Cooped up at home? 5 outdoor projects to get your home ready for the post-pandemic real estate market

There’s talk in real estate circles that homebuyers who get into the market after we’re released from “self-isolation” will have an entirely different wish list than those who bought homes before the pandemic.

This makes sense when you consider that we’ve never spent so much time in our homes as we have over the past few months.

Look for home offices to be on many homebuyer wish lists. Outdoor spaces, however, will be hot sellers as well.

How’s your backyard looking? If you’re planning on selling, take a good long look and get to work on some projects to make your home stand out when we get back to normal.

1. Start with a clean slate

Winter is firmly in the rearview mirror. If your front and backyards still show winter’s scars, it’s time to get that remedied.

Get rid of all the debris that winter deposited in your yard. Remove broken branches, trash, leaves and any other debris.

Although we love spring, we don’t care for the weeds it brings. Weeding should be next on the list.

Pruning dead or dying branches from trees and shrubs will not only make them look better but make them healthier as well.

Tip: Disinfect your pruning equipment before using. Give it a 5-minute soak in a disinfectant, such as Lysol. Rinse with water and allow to air-dry.

2. Turn your attention to the hardscaping

Hardscaping refers to the non-living elements in your landscape. This includes pottery, benches, water features, pavers, arbors and fencing.

Consider painting the fence if it needs it. Darker colors are better, according to Darin Bradbury, a landscape designer.

“Not only does the dark color give those vertical surfaces around the garden a uniform finish, but it creates the perfect backdrop for all that green foliage,” Bradbury tells Georgia Madden with Houzz Australia.

3. Add new plants

While the gardening centers at the big box home improvement stores remain open during the pandemic, it’s a good idea to shop online right now.

There are many online plant retailers and we’ve rounded up several for you: DirectGardening.com, NatureHills.com, BrighterBlooms.com and FastGrowingTrees.com.

Landscaping professionals suggest that we should choose a theme before planting. The theme can be based on color, scent, pollinators (such as butterflies) or choose from some of the popular gardening themes:

Sticking to a theme helps prevent the space from looking too “chaotic and disconnected,” landscape designer Wayne De Klijn tells Madden.

“The right plant for the right space” is an old gardening adage that describes one of the most important secrets to gardening success.

Before purchasing plants, observe the landscape for a few days. Where is it sunny all day, shady all day, partially sunny? Choose your plants based on the existing conditions in your garden and you should have far fewer problems.

4. Mulch – the workhorse of the landscape

Mulch offers so much to your garden. It’s ornamental, it helps suppress weeds, it keeps the soil cooler in the summer, it helps the soil conserve moisture and, if it’s organic, it breaks down, adding nutrients back into the soil.

Choose whichever type of mulch you like and spread at least 2 inches of it over the soil, keeping it about 6 inches from the base of each plant.

5. Spruce up outdoor furniture 

Since we are all supposed to be staying home, running out to buy a new patio furniture set is not a wise idea. Hopefully, with a little DIY action, you can spruce up what you have.

Best of all, you can buy most of the products you’ll need online at Amazon.com or Gardener’s Supply Company and have them delivered to your door.

If your outdoor furniture is made of wood, follow the instructions you’ll find online at YouTube.com. Ideas for updating other types of patio furniture can be found at BobVila.com.

Stay well!

 

Cornavirus patient in the home? Here’s what you need to do to avoid infection

We’ve been admonished to do our part to “flatten the curve” by socially distancing ourselves from others, by washing our hands frequently and other forms of collective action.

If you happen to share a home with a coronavirus patient, it’s even more important to remain vigilant against the coronavirus.

While a daily cleaning and disinfecting of the home is important, there are additional tasks to perform when caring for someone suffering from the effects of the virus.

What to use to disinfect

After cleaning high-touch surfaces in the patient’s room (soap and water is fine for this), use an Environmental Protection Agency (EPA)-registered disinfectant, according to the instructions on the label. Wear gloves and ventilate the area while working.

