Not Too Big, Not Too Small? What’s the Perfect Square Footage for Your Home?

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So many homebuyers look at price per square footage as a factor in whether or not to consider a home. While this is a good idea in a general sense, there is no set formula or standard by which you should decide to buy a home when it comes to price per square footage.

In fact, builders will calculate the area of a home differently than an appraiser will. Appraisers’ calculations differ yet from an auditor’s and you could easily end up with three varying numbers that mean little to you as a homeowner.

At the end of the day, what matters most is how you feel in the space. It is important to compare the space to your needs and your usage. Consider where you are coming from and what type of room you require to live comfortably. As you walk through a home, survey each room and imagine your belongings in the area. If it seems the home lacks enough square footage or feels cramped despite a decent amount of area, then it may be a good idea to move on. Conversely, if the layout is set up in a way that despite being a few hundred square feet less than what you had imagined the perfect size it still feels good – then go for it!

If you fall in love with a property but it seems the space is a little too cramped for your taste – there are a few alternatives to consider that might help get around the issue. Décor plays a huge role in how big or small a space may seem. Utilize light colors, varying textures and airy furniture that is set up to make a room seem larger. Similarly, you can paint the walls in lighter hues to draw the eyes away from the walls and into the room itself.

If the issue is larger than that, another option is to consider renovating the space to expand areas of the home in a way to specifically suit your needs. With today’s dwindling inventory, more and more buyers are eager to lock in the phenomenally low interest rates and adjust their requirements slightly. You might get the best of both worlds by adding additional space, customized to your own needs while locking in a great price in a home that you have otherwise fallen in love with!

If you are considering buying a new home and would like personalized attention on this or other aspects of real estate, I invite you to contact us today!  We look forward to serving you!

FSBO - Your Advantages and Disadvantages - Why Shouldn't I Try to Sell My Home by Myself?

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Many home owners think about selling their own home but relatively few attempt it. Why? Because it's an extremely time-consuming and often exhausting process, especially if you're working a full-time job! It's the Realtor who takes this burden off your back.

Nonetheless, I don't discourage you from putting your home on the market and attempting to sell it yourself.
But before you do it, I do encourage you to become extremely knowledgeable about the process and aware of the both advantages and disadvantages of it.

Below, I've provided information on the benefits and drawbacks of doing a "For Sale By Owner" (FSBO) sale. 

Read it carefully and then make your decision!

Advantages of Selling Your Own Home

Of course, the biggest advantage a FSBO is that there's no commission to be paid to a Realtor. You get all the proceeds from the sale, minus any marketing costs you incur.

A second advantage is that you have complete control of the transaction. You don't have to rely on anyone else. You're totally independent.

A third advantage concerns your equity. If it's low, you have the possibility of selling your home without having to write a check.

A fourth advantage is that you don't have to rely on a realtor to schedule showings, answer inquiries, etc.

Disadvantages of Selling Your Own Home

Perhaps the greatest disadvantage is the tremendous amount of time you have to put into the sale.

It's a time-consuming process to do all the paperwork, the marketing and advertising, the showings, etc. by yourself - not to mention the hours it takes to get acquainted with all the legal, financial, and other issues. You must be prepared for this.

A second disadvantage is the costs in terms of marketing and advertising. If you don't exactly what you're doing, this can be very expensive!

A third disadvantage is that you won't have access to the Multiple Listing Service (MLS) unless you pay a fee to have your listing included. If you don't pay that fee, then you'll end up hunting for buyers one at a time, a very inefficient, ineffective, and frustrating process.

The fourth disadvantage relates to your knowledge of the market. If you're not knowledgeable about it, you may not price your house correctly.

That is, you may underprice it or overprice it. If you underprice your home, you lose money. If you overprice it, you lose buyers. By the same token, if you do find a buyer and you're not experienced at negotiation, you could be taken advantage of.

A fifth disadvantage relates to a belief of some buyers. They believe that since you're selling the house by yourself and not paying a commission, then they're the ones who should get the savings instead of you!

My Advice: Do your homework before considering selling your home by yourself! And, if you do decide to go the FSBO route, be fully prepared in all aspects of home sales!

