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Q: Where Can You Find Fixer-Uppers?

A: They are literally everywhere, even in wealthy enclaves. What sets them apart is price.  They have lower market value than other houses in the immediate area because they have either been poorly maintained or abandoned.

To determine if a property that interests you is a wise investment will require a lot of work. You will need to figure out what the average home in the area sells for, as well as the cost of the most desirable ones.   

Experts suggest that novices avoid run-down properties needing extensive work.  Instead, they recommend starting with a property that only needs minor cosmetic work – one that can be completely refurbished with paint, wallpaper, new floor and window coverings, landscaping, and new appliances.

Also, keep in mind that a home price that looks too good to be true probably is. Find out why before pouring your hard-earned money into it.

When looking for a fixer-upper, some experts suggest you follow this basis strategy: find the least desirable home in the most desirable neighborhood. Then decide if the expense that is needed to repair the property is within your budget.

 

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Report: Minor Home Improvements Offer Best Return

A recent release by the Appraisal Institute advises homeowners to choose upgrades instead of major remodeling projects to see the greatest potential return on investment.

“In general, simpler, less expensive projects have the best cost-to-value ratio,” says Appraisal Institute President M. Lance Coyle, MAI, SRA. “With the spring home buying season around the corner, homeowners should invest in projects that are most likely to preserve the value of their homes.”

According to Remodeling magazine’s most recent Cost vs. Value report, only five projects saw their cost-to-value ratios rise in 2014: roofing replacement, garage door replacement, 20-gauge steel entry door replacement, vinyl siding replacement and fiberglass entry door replacement. Among projects with the biggest declines were two-story additions, composite deck additions, master suite and kitchen remodels.

Other minor projects with potential major payoffs, says the Cost vs. Value report, are mid-range and upscale garage door replacements, manufactured stone veneer, mid-range window replacements and minor kitchen remodels.

Coyle says that some homeowners might choose to fund home upgrades with tax refunds. Before calling a contractor or heading for the home improvement store, however, he says they should consider if the improvement is in keeping within community norms.

“It’s possible that consumers won’t be able to recoup the cost of the upgrade when the home is sold, so it’s important to meet, not exceed, what’s standard for the neighborhood, and to also consider expected length of time in the property,” Coyle says.

He also says that making routine home repairs is essential to maintaining a home’s value. A house that has been well maintained likely will have a higher value than a similar house that is in disrepair, Coyle says. For example, replacing worn out trim boards may in certain situations not add any additional value to the home, other than to preserve the value that would be likely as evidenced by sales of similar homes in the area that do not have worn-out trim boards.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a qualified real estate appraiser to conduct a feasibility study.

During a feasibility study, the appraiser will analyze the homeowner’s property, weigh the cost of rehabilitation and provide an estimate of the property’s value before and after the improvement.

Some green and energy-efficient renovations – such as adding Energy Star appliances and extra insulation – are likely to pay the homeowner back in lowered utility bills relatively quickly. Lower utility costs also are a draw for potential homebuyers. When valuing a home, the appraiser evaluates local supply and demand for green and energy-efficient properties and features.

For more information, visit www.appraisalinstitute.org.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes of The Carolinas
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

5 Tips to Take the Stress Out of Searching for a Home

By Keith Loria

As the spring home-buying season approaches, now’s the time to make sure you have everything in order so that you can hit the ground running once the warm weather arrives. To ensure the process is as simple and painless as possible, take the following advice to heart as you search for your new home.

1. Be Willing to Walk Away. You may have found the home of your dreams, but that doesn’t mean you should pay way over asking price or make concessions that you don’t want to make. If the negotiations begin to head in a direction you’re not comfortable with, take a step back and really consider the deal. Always keep an open mind and remember that there are other homes out there—some that might even fit your needs better. Plus, when a buyer walks away from a deal, more often than not, the seller’s agent is more inclined to reach back out and be more willing to work with you.

2. Set Reasonable Expectations. Everyone has an image of the perfect house in their mind, but depending on budget, location and many other factors, finding a home with everything you’re looking for may be impossible. Therefore, it’s always a good idea to make a list of the things you desire in a new home and arrange them from most important to least.

3. Look at Homes You Can Afford. This may seem like a no-brainer, but prospective buyers often house hunt and bid on properties that are way out of their price range. While it’s okay to look at a wide range of homes, including some that may be just above your price range, don’t waste your time looking at homes that are priced anywhere from 25 – 50 percent over what you can afford.