The EPA offers a very long list of disinfectants to choose from on its website at EPA.gov. Many appear to be available only to professionals but the experts at the Centers for Disease Control offers several recipes for DIY disinfectants to use on surfaces that may be contaminated by COVID-19 (coronavirus):

  • 4 teaspoons of household bleach in 1 quart of water (allow it to remain on the surface for 10 minutes before wiping the surface dry).
  • 70 percent dilution of isopropyl alcohol (must remain on the surface for 30 seconds).
  • Undiluted hydrogen peroxide (allow it to remain on surfaces for one minute).

Use care when working with bleach. Since it interacts with other substances and may emit caustic fumes, avoid mixing bleach with anything other than water. Ventilate the area in which you are working.

The CDC cautions Americans to avoid using recipes you find online. Vinegar, for instance, will not kill this virus, nor will tea tree oil.

How to disinfect a coronavirus patient’s room

Porous surfaces, such as drapes and rugs should be cleaned with a product manufactured specifically for the material and then laundered using the warmest temperature possible.

Wash bed linens, towels and clothing separate from other family laundry, and in the warmest water possible. Wear gloves when handling possibly-infected laundry and never shake the items before washing.

The CDC recommends using disposable “food-service items,” such as paper plates and plastic utensils. These can be placed into the trash and disposed of properly.

“Non-disposable food service items used should be handled with gloves and washed with hot water or in a dishwasher,” the experts caution. “Clean hands after handling used food service items.”

If your patient doesn’t have his or her own bathroom, clean and disinfect the bathroom after each time the patient uses it.

How to keep everyone in the home healthy

Frequent hand-washing is the name of the keep-healthy game when living with a coronavirus patient. Everyone in the home should wash their hands:

  • After removing gloves
  • After sneezing, blowing one’s nose or coughing
  • After using the restroom
  • Prior to preparing and eating food
  • Before and after your caretaking duties
  • After you’ve been outdoors, immediately upon entering the home

Caretaking considerations

  • The patient should be confined to one room of the home.
  • The patient should eat/be fed in their room.
  • All items handled by the patient should be disinfected daily or, if disposable, placed in a trash can lined with a plastic or paper bag. The caretaker should wear gloves when removing and disposing of these bags.
  • Remind other household members to use care when interacting with the patient.

Find additional tips from the following resources:

Caring for Someone at Home

Hand Washing: A Family Activity

Clean and Disinfect

Coronavirus disease (COVID-19) advice for the public: Myth busters

Preventing the Spread of Coronavirus Disease 2019 in Homes and Residential Communities

 

What to do if you can’t make your mortgage payments

It seems like only yesterday that the word “foreclosure” dominated the headlines as millions of Americans lost their homes during the Great Recession.

Now, that dreaded “F” word is reappearing in media accounts of the COVID-19 pandemic’s effect on the economy. Yes, they’re speculating. Nobody really knows what will happen nor how long this will last.

All it takes is the prospect of missing one mortgage payment, however, to bring back all those dreadful memories from years ago.

Put “foreclosure” to the back of your mind. We have some suggestions to help you deal with the prospect of being unable to make your mortgage payments.

You’re safe for now

“President Trump on Saturday ordered foreclosures and evictions to cease for 60 days across the U.S. in response to the coronavirus pandemic that has idled millions of workers.”

Good news for the tens of thousands of Americans who have lost their jobs over the past few weeks. At least for one month, they will have one less bill to worry about.

But what happens next month? A lot depends on your current financial picture. If you’re a saver, you have far more options than those Americans who live paycheck-to-paycheck.

That first call

It’s a scary one – calling your mortgage company to tell them you can’t make your payment. But, call you must and afterward, you’ll be glad you did.

Many mortgage companies and banks are offering deferral programs during the COVID-19 crisis.

Keep in mind that a deferral isn’t forgiveness and you’ll be expected to make up the missed payments at a later date (unless you can convince them to tack the missed payments onto the end of the loan).

As well, the interest on the loan will most likely continue to accrue.

You will most likely need to offer proof of your hardship and many lenders require pay stubs and bank statements (to show a declining income) and a profit and loss statement from the self-employed.

