Featured

Surveys & FHA Loans: What You Need to Know

new-hope-pa-septic-system-installationI was recently working a purchase for a buyer using an FHA loan and I get a call from the lender the day before closing saying that the septic tank and the well are not 50 feet apart as required by FHA guidelines, so we can’t close this deal. WHAT?! I am aware that there are certain housing guidelines that must be satisfied for an FHA loan, but this was not one of them I knew about!

My first question was, “are you sure the surveyor did it right because the seller said that the septic tank was up front”. He assured me that the surveyor found it in the back with the well and that it was too close. Apparently a remedy for this is to call the local municipality and have them override it, but he said that process could take up to three weeks. We didn’t have three weeks, my buyers had to be out of their rental in 5 days! So what do we do?! Luckily my client was able to qualify for a conventional loan product and get closed within the 5 days, but what if they couldn’t and I had to tell them they couldn’t buy this house? That was just unacceptable and I felt I was doing a major disservice to my client, after all it was my job to know these things!

So for all the agents out there working on FHA loans, here is the scoop so you can better serve your clients:

1) If you have a property with a septic tank make sure you inquire about a survey as soon as possible! If the seller does not have one that can be used then make sure that one is ordered after the appraisal is found to be satisfactory. Give ample time in case you have issues that come up.

2) The LENDER requests a survey with the septic through the TITLE REQUEST that they send to the title company or attorney. It is always a good idea to make sure your title agent or attorney is aware that the loan is FHA so that they can make sure to keep an eye out for anything that might not be FHA compliant.

3) “For an FHA appraiser to pass your well, it must be at least 50 feet from your septic tank and at least 100 feet from the septic tank’s drain field. In addition, the well cannot be within 10 feet of your property line. The appraiser can also test for chlorination in the water. If the well is inoperative, it must be filled with at least 20 feet of concrete and capped.” (https://homeguides.sfgate.com/fha-well-septic-guidelines-6948.html)

I am glad that this worked out this time and my clients weren’t horribly mad at me for this, but I am even more happy that I was able to find this out so I can prevent it from happening in the future!

 

Advertisements

Want to Be a Landlord? Here is What You Need to Know

You’ve been a homeowner for a while now and overall, everything’s gone pretty well. Your home is a comforting, safe place that has given more than it has taken — you’re pretty happy with how that purchase has gone, really.

That’s why when your friend was talking about the frightening amount of rent he’s paying for his place, the wheels started to turn. Owning a rental or two just might be a great way to bring in some extra income without having to really work for it. Plus, there’s all the equity you’ll gain as those renters pay down your note. What could be better?

The Road to Rental Success is Paved With Good Intentions

There’s nothing ethically wrong with being a landlord and there’s nothing wrong with not being a landlord, but either way, you should go in with your eyes totally open. Rentals are hard work, even if you only have one or two single family homes. Before you buy your first rental, take some time to ponder these finer points of landlordship:

1. New tenants should always be considered carefully. Even your closest pal might have some really negative feelings about how a rental and the landlord attached deserve to be treated. You’re obviously not going to make a million bucks on your one house, but it would be good to cash flow. Always do a background check and ask probing questions to learn more about the people who will be living in your house. Bad renters can be enough to sink your entire rental empire before it’s really taken off. If you have to gut the house and start over between tenants, there’s no way you’re going to win at landlording.

2. Think about rent collection now. How do you plan to actually get your money? Now is the time to think about this, before you have a tenant that can’t or won’t comply with your wishes. In this day and age, it’s not unusual for a landlord to require electronic payments. They’re simple to set up using one of many systems available online, depending on just how large you hope your rental empire becomes, and easy for tenants to use. When it’s electronic, there’s no question about that check that’s in the mail. One click and it’s done.

