Selling a Home

The Debt-Free Move

Looking at a big move in your future? Here’s how to minimize debt in the process.

by Chris Sirico

 

 

No matter how you slice it, moving is expensive. The American Moving and Storage Association estimates that the average in-state move cost around $2,300 (and that number increases to $4,300 for a state-to-state move.) But with careful budgeting, research, and a little elbow grease, it’s possible to execute a move without racking up tons of debt. This guide will help you think through the costs you’ll face and how to minimize them as you plan for your move. We’ll cover when to use professional help, planning for the day-of, getting settled in and avoiding financial pitfalls along the way.

Contents

Planning Your Move
Selling Your Old Stuff
When to Hire Help
U-Haul or…? Options for Bulky Items
Case Study: Baltimore to Chicago
Practical Packing Tips
Moving In

Planning Your Move

You’ll be better able to control expenses if you can begin planning weeks or months in advance. Here are some things to consider as you build a moving checklist.

Negotiate an Employer-Paid Move

If you’re moving for work, ask your employer about covering your relocation expenses. You may also be able to negotiate a reimbursed move if your current employer transfers you to a new city. An employer-sponsored move could include container rental, storage, shipping, travel and petty cash.

Save Receipts for a Tax Deduction

You might be eligible for a tax deduction if you are moving for work but your employer isn’t covering the cost. This could be one of the biggest ways to recoup some of your moving expense. Read more on the IRS website.

Move Off-Season

About 60% of moves occur June through October, according to a US Census report.The cost of movers, rental companies and even housing can increase during this peak season. Move during the cooler months to use the law of supply and demand to your advantage.

Minimize Storage and Time Off

Try to avoid relying on renting storage for your things. While you may need a few days (or weeks) of storage, an early start and a little creativity can help minimize this cost. Be sure to sell, donate and toss the things you won’t keep before moving your stuff into storage.

You will need to take some downtime from work, but a head start can help minimize the cost of those lost wages. Chip away at your pre-move tasks a little at a time. Once you’ve moved, give yourself a couple days to get the basics unpacked in the new place, but get back to work as soon as practical.

Moving While Selling and Moving Quickly

Your priorities might shift depending on your circumstances. It makes more sense to pay for storage if you’re showing your house while preparing for a move. It may also make more sense to pay for professional moving services if you need to move in a hurry.

Consider a Balance Transfer Card

If your move will cost more than the cash you have on-hand, you’ll need a plan to keep that debt from costing you even more in interest. Hopefully a costly move brings better financial prospects. But if you need a little time to pay off your moving debt, you might look into a balance transfer credit card.

Balance transfer cards offer attractive terms for those looking to transfer a balance from another credit card. Balance transfer cards usually have 12-, 15- or even 18-month introductory periods with 0% APR. Some also include cash back or other rewards programs you’ll appreciate even after you’ve paid off your balance.

Subscriptions and Services

Don’t forget to cancel your gym membership, cable and utilities. You can forward your mail online ahead of time, but you’ll also need to update financial accounts, online retail accounts and magazine subscriptions.

Get a Tune-Up

The last thing you need during a big move is an automotive breakdown, which could result in very costly repairs on top of your moving expenses. Make sure your vehicle is up-to-date on regular maintenance: oil, fluids, tire pressure and parts replacement. Be sure you have a spare tire with sufficient air pressure, too.

Include Extra Time and Cash for Emergencies

Don’t plan to move in a half day, especially if you’ve hired movers to load your belongings. It’s bad moving etiquette not to be available for the duration of the work.

Think it’ll take 3 days to move? Give yourself 5. The hardest part of planning a move is the unknown unknowns. Be sure to build in some margin for error. There are bound to be a few wrinkles, and moving is stressful enough without feeling like you’re in a time crunch.

Note that these prices are seasonal and show just one example of how these services might compare. Quotes will vary by provider, moving distance, location, dates, and other factors.

The same is true for the cost of your move—it’s likely to cost more than you expect. Have access to cash in case you need more transport capacity, storage time or another emergency solution. It’s normal for unforeseen expenses to pop up. Count on them ahead of time, and you’ll be able to face them more calmly when they do arise.

Pack a Lunch (and a Tent)

A family can spend hundreds on meals and accommodations during a long move. Fortunately, you can take advantage of the occasion to enjoy a few nice picnics and a night under the stars. Pack a cooler of groceries for your drive: sandwich items, fruits, veggies and bottled water are cheaper, healthier alternatives to highway restaurants.

If you’re not afraid of roughing it, a campground can be less expensive than a hotel. My family always looked for KOA exit signs when traveling cross-country.

Selling Your Old Stuff

Start unloading unwanted items by selling online. Sell high-quality clothing at a consignment store or used clothing boutique. Sell or trade in unwanted books at a used bookstore. Use your imagination.

