Want to Add Value to Your Home? Get Into the Kitchen and the Bathroom!

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Everyone knows that – all things being equal – the first areas buyers look at when considering the purchase of the home are the kitchen and the bathroom. They know they’re heavily-used areas and also the most expensive to upgrade. So, buyers want to know they’re in great shape or need, at most, minor repairs.

This tells you that you need to make the kitchen and bathroom “shine” in terms of their appeal. By some estimates, you can earn back 80 to 90 percent of your money in resale value!

Here’s more good news! Depending upon the state of these rooms, improvements don’t have to be all that expensive! Let’s look at the kitchen first.

Making Your Kitchen Shine!

The first bit of advice for you actually applies to both the kitchen and the bathroom – use paint! In fact, use high-quality paint. It’s a fact of life that kitchen walls get spattered with grease and food (especially if you have kids!), and bathroom walls get battered with steam and moisture.

So, the first thing to do is to take a look at those walls, clean them, and then paint them. And consider the color carefully. It should be a color that’s relaxing and tends toward a neutral tone.

Once you’ve chosen a color, spend the money on good paint, not the cheap stuff. It’ll look better, and buyers will notice that it’ll resist stains and water for a longer period of time than lower quality paint. It’ll also tell them that you’ve taken good care of your home.

Another inexpensive “fix” you can do yourself is, of course, the faucets over the sink (or the sink itself). A visit to a “big box” store like Home Depot, Menards, etc. will cost you little money. All you have to do is invest some “sweat equity.”

Of course, fresh curtains always spruce up a kitchen as well as orderly counters, islands, etc. And don’t forget lighting! Warm, friendly lighting can make a huge impact upon a buyer’s first impression. 

Another area to look at is the kitchen floor. If it’s worn, I’d recommend that you replace it with a hard-wearing material. Everyone knows the kitchen is a high-traffic area so they’ll look closely at the floor to see if they’ll have to bear the expense of replacing it.

Again, if you have handyman abilities, you can do this yourself. There are many inexpensive materials available today that are relatively easy to put in – high-quality tile, laminate floors that clean up easily, etc. 

In terms of kitchen cabinets and counters, you may want to consider refinishing them or replacing them if they’re in bad shape. This can be rather expensive, of course, but it also might make the difference between a sale and the home staying on the market.

Moving on up in terms of expenditures, buyers today expect modern appliances in the kitchen – stoves, dishwashers, etc.

These are big ticket items, of course, but if your appliances are worn or out-of-date, think about replacing them, especially if you’re having trouble selling your home.

Look for sales on modern higher-end appliances such as the ones available at Sears, etc. Buyers will spot cheap ones in a heartbeat, and this can cost you a sale.

Today’s buyers look for spacious kitchens that open on to another room and which have a window over the sink. Obviously, if your kitchen doesn’t have these features, it would be far too expensive to put them in.

However, you can make your kitchen look as open as possible. Make sure the counters are clear, visible pots and pans are ordered neatly, and the floor is free of clutter.

Okay, now onto the bathroom!

Making Your Bathroom Shine!

If your bathroom is in good to great shape, then it’s a simple matter of paint, as I mentioned before, and a good all-round clean up. Since we’re dealing with sanitary issues, you want this area to sparkle as much as possible.

But, what if the shower, tub, sink, or toilet are not in great shape or are out of date? Well, then, I’d recommend that you do a whole remodel.

It can be expensive, but when you replace, say, just one item, it can create an unharmonious look. Ideally, you want the sinks, faucets, toilets, showerheads, tile, etc. to match to make the bathroom look as unified and appealing as possible.

Depending upon your expertise, you can install these items yourself at a lower cost. If not, hire an expert to do the work, especially if your home has been on the market a long time and isn’t selling.

Okay, here’s one last suggestion. It’s an expensive one but it’s been proven to add value to your home – add a second bathroom!

One-bathroom houses are simply harder to sell and sell for less than ones with two or three bathrooms. 

