10 Ways to Turn Off Potential Buyers

As a result of our obsession with photos and visuals today, buyers make judgments of homes immediately. Many will do their first showing online, so if your photos turn them off, they may never step foot inside.

Sellers need to go to great lengths to get buyers in the door. If you can get them through, it’s the small (and often obvious) things that will keep them interested. Though it’s a home first and foremost, it’s also an investment. Make changes or alterations that could turn off a buyer, and you risk hurting your bottom line.

If you’re planning to put your house on the market, be aware of these 10 ways you might be turning off potential buyers.

1. Turn your garage into a family room.

A family room might be attractive – to a family. But if you’ve sacrificed the garage, the trade-off might be a turn-off, especially to people who don’t have kids or who live in dense urban areas, where parking is at a premium. Even in the suburbs, most people want a covered, secure place to park their cars.

Don’t forget that a garage often doubles as a storage location, housing everything from the lawn mower to excess paper towels and cleansers. If you go glam with your garage, you’re likely to force a buyer to look elsewhere.

2. Convert a bedroom into a something other than a bedroom.

Aside from location and price, one of the first things a buyer searches for is number of bedrooms. Why? Because it’s a fundamental requirement.

You might think that having a wine cellar with built-in refrigerators in your home will make it attractive to potential buyers because it was attractive to you. But that’s not for everyone.

And while it’s true many people work from home today, at least part of the time, that doesn’t mean they want a dedicated home office -especially one with built-in desks or bookcases they can’t easily remove.

If you must convert a bedroom into something else, make sure you can readily change it back into a bedroom when you go to sell. If you have lots of bedrooms, buyers might be more forgiving. But a buyer who needs three might see your custom home office as a turn-off.

3. Lay down carpet over hardwood floors.

People like hardwood floors. They look cleaner, add a design element, don’t show dirt as much, and consumers with allergies prefer them over carpets.

If you have gleaming hardwood floors, show them off. Let the buyer decide if she wants to cover them. It’s easier for her to purchase new carpeting of her choosing than to get past yours.

4. Install over-the-top light fixtures.

A beautiful chandelier can enliven a dining room. But it can also turn off buyers who prefer simpler, less ornate fixtures.

Did you fall in love with a dark light fixture on a trip to Casablanca? That’s great. And you should use it for your enjoyment. But when it comes time to sell, replace it with something more neutral.

Remember, you want to appeal to the masses when your home is for sale. You want to stand out from a crowded field of sellers – but in the right way.

5. Turn your kid’s room into a miniature theme park.

Little kids have big imaginations. They tend to love Disney characters, spaceships, and superheroes, and their parents are often all-too-willing to turn their rooms into fantasy caves.

But the more you transform a child’s bedroom into something resembling a Disneyland ride, the more you’ll turn off most potential buyers. Your buyer might have teenage children, and see the removal of wallpaper, paint or little-kid-inspired light fixtures as too much work.

If you can, neutralize the kids’ rooms before you go on the market.

6. Add an above-ground pool.

Does it get hot in the summer where you live? Wish you had a backyard pool, but can’t afford to have a “real” pool installed? Then you might be tempted to buy and set up an above-ground pool.

For most buyers, though, these pools are an eyesore. Also, an above-ground pool can leave a big dead spot of grass in your backyard – another eyesore.

If you must have it, consider dismantling it before going on the market. Of course, be sure you’re ready to sell, or you may be stuck without a place to cool off next summer.

7. Leave dirty dishes in the sink.

A kitchen full of dirty dishes is not only unattractive, but it sends a strong message to the buyer: You don’t care about your home.

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If your home is for sale, buyers will be coming through, and you want to impress them. Would you keep dirty dishes in the sink for your in-laws or overnight guests? Probably not. Then why wouldn’t you clean up for your potential customers?

Putting your home up for sale, and keeping it on the market, is work. If you aren’t cut out for it, considering holding off until you are ready to clean up for the buyers.

8. Make buyers take off their shoes.

This turn-off cuts both ways. As an agent, I always hated being forced to take my shoes off in someone else’s home - until I sold my own. Not only was it inconvenient, but also I wasn’t happy about my socks picking up a random homeowner’s dirt, pet hair and dust.

Once I became a first-time home seller, and one with sparkling new hardwood floors and carpet, I couldn’t imagine allowing dirt and grime from the outside world to dirty up my floors.

So what’s the compromise? Shoe covers from a medical supply store. Buyers and agents don’t need to take off their shoes, simply cover them. It’s a win-win for everyone.

9. Smoke cigarettes in every room of your house – for years.

Over time, the smell of smoke permeates your home. It gets into the carpet, drapes, wood paneling - just about everywhere. And that’s a big turn-off to most buyers today.

