Millennials Want Home Equity Access

Posted on April 4, 2017 by Debbie Prosser

Daily Real Estate News | Tuesday, April 04, 2017

Homeowners are tapping into equity at the fastest rate in eight years, thanks to rising home prices. And millennials are leading the pack of those who are cashing in.

In 2016, the number of homeowners with potentially “tappable” equity rose to 39.5 million—those are borrowers who have at least 20 percent equity in their homes, according to Black Knight Financial Services.

Millennials, in particular, are turning to HELOCs—home equity lines of credit—more so than Generation X members or baby boomers, according to a recent survey by TD Bank. More than a third of millennials say they’re considering applying for a HELOC in the next 18 months. That is more than double the rate than Generation X and nine times higher than baby boomers.

“We are a little surprised about that,” Mike Kinane, general manager of home equity products at TD Bank, told CNBC. “I think millennials are taking a more conservative approach, but they recognize that HELOCs have a good purpose, especially for remodeling.”

Indeed, remodeling was the number one motivation for taking out a HELOC last year, according to the TD Bank survey (debt consolidation was number two). Millennials are entering the housing market slower than previous generations. When they do buy, they often are purchasing lower-cost, fixer-upper homes. As home prices rise, they’re pulling out equity from the home to remodel. They say their main motivation to renovate is to increase the value of their home, according to the TD Bank survey.

Millennials are being more reserved in taking out HELOCs. Borrowers who did do cash-out refinances last year still had near 35 percent equity remaining in their home, which is the lowest on record, according to Black Knight. They also had an average credit score of 750.

“Customers are borrowing a lot less than they could borrow if they needed to,” Kinane says.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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Mortgage Rates Got Cheaper This Week

Posted on March 31, 2017 by Debbie Prosser

Daily Real Estate News | Friday, March 31, 2017

For the second consecutive week, average mortgage rates fell, lowering the borrowing costs of buyers.

“The 10-year Treasury yield remained relatively flat this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate fell 9 basis points to 4.14 percent, another significant week-over-week decline.”

Freddie Mac reports the following national averages with mortgage rates for the week ending March 30:

  • 30-year fixed-rate mortgages averaged 4.14 percent, with an average 0.5 point, falling from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 3.71 percent.
  • 15-year fixed-rate mortgages averaged 3.39 percent, with an average 0.4 point, falling from last week’s 3.44 percent average. A year ago, 15-year rates averaged 2.98 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.18 percent, with an average 0.4 point, falling from last week’s 3.24 percent average. A year ago, 5-year ARMs averaged 2.90 percent.

Source: Freddie Mac

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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Pending Home Sales Leap 5.5% in February

Posted on March 29, 2017 by Debbie Prosser

WASHINGTON (March 29, 2017) — Pending home sales rebounded sharply in February to their highest level in nearly a year and second-highest level in over a decade, according to the National Association of Realtors®. All major regions saw a notable hike in contract activity last month.

The Pending Home Sales Index,* www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, jumped 5.5 percent to 112.3 in February from 106.4 in January. Last month’s index reading is 2.6 percent above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

Lawrence Yun, NAR chief economist, says February’s convincing bump in pending sales is proof that demand is rising with spring on the doorstep. “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” he said. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

Added Yun, “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”

Looking ahead to the busy spring months, Yun expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers.

“The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy,” said Yun. “The country’s healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation’s low homeownership rate.”

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast rose 3.4 percent to 102.1 in February, and is now 6.6 percent above a year ago. In the Midwest the index jumped 11.4 percent to 110.8 in February, but is still 0.6 percent lower than February 2016.

Pending home sales in the South climbed 4.3 percent to an index of 127.8 in February and are now 4.2 percent above last February. The index in the West increased 3.1 percent in February to 97.5, but is still 0.2 percent higher than a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

* The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

“Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.”

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Are You a Cheap vs. Frugal Homeowner? How to Tell the Difference

Posted on March 28, 2017 by Debbie Prosser

Sometimes trying to save will actually cost you more. Here’s when that happens.

You’ve got all the loyalty apps (free burrito after you buy 10!), you shopped around for the lowest rate on your mortgage, and you never go to the grocery store when you’re hungry. You’re frugal, and the rising amount in your savings account is a testament to that.

Since saving cash is never a bad thing, you’ve got nothing to worry about, right?

Unless, of course, you venture so far past frugality you enter the world of cheap. And cheap homeowners always end up paying more in the end when quick fixes and half-solved issues become big, pricey problems.

