Welcome to Teresa Elliott's Video Web Series with resources and topics that matter the most to you, featuring Teresa Elliott of Elliott Co., BHHS Ambassador Real Estate in Omaha, NE.
For some, the phrase “home maintenance” might sound like a great way to spend a weekend, while to others it might seem like a dreaded, even avoided, task. However you view routine home maintenance, the fact of the matter is that this somewhat simple task, if done consistently, can increase your home’s value over time. Increased Property Value Benjamin Franklin once said,“An ounce of prevention is worth of a pound of cure.”This is certainly true when it comes to your home. In fact, proactive maintenance is essential to preserving the value of your home. If you ignore this important task, your home could actually lose 10% of its value over time. There are a number of benefits you can expect from just making sure you home is kept in decent shape with occasional maintenance.For one, your curb appeal is improved by just simple acts of routine upkeep from time to time. Ultimately, your home reflects your attention to detail, or lack thereof. Neglecting a home can greatly bring down the value of any property. Things like a house with chipped or fading paint, sagging gutters, or worn carpeting leads to a problem when it is time to sell.Not only does the work accumulate over time, so do the costs.A few simple fixes every year can add up to an increased home value over time. Cost vs. Value It’s easy to look at the cost of regular home repairs as a burden that might be able to be avoided. However, it is important to look at the value that you are placing in your home by performing the regular costs of upholding a well-built and maintained home. A study out of the University of Connecticut and Syracuse University suggests that home maintenance can actually increase a home’s value by about 1% each year.Instead of viewing the routine tasks around a home as “chores,” these tasks should be looked at as a money maker. When you sell your home, you will reap their rewards.
Dr. John P. Harding, Professor of Finance and Real Estate at the University of Connecticut’s School of Business and an author of the study said,“It’s like going to the gym. You have to put in the effort to see the results. People and houses are somewhat similar – the older they are, the more work is needed.” Some years what needs to be down may be more expensive than others, but it is the overall strategy to keep a “fit” home that should be the ultimate goal. Proactive Maintenance Strategies Budgeting for home repairs each year will prevent them from seeming like a burden each year.Knowing there will be a certain amount of money going to home repairs and upkeep makes them a regular part of your annual routine.They won’t be a source of financial devastation they can be for many families. Other things to keep in mind to take the burden out of home maintenance include: Play offense, not defense.Being proactive is vital in preventing a small problem becoming a mountain of problems. By having a regular inspections and creating a maintenance schedule, you are in control, for the most part, of home expenses, instead of the other way around. Focus on a room a year.If you home is generally in good order, you may be at a loss of where to start. By targeting a room each year, you can inspect each and every item in that particular room and know where improvements can be made. This prevents an overwhelmed feeling with you looking at your entire house, scratching you head of where to start. Keep track. Maintain a notebook or computer file to keep track of all of the maintenance and upgrades you perform is important. Also, either keep a physical file of paper receipts or a file on your computer where can put your scanned receipts. This helps you keep track of what you have done and also helps you prove to a potential buyer exactly what you have done to the home. It also shows you are a conscientious homeowner who has paid attention to the details of your home. Home maintenance is an important task that should not be overlooked. Not only does it maintain a nice home while you live there, it also helps increase your home’s value when you are ready to sell.