Getting rid of the smoke smell can be a big job. If you’re a smoker, seriously consider how you want to present your home to the market. For a long-term smoke-filled home, it means painting, removing carpets, and doing lots of deep cleaning. If you don’t do it, don’t expect to get top dollar for your home.

10. Keep Fido’s bed and toys front and center.

Family pets bring a lot of joy to the home. But they don’t always bring the same joy to a prospective buyer. Dog’s toys, filled with saliva, dirt and dust, can be a sore both for the eyes and the nose.

If you have a pet, put a plan in place to move the food and water bowls as well as the toys and dog’s bed to a better location, like in the garage.

It’s your home – for now

Part of the joy of owning a home is that you can do whatever you want with it, to it, and in it. You should enjoy it. But if you want to sell it quickly and for top dollar down the road, try to picture how others might react to any renovations, additions or modifications you make.

The more specific you get – such as turning your kid’s room into a miniature castle – the harder it will be to sell your home later, and the less return on investment you’ll get. When considering changes to your home, always consider resale.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

30-Year Fixed Mortgage Rate Returns to Record Low

As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

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As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

Mortgage rates remain flat, but upward movements may be on the horizon.

“Mortgage rates moved slightly lower this week, barely budging as markets await a signal for a more pronounced move in either direction,” said Zillow Senior Economist Matthew Speakman. “Rates have stayed basically flat over the past few weeks, and where they head from here is dependent on two key factors: COVID-19 cases and potential actions taken by the Federal Reserve. While COVID cases remain elevated, they are showing some early signs of plateauing – news that is undoubtedly good for the world, but could place more upward pressure on mortgage rates. The Fed, meanwhile, continues to wrestle with whether, how, and when to tighten monetary policy at a time when inflation and joblessness remain elevated. A softer-than-expected August inflation reading this week likely lowered the odds that the Fed announces any immediate moves to tighten policy at their upcoming September conference, but the fact that interest rates haven’t moved much in recent weeks indicates that investors are still waiting for more certainty. All told, there’s a good chance that mortgage rates will move notably in the coming weeks, but the jury’s still out on which direction they’ll head.”

Additionally, the 15-year fixed mortgage rate was 1.99%, and for 5/1 ARMs, the rate was 2.34%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.84% 2.9% -0.07%
20-Year Fixed 2.54% 2.62% 0%
15-Year Fixed 2.06% 2.16% -0.02%
10-Year Fixed 2.06% 2.19% -0.06%
7/1 ARM 2.4% 3.06% 0.04%
5/1 ARM 2.35% 3.18% 0.01%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.84% APR with a $75,000 down payment will have a monthly payment of $1,239. A 20-Year Fixed loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,595. A 15-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $1,939. A 10-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $2,768. A 7/1 ARM loan of $300,000 at 2.4% APR with a $75,000 down payment will have a monthly payment of $1,169. A 5/1 ARM loan of $300,000 at 2.35% APR with a $75,000 down payment will have a monthly payment of $1,162. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.25% 2.9% 0.05%
30-Year Fixed VA 2.48% 2.74% -0.02%
15-Year Fixed FHA 1.75% 2.41% 0.22%
15-Year Fixed VA 1.89% 2.35% 0.45%
5/1 ARM FHA 3.11% 3.27% 0.08%
5/1 ARM VA 2.44% 2.41% 0.07%

A 30-Year Fixed FHA loan of $300,000 at 2.25% APR with a $75,000 down payment will have a monthly payment of $1,146. A 30-Year Fixed VA loan of $300,000 at 2.48% APR with a $75,000 down payment will have a monthly payment of $1,181. A 15-Year Fixed FHA loan of $300,000 at 1.75% APR with a $75,000 down payment will have a monthly payment of $1,896. A 15-Year Fixed VA loan of $300,000 at 1.89% APR with a $75,000 down payment will have a monthly payment of $1,915. A 5/1 ARM FHA loan of $300,000 at 3.11% APR with a $75,000 down payment will have a monthly payment of $1,282. A 5/1 ARM VA loan of $300,000 at 2.44% APR with a $75,000 down payment will have a monthly payment of $1,176. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 2.87% 2.91% 0.03%
20-Year Fixed Jumbo 3.14% 3.19% -0.05%
15-Year Fixed Jumbo 2.6% 2.68% 0.03%
10-Year Fixed Jumbo 2.78% 2.93% 0%
7/1 ARM Jumbo 2.43% 3.06% -0.02%
5/1 ARM Jumbo 2.24% 3.12% 0.05%
3/1 ARM Jumbo 0% 0% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 2.87% APR with a $150,000 down payment will have a monthly payment of $2,486. A 20-Year Fixed Jumbo loan of $600,000 at 3.14% APR with a $150,000 down payment will have a monthly payment of $3,370. A 15-Year Fixed Jumbo loan of $600,000 at 2.6% APR with a $150,000 down payment will have a monthly payment of $4,027. A 10-Year Fixed Jumbo loan of $600,000 at 2.78% APR with a $150,000 down payment will have a monthly payment of $5,733. A 7/1 ARM Jumbo loan of $600,000 at 2.43% APR with a $150,000 down payment will have a monthly payment of $2,347. A 5/1 ARM Jumbo loan of $600,000 at 2.24% APR with a $150,000 down payment will have a monthly payment of $2,291. A 3/1 ARM Jumbo loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

8 Tips for Lowering Your Homeowners Association Dues

Llike any budget, there could be lots of ways to reduce HOA expenses.