Here are six things homeowners do when they’re trying to be frugal, but instead they’re really being cheap (yikes!):

Using the Wrong Tool

You’ve finally decided to paint the molding in your foyer. There’s not much to paint, so you figure you can get by with that 2-inch flat brush in your garage cabinet, even though the paint guy recommended a different (and pricey!) one. Why buy a new one when you already have a perfectly good one at home?

Halfway into your project (which you thought would take two hours, and now you’re into hour four), your back is aching from trying to get those bare spots in tight spaces. And the paint just doesn’t look right. It’s uneven and splotchy.

Turns out you used a brush meant for latex paints, and you’re using oil paint, which requires natural bristles to get a polished look. Plus, you needed an angled brush to get into tight corners. Four hours wasted, and it looks worse than when you started. Now you’ve got to buy more paint — and that darn brush!

Financial planner Daniel Grote says not buying the brush the paint guy recommended is a classic sign of cheapskate-ness: “Frugal homeowners buy when it’s necessary — and are fanatical about good-value purchases. Cheapskates don’t buy, even when they should.”

Some other cheap tool moves homeowners often make instead of spending money:

  • Using glue when you really should use a screw.
  • Using chemicals for clogs instead of calling a plumber or investing in an auger.
  • Using cheap screwdrivers that strip screws.
  • Using a hammer in place of a mallet.
  • Using a manual saw in place of a table saw.

How to be frugal: Invest in the right tools, not cheap knockoffs. “Finding the right tool is important,” says personal finance expert Bob Lai. “It will take less time and money in the long run.” If it’s an expensive one that you only need once or twice, rent it or borrow it.

Bonus: You’ll find DIY projects get easier because your skills (and the results) will improve with the right equipment.

Letting the Yard Wither Away to Avoid High Water Bills

You swear your water bill is trying to topple your heating bill as the king of Utility Mountain. You’re terrified it just might do that next month. You may just as well give up and stop trying to nurture your landscaping. Survival of the fittest, right? Besides, that means less time maintaining it.

But a wilting yard also means a drop in the value of your home (read: $$$ lost when you sell). Or if you’re in an HOA, you could face costly fines that’ll make you pine for those high water bills.

How to be frugal: Invest in water-wise landscaping. It’s not just about desert-friendly plants, it’s about plants that thrive on the amount of rain that naturally occurs in your climate, which translates to less watering and lower utility bills. And if done right, it can actually boost your home’s asking price when you sell. Plus, you’ll still get the advantage of less maintenance. For even more savings, invest in rain barrels. That water is free.

Never Paying Retail

Everyone knows that if you’re patient enough, you’ll be able to get that slate flooring (it’s slip resistant, yay!) for your new bath at a deep discount.

So you waited, and, yes, the price was cut almost in half. But, wait, there’s not enough tile left to cover your entire floor. Sigh. Back to square one.

In the meantime, your contractor is threatening to walk out because you’re running more than two weeks behind schedule, and he’s got another job lined up he doesn’t want to risk losing while sitting around waiting on you.

How to be frugal: Definitely do some serious comparison shopping, but don’t forget to consider delivery times and prices as part of the equation. Once you’ve identified the most-value-for-your-money price, lock it in.

Otherwise, you risk costly delays and disappointing results if you keep waiting for a lower price.

Focusing Only on the Bottom Line When You Get a Bid

Crooked countertops. Misaligned tiles. Paint that warps and cracks if it’s even the slightest bit humid. Cheap contractors often cut corners to give you that low quote — and fixing their errors is definitely not cheap.

How to be frugal: 

  • Make sure each bid has the same line items.
  • Ask why high prices are high and low prices are low.
  • Check references.
  • Scour online reviews.

Putting Off Maintenance Tasks to Save Money

You know you’re supposed to keep your gutters clear, but, geez, it’s like your trees are laughing at you and raining down debris as soon as you get them clear. You don’t have the time to deal with it, so you’re going to have to pay a pro.

That being the case, what’s the real harm in waiting until the end of the leaf-falling season to clear the gutters? Pay to have it done once instead of twice or thrice? That’s how to save, right?

While you’re waiting for all the leaves to fall, your gutters already are full. And that means water could already be sneaking into your foundation because it’s spilling over the sides instead of through the downspouts that take water away from your foundation. Clogged gutters can also damage your gutter system, forcing you to replace part of it or suffer even more costly damage. A clogged gutter can also create an ice dam, which can slowly release water into your home’s walls and roof causing thousands in damage. So much for saving a couple of hundred of dollars.

