by Carla Hill

You’ve finally decided that now is the time for you to jump into the housing market! Perhaps you’ve done the math and want to take advantage of historically low interest rates and high levels of affordability. Maybe you have a new family that is quickly outgrowing your little rental. No matter the reason, buying real estate is a big responsibility.
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There are several rookie mistakes that many first-time home buyers can make. Keep reading for how to avoid them!

First, first-timers underestimate the importance of finding the right real estate agent. Not all agents are equal. Not only do their experience levels and commission rates vary widely, but every agent has their own unique personality. You want to be sure you find an agent that you feel comfortable with and that you respect.

In order to find the best fit agent for your needs, set up several interviews with local agents. Ask them about their business. Do they have a cell number where you can reach them? Do they web conference on days you can’t meet? How often do they send prospective homes to buyers? Be sure to ask for testimonials and references. Finally, just get a feel for how your two personalities will mesh. Does the agent seem to have your best interest at heart? Are they giving you the respect you deserve or treating you like a dunce?

Next, a common mistake for first-time agents is to consider what type of home you want. If you know ahead of time what you are looking for, the price range, as well as what you’re willing to compromise on, you’ll be much more likely to make a decision quickly about buying a specific home.

This is important for two reasons. You don’t want to make an impulsive decision, but you also don’t want to wait so long that someone else swoops in and buys the house before you can make an offer!

The third mistake is not considering that a home is an investment — one where you don’t want to lose your shirt down the line. Is this home priced right? Compare it to other similar homes. Is this home in a desirable location or is it next to a busy street, etc? Will is require a lot of work? When you go to resell this home, you want to make a profit or break even.

You’ll need to consider that you’ll probably pay an agent a commission and will be paying closing costs at selling time. This is extra money on top of what you need to make on the sale of the home to break even.

Most experts say you need to stay in a home for at least 3 to 5 years in order to break even. This time frame could be even longer if home values continue to fall. Remember, homeownership is a long-term investment

Next, ask your lender lots of questions and be proactive about finding the best deal. Different lenders will offer you different rates. Research your options. Would you be better served with a 15-year or 30-year note?

Ask lots of questions about the difference between adjustable and fixed rate mortgages. Learn about points. Find out how much interest you’ll pay over the life of the loan. The lender is there to serve you, so don’t be shy about getting the information you need.

Finally, don’t be greedy or low-ball sellers. This may be a buyers market, but if you offer too little or ask too much in concessions you may turn the seller off. They don’t have to sell their home to you!

Avoid these common first-time buyer mistakes and you’re sure to have a fun and rewarding buying experience!

By Melissa Dittmann Tracey, REALTOR® Magazine

It doesn’t have to cost a fortune to improve a home and make it more sellable, according to HomeGain’s 2012 National Home Improvement Survey.

HomeGain surveyed nearly 500 real estate professionals nationwide to determine the top do-it-yourself home improvement projects that offers some of the biggest bang for your buck when selling a home.

“In a buyer’s market, sellers need to dress their homes for success before putting them on the market,” says Louis Cammarosano, HomeGain’s general manager. The survey shows “that do-it-yourself home improvements like cleaning and de-cluttering and lightening and brightening your home are cost-effective ways of increasing your chances of selling faster and closing closer to the asking price than homes rushed to the market with no improvements.”

Here are the top five projects that real estate professional recommend to their clients–projects that have the potential to offer some of the highest returns on investment at resale, according to the 2012 HomeGain survey:

1. Clean and declutter

What to do: “Removing personal items; wash and clean all areas of inside and outside of house; freshen air; remove clutter from furniture, counters, and all areas of the home; organize closets; polish woodwork and mirrors.”

Estimated cost: $402

Potential ROI: 403% or $2,024 to the home’s sale price

2. Lighten and brighten

What to do: “Open windows; clean windows and skylights inside and outside; replace old curtains or removing curtains; remove other obstacles from windows blocking light; repair lighting fixtures; make sure window open easily.”

