Home improvements that turn off buyers

I’ve written multiple times on the home improvements that add the most value and the areas you want to focus on to attract buyers.  I found a great article on what could possibly turn buyers off, those improvements or features that might cause your home to sit on the market for a lot longer than you expected.  So if you do need to make one of these changes, consider your market and possibly try to convert it back prior to listing.  I’m focusing on a few that may affect more Chicagoland buyers.

1. Inserting a motorized stair lift.  Of course, this may be a necessary feature for someone who can no longer climb the stairs.  But for buyers that do have disabilities and are looking for a home, most buyers are looking for a ranch-style home, and they often search for homes that have a first floor master  bedroom and full bath.  You may also be competing with communities that specialize in low-maintenance living and those for ages 55 and over.

2. Converting a bedroom to a home office.  I’m not saying not to do it.  Trust me, I have one myself.  I’m saying that if you do, you could hurt your resale by not converting it back for showings.  If you have a 3-bedroom home and only 2 of your bedrooms look like bedrooms, many buyers may be turned off.  It’s best to put your desk and computer away and put a bed back in.  Now some people really upgrade a home office with flat-screen televisions, custom lighting, etc.  This would hurt your resale value a lot more, especially if it’s taking up a bedroom space.  If this is a location in an area of the basement that isn’t taking up a space meant for something else, you should be fine.

3. Converting a room to a hobby room.  This is a similar scenario to having an office in a bedroom.  I’ve come across lots of bedrooms that are now knitting rooms or scrapbooking rooms or pottery rooms.  Again, move that space somewhere like a basement, where it’s not taking up a bedroom.  Your home could sit on the market several months longer because of this.  

4. A home theater.  This I’ve seen quite often.  Oh, they’re nice features to have.  I’ve even seen mini movie theaters complete with theater chairs, popcorn machines, etc.  While it may not turn off a ton of buyers, it can put the home out of budget for many that weren’t expecting that feature to begin with.  You may price your home higher to recoup the $8,000-$15,000 it cost to install, but it will be hard to make that money back on a sale.

So if you are considering a major home improvement or upgrade, it’s best to consult with a Realtor prior to spending any money, just to get an opinion on resale value and how much you can expect to recoup when it is time to sell.  If you need to reach me, find me via my Web site.

Get those buyers in before winter

As the cooler and colder weather is starting to breeze through the midwest, we’ve reached the part of the season that might be the end of regular home showings through the holidays.  If you have your home on the market to sell, here are some tips to get it shown and sold prior to wintertime, according to this AOL article.

First of all, the number one tip this article stresses is that, if you don’t have to sell over the winter, don’t.  If you’ve ever sold a home before, you know that you’ll get a lot less showings in the winter because of the weather and the holidays.  People don’t want to go out traipsing through snow and sleet to look at homes unless they have to.  So if you don’t have an urgent need to sell, you might consider taking it off the market until after the holidays or early spring.  We always say after the Super Bowl is a good time to get it relisted.

 1. Keep your photos updated.  Just like it’s important when your home is for sale during June to remove the pictures of the snow-covered driveway, it’s equally important to do the opposite.  If you’ve been listed since April with a green lawn and trees in full bloom, you’ll want to switch photos to that showing some snow and the way the interior looks with the light on.  You don’t need to make it obvious through your photos how long your home has been on the market.  You might also want to consider updating your remarks to reflect upon the new season and the holidays, such as, “You’ll love winter mornings nestled in front of your gas fireplace.”

2. Target your specific buyer.  Is your house just a few-minute walk to the local elementary school?  Consider advertising in a PTO or PTA bulletin.  Located 3 minutes from the commuter train station?  Post a flyer there.  If you have farmland with horse stables, you might want to advertise in an equestrian magazine.  Built a home gym in your basement with a steam shower?  Post a flyer at the local gym.  You get the idea.  Think outside the box.

3. Make your home accessible.  Keep driveways and walkways clear of snow, ice, and leaves so that buyers can easily reach the front door.  Keep the heat on and turn the lights on.  And as I always stress, try not to turn away any showings for any reason.  You never know if that buyer will get a chance to come back at another time.  And they could be the future buyer of your home!

