6 Most Cost-Effective Ways to Spend Your Tax Refund on Your Home

On April 27, 2014   /   Real Estate News  
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tax refund sigh

By: Angela Colley for Realtor.com

If you happen to get a tax refund check from your state government or Uncle Sam, you have a great opportunity to invest it in home improvements and increase the equity in your home.

To find those projects that give the most bang for your buck, we checked the 2014 Remodeling Cost vs. Value report, a collaboration between several research teams including REALTOR Magazine and the National Association of REALTORS® that compares the average cost and resale value of 35 popular remodeling projects across 101 American cities. Here are its findings:

1. Replace the Front Door

Adding a sleek-looking, new front door can boost your home’s curb appeal as well as improve its insulation while toughening up its security. Buying and installing a new steel entry door costs $1,162 and has a return-on-investment (ROI) of 96.6%.

2. Add a Deck

Deck additions now have the best ROI since 2007. A 16-by-20-foot wood deck addition will run you about $9,540 but will return about 87.4% of its cost after resale. If you already have a deck, you could add some extras, such as an outdoor fireplace.

3. Add a Bed and Bath to Your Attic

An extra bedroom can substantially increase your home’s value. So while it’s not cheap—turning an attic into a 15-by-15-foot bedroom with a 5-by-7-foot bathroom with shower will cost, on average, about $49,400—you can expect a decent ROI of 84%. If you choose to forgo the bathroom, the job will be cheaper but the ROI may not be as high, since there is value in not having to go downstairs for a bathroom (The report doesn’t offer a cost vs. value analysis without it).

4. Replace the Garage Door

Replacing that rickety garage door with a smooth-moving, modernized one is an inexpensive addition with an average cost of about $1,530 and an estimated ROI of 83.7%. While the garage might not rank high on your list of things to fix, remember that more than three out of every four homebuyers purchase a home with a garage.

5. Tweak Your Kitchen

Kitchen remodeling is predicted to be the most common renovation that homemakers will decide to make in 2014. However, you don’t need to do a full-blown kitchen redo for a solid investment. Leave the old cabinets but replace the doors and drawers; pop in some new energy-efficient appliances; and install a new, modestly priced sink. Replace old countertops, touch up the paint and fix cracked flooring. The cost for this type of mid-range remodeling is $18,856, and is estimated to have an ROI of 82.7%.

6. Replace Windows

Not only can replacing windows earn a solid ROI, you can also cut down on your heating and cooling bills and earn energy tax credits with energy-efficient models. The cost to replace 10 standard windows with insulated wood replacements is about $10,900, with a 79.3% ROI, according to the Cost Vs. Value report. If you’re going with vinyl windows, the job will cost about $9,980 and has an estimated ROI of 78.7%.

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The Best Season to Sell Your Home—and Why

On April 20, 2014   /   Real Estate News, Tips for Selling your House  
Tags: , ,
sell home

By: Anne Miller for Realtor.com

Timing really is everything when it comes to home sales. Getting your asking price, and even attracting multiple buyers, can simply be a factor of the time of year when the home is sold.

Spring and Summer

Spring brings rain and flowers—and possibly extra green in the final sales price of your home. Families like to move during the summer when there’s a break in the school calendar so they don’t have to pull their children from class, and so they are well-settled before the new school year. Plus, it’s often easier to move in the warm spring and summer months than during winter snows.

REALTORS® say 50% of homes are sold during the summer.

Fall and Winter

Maybe your employer notified you of a job relocation in the fall and you missed the peak selling season for your home. Don’t despair. If you are selling your home in the fall, you can stage your open house with the warmth of the turning season to add to the appeal. Accentuating your landscaping with seasonal decorations, such as pumpkins and gourds, will appeal to the potential home buyers.

The winter season isn’t a favorite for home buyers to view homes, but holiday ornaments add charm and help homes sell during the winter season. Owners who put their home on the market during the winter may be more eager to move, and so might close faster. Prices may also dip compared to the busy summer market, since there’s less demand. And you might find it easier to schedule time with experts, such as home inspectors; or have a faster turnaround on services, such as lawyer reviews, during the slower time of year.

Geography, Geography, Geography

Selling a home quickly may not only be contingent on a season. The geography of your home may be a contributing factor to when the home should be sold. Florida’s large snowbird population makes winter months attractive due to the warm weather. The heat and humidity of Florida summers can make that season less than ideal for selling.

For all of those reasons, evaluate your location and weather before planning to present a new home to the real estate market.

Have a Plan

Sometimes personal situations prevent selling a home during the prime season. A REALTOR® can help you sell a home in any season.

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This Neglected Home Repair Can Cost You $100 or More a Year

On April 13, 2014   /   Home Inspection, Real Estate News  
Tags: ,
water spicket

By: HouseLogic

The U.S. Environmental Protection Agency says one in 10 homes has a leak that wastes at least 90 gallons of water per day. Given the average cost of water, that adds up to more than $100 a year.

“Easy-to-fix household leaks waste more than 1 trillion gallons of water annually nationwide, which is equal to the amount of water used by more than 11 million homes,” said EPA Acting Assistant Administrator for the Office of Water Nancy Stoner.