How to be frugal: Anticipate maintenance costs, knowing that they are insurance against more costly repairs. Build them into your budget so they don’t feel like unexpected expenses.

Overestimating Your DIY Skills

When you got the bid for refinishing your hardwood floors, you thought, “Why not do it myself and save that $5K?” So off you go to your big-box store to rent a sander. How hard could it really be?

You’d be surprised. You could create dings, dents, and even valleys if you’re not sure what you’re doing. And keeping it dust-free during the polyurethane stage is practically impossible unless you’re such a neat freak that no speck stands a chance.

It’s not just the sander. Other powerful tools, like power washers and lawn aerators, can cause more harm than good in the hands of amateurs.

How to be frugal: Concede that sometimes paying someone else really is the better fiscal thing to do. If you ruin your floors, you’ve hurt your home’s value. If you sell, you might not get the best price. Or you’ll have to replace the floors completely, which would cost more than hiring a pro in the first place. Research the difficulty of projects and tools before committing to them.

No one wants to be a cheapskate. Now you can be sure you’re not.

“Visit HouseLogic.com for more articles like this.  Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.”

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How a Smart Home Is at Risk

Posted on March 23, 2017 by Debbie Prosser

Daily Real Estate News | Thursday, March 23, 2017

Smart homes can be susceptible to viruses, if homeowners aren’t careful.

Many smart home devices are vulnerable, security experts say. A flood of inexpensive security cameras, thermostats, and other internet-connected devices have come to the market, and many of them are carrying minimal safeguards against remote hacking, The Wall Street Journal reports. What’s more, often times, many owners don’t realize their devices contain malicious software.

These threats are allowing hackers to do everything from peer into internet-enabled cameras to infecting digital thermostats to attacking computers where bank account information or sensitive data is available.

“The devices continue to function and that’s mostly what the owners are concerned about,” says Steve McGregory, a researcher at security firm Ixia. “Who’s responsible for it? There’s a line of people that you could look at and say, ‘You should probably do more.'”

The Wall Street Journal offers up some of the following tips from experts on how to better secure a smart home:

  • Do a hard reset: Some more basic computer viruses that lurk on home routers and digital video recorders are unable to survive a hard reset. If an infection is ever suspected, power off the machine.
  • Update your password: Don’t use simple passwords like “12345” or “admin.” Have a unique username and password to protect the machine from threats.
  • Perform updates: Some companies offer software patches if a security vulnerability threatens a device. But the user also is the one who has to initiate these updates. Enable automatic updates, whenever possible.

REALTOR® Magazine Online

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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8 Popular Tips That Cost Homeowners More in the Long Run

Posted on March 20, 2017 by Debbie Prosser

Hacks and advice that are more hurtful than helpful.

You’re always on the lookout for smart ideas and hacks to manage your home (and save money!) — whether that means listening to the wisdom of your parents who’ve owned a home longer than you’ve been alive, or scouring every corner of the internet for savvy tips.

But just because a tip has been pinned, shared, and Instagrammed thousands of times doesn’t make it smart. Here are eight tips (myths, really) that most people believe are good advice, but instead will cost you cash you don’t need to spend:

Myth #1: Lemons Are Great for Cleaning Garbage Disposals

What it could cost you: A plumber’s visit (and maybe a new disposal)

Proceed with caution when it comes to this well-circulated DIY fix. Citric acid is a natural deodorizer, but plumbing experts say it can corrode the metal in your disposal. That tough lemon peel can also damage the grinding components and clog your pipes. Next thing you know you’re Googling reviews for plumbers.

The better way: Turn on the disposal and, while running cold water, dump in two or more trays of ice cubes. Despite the clamor, this will safely dislodge buildup on the walls and the impellers, which grind up the food. Use vinegar to deodorize.

What it could cost you: Pricier energy bills

Despite its name, don’t rely on duct tape to seal leaks in your HVAC’s ductwork. Testing by the U.S. Department of Energy found it deteriorates over just a few years (hot air from the HVAC system degrades the glue), letting conditioned air escape without doing its job.

The better way: Use duct mastic (a gooey substance kind of like caulk that dries after applied) to seal metal and flexible ductwork, and use it along with a layer of fiberglass mesh for gaps larger than 1/16 of an inch wide. Use gloves with metal ducts because the edges can be sharp, and mastic is messy stuff.