Don’t overlook your own friend base when selling your stuff. Use social media to post about your moving sale and any big items you’re looking to part with. Sell other items in a moving sale that you can promote with signs, social media and a Craigslist ad.

eBay is a great tool for selling small, high-value specialty items. Think of what might not find a fair price on Craigslist—electronics, musical instruments, hobby gear, specialty clothing, or accessories—and list those things.

Of course, there will be some items that don’t sell. Save the unwanted clothes; they’re handy for use as cleaning rags or packing materials when you move out. But donate other items to a thrift store. (Tip: be sure to fill out your donation receipt so you can take a tax deduction on the value of your charitable donation.)

When to Hire Help

How Much Stuff Do You Have?

The scope of the job, the time required, the number of large items, and the type of vehicle needed will all depend on the size of your household. If you’re moving with a lot of stuff – especially several big-ticket items – hiring professionals to transport your belongings safely can pay off.

A DIY Move Isn’t Free

It’s also important to remember that a DIY move isn’t free. You may face fewer out-of-pocket costs, but you’ll still have to spend your own time moving. You’ll have to pay for packing materials, fuel and rentals separately. When you do the work yourself, you also take on the risk of property damage—or worse—injury.

If you plan to enlist friends to help you move, you’ll probably want to at least feed them lunch as a courtesy for their help. Pizza might cost less than the $120–$200 per hour you’ll pay a four-person moving team, but it’s not free.

You Have Options—Hire Professionals for Packing, Loading or Transport

You can hire professionals for packing, loading, transport, or any combination of the three. Professional movers will pay for (or have insurance that will cover) broken items that they packed, loaded and shipped. (See the section on movers insurance below for more information.)

What If Something Gets Broken?

Renter’s insurance may cover damage when moving. It’s worth checking your coverage if you have it. Professional movers usually have a base level of insurance, but it might not be enough to cover damages to big-ticket items. If you’re concerned about loss, consider buying additional movers insurance. (The best insurance, though, is proper packing.)

U-Haul or…? Options for Bulky Items

Sell It!

If you ask a frequent mover how they move cheaply, there is one tip they’re almost sure to share: sell as much of your furniture as possible and replace it in your new city. Only ship furniture and bulky items with sentimental value. Sell and rebuy items from discount retailers like IKEA—they’re cheaper to rebuy than to haul, and they might break in transit.

Friend with a Truck

Let’s say you’re moving a short distance. If you’re like me, your first thought is, “Who do I know that has a pickup truck?” These people are born helpers, bless their hearts. I know pickup drivers who really enjoy helping people move, even if they do get asked a lot. So go for it! Just know there are other options if your truck-owning friends turn you down.

Rent a Pickup

You can rent a flat-bed pickup truck from a home improvement store for less than $30 a day. That’s less than a few cases of limited-edition craft beer you might buy to bribe a buddy. A rental’s truck bed is more spacious than the average pickup, too. A pickup rental is a great option for a one-day, in-town move.

Strap It on Top

I’ve moved mattresses, bed frames, bookshelves and dressers with nothing more than a midsize sedan, a moving blanket and some hauling straps. A set of 4 straps is about $10, and they’ll come in handy for years after your move.

Make sure you know how to use your straps. Get that item tightly secured, and give a couple tugs to make sure it can’t slide backward. Mattresses like to bend upward when they catch wind. To avoid this, strap them down near the front through your front windows and towards the back through your rear windows. (Then you get to hop in through the window like Mario Andretti.)

Rent a Moving Truck

If you do have a lot of furniture that you’d like to hold on to, a rental moving truck might be your default option. Shipping or truck rental is likely to be your single greatest moving expense, so do some comparison shopping before you choose. Factor in the fuel you’ll buy (with mileage as low as 6 mpg highway) and any per-mile cost the provider charges. It is usually possible to tow a car behind a moving truck if you’re moving solo.

Ship a Moving Container

Services like PODS, U-Box and U-Pack are transportation-included moving solutions that deliver a container that you pack. Pricing varies based on the packing volume needed and the distance you’re moving. These services tend to land in a price range at, or above, that of a moving truck rental (see case study below). But you might find that they hit the sweet spot for a small load of furniture that wouldn’t fill a moving truck. Container shippers do include fuel cost in the price. They also tend to offer storage, which might be helpful if you’re dealing with tricky logistics.

Ship with Amtrak

If you’re willing to try an adventurous method to save on moving, consider using Amtrak. You can ship up to 500 pounds of stuff per day, and it costs about 50 cents per pound. That could be a significant savings over traditional methods, but there are guidelines and some damage risk.

Amtrak’s basic shipping guidelines require shipments be in boxes 3′ X 3′ or smaller that weigh 50 pounds or less. Amtrak also ships bicycles, and some stations can ship fully-packed palettes and other large items.

