Author: Shannon

From Ikea product hacks to painting kitchen cabinets and refinishing countertops, Americans are absolutely hooked on the DIY craze.

There are some things, however, that only a pro should tackle and that includes determining a home’s current market value.

In fact, a National Association of Realtors’ survey of for-sale-by-owners found that determining an accurate price for their home was the homeowner’s most challenging task.

Pricing your home too high or too low are both disastrous to your pocketbook.

Real estate agents and professional appraisers pretty much use the same process to determine a home’s market value. The purpose behind the two, however, is what differs, albeit slightly.

Agents are determining market value whereas the appraiser’s sole purpose is to ensure that the lender isn’t loaning more than the home is worth.

Both will compare your home to others. These other homes are known as “comps,” short for “comparable.” Let’s take a deeper dive into how a particular home qualifies as a comp for your home.

What is “market value?”

Businessdictionary.com defines market value as “The highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market.”

Well, that’s just swell. But how do we know what a buyer will pay?

By investigating what recent buyers have paid for similar homes

Sold homes, then, are the comps agents use when preparing a comparative market analysis. Appraisers, too, use sold homes when working on figuring out how much a home is worth.

Typically, we’ll look back no more than six months for sold homes, similar in age, style and size, within a one-mile radius of yours. Yes, there are times we need to look further back in history or extend the radius, but not often.

Now you get to find out why we say it three times

Proximity is an important factor when searching for comps. So important, in fact, that some lenders require that their appraisers search no further than one-mile in all directions if the subject home is in the suburbs and five miles in rural locations.

We, as real estate agents, have a bit more flexibility. We typically start our search for comps close to the subject property and work our way out until we have at least three comps that have sold in the past six months or so.

Then, there are additional “location, location, location” aspects to compare.

A home’s location can positively or negatively impact it’s value. Positive nearby amenities include:

• Parks
• Schools
• Shopping
• Cemeteries (A national real estate company found that homes within 100 to 200 yards of a cemetery sell for an average of $17 more per square foot than those located more than 500 yards away).
• Access to freeways and highways

There are additional proximity amenities, some of which are specific to certain regions, such as proximity to the beach or golf course.

Negative influences include:

• Neighborhood condition (if the neighborhood is rundown)
• Neighbors (hoarders, sexual predators and homeowners in foreclosure)
• Traffic, train, airport or other noise
• Schools (homes in poor-performing school districts are worth less than those in high-performing districts)
• Oversupply of homes for sale
• Crime

These are just a few of the ways the location of your home impacts its value.

Comparing the condition of the home

With both the real estate agent and the appraiser, the condition of your home will carry a lot of weight when viewing the comps.

First, we’ll determine if there are any deferred maintenance issues, such as leaky plumbing, overgrown or neglected landscaping, damaged flooring, cracked tiles or window glass, among others.

Then, we’ll deduct value if comparable homes are in better condition or add value if they aren’t.

Determining how much a home will sell for in the current real estate market depends on how much buyers are willing to pay for similar homes. Those homes, as you now know, are called “comps.”

Moving is bad enough, but moving in wet, muddy, sloppy weather should be illegal.

Alas, it’s not, and if you have no choice but to move during winter, do yourself a favor and hire professional movers.

If that’s not possible, pay heed to 5 of the most important tips from the pros.

1. What will you do with pets and kids?

You’ll need to work quickly during a winter-weather move and, since children and pets tend to get in the way during periods of excitement, find a place to “stash” them during the process.

Consider asking a family member to watch the kids or hire a sitter. Pets can be placed in boarding where they’ll be safe.

2. What does the weather service say?

The best way to remain updated on weather conditions is with an app on your phone.

AccuWeather offers a free weather app and also a brilliant Road Trip Planner (you’ll need your laptop for this).

Many local TV station news departments offer apps that provide local weather alerts. In Minnesota, for instance, movers can download the CBS Minnesota app, or get road condition information from the Department of Transportation.

Check their websites or search iTunes or Google Play for a region-specific app.

3. Pack the necessities first

The last thing you’ll want to do after slogging through messy weather is to have to go through all those boxes to find the essential items you’ll need right away.

Before packing anything else, fill a box with the following:

• Old towels and rags to wipe wet floors.
• Snow/ice removal items, such as a shovel, ice scraper and a walkway de-icer
• A change of clothing for all family members (including dry shoes or boots)
• Snacks
• Food for the pets (don’t forget the bowls)
• Several large bottles of drinking water
• Any medications you take daily
• Bathroom items such as a shower curtain, shampoo, soap, toilet paper
• Valuables
• Coffee maker and everything to go with it
• Things to keep the kids occupied

Place the box in the trunk of your car.

4. Protect your electronics

“Electronic components can develop condensation as the temperature decreases,” according to the experts at Bekins. “This condensation can cause water damage or even short circuiting,” they caution.

Think “insulation” when considering how to protect your electronics. First, wrap each item in bubble wrap, then in a blanket. Place each item in a bubble-wrapped box and seal it tightly. Then, wrap the box in either bubble wrap or a moving blanket.