So, if you have the financial wherewithal, consider adding one. A good place for a second bathroom is right off the master bedroom. This will appeal to buyers with children since they’ll have a space separate from the kids.

Also, if for some reason, you decide not to sell, a second bathroom can make life easier for you if you have children as well!

Want to hear some more suggestions for improving the value of your home? Contact me today and we can talk about some inexpensive methods of doing just that!

Understanding the Difference Between Online Resources and a Realtor When Pricing Your Home

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The Internet can be a great resource for a host of things centered on buying or selling your home but in some cases, the most you can expect to gain is a basic understanding of things.  For something as serious and important as pricing your home to either value it or sell it, relying on the Internet can only go so far.  Here we’ve outlined some key differences between the figures you will yield from online sources versus those that have been compiled by your local Realtor. 

ACCURACY IS VITAL
In today’s market especially, accurately pricing your home to sell is essential.  With it being a buyers’ market, you will have to gain a solid understanding of allfactors that contribute toward your property’s value.  There can be negative repercussions of pricing a home either too low or too high.  One such scenario is if there was a seasoned buyer who had taken the time to research in advance of searching for homes.  That buyer’s knowing what to expect in the local market seeing your overpriced home could result in a turn-off and you could lose the sale.  By the same token, you stand to get the shorter end of the stick in case of not knowing what you could have charged.  Spending a little more time and/or expense can make a huge difference in the end outcome.  


ONLINE TOOLS AND CALCULATORS
There are more than several websites where anyone can log on, put in their zip code and be given an instant “analysis” of their real estate value. The figures that appear as results from searches made through online resources stem from a conglomeration of several weeks and sometimes months of data collected from a particular region.  

Websites such as www.zillow.com,www.realtytrac.com or www.trulia.comoffer a great way to get a generic idea of the value that homes in your region are going for or have gone for recently.  As an added resource to other services also offered on these sites, the goal is not to assist homeowners in assigning a selling price on their property based on the data, rather to offer a snapshot on sales and pricing data for the area.  In fact, for many people it is the perfect tool to add an extra edge when determining the fair market value of your home, along with other factors.  


PROFESSIONAL COMPARABLE MARKET ANALYSIS
While online real estate tools are a great way to get a preliminary idea, they are only going to yield a figure that will show you where to start.  To get an accurate assessment, you will need to avail the professional services of a Realtor.  The only way to get an accurate “reading” of what the market rates are for homes in your vicinity and your neighborhood in particular, is to have a comparative market analysis conducted by a Realtor who understands your neighborhood.  There is a good chance that they have dealt with properties in the area on a first-hand basis, regularly interact with the agencies and organizations that deal with very homes in your neighborhood and are familiar with the people in various facets that you will end up needing to interact with yourself, as the seller of your home. 

Realtors conduct a detailed Comparable Market Analysis (sometimes also called Competitive Market Analysis) through a series of data compilation of area homes and properties, considering factors such as amount of land, the square footage and number of bedrooms or typical amenities in the neighborhood.  But homeowners can also opt to delve into accurate detail about their property’s value by relying on an independent appraiser.  Also, through the use of CMA data the County Tax Assessor determines the value of your property taxes.  
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When you are pricing your home to sell, it is vital that you use all available resources.  At first, it makes sense to “shop around” and get to know the generalities before you head for the specifics.  And as with most transactions dealing with your real estate world, it is always best to rely on your Realtor for quality, effective and accurate information that is relevant to you and YOUR market. 

Cincinnati FHA203K Loan

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Using an FHA 203k loan can help you get the home you want - especially if you are looking at building some fast equity in a 'fixer upper'. Looking for a home that's almost perfect? Check out this loan to get funding for the house and any repairs that is bundled together, and a 203k loan may be easier to get than other home improvement loans. First, I'd like to share an example of how this works. We are closing on a home for a client shortly who is purchasing property for 120,000 dollars. After escrowing approximately 10,500 dollars for cosmetic and deck repairs, their "subject to" appraisal came back at 195,000 dollars! That's 64,000 dollars in equity the minute the Deed is recorded! What an awesome program! You can kill two birds with one loan.

