Updates, Renovations and Remodels

Updates, Renovations and Remodels

When selling a home or property, one of the main foals of the seller is to get the highest offer possible. If the market is hot, the chance of getting a high offer is relatively high. If the market is on the cooler side, many sellers looks to alternative options to make their properties more marketable, usually by way of a remodel, a renovation or by updating the property. But what is the difference between a remodel and a renovation? Is an update something that is easy or difficult?

While there are no doubt projects that see better return on investment than others, homeowners have a number of options when it comes to boosting their property's value. If you're not particularly ready to put your property on the real estate market, but are looking for ways to help boost your home's overall value, an update, a renovation or a remodel might be just what you're looking for at the current time.  

Updates

Want to help boost your home's value but have a limited budget for projects? Updates are a great option for the homeowner that has limited resources, funds or even time. But what's an update? An update essentially brings new life to your property, and perhaps brings things up-to-date, but it does so without significant alterations to the existing structure or property. Updates that are common in many households are updating light fixtures, installing new appliances, updating the home to be more energy efficient, updating exterior paint or changing interior colors, etc.

Depending on your budget, updates shouldn't break the bank, but they can help to boost a property's value or overall marketability. Buyers like seeing updates, especially when they boost the overall appearance of the home. Updates are a great and relatively convenient way of sprucing up a home without dedicating a high amount of time and money to projects, and even minor updates can help boost a property's overall value. Even just repainting the exterior trim can make a big difference.

Renovations

Renovation means to restore to a good condition or make new again. Renovating a property or a part of a property refreshes and revives it. Renovation can cover a number of different things: renovating plumbing or electrical throughout a home or property, refinishing hardwood floors, re-facing kitchen cabinets, adding modern finishes and fixtures to an older home. Renovating a property generally means that you're making the property meet current market expectations. Renovations, especially of certain rooms, can make spaces much more attractive to buyers but also add considerable value. Kitchens are one of the best options for a renovation when it comes to overall return on investment.

If you're looking to help boost the overall value of your property, adding stainless steel appliances to a kitchen (or even updating to newer appliances), putting in granite or other stone counter tops, changing outdated cabinet doors and hardware can all help boost a property's value and catch a potential buyer's eye. Depending on the number of projects you'd like to tackle, renovations can be relatively quick or take time and cost a few dollars. Again, your budget and time frame will determine the scope of your project, but renovations can add considerable value to your property and provide a large return to investment when it comes time to sell.

 Remodels

Remodels require a little more time, labor and funding, and more often than not remodels involve removing or moving walls, building additions or anything that includes significant structural changes to increase utility or appeal via replacement or expansion. A remodel changes the use of a space by altering the structure and style of a home. Popular remodels include kitchens, bathrooms and even going so far as to add additional square feet to the entire house. Because of how extensive a remodel can be, it's always suggested that permits are obtained for the work and that an architect and/or contractor is used to make sure any work is done according to current local building codes. 

Remodels that help improve a space can increase a property's value immensely, and in some hot real estate markets could even see a 100 percent return on investment. Some of the most popular remodels home buyers seek: kitchens, bathroom, and additional square footage (adding rooms) as they show the homeowners invested in the property and took the time to improve it for the future. 

Updating a home or property, or choosing to renovate or remodel, is a big decision and ultimately depends on how much time, effort, money and sweat a seller wants to put into the task. But if you're on the fence of whether or not your property could fetch the highest selling price in today's market, considering an update, a renovation or remodel might be the best solution at the current time to get your property to the top of every buyer's list. 

For more information on how to update your home or if your interested in scheduling a no-obligation meeting with Will Steinmetz, please do not hesitate to call (810) 844-2201.

Appraisals and Home Inspections

Appraisals and Home Inspections

When buying or selling a home, many have heard of an appraisal and a home inspection. While both are very important to the entire transaction, an appraisal and home inspection are two very different things. If you're looking at buying a new home or property, or you're interested in selling your current property, it is beneficial for both parties to know the difference between the two and why they are important. 

What is a Home Appraisal?

