14 Questions to Ask Your Contractor

For anyone who has been in the business more than five minutes — and that should be all of you — it becomes clear that there are levels of involvement in the real estate industry. There are, of course, your buyers and sellers, and then there are your real estate professionals who help broker those one-to-one deals. There are levels of commercial real estate agents and finally those who buy and sell their own properties as investors or speculators, often overseeing the construction or renovation of properties themselves.

It’s this last group that we’re talking about here today. Working with contractors can be one of the most stressful — and rewarding — parts of our business. A bad one can make your life a walking nightmare, while the right contractor can make your life infinitely easier and more profitable.

But how to know the difference? Start with the following checklist of questions and resources, and we guarantee your list will be narrowed quickly. After that, trust your recommendations and your gut. It’s gotten you this far.

  1. How long have you been in this business? It may seem like a no brainer, but opening the conversation about your contractor’s experience can give you all sorts of insight into his or her track record. Experience matters in this business.
  2. Would you mind starting on a smaller project? If you’re on the fence but leaning toward the contractor, we suggest giving him or her a smaller project to complete before you ask them to build that new master wing.
  3. Can I see your certificates? This should include everything — licensure, insurance, you name it. If he or she can’t produce those documents at short notice, it’s time to move on.
  4. Have you worked in this county/city/neighborhood before? Not only can code requirements vary from county to county and city to city, but even different neighborhoods have different rules for what can and can’t be done construction-wise. Live in a historic neighborhood? There may be some squawking about that new carport. Make sure your contractor knows how to navigate that.
  5. What are the terms of payment? It’s not the best practice to pay for a job upfront, so make sure the terms are hammered out before you start, and you aren’t surprised by a request for giant check the day construction starts.
  6. What hours do you typically work? This matters especially in neighborhoods, where those living nearby — or even you, if it’s your house — may be inconvenienced by odd-hours hammering and sawing. Make sure the contractor’s hours are appropriate, and that the crew is actually working during them.
  7. What’s your storage plan? Theft at construction sites is not uncommon. Expensive equipment can disappear if left out overnight. Make sure the contractor knows that you expect tools to be locked up or taken home overnight, and help accommodate those requests with a locked room or even a temporary storage shed, if necessary.
  8. What are your warranty terms? Most contractors offer a warranty, in addition to any warranties on materials used. Make sure you get that in writing, and copies of material warranties, before construction begins.
  9. Do you use subcontractors? Most general contractors won’t have a pro plumber on his or her staff, so others will be brought in to take care of specialty pieces of the project. Make sure you know who those are and the budgetary expectations that go along with that so you’re not facing an additional bill from another contractor.
  10. Can I see your references? It’s possible you’ve already gotten good word-of-mouth before you even interview the contractor, but it never hurts to see a list from the contractor. Make some calls and drive by the projects unannounced while they’re working — how the crew is going about its business — are they hard at work or lollygagging? — can give you great insight.
  11. Have you had any disciplinary action filed in the past? This is a tough question, and not one to ask flippantly or unkindly. You’re just trying to find facts. Another route would be to consult your state’s courts archive for lawsuits filed against the company or individual contractor.
  12. How do you communicate with your customers? Setting a reasonable expectation of how often you should be hearing from the contractor will keep you from freaking out if you go a couple of days without an e-mail.
  13. How many projects do you have going right now? No one wants to play second-fiddle, much less fifth or sixth fiddle. If you feel like you’re not going to be a priority, it might pay to find someone who will make you feel like one.
  14. How do we settle disputes? Making sure you know how to properly address problems or concerns is one of the most important steps. You want to make sure you’re following procedures, especially if you think the contractor is not. If nothing else it will make for peace of mind during the stressful process, knowing you have an agreed-to avenue if there is a dispute.
  15. Do you have any questions for ME? Turnabout, as they say, is fair play.
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5 Good Reasons To Sell This Fall

Here are five reasons why listing your home for sale this fall makes sense.

1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! In fact, more often than not, multiple buyers end up competing with each other to buy the same homes.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now
Housing inventory is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon!