Whether you just bought a condo or have owned one for years, you’ve probably accepted the monthly homeowners association (HOA) dues at face value. But there are reasons why you shouldn’t.

HOA dues are money out of your pocket. They can have a huge impact on your decision to buy, or not buy, a particular condo. For example, you might have fallen in love with a condo in a big complex but decided you just can’t afford the HOA dues. Also, high HOA dues can be a deterrent to future buyers, too, when you go to sell later.

An HOA is made up of residents of the condo building or complex — volunteers who are busy with their jobs and families just like everyone else. It could be that no one on the HOA board has time to look for ways to reduce the monthly HOA dues.

But like any budget, there could be lots of ways to reduce expenses. Here’s how you can have a positive impact on your HOA dues.

1. Ask to see the HOA budget

As a condo owner, you have the right to review the HOA budget. Get a copy and check it over thoroughly. If you have questions, ask the HOA president or a board member.

2. Join the HOA board

If you’re on the board, you’ll have more opportunity and more clout to dig into the HOA’s finances — such as its contracts with the property management company, landscapers and so on.

3. Review the HOA’s contracts

An HOA often has agreements with a variety of vendors: the property management company, a landscaping/grounds maintenance company, and so on. In some cases, those agreements or contracts may have been negotiated years ago and might be renegotiated today in more favorable terms for the HOA.

For example, the recent buyer of a condo in an Atlanta complex felt like the HOA dues were too high. So he asked to join the board, and the members were happy to have him. He then performed an audit and discovered money was being wasted in several areas, such as on landscaping/gardening.

The HOA’s agreement with its gardener had been negotiated five years earlier. The gardener, by default, raised his fees every year. The Atlanta condo buyer, with the HOA’s approval, sought bids from a variety of other gardening companies and succeeded in finding a reputable gardener at a lower monthly cost.

4. Reduce landscaping costs

If finding another landscaping or gardening company isn’t an option, maybe the HOA can reduce the frequency of these services, without jeopardizing aesthetics. It’s worth asking.

5. Determine if HOA is paying too much in property management fees

In large condo developments, the property management company would likely be the one to lead the charge to reduce expenses. But they’re unlikely to advocate lowering their own fees. So you’ll need to work with your HOA directly in exploring ways to reduce the property management company’s fees.

6. Look at insurance premiums

Insurance is often a big HOA expense. Get quotes for insurance premiums and be prepared to renegotiate with your current carrier once your policy comes up for renewal.

7. Defer non-essential maintenance or other projects

Aside from HOA dues, condo owners are often hit with assessments to cover things such as roof repairs and hallway painting. Talk to the HOA board about deferring any non-essential HOA projects for a year or two.

8. Reduce reserves, if possible

Every HOA has reserve funds to cover unexpected expenses. Over time, those reserves, if not tapped, build up. Find out how much the HOA has in reserves. If it’s a healthy amount and no major improvement or repair projects are in the works, ask the HOA board to consider temporarily reducing the amount it puts into reserves every month.

Easier said than done?

Most HOAs will welcome your participation. But your belt-tightening suggestions may require a formal vote from HOA board members or the entire association before they’re enacted.

At any rate, understand that changes to the budget may not happen overnight. Finding the fat, renegotiating fees, and asking for additional bids can be extremely time consuming.

Still, it’s worth a try. Talk to your HOA president, treasurer or other board member. Tell them your goal is to simply explore possible ways to lower the association’s cost for everyone’s benefit. A little bit of legwork may save you — and your neighbors — some money every month.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

3 Ways to Protect Your Escrow Deposit

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When buying a home, you’ll probably hear your lender or real estate agent use the word escrow. The term escrow can describe a few different functions, from the time your offer is accepted to the day you close on your home — and even after you become a homeowner with a mortgage.

There are essentially two types of escrow accounts. One is used throughout the homebuying process until you close on the home. The other, commonly referred to as an impound account, is used by your mortgage servicer to manage property tax and insurance premium payments on your behalf.

Disclaimer: The information contained in this article is for informational purposes only and is not intended to be relied upon as financial or legal advice, guarantees or warranties of any kind. Reference to escrow accounts here refers to an escrow account established to facilitate the purchase transaction of a new home.

What is an escrow account?