Myth #3: Bleach Will Banish Mold

What it could cost you: A threat to your health, plus hundreds of $ (even thousands)

Although bleach can kill mold on non-porous surfaces, it isn’t effective on absorbent or porous materials — you know, the places it loves to lurk, like grout, caulk, drywall, insulation, and carpet, according to the Centers for Disease Control and Prevention. Instead, it just bleaches it so you can’t see it. And diluted bleach can feed future mold growth (yikes!) because only the water will be absorbed, which mold just loves.

The better way: Use a commercial anti-fungal product to take out mold at its roots. And only tackle mold removal yourself if the area is less than 10 square feet and you use protective gear, such as a respirator and chemical-resistant gloves. Otherwise, call in a mold remediation specialist who’ll know how to remove it without spreading it’s yucky (and potentially harmful) spores.

Myth #4: Change Your HVAC Filter Every Month

What it could cost you: Around $100 a year

Although the air filter should be changed regularly to keep your home’s HVAC system operating efficiently, this piece of advice is more of a convenient general rule that could cause you to throw away perfectly good filters (and money!).

“The harsh truth is that it’s easier to say, ‘Do it every month’ and know that means people might do it every three or four months,” says homeowner advocate Tina Gleisner of Home Tips for Women.

The better way: The Department of Energy recommends checking, but not necessarily changing, your air filter every month. Change it if it looks dirty, replacing it at least once every three months.

Myth #5: Buy a Rinse Aid for Spot-Free Dishes

What it could cost you: Dollars instead of cents

Most dishwashers now come with a built-in dispenser for commercial rinse aids, plus a free sample to get you started. So now you’re hooked (spot-free glasses every time!), and it has become a regular item on your shopping list, even if it does cost almost $4 for 8 ounces.

The better way: If you’ve never tried, run your dishwasher without a rinse aid. If your water is soft, your dishwasher may deliver spot-free sparkle without any extra help. But if you’re still seeing spots, just fill the rinse-aid dispenser with plain white vinegar (less than a 50 cents for 8 ounces).

Money Tip: Rinse aid does help dishes dry faster, which stops those annoying wet drips from top rack to bottom when you unload. But instead of spending money, unload the bottom rack first while letting the top rack air dry.

Myth #6: Home Improvement is Always a Good Investment

What it could cost you: Thousands of dollars in disappointment

Dreaming of diving into your own pool or adding a second bath to put an end to those morning squabbles? That’s the beauty of owning your own home, you can renovate to make all your dreams come true. And you’ll get money back on most any improvement you do, but don’t expect it for all improvements. FYI: A new bath returns 52% of its cost.

The better way: First off, your own happiness matters, so by all means, follow your remodeling bliss if you’re financially able. But if payback is important, do some research and talk to a REALTOR® who knows what buyers are seeking in your market. The Remodeling Impact Report from The National Association of REALTORS® (the sponsor of HouseLogic) is a fantastic resource to get the scoop on what projects will boost your equity the most. For example, it points out that small projects such as an insulation upgrade, refinishing floors, and even seeding your lawn will recoup almost all, and in some cases more than, your original investment.

Myth #7: Put Dryer Sheets in Air Vents for a Sweet Smell

What it could cost you: Higher energy bills and a potential fire hazard

Social media PSA: Thousands of pins and shares do not mean a remedy is smart or safe. If you follow this popular hack, you’ll block the flow of air in your vents, making your HVAC system work harder and increasing your energy costs. The blockage even can pose a fire risk when the furnace is pumping out hot air.

The better way: If fragrant air is what you’re after, there are no shortage of options available that won’t burn your house down. Give each room — or each day — a signature scent with all-natural scented candles, sprays, oils, and aromatherapy devices. If you’re seeking a scent to mask an offensive odor, however, it’s important to find and remove the source. Some stinky suspects — like mold, mildew, sewage, and gas leaks — can carry health risks.

Myth #8: Product Warranties Will Save on Repair Costs

What it could cost you: $50 to $100 or more

The last time you bought a major appliance or even a hand mixer, you were probably offered a warranty or service plan. While marketed to cover repair costs, these contracts typically cost more than you would ever spend to fix an item. And keep in mind that most manufacturers offer at least a 90-day warranty anyway.

The better way: Maintain the appliance as recommended by the manufacturer, and smartly stash the dollars you would spend on a warranty in a repair fund instead. Also, buy with a major credit card, such as AmEx or Visa. Many credit card companies extend product warranties (for free!) up to a year or so. Might be worth checking to see if yours does.