If you have any more tips, I’d love to hear them.  Please leave me a comment or visit me online.

New construction home inspection checklist

My loyal readers know how much I believe in the importance of a home inspection once a home goes under contract or prior to closing.  It lets you take a look at the state of the current appliances and utilities and lets you know what repairs are necessary or to be expected in the future.  What you may not realize is how important an inspection is when you’re purchasing new construction.  You figure since the home is brand new that everything is perfect.  I’ve had clients buy new construction only to move in and find the air conditioning doesn’t work or they have leaky windows.  And given the current economy, it’s possible that some home builders are paying less to find subcontractors who in turn are doing poorer work.

It’s also very important to make sure you hire an inspector that’s not affiliated with the builder.  You’ll want an unbiased independent inspection to make sure everything is working the way it’s supposed to.  Here’s several items that you’ll want to look at:

1. Open all the windows.  Make sure the latches work, nothing is leaking, and that there is no broken glass.  If they have screens, make sure nothing is torn.

2. Check all light fixtures.  Make sure the switches operate and you know what light they turn on and off.  

3. Check all the floors.  Carpeting should be tightly fitted without gaps.  Tile and vinyl should not be cracked or chipped.  

4. Countertops should not be nicked or scratched.  Make sure all toilets are properly secured to the floor by sitting on them.  The tub should be free of scratches, as well.

5. If you have a basement in your new home, check to make sure you don’t see any water damage on the walls or any cracks.  Find out where the water heater, furnace, and air conditioning unit are located and how they work.  

More great tips can be found here.  It’s important to read over your contract to make sure of the period that you’re allowed a home inspection and final walk-through to look for these items.  Some contracts state that any problem you find after closing are not the responsibility of the builder, so make sure to be thorough in your inspection.

I can be reached online with more questions.

Summer selling tips

A couple weeks back I wrote about how to save money by cooling your home.  I’m sure those of you choosing to sell right now would appreciate some tips on selling in the summer months.  While it seems like the housing market is at a standstill, there are plenty of buyers out there now who need to purchase a home.  I just read an article that lots of buyers now are cash buyers, which is good for people selling rentable units, as a lot of these buyers are investors.

1. Keep it cool.  Make sure the air conditioning is on in your home, even if you’re gone – actually, especially if you’re gone.  If the outside air is 75 degrees or higher, I recommending turning on the air.  You don’t have to make it feel like a meat cooler, but make sure it’s cool enough in there so your potential buyers aren’t sweating the second they walk through the door.  If there’s no air conditioning, make sure to put fans in there to circulate the air and open windows.

2. Stage your balcony if you have one.  Make sure you have some colorful flowers and a comfortable place to sit.  A balcony is extremely inviting and not only does it make the balcony look spacious by adding furniture, but it adds to the living space, making the entire unit seem more spacious.

3. Stage the inside.  It’s really hard these days to show a vacant unit.  They seem a lot smaller and lifeless.  You can stage it without spending a fortune by picking up furniture at garage sales or on Craigslist.  You don’t need to furnish it to the nines.  Just enough to put a bed in a bedroom to see how that fits, a dining room table in a dining room, etc.  It really will make the place look bigger.  It’ll be worth the investment.

4. If you live in attached housing, get FHA certified.  This is something that your condo association will need to do, not you individually.  It makes it much more attractive to buyers who use FHA financing, and that represents about 30% or more of buyers these days.  

5. Spread the word.  And this isn’t just for summer.  Yes, it’s your Realtor’s job to market the listing.  But you never know who you might run in to that is looking to move or knows someone looking.  Post ads on your social networking sites, let your colleagues at work know, tell people at church.  

A few more great tips can be found in this article.

Any more tips you can offer those trying to sell in the summer?  I’d love to hear your suggestions.  Please leave me a comment or visit me online.