An escrow account is a contractual arrangement in which a neutral third party, known as an escrow agent, receives and disburses funds for transacting parties (i.e., you and the seller). Typically, a selling agent opens an escrow account through a title company once you and the seller agree on a home price and sign a purchase agreement. When you’re buying a home, this escrow account serves two main purposes:

  1. To hold earnest money while you’re in escrow
  2. To handle and disburse the funds until all escrow conditions are met and escrow is closed

How does escrow work?

When you make an offer on a home, the seller may require you to pay earnest money that will be held in an escrow account until you and the seller negotiate a contract and close the deal. This earnest money gives the seller added assurance that you do not intend to back out of the deal, and it protects them in the event that you do. It also motivates the seller to pick your offer over others.

During the escrow process, the escrow agent will handle the transfer of the property, the exchange of money, and any related documents to ensure all parties receive what they are owed. This removes uncertainty over whether either party will be able to fulfill its obligations, and it helps ensure that neither party is favored over the other.

What does in escrow mean?

When you hear the phrase “in escrow”, it means that all items placed in the escrow account (e.g., earnest money, property deed, loan funds) are held with an escrow agent until all conditions of the escrow arrangement have been met. The conditions usually involve receiving an appraisal, title search and approved financing.

While the earnest money is in escrow, neither you nor the seller can touch it. Once conditions are met, the earnest money will likely be applied toward the purchase price or your down payment on the home.

What does it mean to close escrow?

To close escrow means that all of the escrow conditions have been met. You’ve received a home loan, and the title has legally passed from the seller to you. During the closing of escrow process, a closing or escrow agent (who may be an attorney, depending on the state in which the property is located) will disburse transaction funds to the appropriate parties, ensure all documents are signed and prepare a new deed naming you the homeowner.

Afterward, the escrow officer will send the deed to the county recorder for recording before escrow is officially closed. Once closed, you and the seller will receive a final closing statement and other documents in the mail. Check the statement carefully and call the closing agent immediately if you spot an error. Save the statement with your most important papers, as you will need it when you file your next income tax return.

What is an escrow payment?

After you purchase a home, you’ll be responsible for maintaining insurance on the property and paying state and local property taxes. The property tax and insurance premiums you owe are the escrow payments made to your escrow or impound account.

The impound account ensures that the funds for taxes and insurance are available and that premiums are paid on time. Your lender doesn’t want you to miss a tax payment and risk a foreclosure on the home. They also don’t want you to miss a homeowners insurance payment, or they may be forced to take out additional insurance on your behalf to cover the home in the event of property loss or severe damage.

How monthly escrow payments work

The amount of escrow due each month into the impound account is based on your estimated annual property tax and insurance obligations, which may vary throughout the life of your loan. Because of this, your mortgage servicer may collect a monthly escrow payment, along with your principal and interest, and use those collected funds to pay taxes and insurance on your behalf. 

Your lender will notify you 30 days before your next payment if the amount changes. You can also ask your mortgage servicer to walk you through the local impound account funding schedule that applies to your loan. If there are insufficient funds in your impound account to cover the taxes and insurance, your monthly mortgage payment may increase (even though your principal and interest will stay the same on fixed-rate loans).

Initial escrow payment at closing

Lenders usually require at least two months’ worth of insurance and property tax funds in the impound account at closing. The amount you have to prepay into an impound account for these costs is based on your location. Keep in mind that these funds aren’t additional closing costs. Instead, you’re prepaying extra months of home insurance and property tax bills that you would be required to pay when due. Your mortgage servicer will list the initial escrow payment amount due at closing on your loan estimate.

Your escrow analysis statement

Each month, your mortgage statement will show you how much you’ve accrued in your impound account. And each year, your mortgage servicer is required by law to send you an annual escrow account analysis showing you some of the following:

  • The amount of funds received from you
  • The amount of funds paid out for insurance and property tax
  • An estimation of how much the escrow portion of your monthly payment may increase or decrease based on the premiums owed
  • Notice if you don’t have enough funds in your account to pay the estimated tax and insurance due in the next bill (i.e., escrow shortage)
  • Notice if you have a negative balance in your account that is owed to bring your account to current (i.e., escrow deficiency)

Is an escrow account required?

An escrow account for paying property tax and homeowners insurance is generally required by lenders who originate VA, FHA and conventional loans. In some instances, lenders may allow the homeowner to pay the property tax and home insurance as a lump sum instead of setting up an escrow account. If you waive escrow, be aware that some lenders may charge you a fee or an increased interest rate.

While you may not be required to set up an escrow account, you can choose to open one voluntarily to break up insurance and property tax payments into smaller amounts, keep track of payment due dates and avoid surprise bills at the end of the tax year.

Need a home loan? Contact a pre-approval lender today to get pre-approved for a mortgage.

Source: zillow.com

10 Steps to Finding Your First Rental

When you’re looking for an apartment for the first time, it can be overwhelming.The best way not to panic is to break the process down into 10 sequential steps.