3. Get comfy with the legal stuff. Do you know what your obligation is to your tenants were your rental to be made uninhabitable through no fault of their own? Does your state allow them to withhold rent with no penalty if you don’t get that property fixed up fast enough? Can they crash in a hotel and charge it all to you during said repairs? There’s a lot of legal stuff to cover, it definitely helps to have a real estate attorney in your corner. Real estate attorneys can also help you draft a rental agreement that protects both you and your renter.

4. Planning repairs and upgrades. Repairs and upgrades are best made before anyone moves in, that way you have full access to the property and can move a lot faster not having to remove furniture and personal objects. Repairs of a rented unit sometimes can’t be helped, so have a plan for how to handle them. Calling a home pro in can speed up the service and ensure the problem is fixed right the first time. Always check that your pros offer 24 hour service, in case of an emergency — otherwise you’ll be the one called in at 2 am to fix that busted pipe.

Upgrades also require plenty of forethought. Choose materials that are going to be easy to take care of and durable, even if they cost a little more. If you keep this rental house over the long term, making those choices early will mean not having to replace things like carpet every time a tenant moves out. Unlike your personal home, this house is an investment, so set it up in such a way that you get the most for your money across your entire anticipated ownership.

5. Dealing with eviction. This is a worst-case scenario scenario, but have you considered what you’d do if a renter stopped paying rent? Do you allow one missed payment, then start the eviction process? More importantly, can you stomach the idea of eviction? Even the best renter can turn into a financial drain when there’s been a death in the family, they’ve gotten laid off or new debt is making it harder for them to make ends meet. If you can’t see yourself evicting a family whose breadwinner died, making it too hard to keep up with the rental payments, rentals might not be for you. A workable compromise could be to immediately hire a property manager to deal with the dirty details.

Ready to Become a Landlord?

Being a landlord has its ups and downs and it requires a lot of general knowledge that’s hard for any one person to really maintain. That’s why HomeKeepr is such a handy community for new landlords like yourself. You can meet home pros with every kind of skill you might need, from legal to property management. Just log in and you’ll be given a list of recommended pros in your area that are ready to help!

 

“>Ready to Start Your Journey? Find Local Pros to Help

 

IMPORTANT! Changes to Tax Laws and How It Affects You!

As a homeowner, or soon to be homeowner, you can get some pretty sweet tax deductions from things related to your home. Some tend to change from year to year, like those for energy-efficient upgrades, others are pretty stable, like being able to deduct mortgage interest.

The tax bill that will be in force in the up and coming tax season, the Tax Cuts and Jobs Act (TCJA), has made some fairly dramatic changes to how many homeowners will file their taxes this year. Take a look at this preview of home-related points to ponder for your 2018 tax filings.

TCJA Items to Watch in 2018

When the TCJA was pushed through Congress in December 2017, many people were up in arms. The overhaul, they said, was going to be problematic for a number of reasons, which, we’ll see how that pans out. It does seem that when it comes to real estate, the TCJA is going to be a pretty prickly thorn in a lot of property owners’ sides.

These are the top items you’ll want to pay close attention to this year:

Item #1: SALT

The state and local tax deduction (SALT) is set to be a problem for homeowners in high-tax areas. In the past, you could claim an unlimited amount of already-paid personal state and local income taxes, as well as your property taxes, as a deduction to offset your tax bill. From now until 2025, you’ll only be able to use your Schedule A to itemize $5,000 worth of these taxes if you’re married filing separately and $10,000 if you are single or married filing jointly.

This looks like a bear of an issue for many people in those high tax areas on both coasts, but for some, the increase of the standard deduction to $12,000 for singles or $24,000 for couples may balance the equation.

Item #2: Your Mortgage Interest Deduction

If your home was purchased after December 14, 2017, you will be subject to the new limits on mortgage interest deductions. Instead of being able to deduct the interest on up to a $1,000,000 mortgage, you’ll be capped at the interest on only $750,000. Now, if you’re in the less spendy parts of the US, you probably don’t need to worry about this at all, but again, for those of you on the coasts where real estate prices are often hugely inflated by comparison, it may make a weighty difference.