New program to benefit commuters

With the influx in gas prices, it’s getting more costly to drive your car to work, especially those living in the suburbs commuting to the city and vice versa.  And higher gas prices mean higher-priced tickets for the bus and train, too.  The Chicago Tribune has a new article about a great new program to benefit commuters. I am highlighting some of the main points below.

 There’s a Chicago organization called the Metropolitan Planning Council that is piloting a program called Commute Options.  What they’re hoping to do is recruit 10 to 15 employer this year that would offer their employees incentives to reduce the cost of commuting to work.  Right now a lot of affordable homes are in areas where there doesn’t happen to be a lot of job openings.

According to a council spokesperson, “A lot of communities where people can afford to live in our region are not the places where there’s a thriving job market.  In order to bridge that gap, we’re working with employers to give employees some options.”

So this is important information that can also benefit home sellers.  If you live within 2 minutes to a highway or are a 2-minute walk to the Metra station, you definitely want to highlight that in your home listing.  More and more people find commuting information as important as the number of bedrooms in a home or what type of flooring there is.  

The article also mentions a recent survey of Coldwell Banker agents.  75% said the increase in fuel prices has led their buyers to adjust their thinking on where they want to live.  More and more want to be closer to work or in a location that work is easily accessible and affordable.  

So sellers need to make sure their Realtor knows all the information about public transportation that’s close as well as proximity to highways and major roads.  It’s important to highlight.  

I hope everyone had a nice holiday weekend.  I can be reached via my Web site.

What buyers are looking for this year

We all know there’s a lot of houses on the market.  Inventory is high.  Values are down.  It’s harder to get a loan.  Interest rates are low.  People’s discretionary income is lower.  So what does all this mean in terms of the housing market?  Here’s a list of some items that Bankrate.com has put together of what home buyers are looking for when they buy a home this year.  This will also help sellers be aware of how to stage their home and what buyers are looking for when it comes time to negotiate.

1. A deal.  An amazing deal.  They want to tell everyone they know that they got this amazing house for such a good deal.  In 2007, it would have cost them $500,000, but they just closed on it for $395,000.  So this makes them a lot more critical.  They’re going to take longer than usual to find a house.  They’re not going to feel like they have to settle.  And that’s because they don’t.  Unfortunately for sellers, buyers hold the power when negotiating right now.  So understand that when turning away a low offer.  It might be worth it just to counter to see what happens.

2. Good condition.  I mentioned before that discretionary income is limited.  They don’t want to have to redo carpet and paint and put in new appliances.  They want homes that are more updated and in good condition.  When showing your home, make sure it’s clean and presentable.  It’s like putting your best foot forward at a job interview.  You only get one shot.  Make it a good one.  And reconsider taking your appliances with you when you move.  It’s likely the buyers want them to stay with the home.

3. More green.  It’s a lot more common these days to find buyers looking for energy-efficient appliances, windows, furnaces, and air conditioners.  Again, this helps them save money down the line, aside from being good for the environment.  Buyers want to know that maintaining their home will be easy on the wallet.  So if you are looking to sell and plan to upgrade some items, try to go as green and energy efficient as possible.

4. Smaller homes.  This is not to say that if you are selling a 5,000 square foot home that nobody will be interested.  But consider how you stage your home.  Make use of space.  It’s more common that buyers aren’t interested in a sitting room.  Make it into an office.  Create a craft room with your sixth bedroom.  Buyers want homes that serve a purpose because they don’t feel like they need the extra space if all it is is just space.  “Three to five years ago, if they could get a loan that would get them into a McMansion with stone and tile and brick and more rooms than they needed, they would do it,” says Jeff Wiren, president of the Portland Metropolitan Association of Realtors. “Now they’re saying ‘I don’t know if I want to heat that place and clean it.’ They’re being much more realistic.”

So those are four of the nine items that Bankrate thinks buyers are looking for in 2011.  What do you think?  As a buyer, do you agree?  I’d love to hear your thoughts.  Please leave me a comment or visit me online.

