5 Small Home Improvement Projects with Big Returns

The very mention of ‘home renovation’ can cause anxiety in homeowners, particularly those who have already gone through the process. Extensive remodeling projects can be expensive, disruptive, and time-consuming, but that does not necessarily apply to every project. There are a number of upgrades that can dramatically improve the look and feel of your home without breaking the bank or creating total chaos in your life. If you are trying to sell your home, you will find that inexpensive improvements can yield big returns. Here are five enhancements that fall relatively low on the hassle scale:

1. Hardwood Flooring Installation

Installing hardwood flooring should, in most cases, be left to a contractor, as it requires special equipment and expertise. On the other hand, glue-down hardwood floors are less costly, especially if your home is on a concrete slab. The installation of nailed hardwood floors over concrete requires that a layer of plywood or other suitable wood medium be applied first so that the new product can be attached with nails. However, glue-down flooring eliminates this step because an adhesive is used for the attachment process. It is generally a faster installation as well. For instance, a 400 square foot room floored with 3-inch flooring can usually be completed in 1 to 2 days.

If you already have hardwood floors that are worn, you might want to consider refinishing. Again, this is a job for the well-skilled craftsman, but it will dramatically improve the look of the room and require much less time than a complete replacement. In fact, approximately 86% of homebuyers in 2011 chose a home with hardwood floors, so this renovation is a worthy investment if you plan to sell your home somewhere down the road.

2. Kitchen and Bath Hardware

One of the simplest upgrades that can be performed is the installation of new hardware such as towel racks, cabinet handles, toilet paper dispensers, and other wall-mounted hardware. Several aesthetically pleasing designs are available for a range of prices. If you are handy, this is a true do-it-yourself project.

3. Cabinet Upgrades

Replacing cabinets is an extensive process, particularly in a kitchen. Unfortunately, this process will make that area practically unusable during the renovation. If your cabinets are not dated or damaged, you may opt to refinish the doors and drawer panels instead. In addition, you may want to replace old hardware like pull handles and knobs. This is a much cheaper option and will reduce the disruption since the cabinets themselves do not require demolition.

4. Exterior Door Replacements

The front entry is one of the first things a visitor sees when approaching your home. If the front door is old, warped or damaged, replacement should be considered, not only for cosmetic reasons but for energy efficiency benefits as well. Standard size doors can be purchased at virtually any home improvement center. They may also have an installation option as well, and that can make this a truly painless upgrade.

5. Wall Painting

A fresh coat of paint can do wonders for any room. Walls and ceilings get stained and dulled over the years, and a fresh application of paint not only brightens but protects these areas. Painting is a true do-it-yourself project; it does require patience and attention to detail but the outlay for materials and paint is minimal for the benefits gained.

Written By: Erin Devine

5 Things New Home Buyers Look for First

The real estate market is so huge these days that people that want to sell a house need to make sure that everything is in a perfect state. And not only that – they should also try to make the most important features stand out in order to make the potential buyers even more interested in their particular house.

Nobody buys a house without looking around for awhile, so it is necessary to get the property into the ideal state. Of course, there are some things that new home buyers look for first – and those are the things that you should focus on in your preparations the most. In this article, we are going to look at some of the top ones.

Patio

Patio might not be the most important feature for many buyers, but it is a feature that has a huge influence on the buyer’s first impressions and we all know how important that factor might turn out to be. Someone who will have to walk through a patio that is in a state of disrepair is surely not going to regard the entire property very highly. On the other hand, a well-designed patio with seasonal decorations that is kept in a good state might have the opposite effect on the potential buyer, so make sure that your patio is indeed going to start the inspection on a high note.

Roof

When it comes to exterior features, roof is one of those things that stand out the most and any deficiencies in that department are going to be noticed by everyone who will want to take an in-depth look at the property. This is especially true in locations that experience their fair share of bad weather and where it is a really good idea to have a roof of the best possible quality. You might not be willing to invest into a complete renovation, but you should undoubtedly fix the most obvious problems in order to make your house more attractive.