“Perform due diligence!” is the one law you should never break in any kind of real estate deal – residential, multi-occupant, or commercial! What is due diligence?It’s a common phrase for the evaluation of a property and its surrounding environment before you commit to buying it. Due diligence has two objectives.First, you want to reduce or eliminate risk!Needless to say, you’ll be assuming a large loan and will want to know exactly what’s right or wrong with a property before you sink any money into it. Two, due diligence allows you to uncover real bargains, especially for investors. On the surface, one property may look like a “loser,” but a closer inspection may reveal that the building is structurally sound and requires only minor and inexpensive maintenance and repairs. One part of due diligence is what you’d expect –the physical inspection of the property and inspection of all documents and records concerning that specific property.The other part is the inspection of the documents and records concerning that property. In this article, I’ll just talk about the physical inspection portion of due diligence. Physical Inspection of Properties Below, I’ve listed all the inspection tasks which should be performed by a professional inspector. Of course, you should visit the property as well. Many times, a quick “eyeballing” can reveal any obvious signs or poor maintenance or decay - a leaky roof, wet basement, foundation cracks, cracks in the walls, plumbing leaks, etc.. In those cases, you’ll know you don’t need to waste any further time on that property. As I mentioned earlier, such an inspection may reveal that you’ve actually got a bargain on your hands instead of a “dog.” In such a case, you’ll want to purchase or invest in that property quickly. What happens when you find problems in a property and still like it? Well, then, you can require that the seller correct those problems or reduce the price before you sign any contract. In general, defects fall into two categories. One category contains the obvious defects – wet basements, peeling paint, broken windows, leaky plumbing, warped floors, etc. The other category contains the more expensive and dangerous hidden defects. These can include corroded pipes in the walls, roof or window leaks that don’t show up until it rains or snows, subtle cracks in the foundation. Obviously, you want to make sure these hazards are spotted before you ever sign a purchase agreement. They can cost you a lot of money in the long run, not to mention the fact that they can send your blood pressure through the roof! What Do Professional Inspectors Look For? Below are the items inspectors examine when they check a property: • Overall structural integrity • Property drainage/landscaping • Walks and drives • Foundation, footings, crawl space, basements, sub-flooring, decks • Exterior walls, siding, trim • Windows, doors, cabinets, counters • Gutters, downspouts • Roof, roof shingles, roof structures. chimneys, attic • Floors, walls, ceilings, etc. • HVAC systems • Plumbing systems, (fixtures, supply lines, drains, water heating devices, etc.) • Electrical system (wiring, service panel, devices, and service capacity • Energy conservation/safety Items • Insulation & ventilation • Moisture intrusion/mold And, of course, we can’t forget the voracious appetites of….bugs! Pest Control Inspection Depending on the area of the country in which you live, insects can cause a heckuva lot of damage to a property! I’m talking about such bugs as termites, carpenter ants, powder post beetles, and any other insect that likes to munch on wood. Then, there’s fungus, in the form of “dry rot.” It can also cause a lot of destruction. In such cases, you’ll need to hire the services of a specialist (pest control inspector) to examine the property. If the operator identifies any problems, he or she should provide you with a diagram that pinpoints the location of the infestations. If serious problems exist, they need to be corrected immediately! The expense is usually paid for by the seller. To protect yourself against any of the problems I mentioned above, ensure that the purchase contract provides for cancellation without penalty or loss of money if the physical condition of the property doesn’t meet standards. So, there you have it – all the physical items you or an inspector should check on to meet the law of due diligence! Remember – never, ever break this law!To learn more about any special concerns for due diligence in our area, contact me today!
Knowing property value trends can be very helpful to you as a buyer, seller or investor. As a buyer, you can pinpoint bargains in areas that are trending upward (or downward) in price. As a seller, you can use the information as part of the bargaining process to get the maximum price from the sale. As an investor, you can use the latest forecasts and trends to determine whether you want to invest, when you want to invest, and how much to put into a property. Remember, the trends are not guarantees of future performance; they're an educated guess as to which way the market is moving.Whatever your real estate goals, you want the latest and best information, and you want it from experienced professionals.In terms of your neighborhood and/or city, your local real estate agent is the best source for weekly and monthly trends. After all, it's their job to stay on top of such trends in the markets they serve. Other organizations provide state, regional and national forecasts. They're often updated on a monthly or quarterly basis. Sources of Information Thanks to the Internet, there are many, many sources for data on real estate property value trends. For state trends, go to the Federal Housing Finance Agency website (http://www.fhfa.gov/Default.aspx?Page=215).Click on your state to get the Housing Price Index (HPI). If you're wondering exactly what the HPI measures and how it's calculated, here's what the site says: "The HPI is a broad measure of the movement of single-family house prices.The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or re-financings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. The HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes."So, if you want property value trends for Nebraska from the FHFA site, click on "State HPI Summary" and scan down the list of states until you find Nebraska. The handy table gives rankings and trends in quarterly, 1 year, 5 year and "Since 1991Q1" columns.On the same site, you can also click on "Research and Analysis," and you'll get a list of government and industry sites which will provide you with information on property trends. Note: The FHFA site doesn't provide predictions; it simply reports data. To get analysis and predictions, try the respected RealtyTimes.com. It reports on current market conditions and provides advice to consumers as well. Another site for information on residential properties isZillow.com. To find local information, fist click on the "Local Information" tab. That takes you to the page where you'll find the "State," "City," and "Nearby Neighborhoods" tabs. Click on the appropriate names, and you have local information! There are many, many other websites from which you can gather property value information. I don't have the space to list them all, so here's a partial list of major industry and governmental agencies: - National Association of Realtors = Freddie Mac - National Association of Home Builders - Census Bureau Of course, the network, cable, and satellite channels report many of the finding from the sources listed above on a national basis. But, if you want local information, I recommend you work with your local real estate agent! He or she is best positioned to give you the latest information on property value trends. To see what I can do for you in that regard, please contact me today.