According to a Zillow report published shortly after the TCJA passed, “Under the current setup [Pre-TCJA], roughly 44 percent of U.S. homes are worth enough for it to make sense for a homeowner to itemize their deductions and take advantage of the mortgage interest deduction.Under the new bill (as reported), that proportion of homes drops to 14.4 percent. Interest on second/vacation homes will remain deductible, but will also be capped at $750,000.”

Item #2B: Home Equity Loan Interest Deductions

This one is being called out specifically because of the number of people who are likely to be affected by it. If you purchased a home at any time and took out a home equity loan, you may lose your deduction this year. The TCJA says that unless your home equity loan was used for home improvements, it’s no longer allowed.

There is no grandfathering for this clause, you are paying for decisions you made in the past, not knowing this bill would become a law.

How the IRS will be able to verify how you spent your funds, especially if the loan is 10 or 15 years old, is anyone’s guess.

Item #3: Gains From Home Sales Still Protected

Despite all the new rules that are taking deductions away, the home sale gain exclusion remains. You’ll still be able to exclude up to $250,000 ($500k for married filing jointly) of gain from a home you’ve owned and used as a primary residence for at least two of the last five years. So, you’ve got that going for you.

Taxes and Real Estate: A Tricky Mix

It’s a good thing you have a whole community at HomeKeepr watching out for you when it comes to changes to the tax laws this year. When you’re ready to start discussing your own tax situation, just use the search function to find accountants and tax preparers that can answer your burning questions. Since all the HomeKeepr pros come heavily recommended, you can feel confident that you’re ready for the big tax law change.

3 Reasons You Need a Permit

It all started with a shelf.

You just bought your home and, though it needed a little surface work, you were pretty proud of it. It was yours, to do with as you wanted. So the first thing you did was run out and bought some lumber to construct a custom, built-in shelf system in your living room.

Oh, man, that was a breeze, you thought to yourself as you sat watching television and admiring the shelving. That was when you realized how much your house would benefit from knocking the wall out between the kitchen and the living room. After all, if Vanilla Ice can do it, surely you can.

If you had to look back and pick the moment when everything went south for you, that would be it. Thanks, Vanilla Ice. Thank you.

Instead of getting a permit for this major structural modification to your home, you just started smashing. After all, they don’t get permits for this stuff on television, so why bother with it?

Now you know why. Oh, now you know.

Many DIY Jobs Require a Permit

Whether you’re a trained carpenter or a DIYer that binges HGTV, there are certain kinds of home remodeling that will always require a permit. This ensures that someone is looking over your shoulder to make sure that you’re doing the work correctly.

Advanced jobs in plumbing, electrical, HVAC and other specialty fields always require a permit to ensure that the home is and will remain safe for the occupants. Other jobs, like those that involve making structural changes, may or may not need a permit. That’s usually at the discretion of the permitting body.

You’ll want to speak to your municipal planning and zoning department to determine whether or not your job needs to be permitted. Typically, getting a permit requires that you describe the work you plan to do and pay a small fee that covers, in part, the cost of having expert inspectors ensure that your worksite is safe and your repairs are done correctly.

This is Why You Need a Permit

It can be a pain to go down to P&Z (or planning and development in some areas), but it’s really worth the effort in the long run. Despite the amount of documentation these can require, depending on the complexity of your project, you’ll find that going through the process properly will force you to really think about each step in your process.

Of course, that’s just one reason to get a permit, there are plenty more, like:

1. Avoiding serious legal ramifications. In any municipality that requires permits, there’s some kind of severe punishment for not getting one.

For example, in Dallas, Texas, the ordinance reads like this: “Punishment. Any person who knowingly violates a provision of this chapter or the codes is guilty of a separate offense for each day or portion of a day during which the violation is committed, continued, or permitted, and each offense is punishable by a fine not to exceed $2,000. (Ord. 26029; 26286).”

