is the amount of “house” you can afford to buy. Using the standard rule that your mortgage payment shouldn’t be more than 28% of your total income, a family with annual household income of $75,000 could get approved for a mortgage payment of $1,750 per month, as long as their other debts weren’t excessive. With a 30-year mortgage, this means that you could afford to buy a home worth approximately $341,000, assuming the national average cost of property taxes and insurance, and a 20% down payment. If you choose a 15-year mortgage, your affordability drops to $236,000.

While I never advocate buying a house at the top of your budget unless it’s absolutely necessary, the affordability issue should be taken into consideration. However, if you can afford a house that meets your needs while using a 15-year mortgage, it’s worth looking into.

The numbers speak for themselves
Let’s say you’re in the market for your first home, and you decide on a house that costs $150,000. With a 20% down payment, this means you’ll need to obtain a mortgage for $120,000.

A standard 30-year mortgage would result in a $573.59 monthly payment for principal and interest, and over the life of the loan, you’ll end up paying $206,492 — $86,492 in interest. On the other hand, while a 15-year mortgage would result in a higher $842.62 payment, your total interest cost would plunge to just $31,671.

In other words, while your monthly payment would be 47% higher, you’ll pay off your house twice as fast and pay 63% less interest.

If you can afford it, it’s definitely worth considering
On a personal note, when my wife and I bought our first home a few years ago, we decided to buy a house that was well within our financial comfort zone and finance it with a 15-year mortgage, a decision that served us well. Because of the accelerated principal repayment, after just a few years, we had built up enough equity that we were in a position to sell the home and put a down payment on our “forever” house.

I highly recommend 15-year mortgages for younger buyers in particular, as it is a smart way to build equity at a time in your life when it’s extremely important to make wise financial decisions. Limiting your home search to what you can afford with a 15-year mortgage may seem like a sacrifice in the meantime, and it is, but it is a sacrifice that can pay off tremendously in the long run.

Selling this winter? Make your home inviting

When the days are dark and cold, not much sounds better than retreating indoors to a warm, comfy home. Home shoppers during the winter season are looking for warm retreats, too. If your home is on the market this winter, here are a few tips to make it inviting to potential buyers.

Daylight hours are fewer in the winter, so make the most of those hours by ensuring your windows are clean. Clear window panes allow the maximum amount of natural light to shine through, making rooms more cheerful and appealing.

Cleaning your light fixtures and dusting light bulbs are quick tasks that give an instant boost to lighting your home as well, and can brighten a room by up to 30 percent without the need for additional lights. Leave a few interior lights on in addition to front porch lights in case showings are scheduled after the sun goes down. Homes are especially beautiful in the evenings when properly illuminated and your potential buyer will appreciate it.

In the cooler winter months, make sure the thermostat is set a little higher to take the chill out of the air in the house. Also, place throws on sofas and quilts or blankets at the foot of beds to create a cozy and comfortable feel.

Despite the age of your home, it’s easy for a draft to occur. Broken seals around doors and windows could be letting in the chill you’re trying to get rid of. Sealing pesky air leaks not only keep rooms warm, it also keeps your heating bill lower.

If you’re game for a weekend DIY project, consider changing the paint color in your most lived-in rooms. Reds, oranges and yellows are touted for bringing a warmer feel to a room and are good options for rooms that don’t receive much light.

A healthy home also makes for a cozy home. Change your air filters regularly to help trap airborne allergens. Most filters state their advantages and replacement schedule on the packaging. Changing your HVAC filter every month also helps to keep from circulating dust.

You can turn your home into a comfortable and cozy retreat this winter. Light some scented candles or use your slow cooker to fill your home with a pleasant aroma. A soothing scent combined with the tips here will allow you and any potential buyers to experience the full warmth your home has to offer.

So You Wanna Sell Your Home? Step 1: Whip It Into Shape – Real Estate News and Advice – realtor.com

If you’re looking to sell your home during prime house-shopping season this spring, you’d better get cracking now. After all, it’s not as easy as slapping an ad on Craigslist; if you want your humble abode to stand out from the competition, that could take months to do right.

