Some homeowners bypass the permit process when they remodel their home. They may find the process too expensive or cumbersome. Permitting fees can sometimes cost hundreds of dollars or more. Some homeowners may believe that if they go ahead with a kitchen or bath remodel without a permit, they’ll likely never get caught.
But failing to get a permit could be troublesome when they go to sell the home.
Most states require homeowners to fill out a disclosure statement when they go to sell. In that form, sellers are usually asked if they completed work to the home without a required permit. Lying about it can also backfire—the sellers could be sued later by the new homeowner for making false statements.
“You can personally become liable for work carried out without permits,” writes Bill Gassett, a real estate professional with RE/MAX, REALTORS® in New England, forThe Washington Post. “Maybe the finished basement built by the previous homeowner with the fancy kitchen that sold the home has to be ripped out, or you’ll have to pay a penalty.”
Also, if there’s any incident that was caused by the lack of permits, the homeowner may face a denial of their insurance claim. If their insurance company finds they didn’t have the required permit, they could deny the claim. Many of these denied insurance claims stem from incidents that involve remodeling projects around electricity, gas, or water that were done without the appropriate permits.
Laundry rooms and Energy Star–compliant windows topped the list of what buyers considered the most “essential” or “desirable” features in a home, according to the National Association of Home Builders’ 2019 “What Home Buyers Really Want” report, released at the NAHB International Builders’ Show in Las Vegas this week. Most of the features that new homeowners or aspiring buyers ranked highest related to helping them save in utility costs, add extra storage, and spruce up the outside, said Rose Quint, the NAHB’s assistant vice president of survey research.
The NAHB surveyed nearly 4,000 consumers who either purchased a home within the last three years or plan to buy a home in the next three years to identify their top desires in a home. Consumers were asked to rank 175 home features based on how essential they were to their home purchase decisions.
Consumers ranked the following home features highest:
Laundry room: 91%
Energy Star windows: 89%
Patio: 87%
Energy Star appliance: 86%
Ceiling fan: 85%
Garage storage: 85%
Exterior lighting: 85%
Walk-in pantry: 83%
Hardwood flooring: 83%
Double kitchen sink: 81%
Energy Star–whole home: 81%
While consumers may rank certain energy-saving features highly, they may not be motivated to pay more for them, Quint said. Sixty-eight percent of consumers said they are concerned about the environment and would like an environment friendly home, but they were not willing to pay extra for one.
However, when asked if they would pay more for a home to save $1,000 a year in utilities, the responses changed. Forty-six percent of respondents said they’d pay an average of $1,000 to $9,999 more for a home to save $1,000 per year on their utility bills; 37 percent would pay $10,000 or more.
“Buyers may not be turning their hearts to the concept of saving the environment, but they will respond positively if you put it in the dollar sense of what they can save,” Quint said. “This shows it’s important to advertise homes on the savings it will bring the home buyer and how it could put money back in their pocket.”
Additional consumer preferences that emerged from the survey included:
86% prefer an open layout, where the kitchen and dining room are open, either completely or partially.
70% of consumers prefer the washer and dryer on the first floor.
67% prefer 9-foot ceilings on the first floor.
64% want two or two-and-a-half bathrooms.
On the other hand, the survey found the features that ranked the lowest on home buyers’ wish lists:
Designing houses with features buyers want is a continuous process for the home building industry. During a Feb. 19 session at the 2019 International Builders’ Show in Las Vegas, builders and designers took a break from their work to talk about some of the changes they’re seeing.
Curved entryway staircases step back.
A curved stairway leading to the upper floor can make for a grand entrance into a home, and certainly serves as a focal point for people when they go in. But architect Todd Hallett, president of TK Design and Associates, told a builders at the session “Do This, Not That! Design Do’s and Don’ts for 2019” that curved staircases are a “not” in today’s floor plans. They take up too much space and can make an entryway feel crowded, he said. Also, when you first enter a home, the stairway disrupts your line of sight, making it hard to see through to the back of the house. Plus, he added, curved staircases can be costly to build.
Instead, builders are looking at simplifying staircases and putting them in where more of the action is. “This might be a stairway leading upstairs that is off the great room or the kitchen,” Hallett said. Or, if the staircase does go in the entryway, it may be tucked off to the side so it’s not the first thing you see when you walk through the front door.
For the last few years, homeowners have traded bathtubs for large, luxurious showers. But while expansive showers are still a hot trend, Hallett said tubs are reclaiming their place in the bathroom. A standalone bathtub “is becoming a focal point when you walk into the bathroom,” Hallett said. “When you walk in, you look directly ahead to see the tub and the shower then behind it. … It becomes a dramatic space.”
A clean look at the laundry room.
The laundry room is the most “essential” and “desirable” feature in a home,according to an NAHB consumer preference survey released this week. As such, builders want to transform the space from a small room tucked away to conceal the washer and dryer into a more prominent part of the home.