Historically, a homeowner stayed in his or her home for an average of six years, but that number has hovered between nine and ten years since 2011. Many homeowners have a pent-up desire to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

3. The Process Will Be Quicker
Today’s competitive environment has forced buyers to do all that they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 44 days.

4. There Will Never Be a Better Time to Move Up
If your next move will be into a premium or luxury home, now is the time to move up! The abundance of inventory available in these higher price ranges has created a buyer’s market for anybody looking to purchase these homes. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly AND you’ll be able to find a premium home to call your own!

According to CoreLogic, prices are projected to appreciate by 5.1% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on With Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you feel you should?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

courtesy Keeping Current Matters

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Household Mortgage Debt

Some homeowners have recently done a “cash out” refinance and have taken a portion of their increased equity from their house. Others have sold their homes and purchased more expensive homes with larger mortgages. At the same time, first-time buyers have become homeowners and now have mortgage payments for the first time.

These developments have caused concern that families might be reaching unsustainable levels of mortgage debt. Some are worried that we may be repeating a behavior that helped precipitate the housing crash ten years ago.

Today, we want to assure everyone that this is not the case. Here is a graph created from data released by the Federal Reserve Board which shows the Household Debt Service Ratio for mortgages as a percentage of disposable personal income. The ratio is the total quarterly required mortgage payments divided by total quarterly disposable personal income. In other words, the percentage of spendable income people are using to pay their mortgage.

Today’s ratio of 4.44% is nowhere near the ratio of 7.21% during the peak of the housing bubble and is instead at the lowest rate since 1980 (4.38%).

Bill McBride of Calculated Risk recently commented on the ratio:

“The Debt Service Ratio for mortgages is near the low for the last 38 years. This ratio increased rapidly during the housing bubble and continued to increase until 2007. With falling interest rates, and less mortgage debt, the mortgage ratio has declined significantly.”

Bottom Line

Many families paid a heavy price because of questionable practices that led to last decade’s housing crash. It seems the American people have learned a lesson and are not repeating that same behavior regarding their mortgage debt.

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Upsizing Your Home

Unfortunately, our homes don’t always grow with us. What may have initially worked fine for a single person, a young couple’s starter home, or a family with a newborn can quickly become too small as families expand and multiple generations live under one roof.

Remodeling and adding to your home is one option for creating more space, but it can be costly, and the size of your property may be prohibitive. That’s when moving to a bigger home becomes the best solution.

WHERE DO YOU NEED MORE SPACE?

The first thought when upsizing your home is to simply consider square footage, bedrooms, and bathrooms. But it’s important to take a more critical approach to how your space will actually be used. If you have younger children (or possibly more on the way), then focusing on bedrooms and bathrooms makes sense. But if your children are closer to heading off to college or starting their own families, it may be better to prioritize group spaces like the kitchen, dining room, living room, and outdoor space—it’ll pay off during the holidays or summer vacations, when everyone is coming to visit for big gatherings.

MOVING OUTWARD

If you need more space, but don’t necessarily want a more expensive home, you can probably get a lot more house for your money if you move a little further from a city center. While the walkability and short commutes of a dense neighborhood or condo are hard to leave beyond, your lifestyle—and preferences for hosting Thanksgiving, barbecues, and birthdays—might mean that a spacious home in the suburbs makes the most sense. It’s your best option for upsizing while avoiding a heftier price tag.

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Investments for Home

Best Financial Investments for Your Home

Over the last couple of years, rehabbing TV shows have become increasingly popular. In these shows, people fix or introduce new features to their homes while adding substantial market value to the house in the process. If you own a home, you can make many of these types of fixes or additions to increase the value of your home, too. You can also enjoy these changes for as long as you live there. Some of the best financial investments you can make to your home include:

Major Problem Fixes

The first high-return investment you should make in your home is to correct all major problems. If your home has serious issues, such as a broken air conditioner or a pipe leak, fixing those issues should be priority No. 1. Repairing or replacing the roof and siding can be a great investment, and potential buyers will generally factor in both the time and cost of having to fix it. Problems like these are always easier to fix when they’re small than later after having put them off.

