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

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 teresa@teamelliott.net and we can talk about some inexpensive methods of doing just that!

What Are Reverse Mortgages and What Are Their Benefits?

As the name suggests, “reverse” mortgages work exactly the opposite from a "regular" mortgage. Instead of you making monthly payments to a lender, the lender pays you. And, generally speaking, you don’t have to repay it for as long as you live in your home. So, what does the lender get out of this bargain? Well, in return, he or she holds part or all of your home's equity.

Reverse Mortgage Advantages

Home owners who are “house rich, but cash poor” can be beneficiaries of this type of mortgage. It allows them to stay in their homes and still meet their financial obligations. In addition, the proceeds of the loan are tax-free. Also, there are no minimum income requirements, and, for most reverse mortgages, the money can be used for any purpose you choose.

Reverse Mortgage Disadvantages

Below is a list of the major disadvantages of such loans:

1.) Reverse mortgages tend to be more costly than traditional loans because they are “rising-debt” loans. This means that the interest is added to the principal loan balance each month. Therefore, the total amount of interest owed increases significantly with time as the interest compounds.

2.) Reverse mortgages also use up all or some of the equity in a home. This fact means that fewer assets are left for the homeowner and the heirs.

3.) Lenders generally charge origination fees and closing costs; some charge servicing fees. It’s up to the individual lender as to how much the fees and costs are.

4.) Interest on reverse mortgages isn't deductible on income tax returns until the loan is paid off in part or whole.

5.) Because you retain title to your home, you remain responsible for taxes, insurance, fuel, maintenance, etc.

6.) Scams are sometimes run by unethical lenders. Never accept a deal with door-to-door/home solicitation lenders. Reputable lenders have no need to go door-to-door in search of loans.

From all the disadvantages listed above, you can see that you need to understand exactly how they work and what responsibilities you’ll take on with such a loan. Below, I’ve provided you with basic knowledge on reverse mortgages so you have a foundation upon which to consider them.

Types of Reverse Mortgages

Reverse mortgages have several different forms:

1.) Federally insured Home Equity Conversion Mortgages ("HECM"). These are administered by the Department of Housing and Urban Development ("HUD")

2.) Single-purpose reverse mortgages. These are usually offered by state or local government agencies for a specific reason

3.) Proprietary reverse mortgages. These are offered by banks, mortgage companies, and other private lenders and backed by the companies that develop them.

Qualifying Factors

You must be at least 62 years of age and have paid off all or most of your home mortgage. In general, income is not a factor, and no medical tests or medical histories are required. If you seek an HECM, you also must receive free mortgage counseling from an independent government-approved "housing agency." This may also be true of financial institutions offering proprietary reverse mortgages.

Loan Amount

The mortgage loan amount depends on:

- Your age
- The equity in your home
- The value of your home
- The interest rate

If you choose an HECM, federal law limits the maximum amount that can be paid out. There are several ways in which you can be paid - in a lump sum, through monthly advances, through a line of credit, or a combination of all three.

Recommendation

As with any mortgage, shop around and compare terms of reverse mortgages. In particular, check:

1.) Annual percentage rate (APR). This is the yearly cost of credit

2.) Type of interest rate. Check to see if it’s a fixed rate or an adjustable rate.

3.) Number of points (fees paid to the lender for the loan) and other closing costs. In some cases, this can be costly so check closely.

4.) Total amount loan cost ("TALC") rates. The TALC rate is the projected annual average cost of a reverse mortgage, including all itemized costs. TALC shows what the single all-inclusive interest rate would be if the lender could charge only interest and no fees or other costs. More about it here!

5.) Payment terms, including acceleration clauses. These terms state when the lender can declare the entire loan due immediately.

Remember: Under the federal Truth in Lending Act, lenders must disclose these terms and other information before you sign the loan. Also, on plans with adjustable rates, they must provide you with specific information about the variable rate feature. And, on plans with credit lines, they must inform you about appraisal or credit report charges, attorney's fees, or any other costs associated with opening and using the account. Make sure you understand these terms and costs.