Or, if you’re in St. Paul, Minnesota, you can be charged with a misdemeanor — along with a stiff fine — for any work exceeding $500 that hasn’t been permitted first. Do you really want a criminal record because you wanted to install a bay window where two tiny windows used to be?

2. Being confident the work you’ve done is done right. Unless you have an expertise in construction, you probably have a lot of gaps in your knowledge base, including how to tell if a wall is a load-bearing (aka. structural) wall. This sort of mistake is more common than you might imagine and can be devastating to a home.

For example, when you pulled that wall down in the opening scenario, you didn’t know it was a structural wall. Now, months later, you’ve been noticing an increasingly deep sag where the wall used to be and the floor tiles are cracking here and there. The reason? Your house is under a lot more stress now because you took out a wall it needed and didn’t replace it with something to help carry the weight.

Had you sought a building permit, a housing inspector would have come by to check your work and advised you to put a 10-inch header up to make the project work without compromising the house’s structure. Inspectors aren’t always there to bust your chops, they can actually help.

In addition, when you go to sell your home, you will now have to disclose that you did this work without a permit and that it has caused some pretty serious problems. It’s a complete no-win and it’s going to be costly to have an expert come in and fix what your demo saw or sledge destroyed for peanuts..

3. Ensuring that all work is safe and up to code. If home pros shared some of the most terrifying things they’ve ever seen in homes, you would understand in an instant why permits keep you and your neighbors safe. These are the times when you can’t do much besides shake your head and laugh, because human ingenuity plus human sloth makes some really crazy work arounds.

Had these creative types of work been inspected, of course they wouldn’t have passed. Today’s building inspector and the permit office attached can prevent tomorrow’s house fire, ceiling collapse, or rapid structural degradation.

Not Sure If You Need a Permit…?

If you don’t know if you need a permit, call the authorities that issue building permits for your area. This is typically Planning and Zoning or Planning and Development within your city or county’s offices. They can explain what’s permitted and what isn’t, or at very least, send you some literature.

When the permit process seems impossible, the actual work you have planned may be more than you really are ready to handle. This is a great time to reach out to your HomeKeepr community for help. Recommended pros like general contractors, electricians and HVAC experts are ready to take up the torch, including getting that permit you need.

You don’t need more stress in your life. Relax while trusted pros make your house into a home.

Find Out More About Permits In Brevard: Brevard County Permit Department

Need a Pro? https://www.homekeepr.com/blog/assets/dist/homekeepr-blog.min.js

“>HomeKeepr: Find Advice and Pros

What You Need to Know About Mortgage Insurance

Whether you’re in the process of buying your first home or you’ve been a homeowner for years, there are few phrases that hit right to the bone like “mortgage insurance.” Why, you’re not sure entirely, but lots of people indicated that it was terrible and you were going to regret it.

As usual, the truth lies somewhere closer to the middle. Mortgage insurance is not your enemy, but it can be a costly surprise if you’re not prepared. Let’s dive into this hot button topic.

What Exactly is Mortgage Insurance?

Mortgage insurance is a type of coverage that your lender will take out on your loan to help shield them against loss should you default. They generally only require it if you have less than 20 percent down and often, this monthly payment will drop off once you’ve paid your home loan down to the point that your house has about 22 percent in equity versus its mortgage.

To be clear, this insurance does not cover you — at least not directly. In the case of default, the bank gets the check, but you get something, too. In many states, even recourse states, the mortgage insurance can be enough to prevent the bank from coming back on you for the difference between what you owe and what it was able to recover at a public sale.

Having mortgage insurance does not guarantee you will be free and clear should you lose your home, but it sure helps, especially if that house is in good condition when you turn it over to the bank. Its original purpose was to make it easier for people to get mortgages, even if they couldn’t come up with a big down payment, but during the housing bubble a decade ago many homeowners discovered that it can help on the back end, too.