Exterior Improvements

Investing in the facade of a home can also bring great returns. Replacing garage doors is one of these investments. If your garage door looks new, your house will look new, as well. Painting the outside of your home is another good investment in the exterior. If you don’t want to take the time and money to fully repaint your home, pressure-washing can be a quick way to make the outside of your home look much more presentable.

Entryway Improvements

Another good investment is to invest in a new entryway door. Like the garage door, the front door is important in making a good first impression on a potential buyer. Replacing your front door with a steel door can also make your home safer; increasing the safety of your home can be another great selling point for a potential buyer. Replacing windows is another way to make the outside of your home look better, as well as improve the home’s energy efficiency.

Fixes and additions to the inside of your home can be a great financial investment. A fresh coat of paint to the interior can add value by making the home look cleaner and brighter.

Update Bathroom, Kitchen and Appliances

Improving your home’s bathroom, particularly visible elements such as vanities, lighting, toilets and tubs, can create a high return. For bathroom improvements, you may obtain a better return on investment by spending your money on items in the bathroom that a potential buyer would see, instead of completely gutting the bathroom.

Kitchen remodels can be another way to significantly improve the value of your home. For kitchen remodels, you’ll want to spend money on functional items such as cabinets, drawers, pantry doors and appliances. Appliances such as refrigerators don’t have to be completely new, but they should keep up with current trends. Kitchen remodels should also suit the home. A kitchen that looks like it belongs in a $300,000 home will feel out of place in a $150,000 home.

Adding high-efficiency appliances to a home can modernize it and also save you money on electricity. Some states and cities have tax programs that could reduce your taxes if you buy and use high-efficiency appliances that require less electricity.

Overall, you should research the investment potential of your home before making any purchase. If you are trying to increase the value of your home, you need to make sure your fix or addition will increase the value of the home not only for you, but also to potential buyers.

This article is intended for informational purposes only and should not be construed as professional advice. The opinions expressed in this article are those of the author and do not necessarily reflect the position of RISMedia.

Posted on Nov 22 2017 –  RisMedia Housecall, By Craig Middleton

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Howell Branch, New

New Office in Historic Downtown Howell, now 5 locations for Coldwell Banker Town & Country. Very excited to find the perfect downtown location for our new office. We are looking forward to seeing you at our grand opening near the end of November at 211 E Grand River Ave. Call or email us today for free market analysis on your current home and up to the minute new listing info.

The Gerardi Group are all Howell area residents ready to serve you. 855- GERARDI or SOLD@GerardIGroup.com  

#GerardiGroup #HowellHomes#ColdwellBanker

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Go it alone, or use a Realtor

6 Reasons You Should Never Buy or Sell a Home Without a Local Agent

It’s a slow Sunday morning. You’ve just brewed your Nespresso and popped open your laptop to check out the latest home listings before you hit the road for a day of open houses. You’re DIYing this real estate thing, and you think you’re doing pretty well—after all, any info you might need is at your fingertips online, right? That and your own sterling judgment.

Oh, dear home buyer (or seller!)—we know you can do it on your own. But you really, really shouldn’t. This is likely the biggest financial decision of your entire life, and you need a local Realtor® if you want to do it right. Here’s why.

1. They have loads of expertise
Want to check the MLS for a 4B/2B with an EIK and a W/D? Real estate has its own language, full of acronyms and semi-arcane jargon, and your Realtor is trained to speak that language fluently.
Plus, buying or selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. Realtors have the expertise to help you prepare a killer deal—while avoiding delays or costly mistakes that can seriously mess you up.

2. They have turbocharged searching power
The Internet is awesome. You can find almost anything—anything! And with online real estate listing sites such as yours truly, you can find up-to-date home listings on your own, any time you want. But guess what? Realtors have access to even more listings. Sometimes properties are available but not actively advertised. A Realtor can help you find those hidden gems.
Plus, a good local Realtor is going to know the search area way better than you ever could. Have your eye on a particular neighborhood, but it’s just out of your price range? Your Realtor is equipped to know the ins and outs of every neighborhood, so she can direct you toward a home in your price range that you may have overlooked.

3. They have bullish negotiating chops
Any time you buy or sell a home, you’re going to encounter negotiations—and as today’s housing market heats up, those negotiations are more likely than ever to get a little heated. You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?
And it’s not just about how much money you end up spending or netting. A Realtor will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.

