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October 2011 Blogs
5 Home Improvement Projects that Will Get You Top Dollar For Your Home:
It’s a highly competitive market for home sellers right now. More homes to compete with means that the
impression your homes makes - from the curb, and on the inside - matter now more than ever. You can increase
your chances of selling faster - and at today’s top dollar - by investing in a select few home improvement
projects that have been shown to make a big impact on buyers.
Bad news alert: it might cost you a little time, effort and cash. The good news, though, is that the best projects
for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here
are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract
buyers, and to attract dollars from those buyers.
1. Painting: Adding a fresh coat of paint to ceilings and walls is a
tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten
your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have
an easier time envisioning how they will infuse their own personalities into your home if they’re looking
at a relatively blank slate.
Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.
Fresh exterior paint - even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims
- is also a quick, inexpensive way to polish the look of your home from the curb.
2. Landscaping: Everything you’ve heard about curb appeal is
true. First impressions matter - especially if your house is one of eight or nine a buyer has seen in one
day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and
inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the
biggest impact - and be diligent about keeping your landscaping very well-manicured throughout the time
your home is on the market.
Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge
your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of
your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want
to take on. Think clean, simple and elegant for the biggest boost in value.
3. Cleaning and de-cluttering: Start by removing all your family
photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and
counters. Buyers want to be able to envision their lives in the house, not yours. Personal items - and the
visual clutter they create - have been shown time and time again to block buyers’ ability to create this
vision.
Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the
fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture
that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail
and other items.
And then clean - and keep cleaning obsessively, the entire time your place is on the market. Kitchens,
bathrooms and bedrooms should look unlived in when they are shown. And don't forget to clean less obvious
places like windows, walls, doors and and floors, to dust off shelves and furniture, and to polish appliances.
4. Plumbing repairs and water stain/damage repair: Paying a plumber
to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get
it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely
provoke disgust and exasperation on the part of the buyers you want and need to impress. And they can be pretty
cost effective to fix - ask your agent for a referral, if you need one.
Offering a broker's incentive makes your home stand out among all those listings to the brokers and agents
who put buyer's property tours together. While these aren't "buyer incentives," strictly speaking,
but they do operate to boost the number of buyers that come view your home - in turn, boosting your home's
likelihood of getting an offer.
5. Staging: Staging your home can make a dramatic difference in the
price for which your home sells. Good staging is equal parts:
(a) removing your personal belongings and replacing it with more artwork, decor and
cleaner-looking furniture,
(b) and tweaking the home’s paint, wall coverings and even landscaping to show the place in its
very best light.
When done well, staging can convert your home from just another listing on a buyer’s list to the setting
for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special
skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to
a buyer), to items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story
of the life buyers can fantasize about living in your home.
Talk to your agent about staging - some agents have the skill to do this on their own, while others might have a
professional stager they frequently work with.
In some cases, you might want to take on even larger projects. Before you go that route, talk with a
local real estate agent; they are well-positioned to know what sort of updates and features will make the
most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant
difference in the price it commands, so take advantage of your agent’s expertise as you make decisions
about which property preparation investments to make (and which to forego).
5 Credit Myths - BUSTED!
When it comes to credit, sometimes the largest challenge is the most difficult to surmount: we
simply don’t know what we don’t know, so our assumptions and inaccurate beliefs run wild and free
through our mental real estate. Most of the time, there’s no harm; following finance fundamentals
like paying every bill on time, every time, keep us out of credit danger zones.
But when it’s approaching the time to buy, refi or even rent a home, relatively small credit
score differences can stop you from getting your dream home, and can cost (or save) you thousands
of dollars in interest over the life of your loan.
If you’re at a time in your life where it makes sense to invest some time and effort into
optimizing your credit score, here are five common credit myths we’d like to help you bust without
further ado:
Myth #1: Having lots of cash, a great income, or tons
of equity, makes your FICO score less relevant.
