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Harvard Housing Study

JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY – 2019

Harvard released its comprehensive study on housing trends and the current state of housing.  The report begins with the Executive Summary:

With new construction still slow to recover from historic lows, almost 80 percent of the nation’s 137 million homes are now at least 20 years old and 40 percent are at least 50 years old. The aging of the US housing stock has been a boon to the home improvement industry, helping to lift the remodeling market to nearly $425 billion in 2017, according to the latest estimates from the Joint Center for Housing Studies. 

Indeed, in the years since the Great Recession, spending on improvements and routine maintenance to both owner-occupied and rental properties has not only increased the value of the existing stock but also contributed a dominant share of residential investment. In addition, the tens of millions of projects undertaken annually—from roof and window replacements to major kitchen and bath remodels—generated 2.2 percent of national economic activity in 2017.

Some of the recent strength of the remodeling market reflects a significant increase in spending by rental property owners. The surge in rental demand following the housing crisis prompted owners to invest in substantial upgrades to their units. Homeowners also had some catching up to do on maintenance and replacements deferred during the downturn, particularly on properties converted to rentals or left vacant for extended periods.

Get the full report here:  Harvard JCHS Housing Study

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Remods, Updates & Upgrades…

Top 15 Home Features That Will Sell Your Home Fast—and for More Cash
Lance Lambert | Mar 19, 2019 |  Realtor.com

It’s one of the (many) high-stakes gambles of homeownership: that awesome new feature or design improvement you’ve been wishin’ and hopin’ (and of course savin’) for might ultimately hurt, not help, your place’s resale value. After all, times and tastes change, and eventually most homeowners will become home sellers. So how do you know that today’s sleek, new quartz countertop won’t become tomorrow’s eye-scorching popcorn ceiling on the open market?

Relax, we’re here to help you suss it out. Realtor.com®’s data team searched to find the home features that can help folks sell their home the fastest—and for the best price. We narrowed our list to the items found in homes with the highest list prices that went under contract the fastest. It’s a high-value sweet spot.

There’s plenty on the line here. Homeowners spent more on upgrading their homes in 2017 than in any year since 2006, according to the most recent Joint Center for Housing Studies of Harvard University study—an average $12,361 in discretionary spending. Much of that went into upgrading kitchens and bathrooms, the top room remodels, according to home design website Houzz.

“Anytime a buyer can walk into a house and see it already has the features they want, that’s a huge bonus for the seller,” says Anna Maria Mannarino, who runs her eponymous interior design firm in Holmdel, NJ. “If buyers feel they need to add key features or designs, they’re going to calculate how much it will cost and then lower their bid.”

To figure out the top home features, we dug through more than a million single-family home listings on realtor.com in February. We calculated a median price and days on market for each abode with one or more of the 70 popular features we evaluated for this ranking. Features in homes that took longer than 84 days to sell, the national median, were cut from our list. We also eliminated amenities, such as high ceilings, that are difficult—and expensive—remodels.

So what are the most profitable home features for sellers hoping to close quickly?

Here are the big 15:

  1. Chef’s kitchen/gourmet kitchen
  2. Theater room
  3. Home gym
  4. Three-car garage
  5. Solar panels
  6. Quartz counters
  7. Exterior lighting
  8. Tennis court
  9. Home office
  10. In-ground pool
  11. Mudroom
  12. Security system
  13. Fireplace
  14. Smart home features
  15. Walk-in closet

OK, let’s take a closer look at trends that could help you make bank when it comes time to cash in and sell your home.

Kitchen makeovers bring in the dough

Once upon a time (say, when you were growing up), most kitchens were drab, unsexy spaces that folks didn’t spend much time in beyond preparing and consuming dinner. But as the open kitchen trend has exploded, they’ve become centerpieces of the home—way more visible, personalized, luxurious, and important to buyers. Homeowners have upgraded to chef’s and gourmet kitchens (No. 1 on our list), making them glamorous showpieces where they can entertain their friends.

These days, trendsetters are choosing dark and moody color palettes, like black and navy, over the more bland white, gray, and neutral shades. They’re opening the rooms to the outdoors by installing walls of windows or double doors that open to the yard. And open shelving (versus the classic kitchen cabinets) is gaining more traction.

