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.
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?
o Are there visible cracks on the outside walls?
o Are there any trees near the foundation?
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?
Appliances: (If included)
o Do the appliances appear to be well-maintained?
o What are the ages of the:
o Are there any leaks under the sinks (bathrooms and kitchen)?
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?
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?
o Are there any unusual noises?
o Do the faucets and other fixtures have enough pressure?
o Check all of the following elements for signs of damage or wear:
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.
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:
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.
New year, new home improvement projects? Whether you’re dying to update your kitchen, add a half-bath, or kick back on a brand-new deck, it pays off big-time knowing just what kind of return on investment your dream renovation might deliver. And you’re in luck, because Remodeling magazine has just released its annual Cost vs. Value report, which analyzes what you’ll pay for various upgrades—and how much you’ll recoup on that investment when you sell your home.
For this much-read report (which, by the way, is celebrating its 30th anniversary), researchers scrutinized 29 popular home improvements in 99 markets nationwide, polling contractors on how much they charge for these jobs as well as real estate agents on how much they think these features boost a home’s market price. From there, they divided each project’s upfront cost by the home’s resale value; the resulting percentage gives you a sense of how well each particular reno “investment” pays off.
There wasn’t a lot of change between the 2017 report and its 2016 predecessor, with most projects retaining their value.
But what is noteworthy is that the value of pricier projects rose significantly over last year, says Craig Webb, editor of Remodeling. He believes this indicates that the housing market is healthier and more bullish than ever.
“When the market is hot, Realtors® are more likely to give value to more expensive renovation projects, because they expect that the market will stay hot and people will pay the price,” he explains. “When the market is cool, Realtors tend to put less value on those big-dollar projects, because they have concerns about whether the house will get sold in any state.”
Still, the perennial chart toppers for ROI are the cheapest to pull off. This year (as last), the No.1 finisher was installing loose-fill fiberglass insulation in the attic. Not exactly sexy, but boy, is it cost-effective! In fact, this is the only project that regularly pays back more than you invest, with an average 107.7% ROI.
This pink insulation won’t put you in the red.DonNichols/iStock
Next up is replacing a run-of-the-mill entry door with an attractive yet tough steel replacement at 90.7%, followed by manufactured stone veneer at 89.4%. Glamorous, no. Valuable, very.
Yet homeowners all need to come to grips with the fact that most renovations won’t pay them back in full. On average, in 2017, you can expect to get back 64% on every dollar you plow into home improvements (same as last year).
Plus, your returns will vary widely by project—and sorry to bring your expectations down another notch, but the payoff on big, alluring, “HGTV-ready” renovations isn’t so great. Adding a bathroom, for instance, will bring only a 53.9% ROI when you sell; a master suite, 64.8%.
Top renovation trends nationwide
Remodeling’s report also points to broader renovation trends that seem to be catching on nationwide. One definitely worth watching is energy efficiency—including simple jobs like adding insulation.
“We added [the category of] attic insulation only last year, and we were surprised at how well it did,” Webb says. Similar projects are installing better-insulated windows and doors.
One new category this year speaks to another hot trend: universal design, which ensures that a home’s features can be used just as easily by the elderly and disabled as anyone else. That means things like grip bars in showers, lever-style doorknobs, and wider, wheelchair-friendly doors. A universally designed bathroom, for instance, reaps a respectable 68.4% ROI.
“This is the first year we’ve included universal design, and it’s truly a rising category,” says Webb. “It’s based on a growing desire to age in place and a greater awareness of people with disabilities.”
Last but not least, the 2017 data suggest that “curb appeal” projects (such as new doors and exterior siding) generate higher returns than improvements done on a home’s interior. In other words, it really isn’t what’s on the inside that counts. If you’re trying to sell, pretty up the outside and it’ll pay off in spades.
How to decide if you need to renovate
Fancy new garage doors could be a good investment depending on where you live.hikesterson/iStock
So if you’re now sitting there scratching your head wondering which upgrades to make, take a step back and ask yourself this question first: How long do you plan to live in your home?
“If you see yourself keeping the house for at least five years, you shouldn’t worry about value at all,” Webb says. The reason: Housing trends and fads can change dramatically in this amount of time, so what’s hot today could be passé all too soon. So if you plan to stay put, renovate however will make you happy, period.
If, on the other hand, you’re planning to sell in less than five years, “then looking at the return makes sense,” says Webb. Just keep in mind that tastes vary widely by location, so it’s important to pinpoint what’s hot in your area (which is why Remodeling breaks down its data into nine U.S. regions). For instance, composite decks may be big in the Midwest, whereas the South is gaga over new garage doors. As Webb points out, “Every one of the 29 projects had at least one market where the payback was over 100%. So every project got love somewhere.”
Check out this chart below to get a sense of how much various midlevel renovations will cost, and pay you back down the road.
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.
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.
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.
By Patti Stern, PJ & Company Staging and Interior Decorating
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.
By Danica Ro
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.
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.
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.
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.
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.
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.
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.
Design 1: Classic Vibe
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
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
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.
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.
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.