Case Study: Baltimore to Chicago

Here are some quotes from container and truck rental providers for a hypothetical move from Baltimore to Chicago, a state-to-state move of 700 miles. These are summertime prices (peak season) quoted a week out from the beginning of a weekend move (peak days and non-ideal lead time). Bear in mind that this is a worst-case scenario in terms of pricing. Since each container is a different size, estimates are based on enough storage for a 3-bedroom house as defined by each company.

Averages are for illustrative purposes only, based on data from the American Moving & Storage Association Industry Fact Sheet using an average household moving load of 7400 pounds. Costs for all services will vary by location, service provider, size of household and season.

Details

PODS – $2791
(8′ X 8′ X 16′ box; includes transit and 30-day storage)

U-Pack Trailer – $1775
(using 17 linear feet X 8′ X 9′)

U-Box – $2350
(5 boxes; 7’6″ X 8′ X 5′)

U-Haul 26′ Truck – $2443 total ($2009 for Sunday pickup)
(maximum length, 26′ X 7’3″ X 6’10”)
$2170 (but down to $1736 for a Sunday pickup)
+ $273 Gas (6 mpg at $2.40/gal)

Penske 26′ Truck – $2195 total ($1964 AAA rate)
(maximum length, 26′ X 8′ X 8′)
$1922 ($1691 with 12% AAA discount)
+ $273 Gas (6 mpg at $2.40/gal)

Practical Packing Tips

You’ll set yourself back if you have to replace furniture you didn’t take the time to disassemble, glassware you didn’t pad, or a flat-screen TV you loaded loose into a shipping vessel.

Collect used boxes from a grocery store to save on packing material, but ensure each box is strong enough for its contents. Save unwanted clothes and gather newspaper for padding.

There are some packing materials you shouldn’t skimp on. Stock up on furniture pads, moving blankets, and stretch wrap. Get more than you think you’ll need. These tools are a physical insurance policy for your belongings—the short-term expense will prevent expensive replacement costs later.

Don’t wait until the last minute to start packing. Sort through and organize your possessions in the weeks leading up to your move. You’ll have less to pack and load if you can eliminate unused possessions by selling or donating them. You can also ease the days before your move by packing rarely-used items early. Check your attic, basement, shed, and closets to see what you can do without for a couple weeks.

Make sure you fit belongings securely into your truck and within each container. Jostling can cause objects to shift, fall or crush in transit. Bundle items in large groups. First pad with moving blankets or furniture pads between objects and on the outside of the bundle, then fasten everything together with stretch wrap. Secure packing is particularly important if you’re using Amtrak or a container service like U-Pack or U-Box.

 

Moving In and Paying Off

The job isn’t over as soon as you pull in to your new place, and neither are the expenses. Take these steps to make your new life on the other side of your move as affordable as possible.

Ask Around

Your realtor is a great resource in shopping for all the services you’ll need in your new place: TV, electricity, doctors, etc. They’ll be familiar with the area and can probably give you a rundown of popular options.

While you’re at it, make friends with your new coworkers and neighbors. They can point you to the best value at stores, gyms, nightlife and other pastimes in your new neighborhood. Maybe there’s a great park or dollar theater out there. Find out by asking around.

Unpack ASAP

There are a couple of reasons to get your new place set up quickly. For one, you’ll be less tempted to eat out if you have a fully stocked kitchen and a comfortable place to eat. For another, you won’t end up re-buying household items that are tucked away in boxes stacked in your garage.

Re-Buy Housewares and Furnishings on the Cheap

New home, new stuff, right? Maybe not. You can save money on the tail end of your move by shopping judiciously for the things you’ll need. Look for essentials at dollar stores and thrift stores. Check Craigslist for furniture before you visit retail stores. You can always add the bigger, nicer items later.

Space out Home Improvement Projects

No home really feels like home until you’ve added your own personal touch, but the cost of home improvement projects can add up quickly. The key is to prioritize what needs to be done immediately and what can wait. By all means, fix that roof leak to prevent greater expense in the future. The covered patio, however, should probably wait until you’ve paid off the cost of the move itself.

Think through your move ahead of time. Lighten your load by selling and donating possessions. A little creativity and comparison shopping can go a long way to save you money.

 

The Quick Home Inspection Checklist: What to Look for When Buying a Home

BY

Whether you’re a first-time home buyer, or starting to look around for a new one, it always helps to know what to look for when buying a house. There are numerous red flags that can pop up while checking out a home, sometimes it’s the state of the foundation, other times it’s the quality of the appliances. To help you spot them, we’ve put together a few tips and a quick checklist to use when buying a home.

Before You Go House Hunting

 

Find a Real Estate Agent With High Ratings
Use real estate forums and directories, such as Zillow, to find agents with good reputations in your area. You may also consider hiring an Exclusive Buyer’s Agent, a real estate agent who specializes in working with home buyers, rather than sellers.