Estimated cost: $424

Potential ROI: 299% or $1,690

3. Repair electrical and plumbing

What to do: “Update leaky or old faucet spouts and handles; repair leaks under bathroom or kitchen sinks; laundry room pipes; toilets should be in good working condition; remove mildew stains.

“Update electrical with new wiring for modern appliances and/or Internet and other audio/visual equipment requested in homes today; door bell should work; service sprinkler systems; fix lights and outlets that do not turn on; replace old plug points with new safety fixtures.”

Estimated cost: $808

Potential ROI: 293% or $3,175

4. Landscaping

What to do: “Front and back yards; add bark mulch; rake and remove leaves, branches and debris; plant bushes and flowers; add planters and hanging plants; mow grass; water lawn and plants; remove weeds and dead plants; manicure existing plants; any yardwork that improves the curb appeal of a home.”

Estimated cost: $564

ROI: 215% or $1,777

5. Staging

What to do: “Add fresh flowers; removing personal items; reduce clutter; rearrange furniture; add new props or furniture to enhance room/s; play soft music; hang artwork in walls.”

Estimated cost: $724

ROI: 196% or $2,145

However, the survey finds that the home improvement projects that offer the highest potential price increase to a home’s resale value continues to be updating the kitchen and bathroom. Home sellers could potentially see a $3,255 price increase to their home at resale by tackling kitchen and bathroom projects, according to the HomeGain survey. But those projects aren’t usually cheap to do. Check out our post earlier this year about the 2011-2012 Cost vs. Value report to see what home remodeling projects offer the biggest potential returns at resale.

By Melissa Dittmann Tracey, REALTOR® Magazine

Springtime is the best time to give a home a fresh coat of paint, according to the Paint Quality Institute.

“By painting in moderate weather, you’ll likely get a longer-lasting paint job,” says Debbie Zimmer, paint and color expert for the Paint Quality Institute. Zimmer says that exterior painting is best to do when temperatures are above 50 degrees Fahrenheit, but not when it gets too hot. “Very hot days can cause the paint to dry too quickly and impair good paint film formation,” she notes.

Some more tips for exterior painting from Zimmer:

1. Paint in the shade and avoid painting in direct sunshine. Sunlit surfaces can be 10 to 20 degrees hotter than the air temperature.

2. Don’t paint when it’s too windy. Wind can cause latex paint to dry too quickly as well as cause dust and other contaminates to imbed in the paint, possibly creating a surface ripe for mildew, Zimmer says.

3. Avoid the rain. Wait for another day if it’s rained within the last 24 hours. If several days of rain is forecast, postpone your painting for several days until a rain-free week.

4. Prime the surface. Apply a coat of primer to any new surface that has never been painted, or spot-prime areas where paint has worn away, Zimmer suggests.

5. Don’t skimp on paint. Use top quality 100 percent acrylic latex paint. It’s durable, flexible, colorfast, and can often last 10 years or more compared to ordinary paint, Zimmer says. To make the paint last even longer, apply at least two coats–a coat of primer and coat of paint, or two coats of house paint, she adds.

6. Don’t postpone painting. Postponing painting the exterior of a home that is long overdue can actually cause damage to a home. Exposed wood can begin to rot and other types of exterior siding also can suffer when the paint starts to wear off, Zimmer says.

On April 9, 2012, in Home Trends, by Melissa Tracey

By Melissa Dittmann Tracey, REALTOR® Magazine

Creativity and cost-savings are the main themes driving new-home design trends today, according to the National Association of Home Builders.

Here are some of the latest new-home design trends, according to NAHB:

1. “Pocket offices.” More space is being added to popular family gathering places like the kitchen and family room. As such, space devoted to formal home offices and dens are falling to the wayside. Instead of a formal home office, more new homes are incorporating a small space devoted to home management, known as “pocket offices.” These pocket offices may be anywhere, even included in a large pantry. They also might be tucked away near the kitchen or family great room. Most people today are mobile with their electronics and home office items anyway so they might not need as big of space to spread out and a “pocket office” may suffice.

2. Tucked away relax spots. Window seats and alcoves are increasing in new homes because they don’t take up much space but can still provide some private time.