When you’re looking for an apartment for the first time, it can be overwhelming. The best way not to panic is to break the process down into 10 sequential steps. The timeline will mostly depend on how long it will take you to save the upfront cash you’ll need, but after the money is in the bank, you should be in your own place in no time.

Determine your price range

There are two common ways to do this: You can divide your monthly take-home income by three. (For example, if you take home $1,800 a month after taxes, you could afford a place that costs up to $600 per month.) Or divide your annual gross income (before taxes and other deductions) by 40. (For example, if you made $40,000 a year, you could afford a place that cost up to $1,000 per month.) Either way gives you a rough idea of your maximum budget.

Start saving

Before long, you’ll need to put down a security deposit (usually equal to one month’s rent), plus the first month’s rent. And that doesn’t even include application fees and credit-check fees you may be charged. So start saving now, particularly because moving itself can cost anywhere from $200-$2,000, depending on the distance of the move and how much you do yourself.

Check your credit

Management companies will be checking your credit once you start applying. You don’t want to be caught flat-footed, so check if there are any blemishes on your report at the free Annual Credit Report website, which is sponsored by the federal government. If you have great credit, you have nothing to worry about. If your credit has blemishes, you may need to ask a friend, parent or relative if they would be willing to serve as your co-signer on a lease. In any case, be ready to explain your low score to potential landlords and what you are doing to fix it.

Settle on a neighborhood

Whether you’re moving crosstown or across the country, the best way to decide on a neighborhood is to visit. Also, ask friends who already live in the neighborhood what they think. Another thing to consider is affordability — we’d all love to live in SoHo, but most of us can’t afford it. In other words, be realistic. To determine the cost of a neighborhood, go online to see what an average 1- or 2-bedroom runs. A good rule of thumb is that at least a third of the listings in your neighborhood of choice should be within your budget. If it’s any fewer than that, you’re going to have limited options.

Start looking

Find listings online, but also remember to network among friends and colleagues, respond to “For Rent” signs you see in-person and cold-call management companies that have appealing buildings. If the rental market in your chosen city is really tight, you may need to use a broker. That will typically cost one month’s rent, so to move in you’ll need to have three months of rent in cash. Ouch! Also, be wary of red flags. If you know a particular landlord or management company is involved in poor practices, don’t even bother looking at their places.

Another word of advice: If something seems too good to be true, it probably is. When dealing with a potential landlord, the conversation should be respectful and straightforward. And remember to always Google the address of the building as a final precaution.

Put in an application

Once you find a great place, don’t get cold feet. If it’s within your budget, in a neighborhood you love and with a solid management company, then apply. If your credit score is good — or you have a co-signer lined up — you’re likely to get it!

Sign the lease

Your lease is a contract, so make sure you understand it. Often, if you have issues with certain points on the lease, you can alter or discuss them with the management company before signing. So read the lease carefully. A few things to look out for: the penalty for breaking the lease early, the policy for fixing issues with the apartment, how much notice you must give if you want to renew and the rules for getting your security deposit back.

Transfer/set up your utilities

Call the utility companies at least a week in advance, so you have a buffer in case you need to schedule an appointment. Other things to think about: You should get renter’s insurance before you move in, and you should also change your address with the USPS. Depending on where you’re moving, you may also need to register for parking stickers, change your driver’s license (if you’re changing states) and get a local library card.

Conduct a walk-through

During the walk-through, you need to document any pre-existing problems you find with the apartment, so that you’re not held liable. This means testing everything from the burners on the stove to the quality of the carpet to the functioning of the refrigerator. If anything’s off, document it. If the landlord needs to fix something, get it in writing. This is the best way to protect yourself, your future home and your security deposit.

Make the move

If you’re moving long distance, schedule movers several weeks in advance (prime dates book up quickly). If you’re finally moving out from your parent’s basement, they’ll probably help you pack up the station wagon and drive you! In any case, start packing early: It takes longer than you think, and if you’re not totally packed when the movers arrive, you’re courting disaster. Also, label your boxes and make sure you have staples such as toilet paper, light bulbs and cleaning supplies at the ready. You’ll need them right away when you move in.

This may all seem like a lot, but if you break it down step by step, finding and moving to a new apartment becomes very manageable. And nothing beats that great feeling you’ll have when you first walk into own apartment.

MyFirstApartment.com helps novice renters successfully navigate the first year of living on their own. The blog shares proven tips and tricks for everything from finding the perfect rental or roommate, to furnishing on a small budget or no budget, to dealing with landlords or roommate’s girlfriends.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

4 Tips for Buying a Fixer-Upper

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While the process of buying and renovating fixer-upper homes has increased in popularity due to fix-and-flip home improvement TV shows, not everyone is cut out for  major renovation projects. 