 

 

Look at the Local School Districts
If you plan to start a family, it’s good to know the quality of the local schools beforehand. There are numerous sites that track school performance, providing a relatively accurate picture of the quality of local schools:

Your Quick Home Inspection Checklist

During the initial home tour, you should mark down specific areas of the house that you want your inspector to examine more closely. Use the checklist below to guide you as you take a look through the house.

Exterior:

Roof/Attic:

o Are there shingles missing?
o Is there flashing and trim installed?
o Are there any signs of leaks?
o When will the roof need to be replaced?

Foundation:

o Are there visible cracks on the outside walls?
o Are there any trees near the foundation?

Yard:

o Does the drainage slope away from the house?
o Are there any soggy areas you can identify?
o Are the walkways and driveway in good condition?

Interior:

Appliances: (If included)

o Do the appliances appear to be well-maintained?
o What are the ages of the:

Refrigerator? ___
Dishwasher? ___
Oven? ___

o Are there any leaks under the sinks (bathrooms and kitchen)?

Structural Elements:

o Has there previously been a fire in the home?
o Do the walls show vertical or horizontal cracks?
o Are there any stains on the floors, walls or ceilings?

Ventilation and Sub-Systems:

o Does the house smell? Can you identify the source?
o Do the heating and AC systems appear to be working?
o Does the water heater produce enough hot water?
o Is there a working exhaust fan in the kitchen?

Miscellaneous:

Electrical:

o Do all the switches work?
o Is each outlet properly grounded?
o Do the ceiling fans work?
o Has the electrical panel been recalled?

Plumbing:

o Are there any unusual noises?
o Do the faucets and other fixtures have enough pressure?

Garage:

o Check all of the following elements for signs of damage or wear:

 Slab
 Walls
 Ceiling
 Vents
 Garage Door
 Lights
 Openers
 Windows
 Roof

 

After the Tour

Hire a Home Inspector
After you’ve toured the house, you’ll need to hire an inspector to give the house a more thorough inspection. Most real estate agents will recommend one to you, but you could also go out there and find one yourself.

 

 

Start by looking up inspectors near you using the American Society of Home Inspectors (ASHI) directory, or your preferred local services platform, such as Angie’s list. You will want to find someone with three to five years of full-time experience, and who can also provide proof of licensing (requirements may vary by state) and insurance (both general liability and errors and omission coverage). These are the inspectors who will know what to look for when you’re buying a house.

 

 

Read Through the Inspection Report
The inspection should take no more than three or four hours, after which you will have a full report to pour over (an example of which can be found here). Any potential problems will be noted on the report – usually with pictures included. Bear in mind that any home is going to have issues. The key is to identify the costliest problems before signing, and using that information to either renegotiate the selling price or walk away.

The most common problems identified on a home inspection checklist include:

  • Faulty Wiring: Wires without wire nuts, open junction boxes.
  • Faulty Plumbing: Low water pressure, water stains on ceilings.
  • Poor Drainage: Soggy areas in the yard, leaks in basement.
  • Bad Gutters: Clogged gutters, basement dampness.
  • Foundation Flaws: Small cracks, sticking doors and windows.
  • Poor Maintenance: Chipped paint, worn shingles, cracked driveway.

All of these problems can be easily fixed with the right contractor, and shouldn’t be deal breakers. However, if any of the following problems are flagged in the report, you might want to have second or third thoughts:

  • The Roof Needs Replacing: The average cost of a roof replacement is $7,000.
  • The House Is in a Flood Zone: Use FEMA’s flood maps to determine if the home is at risk.
  • Major Foundation Issues: Hire a structural engineer to determine if those cracks are actually serious.
  • Aluminum Wiring: This type of wiring almost always needs to be replaced, a process that can cost thousands of dollars.

These are some of the most expensive repairs and conditions you will come across while house hunting. If any of these pop up during the course of your home inspection, be sure to consult with your real estate agent to see if the sellers can be convinced to pay for the repairs. For certain issues outside the home, such as flood zones, be prepared to pay for additional insurance coverage to mitigate your risk.

Don’t let those potential pitfalls deter you from making an offer on the home of your dreams. As long as you keep a checklist when buying a home, and heed the findings of your inspector, you’ll be able to make a fully informed decision.

Think You Know The Best Time Of Year To Sell Your Home? Think Again.

By Jessica Cates

The best time of year to sell is a hotly debated topic. Many experts agree that spring is a safe bet, and industry research backs this up. But, a recent Redfin report also brings some surprising data to light. Read on to learn which seasons will help you sell faster and for more money in your metro.

Spring Selling is Usually a Safe Bet:

As expected, homeowners who decide to list in the spring tend to do pretty well when it comes to selling fairly quickly and getting a good return on their real estate investment. This is often attributed to the fact that nicer weather and more free time tend to prompt more buyer activity. More activity means more competition in the market, which helps drive prices up. But if waiting until spring isn’t your ideal scenario – you’ve got options.