What if my lender won’t work with me?

We have yet to hear of a lender who is refusing to at least listen to homeowners at this time. This doesn’t mean they don’t exist. If you have a conventional loan and the lender refuses to work with you, call a HUD-approved housing counsellor at 800-569-4287.

Borrowers with FHA-backed loans will find help dealing with their lender by calling the National Servicing Center at 877-622-8525. You will be asked to provide the names of all people listed on the mortgage and the full address of the property. If you have your loan settlement statement handy, jot down the 13-digit FHA case number. This may get you faster service.

VA borrowers can find help on the U.S. Department of Veterans Affairs website.

Additional solutions

If your lender won’t work with you, or you prefer not to pursue the aforementioned solutions, consider the following ways of dealing with mortgage payments that you cannot afford at this time:

  • Sell the home
  • Apply to refinance your mortgage

Avoid foreclosure prevention scams

During the Great Recession, foreclosure prevention scams became a cottage industry. While we haven’t seen any recently, if the crisis continues, they may pop up again.

Many of these scam companies chose names and phone numbers that were quite similar to those of government programs. They charged high up-front fees while promising to pay off the borrower’s delinquent mortgage.

If you have any questions or suspicions about offers you receive, call a HUD housing counselor (800-569-4287) or reach out to us and we’ll point you in the right direction.

3 types of home valuation

Whether it’s a car, garage sale items or you’re selling on websites such as Ebay, successfully selling “stuff” has one major requirement: you need to know how much it’s worth.

After all, price an item too high and it most likely won’t sell. Price it too low and you’ll lose money on the deal.

The same holds true for houses, but there is a lot more money involved and the stakes are far higher.

There are several different home evaluation models, depending on the purpose for which the value needs to be ascertained. Let’s take a look at these and the differences between them.

Your home’s assessed value

Homeowners can’t get around paying property taxes and they’re based on your home’s assessed value. Your county or other municipality official, most commonly known as the “assessor,” will come up with the number for this evaluation.

He or she will use many of the same resources as a professional appraiser, from public records to recent sales. After deducting any exemptions available to you, the assessor multiplies the value by the assessment rate for your municipality to come up with the tax value for your home.

You’ll notice that the assessor’s value is often quite different than your home’s actual market value. Again, this evaluation is for tax purposes only and does not express your home’s current market value.

The market value of a home

The market value of a piece of property is based on what a buyer is willing to pay and a seller will accept. It is reflected in the recent sales prices of similar homes, or “comps,” short for “comparable homes.”

Most home sellers rely on the skill and experience of their real estate agent to determine their home’s current market value. And, although they don’t call their determination an “appraisal,” real estate agents use many of the same valuation techniques as appraisers.

They will base their determination on the following, when comparing your home to the comps:

  • The size of the home
  • Age of the home
  • Condition of the home
  • Location of the home
  • Special features

Then, if the agent is familiar with your neighborhood, he or she will use any knowledge of recent home appraisals in the area to help narrow down a price for your home.

This is what knowing market value does for homeowners: it helps them determine a competitive price for their homes.

A home’s appraised value

The appraised value of a home is that which is determined by a professional home appraiser. Typically hired by a buyer’s lender, this is the value determination that can make or break a home sale.

The appraiser will visit the home, taking measurements and notes. Back at the office, she will use many of the same techniques that real estate agents use, with the addition of public record information and other assistance.

Whether or not your agent’s evaluation matches that of the appraiser depends largely on current market conditions. In a recovering market, such that we saw after the recession ended, it may be challenging to pinpoint value.

When purchasing a home, it’s a smart move to look at a home’s property tax burden. But, for sellers, this type of value means little. It’s the market value and the appraised value that are important.

Still have questions? Fee free to reach out to us.

The Right Way to Remove Wallpaper

If you think wallpaper is something only your grandmother would love, think again. “Wallpaper is back with a vengeance,” Brook Anderson with Bay Hill Design in Austin, TX tells Studio 512.