In fact, only 19% of homeowners said their home needed serious updates, and only 3% said their home needed a complete overhaul, according to the Zillow Group Consumer Housing Trends Report 2020. 

Buying a fixer-upper involves purchasing the least desirable home on the block and overseeing its transformation. Whether you’re considering a fixer as an investment — and you plan to sell after construction is complete — or you’re fixing up a home to make it your own, there’s a lot to consider when buying a fixer-upper, from home price to construction costs to financing. 

What is a fixer-upper home?

A fixer-upper is a home that needs repairs, but not so many that it’s uninhabitable or worthy of being torn down. 

Fixer-uppers are usually offered for a lower price than homes in better condition, which makes them appealing to buyers looking to maximize their purchasing power or investors looking to flip the property and turn a profit. 

Should I buy a fixer-upper home?

Most often, people buy fixer-upper homes because the cost of purchasing the home plus renovation costs may total less than what they’d pay for a comparable home in good condition. 

Here are some of the key reasons buyers decide on buying a fixer-upper:

Reduced price

If you have your eye on a popular neighborhood, either for resale value or your own lifestyle, you may be able to get a better deal buying a fixer upper in your desired location and renovating it than purchasing an already-updated home. 

Customizable improvements

When you purchase a fixer-upper, the sky’s the limit when it comes to fixtures and finishes (within your budget, of course). Renovating a fixer-upper can be ideal for buyers with very specific tastes or those who want more control over the aesthetics of their home. When buying a fixer-upper, you avoid paying for the renovations someone else completed, especially if you don’t like them. 

Older home charm

The character of older homes isn’t easy to replicate. Buying an older home in need of some TLC can allow you to restore and maintain time period details, while bringing the home up to today’s efficiency, safety and comfort standards. 

Make a profit

Whether you’re planning to flip or live in the home for a few years before selling, you may be able to turn a good profit based on the renovations you make. Your return on investment depends on the types of renovations you complete, the materials you use and the quality of the work. If profit is the goal, select popular home improvements in your market to increase property value and appeal to a wide variety of buyers. 

Tax incentives

In some metropolitan areas, such as Philadelphia and Cincinnati, buyers who purchase a fixer-upper and renovate to improve the property value may be eligible for a tax abatement or credit. 

How to find fixer-upper homes

Finding the right fixer-upper is all about where you look. Here are a few strategies for finding the right home. 

Search online: Use Zillow to search for homes below market value. You can search keywords such as “fixer upper,” “needs work” or “TLC” to narrow down potential properties. 

Work with an agent: A local buyer’s agent should be able to help you find fixer-upper homes in your desirable neighborhoods. Well-connected agents may even be able to show you homes that haven’t hit the market yet, via word of mouth. 

Search auctions, foreclosures and short sales: Distressed properties may be in fine structural condition but are sold below market value in order to offload them quickly. It’s important to note that these homes are usually sold as-is, and disclosures might not be available, so be sure you have enough extra money in your budget to cover surprise issues. 

What to look for when buying a fixer-upper home

When shopping for a fixer-upper, prioritize the things you can’t change about a home (like its location), or things that would be too costly to change (like significant structural renovations). Here are key factors to consider:

Location

Location is the most important thing to look for, because it can’t be changed. Look for a fixer-upper in a desirable or an up-and-coming neighborhood in order to maximize potential resale value. Finding the right location will also ensure that you’re happy in the home. Pay attention to things that might be important to you, like school ratings, nearby parks and restaurants and commute times. 

The home’s location will also play a part in determining your renovation budget and estimating the home’s post-renovation value. The quality of finishes and upgrades you select should be in line with comparable homes in the same neighborhood if your goal is to recoup costs on resale.

Layout and size

With a fixer-upper, you might be able to change the layout as you see fit, but pay attention to any design and layout ideas that would require removing load-bearing walls. This can be a costly exercise, and sometimes it’s just not possible. Home additions to increase square footage are also expensive and might not be allowed, depending on local zoning requirements and laws. 

Home condition

There’s a difference between a fixer-upper and a home with significant structural defects. Structural and mechanical problems are a lot more expensive to fix than cosmetic ones. Be sure to hire a home inspector to gain knowledge of the home’s positives and negatives — hiring a home inspector is an invaluable step, even if you’re buying a home as-is. Here’s what should be on your home inspection checklist for a fixer-upper:

  • Strong foundation
  • Up-to-code electrical
  • Proper plumbing
  • Solid roof condition (should come with roof certification)
  • HVAC and/or central AC
  • Functional windows

Straightforward cosmetic updates

Prioritize homes that have outdated or worn out finishes that don’t appeal to the general public but can be updated affordably and without too much effort. Ideally, the fixer-upper you buy will only need cosmetic upgrades. Look for homes with:

  • Peeling or dated paint (interior and exterior)
  • Older bathroom fixtures and tile
  • Dated kitchen cabinetry
  • Laminate or tile countertops
  • Stained carpeting
  • Hardwood floors in need of refinishing
  • Leftover belongings or trash that need to be removed
  • Neglected landscaping
  • Old or non-functioning appliances

How to buy a fixer-upper

Buying a home that needs work can be risky, because you won’t know the full condition of the home until you start tearing down walls. That’s why doing your due diligence on the property and neighborhood ahead of time is key.