Step 1 to selling a home is a New Year’s classic: Whip your place into shape by fixing any problems and upgrading the eyesores. Because like it or not, your home has sustained some wear and tear over the years. Here’s how to assess the damage and find out which renovations will pay off down the road.

1. Tally the age of various items

No matter how great your home looks at first glance, any savvy buyer will point to various parts and pop the question: How old? And since guesstimates won’t cut it, it’s time to gather some paperwork. If you’ve purchased your home in the past few years, check your home records or seller’s disclosure for the age or last repair of big items (namely your roof, HVAC system, water heater, and gutters), or dig up copies of your own maintenance records or receipts.

How long items last depends on a lot of factors such as the model and how well it’s been maintained, but you can get a general idea of average life span from the National Association of Home Builders. For example:

·       Wood shingle and shake roof: 15 to 30 years

·       Central air-conditioning unit: 15 years

·       Electric water heater: 14 years

·       Gutters: 30 years

 

2. Do your own walk-through

Channel Sherlock Holmes and go through your home, room by room. Look for signs of damage that might drag down its value. Chandler Crouch, broker for Chandler Crouch Realtors in Forth Worth, TX, suggests looking for these common problem spots:

·       Wood rot around outside door frames, window ledges, and garage doors. Condensation and rain can cause these areas to weaken and rot.

·       Water stains on the ceiling or near doors and windows. This can indicate a leaky roof or rain seeping in from outside.

·       Leaks under sinks or around toilets.

·       Bulges under carpet or discoloration on hardwood floors, which can indicate flooding problems or an uneven foundation.

 

Next, test what’s called the “functionality” in every room. For example, “Cracks visible in the walls and floor, doors that don’t shut right, broken handles on cabinetry, basically anything that doesn’t work perfectly should be repaired,” Crouch says. And don’t forget to inspect the outside.

“A lot of sellers skip the outside, but it is so important. That is where buyers will make their first impression,” says Darbi McGlone, a Realtor® with Jim Talbot Real Estate in Baton Rouge, LA.

3. Bring in the pros

Once you’ve done your own walk-through, you may want to have a pro take a second look. These people can spot flaws you overlooked, because either you’re used to them or you didn’t realize they could cause trouble. You can enlist a Realtor or hire a home inspector to do an inspection (or pre-inspection) to pinpoint problems from bad wiring to outdated plumbing.

While the cost varies, people pay an average of $473 for a home inspection, according to Angie’s List. Go to the National Association of Home Inspectors to find an inspector in your area. It may cost a bit, but it will buy you the peace of mind of knowing you’re not in for any surprises down the road. In fact, having a home inspection report handy to show buyers can inspire confidence that they (and you by association) aren’t in for any nasty surprises as you move toward a deal.

4. Decide what needs renovating

Once you know what in your house could stand for repairs or upgrades, it’s time to decide where to infuse some cash. Don’t worry, not everything needs to be done before your home’s on the market. And while you’re probably not jumping at the idea of renovating a property you’re going to sell, certain fixes will give you an edge over the competition, which means more/better offers. Remember, real estate is an investment!

But don’t just obsess over the obvious—e.g., your kitchen could stand for new cabinets. After all, many buyers will want to tweak cosmetic details to their own tastes, so you could be throwing money down the drain. Instead, focus on fix-its that are less susceptible to personal preferences that buyers like to know are in good shape.

For example, a recent study by the National Association of Realtors® found that upgrading hardwood floors reaps an estimated 100% return on investment, essentially paying for itself. Upgrading your insulation can net you a 95% ROI, a new roof a whopping 105%! Because what buyers don’t like to know they’ve got a solid roof over their heads?

Once you’ve got the ball rolling on getting your place in shape, you’ll be ready for the next step—stay tuned next week for more details on what to do!