Celeste Randolph, a designer in Los Altos, CA concurs “Geometric prints in wallcoverings … are huge right now.”

Today’s wallpaper would blow gramma away. Carnegie Fabrics, for instance, offers a line of thermoplastic olefin wallcoverings or you could consider cellulose wallcoverings or artisan-crafted, handmade wallpaper, like these from Benjamin Moore.

Whatever you choose, to be successful with a DIY wallpaper hanging project requires careful and thorough preparation of the wall to which you hope to stick it.

“Wallpaper can’t cling to greasy, dirty walls, old wallpaper or paint,” claim the experts and WallpapersToGo.com. “That’s why we can’t emphasize enough how critical it is to have your walls properly prepared.”

If the wall is currently covered with wallpaper, you’ll need to remove it. Not a fun job, but we’ve rounded up some tips to make it easier.

The tools you’ll need to strip the old wallpaper

As mentioned above, understand that stripping wallpaper is not a fun job. And, it will take longer than you want it to. Don’t plan to get it all done in one day, even if you are working in a small room.

Then, head out to a hardware or home improvement store to pick up the supplies you’ll need. These include:

  • Drop cloths
  • A wallpaper scoring tool
  • A wallpaper scraping tool
  • Wallpaper removal solvent
  • A spray bottle

Let’s get that wallpaper removed

Push the furniture into the center of the room and cover it with drop cloths. Then, lay a few of them down on the floors where you’ll be working. Finally, put some old towels or rags along the baseboards, lay drop cloths over them and tape it to the baseboards.

Examine your walls to determine if they are made of plaster or drywall. If your home was built more than 50 years ago, the walls are most likely plaster. Homes built since then typically offer drywall.

Not sure? Knock on the wall. If the sound is dull, it’s plaster, according to home improvement experts at Lowes.com. Drywall sounds hollow when you knock on it.

You’ll need to approach drywall with caution, being “careful not to damage the cardboard facing when using a wallpaper scraping tool,” say the pros at Lowes.

Next, pull off all the paper that comes off easily. Yes, you will be left with plenty of glue on the wall and patches of wallpaper. Score all the remaining wallpaper so that solvent can get through the paper and into the glue.

Beginning at the top of the wall (the area closest to the ceiling), spray a small area of wall with the wallpaper removal solvent (prepared according to package instructions). Allow the solvent to sit for a few minutes to ensure it has soaked in. Then, use the scraper to gently scrape the wallpaper and glue from the wall until it’s smooth.

Occasionally, especially with old wallpaper, the solution won’t be absorbed. Use coarse sandpaper to scuff up the area or use the suggested scoring tool. Soak the area again and allow it to sit for 30 minutes.

After all the glue and backing has been removed, clean and dry your walls before applying your new finishes.

A note about washable wallpaper

Washable wallpapers include a top layer, typically a plastic-like film. This is where the scoring tool comes in handy; use it to break holes in the wallpaper. Use the spray bottle, filled with water, and squirt the water into the holes you created.

Wait 10 minutes and then scrape the wallpaper from the wall.

Is this a good time to buy or sell a home?

Social distancing. Self-quarantine. Hand sanitizer, soap and water and elbow-bumping instead of shaking hands.

In our efforts to deal with a world-wide pandemic, not only are our priorities changing, but our vocabulary as well.

There was no warning, really, so it naturally caught many of us by surprise. We’re getting a lot of questions from our clients, worried about whether or not they should continue to close on their transactions, continue searching for a home or for a buyer for their current home.

We aren’t medical experts, so we can’t field medical questions. But we are real estate experts and are happy to offer our opinion of what is happening in the housing market and what experts expect in the coming weeks and months.

Uncertainty reigns

While there are plenty of rumors and much guessing from the experts as to how the U.S. economy will be impacted by the safety measures federal, state and municipal governments are enacting, nobody is certain.

We agree with those who claim that it all centers on how long the virus takes to get under control. The longer Americans are out of work, the longer retailers and other businesses remain closed, the bigger the impact on the economy.