A home appraisal is an educated guess as to the worth of a property. An appraisal is required by a financial institution; if you're looking to get a mortgage loan, the property will have to have an appraisal. If a mortgage loan is not needed ( the buyer is purchasing with cash), then an appraisal is not required for the purchase. Who pays for the appraisal? Generally it's the seller, and for the most part it's paid for at closing when the other closing costs are paid.

But why is an appraisal needed?

An appraisal lets the bank or lender know what the loan collateral will be set at for a worst-case scenario situation. What does this mean? The banks wants the home to appraise for a similar amount they are going to loan to the buyer. Should anything happen, and the bank has to sell the home, the bank doesn't want to be stuck with a home that had a million-dollar loan on it but can only be sold for $100,000.

Appraisals are important, but they can be a tad stressful. The appraisal is done after the sale price is negotiated and the contract has been signed, which is why many people hope the appraisal is close to the sale price negotiated by the buyer and seller. To protect the transaction for both sides, the buyer and seller should have a sales-and-purchase agreement that addresses the possibility of the appraisal being below the purchase price. This would allow the buyer to terminate the contract or renegotiate the sale price. If not, the buyer could be obligated to cover the difference between the purchase price and the appraisal.

What does an appraiser do?

The appraiser will walk around the property and look at the value of the home, but she or he will also make note of any problems or issues. It has happened that an appraiser has pointed out things to be fixed in order for an appraisal to come back higher. Appraisers mainly look to check the main characteristics of the house: square footage, bedrooms and bathrooms, the overall condition of the property, recently sold comparable properties in the area and any noticeable health or safety issues. Appraisals are not an in and out thing - they can take up to a couple days to complete, and the loan underwriters can request more information than in previous years. As a seller, the number one thing you can do to help the appraisal process is to make sure the house or property is in good order.

While an appraisal determines the value of the property based on an inspection done for the loan company, an appraisal is not a home inspection. The appraisal is for the mortgage lender; the home inspection is primarily for the buyer.

What is a Home Inspection?

A home inspection  is the inspection of the physical condition of a home or property. A home inspector is going to look for defects or malfunctions in the property's structure, systems and physical components (which can be anything from the roof and plumbing to the HVAC system, floors, windows and foundation). A home inspection generally takes place after the seller and buyer have signed a contract. The home inspection can help guide any repairs that might need to be done to the property, or it can alter the final selling price if major repairs need to be done to the property. But it's important to remember that a home inspection is not a mandatory part of buying a property. Selelrs can sell their properties "As is", and any home inspection done will simply be a way for the buyer to know what to expect once they receive the keys.

Who is Responsible for the Home Inspection?

The buyer generally arranges and schedules the inspection; your agent or Realtor will most likely be able to suggest a home inspector she or he has worked with in the past, but it's important to make sure the inspector has experience and is a member of the American Society of Home Inspectors. But the most crucial part of the home inspection is to provide a through and tough inspection of the property to the buyer.

When buying or selling a home, it's important to know and be aware of all that is available to buyers and sellers. While the appraisal is done for the benefit of the lender, the appraisal also benefits both the buyer and seller by determining a value on the property. The home inspection is done for the benefit of the buyer, but it's also a good indication for the seller about the property and any issues that might need to be addressed should the buyer drop out of the transaction. Both an appraisal and home inspection are valuable and important parts of a property transaction.

 

Real Estate Tips for Buyers and Sellers

Thinking about starting a home search or selling your home soon? The 2016 real estate season is upon us, and if you are anticipating a home search, or selling a property, here are some top tips to help you navigate the real estate market in  your area this spring and summer. 

For Buyers

Don't Go Overboard With An Offer

 While you might be inclined to get into a bidding war over your dream home (the market is pretty competitive), don't overspend to the point where if the market stabilizes your home will have an overly inflated price and make it difficult to resell in the future. If you plan on living in the property for along time, paying a high price isn't a bad thing, but it's a good idea to set a limit on how high you're willing to bid for a home. 