In just 10 minutes, you can give your home a water checkup. Start by looking at winter water bills and fixtures for water waste, then twist and tighten pipe and hose connections. Consider replacing broken or inefficient fixtures with WaterSense-labeled models, adjusting water pressure, and softening well water. If winter water usage for a family of four exceeds 12,000 gallons per month, it’s likely your home has a leak problem. Here are some easy tips for finding and fixing it:

  • Check toilets for silent leaks by putting a few drops of food coloring in the tank at the back and, if after 10 minutes color shows up in the bowl before flushing, it may be time to make an easy repair and replace the flapper.
  • Check outdoor plumbing and hoses for damage from winter frost and tighten connections at the water source.
  • For in-ground sprinkler systems, have a professional certified through a WaterSense-labeled program inspect sprinkler heads and pipes for signs of leakage.
  • Check additional plumbing and outdoor fixtures for leaks. They may just need a quick twist or pipe tape.

Source: EPA

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How to Handle a Home Seller’s Counteroffer

On April 6, 2014   /   Real Estate News  
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counter offer

By: Michele Lerner at Realtor.com

When you have found a home you want to buy and submitted a purchase offer to the sellers or the sellers’ agent, the sellers have the right to accept it or make a counteroffer.

The likelihood of your receiving a counteroffer depends on several factors, including whether your local market is skewed in favor of buyers or sellers, how long the home has been on the market, how eager the sellers are to move, and whether your offer comes close to the sellers’ expectations.

Typically, a counteroffer will include a higher price and/or a larger earnest money deposit, a different closing date, a change in the contingencies or the timing of the contingencies, or an exclusion of specific fees. You can accept it, reject it, or make a counteroffer in return.

A counteroffer will always include an expiration date. If you don’t respond by the seller’s expiration date, the offer is void and the seller can accept an offer from someone else.

What to Do With a Counteroffer

Your decision about how to handle a counteroffer will depend, in part, on how much you want this particular house.

If you’re fine with the sellers’ conditions in their counteroffer, you can simply accept the offer by signing it.

If you don’t like the counteroffer, you and your REALTOR® should discuss the specifics of the offer and see if there are parts of it that you can accept. You can make a counteroffer to the sellers with a new price or a different set of contingency dates or a larger earnest money deposit—anything that’s acceptable to you and that you think could sway the homeowners to sell their property to you.

Keep in mind that you need to stay within the confines of your pre-approved mortgage and that the house must appraise so that its value is equal to or larger than the sale price.

Once you make a counteroffer to the sellers’ counteroffer, you will be obligated to go through with the deal if the sellers accept it. So, make sure you are comfortable with your offer.

The sellers may not respond to your offer. If they don’t and you still want the house, you can make another counteroffer within a week or so to see if you can nudge them into negotiating.

Your best resource during this stage of buying a home is your REALTOR®. Ask your REALTOR® to talk to the listing agent and find out what is most important to the sellers—such as, the move-out date, the price, or perhaps avoiding having to make repairs. The more you know about the sellers’ motivations, the easier it is to tailor your offer so that it’s acceptable to them.

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How to Handle Homebuyer’s Repair Requests

On March 29, 2014   /   Real Estate News, Tips for Selling your House  
Tags:
homebuyers repairs

How to Handle Homebuyer’s Repair Requests

By: Michele Lerner at Realtor.com

If you are selling your home and have gotten an offer, you may concerned about the prospective buyers asking you to make costly repairs that potentially could cut into your profit.

Repair requests can be negotiated under most circumstances, but it’s important to recognize that your ability to negotiate depends on the contract proposed by your buyers. You and your listing agent need to carefully read and understand the implications of that contract.

Home Sale Contract Options

Standard real estate contracts vary by location, but all of them are completely negotiable.

As a seller, you should never sign a contract until you fully understand its obligations, particularly where it concerns your responsibility for repairs. The best contract for a seller would be for the buyer to agree to purchase your home “as is” or to request an “information only” home inspection, thus absolving you of any need to pay for any repairs.

In most cases, though, your contract will include a clause that says the purchase is contingent upon a home inspection. Some contracts will expressly state that the buyers cannot request any cosmetic repairs to be made and can only ask for fixes to structural defects, building code violations or safety issues. State laws may also impact your liability as a seller for any issues uncovered during an inspection, so it’s important that your REALTOR® understands these regulations. If you are uncertain about the contract, you can also consult a real estate attorney.

Market Conditions

While buyers are always advised to have a home inspection so they know what they are buying, when there are a limited number of homes for sale and buyers need to compete for homes, they are more likely to waive their right to ask a seller to make repairs. In a buyers’ market, though, sellers may find that buyers are more aggressive in asking for work to be done on the home.

Repair Negotiations

Your ability to negotiate depends on the way your contract has been written. In most cases you don’t have to agree to make cosmetic repairs. If a home inspection finds other problems, though, you are typically better off making repairs rather than having the buyers walk away from the transaction. For one thing, the next home inspection is likely to find the same problems so you may not be able to sell your home without fixing the issue.

Most contracts stipulate that the home inspector will provide a free copy of the report to the sellers as well as to the buyers. If you receive a copy of the report and it describes defects in your home, you’ll need to disclose those defects to the next prospective buyers.

Before you jump into negotiating requested repairs with the buyers and their agent, you should discuss the home inspection report with your REALTOR®. You can get bids from several contractors to find out how much a repair will cost and then decide what to offer the buyers.

Some buyers prefer to request a credit at the closing to pay for repairs that they will handle themselves after the settlement, rather than have the sellers make the repairs beforehand. Another option to consider is to offer to pay for a home warranty for the buyers that will cover future issues with the home’s systems and appliances. However, a warranty only covers features that are working, so if you have a broken water heater, you will probably have to pay to have it fixed before your transaction can be completed.

Whether you get a minor or major repair request, rely on the professional advice from your REALTOR® or real estate attorney to help you handle the issue.

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