Yes, President Trump is working on a stimulus package for both individual taxpayers and businesses. Hopefully, it can be pushed through Congress soon.

Will our deal close?

If you have already signed a purchase agreement, as a buyer or a seller, lenders are taking extra steps to help speed up the process.

The Department of Veterans Affairs, for instance, is allowing VA buyers and sellers to participate in meetings with title companies, appraisers, lenders and VA personnel via phone or “other electronic methods,” according to the experts at Military.com.

Newly constructed home sales are still quite strong and closings are running smoothly. “During the first two weeks of March, new orders were up 16%, closings continued on schedule and traffic in home sales centers was strong,” Stuart Miller, Lennar Corporation executive chairman told the South Florida Business Journal.

The real sticking point to be aware of is that with municipal buildings closing down, the sale may not be recorded when you expected it to. Some municipalities are offering alternatives, such as closing remotely, through e-recording (thank goodness for technology!) and even by mail.

Is this an ok time to buy a home?

Within the real estate industry there’s a well-known saying that the best time to buy a home is when you can afford to buy a home.

While mortgage interest rates have edged up a bit over the past few weeks, we’re still at historic lows. Borrowing money has rarely been so inexpensive.

When rates are higher you won’t get nearly the size or type of home you can right now.

If you’re worried about exposure while house hunting, understand that touring homes for sale is a bit different now but still quite doable. Much of the process can be done online via virtual open houses, 3-D home tours, floor plan drawings and more.

Even in-person tours can be accomplished in a safe, healthy way.

What about selling? Is this an ok time?

While spring is typically the best time of the year to put a house on the market, this spring is going to be quite different.

There are buyers in the market, however, so if you need to sell, by all means, let’s get that home on the market.

As mentioned in the buying section, above, we can employ a number of methods to keep your home and your family safe during and after showings.

Remember, the inventory of available homes is still quite low, so you will have little competition for homebuyers’ attention. We’re even seeing bidding wars still happening, across the country.

If the home is in good condition and priced well, it will sell.

Please don’t hesitate to reach out to us with any questions or concerns. We’re happy to help.

A day in the life of a real estate agent

Some jobs look so easy, don’t they? Take writers, for instance. They not only work when they feel like it, all they do is sit at a keyboard and kick out words. And, they make the big bucks for this life of leisure.

Many people feel the same way about real estate agents. Most misunderstand how little we actually earn out of that commission check for the work we do. In fact, let’s clear that one up right now.

The commission check for real estate agents is typically split in half, with 50 percent going to the buyers’ agent’s broker and 50 percent to the listing agent’s broker.

All agents negotiate what is known as a “split” with their brokers. This split can range anywhere from 20 percent of the broker’s half of the commission up to 100 percent in some cases. Most, however, range from 50/50 to 60/40.

Assume your agent has negotiated a 50/50 split with his or her broker. This means that the agent will receive half of the broker’s commission. Or, 25 percent of the total commission.

From this amount, the agent deducts his or her costs of the transaction, such as gas, wear and tear on her vehicle, marketing costs, MLS fees, lockbox fees and more.

In the end, we receive a far smaller piece of the pie than the general public assumes. Especially when one considers what a day in our shoes involves.

Here’s a list of what we do in a typical day at work:

  • Check the MLS every morning for new listings that fit buyers’ criteria
  • Preview new listings in person
  • Consultations with new clients
  • Set appointments to show homes to clients
  • Show property to clients
  • Navigate the purchase agreement with buying clients
  • Present offers to purchase to sellers and their agents
  • Schedule inspections (whole home, pest, etc.)
  • Analyze inspection reports
  • Negotiate contracts, repairs, etc. with listing agents
  • Schedule repairs
  • Meet service technicians at homes, wait while the technician inspects a system and while the technician writes up a price quote.
  • Inspect repairs
  • Shepherd transactions through escrow to closing
  • Attend the final walk-through with buying clients
  • Analyze the market for sellers to determine a likely market value for their homes
  • Navigate the listing agreement with selling clients
  • Schedule for sale sign installations
  • Install lockboxes on listings
  • Schedule photography session for listings
  • Create and execute a marketing plan for selling clients
  • Find buyers for listings
  • Plan, schedule and execute open houses
  • Plan, schedule and execute broker’s open houses
  • Compile pro forma financial statements for income property sellers and buyers
  • Attend broker’s open houses
  • Attend broker’s sales meetings
  • Attend MLS meetings
  • Coordinate closing with title companies and client
  • Attend closings with clients
  • Coordinate simultaneous closings for clients who require them
  • Make phone calls