203k Loan Bundling

Using a 203k loan allows you to combine loans for purchase (or refinance) and home improvement. This can reduce closing costs and paperwork; multiple loans mean more closing costs, and temporary loans may have higher interest rates than your 203k loan. You kill two birds with one loan.

Keep in mind that 203k loans require a little more paperwork than some other loans because you have to manage and document improvement projects.

Handle Deal Breakers

You may want to buy a home that's almost perfect. However, serious defects may scare lenders off. If sellers won't fix the problem, you can't buy the house unless you use something like a 203k loan. The lender knows you'll fix serious problems that you've agreed to fix, and they can move forward on the deal.

Temporary Housing

203k loans allow you to set money aside for housing while your repairs are completed. You can continue to pay an existing mortgage, or pay rent for up to six months. You won't have to live with an on-going construction project or come up with two housing payments each month.

Large Loans

Using a 203k loan provides access to large loans. Yes, there are limits, but you can borrow enough to finance 110% of the home's projected value after improvement. 203k loans, like other FHA loans, have low down payment requirements (for better or worse). Because they're guaranteed, the interest rate is competitive.

Improvements that Matter to You

The main benefit of 203k loans is the ability to make the improvements you want. Funding for an addition or updating the kitchen is taken care of up front. You can turn the home into something you want. If you're environmentally conscious, you can even choose green appliances and materials

There are many homes available that with a little TLC could be your dream home. A Cincinnati fixer-upper may also make a great investment, especially if you are able to do some of the labor yourself, or you are a savvy buyer. You are the person that has the vision to take that sad-looking little home on a great lot in a good location and turn it into the most desirable home on the list of Cincinnati homes for sale!

Ask your lender if they offer a 203k loan or contact Sarah Close Associates at Keller Williams and we will put you in touch with ours.

Deed Restrictions (10 Things That Can Ruin Your House)

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It is imperative, if you are looking to build or remodel a home, that you are aware of any deed restrictions.  A deed restriction is a provision in a deed that limits what can be built on a property, or how a property can be used.  So if you want to assure that your dream home will not turn into a nightmare, here are common deed restrictions that any property owner should be aware of.

Obstructing a Neighbor’s View

Many deeds have agreements in them that state that the neighboring properties views must be the same as when the agreement was reached, which may have been decades ago.  Though extremely popular in resort towns where views of mountains or the beach are highly valued, these restrictions are also in place in many communities with more subtle views. 

Type and Number of Vehicles

In order to keep neighborhood streets from appearing cluttered, some properties may have restrictions on the number of cars each house may keep in the driveway and parked on the street.  If there are multiple members of your household that are driving age and have a vehicle, make sure you are aware of any restrictions that may prohibit some of these vehicles from being parked in the driveway or street.

Building Fences

The size and style of fence which may be built on a property are often specified in a deed.  The most common of those outlawed by deeds around the country include chain-link fences or very tall privacy fences.

Removing Trees

This restriction is becoming much more commonplace in many neighborhoods which wish to maintain an environmentally conscious atmosphere or preserve tree-lined avenues.   There may be a complete ban on tree removal or a certain percentage of trees on a property may be protected, so before you start up your chainsaw, brush up on your properties stipulations regarding the removal of trees.

Approving Plans

In an attempt to keep a neighborhood’s identity uniform, many HOAs (Home Owners’ Associations) will need to approve your building plans before construction begins.  So, if you are hoping to build a modern home in a neighborhood full of Victorian-style homes, contact the HOA beforehand to get the go-ahead or you may face an injunction that forces you to alter your building plans to conform to the neighboring houses.

Adjacent Structures

One of the most heavily controlled deed restrictions consists of the building of any adjacent structures on a property, whether it be a shed or pool house.  If the building of such a structure is not forbidden outright, odds are that the type, size, and location of the structure on the property are limited due to a deed restriction. 