5. Use extra care when moving appliances

As soon as you move in, you’ll be tempted to get the washing machine and dryer set up, but don’t give in to the temptation.

Appliance manufacturers say that washers need to sit for at least 12 hours. This is to ensure that any traces of water that remained in them while moving hasn’t turned to ice, which could damage the appliance.

And, yes, the dryer needs to come to room temperature as well. Otherwise, the igniter and heating element may become brittle.

Sudden changes in temperature can also be lethal to your electronics, so unwrap them and allow them to sit for a while.

After the boring stuff is out of the way – the loan application process, choosing a lender and then hiring a real estate agent, it’s time to go shopping, the truly fun part of buying a home.

Have you started your wish list yet? The first section should be all about location – where you want to live, right down to several neighborhoods that you find appealing.

We believe in the “Google Earth” method of finding anything – start wide and then narrow down the search radius.

At the wide end of the spectrum, you’ll need to decide whether you want to live downtown, in the suburbs or a more rural area. Let’s walk through some of the terminology you may see while shopping for a neighborhood and the pros and cons of each.

1. Urban Core

The most common name for living in the heart of a city is “downtown,” but the media have introduced another term, “urban core.”

In some areas of the country, such as Austin, Texas, the word “central” might be placed before the name of the city. So, if you live in an apartment in downtown Austin you would most likely tell folks you live in “central Austin.”

Housing choices in the urban core also depend on region. They can range from luxury penthouse condos to warehouse conversion lofts and apartments that sit atop businesses.

Your neighbors will be diverse as well, including a mix of low-to-middle income folks, the affluent and seniors.

Urban core residents like their neighborhoods because the housing is affordable (again, depending on region), it’s typically easy to get where you need to go on foot, they’re close to nightlife attractions and these neighborhoods generally lack the shopping malls so prevalent in suburbia.

Drawbacks to downtown living include trying to find parking, more crime and lots of transients.

Popular urban core neighborhoods include downtown Los Angeles, Battery Park City in Manhattan and downtown Seattle.

2. Suburbs

There are as many different descriptions of the suburbs as there are neighborhoods within them. One thing most can agree on is that the suburbs are located outside of the urban core.

Sometimes called “bedroom communities,” the suburbs offer a quieter, slower pace yet lack the uber-close proximity to many conveniences and entertainment venues.

Zillow.com finds that more than half of millennial homebuyers are choosing the suburbs, so if you plan on selling your suburban home, you may want to target this group of buyers.

Money magazine studied suburbs and, in February 2018 came up with a list of “the best” in the U.S. They include:

• Peters, Missouri (a suburb of St. Louis)
• Vinings, Georgia (outside Atlanta)
• Schaumburg, Illinois (a suburb of Chicago)
• North Arlington, New Jersey (a New York suburb)
• New Berlin, Wisconsin (outside Milwaukee)

You can find the rest of the list at cnbc.com.

If you count yourself among those who dream of buying a home in the suburbs, plan on having a wide choice of home styles from which to choose: apartments, condos, townhomes and single-family homes.

Tip: Consider your commute before settling on the suburbs.

3. Subdivisions

Whether you long for the small-lot subdivisions that became popular in the Los Angeles area a few years ago or are seeking a large lot with manicured lawns and mature landscaping, subdivisions are still in great demand – especially among families.

They may be located in the suburbs or near the urban core.

Subdivisions typically offer residents amenities and what is offered depends on region, developer and the price of the homes.

Larger subdivisions may have a park or three for residents, a clubhouse, community pool, and bicycle or pedestrian trails. But the sky is the limit – literally – in some subdivisions.

Just outside of Charlotte, North Carolina you will find Aero Plantation, home to 90 families. It’s what is known as a fly-in subdivision and light aircraft have the right-of-way on all the roads. Lots are huge – 2 acres minimum – and there’s also a forest and lake in the community.

Trying to describe the typical subdivision home is futile as the variety is huge. Those with cul-de-sacs, however, typically house lots of families with children.

4. Rural areas

If you’re seeking a sense of community and want to put down “roots,” choose a rural area in which to buy a home. According to Pew Research, 40 percent of rural residents know their neighbors.

Only 28 percent of suburban dwellers can say the same while 24 percent of urban core residents know their neighbors.

This is a surprising finding, considering the sparse population of most rural communities.

Choose a rural setting for your new home and you’ll find that your neighbors exhibit a sharp divide in values and politics from the urban core dweller, according to Pew Research.

The populations of rural communities have been on the decline, so many are using incentives to attract new residents, according to a Zillow study. For instance, Tribune, Kansas, in its desire to attract new college graduates, offers the Rural Opportunity Zone program.

“They’ll help you pay off your student loans — up to $15,000 over the course of five years,” according to Brittan Jenkins at Business Insider.

Once you’ve decided on the type of “developed human settlement” (as Wikipedia calls them) that best appeals to you, narrow your home search to the neighborhoods that include the type of home you want and the price range.

Contact us, we’re happy to help.

Whoever coined the phrase “Bridezilla” must’ve been referring to the bride (or groom) who was juggling wedding planning with homebuying.