Calls are a big part of a real estate agent’s workday. In fact, a typical day in the life of a real estate agent will include phone calls to or from:

  • Lenders
  • Inspectors
  • Appraisers
  • Clients
  • Other agents
  • Title company representatives
  • Escrow companies
  • Repair people
  • Pest control companies
  • Contractors
  • Vendors

Then, there are the phone calls related to marketing our services, to prospect for new clients and to follow up with leads.

Finally, we must set aside time each day to return the many voicemails, text messages and emails we receive.

Yes, these tasks make for long days. But, we wouldn’t trade what we do for  any other job.

What you need to know about carbon monoxide in the home

Violence sells and “If it bleeds, it leads” has been the media’s strategy for the past decade or more. The gorier, more brutal the death, the more it’s hyped.

What we rarely hear about are the less dramatic, less clickbait-worthy ways we can die. Which is sad, because some, such as carbon monoxide (CO) poisoning, are preventable with just a little basic knowledge.

Think CO poisoning isn’t common? Think again: it’s the leading cause of accidental poisonings in the U.S. according to the Journal of the American Medical Association.

In fact, the Centers for Disease Control and Prevention (CDC) claim that it’s responsible for the deaths of more than 400 Americans and the medical treatment of an additional 50,000 each year. Half of these deaths, they say, happen between November and February.

What exactly is carbon monoxide?

Known as “the silent killer,” carbon monoxide is a colorless, odorless gas which can cause sudden illness and death” and it is “produced anytime a fossil fuel is burned,” according to the CDC.

Sources of carbon monoxide in the home include:

  • Charcoal grills
  • Clothes dryers
  • Fireplaces, both gas and wood burning
  • Furnaces or boilers
  • Gas stoves and ovens
  • Lawn equipment
  • Motor vehicles
  • Portable generators
  • Power tools
  • Tobacco smoke
  • Water heaters
  • Wood stoves

Symptoms of carbon monoxide poisoning

According to the Minnesota Department of Health, “Identifying CO poisoning can be difficult because the symptoms are similar to the flu … people will ignore early signs and eventually lose consciousness and be unable to escape to safety.”

Early symptoms include a mild headache and a feeling of breathlessness after moderate exercise. The difference between these symptoms and those of the flu include:

  • Symptoms ease when you are out of the house
  • Symptoms are more pronounced in family members who spend the most amount of time in the home.
  • Pets may exhibit signs of illness.
  • Your symptoms do not include body aches, a fever and other common flu symptoms.

Prevention

The CDC offers up plenty of tips to prevent carbon monoxide poisoning in the home. Here are just a few.

  • Don’t use your gas oven for heating the home.
  • If you use your fireplace, have the chimney swept annually.
  • Don’t leave your car or motorcycle’s engine running in a closed garage.
  • Have your water heater and heating system checked annually.
  • Ensure that all rooms are ventilated adequately.
  • When using a generator, keep it at least 20 feet away from a vent, door or window.
  • Install CO alarms in the home. The CDC recommends one in each bedroom and one on each floor of the home, including the basement. If the alarm sounds, leave the home immediately and call 911.

Learn more about carbon monoxide in the home and how to prevent poisoning at the CDC website.

The cost vs. benefit of buying a new-build home

You have to admit that the real estate industry is way out in front of the auto industry when it comes to marketing lingo.

The latter, for instance, gives us a choice between “new” and “used” cars while the former offers new and “existing” homes.

Unless we’re contemplating buying a priceless antique, it’s safe to say that most of us prefer new to used, whether it’s cars or homes.