“Even if you don’t consider yourself a big foodie or a master chef, higher-end kitchens have a huge appeal,” says Jamie Novak, a Los Angeles–based professional organizer and author of “Keep This Toss That.” She works with homeowners who are planning to stay put as well as those getting ready to list their properties. “When the appliances are pretty and functional, it’s a win-win.”

Homes with chef’s kitchens sell for a median $599,000—more than double the national median of $295,000. Chef’s kitchens generally feature an open layout big enough to accommodate plenty of cooks in the kitchen, a large island, a gas cook range built for larger, hotter flames, a Sub-Zero refrigerator and freezer, and multiple sinks and ovens. Popular brands include Viking ovens and ranges, Bosch appliances, and Kohler and Moen faucets and sinks.

The average kitchen overhaul cost $12,300, while major kitchen overhauls usually cost upward of $40,000, according to the Harvard University study.

“People look at a kitchen, and if they don’t like it—they’ll often pass on the house,” says Lori Wellman, owner of Lincoln Cabinet, a Lincoln, NE–based remodeler.

Quartz counters (No. 6) are also in high demand. The engineered variety (a fancy word for enhanced) doesn’t chip as easily as the natural kind, doesn’t require much upkeep, and is difficult to stain or damage. Plus there are hundreds of colors, patterns, and textures to choose from.

It was the material of choice for home renovators, rising from a 41% market share in 2017 to 48% in 2019, according to Houzz data.

“[Engineered] quartz is a very, very versatile material,” says Nino Sitchinava, the site’s principal economist. “You can control palettes and colors and textures really, really well.”

Specialty rooms: Why go out when you can stay in?

Properties with dedicated specialty rooms, like theater rooms (No. 2) and home gyms (No. 3), showed up in only a small percentage of listings (1.5% and 1.1% respectively). And while they’re not as popular as they once were, say design experts, homes that come equipped with such rooms sell for about twice as much as the national median of $295,000. They’re fun to enjoy, too!

“At the high end there’s real cachet in having those specialized spaces,” says Jenni Lantz, manager of DesignLens, a design resource for developers, builders, architects, and interior designers. “Of course you need to have the space for them.”

Folks without big bank accounts can also create these spaces on a shoestring, DIY budget. Dark basements can become theater rooms, for example, with the addition of an oversize screen, wireless speakers, and a comfy couch. Popcorn makers are a bonus!

Unlike theater rooms and gyms, mudrooms (No. 11) have been gaining in popularity in recent years, say design experts. These small rooms are where coats and dirty shoes are kept are typically located toward the front of homes, and more homeowners are retrofitting them into their abodes. They’re becoming more stylish with rustic, wood benches to store those muddy boots under and fancy coat racks.

“Mudrooms are a fantastic transition from an outdoor space to your indoor living [space],” says organizer Novak.

They cost an average $12,000 to install, according to Fixr, a company that connects owners to home-related services.

Home offices (No. 9) have also become increasingly sought-after as more people work remotely or go freelance. The key is natural lighting, perhaps a window view for the desk, and doors that can shut out the clamor of the kids playing in other parts of the home.

Outdoor features are in

The trend today may be all about indoor-outdoor living. But it wasn’t beautifully inlaid patios, outdoor kitchens complete with pizza ovens, or trickling fountains that came out on top for outdoor features. That honor went to three-car garages (No. 4).

“Americans love their garages,” says Rick Foster, a managing broker and license partner at Engel & Völkers Annapolis, in Maryland.

Buyers aren’t just looking for a place to park their cars. “Having extra storage space is a big benefit,” adds Foster.

Certainly prestige comes into play—for many, bigger is indeed better.  But unlike some outdoor features, this one is difficult and costly to add after the fact. Buyers want one already in place.

Other popular outdoor features on our list include solar panels (No. 5), tennis courts (No. 8), and in-ground pools (No. 10).

Solar panels are hot (yes, really) thanks to demand from both climate-conscious buyers and those simply hoping to cut down on their electricity bills. Homes with these features sell the fastest of all of the amenities on our list, at a median 51 days. About 2% of homeowners undergoing remodels have been installing them each year from 2015 to 2017, according to Houzz data.