MIP, PMI and Funding Fees

Mortgage insurance is a blanket term for several different insurance programs that essentially do the same thing. Rather than just calling it “mortgage insurance” across the industry, due to the way each program came into being in sort of a vacuum, different loan types have different names for it. For example:

* FHA calls it MIP, the Mortgage Insurance Premium. It was one of the first programs and the name is an original, for sure. It requires both an upfront and monthly payment.
* Private Mortgage Insurance is available on conventional loans and will be provided by one of a few different companies, MGIC being one of the biggest.
* Many people think that VA loans don’t have mortgage insurance, but they do — it’s a one time charge at closing known as the “Funding Fee.”

For most people, having mortgage insurance is just a reality of life. They can either continue to give their entire payment to someone else to pay off real estate the renter will never have a stake in, or they can give a fraction of their payment over to the bank in order to be given a chance to establish some equity and build a little wealth, even if it’s in the form of the family home.

Since the pricing of your mortgage insurance is based largely on your outstanding mortgage balance, the payment will get smaller and smaller each year. You can expect to pay from a half percent to one percent of your total mortgage balance annually. So, for example, if you borrow $300,000 to buy your home, your mortgage insurance payment will be anywhere from $1,500 to $3,000, or $125 to $250 a month, the first year.

Getting Rid of Mortgage Insurance

Although mortgage insurance has its place, you don’t want to pay it forever. That’s where this section of the blog comes in! If you borrowed using an FHA program after the summer of 2013 and had less than 10 percent down, you probably have lifetime mortgage insurance. There’s no joking, this is not a great situation.

Usually, once you reach 78 percent loan to value, based either on the original appraisal or an updated one, the bank will drop your mortgage insurance. You may have to write a formal request, but it’s not that big of a deal. With these FHA products, the mortgage insurance is meant to stay for the entire life of the loan. So, your options to shed it are a little trickier. You can:

1. Avoid it entirely by using a piggyback loan. This is a combination mortgage made up of an 80 percent LTV conventional loan and a 15 percent LTV secondary loan. That secondary loan, however, can have a pretty high base interest rate and may have terms like an adjustable rate, a shorter amortization period or a prepayment penalty.
2. Bring more to closing. Hey, it’s not fun to crack your piggy bank or 401(k) to get extra money, but there are times when it makes sense. This is one of them. You always need somewhere to live, you might as well be building equity, too.
3. Refinance the monster. If you’ve noticed prices in your neighborhood rising dramatically or you’ve just been paying on your mortgage a while, it could pay to refinance your loan. Your Realtor can help you determine if it will be worthwhile to spend the money for a new appraisal and new loan paperwork. That’s also the downside, though. It can cost as much to refinance at the wrong time as you’re paying in mortgage insurance.
4. Sell your home. You know, it was a good home, but you’re sick to death of paying the mortgage insurance. You plan to take the sale proceeds to buy another place that you can put at least 10 percent down on to avoid further incidents of lifetime mortgage insurance.

Most of the time, if you compare your mortgage insurance to the alternatives, it’s not really that big of a deal to pay an extra percent for the ability to buy a home with five percent down, rather than when you finally have 20 percent down.

Keep in mind that although interest rates have been in the three to four percent zone for a while now, pre-bubble, they were between six and eight percent for a prime mortgage and no one blinked an eye. Effectively having a four to five — or even six — percent interest payment doesn’t have that much of a relative impact on your monthly housing costs.

Ready to Shed That Mortgage Insurance?

Log in to your HomeKeepr community, where you can meet bankers who can help you refinance, builders who can help you add instant equity to your home and, of course, your Realtor who can help you build your case if you’ve accumulated enough equity naturally to be rid of mortgage insurance entirely. Because the entire community is powered by recommendations, you know the people you’ll meet can be trusted to follow-through in a totally professional way..