“Visit HouseLogic.com for more articles like this.  Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.”

 

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Borrowers Face Higher Mortgage Rates

Posted on March 17, 2017 by Debbie Prosser

Daily Real Estate News | Friday, March 17, 2017

For the second consecutive week, mortgage rates were on the rise. “As expected, the [Federal Reserve’s Federal Open Market Committee] announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year,” says Sean Becketti, Freddie Mac’s chief economist. “Although our survey was conducted prior to the Fed’s decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year mortgage rate 9 basis points to 4.30 percent this week. Increasing inflation, continued gains in the labor market and the Fed’s intentions for further rate increases—all three will keep pushing mortgage rates up this year.”

Freddie Mac reports the following national averages with mortgage rates for the week ending March 16:

  • 30-year fixed-rate mortgages averaged 4.30 percent, with an average 0.5 point, rising from last week’s 4.21 percent average. A year ago, 30-year rates averaged 3.73 percent.
  • 15-year fixed-rate mortgages averaged 3.50 percent, with an average 0.5 point, increasing from last week’s 3.42 percent average. Last year at this time, 15-year fixed-rate mortgages averaged 2.99 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.28 percent, with an average 0.4 point, increasing from last week’s 3.23 percent average. Last year at this time, 5-year ARMs averaged 2.93 percent.

Source: Freddie Mac

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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What Do Real Estate Pros Look for When It’s Their Turn to Buy?

Posted on March 16, 2017 by Debbie Prosser

What you really need to know about buying — from the people who house hunt for a living.

Take the long view when you’re buying, says Chicago agent Pekarsky. He plans to start a family in a few years, so he set his sights on a single-family with plenty of bedrooms. Image: Jacob Hand for HouseLogic

It’s not every day that you buy a home and make decisions about the next three, five, or 10 years of your life. Since you can’t exactly take a home on a test drive, how do you decide? That got us to thinking about real estate pros. When they’ve seen practically everything on the market, how do they choose?

Four pros who’ve seen it all share their advice and their stories of hunting for just the right home.

Be Willing to Compromise for Your Priorities

Veteran real estate agent Nancy Farkas knew exactly what she wanted in her home: ranch style, three bedrooms, high ceilings. But you know what she bought? A two-story Colonial.

Huh?

For Farkas, an associate partner with Coldwell Banker Heritage REALTORS®, in Dayton, Ohio, the home’s location and price trumped style. “I had a dog I had to go home and walk at noon, and the house was close [to work] and the right price,” she says.

Her advice: Make sure your practical and functional priorities don’t get lost in all the home buying hoo-ha (sparkling granite counters, new hardwood floors, a steam shower!). Remember, you can always add the hoo-ha, but you can’t make a home fit all priorities, such as location and price.

Dig Into the Details

When Grigory Pekarsky, co-owner and managing broker with Vesta Preferred Real Estate in Chicago, was looking for his first home, one of his priorities was to minimize his maintenance costs. He made sure to find out if the house had a newer roof, good siding, and a newer furnace. But he recommends you go even deeper to uncover a home’s not-so-obvious maintenance costs:

  • Scope out the sewer line — especially if you’re interested in an older home — to make sure there aren’t any tree branches or other debris clogging up the works. Otherwise, you might find some nasty sludge in the basement.
  • Look at the trees. How mature are they? Roots from older trees can invade the sewer line; untrimmed branches can pummel your gutters during storms.
  • Know what’s not covered by homeowners insurance. “I learned seepage isn’t covered. Shame on me,” he says.
  • Ask how old the appliances are. You might need to budget for something new in a few years. Sellers are only required to fix what the inspector finds is broken; they’re not going to upgrade working appliances for you.

Focus on Lifestyle

Having lived the high-rise apartment life as a renter, Pekarsky knew a single-family home was just what he wanted. He was tired of living in a relatively small space with no yard. He wanted a house he could “grow into in the next three to five years.” That meant multiple bedrooms and bathrooms for the family he plans on having. So what he bought — a three-story, single-family with a finished attic bedroom on Chicago’s North Side — suits his lifestyle perfectly.

On the other hand, Matt Difanis wished he’d bought a condo when he bought his first home, a small bungalow ranch in a charming, historic neighborhood in Champaign, Ill. It was first-home love — until it rained.