Winter is a Surprisingly Good Time to List:

While you’d think people tend to hunker down in the winter and are less likely to home shop, Redfin’s data proves otherwise. They pulled numbers on over seven million home sales across the US that occurred over the past four years. In their analysis, they discovered that winter sellers are actually on pace with spring sellers when it comes to getting over asking price and selling quickly. Part of it has to do with the fact that winter shoppers tend to be more serious buyers and part of it has to do with other factors that impact local and national real estate markets, a number of which are outlined here. Check out Redfin’s data, organized by major metros, below:

2016-12-14-1481751782-2513270-redfinstats-thumb

 

Redfin has reported similar findings in the past – and has even shown that in previous years, winter sellers sold faster and made more money than those who listed at other times of the year.

Summer and Fall Lag Behind:

Summer break can get busy for people when the kids are out of school and fall gets busy as the holidays approach. Knowing that, it’s no surprise to see that these two times of the year come up short when it comes to faster sales and higher payouts. But be sure you take a look at the impact on your specific city. In some cities, the differences are negligible. In other major metros, the impact is more severe, which means listing in slower seasons can translate into making significantly less money on your sale.

Don’t Forget to Consider Your Motivation to Sell:

The real estate market is fluid and is impacted by a variety of factors, so what’s true now may not be true six months from now (or even one month from now). For example, rising interest rates are driving a lot of activity now, as buyers try to lock in low rates on their home purchase. But the same may not be true this time next year.

All market trends aside, your motivation to sell should also play a big role in determining when you should list. If you have an immovable deadline, all you can do is price right and do everything in your power to make the best of current market conditions. But, if you have more flexibility with your timeline and your local market tends to favor a particular season, it may be worth it for you to time your sale in a way that allows you to take advantage of the optimum selling season.

In any case, it’s always a good idea to consider historical data, current market trends, and your own needs as you work to decide when it makes the most sense to sell your home.

Steps to Sell a House: How Long Does Each One Take?

By Jamie Wiebe

steps-to-move-628x354

Adam Gault/Getty Images; realtor.com

Even in the hottest markets, selling a house is by no means a transaction that happens overnight. Every step—from listing your house to getting an offer to closing—takes time. But how much time?

To help you pace yourself, here are the steps to sell a house, and how long each one typically takes so you can plan accordingly. Depending on where you live, you may need to settle in for a long ride!

How long does it take to list a home?

Answer: 3 to 5 days

It will take your listing agent a few days or a bit longer to gather all the necessary info on your home (e.g., square footage, special features, and photos). But once your agent has it all, things generally happen fast. Your agent will then upload these details onto the multiple listing service, which will make the listing viewable to agents. A shorter, consumer-friendly version of the MLS listing will also appear on sites like realtor.com®—and since this site refreshes its data at least every 15 minutes, your home will be in front of plenty of eyeballs in no time at all.

How long does it take to get an offer on a home?

Answer: 65 days

The current average age of properties on the market is 65 days. That said, this varies greatly by location and time of year, so there’s no one right answer to how long you’ll wait for that blessed first offer. Is your market hot or chilly? San Francisco residents might sell their house in a hot second, but if your place is rural, expensive, or unique, you’ll probably wait longer.

How long does it take to close after we receive an offer?

Answer: 50 days

Currently, there’s an average of 50 days between when buyers apply for financing and when they get approved and can close on a home. Yes, that’s a long time, especially if you’re selling and eager to get on with it. But buyers and mortgage companies need to do their due diligence—and you certainly don’t want any last-minute surprises before the buyer takes possession. Closings fail for a number of reasons, like contingencies (perhaps the buyer’s home didn’t sell, or the bank rejected her loan). Whatever you do, don’t be a pain and not fix issues that arise during inspection (assuming, of course, you agreed to fix them). Final walk-through surprises can delay closing even longer.

How long before I get paid?

Answer: 0 days!

Here’s good news: Your money should be available immediately after you sign on the dotted line. Cash is typically disbursed by the title or escrow company, which will wire the money to your bank account or cut a check on closing day with little to no lag time. Make sure to check with your attorney or real estate agent, though—they’ll be able to provide specific details on the process for your sale.

How long do I have to move out?

Answer: 0 days, except by special agreement

Typically, sellers are expected to move out by the day they close on the home so the new buyers can move in as soon as they’ve signed on the dotted line. Most people move out in advance of the close, but if you need more time, you can negotiate a rent-back agreement, which allows the new buyers to essentially become your landlords for a few months while you find a new place to live. But considering how long the home-selling process takes, odds are you’ll be chomping at the bit to get out!

4 Ways to Survive Future Real Estate Market Crashes

market-crash-1

 

BY LARRY ALTON

The real estate market may be very healthy compared to what it was five years ago, but that doesn’t mean we’re in some sort of eternal bliss. There will be rough patches ahead — and likely a couple more crashes in your lifetime — but how can you as an investor safeguard yourself against them?