Finally, in most cases, you have at least three business days after signing a reverse mortgage contract to cancel it in writing! Want to learn more about reverse mortgages or any other kind of mortgage? Contact me immediately at teresaelliott@cox.net or 402.690.1573! I’ll give you fair and objective information on all these subjects!

“D.O.M." Your Way to a Better Value When Buying a Home!

The term “D.O.M” refers to the number of days a house is listed for sale on the market; thus, “DOM” or “Days on Market.”

A rule of thumb for D.O.M. is that a home which has been listed for more than 90 days is an excessive amount of time. However, this depends heavily on the state of the market at any particular time! In Omaha the average DOM of residential listings listed from August '09 YTD is 59 days according to the Omaha Area Board of Realtors.

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 at teresaelliott@cox.net or 402.690.1573.

Who Determines the Value of Your Home?

Who Determines the Value of Your Home?

It's the job of the real estate appraiser. At heart, his or her job is to evaluate a property and tell you (the buyer) what condition it's in. Of course, as a seller, you can also have your home appraised so you get an objective "third party" view of your property. Real estate appraisers licensed (or should be!) by the state. But regulations vary so I recommend you contact me or a bank for information on qualified and ethical appraisers (more on this later). Often, they're independent contractors associated with appraisal firms headed by a Certified Appraiser or the equivalent.

What are the Benefits of Using an Appraiser's Services?

When you're a buyer, appraisers provide you two great benefits. First of all, they can uncover hidden problems that could end up costing you a lot of money down the line. Their appraisal help you avoid the property or negotiate a lower price to compensate for future costs. Second, appraisers can do the opposite ─uncover hidden opportunities for you! For example, you might be considering a home that that doesn't look all that wonderful on the outside, but is actually in solid shape as far as its structure is concerned. So, through an appraiser's efforts, you can may end up with an outstanding bargain. From the seller's viewpoint, an appraisal can uncover items that need fixing before you put your home on the market. This ensures that your property is in the best shape possible before buyers ever look at it.

What Kind of Report Will I Receive from an Appraiser?

A certified appraiser should provide you with a written report. These reports generally consist of the following:

• A description of the property and its locale based on a visit to the property by the appraiser. The appraiser evaluates the condition, overall livability based on design, layout, and appeal to the market, and other external factors).
• An evaluation of the “highest and best use” of the land; that is, the use for a piece of land, or property in general, that maximizes its net present value.
• An evaluation of sales of comparable properties (usually three) as similar to the appraised property as possible
• Information regarding current real estate activity and/or market area trends.
• An evaluation of the overall real estate market in the area.
• Statements about items the appraiser feels are detrimental to the property's value, such as poor access to the property.
• Notations about seriously flawed items, such as a crumbling foundation, leaking roof, etc.
• An estimate of the average sales time for the property.
• What type of area the home is in (a development, stand alone acreage, etc.).

How Do I Find a Certified Real Estate Appraiser?

I can direct you to very qualified appraisers. Or, you can find them through your bank. It should have a list of approved appraisers.

If you decide to find an appraiser on your own, check his or her background carefully. As with any profession, there are always a few scam artists who inflate appraisal amounts in order to make money off you. Check with the Better Business Bureau and your state certification office (if there is one). You can also check with your bank to make sure an appraiser is not blacklisted.

How Much Does An Appraisal Cost?

Generally speaking, an appraisal runs from $300 to $500. However, fees do vary with the area. If you need more information on real estate appraisers or any other real estate topic, be sure to call me at 402.690.1573. I'd love to discuss these matters with you!

Welcome to our NEW Blog - TeamElliott.net! - 'What Determines the Value of Your Home?'

9/1/2009 | Omaha, NE - 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 at 402.690.1573 or email teresaelliott@cox.net!