“The appliances are getting bigger .. and they’re getting better-looking now,” Hallett said. “We don’t have to close off the laundry room.” In more new-home floor plans, the laundry room is becoming part of a larger family entry area—a large open space off the garage. It features not only the washer and dryer but also cabinetry, a mudroom, and maybe even a desk and computer area, shelving, and benches, Hallett said. “It’s a lot more open, and you’re no longer walking into this tight hallway space,” he said.
Builders are moving away from having to squeeze two separate closets into the owner’s suite. “The trend now is going back to just one big closet,” Hallett said.
Hallett said builders can do more with one larger space than by dividing it into two. For example, one large walk-in closet can feature a large island in the middle with extra drawers and a long countertop. A window can also be added to let in natural light.
You can also dress up a bigger closet with artwork and a seating area. AtThe New American Home, a showcase home in Henderson, Nev., unveiled during the conference, the master suite closet (in photo at left) features a large carmel stone hanging on the wall that was backlit to illuminate the space. It also served as a centerpiece for the adjoining master bathroom.
Mortgage rates inched lower for the third consecutive week. Freddie Mac Chief Economist Sam Khater says the lower rates bode well for the spring home buying season, typically the busiest time of the year for home shopping.
“Mortgage rates … [are] continuing the general downward trend that began late last year,” Khater says. “Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.” The National Association of REALTORS® reported this week that more houses were on the market in January, rising to 1.59 million nationwide and at a 3.9-month supply at the current sales pace.
Freddie Mac reports the following national averages for mortgage rates for the week ending Feb. 21:
30-year fixed-rate mortgages: averaged 4.35 percent ,with an average 0.5 point, dropping from last week’s 4.37 percent average. Last year at this time, 30-year rates averaged 4.40 percent.
15-year fixed-rate mortgages: averaged 3.78 percent, with an average 0.4 point, falling from last week’s 3.81 percent average. A year ago at this time, 15-year rates averaged 3.85 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.84 percent, with an average 0.3 point, falling from last week’s 3.88 percent average. A year ago, 5-year ARMs averaged 3.65 percent.
Homeowners are hitting the pause button on remodeling projects, which may prompt home renovation activity to fall to its lowest level in three years, according to a new report from Harvard University’s Joint Center for Housing Studies.
“Remodeling activity tends to go hand-in-hand with home sales, so when a homeowner is preparing their home for sale they’re likely to do some work just getting their home ready for the market,” Abbe Will, associate project director at the center, told CNBC. “Then really in the first two or three years after purchase, that new homeowner typically spends quite a bit more on home improvements, making that home kind of fit their needs, customizing it, maybe doing some work before they even move in.”
Indeed, new homeowners spend about 30 percent more on remodeling a newly purchased home than a longtime resident does, according to the center. Most homeowners tend to use home equity—either through a cash-out refinance or a second line of credit—to fund their renovation projects. But with home values softening, they may be less inclined to take money out, Will notes.
In addition, higher mortgage rates make tapping home equity to pay for renovation projects more costly. On top of that, material costs are also on the rise.
“If they’re going to do a cash out refi, or they’re looking at a home equity loan or line of credit, I think the sentiment is that homeowners are taking a pause and wondering if that’s really the right move right now, and then thinking, we don’t have to do this major discretionary project now,” Will says. “We can put that off and see what’s happening with the market.
Many homeowners show a reluctance toward refinancing, believing that some offers from banks may be “too good to be true.” But their suspicions may be costing them thousands of dollars in savings, according to a new study in the February Issue of The Review of Financial Studies from Columbia Business School researchers.
Fifty-one percent of 550,000 borrowers who were sent preapproval applications through the Home Affordable Refinance Program between November 2011 and March 2013 chose not to refinance their mortgages, even though there were no monetary costs for them to do so and they could have lowered their mortgage rate, the study showed. For those who did not apply, they may have missed out on nearly $9,000 in savings, according to the study.
Researchers Eric J. Johnson, Stephan Meier, and Olivier Toubia say that a separate survey of 4,000 homeowners showed banks’ motives consistently related to the probability of homeowners’ accepting a refinancing offer. Some financial institutions tried to help overcome some of borrowers’ hesitations, such as by offering $500 cash back rewards if the refinancing process took more than 30 days or by offering an immediate benefit for applying, like a gift card.
However, those interventions also failed to motivate borrowers to act.
“The findings highlight the important role of trust in financial decisions,” the authors note in the study.
Researchers say it could be that some homeowners may have ignored the offers in the mail. But “ignoring this one could be costly,” they note. “This failure to refinance is costly for society as well, since lower payments reduce defaults.”
Spacious areas can sometimes feel cold and unwelcoming. How can you make a large living room with high ceilings feel more inviting? Houzz, a home remodeling website resource, provides some of the following tips:
For a room with tall ceilings, incorporate tall plants. It’ll help fill in vertical height gaps while also drawing the eyes up to help accentuate the high ceilings.
Paint two-tone walls.
To make the ceiling feel lower and more intimate, be sure to use a different color of paint on the bottom half of the walls. Use wainscoting, or tape off a line and paint everything below it a different color.
Bring in an oversized ottoman.