If you'd like more information and advice on selling your own home as well as my real estate services, contact me.

Are Bi-Weekly Mortgage Payments Worth the Time and Effort?

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In most cases, yes! It’s essentially a process by which you make extra payments on your mortgage. That way, you save interest costs and pay off the loan faster.

How Does It Work?

You make a payment to your lender every two weeks instead of once a month. This means that each payment is equal to half of the monthly amount due. The result – you’re paying the equivalent of 13 full payments rather than the usual 12.

It gets even better! The full amount of the extra payment is applied toward the principal. And because the principal balance is the amount on which interest is calculated, paying down principal results in a reduction in accrued interest!

Let’s look a traditional payment monthly schedule vs. a bi-weekly schedule so you can see exactly how it works.

Example 1: Traditional monthly payments

Let’s assume you have a loan balance of $250,000 with a 6 percent interest rate and a 30-year loan term. In this example, your monthly payments are $1,498.88. So, over the life of the loan, you’d pay a total interest of about $289,595.

Example 2: Bi-weekly payments

Using the same loan balance and terms described above, the difference would be the following:

• $749.44 paid every two weeks

• About $225,490 paid in total interest

• This results in a savings of more than $64,000 in interest!

• In addition, the loan is paid off in 24 rather than 30 years

Bi-monthly payments are still a good strategy if you’re an individual who doesn’t plan to keep your house for 24 or 30 years. Why? Because bi-weekly payments still reduce principle, even over a short period of time.

For example, in the first year, the principle is reduced by nearly $1,600. And, at the end of the fifth year, the principle amount has been reduced by about $9,000!

How Do I Arrange Bi-Weekly Payments?

The first task is to contact lenders to find out if they do offer a bi-weekly payment schedule.

If they offer one, ask what the participation requirements are. In typical situations, lenders require you to have payments automatically withdrawn from your bank account since they dislike processing checks every two weeks.

Often, it’s the case that a one-time fee is charged for this service. The fee can be minimal or be in the several-hundred-dollar range, depending on the lender.

So, after all these benefits, how can there possibly be disadvantages to bi-weekly mortgage payments?

Well, the first disadvantage relates to a situation I mentioned above - the lender’s fee is very expensive for the service provided. In such a case, the costs may outweigh or cut down your overall savings.

A second disadvantage occurs when paying bi-weekly is too hard on your budget. Upfront, you need to make sure that you have the money available for the increased payments.

The final potential disadvantage relates to the length of time you plan to stay in your home. That can affect your overall savings on interest.

I recommend that you weigh the pros and cons of bi-weekly mortgage payments by using one of the many online calculators. Just enter your numbers and the calculator will give you a comparison.

If you’d like the assistance of an expert on the subject, contact us immediately!

Days on Market

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Generally speaking, the longer a home is on the market, the more willing a seller is to negotiate. And that means you might be able to get a good deal!

However, notice that I said “generally speaking.” I put in that disclaimer because there are several reasons a home might be on the market for a long time.

One is that it might simply be overpriced. If that’s the case, then you’re in an excellent position to negotiate since the sellers may be anxious to sell the home.

A second reason may be someone has already put an offer on the property, but their financing, credit rating, etc. hasn’t met the requirements of the deal. In short, there was something wrong with the buyers, and nothing wrong with the home. Again, there may be an opportunity for you in this situation.

A third reason is that someone made a simple mistake in the Multiple Listing Service (MLS)! Perhaps the home got listed in the wrong ZIP code or the wrong neighborhood, or the price was simply wrong and listed too high. Now, normally, MLS is very accurate, but, as always, it’s dependent on humans entering information into the system, so mistakes happen!

Fourth, the house may have stayed on the market for so long because the owners simply refuse to negotiate! A real estate agent can help you identify these individuals for you so you don’t waste time and energy on a sale that will never happen.

Finally, a home may stay on the market for a long time because there is something wrong with it either structurally or cosmetically or both!

Depending on the situation, this can also be an opportunity for you as a buyer! You can use it as a bargaining tool; that is, either the home seller fixes the defects or lowers the price to account for the cost of repairing those defects.