Early 2011 housing trends

I know we’re already into our third month of 2011.  But it’s going to be interesting to see how the year plays out in terms of the housing market.  Will we expect to see many changes?  Or will things stay relatively similar to what we’re experiencing now with sagging prices and high housing inventory? Bankrate.com has come up with a list of some of the most common trends we’ll see in 2011, at least through summer.

1. We’ll see less refinancing of current mortgages.  Some experts say that it’s the higher interest rates that is causing this dip.  But the other side of it is that those homeowners who have equity in their home already took advantage of a refinance within the last two years, as rates steadily dropped.  So there won’t be as many who refinance in 2011.

2. It will still be hard to obtain a mortgage.  And this is just because requirements to get one are tightening up.  Lenders are being very cautious in loaning money.  With Freddie Mac and Fannie Mae requiring some lenders to repurchase sold-off loans and causing them to lose money, they’re less likely to be as easygoing in lending new money unless you have very little risk, such as a high FICO score, solid appraisals on the home, and good income.

3. New homeowners are still unsure about taking that leap and buying that first home.  Yes, interest rates are low.  However, as just stated before, it’s harder and harder to obtain a good rate.  And even though home prices are low, with so much inventory available, buyers are wary about purchasing if they’ll have to sell in the near future and have so much to choose from they often just decide to rent instead.

4. Home sellers will deal with the current economy and we won’t see any change anytime soon.  The market time will continue to stay where it’s at, higher than in the past, because of high inventory and low prices.  Best way to get your home sold is to keep it in showing condition and listen to your Realtor on a realistic selling prices.  Homes do continue to sell.  But don’t expect to get any bites by listing it above market value.

What do you think of these trends?  Are you in agreement or disagreement?  Please leave me a comment with your thoughts below or visit me online.

Mortgage myths debunked

With mortgage rates still extremely low, I thought it was important to talk about some common myths people have about mortgages and the lending process.  I don’t want any potential buyers to become dissuaded buying a house because of what they think might be true.

1. 30-year fixed rate mortgages are always the best choice.  Well, they may be for some.  It truly depends on your situation.  If, for example, you know you’re going to move (because of work, etc.) within a few years, an adjustable rate will be even lower and a better choice for you.  If you don’t plan to move for a long time, the 30-year might be best.  And also know that while the mortgage rate adjusts in a certain time frame for an ARM (usually 3, 5, or 7 years) there is a limit to how much the rate can go up (or down) over time and that you can always refinance at any time.

2. You need to pay off your mortgage as soon as possible.  I had talked about this several weeks back when I was discussing which long-term debt should be paid down first.  It’s very likely in this day and age that your mortgage rate is not the highest interest rate you have.  Usually the highest-interest debt should be paid down first.  Plus, mortgage interest is tax deductible, which is a benefit that other types of debt (credit card, for instance) doesn’t have.  As always, if you have extra money to put toward it, by all means, do so.  Just make sure you apply the extra money to the principal only, not the interest.

3. I’ve already chosen a lender and can’t choose a new one in the process of applying.  Until your loan is officially closed, that’s not true.  If you’re not happy with the lender or the rate or the process, you’re free to switch.  I’ve had clients switch lenders 30 days after signing a contract and 15 days before closing.  To make your life easier, provide your new lender with as much information as you can to ensure the process continues going smoothly.  And it’s best to shop around before signing a contract.

4. You don’t want to refinance because your 30-year loan starts all over.  It’s possible that 30 years will begin on the date of your refinance.  But you can work with your lender so that payments can be adjusted.  Since you’re refinancing for a lower rate, there’s still a good chance that your monthly payments will be lower by doing this, and, therefore, you can pay your mortgage off sooner.

5. I can find a better deal online.  I do know some clients who have closed on homes with online lenders that did a great job.  However, I also know some where it didn’t work out at all.  By finding a loan online, there’s no personal service and no one to guide you through the process or assist you if there’s a problem.  If you do go this route, make sure to verify and ask about all specific fees and read the fine print on everything before agreeing to it.

If you have more questions or need the name of a reputable lender, be sure to contact me online.