4. They’re connected to everyone
Realtors might not know everything, but they make it their mission to know just about everyone who can possibly help in the process of buying or selling a home. Mortgage brokers, real estate attorneys, home inspectors, home stagers, interior designers—the list goes on—and they’re all in your Realtor’s network. Use them.

5. They adhere to a strict code of ethics
Not every real estate agent is a Realtor, who is a licensed real estate salesperson who belongs to the National Association of Realtors®, the largest trade group in the country.
What difference does it make? Realtors are held to a higher ethical standard than licensed agents and must adhere to a Code of Ethics.

6. They’re your sage parent/data analyst/therapist—all rolled into one
The thing about Realtors: They wear a lot of different hats. Sure, they’re salespeople, but they actually do a whole heck of a lot to earn their commission. They’re constantly driving around, checking out listings for you. They spend their own money on marketing your home (if you’re selling). They’re researching comps to make sure you’re getting the best deal.

And, of course, they’re working for you at nearly all hours of the day and night—whether you need more info on a home or just someone to talk to in order to feel at ease with the offer you just put in. This is the biggest financial (and possibly emotional) decision of your life, and guiding you through it isn’t a responsibility Realtors take lightly.

For more info, visit Realtor.com.

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Home Appraisals

What Is a Home Appraisal Based on?

A home appraisal is a complex procedure for determining the value of a home, which is an important number for homeowners and potential buyers alike. Trained and certified appraisers look at several factors to determine a home’s value, including its permanent fixtures and the land it sits on. As homes change hands and values change over time, there’s always a need for new, accurate appraisals.

Physical Factors
Many of a home’s physical features help determine its value in an appraisal. Simple facts such as the age of the home, its square footage and the number of bedrooms or bathrooms can have a major impact on appraisal value. Homes that need significant improvements, such as a new roof, siding or driveway, will appraise for a lower value than those that don’t need as much work. The quality of the construction and the value of fixtures, including floor coverings, plumbing and appliances such as the furnace, air conditioner and water heater, also play into an appraisal.

Location
To an appraiser, a home’s location may be as important as its physical characteristics. Most appraisals include a CMA, or comparative market analysis, which uses the sale price of similar nearby homes to help determine the fair market value of the home being appraised. Homes in more desirable neighborhoods–because of a better public school system, the perception of safety or the level of economic opportunity in the region–are likely to earn a higher appraisal than similar homes elsewhere. Other location features such as the views from a home and the degree of privacy from neighbors also play a role in the appraisal.

Markets
Housing markets are constantly changing as home values rise and fall. This happens because of the law of supply and demand as well as factors such as mortgage interest rates and the general condition of the economy. Appraisers factor economic conditions into their work. This means that a home with a low appraisal value may be a good investment opportunity if the appraisal is low as a result of the housing market and not because of any particular problems with the house itself.

Purpose
Home appraisals have several different purposes. For homeowners looking to sell, they give an indication of what price the owner can expect to sell for, which may determine the entire marketing strategy for the owner and real estate agent. A buyer can use the appraised value of homes to compare the value of different neighborhoods and shop for a house only within a certain price range. Appraisals are also part of the home equity lending process, with lenders appraising homes to determine how much money the owner can borrow against the equity in the home.

Assessments
Assessments are similar to appraisals but have a very different purpose. The process uses similar factors to determine a home’s value. However, whereas an appraisal is performed by a private appraiser for commercial purposes, an assessment is done by an agent of a local government for tax purposes. State and local governments use assessments to levy property taxes based on the value of taxpayers’ homes and real estate holdings.

…OK, a real world example in English please!
Consider a home with 2,000 square feet built 15 years ago, in an wide area of very similar homes in size and age. Average cost for these homes is $120/foot.  Now consider that one home is updated recently and has many upgrades that make it outstanding compared to the other homes in that area.  A kitchen update may cost $7,000, but this homeowner decided on a remodel that cost $25,000. Similarly they spent $12,000 on the master bath and $8,00 on hardwood floors. So we have ~45,000 spent on a home surrounded by homes with an average value of only $240,000.  Does that make this home worth $285,000?  More importantly, can an appraiser give this home a value far beyond the area’s market value. In short, it would be very hard to get this appraisal through underwriting.