HomeKeepr-Find Pros and Advice

Look at Your Home Through a Buyer’s Eyes: Making Your To-Do List

Selling your home is one of the most tricky parts of owning a home, really. There are always little projects that you meant to get to and didn’t, and things that probably weren’t perfect, but didn’t bother you enough to fix. You can’t possibly do everything to make your house like new before putting it on the market, but there’s a minimum level that most buyers will expect.

How many of those things left on your “to do” list absolutely need to become “to dones?”

Getting Ready to Sell that Home Sweet Home

Before you get too serious about selling, it’s a good idea to have your Realtor over for a quick walkthrough. They can give you a punch list of items they think should be updated, fixed or addressed in some other way before you sell your home. You never know when the right buyer will walk through the door, your house needs to be ready to go from the moment you put it on the market. Putting your best foot forward is key to sales success.

That doesn’t mean you need to completely gut and remodel your home, but you should make sure everything is in proper working order and ready for a new occupant. That can be a lot to wrap your head around, though. If you get overwhelmed, start with the list below.

Entry / Living Room

For most homes, the living room and foyer are a combo unit, but if yours are separate understand that this same advice applies to both. The moment that door opens, and even before it does, your potential buyers are forming an opinion of your home. What the open door reveals had better pack a punch (or at least not terrify them).

Make sure that the windows are very clean to let in as much light as possible, that all your light bulbs are in good working order, the flooring is clean and in good shape, any tile grout is intact and the walls are flawless. A neutral color is always a good idea, but white is kind of a turn-off for a lot of buyers. Blues, light grays, beige and creams are all good choices for paint colors.

Dining Room

Your dining room should follow the same advice as your living room, with one exception. Since there’s probably some amount of eating that happens in this part of the house, you’ll want to check the flooring to ensure there’s no staining or spots under the table.

This is a particular problem if there’s carpet. Do not attempt to cover spots with a rug, this could be considered a “hidden, latent defect.” Basically, it means that you’re hiding damage from a potential buyer. That’s a big fat no go.

Instead, call a professional carpet cleaner (you can meet one in the HomeKeepr community!) or just own it and try not to panic if the buyer asks for the carpet to be replaced or cleaned before closing.

Kitchen

The list of things in your kitchen can be long, but we’ll try to make it reasonable. Check all the items on this list, one at a time:

Appliances that stay with the home
• Are they fully functional?
• Do they have an attractive appearance?
• Do they match one another?
• Are they clean?

Kitchen sink area:
• Is the sink free of damage?
• Does it drain well?
• Does the disposal work?
• Does the sprayer work?
• Is the faucet leaking?

Counters, backsplash and cabinets:
• Do the counters have worn or burned spots?
• Are there grouted areas that are needing regrouted?
• Do the cabinet doors open and close properly?
• Is there water damage anywhere?
• Is everything clean and not tacky to touch?
• Do the cabinets have worn finish?

Bedrooms

Bedrooms are by far the hardest, especially if you have kids. If you’re going to have to live in the house until you find a buyer, invest in some storage systems — they’ll pay off in the long run. Organize everything as best you can to give the rooms the appearance of more space, clean the windows, install the lightbulbs, clean the carpets and instruct everyone to keep it tidy. If anything can be moved out to a storage unit, do it.

Bathrooms

Bathrooms are much like kitchens, they have a lot of wet, moving parts. That being said, they also have basically the same punch list. The only addition would be the shower or tub units. Check the faucets and showerheads for leakage and make sure there’s no mold on your tub or shower surrounds. Clean that stuff within an inch of its life and if you can’t get rid of the stains, recaulk. It’s an easy way to make that tub or shower look like you’ve never even used it.