3. Master laundry rooms. Laundry rooms are being added onto the master bedroom’s walk-in closet for added convenience.

4. “Shadow” units. As more families live together under one roof, “shadow” units are increasing in popularity in new single-family homes. These units may be built alongside a home and operate as a separate living unit accessed through a door from the home’s main floorplan. Shadow units may also include homes that come with at least two master suites, such as one located on the ground floor and one upstairs.

5. Rectangular home designs. Rectangular home designs are increasing in popularity because they are more cost-effective to build. The trend was once grand, multiple roof lines. But to make rectangular designs appealing, these homes may have two windows in a corner with mitered glass to allow unobstructed views and light to flow in, according to NAHB. Or these homes might mix exterior materials, such as with metal, wood, and stone to give the home a more modern look.

March 2012 | By Erica Christoffer

Optimizing the use of space in a home will not only attract buyers but also give sellers more bang for their buck, according to Remodeling’s “2011–12 Cost vs. Value Report,” conducted in cooperation with REALTOR® Magazine and NAR’s HouseLogic.com.

An attic bedroom addition costing $50,148 was expected to recoup 72.5 percent of the cost nationally—inching up 0.3 percent from the 2010–11 report. The minor kitchen remodel also fared well, returning an estimated 72.1 percent of the nearly $20,000 job cost.

The report looks at the estimated cost and expected resale return of 35 midrange and upscale remodeling projects in 80 markets. The estimated costs and returns were derived from a survey of more than 3,000 REALTORS® conducted last summer. As in past years, REALTORS® picked exterior projects to recoup the most at resale. Among those, new fiber-cement siding was expected to provide the highest return, recouping an estimated 78 percent of the $13,461 cost.
Top 6 Returns

Siding Replacement (upscale) – fiber-cement
Job Cost: $13,461
Resale Value: $10,493
Cost Recouped: 78%

Entry Door Replacement – steel
Job Cost: $1,238
Resale Value: $903
Cost Recouped: 73%

Attic Bedroom Addition
Job Cost: $50,148
Resale Value: $36,346
Cost Recouped: 72.5%

Kitchen: Minor Remodel
Job Cost: $19,588
Resale Value: $14,120
Cost Recouped: 72.1%

Garage Door Replacement
Job Cost: $1,512
Resale Value: $1,087
Cost Recouped: 71.9%

Garage Door Replacement (upscale)
Job Cost: $2,994
Resale Value: $2,129
Cost Recouped: 71.1%

Remodeling’s2011-12 Cost vs. Value Report ©2011 by Hanley Wood, LLC. Republication or redissemination of the Report is expressly prohibited without written permission of Hanley Wood, LLC.“Cost vs. Value” is a registered trademark of Hanley Wood, LLC.Visit www.costvsvalue.com for information on all 35 projects. There, you can also download a free PDF providing information on average cost and resale value nationally, regionally, and in a specific market. Estimates for construction costs were compiled by HomeTech Publishing.

Daily Real Estate News | Thursday, March 29, 2012

An improving economy is contributing to a gradual rebound in home prices across the country, according to mortgage giant Freddie Mac’s 2012 Economic Outlook report, released Wednesday. But there is still a way to go in the road to recovery for the housing market, the report noted.

“The housing market is showing some signs of shaking off the depression-like conditions that have plagued it for much of the past few years,” according to the report. “As if awakening from hibernation, housing starts and home sales moved to higher levels of activity.”

In fact, the signs have prompted Freddie Mac to revise its forecast upwards for home sales and originations. One economic contributor that’s helping to stabilize housing: The drop in the unemployment rate to 8.3 percent, its lowest level in three years, according to the report.

“A variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery … and more neighborhoods may see a stabilization in overall demand and housing values this spring,” says Frank Nothaft, Freddie Mac’s chief economist.

Median home sale prices are up, despite a slight drop in new and existing home sales, Freddie Mac reports. About a half of the increase in housing starts has been for construction of rental apartments in multi-unit buildings to meet the increasing demand, the report notes. New rental construction, at its current pace, is expected to reach its highest level since 2005.