4. Know Your Budget. Before you get too invested in the home search process, figure out exactly what you can afford by making a list of all your expenses, including taxes and insurance. It’s also a good idea to get pre-approved on a loan before you even begin looking at homes. A pre-approval will not only be instrumental in determining the amount you’ll be loaned, it may also help you get a leg up on any competition for the home if there’s a bidding war.

5. Understand Your Financing Options. There are many different types of mortgages available for those looking to buy a home, including several special loans one may qualify for. With so many financing options out there, it’s crucial that you do your homework to ensure you’re getting the best rate. The last thing you want to do is jump at the first offer from a mortgage lender.

Contact our office today for more home-buying tips.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

5 Inexpensive Steps to a Speedy Home Sale

If you’re a homeowner considering a move, you may be wondering what’s next. Do I need to renovate the kitchen? Repaint the exterior? Replace the flooring? Before taking on a costly remodel, consider this: these measures don’t always recoup the highest percentages in return. Many sellers have much more success by investing in upgrades that boost their home’s value in the process. The best part? Both sides of the transaction profit.

Consumer Reports recommends completing these updates:

1. Paint key rooms.
In the grand scheme of things, painting is one of the least expensive ways to freshen up your home for sale, but it can cost up to $300 a room if you’re hiring a pro to do your entire home. Save big by painting just a few select areas: high-traffic rooms, like the kitchen and bathrooms, and rooms with brightly-painted walls. You can save even more by doing the project yourself – a gallon of paint averages about $30.

2. Spruce up the exterior.
Your home’s exterior is the first impression for many buyers online and in person. Aside from keeping up with maintenance like mowing the lawn and trimming shrubs, assess the outside of your home for any repair work – a fading front door, cracked siding or a loose step – that needs to be completed before selling. And don’t forget about the roof. If it needs to be replaced, choose an inexpensive but durable option, like standard, three-tab asphalt shingles. They cost approximately $75 per 100 square feet, including installation.

3. Upgrade the bathroom.
Bathrooms can become a point of contention for buyers if they’re not in tip-top shape. Rather than taking on an expensive renovation, make minor upgrades that have an impact. Caulk the tub, re-grout tile, and install new fixtures. Larger, less costly fixes are also a possibility if you know where to look – a new vanity, for instance, can cost less than $1,000 if you shop around.

4. Make kitchen repairs.
Buyers want to be wowed by the kitchen, but that doesn’t mean you have to fork over tens of thousands of dollars to make that happen. Focus on making repairs that cost well under $500, like tightening a leaky faucet or eliminating burn marks on countertops. For a cheap alternative to repainting your cabinets, consider updating your hardware in a modern finish.

5. Clean, clean, clean.
Even if the home has been renovated top to bottom, a messy appearance can be the ultimate deal breaker. Fortunately for sellers, de-cluttering and de-personalizing doesn’t have to cost a dime. A short list that will help buyers visualize living in the home:

– Vacuum, dust and wipe all surfaces regularly while your home is on the market.
– Pare down closets to the bare essentials.
– Replace family or otherwise personal photos with neutral wall art.
– Cut clutter in cabinets and on bookshelves.
– Keep counter and tabletops clear, especially during an open house.

If the project is overwhelming, consider hiring a professional cleaning service or organizer to cut through the chaos. A pro can cost anywhere from $600 to $2,500.

Source: Consumer Reports

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Federal Housing Administration Cut Mortgage Insurance Premiums

The number of first-time home buyers entering the housing market is at a 27-year low, according to the National Association of REALTORS®, but the Federal Housing Administration (FHA) took big steps this week to rectify that. Just last week, the FHA announced a 50 basis points reduction in mortgage premiums that, according to President Obama, will serve two important purposes: enticing new home buyers and encouraging existing borrowers to refinance at lower rates.

NAMB, The Association of Mortgage Professionals, led by CEO Don Frommeyer, has been pushing its Washington counterparts to make lower premiums a priority. “This is a great first step in helping to make homeownership more affordable for folks on Main Street,” says Frommeyer. “But there’s still plenty of work to be done.”

FHA borrowers will realize as much as $900 in savings annually on a $200,000 mortgage, which arguably will be filtered back into the economy to encourage ongoing recovery.

Frommeyer and the NAMB membership think this move makes sense from an industry perspective. Now, borrowers with better credit will consider FHA loans as opposed to mortgages financed solely through Fannie Mae or Freddie Mac.

“We support anything that makes homeownership more accessible and more affordable for millennials and first-time homebuyers,” says Frommeyer. “The market simply is not going to recover at the speed it should unless we continue taking steps to recruit this demographic. This is excellent news for the industry.”

For more information, visit www.namb.org.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2015. All rights reserved.