However, you should always, always get a home inspection done on such houses! (Or on any house you’re considering, for that matter!). It prevents you from buying a “money pit,” in which you have to throw a small fortune in order to get defects repaired.

Here’s the short and long of it: DOM can sometimes get you a great value in a home; however, you need the expertise and guidance of an experienced real estate agent to pinpoint such values! I can provide you with that expertise. Contact me today!

What Determines the Value of Your Home?

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Basically, a home's worth is determined by its market value. How is "market value" determined? Most often, it's figured by a comparison ("comp") with homes similar to yours in the surrounding area. So, if the homes in your neighborhood average, say, $250,000, then it's likely that the value of your property will fall in the same range. But market value is also determined by a number of factors including the following: 

External Factors 

There can be several external factors influencing the value of your home. One is "curb appeal", or the first impression your property makes upon prospective buyers. A home that's in excellent condition on the outside will make a great first impression; a home in poor repair instantly loses its appeal to buyers. Other factors can include lot size, popularity of an architectural style of property, water/sewage systems, paved roads, sidewalks, etc. 

Internal Factors  

The condition of a home's interior also has a huge influence on prospective buyers. When you've demonstrated "pride of ownership" and kept up the maintenance (quality paint, trim, molding, etc.), a buyer's interest will immediately perk up for the simple reason that they know your care and concern will result in less cost and maintenance for them. Other internal factors include construction quality, condition of appliances, size and number of rooms, heating/cooling type, energy efficiency, etc. 

Supply and Demand 

"Supply and demand" simply refers to the number of homes for sale versus the number of buyers. When there are more homes than there are buyers, prices tend to be lower. When there are a lot of buyers chasing few homes, then prices tend to rise. In effect, supply and demand affects how quickly your home will sell. Location More than likely, you already know the old saying, "There are three main factors in real estate - location, location, location." While that's not the whole story, desirability is a big factor for home buyers. They may want to live in particular school district known for its education excellence…a great and safe neighborhood with rising property values…etc. 

But I Know My Home Is More Valuable Than a Lot of Comparable Homes in My Neighborhood  

Aren't Allowances Made for This? Definitely! Sometimes, it can be difficult to find homes exactly comparable to your own. So, dollar adjustments are made for the differences between your home and comparable properties. 

Where Do I Find Sales Comparison Information? 

The easiest source to access is your Realtor. After all, it's his or her business to know such information! But, there are also other sources you can tap into in order to get a complete picture of your home's value in comparison to others in your neighborhood. Here's an overview of them:

1. ) The Local Assessor's Office  

It's very likely that your local assessor will be able to provide the sales history of a particular house, neighborhood, or style of architecture. Many assessors also provide lists of recent sales which you can browse and compare to the assessment roll. Today, many municipalities provide local sales and assessment information online making it very easy to access. Check with your local government agency to find out if they provide this service. 

2.) Online Private Companies  

You can search for these companies using the Google search engine and the keywords "comparable home sales" or "comparable sales." Some companies offer free information; others charge a nominal fee. If you wish to get more specific, you can Google "real estate database" and type in the name of your particular state to get additional property information. 

3.) Your Local Newspaper  

It's likely that your local newspaper is a great source of specific real estate information. Look for quarterly sales reports in the real estate or business sections.

The Key to Getting the Price You Want (or Close To It) for Your Home 

The key to getting the best value is finding and matching the right buyer to your home. And that's the job of the Realtor! He or she should work hard to qualify those buyers upfront so the right people are viewing your property! In other words, the Realtor should weed out "lookers" and other unsuitable buyers as a first step in working with you. See how I do that for you by calling me today!

Selecting the Best Contractor for a Home Improvement Project to Increase the Value of Your Home!

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Whenever selecting a contractor for a home improvement project, ask first for word-of-mouth recommendations by family, friends, neighbors, or business associates.

This is the acid test. Great contractors know that personal recommendations are the absolute best method of gaining new business and will work hard to make sure their reputation is sterling.

By the same token, poor contractors or scam artists hate word-of-mouth because it exposes their incompetence and lack of ethics.

If personal recommendations aren’t available, ask the contractors for references and then check out three or four of them.