This scenario is rather common and the sellers wonder why they cant get much more than their neighbor.  The key ingredient is “location” as it pertains to very similar homes.  The key to building value in updates is to understand the value of the updates WHERE YOU LIVE.  With the right current market information, you can determine what updates are appropriate for your home. Not unlike buying direct from a builder, taking a home remodel company’s word for it may be a little bias. To make the most of your investment, get real world local market data from your professional realtor.

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New Home Construction

Thinking of Building your “new” home?

Buying a new home is exciting. You get to build your dream from the ground up, choosing your lot, your model, interior finishes and upgrades. But like any home purchase, buying new construction is serious business, an expensive transaction with many financial implications – current area comps, long-term value, lot position, area utility, “included” features and upgrades that add Value (& ROI), loan options and more all require consideration.

That’s why it’s a good idea to obtain representation from a Realtor® when considering a new home purchase to answer your questions objectively and protect your interests.

Builder sales reps represent the builder.
Most often builders have their own agents on site to answer questions, assist people who walk in, and ultimately help with a purchase. Builder reps provide a valuable service: They can explain differences between models and floor plans and share information about financing options, upgrades and specials. But it’s important to remember that builder reps represent the builder, as they are contractually obligated to do.

Realtors are trusted local resources for real estate information and can help home buyers navigate the increasingly complex home-buying process,” said National Association of Realtors President Gary Thomas. “The buyer agency agreement ensures the buyer that his or her Realtor will represent the interests of the buyer alone and not the seller.

Common Misconception:  “Going to the builder will save you money”
In most cases this is not only incorrect but may have the reverse results, and actually cost you money.  All builders factor in marketing and commission expenses (if they wish to stay in business).  In fact, many depend on local agents to bring their buyers.  Even when they have an in house sales team the motivated buyers in the market are typically working with an agent.

A Local realtor will know the local comps and be skilled at discussing how the  new construction home will measure up over time based on current trends. Additionally, your Realtor will be a voice of reason when selecting options and upgrades that may or may not bring long term value to your home at time of resale.  Regardless what HGTV says, those upgrades are tied intimately to the norm of the area comps – that is to say that a $50,000 kitchen may be overboard for the area and return a street & an appraisal value of ~$10,000 when you go to sell. See my post regarding appraisal factors – http://gerardigroup.com/home-appraisals/

Some builders offer a hook to “save” you money
One of the less discussed scenarios a builder may use to avoid working with Realtors is that they either own their own brokerage or partner with an agency to list your current home at a “discount”.   What’s worse is the sell it or we buy it scenario – like Las Vegas, the cards are stacked for the builder.  If it is a discount on sales commission you are seeking, many local realtors will offer you a break on selling your home if you buy a new home with them. Why is this important:  are they builders or realtors, and is it simply a shell game to distract from the core issue = how much does the new home cost and what is it worth in today’s market?

Another tactic is using their lender…
Of course, what could be easier than buy direct from the builder, visit a hopped up model, drink their cool-aide and … (drum roll) use their lender.  These should send the hair up on the back of your neck and launch all the red flags in your brain as it is a distraction away from the price.  Why is this an important:  While the appraisal process is supposed to be arms length, the builder’s lender has skin in the game and the only thing between the buyer and the closed sale is the appraisal… the one that may be at least partially bias.

Bottom Line, you need ALL the info you can get your hands on
The cost of building is going up in both materials and labor.  Buying a home is the most important financial decision most people will ever make.    A local professional realtor can assist you with understanding the value of your investment before you take the plunge. Since Realtor fees are paid by the seller (in this case by the builder), consulting a Realtor should be a first step.  And when it comes to selling your home, note that 3% of the commission typically goes to a buyer agent – this is true with builder broker’s taking on your home. So, what do you really save?   Without all the data available to you, you may be risking more than a point or 2 in commission.

For additional information, contact Sam @ the Gerardi Group for market analysis, return on investment values and current trends.

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