Garage

There’s not a lot to do in the garage, but do make sure your door opener is functioning properly, that the wheels on the door are lubricated if it’s making a terrible sound when you open it or close it and that you’ve tidied the things inside as best as you can. If you don’t really use your garage, you can dress it up a lot by applying an epoxy coating to the floor. The DIY kits run around $100 and, although they don’t add any value to your home, they’re far more impressive than an old, stained concrete floor.

General Indoors

Overall, it’ll help a lot if you run around your house and make sure that all your lightbulbs are fresh, all the windows are cleaned, you remember to leave the blinds open during the day and that the paint makes each room feel bigger. The key is to bring in more light and then use lighter colors to keep it bouncing around the room. A new coat of white ceiling paint won’t hurt your efforts, either.

Paint is great for a lot of reasons. It can seal in smells you might have never noticed, as well as giving the house the scent of fresh construction. That smell paints a picture for a buyer that says this house has been taken care of and they can trust that it’s in great shape!

General Outdoors

When it comes to the great outdoors, keep your lawn mowed, trim your hedges, clean up any projects that you started and never finished. Landscapers, trash haulers and metal scrappers can help a lot with these tasks. You’ll also want to check out your roof and gutters to make sure they’re in good shape because your potential buyers will be doing the same thing.

The first thing a buyer sees is the view from the street, make sure you run out there during the outdoor prep work to check your look. When you start to wonder if you should actually sell this amazing house at all, you’ve probably got the curb appeal knocked out.

When You Can’t Get It All Done

You don’t have an unlimited timeline, that’s completely understandable, but your home should be ready to sell if you want to get top dollar. If you can’t do the work, just call on someone who can. Your HomeKeepr community is full of professionals who can do specific tasks like cleaning your carpets or help with more general things on your list, like ensuring the whole kitchen is in ready-to-show condition.

Log on, search for the home pro you need right now and let them take it from there. You know they’re going to do great work because your Realtor recommended them!

What Upgrades Give the Best Return?

 

You’ve lived in your home a little while and you think you sort of understand how it should flow. You’re starting to see the warts and little bits of rough that people tend to gloss over when the neighbors pop by to borrow the lawnmower. It’s not that these things make your home flawed — all homes are flawed, they’re made from flawed materials, after all — it’s just that your home could be better and like a skilled craftsman, you’re starting to see places where you could bring out greater potential.

But, which projects make the most sense to do first? Will any of them actually pay for themselves in gained home equity, or are these changes things you’ll have to consider sunk costs in your home and investments strictly in your own enjoyment? And furthermore, are there even changes you can make yourself that will be worth the bother? (Check out our downloadable guide for help in determining which projects are best left to the pros!)

Say Hello to Renovation Magazine’s Cost Vs. Value Report

For the past 31 years, Renovation Magazine has been trying to answer these and other questions by performing a national survey about home renovations and the resell values that tended to accompany them. It comes out early in the new year, giving everyone in the industry something to look forward to after the holiday season. The 2018 report was no less exciting than any other year has been, though there were few surprises.

For example, the top returns in 2016 and 2017 came from midrange fiberglass attic insulation, at 116.9 percent and 107.7 percent, respectively. This year, the number one spot went to another small project: upscale garage door replacements, recouping 98.3 percent of the job cost. In fact, this year’s Top 10 is almost entirely made up of smaller, more simple projects, just like the last two years have been, many of them the same projects, just in different slots.

What does this mean? Well, it means two things, especially if you dig deeper into the data. As a national average, the same projects have been worth making the investment in for the last few years and secondly, there are very few things you can do to your home and get the full cost back out.

Your home is like a piggy bank, but it has some sort of containment issue. You put in a dollar, it only manages to hold on to 90 cents. But, you can think of that loss as the price you pay for getting to use all that cool new stuff while you’re there. Maybe that’ll soften the blow a bit.

Ok, So What Bigger Projects Will Help My Home’s Value?