No Business Here

Perhaps the most easily adapted deed restriction consists of prohibiting the running of a commercial enterprise out of a residential abode.  The reasons behind such deed restrictions include limiting the number of traffic in the neighborhood consisting of customers and deliveries.  However, recently judges have been finding that these covenants are unlawful restrictions to private rights.

Color Palettes

Lists of approved, or occasionally unapproved, colors which a house can be painted are often provided by home-owner association.  So if you are building a new house or giving your current house an exterior make-over, be sure that the color you choose for your home falls within the permitted color spectrum.

Pet Restrictions

If you have a furry loved one in your family or if wish to keep any sort of livestock on your property for organic food purposes (such as chickens or goats), check with your neighborhood covenant to assure that these animals will be allowed on your property.  Though restrictions on livestock may not surprise a home owner, there may also be restrictions against certain breeds of dogs, pot-bellied pigs, or the number of animals you may have in the house. 

Number of Bedrooms

Deed restrictions are in place to limit the amount of septic use of a household due to the idea that the number of bedrooms in a home correlates to the number of bathrooms.  If you are not able to fit your entire family comfortably into your dream house, then this would be a major setback, to say the least.

Instead of fighting deed restrictions, facing heavy fines, or being forced to alter your after new building or modifications have occurred, a home owner is much better of knowing any limitations set in place due to deed restrictions before buying the property.  Arm yourself with the knowledge of any HOA covenant regulations or deed restrictions before purchasing or remodeling a home, and it will make the transition into the house you’ve always wanted much smoother.

What is a 1031 Tax Deffered Exchange?

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There are three types of 1031 tax deferred exchanges that can take place:

1.) Straight exchanges—two parties trade properties of equal or approximate value. This is the simplest exchange.

2.) Multi-party exchanges—this involves three or more parties buying, selling, or exchanging properties. Don't attempt these exchanges without the aid of a tax professional; they tend to be very complex.

3.) Delayed exchanges—this exchange allows the sale of the relinquished property and the buying of the replacement property to occur at different times as long as stringent rules are followed.This is the exchange most often used.

What's the Advantage of the 1031 in Terms of Taxes?

As the law's title indicates, the capital gains tax is deferred, but not eliminated. However deferral is a great way to leverage small real estate holdings into larger ones! Since you can postpone gains, you're able to use a tax-deferred exchange strategy to transfer equity to a larger property, all without paying taxes!

Another advantage is that there’s no limit on exchanges. This means you can make as many exchanges as you want! So, over the course of your lifetime, you can keep growing income and appreciation by adding new properties without having to pay the capital gains tax!

If you specialize in buying and renovating properties and want to keep reinvesting your profits into larger properties, then this strategy is especially attractive.

Note: If you don’t keep reinvesting, you risk being classified as a real estate dealer by the IRS and will not be able to participate in exchanges.

What Are the Basic 1031 Qualification Rules?

There are some basic rules that must be followed in order to qualify for a 1031 exchange. These include the following:

1.) The properties to be exchanged must be located in the United States. Note: You can exchange foreign property for foreign property and domestic for domestic. However, you can’t mix these exchanges together.

2.) You must trade only like-kind real estate.

3.) An exchange must be made that’s equal to or greater in both value and equity. Any cash or debt relief received above this amount is considered “boot” and is taxable.

4.) The like-kind property must be identified within 45 days of the closing on the initial property.

5.) All proceeds from the initial sale must be turned over to a"qualified intermediary" (also called a QI, facilitator, exchanger, etc.) who is the person or company playing the role of middleman.

6.) Any of the proceeds not under the control of the middleman are subject to taxation.

7.) The middleman holds the funds from the initial property in escrow until such time as the closing on the second property occurs.

8.) The middleman also assists the owner with the preparation of paperwork and other services to ensure the transaction progresses in a smooth manner.

9.) The closing on the second property must take place within 180 days following the close on the first property.

Wow, as you can tell, this is pretty complex subject and can't completely covered here! But if you're an investor or plan to be one, I hope I whetted your appetite for this subject.

And please, if you have any further questions, feel free to call me! I'd love to tell you more!

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.