“Housing starts continue to run below net household formations [and will allow for absorption of existing vacant homes],” according to the report.

Source: “Freddie Mac: Economic Growth Expected to Stabilize Housing Market,” Dow Jones Newswires (March 28, 2012)

Daily Real Estate News | Friday, March 23, 2012

Bank of America announced this week that it will make an offer to a select group of its borrowers who face foreclosure: You can stay in the property, but you’ll have to rent it instead.

The bank’s pilot program, known as Mortgage to Lease, will launch in New York, Nevada, and Arizona, and be offered to about 1,000 of the bank’s borrowers.

For home owners who participate, they will still have to relinquish the title of their property. In return, Bank of America will forgive their mortgage debt and allow them to rent the home for up to three years. The rental payments for the home will be at — or below market rates — and the payments will be less than what the borrower paid in monthly mortgage payments.

The bank, which will then have title to the property, would eventually resell the homes to investors.

“If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtail neighborhood blight by keeping a portion of distressed properties off the market,” says Ron Sturzenegger, Bank of America Legacy Asset Servicing executive, about the pilot program.

Source: “Bank of America Tests Rental Program as Alternative to Foreclosure,” The New York Times (March 22, 2012)

Daily Real Estate News | Thursday, March 22, 2012

The U.S. Supreme Court handed private property owners a victory yesterday with a decision allowing a couple to appeal an EPA ruling that their property contains a wetlands.

The court’s decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.

The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA’s wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities, as EPA directed them to. Noncompliance with the directive can subject violators to fines of up to $75,000 a day.

Lower courts have sided with the EPA, saying the agency’s compliance orders aren’t subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it’s appropriate to allow parties to contest agency decisions before having to first comply with the order.

NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.

In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.

The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn’t be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.

With the Supreme Court decision, the Sacketts can now get their day in court.

By Robert Freedman, REALTOR® Magazine

Daily Real Estate News | Friday, March 09, 2012

For the sixth consecutive quarter, the apartment and condo housing market continued to show signs of improvement.

The Multifamily Production Index, released by the National Association of Home Builders, measures builder and developer sentiment about current market conditions in the sector. The index reached 48.9 in the fourth quarter — out of a scale up to 100 — and reached its highest reading since the fourth quarter of 2005.

“The apartment and condo sector continues to be a bright spot in the housing market, with the overall index at its highest level in six years,” says David Crowe, NAHB’s chief economist. “The rental components have been the driving force behind the increased index level. And although the for-sale component remains weaker, it is still double what it was just six quarters ago.”

Still, the improvements are met with caution. Builders warn about the ongoing difficulty developers have faced in obtaining credit to finance development of new apartments as a major roadblock.

Source: National Association of Home Builders

Pricing your home realistically will most certainly get potential buyers through the door, but how do you get them to fall in love with the home? A recent article at U.S. News & World Report offers some of the following tips for sellers in enhancing their home’s appeal.

1. Add curb appeal: “Make sure the house is cleared of winter clutter, that windows are washed, that the front door is painted or clean,” says Brad Knapp, regional vice president for the National Association of REALTORS® for Ohio and Michigan. “You have to give the house good curb appeal.”
2. Declutter: Remove clutter from the home so that buyers can actually see what all the home has to offer. Any excess belongings of the sellers should be stored in the garage or in a storage unit.
3. Be careful not to offend: “Hunters and fisherman often have game hanging on the walls,” Knapp notes. “Some people are offended, so get that off the walls and into the garage.”
4. Consider staging: “It might behoove [sellers] to hire a professional stager to help them,” says Robert Simon, a professor at Cleveland State University. “You have to get it right so it looks lived in, but definitely not cluttered.”
5. Complete routine maintenance: Make sure your sellers complete any routine maintenance projects before the home is listed. Also, sellers need to realize that “people don’t care if you spent $15,000 fixing the roof. It’s worth nothing,” Simon says. “The market expects the roof to be in tip-top shape. You have to go above and beyond.”

Source: “Steps You can Take to Boost Your Home’s Value,” U.S. News & World Report (March 5, 2012)