4 Ways to Protect Yourself

“Historically, economic activity rises and falls in marked business cycles,” senior market strategist Susan Green explains. “Periods of recession appear and recede approximately every 5-10 years.” Thus, it’s reasonable to expect that we’ll encounter some economic issues in the next few years. They may not be as dramatic as what happened in 2008, but reverberations will likely be felt in the real estate market.

Luckily, there are a few ways you can protect yourself.

1. Buy properties that rent below the median.

You have to think one step ahead of the market. While it’s a good rule of thumb to have the best property on the street, you don’t want to be stuck charging a rent that’s higher than the median in the area. This may be fine during times when the market is healthy, but you’ll get swallowed up when the market falters.

People still need a place to live in a down market, but they’re naturally going to gravitate towards what they can afford. By purchasing properties that rent below the median, you can maintain steady occupancy rates, regardless of what’s happening in the larger economy.

brrrr-strategy-deal-1

2. Be the best landlord possible.

It pays to be a good person. When you’re a likeable landlord who works with people, deals with maintenance issues in a swift manner, and charges affordable rent, people are more likely to stick with you when the market turns.

Related: How to Make Money in Real Estate — Whether You’re in an Up OR Down Market

On the contrary, if you’re a jerk and tenants are just renting from you because you were the only option at the time, they’re going to bolt the moment they can. Focus on building a strong reputation now so that you’re better equipped to survive a potential crash.

3. Be realistic with cash flow numbers.

When purchasing a new property, it doesn’t do anyone any favors to plug in vague numbers to determine monthly cash flow. Be conservative and honest.

“You should sit down at the computer, open a spreadsheet, and factor in all your expenses,” real estate investor Jason Hanson says. “What is insurance going to cost? Is there an HOA fee on the house? Are you getting a home warranty? You want to know down to the penny what your cash flow will be on a property.”

When the market does eventually take a downturn and rental rates decrease, you’ll at least know that you have some play in your numbers. On the other hand, if you were liberal with your computations, you’ll find yourself underwater in very little time.

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4. Pay down mortgages when possible.

There’s always the question of whether it makes more sense to pay down on an existing mortgage or put that money into a new piece of real estate. While there are schools of thought that apply to both, consider paying down rental property mortgages when you can. This gives you some leverage if the market crashes and you have difficulty making payments.

Related: The Best and Worst Markets for Residential Real Estate Investors, 2016

 

Never Put All of Your Eggs in the Same Basket

At the end of the day, financial diversification is your friend. Real estate may be one of the more stable and appreciation-friendly investments you can make, but don’t put everything you have into real estate. Spread yourself out a bit and diversify as much as possible. This mitigates your risk and provides more tolerance in a down market.

How to Create a Warm, Inviting Winter Listing

By Patti Stern, PJ & Company Staging and Interior Decorating

patti-image

A Welcoming Curb Appeal

Maintain a polished look by keeping gutters clean and shrubs trimmed. Be sure to also remove any hazards by shoveling, sanding, and removing any ice or snow from the driveway, walkways, and sidewalks. To engage buyers on a gloomy day, keep the front porch well lit, use potted evergreens or berry branches, a wreath on the door, lanterns, and a seasonal welcome mat.

Simple and Elegant Holiday Decor

Do not overdo! Buyers want to see the home’s permanent features and a fireplace or window covered with too many ribbons and stockings will distract from key focal points. Instead, incorporate elegant finishing touches such as mercury glass votives and ornaments for some sparkle paired with candles, pine cones, berries and twigs.

Create Warmth With Lighting

Use modest lighting as an accent to create an inviting ambience. Scatter a few lightly scented tea lights in votives, candles in varying heights on beautiful pillars or lanterns and soft white string lights on the front porch, entry stairway or fireplace.

Splashes of Minimal Color

Too much traditional green and red can compete with existing decor and command a room’s attention. A couple of red plaid throw pillows or a red wool blanket draped on the sofa will add just enough festive pop. We also love using silver and gold paired with fresh, white seasonal flowers to complement freshly painted neutral walls that appeal to nearly all buyers.

Keep It Bright

With shorter days, let in as much natural light as possible by opening blinds and curtains. Make sure that all lights are working, light bulbs have been changed, and be sure that the property is well lit both inside and out for late afternoon showings.

How To Know If You’re Ready To List Your Home

By Danica Ro

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Image: Chris Snook

Even the happiest of homeowners sometimes find themselves wishing for a better option. When you spend hours each week maintaining a sprawling lawn or have to trip through a living room littered with the kids’ toys, it’s easy to dream of listing your current property and purchasing a new home.

When the idea to list their home starts to become serious, many people find that the decision is much harder than they anticipated. Listing a home (and subsequently finding a new property) is a hefty commitment of time and money. And, you know, a little thing called ‘stress’.