“If I didn’t clean out the gutters before every rainstorm, the basement would leak,” says the broker-owner of RE/MAX Realty Associates in Champaign. He didn’t realize that taking care of a single-family home wouldn’t be his cup of tea. “I should have opted for a condo without gutters to clean and a lawn to mow,” he says.

Agent Amy Smythe Harris of Urban Provision REALTORS®, in Woodland, Texas, bought a home with a sizable downstairs suite her parents could use now (and she could use years from now). She says her millennial clients aren’t forward-thinking about their lifestyles. Some are childless and say they don’t care about schools, pools, and tennis courts. Then they become parents a few years later and have to move.

“Once they have kids, the first question [they] ask is about school districts, and the second is about where the parks and pools are,” she says.

The pros’ bottom-line advice: Think of your lifestyle preferences and how those might change in the next few years. After all, the typical homeowner lives in a house for a median of 10 years before selling, NATIONAL ASSOCIATION OF REALTORS® data shows.

Filter Your Choices Through the Lens of Resale

All the real estate pros we talked to — no surprise here — emphasized resale. Take appraiser Michelle C. Bradley of Czekalski Real Estate Inc. in Natrona Heights, Pa. When she built her current home — a 2,200-square-foot ranch — she included a full, unfinished basement, even though she has no use for one and rarely ventures into it.

Why would she do that? Because basements are standard in her southwest Pennsylvania market. But Bradley’s not going to finish the basement until she’s ready to sell. That way, she avoids having to clean it and ensures she’ll install the most fashionable bathroom fixtures at sell time.

Her advice: “Don’t buy or build something unique that you can’t resell. If you’re not in an area with log homes, don’t choose a log home. If you’re not in an area with dome homes, don’t choose a dome home.”

Likewise, If you buy a home priced higher than average for the area, it’ll be difficult to resell at a higher price.  Don’t buy a home that’s not in line with the neighborhood’s average price . When you go to resell, you’ll find yourself in an uphill battle to maintain your higher price.

Other advice from the pros: Watch out for unfixable flaws that could affect resale, like:

  • What’s next to the home, such as vacant land that could be developed, high-traffic businesses, noisy power generation stations, a cell tower, etc.
  • Lot issues, such as a steep driveway that could double as a ski slope in winter, or a sloped yard that sends water special delivery to your foundation.

Of course, a home isn’t just about resale. It’s just one factor to consider. Remember the first point: Be willing to compromise for your priorities. If the home meets your priorities and you’re going to stay there awhile, then resale might be where you compromise.

“Visit HouseLogic.com for more articles like this.  Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.”

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What’s the House Size? No One Is Really Sure

Posted on March 14, 2017 by Debbie Prosser

Daily Real Estate News | Tuesday, March 14, 2017

Just how large a house really is may depend on whom you ask, The Wall Street Journal reports. That’s because appraisers, developers, builders, real estate professionals, tax assessors, and architects all measure spaces differently. No universal standard exists for calculating a home’s square footage. Further, it can also vary regionally.

For example, some calculate space on only the interior dimensions of finished living spaces. Some industry insiders may count the garage or finished basement in the square footage; others may not. Whether to count the square footage of balconies, basements, garages, or even wall thickness can vary too.

Fifty-eight percent of 400 consumers recently surveyed by Houzz.com said estimates of their home’s square footage varied among real estate professionals.

Square footage is an important number when it comes to buying real estate, however. Buyers may even narrow their home search online and compare homes based on price per square foot.

“People want more space and have become very sensitive to that number,” says Robert Edelstein, a real estate and business professor at the University of California, Berkeley.

Real estate professionals, however, are not required to verify the square footage cited in the listings database, says Quincy Virgilio, chairman of the board of directors at MLS Listings. Real estate pros often draw from several sources, such as county records, developer floor plans, and previous sale listings.

Buyers who want to know more about the home’s true size need to ask more about how the size was computed. For example, they should ask the source of the measurements and what is included in that number, such as private outdoor terraces, the garage, basement, utility closets, or even staircases.

“Developers tend to say, ‘We are selling you this much square footage.’ But is it really living area?” says Chip Wagner, a real estate appraiser based in Naperville, Ill. Wagner told The Wall Street Journal that he spots size discrepancies of more than 50 square feet about 20 percent of the time in the homes he appraises.

Encourage your buyers to look past the “big number” and instead focus on the dimensions of individual rooms, suggests home builder Brian Hoffman, a principal with Red Seal Homes, based in Northbrook, Ill.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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