Layout

With the exterior out of the way, the layout is what is going to hit the buyers straight away. Changing the layout is an incredibly tough task and, unfortunately, you will have to pitch your layout a little bit if it isn’t designed according to the current trends and tendencies. One of the things that modern families like to have is shared space between the living room and the kitchen. You are obviously not going to change the entire layout just because you have the two rooms separate from each other, but you should know how to convince the buyer that this is no issue at all if the topic comes up during the inspection.

Indoor Decor

One thing that can be changed more easily is the indoor decor – and you should definitely try to make it as neutral as possible. Neutral and conservative colors are going to appeal to a much wider audience than eccentric colors like dark red. You might love to live in rooms with that kind of aesthetic features, but chances are that the buyers would prefer to come into a place that has a neutral decor and color palette. Thankfully, it is not that hard or expensive to change this particular feature and you should therefore surely consider changing it even before you put your house on the market.

Infrastructure

Finally, everyone who is satisfied enough with what he or she sees will certainly want to take a look at the house’s infrastructure. We are talking about the most basic things – water, electricity, and heating. Every single house has an infrastructure, but customers tend to be very picky these days. First and foremost, everything needs to be in a perfect state – nobody will want to buy a house in which the heating system will have to be changed in the near future.

With that out of the way, home buyers also tend to look for how efficient all those systems are, especially when it comes to environmental friendliness. Solar panels seem to be what the craze is mostly about these days – and innovative solutions like that can certainly make your house stand out from the rest of the market. So don’t forget to mention them during the inspection!

Written: Paul Hayden

Staging Your Property to Appeal to All Five Senses

Before you conduct your first open house, consider how you can stage your property so that it is more appealing to potential buyers. Most open houses appeal to only one sense – our eyes. This is extraordinary given how much our day-to-day emotions are influenced by what we smell and the fact that there is a high chance our mood can change when we are exposed to a positive sound. The importance of our senses has been completely overlooked when it comes to selling a home… until now.

Sniffing an opportunity…
Have you ever walked past a Subway sandwich shop where you can smell the aroma of warm bread? If you look carefully at the awning you will spot vents that are specially designed to disperse baking aromas. This has proved to be a profitable exercise for the Subway Franchise.

Studies show that smell is heavily connected to our memory and our mood. When the opportunity presents itself, I like to place a tangerine or a pinch of vanilla extract on a sheet of tinfoil and turn the oven to 275 degrees. I have observed that this subtle smell will put a smile on a visitor’s face and allow a buyer who has seen 15 similar apartments in one day to distinguish your apartment as the “vanilla smelling apartment”. The smell must be subtle and anything too strong could backfire.

Taste goes hand in hand with smell.
Who’s in a good mood when they’re hungry? In addition to creating a subtle aroma, pairing simple foods together could go a long way with changing your buyer’s mood. When I place a pinch of vanilla extract in the oven I generally like to offer foods that match this smell such as cookies, chocolate, and coffee that I have brewed. When I place a tangerine in the oven, chopped fruit with tooth picks and wine generally matches the aroma better.

Depending on the type of clientele your listing attracts you can choose between one or the other. From my experience when dealing with apartments that have multiple bedrooms where a family is going to live, I generally like to serve coffee and cookies, as I sometimes expect kids to show up. The use of coffee will also make them feel more alert and thus more prone to listening to what you have to say and the act of making the coffee and pouring it into their cup will make them feel more at home. When dealing with a one bedroom apartment that will generally attract a first-time single buyer and clients looking for pied-a-tiers, I find fruit and wine make them feel more relaxed and more prone to opening up to the agent.

Sound is connected to mood as smell is connected to memory.
Sound creates feelings and emotions. Think about the last love movie you saw, it isn’t nearly as emotional if you watched it with the sound off. If you have ever been to a townhouse open house in NYC at times you’ll see them hire an opera singer, cellist and violinist. I am not saying you should go that far, however, I do think that a subtle natural melody can help soften the mood and make a buyer feel more relaxed.

Temperature is key and doors are for discovery…
The skin is the largest organ of the body. It instantly alerts us to cold, heat, pain or pressure. When you hold an open house make sure the temperature of the house is right. In the fall and spring I would advise keeping the thermostat at 72 degrees. In the winter I would advise 80 degrees and in the summer at around 60. Remember if the house is too hot it’s going to come off as ‘stuffy’ and if the house is too cold it’s going to come off as unwelcoming.