How can you know if you’re ready to list your home? We’ve laid out a few key points to help you understand your situation and make a confident decision.

 

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Image: American Artisans Designers & Fabricators

Does your home fit your needs?

As time goes on, our lives change. In a perfect world, the homes we love would grow and change with us in order to fit our lifestyles; a new addition to the family, a longer commute to a relocated office, or an elderly-friendly space for an aging parent. Unfortunately, the ability to morph our homes so greatly is rarely the case.

And so, one of the biggest signs that you’re ready to sell your home is if it no longer suits your needs. After all, who wants the headache of constantly retrofitting a space when you could find one that already fits your family comfortably?

Making a pro and con list of your home’s features is an easy way to see if your needs are being met. Start with the big-ticket items — a lack of necessary bedrooms or a larger kitchen, and work your way down to the more trivial points.

When you’re finished, you should be able to see very clearly whether it makes more sense to sell your home or to stay put.  

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Image: Terrrat Elms Interior Design

Do you know your home’s current market value?

The real estate market is constantly fluctuating, which can be a hard truth for sellers to accept. Your home’s sale price in the current market may not match the price at which you bought the property.

Obviously, this can be a good thing if the market is stronger now than when you first purchased. But, if you mortgaged the property at a high sale price and now need to pay off that mortgage when values are low, selling your home can become a bit more difficult.

Contact a real estate agent to determine your home’s current value. After taking a thorough look at the property, he or she will generate a Comparative Market Analysis for you. This report takes your home’s condition, upgrades, size, and location into account and compares it to similar properties that have recently sold in order to give you a fair price point.

If you find that sale prices have decreased drastically but you’re desperate to move, consider doing some upgrades. Assets such as a remodeled kitchen, a finished basement, or a central air system are all taken into account when judging a home’s sale price.

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Image: Feldman Architecture

Are you financially capable?

Potential sellers often assume that since the buyers are the ones purchasing the property, they are the only ones making a commitment. This is not the case. While the sellers’ financial responsibility in the transaction may not be as large, there is a cost. Before deciding to sell, make sure you have the ability to make payments, if necessary.

Verify that you will be able to pay off your mortgage at the current sale price. Make sure you will have enough money left over after settlement to cover your new living arrangements. Set aside a lump sum to pay for any necessary repairs after inspections and leave a little extra for unanticipated costs that can and will pop up along the way.

However, sometimes the decision to sell your home is a step towards financial security. If you are putting your home on the market to avoid foreclosure or bankruptcy, your concerns are a bit different.

You’ll want to contact a real estate agent who specializes in short sales: a type of transaction where the bank agrees to forgo some of the money owed on a mortgage to keep the owner from defaulting on a loan entirely. Make sure to list your property “as-is” when marketing it, so potential buyers know you won’t be making repairs. Be honest about any financial changes throughout the course of your transaction.  

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Image: Murphy Co. Design

Have you made the repairs on your to-do list?

Every home has a never-ending to-do list of chores and improvements. When you need to decide whether or not you’re ready to list, it’s time to start checking items off.

These small fixes could help make your decision easier. Once you’ve finished the list, ask yourself whether they have improved your overall opinion of your home. If so, has it improved it enough to convince you to stay?

Even if the answer is no, making these small household improvements will work to your advantage. An improved condition could mean an increase in property value. Additionally, since buyers inspect the property and take necessary repairs into account during contract negotiations, making the repairs ahead of time will put you in a stronger bargaining position.  

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Image: Clean Design

Do you have a plan for the future?

This may sound obvious, but it’s important enough to bear repeating. It’s easy for potential sellers to be swayed by the prospect of being given hundreds of thousands of dollars for their current property. That is because they don’t always put enough thought into what they’d like in a new home and the associated costs. Before listing your property, take the time to think about your next step.

Think about factors such as location, property size, the amount of maintenance you’d like to perform, and financial concerns like property values and yearly taxes. If you have a growing family, you may want to research the quality of the school districts before settling on a location. For those concerned about maintenance-free living, consider a condo or townhome community rather than a single-family property.

Start planning by having a discussion with your family members about what qualities are important in a new home. Take time to look at properties online to get a feel for your likes and dislikes. Once you have a specific area in mind, spend some time there to get a sense of the community. If you like what you find, contact a real estate agent to help get you ready for the next step.

When deciding whether or not to list your home, there is no right answer. Use these points as a starting guide for how to determine if you’re ready to sell. Whether you end up selling or staying just make sure that you are comfortable and secure in your final decision.

When did you know you were ready to sell your home? Or, what made you decide to stay? Let us know in the comments below, or reach out to us on social media.

View the Same Property Staged 3 Different Ways

By Saghar Setareh, CoContest guest contributor

How can you know the best style for staging a property? After all, you’ll need to satisfy home buyers’ various style tastes as well as make sure you’re showing the property in its best light.