Fact: No matter how much cash you have, if you want a
mortgage, you must meet the lender’s FICO score guidelines. Of course, if you’re flush with cash,
it should be relatively easy to make your monthly payments on time. But if you have come into
cash relatively recently or you’re coming off a rough financial patch, lenders don’t not look
at your credit score on the theory that your other assets diminish your credit riskiness. Most
lenders want nothing more than to avoid having to foreclose on a home, even if the homeowner
has other assets.
And the best predictor of whether you’ll default on a loan in the future is how you’ve handled
your credit in the past, so your credit score will drive whether you qualify for a home loan and what
interest rate you’re charged, no matter how much you make.
Two exceptions: if you buy a home with all cash, or take a hard money loan, which usually
requires a much larger-than-average down payment and interest rate, you might be able to bypass
credit score scrutiny, but you’ll pay for it.
Myth #2: Having no debt or no late payments means you
have great credit.
Fact: Financial responsibility and good credit are two
different things. Your FICO score is meant to be a measure of your responsibility when it comes
to managing debt, as proven by the fact that you have credit accounts, use them regularly and
don’t abuse them.
Having no credit accounts or debts doesn’t give you good credit - it gives you no credit.
And on the other end of the credit usage spectrum, being maxed out on various credit accounts
all the time, submitting lots of credit applications and other credit moves that indicate you
may abuse your credit can actually depress your score. Best practice is to have several credit
accounts (student and car loans count!) that you actively and responsibly use on a monthly basis.
Tip: FICO gives a top score to accounts with balances that
are 30 percent of the credit limit, so if you can keep your credit card or loan account balances at
or around that mark, even better.
Myth #3: Checking your own credit score in advance
prevents surprises when you apply for a mortgage.
Fact: Your mortgage originator (broker or banker) must pull
their own version of your report from their own provider, and it might have a very different score,
rating scale or even different line items than the free or paid report you pulled online. This is
why it’s imperative to start working with a mortgage professional as early as possible - a year in
advance is not overkill - so you can detect any errors or issues and get their recommended fix in
the works with plenty of lead time.
Myth #4: If you’ve had a foreclosure or short sale,
your credit report will be damaged for 7 years.
Fact: Derogatory credit items, like late mortgage payments,
foreclosures and short sales, appear on your credit report for 7 years, but your credit score can be
rehabilitated enough to buy a home or obtain other credit in less time, depending on your
circumstances. Your post-short sale or foreclosure waiting period depends on a number of things,
including what type of loan you’ll be seeking to buy your next home with, how much cash you’ll
have to put down and whether there were any extenuating circumstances involved in losing your
home in the first place; some loans allow for an immediate purchase, others require a waiting
period of 2, 4 5 or even 7 years after the loss of a home.
Of course, your FICO score is also a key criteria in a post-home loss “buy,” but
interestingly enough, the length of time it takes to get your FICO score back up depends
on how high it was beforehand. Earlier this year, the New York Times reported that it
would take a consumer with a 680 FICO score three years after a foreclosure to bring
their score back to that level, while it might take someone with a 780 FICO score
(near-perfect) seven years for full score recovery.
And keep in mind that as your foreclosure or short sale ages, its impact on your
score will decrease, too.
Myth #5: Short sales have much less impact on your
credit score than foreclosures.
Fact: Hear ye, hear ye - short sales and foreclosures
have the same impact on your credit score, according to the FICO folks themselves. (The only
exceptions are for short sales or deeds-in-lieu of foreclosure where the property was not
upside down, which are few and far between, if they’re not just a real estate urban legend!)
However, the number of missed payments you had before your home was lost to foreclosure
or short sale might weigh on how gravely injured your FICO score is in the process. At the going
rate at which banks are foreclosing on homes - clocking roughly 2 years of missed payments before
a home is repossessed - your FICO score could take an even greater hit than if you were able to
divest of it via a short sale in 1 year’s time.
5 Ways to Know If A Home Is "The One"
With so many homes on the market, many buyers house hunt for months, even years before hitting property pay-dirt. Even for the
savvy buyers who have narrowed their house hunt to an affordable price range, the condition issues so common in distressed homes
can make choosing a home difficult.