Get a professional home inspection

When you put an offer on a house, be sure to include an inspection contingency. An inspection contingency allows you to back out of a deal and get your earnest money deposit back if the inspection reveals that the home has serious hidden defects.

Even homes marketed as being in “as-is condition” can be inspected — the only difference is with an as-is home, the seller is telling you that they do not want  to make any repairs based on your findings. 

The buyer is responsible for the cost of  an inspection, which ranges between $250 and $700, depending on the size of the home and your location. In addition to a general inspection, you might also opt for specialized inspections for trouble areas. Common specialty inspections include pests, sewer lines, radon, lead-based paint and structural inspections. Costs for specialty inspections are similar to general inspections. 

A structural inspection reviews the home’s structural integrity, but also lets you know of any natural hazards nearby that could impact the resale value or your own health and safety. You may also consider hiring a structural engineer to assess the property before you make an offer. It will cost between $500-$700 but could save you thousands of dollars in future foundation repairs.

Hire an architect and general contractor

An architect can create a new layout for a home, create plans and blueprints and tell you what is and isn’t possible. Some cities require you to submit architectural plans to acquire home permits, making an architect a necessity. The average cost for an architect is around $5,000, depending on the scope of your project. 

Your home inspector should be able to give you a rough estimate of what it would cost to adequately repair problem areas that come up in an inspection, but since they’re not the one who will be doing the work, it’s best to get a more accurate quote from a contractor. Whatever they quote you, add a 10% contingency for any problems that come up along the way. Be sure to get quotes from a few contractors and do your due diligence in checking their licensing and customer reviews. 

Budget for improvements

Working with your contractor, be sure that your budget takes into consideration all applicable costs. Don’t forget to include:

  • Permit fees, if applicable
  • Cost of materials, like flooring, paint, light fixtures, cabinetry, countertops and hardware
  • Cost of labor, including general contractors, plumbers, electricians and inspectors
  • Cost of living during renovations, if the home will be uninhabitable during the project

Know your limits

Above and beyond the financial concerns, you also need to gauge your tolerance for a major renovation project, especially if you plan to save money by doing some of the work yourself. Home renovations are not as easy as they look on TV and if it’s your first time, a lot can go wrong. Even if everything goes right, there’s a lot of hassle involved in a large-scale construction project. You’ll have to live in a construction zone or move elsewhere temporarily, while still paying all the carrying costs for the home. 

If the thought of a months-long renovation is more than you’re willing to take on, but you’re looking for a move-in-ready home, consider a Zillow-owned home. Every home has been recently repaired for buyers to avoid costly surprises. 

Financing options with fixer-upper loans

You can purchase a fixer-upper with a traditional conventional loan then pay for all the improvements out of pocket. Or, you can get a fixer-upper mortgage that’s designed to help you finance both the house itself and the renovations. Common types of home loans for fixer-uppers are: 

FHA 203(k) standard

An FHA 203(k) Standard loan finances the purchase and renovation of a primary residence. Here are the key requirements:

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • The total cost of the loan must fall under FHA mortgage limits in your area
  • No luxury improvements (like pools) are allowed, but structural work is allowed
  • Requires a HUD consultant to approve the architectural plans, oversee payments to contractors and review inspections to ensure the home meets structural integrity and energy efficiency standards
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

FHA 203(k) streamlined

This financing option has similar requirements as the FHA 203(k) Standard, but it’s meant for simpler, cosmetic renovation projects, as it has a spending limit. 

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • For cosmetic upgrades under $35,000
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

HomeStyle loan

A HomeStyle loan is a combination home loan and home improvement loan, guaranteed by Fannie Mae. 

  • Minimum credit score of 620; minimum down payment of 3 or 5%, depending on a few factors like owner occupancy, first-time home buyer status and income
  • Allows for other improvements that aren’t covered under an FHA 203(k), like pools and landscaping—but note that all improvements need to be “permanently affixed to real property (either dwelling or land)”
  • The contractor is paid out of an escrow account managed by the lender
  • You must use a certified contractor

CHOICERenovation

A CHOICERenovation loan is a combination home loan and home improvement loan, guaranteed by Freddie Mac. 

  • You can finance renovations that cost up to 75% of a home’s value
  • Money can be used for upgrades that prevent natural disasters
  • You can DIY the work and get a down payment credit
  • Requires multiple appraisals to ensure you’re upholding the terms of the contract and that the agreed-upon renovations make the home meet its estimated value

Source: zillow.com

How Do I Know Where My Property Lines Are?