Start Your Search Ready

If you're already looking into purchasing a home or property, and you know you'll need a mortgage, you should already be shopping for a loan. Buyers with a mortgage pre-approval are a step above those that haven't even looked into loans. You can also help your purchase game by having fewer contingencies or conditions that affect the purchase. If you can start your home search with some of your bases covered, and the ability to be flexible, you'll already be far ahead of those just entering the real estate race. 

New Doesn't Mean Pristine

While we all dream of buying a brand new home, complete with absolutely no projects, it's quite common for brand new construction to have issues. The reality is that builders can and do cut corners, and the last thing that you want is to invest your money into a brand new home only to find out that certain things were not completed 100%. If you're looking to buy new construction, it's not a bad idea to hire an independent inspector to make sure your new home is up to all current building codes and standards. 

Beware of Hidden Costs

While you might find a home that is the perfect price for your budget, beware of the hidden costs that come along with buying a property. You may or may not have a mortgage, but you will have yearly property taxes that will either be monthly payments or a large payment once a year. If you do need a mortgage, you can expect an origination fee, and depending on the amount of your down payment or your credit rating, you can also expect to pay private mortgage insurance. You can also expect fees by way of the home inspection, appraisal, and in some communities there will be monthly HOA fees. 

Don't Be Afraid To Go Outside Your Comfort Zone

Many buyers have a specific neighborhood, town or city picked out before they begin their property search. With the U.S. real estate market being as competitive as it is for buyers, don't be afraid to look into areas that are developing when you look for a new home or property. Homes and property prices might likely be lower in developing areas, and if you can find an area where new businesses are being introduced and other amenities will be available, home values may significantly increase over the coming years. 

For Sellers

Play To Your Advantages

The U.S. real estate market is being called a Seller's Market, meaning there are more people trying to buy houses and properties than there are actual properties to buy. Because of this, as a seller, you can play to your advantages: you can likely get away with not paying closing costs; you can dictate the terms of the sale and any contingencies a buyer might have; you can entertain multiple offers and choose the best one for you. But in all of this, don't try to price your property outside of your area - you want to sell your home not keep it on the market forever. 

Know The Best Area Of Your Property

If you're considering selling your property, there are two room updates almost every buyer appreciates: kitchens and bathrooms. If you have the time and money to invest in updating these two areas of your home, try basic face lift (you don't need to go overboard!). Add some fresh paint, clean up the cabinets, and install new lighting or hardware. Make the kitchen and bathrooms pop: buyers always react best to a fresh, clean and clutter free kitchen and bathroom. 

Do You Have A Replacement Property Picked?

You might be considering selling your home or property - have you started your property search yet? With the market being as competitive as it is, it's a good idea to start your property search when you put your own property on the market, and sometimes even before. You don't want your home to sell before your have a place picked out. If you do find yourself in a bind, you can always work with your agent to make the closing period longer. Whatever you decide to do, make sure you start your property search as soon as possible.

Common Household Hazardous Waste and How to Dispose

Common Household Hazardous Waste and What to do With Them

We want to believe our homes are as safe as they can be, and for the most part they are. But there are items we use every day that are in fact hazardous. Knowing what products are hazardous, and the proper ways of disposing household hazardous waste, is not only good for the environment, but it will help you feel even safer in your home. 

Batteries

We all use batteries in our homes, and most of those will be the regular alkaline batteries purchased at the grocery or hardware store. These batteries can be thrown away in the garbage once used, but it is suggested that if you have the ability to recycle them, please do so. Should you have other batteries in your home such as rechargeable batteries, automotive batteries, or lithium, lithium ion or zinc air, these should definitely be recycled through proper facility as the contents inside the batteries are toxic and harmful to humans, animals and the environment.

Compact Fluorescent Light Bulbs

Touted as a great way to save energy, compact fluorescent bulbs (CFLs) became popular in the mid-2000s and they continue to be a top choice for American households. But while these bulbs provide energy and money saving opportunities for homeowners, they do contain mercury, which is known to be a potent developmental neurotoxin. Because of the mercury in the bulbs, it's best to not put them in the garbage, as they can end up in landfills (or end up outside landfills) and contaminate the environment. Recycle CFLs at your local hardware stone (the larger retailers have places to put used bulbs) or contact your local jurisdiction to find out the best way of recycling your used CFLs. Should a CFL break in your home, wear gloves to pick it up, and contact your local hazardous waste disposal company to ask for information on disposing of the broken bulb.   