Again, according to the data provided by Remodeling Magazine’s well-respected survey, bigger projects that should get you some attention (and recoup decently on their own costs) this year include:

#4. Adding on a wooden deck. (82.8 percent)
#5. A minor midrange kitchen remodel. (81.1 percent)
#7. Replacing your windows with vinyl thermopanes. (74.3 percent)
#8. Upgrading your bathroom to a universal design. (70.6 percent)
#9. Just upgrading your bathroom, period. (70.1 percent)

You may notice a trend here. Kitchens and bathrooms are a big deal. They’re always a big deal. In fact, for most houses, it’s the kitchen and the bathroom that really sell the house. You can have the best curb appeal possible, but if your bathroom is difficult to use or your kitchen has no cabinets or non-functional work spaces, you put your money in the wrong places.

Curb appeal does matter, otherwise, that garage door and the stone veneer wouldn’t appear in the chart above so many times. People want to buy a nice looking home, which is what your home values are really based on. An appraisal is nothing more than a complicated calculation that determines what an average buyer would give for your house in its current condition in the current market, after all.

When you’re thinking about putting money into your home to increase the equity you hold or to improve its value for a sale down the line, just ask yourself if the thing you’re about to do is something that a random person off the street could appreciate. For example, do not paint your ceiling blood red. No matter what HDTV says. Do paint an accent wall red if you really need to paint something.

How Do I Get Started on Bigger Projects?

If you’ve never been part of a larger remodeling project, you will most definitely need the guidance of a pro, at minimum. There’s a lot of planning and a whole box of tools (both literal and metaphorical) that it takes to put together an effort like that. After all, you want your project to look like it does in your mind’s eye, don’t you?

Don’t worry, the home pros of the HomeKeepr community are there to help. They have the skills and experience to explain the remodeling process to you and even take the wheel if you feel like it’s a bigger task than you can handle. They come recommended, so you know you can trust them with your home and your vision.

Why Rent When You Can Own?

Homeownership is More Obtainable Than You Might Think

 

Home ownership rates are the lowest they have been in the last 50 years. Yet a large portion of Americans are still renting properties, instead of enjoying a home of their own. Consumer reports believe this is an issue because of a buyer’s lack of trust in their ability to purchase. It is still a long standing notion that a buyer needs 20% towards the cost of the home in order to move forward, but this isn’t true. With countless down payment assistant programs, and closing cost roll-ins, a home owner could move in with as little as a few hundred to a couple thousand dollars. Which is a huge difference in the time it takes to save up to make the move.

 

With interest rates at an all time low, home ownership in today’s market is a great investment. The money saved over a mortgage’s lifespan can result in tens of thousands of dollars, if not hundreds. That’s more money in your pocket today. Don’t wait to buy when interest rates soar again. With low interest rates, that means your monthly mortgage payments are at a significantly lower cost, as well. With such a heated housing marketing, rental prices are soaring, and statistics are constantly showing that home ownership can be equivalent to your rental rate each month, if not less. Why get stuck in a small 2 bedroom apartment, if you can move into a home a pay a monthly rate that is the same, and get a 3 bedroom house with a great backyard?

There is also a fear that a home can keep you “stuck” or “rooted” to one place, without an easy transition out if you decide to move. Although the future of the housing market isn’t easily predictable from location to location, you can always discuss with your agent about buying a home in an area that has a strong turn-over rate when a home hits the market. The equity build up when it comes time to selling is going to be far more beneficial, than if you put money into a rental and decided to move. The money from selling the property can be used to purchase a new home. With renting, there would be no additional funds to transition into a new place.

Now imagine if you were renting a home for $2000/month. If your landlord is renting to make a profit, think how much less you’d be paying on a monthly basis towards your mortgage, if the home was yours. Then you wouldn’t be paying a landlord to profit off of you, you’d be paying a reasonable rate, and get to call the property your own. Discuss with your agent and lender the steps you need to take towards home ownership, you might be happily surprised about the type of home you can afford to move into.