Thanks to the power of the Internet, we wanted to see just how much the point of view in staging of properties can vary. We asked for designers to upload their take on one floorplan at the CoContest website. All designers staged the same room, but recreated it differently based on their own style and taste and interpretation of the client’s request in the contest.

The challenge: This modern apartment in Connecticut needed to be renovated, in a way to enjoy the artwork during the gatherings of family and friends.

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Photo courtesy: CoContest

Design 1: Classic Vibe

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Designed by Decolite Design

This room offered up a more classic appeal. The designer Decolite Design used a crystal chandelier for the main lighting, colonial furniture for the main living room, black chesterfield sofas with white armchairs, and a large, white rug. The artwork is also from the classic period. The pallet of colors is black and white, and a piano along the wall also helps to complete the look.

Design 2: Bold Artwork

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Designed by Marta Valence; Photo courtesy: CoContest

This designer Marta Valente above used bright and saturated colors in the artwork to compliment the two dark sofas and white and mustard color chairs. In order to add a more modern and industrial look to the space, a wooden table with metal legs was brought in. To complete this look, the wall has gray bricks and there’s a colorful buffet in stripes along one wall.

Design 3: A Modern Touch

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Designed by BIVIO Architettura. Paula Godoy & Celia Cardona; Photo courtesy: CoContest

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Designed by BIVIO Architettura. Paula Godoy & Celia Cardona; Photo courtesy: CoContest

Another designer BIVIO Architettura. Paula Godoy & Celia Cardona used very modern furniture from the late 20th Century, puffs, and large paintings to work as a separator. Texture is also used in the modern furniture and couches to match the abstract paintings on the wall. Low, coffee table and cushions are also part of this look. But the most distinctive feature of this project: The vertical bars that divide the living room in two separated parts.

 

These are only three design ideas from many, that present the property in three, completely different styles, made possible to imagine how the property would look like, with a convenient price.

 

Make Magic Happen: Home Staging Ideas for the Bedroom

By
Jennifer Kelly Geddes

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Peter_visual/iStock

If you’re selling your home and want to use some tried-and-true home staging ideas to make it stand out, you can work some major magic in the bedroom. At their best, bedrooms can make buyers dream of drifting off under the sheets. At their worst, they can wake them up to an idea that they could never, ever feel at peace in your home.

So here’s how to stage your bedroom so it feels calm, cozy, and ultimately irresistible to anyone who sets foot inside.

Keep it single-use

With the exception of master suites with separate sitting areas, bedrooms should be staged as a single-function room, recommends Amy Bell, an interior decorator with Red Chair Home Interiors in Cary, NC.

“A desk or treadmill in the bedroom sends the message that there are not enough rooms in the home,” she notes.

Also, make sure the bed is the right size for the space, says Lisa Gulliver from Showhomes: “A bed that’s too big makes the room feel small, while one too small feels bare.”

A standard queen, which is about 5 by 7 feet, needs a room that’s at least 10 by 10 feet to leave enough space to get around it and add a few other pieces of furniture.

Focus on the bed

The point of a bedroom is not a roaring fireplace or an enormous flat-screen TV, points out Jonathan Rosen of the Rosen Berry Group in Dallas. Arrange the furniture so the first thing you see is the bed.

If you have the space, add a comfortable wingback chair with a stool or ottoman in the corner to create a reading nook, suggests Gale Sitomer of G Sitomer Interior Design in New York City.2

Bedroom staging secret: This is really where the magic happens. Alex Kroke Photography

Refresh your linens

No one wants to buy a house with an old bedspread or rumpled sheets and blankets—so make your bed already! And when it comes to choosing colors, Gulliver says homeowners should avoid dark shades and heavy patterns like paisley. Instead, pick a neutral, light-colored comforter with simple, decorative pillows.

“This arrangement photographs well and looks comfortable,” she says. A simple headboard in a classic rectangular shape is the safe bet. But if your bedroom doesn’t have one, prop up two European-style pillows against the wall for queen beds (three for a king) to give your bed a finished look, says Bell.

Check the lights

Open the drapes at every showing; however, if it’s a night viewing, dim the lights for a warm glow, notes Katie McCann, an organization coach at Maeve’s Method.

Reassess lamps and other lights, and upgrade where necessary. “Have different types of lighting—both overhead and accent—in the bedroom and note that bedside lamps are a must,” says Sitomer.

Clean out closets

Bedroom storage (or lack thereof) is a typical deal breaker, so another home staging must is to make sure your closets are not overstuffed, says Sitomer. There should always be space between hangers, and the folded items should be neat and organized.

Have a spare room? Add a bed

When in doubt about an extra room in the house, set it up as a bedroom.

“Especially in smaller homes, any room that legally qualifies as a bedroom should be staged as one,” advises Bell. If you have a catch-all room and aren’t sure whether it should be presented as a home office or bedroom, opt for a bedroom and you’ll never go wrong.