Corrosives

 Many household cleaners are considered corrosives, which means they can cause skin damage or corrode metal. Because of this, there should be caution when using them and when they are discarded. Yes, some corrosives are used in drains, but that doesn't mean you should pour corrosives down the drain to get rid of them! If you need to dispose of corrosives, it's best to bring them to a place that will dispose of household hazardous waste for you, and be sure to wear gloves and protective eye wear whenever handling corrosives. 

Pesticides and Herbicides

 If you have a yard, it is likely you've used a pesticide or herbicide before. While these chemicals can come in handy when battling weeds or common yard pests (bugs and other insects), they are generally very toxic to humans and animals (especially pets!). When handling pesticides and herbicides, make sure you protect your eyes, face, arms and hands with gloves and a mask or goggles, and should you need to dispose of these chemicals, it is best to bring them to a hazardous waste drop-off site. Whatever you do, don't put these items in the garbage or dump them into a drain or onto the street. 

Electronic Waste

We don't often think of old electronics as waste, but that old computer or outdated television that's been sitting in your garage for a few years is definitely waste. Electronic waste (also known as e-waste) can come in many forms: cell phones, computers, televisions, VHS and DVD players, and anything else that is an electronic. While we may be inclined to just throw these items into the garbage can, many of these items contain hazardous materials within them, like lead or mercury, and they require special recycling. Should the materials in them get into the ground of find their way into a water system, it would be detrimental to the local environment. You can do a general internet search to find companies that are more than willing to take any old electronics you might have in your home. 

Aerosols

Aerosol cans come in many shapes and sizes, and weather they contain oil for greasing baking pans or WD-40, cans that are full or partially full have the ability to explode if punctured or exposed to heat. Empty aerosol cans can be put in the garbage, as long as they are indeed empty of contents, but if they are not, it's best to take the cans to a household hazardous waste drop-off point, especially if they contain chemicals or anything flammable in them. 

Automotive Products

If you have a garage and a car, it's likely you might have some automotive products; you might even have some if you have yard equipment like a lawn mower or a blower. Automotive products (fuel, oil and other fluids) can be highly flammable, and all of them are not safe to dispose of in a garbage can or in an outdoor drain. Because of their designations as hazardous materials, these fluids should be taken to a hazardous waste facility when being disposed of to ensure that they are being properly taken care of.

 

When to Use a Professional

As homeowners, we want our properties to reflect our styles and the designs of the current day. If you have purchased an older property, or you just want to update your current home, a certain degree of work and projects are required to bring your property up to the level you strive for. While many of us have experience with home projects, there are some of us that don't. Below are some of the commons projects homeowners embark upon, and suggestions on when it's best to do it yourself  or call a professional for help.

Walls

Most painting job are DIY, pending you have a steady hand. Should you have structural repairs or water damage, call a pro, especially if you're going to demolish the existing wall, replace or re-frame anything, install new Sheetrock or drywall or anything else that is labor intensive. 

Floors

Floor repairs can be fairly easy, from cleaning to repairing small nicks in the flooring. If you want to take on a larger project, it might be worthwhile to hire a pro if your project requires installing hardwood floors or laying tile. With the  amount of work required to install a new floor, hiring someone with the experience can save you time, money and a lot of body aches.

Windows

If you're doing minor maintenance and repairs (like repairing or replacing wood sills or caulking around windows), you should be able to do this type of project no sweat. But if you're looking to replace a window, or need to rebuild a window frame, count on calling a professional for help.

Electrical

If you have no experience with the electrical system of your home, keep your improvements limited to changing outlet covers and switch plates. You can also change your current light bulbs with energy saving bulbs. 

Tile

Tiling a back splash or replacing dirty old grout are projects most homeowners will be able to tackle on their own. But if your project requires tiling floors, walls, or large tile installations, it might be worthwhile to contact a professional for help, especially if your project requires cutting any tile. 