Believe it or not, many couples avoid the chicken and egg scenario (what comes first, the wedding or the house?) and decide to do both processes simultaneously.

It sounds crazy, but if you have a system and some professional guidance,  you can be successful.

Read on for our tips to get you from chaos to homeowning spouses.

It all comes down to money matters

Since the first step in a home purchase is getting a loan, you’ll need to decide if you should both apply or just one of you.

If you go for the joint mortgage, the lender will combine both applicants’ income, assets and debts. If one of you has a lot of debt, it will weigh down the application.

If, on the other hand, you’re like the average couple, where one of you looks better on paper than the other, perhaps that one should apply for the loan.

In many cases, one half of the couple has good credit but a lower income than the other. The lower income limits the amount of loan you’ll qualify for, while the high credit score may help you get a better mortgage rate.

You may want to sit down with your financial professional for the best advice on how to approach the mortgage application process.

You must consider the unthinkable

Although it may be unthinkable right now, there is a chance that you may not make it down the aisle. If you don’t, you will be among the nation’s 25 percent of failed engagements (according to Time magazine).

So, even though it’s unthinkable, you should be prepared for it, just in case. The best way to do this is to meet with an attorney about how you should divide the property, should a breakup occur. This is especially important if only one of you is on the home’s title.

To be extra safe, have your lawyer prepare a written agreement that both of you can sign.

While it’s not nearly as romantic as planning a honeymoon, planning for the successful purchase of a home before you tie the knot is important.

Feel free to reach out to us with any questions you may have. We love to talk about real estate!

A Sacramento area HOA created a requirement that insisted homeowners keep their garage doors open from 8 a.m. until 4 p.m., Monday through Friday. If they refused, they would be fined $200.

Apparently, the HOA hoped this invasion of homeowners’ privacy would prevent them from renting out their garages as living spaces. The requirement was later rescinded.

An Orlando area HOA ordered Robert Brady, a 70-year-old Vietnam veteran who has lived in his current home for 45 years, to get rid of his dog.

Brady, who has a letter from the VA stating that the dog is a mental-health therapy dog and helps keep the man’s problems in remission, was told that “Bane” exceeds the HOA’s weight restriction of 35 pounds. The dog weighs 40 pounds.

Say the words “homeowners association” and most of us come up with an image of a gang of power-hungry, nosy, petty despots.

The reality

Despite what we read in the media, 63 percent of Americans who live in communities managed by homeowners associations say they are satisfied with their communities, according to the Community Association’s Institute 2018 Homeowner Satisfaction Survey.

Only 38 percent of those surveyed, however, say members of their elected governing board “absolutely serve the best interests of their communities.”

Obviously, there is a distinction with one being satisfied with a community overall yet dissatisfied with their HOA.

Whether their reputation is over-hyped or well-deserved, HOAs offer both disadvantages and advantages to their members.

Dues: the most obvious disadvantage

One of the most obvious disadvantages of buying a home in a HOA-governed community is the monthly fee you’ll be required to pay. Don’t pay it and the association can (and most likely will) slap a lien against your property and, possibly, push your home into foreclosure.

These payments are a lot easier to tolerate if you consider them as helping to ensure your property’s value.

A 2017 Trulia study puts the average HOA fee, nationwide, at $331. Of course, the fee varies, depending on the services provided by the HOA and the community’s amenities.

When you pay the fees also varies, from monthly to yearly and, sometimes, quarterly or semi-annually.

The HOA uses this money to maintain and improve the common areas, to pay for taxes and insurance on the common areas, to enforce the rules and to pay legal fees. They will also use a portion to fund the reserve account – monies put aside to pay for unexpected major expenses or planned long-term projects, such as roof replacement or landscape upgrades.

Then there are the special assessments

Sometimes the HOA doesn’t have the funds to remedy an unexpected expense. Ideally, the reserve fund will have sufficient money in it, but, when it doesn’t, it falls to the homeowners to fork over what’s needed.

How the assessment is determined depends on the HOA’s governing documents. Most often, the governing board will make the decision while some HOAs require that the membership be given a vote before the imposition of a special assessment.

If you are considering buying a home in a managed community

Once your offer is accepted, you’ll receive a package of HOA documents to examine. It’s often a huge stack of paperwork, filled with legal terminology.

We urge our clients to consult with an attorney to help them decipher the documents. Once you accept them, you have no recourse but to abide by what’s in them.

Pay special attention to the Declaration of the Covenants, Conditions & Restrictions, or the CC&Rs for short. This document outlines how you can use the home, and how you can’t. For instance, it may contain a weight limit for pets, it may dictate your front yard landscaping and what window coverings are allowed.

The meeting minutes might also be of interest to you. Look for homeowner complaints. More important, look for the same complaints repeated over a number of meetings. This is an indication of an unresponsive HOA.

The financial documents can give you an idea of how the board handles the HOA’s finances. How much money is in the reserve fund? Check the history of special assessment impositions and the HOA budget as well.

When you buy a home governed by an HOA, you’ll not only pay a fee each month, but your use of the home and the property on which it sits will be decided by people you may not even know.

For those reasons, it pays to read the documentation carefully and see an attorney with any questions you may have.