But be warned: They’re not cheap. Installing a 5-kilowatt system, the standard system of about 20 panels, costs around $25,000 to $35,000, according to www.solarpowerauthority.com.

“Solar is a very regional preference,” says Sitchinava of Houzz. They’re particularly appealing in places that get a lot of sunshine but have high AC bills, such as California, Arizona, and Texas. “The long-term payoff is pretty phenomenal.”

Tennis courts are also appealing, but they can set homeowners back more than $50,000, according to Quality Court Industries, a tennis court construction firm that operates throughout the Southeast.

Even having a shared court open to residents of a community can boost property values. The same goes for in-ground pools, which can be private or shared as well.

Built-in pools are polarizing features in some parts of the country—attracting some buyers while repelling others due to maintenance or liability issues. The cardinal rule for this feature: Install it for your own enjoyment first, resale value second.

“They’re consistently popular,” particularly in warm-weather areas, says design expert Lantz. “People still like to lay out by the pool.”

Smart home features and other electronics can pay off

Smart home technology (No. 14) is a catchy umbrella term people use to describe everything from a few interconnected appliances or internet-controlled thermostats to fully wired homes. The expensive, built-in approach has waned a bit, but the more ad hoc approach is booming, thanks to smart devices that can be used as simple control centers, like Amazon Echo and Google Home.

“The convenience is unparalleled, and the technology is getting so easy to use,” says organizer Novak.

Security systems (no. 12), often smart ones integrated with mobile and other devices, are gaining traction as must-have features. Just 10% of homeowners undergoing remodels had a security system installed in 2015, according to Houzz data. By 2017, about 15% did.

Folks used to have to hire a security company to come in, assess the property, and then install a system that could run anywhere from $600 to more than $1,000. And that doesn’t include the monthly monitoring fees. Now, homeowners can pick up a simple, smart home security system from companies like Ring for around $150.

“People really like having an app on your phone and knowing if someone’s at your home and being able to speak to them,” says Craig Grant, CEO of the Real Estate Technology Institute, an online portal where folks can learn about real estate technology.

Classic indoor amenities have lasting appeal—and a new look

Some things never go out of style. Fireplaces remain a highly sought-after amenity, although today’s sleek, electronic models don’t have much in common with the ashy traditional hearths. These newer fireplaces are often installed right into wall.

“No matter where your home might be, fireplaces are always welcome,” says Nancy Fire, the design and trend forecasting expert behind the HGTV HOME brand.

Other timeless features that boost home values are spacious, walk-in closets. Sometimes folks will even tear down an adjacent bedroom to build that massive closet with floor-to-ceiling shoe and accessory walls, a ladder to store and fetch rarely used items, and seating to make it easier for friends and family to share their outfit opinions, says remodeler Wellman.

Walk-in closets, while still popular, aren’t as in-demand as they used to be—and the decluttering movement (and its guru Marie Kondo) can partly be blamed.

“If you’re trying to pare down your clothing, then you don’t want a big walk-in closet to fill,” says Novak, whose clients prefer smaller, sliding-door closets. “It just becomes a big mess.”

Clare Trapasso and Rachel Stults contributed to this report.  Lance Lambert is a data journalist for realtor.com.

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Time to Build?

Livingston County has an abundance of excellent local and regional builders.  With the continued increase in growth of business and population, the demand for housing and new homes has never been greater.  The local experts at the Gerardi Group are familiar with the process of new construction and have an abundance of relationships with the builders.

Buying a new home can and should be a dream come true.  Part of that process is understanding value in the current market conditions as well as with intelligent choice in options and upgrades.  Nothing can be more disappointing than going it alone only to find that your new home closed upside down due to over-paying for the property or spending more than the market will bare on over-personalization.   An experienced agent can help you understand home value and comps, as well as the features that should enhance and maintain value with out over doing it.  Thinking new construction? Make your first call to the local professionals at the Gerardi Group at 810-626-8839 or email SOLD@GerardiGroup.com.

Search for New Homes Now:

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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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