Knowing the location of your property boundary lines means you will know where to legally place features such as fences, pools, garages or driveways.

Aside from not holding late-night band practice in your garage, knowing the location of your property lines is one of the best ways to avoid disputes with your neighbors.

Property lines are the defined points where one owner’s land ends and the neighboring property begins. A property owner uses boundary lines to determine where to legally place features such as fences, pools, garages or driveways. Erecting a structure on or partially on another person’s property can lead to disputes and, often, lawsuits.

Finding out where your property lines are is not difficult:

Check your deed

Your deed contains a description — in words — of your property’s boundaries. Following the description, you should be able to measure from named landmarks to determine the location of your boundaries. Just be warned: The description may rely on the location of a tree that no longer exists or a creek that has gone dry.

If the most recent deed for your property does not contain this sort of description, it will refer you back to an older deed. Keep following the references back, until you find a deed with a description of the boundaries.

Review your property survey

When you bought your home, it’s likely you received a map, also known as a plat, showing property lines and measurements. If it wasn’t included with your paperwork, check with your local clerk’s or surveyor’s office. Some of these maps may be available online, while others will be hard copies or microfiche copies. Even maps of neighboring properties can be valuable if they show shared property lines.

If you live in a subdivision or neighborhood in which many homes appear to have been built around the same time, it is possible your deed’s legal description will be vague, reading something like “Parcel 17, New Castle Development” or “Lot 7, Second Addition.” This is an indication that surveyors created multiple lots at the same time and drew one map showing where they were all located. You should be able to find the master plat in public records.

Hire a surveyor

If you don’t have a survey or plat — or at least not one that’s at all up-to-date or specific — you may choose to hire a professional to do a land survey. The surveyor can measure and map the property and will generally also mark the corners of the property with stakes.

The cost of hiring a professional surveyor depends on your location and project. If you decide to hire a surveyor, ask friends and family members for referrals. You’ll want to meet with several potential surveyors to discuss your needs and choose one who is experienced and with whom you feel comfortable working.

The surveyor needs to be licensed with your state and should carry professional liability insurance, which can cover you if the surveyor makes a mistake in the survey. Ask if the surveyor is willing to walk your property lines with you following the completion of the survey. Also ask about the equipment the surveyor uses; GPS and CAD, for instance, allow for more precise surveys than those possible before these innovations. You must also tell your surveyor why you need a survey and exactly which services you require. This will ensure that the fee estimate you receive is as accurate as possible.

Source: zillow.com

Think Twice Before Posting a Negative Rental Review

If you plan on making comments or reviews, it is suggested that you take a few things into consideration to protect yourself and offer the best online review to the public.

San Diego Premier Property Management

The landlord won’t make timely repairs, the common area laundry room is a mess or the management company never answers the phone. These are very common complaints found online from renters regarding their experience with property management companies across the country.

In the past, potential applicants would only discover these complaints by either word of mouth, knowing someone in the complex or, worse, once it was too late and they were already experiencing issues firsthand. Well, social media has certainly changed that, and with a click of a mouse, past and present tenants can now comment on their rental experience.

Sites such as Yelp, Kudzu, Angie’s List and, of course, Facebook and Twitter are respected open forums that allow reviews, dialogue and comments that in some cases can have lasting and serious consequences — good or bad — for property management companies. This form of feedback and review seems fair and useful in helping determine which property management companies have built better tenant relations. But should tenants beware when posting something less flattering or even downright negative regarding their experience with a property management company?

Helen Maslona of Chicago was recently sued over her posting of a negative online review about a contractor. These types of lawsuits are becoming more common, and are referred to as SLAPP lawsuits (Strategic Lawsuits Against Public Participation). As many as 27 states have anti-SLAPP laws, but many don’t, leaving unsuspecting reviewers vulnerable to backlash from their comment or review.

If you plan on making comments or reviews, it is suggested that you take a few things into consideration to protect yourself and offer the best online review to the public:

  • Tell the truth about the experience.
  • Comment with the intent to help others benefit from your review.
  • Stay clear of vulgarities, heavy opinions and accusations.

If you do find yourself posting a negative review, allow the property management company to respond and hopefully clear up the misunderstanding. Most reputable companies will try to accommodate their tenants and preserve their online reputation. In kind, make sure you follow up that negative comment with an update showing the resolution.

Just remember that reviews on social media sites are both necessary and important but can have consequences, so be careful what you post out there.

Salvatore Friscia is a seasoned real estate investor and a residential property management specialist, focusing on single-family homes, condos and small apartment complexes. He is the founder of San Diego Premier Property Management as well as The Friscia Group One, an investment group focused on distressed properties. He is a regular contributor to the industry blog All Things Property Management by Buildium, a property management software company.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com