And on the flip side, some subdivisions have scads of similar homes, all of which are in good shape, all listed at a similar
price, making it nearly impossible to choose just one.
Here are five indicators that a particular home you’re viewing might be “The One” – the property on which you’ll want to
place an offer:
1. You feel possessive about it, instantly. I once showed a less-than-fabulous
home to a buyer who stepped in the front door, opened her eyes wide, and uttered in a much-quieter-than-normal voice, “I would cry.” We
got a good laugh out of this later, after she found and bought a home that made her feel virtually the opposite.
Not only did the winning home bring a smile to her face, it also made her instantly possessive. She didn’t just want it - she
wanted it immediately. She could barely even wait to write the offer paperwork! When another agent showed up to bring a buyer through
the place while we were still there, she lingered leisurely (in hopes they would just leave) and secretly looked at them with daggers
in her eyes (out of competitiveness, because in her heart, the home had already become hers).
If you walk through a place and leave wondering how quickly you can get your offer in, how much you’d offer to beat someone else
out, or what you can do to lock it down quickly, it might be “The One.”
2. You start rationalizing its flaws away. Train tracks 10 feet from the bedroom window? Next
door neighbor that runs a pigeon-sitting service? Okay – I exaggerate. But if you find yourself viewing a home with traits that you
would normally deem undesirable or as deal-killers, yet you like the place so much that you instinctively compile a mental list of
reasons those traits just don’t matter, you might have found “The One.”
Now, smart buyers should be aware of a syndrome I like to call “Pottery Barn Psychosis,” whereby the aesthetics of a wonderfull
y staged home with amazing curb appeal can hypnotize a buyer, rendering them blind to the negative property features, which would be
glaring or grave concerns if the place weren’t so stinking cute. It’s fine to make a conscious decision that the pros of a place
outweigh its cons, and even to consciously re-rank your priorities in light of a particular property’s advantages. But buyers should
take steps to avoid falling victim to Pottery Barn Psychosis (and the Buyer’s Remorse that often follows suit) by writing down your
absolute musts and deal-breakers before you ever step foot in a single property – and by revisiting this document before you write
an offer and again before you remove your contingencies.
3. The bathroom and kitchen don’t disgust you. We humans are born with only two fears in life:
the fear of falling and the fear of loud noises. By about eight months old, we start to acquire new fears, and most of us never stop.
Among the first fear most people learn: the fear of other people’s kitchens and bathrooms.
I exaggerate (again!), but it is true that generally speaking, other people’s kitchens and bathrooms hold definite gross-out
potential. There’s just something about what goes on in those rooms that seems exceptionally intimate and even unsanitary. So,
if you happen to find yourself falling in love with a home’s river rock shower floor or drooling over the pot-filler over the
stove and the built-in cookbook stand on the countertop, that’s a sign that you’re falling head over heels with a home that
might just be “The One.”
4. You involuntarily envision your own family, furniture, decor, daily activities or
remodeling choices in/to the home. They say that the best staging helps prospective buyers envision their own idealized
lives taking place in the staged home. But whether or not a property is staged, if you find your mind’s eye Photoshopping
a given property to insert your own kids and sofa into the living room, your dining table and favorite wall hangings into
place in the dining room, and your daily meditation in the breakfast nook – or even start mentally removing walls entirely
– it’s entirely possible that the home you’re in could be “The One” for you.
5. You lose interest in seeing other homes. I once took some buyers out for their first
house hunt in my territory after they’d spent two years looking for homes in a neighboring area, without ever making a single
offer. I’d planned to show them seven homes, but when they got to the fourth property, they declared that they’d found their
home, and they neither wanted nor needed to see any more. I insisted that they finish the list, if for no other reason than
to confirm their choice and to avoid feeling later that they hadn’t seen enough nearby homes to compare theirs to. They humored
me and saw the last three places on the list, then promptly bought house #4 and still live there, blissfully happy, to this day.
When you find “The One,” continuing the house hunt you may have obsessed over for months, even years, starts to seem silly,
like a waste of the energy you could be using to move into your new home.