Larger seating arrangements can feel empty if there is too much distance between the furnishings. To close the gap, bring in an upholstered ottoman. It’ll add more softness to the room than a traditional coffee table.
Use furniture to define zones.
Try using a daybed bench or chaise to split up a really large living space. You can then create two full seating areas and help create a flow between the zones. A console table can also help section off parts of a living room. Float a sofa in the middle of the room and then place a console table behind it.
Create an intimate nook.
In large living rooms, create a second seating area in an unfilled corner. For example, put a small table against a bare wall and place two chairs on each side of it. This could be a space for reading or an intimate conversation area.
Couples may be eager to find their perfect home. But house hunting can be stressful, and finding a property that both parties agree on can pose a challenge.
A common spat that many real estate pros see? Not being able to agree on where to live. Elizabeth Gigler, broker for John Greene Realty in Naperville, Ill., told realtor.com® in a 2018 article that she once had one partner who really desired a home in a prime location while the other partner wanted to focus solely on the mortgage payment. Touring homes and not being able to agree on the location can lead to a lot of disagreements, agents say.
Another common sticky point for couples is whether the house is perfect enough to make an offer on it. Couples sometimes have difficulty agreeing on whether they love the house enough to make an offer. “So they keep looking, while the other is thinking, ‘Haven’t we found it already?’” Nathan Garrett, a real estate professional in Louisville, Ky., told realtor.com®.
Other spats can arise while discussing how aggressive to be when making an offer on a home, and how much of the home needs to be remodeled.
But working with newlyweds or couples doesn’t have to end in a spat every time. To keep the peace, Jeff Fagan, president of the Orlando Regional REALTOR® Association, offers some of the following suggestions when working with couples:
Make a list and find a compromise.
Each should make a list of amenities they’d like to have in a house and later compare notes with the other, he says. “See what features you two have in common and use these as the foundation of your home search,” Fagan says. “From there, compromise on other features you’d like to have. Most importantly, remember that no house is worth a strain on your relationship.”
Determine the ideal house size.
“A common mistake that couples make when buying a home is that it’s too small or too big,” Fagan says. He encourages couples to ask themselves a few key questions, such as: Do we plan on having kids in the next five years (if you don’t have any already)? How often will we have guests? Will we adopt any pets? It’s important for the buyers to factor in the answers to these questions when determining the home’s fit.
Drive around the neighborhood together.
“No matter how great the house is, if it’s in an area that doesn’t work for both people, you may regret your purchase,” Fagan says. If the couple plans to have children while living in the home, they’ll want to carefully evaluate the school district. Also, they’ll want to tour the surrounding area to see if what they desire is nearby, such as restaurants, gyms, and access to public transportation. They’ll also want to carefully consider each other’s commute times from the home, too.
Nearly 60 percent of millennial singles say that homeownership makes a potential mate a lot more attractive, according to a new survey conducted by realtor.com®. Women were more likely than men to find homeownership attractive (48 percent versus 43 percent).
“Attractiveness is in the eye of the beholder, and this survey data suggests that many beholders find homeownership attractive, perhaps using it as a signal for financial savviness and success,” says Danielle Hale, realtor.com®’s chief economist. “Single millennials seem to find homeownership in a potential partner especially attractive, even if only one-quarter feels that it is important.”
Overall, 24 percent of 500 single respondents of all ages surveyed said they felt it was important for their partner to be a homeowner.
Homeowning folks are most likely to be found in the South and Midwest, the survey found. The greatest share of single male homeowners was found in Detroit, in which about 23 percent of all single males owned a home. Detroit was followed by St. Louis at 21.3 percent, Minneapolis at 21.3 percent, Cleveland at 21.2 percent, and Pittsburgh at 19.9 percent.
“These markets have a high volume of young people, and relatively low median listing prices,” realtor.com® notes in its study. For example, Detroit and St. Louis median list prices are $220,000 and $198,000, respectively.
Single women are one of the fastest-growing demographic segments in the housing market, according to realtor.com®. Homeowning females are likely to be found in Detroit, where 23 percent of single women own a home, followed by Baltimore (21 percent), Charlotte, N.C. (21 percent), Philadelphia (21 percent), and Minneapolis (21 percent).
“Strong job opportunities and growing economies that draw many young professionals to the areas are also helping keep them in these markets as homeowners,” realtor.com® notes in the study. “Affordable home prices have also helped singles achieve homeownership in these markets.”
Cooling inflation and slower global economic growth prompted mortgage rates to drift down to the lowest levels in a year, Freddie Mac reports.
“While housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring home buying season,” says Sam Khater, Freddie Mac’s chief economist.
Freddie Mac reports the following national averages with mortgages for the week ending Feb. 14:
30-year fixed-rate mortgages: averaged 4.37 percent, with an average 0.4 point, dropping from last week’s 4.41 percent average. A year ago, 30-year rates averaged 4.38 percent.
15-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.4 point, falling from last week’s 3.84 percent average. A year ago, 15-year rates averaged 3.84 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.88 percent, with an average 0.3 point, falling from last week’s 3.91 percent average. A year ago, 5-year ARMs averaged 3.63 percent.