Plumbing

DIYers should be able to do small projects, like replacing toilet flapper, addressing drips, upgrading shower and sink fixtures, and other small things that don't require a lot of tools. If your project requires moving or installing any plumbing or pipes, call a pro for help. 

Home Repairs for a Professional:

 

Plumbing

Small leaks can mean thousands in repairs if they're not caught in time. If you need to modify your plumbing system, then you should definitely call a professional. Welding pipes together requires a torch, and if you don't have that experience, it's best to rely on the experts for this type of work. 

Electrical

If your project requires direct contact with electricity, call a pro. This includes rewiring, adding power to areas that do not currently have power, and any installation of large or heavy light fixtures (think a chandelier). Electricity is no joke, and the last thing you want is to cause yourself harm, or harm your home, during a DIY project. 

Asbestos, Mold and Lead Paint

If you have a new home, you will not encounter asbestos or lead paint. But if you are interested in older homes, asbestos and lead paint are possibility. Once used as insulation, asbestos is toxic, and there are laws that  govern how it's removed and disposed of. Lead paint is also highly toxic, and removal should be done by a lead professional. Should you have mold in your home (certain types are toxic), it's best to leave the removal of all of these to the professionals: they know how to remove and dispose of all toxic materials, and they can do it safely. 

Roofing

Repairing a roof shingle might seem like an easy task, but there is more danger in getting on and off a roof than most homeowners realize. Tools, multiple trips up and down a ladder, and constant attention paid to the incline of the roof make roof repairs tiring, and if you're not prepared, dangerous. Stick with the professionals - they have the proper gear and the experience required to do the job right. 

Anything with Gas

Gas is similar to water: if it can find a way out, it will escape. If you're replacing appliances that run on natural gas, it's best to hire someone to help with installation. The last thing you want is for gas to escape and result in a buildup of carbon monoxide in your home. 

 

What's My Home Worth?

Large Livingston County map hanging in our office

Are you interested in what you home is worth in today's market? Here at RE/MAX, we have a new tool that allows clients to get a good idea of what homes are selling for in their area. If you are located in Livingston County or the surrounding areas, click here to find out what you home is worth today!

November Newsletter 2015

 

 You Can Buy and Sell Real Estate During the Holidays

It's common knowledge that most people are advised to get their home on the real estate market in late spring or early summer as that is 'real estate season'. While that majority of homes do sell in the spring and summer, listing your home during the holidays or in the winter is not as taboo as some would lead you to believe. There are actual benefits to listing or looking for a home during the holidays, and if you've missed out on the real estate scramble of the spring and summer, starting a home search or listing your home now might just be in your best interest. Here are some of the top reasons why you shouldn't avoid listing your home, or looking for a home, during the holidays.

Buyers Never Stop Looking

Many would lead you to believe that the real estate market comes to a complete stand still during the holidays or in the winter, but that's not the case. Every state's real estate market is thriving year-round, and that even includes during the holiday season. Serious buyers never stop looking, and a serious seller (or a seller that wants or needs to sell their property) will keep their home on the market all year long. The holidays bring out the buyers and seller that are determined -- they need something or want to sell now, and they're not willing to wait for the spring or summer. 

Many people with school-aged children want to wait to buy a new home when their kids are not in school, but the reality is that a family or anyone looking for a new home can move at any time of the year. Perhaps if you're in an area with inclement winter weather, you  might want to put off your search or move until better weather arrived, but for those that live in a mild climate, moving in November or December is just as easy as moving in May or June. Buyer can also sign up for new listing emails, which alert them to whenever a new property has come on the market, and the sellers have the ability to sign up for seller reports, so they can stay on top of the market in their neighborhood. 

Inventory and Competition

While it is known that home inventory is largest during the spring and summer months, the MLS always has homes and properties listed on it. Fall and winter will have properties available, but the number of properties will be lower. Unless you're totally transfixed on a certain home, or you have a list of needs and wants a mile long, you can be sure to find a property that will fit you housing needs throughout the year.