In fact, a 2014 Harris Poll survey found that 41 percent of Americans prefer a newly-built home.

Can you blame them? You won’t get that “new car smell” in an old beater any more than you’ll get the satisfaction of knowing that nothing in a new home has ever been touched or used by anyone else. No grease on the appliances, smudges on the walls or pet or kid odor in the carpet.

It all boils down, like many things in life, to how much we can afford to spend. For instance, remember that survey I mentioned earlier?

The 41 percent of Americans who would prefer a new home over an existing one went on to claim that they weren’t willing to pay the extra money required to buy a new home.

Now, notice I said “buy” one; it’s not necessarily more expensive to own a new home but may be more expensive to purchase one. I’ll clear up that confusion in a minute.

Price considerations

Most of the homebuyers that we have worked with have one overriding concern when looking at homes: The price.

As a general rule, you’ll pay more for a newly-built home than you will if you buy an existing home.

Nationwide, for example, the median price of a newly-constructed home was $330,800 in the third quarter of 2019 according to the U.S. Census Bureau.

The median price of an existing home was $274,000. That’s a $56,800 difference, which is slightly more than the so-called 20 percent “new home premium.”

Keep in mind that the list price of the new homes is for the basic model and doesn’t include upgrades, which can cause the price to rise significantly.

One final note when it comes to the price of a new home: Negotiating on the price, an option when you purchase an existing home, is typically not an option available to you when you purchase new construction.

Ongoing costs

A mortgage payment is comprised of the loan’s principal, interest, property taxes and homeowner insurance. While all aspects of the payment should be considered when purchasing a home, we’ll take a look at the two most significant.

Property taxes

Taxes levied on an older home are typically lower than those for a new home. But, that doesn’t tell the whole story because for the first year to two years, taxes on a new home may be significantly lower.

Why? Because current-year taxes are based on the value of a home as of January of the previous year.

For example, if a home was completed in June 2020, the taxes for the property will be based on its value in January 2019. Most likely, at that time, there was no home, just a dirt lot. So, for the remainder of 2020, the homeowner would pay property taxes based on the value of a plot of dirt.

In 2021, the homeowner will pay taxes on the home’s value as of January 2020. Remember, the home wasn’t completed until June, so the property’s value was still quite low, ensuring another year of low property taxes.

This difference can be significant, possibly saving the new homeowner up to $250 a month for up to two years. We aren’t tax professionals, though, so this is an issue to run by your accountant.

Insurance

Consider that fourth “leg” of the mortgage payment — insurance. The new home definitely wins when it comes to homeowner insurance, generally being less expensive to insure.

The primary reason for this is that, with newer and more cost-effective building methods, new homes cost less to rebuild or repair.

There are additional factors to consider, however. These include:

  • The home’s location – homes built in areas with weather risks (floods, wildfires, etc.) will cost more to insure than new homes located outside these areas.
  • Proximity to a fire department – insurance rates are typically less for homes located in close proximity to a local fire station.

Maintenance

No, home maintenance costs aren’t a part of a monthly mortgage payment, but they do factor in to comparing the cost of owning a newly-built home vs. an existing home.

Although new homes can have problems, many builders offer a home warranty. As a general rule, you can plan on almost a decade of repair-free ownership when you purchase a newly-built home.

One aspect of the new-home purchase not often addressed is the home’s energy efficiency – a true money saver over the purchase of an existing home.

New homes are built with newer, better insulation and energy-efficient windows, for example. This significantly cuts the cost of heating and cooling the home.

As homes age, the need to repair things happen more frequently. This is why older homes in a managed community, such as townhomes and condos, typically have higher HOA fees.

There are a number of other benefits to purchasing a newly-constructed home, including that you can choose the floorplan that best fits your family’s lifestyle, you can choose the location within a neighborhood and, if you can afford it, you can choose upgraded features for the home.

If you’re interested in viewing newly constructed homes, reach out to us. We’re happy to help you avoid some of the more common pitfalls in the process.