Also, before a buyer walks into the house, close all doors to closets, bathrooms, and bedrooms. The more doors a buyer opens the larger the apartment feels.

Sight is the most seductive sense of all.
It often overrules the other senses, and has the power to persuade us against all logic. What you should understand about vision is that it’s all about light and that’s why they say, to truly see what an artist saw when painting a given picture; you should look at it under the same light. Here’s my advice:

• The house should be shown when it receives the best natural light.
• Turn on ALL lights in the house.
• Allow your prospective buyer to see themselves in the space. It is important that you remove personal items such as photographs, collectables, awards, family heirlooms or controversial art.
• Clear out any clutter and knickknacks from corners, counters and tables. Remove outdated furniture and extra pieces to open up a room and make it more inviting.
• Buyers love to snoop and will open closet and cabinet doors. Clean and organized closets look roomier. Consider advising the seller to donate unused clothing and items to their favorite charity.
• If the property needs work – dated wallpaper, ratty carpet – consider having it replaced. A fresh coat of neutral paint is a relatively inexpensive way to make a home look clean and fresh.
• Making minor repairs can also make a big difference. Replace cracked floor or counter tiles, patch holes in walls, replace burned-out light bulbs, fix leaky faucets, doors that don’t close properly and broken fixtures.
• Clean like the sale of your home depended on it … because it does. Pay particular attention to the kitchen and bathroom sinks and counters. Clean windows to make a room brighter and so your buyers are no distracted.

Written by: Ariel Dagan

Which Home Loan is Right For You?

The steady uptick in temperature ushers in more than just pool-side cocktails and barbeques. It’s the start of real estate season, and people are hitting the MLS and local Realtors in search of For Sale signs to lead them to their perfect home.

But before you move from hunter to homeowner, the mortgage industry must be conquered, and you’ll have to get a home loan. The good news is that interest rates on mortgages are dropping, with CNN Money reporting 15-year mortgages with an average rate of 3.11%. The bad news is there are so many loan options available, you may have a hard time figuring out which one is right for your situation.

These short questions can help point you in the right direction instead of taking a stab in the dark. If you’d rather view visuals, New American Funding created an infographic quiz that can help you find the right home loan though a series of short questions.

How’s your credit score?

• More than 640: Conventional Loans are your best bet because you can take advantage of the low interest rates and flexible payments
• Less Than 640: FHA Loans provide easier qualifying guidelines if you’re credit score isn’t great or you can’t afford a large down payment.

How big is the home you’re buying/refinancing?

• Less than 3 bedrooms: If your home is more than $417,000, double check your county’s maximum loan limits. For a lot of house, High Balance Loans or Jumbo Loans are your best option.
• 3+ bedrooms: If your home is less than $417,000, you’ll fall into the amounts of FHA or Conventional Loan limits.

Would you consider yourself a risk taker?

• Absolutely: Adjustable Rate Mortgages (ARMs) give you a lower interest rate for the first 3-10 years, but it will adjust based on the market so if you can stomach the fluctuations, go for it and then go skydiving.
• No way: Nothing wrong with being conservative. Secure yourself with a Fixed Rate Mortgage so you know how much you’ll be paying each and every month.

How old are you?

• Under 35: You’re either a first-time home buyer or a home buying prodigy. Assuming the former, the FHA Home Loan First-Time Homebuyer Program is a great choice for your first loan.
• Over 35: You’re likely old enough to have built up your credit history and put some money way to afford an FHA or Conventional Loan. If you’re over 62, check out Reverse Mortgages.

How much is your household income?

• Less than $150,000: FHA Home Loans provide the best value with the lowest price tag.
• Greater than $150,000: If you make more and have a low income to debt ratio, you can quality for a higher loan amount. FHA and Conventional Loans are both options

How much longer do you see yourself working?

• Less than 5 years: If you’re about to be retired, you may qualify for a Reverse Mortgage. If you’re a stay-at-home parent, find a loan that can be more affordable with just one income.
• More than 5 years: FHA or Conventional Loans are best for the working class, but if you see yourself moving in 5 years, consider an Adjustable Rate Mortgage or a 15 Year Fixed Rate.