 Despite the fact that inventory will be lower in the fall and winter, people still list their homes, especially if they are serious sellers. While the market is slower, it also is less competitive in terms of other buyers looking for homes. It's likely the fall and winter won't create scenarios of multiple, high dollar offers on one property; buyers and sellers alike will have more opportunities to actually think about offers, and especially for buyers, low competition guarantees that you're not making a rushed or rash decision based on emotions or other offers when you do find the perfect property.  

Affordability

This is specifically for buyers, but it's widely known that home prices slightly fall in the fall and winter when the market has cooled down and more serious sellers are keen to get a sale. This is mostly because real estate sales are seasonal. But that's not to say if you list your home in the fall and winter you're doing to have to drastically slash the price in order for your property to sell. While it might sit on the market a little longer than it would in the spring or summer, fall and winter sales happen, and if you're a serious buyer or seller, you know you'll want to do all you can to make your dream of buying or selling a home a reality.  

Homes Look and Feel Charming

You'll see a lot of articles on home to spruce up a home to ready it for the real estate market, and while the tips are definitely valuable, it's not a secret that many people decorate their homes over the holidays. There's something warm and inviting about a decorated home, or a home that feels cozy, and people who list heir homes in the fall and winter can take advantage of a fireplace or wood stove to make a room more invinting. 

If you property doesn't have a fireplace or wood stove, you can use candles and other things to make the home smell inviting to buyers. While it may seem cumbersome to sell a property during the holidays or in the winter, you do have some ways to play up the season. And if you are truly set on avoiding the holidays, you can always put it on the market the first of January, when the chaos of the holiday season is over. 

DO’S AND DON’TS WHEN APPLYING FOR A MORTGAGE

DO

1.      Save ALL pay stubs.  A mortgage application requires one month of consecutive pay stubs.

2.      Save ALL bank statements.  A mortgage application requires two months of your most recent bank statements.  You must provide every page of each statement even if the last page is blank!

3.      Keep credit card balances around 30% of the available limit.  Once you exceed this amount it could lower your credit scores!

4.      Provide documents to your loan officer as quickly as possible to avoid closing delays.  You will need to provide documents before and during the mortgage application process.

5.      Check your email frequently for communications. Questions and documents will be emailed to you during the mortgage process.

6.      Shop for homeowner’s insurance right away after your purchase agreement is accepted.  Provide the name, phone and email address of the homeowner’s insurance agent that you obtained your quote from to your loan officer as soon as possible.

7.      Let your loan officer know any changes to your debts or income.  This could positively or negatively affect your debt ratio.

8.      Be careful with “fixer uppers”.  Mortgage lenders are looking for properties to be “move-in condition”.  So, if the property is missing light fixtures, kitchen cabinets, sinks, carpet/flooring, has a damp basement, water stains on the ceiling, etc.  There is a good chance that those items will cause appraisal and underwriting issues.

DON’T

1.      Deposit any funds that do not come from your employer without speaking with your loan officer.  Most other deposits are not acceptable to be used towards your closing costs. Gifts from immediate family members are okay with a fully executed gift letter and a proper paper trail. Retirement funds are acceptable with a documented paper trail and the terms and conditions of withdrawal from your retirement account holder.

2.      Transfer money from one account to another unless absolutely necessary.  This can cause delays as each transfer must be proven to come from one of your other accounts.

3.      Open any new accounts or have your credit pulled.  This will negatively affect your debt ratio and possibly result in a denial!

4.      Change jobs if at all possible.  You will need to provide a pay stub with one month year to date earnings which may cause a delay in the processing of your loan application.

5.      Co-sign for another loan.  This will negatively affect your debt ratio and possibly result in a denial!

6.      Miss any payments on accounts you currently have.  One missed payment could lower your credit score as much as 100 points!

7.      Consolidate credit cards.  This will cause a delay in waiting for the new credit card statement that the other cards were consolidated to and proving the other accounts are paid off.

8.      Payoff any collection accounts unless your loan officer specifically asks you to.  This could actually lower your credit score!

9.      Close credit card accounts.  This could actually lower your credit score!