Be aware of this when applying for a mortgage

With all the extra housing inventory available, it’s a great time for someone looking to invest in real estate to buy a home.  We all know, though, that it’s becoming tougher to obtain a mortgage these days.  Mortgage brokers and banks want solid credit scores and higher down payments.  So if you are making an application for a mortgage, here’s a list of what you want to be aware of during this typical 45-day period to make sure the mortgage goes through.

1. Now is not the time to make any big purchases.  That includes high-ticket items such as cars, appliances, TVs, and furniture for your new home.  A lot of people don’t realize that when you make your purchase, you’re creating more debt for yourself (if you’re charging the item rather than paying cash) and becoming a bigger liability for the bank.  So it’s been known that the mortgage can be pulled in this instance.  Wait until after you sign the closing papers to make the next purchase.

2. It’s not a good time to switch jobs.  When applying for a loan, the lender looks to make sure you have job stability and knows what type of salary and/or bonuses and commissions you receive.  If you switch jobs in the midst of the application, they’re going to have a hard time verifying salary information, which could affect your loan.  Again, wait until after you sign the closing papers to make any career moves.

3. There could be multiple credit checks.  The lender obviously checks your credit at the loan application before they decide if they can pre-approve you.  However, now lenders are often going back to check credit scores again right before closing.  So know that you want to continue making all your payments.  Avoid applying for a new credit card or making a big purchase.  Any upset to your score could affect your mortgage.

4. Have money ready for closing costs.  Don’t take every last penny you have to use toward a down payment.  Closing costs could cost you an additional 3% out of pocket.  You’ll want to check in with your lender within a few days of closing to get a rough estimate of the amount you’ll need to bring to closing.  It’ll most likely have to be in the form of a cashier’s check made out to yourself.  Your lender can give you the exact information.

These tips will help keep the mortgage application going without any hiccups.  Of course, if you have questions or problems along the way, be sure to contact your lender.  They will be able to guide you through the process and give you other tips to make sure there are no problems prior to closing.

I can be reached via my Web site.

Must-notice inspection items

So you found the house of your dreams.  You’re ready to make an offer or you’ve made an offer and now have the home inspection.  Have you seen the movie The Money Pit with Tom Hanks and Shelley Long?  It’s about a couple who get a great deal on a huge house (or so it seems) but the second they move in, everything starts falling apart?  Here are some tips to avoid that happening.  And while you definitely should have a home inspection done, these are items you want to make sure you check out prior to going through with a sale because it can save you a lot of money in the long run.

1. Check out the basement, if the home has one.  If it does, there’s a good chance that your furnace, water heater, and air conditioner are all down there.  You want to get an idea of the age of those systems as well as how well they’ve been maintained.  They’re all expensive items to fix.  The furnace and air conditioner should get routine maintenance checks at least yearly.  If there is a problem, you can always request that the seller fix it, but it’s important for the future to know yourself.  The basement will also help you determine the type of construction and materials used in the construction of the home.

2. Look at the foundation.  Tyson Kunz, a contractor and owner of TTK Home in Tomball, Texas, says you need to look at the size of the trees near the home and how close they are to the home.  Over time, the roots of those trees can cause the foundation to crack and break.  Also look for cracks or gaps in any hard-surface floors to tell you how structurally sound the foundation is.  If there’s only carpet throughout, you can look for cracks in the drywall to give you an idea.

3. Look for water damage.  The first place to start is obviously in bathrooms.  Make sure that exhaust fans in bathrooms bring the moisture outside.  I had a couple once who did their home inspection to find out the fan was venting it directly into the attic, which can cause major mold problems later on.  Check that all caulking is secure and there aren’t any leaky faucets.

4. Plan a bad-weather visit. MSN Real Estate also recommends going back to view the home on a non-sunny day.  You’ll be able to see if water is seeping into the home anywhere, how well the windows seal out cold and water, and that all the systems are working properly.  So even shopping for a new home in bad weather can be a good indicator of how well the home stands up to the elements.

If you have more questions, please be sure to visit me online.