Again, great contractors will be eager to provide you with these contacts because it means more business. On the other hand, poor contractors or scam artists will either refuse to give references to you or play down their importance.

But, don’t stop at checking references! Also, check out the contractor’s personality. Can you work easily with him or her? You want a person who will listen to your suggestions and do their best to incorporate them into the job. If the contractor is abrasive or dismisses your suggestions, choose another one!

Here’s another suggestion: If a contractor tries to bully you into signing with him or her with a big price drop at the last minute, simply tell them, “I’m going to get other bids and compare them, so just give me your best price now without the price drop.” If they don’t agree to your suggestion, tell them to take a hike.By the same token, don’t work with a window, siding, etc. contractor who tries to get you to change what you want to put into your home.

Often, this means that they’re only comfortable installing the product they normally deal with and want the easiest job possible. Again, it’s your money and you’re the boss, so insist on the product you want.

Finally, don’t let contractors make misleading product comparisons. They should be able give you an informed opinion on, say, the difference between the performance of old siding and new siding and the difference in costs between the two.

However, those comparisons should never lead to a product that more expensive than your budget will allows or isn’t really appropriate for your home.

The bottom line – with contractors, you should get straight-forward honest bids with no surprises! To learn more about how to deal with contractors, contact me today, and we can talk dollars and “sense!” 

Tax Tips for People Looking to Invest In Real Estate

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It comes as no surprise to most of us real estate agents that so many people today are delving into the realm of property investment.  Today’s great value in terms of low prices, coupled with the unprecedented affordability factor that today’s interest rates provides – makes it almost a foregone conclusion that investment activity will be on the rise.

Despite a challenging economy with less than to be desired jobs rates in most states, more and more buyers are getting into property buying as a long term investment.  In fact, even world-renowned investor Warren Buffett has recently stated that real estate is among the strongest asset class right now.

Here are a few things to think about when considering property invesments:

Local Tax Auditor – Great Resource for Tax Values

If you are looking for preemptive tax values one of the best resources is your local tax auditor. Contact their office and share with them your intended use for the property in question and you will likely find out what kind of tax payments or implications you will be looking at.  They will also be able to confirm whether or not you will be considered owner/occupant status or otherwise and provide you with useful information about what taxes you can expect.

Homestead Tax Exemption for Seniors and Disabled Citizens

Until 2007, there were income level requirements that hindered the eligibility for the Homestead Tax Exemption for many homeowners.  But after the program was expanded the benefit became available for anyone 65 years of age and older or permanently and completely disabled individuals.  One other key change that was made was to include a flat $25,000 property tax exemption amount on the value of homes meeting eligibility requirements.  For more information on this program, visit the Ohio Department of Taxation’s Homestead Exemption frequently asked questions page. During your search for your investment property if you are looking for something that would qualify for this exemption, contact your auditor’s office to find out the amount of projected taxes for that property.

Investment Property Vs. Owner/Occupant Homes Taxed Differently

Most people new to investing in real estate do not realize that property taxes vary depending on the type of ownership involved.  If you are looking solely to invest in a property rather than use the home as your primary residence, then the tax implications will be different for each.  It is important to meet with your Realtor to discuss the potential differences in this regard to get as much information as possible about the expected property tax amount.

Land Used for Farming Is Taxed Lower Than Other Properties

The Current Agricultural Use Value Assessment in Ohio is a program designed to allow farmers the benefit of being taxed based on the agricultural value of the property as opposed to the full market value.  Typically this translates to a lower tax rate for those property owners.  During the transfer of property in these cases, if the new owner intends the land for development use then often the CAUV tax does not apply.  Additional tax implications for the new owner will ensue, so it would be worthwhile to consult with the tax auditor to find out what you may be dealing with.
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This is a great time to buy real estate.  Whether you are getting into your first home or moving up to seize the affordability factor and buying a better home for nearly the same monthly payment – this could not be a better time.  Equally, investors are popping up all over the place.  In as little as seven or eight years, the property you invest in today will likely bring a good return – reason for many Americans to buy property nowadays!  If you would like further assistance with your real estate endeavors or seek additional information about the tax considerations in this article, contact us today!