Written by: Erin Everhart

Preparing Hardwood Floors for Home Staging

If you have recently listed your house for sale, then there is a good chance you are looking into tips for home staging in order to increase your chances of success when it comes to selling the home. If you’re not, then you should be! After all, there are all kinds of steps you can take to increase the overall appeal of your home to potential home buyers and those who schedule showings. One aspect that many people fail to consider when it comes to home staging, however, is the importance of preparing your home’s floors.

For starters, if you do not already have any hardwood flooring in your home, now would be a great time to have some installed. After all, this is generally thought of as the most appealing type of flooring in homes, especially in areas such as main living spaces and kitchens. You can have this type of flooring purchased and installed for less than you would expect if you shop around and choose the right company, too.

Of course, if you already have hardwood flooring in any space of your home, it is important to ensure that it looks its best prior to that first showing. And while hardwood is extremely appealing, the truth is that it can be very hard to care for. For this reason, it is important to know what steps to take in order to get your floors looking their best for potential buyers.

To begin with, you should start by using a microfiber dusting pad to get rid of excess debris from the wooden floors. This is an important first step to prepare the floors for further cleaning and polishing. Be sure to buy a microfiber cleaning pad, as other types may not be soft enough and could end up scratching your wooden floors. To get debris and dust out of crevices and corners, you may also want to consider using a hose attachment on your vacuum.

Next, choose a floor cleaner that is specifically made for hardwood flooring. Never use a generic disinfectant or other cleaner that is not labeled specifically for use on hardwood. This is because it could cause serious and expensive damage to the flooring this way. Apply small amounts of the cleaner to each area of the floor and rub them into the wood using a microfiber pad.

Once the cleaner is applied, check to make sure that the floors are not too slippery. If the floors are slippery, ensure that any potential buyers you show your home to keep their shoes on when viewing the home to avoid slipping hazards.

Once the floors are shiny and clean, you may also want to consider applying a floor polish to give them an extra shine and protective finish. Most of these come in a wax form, though some cleaners even have the polish built in to save you time and hassle.

Overall, preparing your hardwood floor for a home showing takes time and careful work. However, in taking the time to get your floors looking their best, you will drastically increase the overall appearance of your interior space and your chances of being able to sell your home.

Written by: Erin Devine

Real Estate Forecast 2013: The Housing Market

The housing market will improve moderately in 2013, but nobody will mistake this for a boom. The gains in activity and prices will be a welcome relief, but will leave many homeowners still underwater.

The usual way of discussing housing problems is misleading. Foreclosures, short sales, shadow inventory, upside-down mortgages are all symptoms. The fundamental problem that we have is an excess supply of housing units.

The normal housing vacancy rate for owned property (single family houses and condos not in the rental market) is around 1.5 percent nationally. Our high was three percent, but we are now down to 2.1 percent.  Rental properties are normally about seven to eight percent vacant. (Local norms may be higher or lower.) We reached a peak of 11 percent rental vacancy a few years ago, but have improved to 8.6 percent in the latest observation.  Despite recent gains, we still have too many houses for the current level of demand.

(Data note: these data are a little soft. They do not exactly match vacancy information from other sources, such as the decennial census. They should be taken as a general magnitude, not high fidelity information.)

The improvement we've seen recently results from a simple phenomenon: construction of new fewer housing units has been less than the growth of demand. Last year total units (single family houses plus the number of apartment units) ran just over 600,000. This year we’ll probably build about 750,000 units. At the peak of construction in 2005 there were 2.5 million units built. We need about 1.5 million new units per year to accommodate population growth, the desire for vacation homes as well as demolition of old units. That, too, is a soft number. The true annual need may be 1.4 million or 1.6 million, but it was never 2.5 million nor 0.6 million.

Our recent underbuilding has been the greatest aid to housing recovery. It did not act as fast as we might have expected (as fast as I actually had expected), because the recession slowed population growth, from both a smaller birth rate as well as less net migration from abroad. In addition, the population we did have used fewer housing units per person, as adult children moved back in with their parents. Slow improvement in the job market means slow movement of kids away from their family homes, but even though slow, the movement is in the right direction.

It’s too early for housing starts to get back to normal—and we certainly will not see above-normal construction anytime soon. But 2013 will probably see over one million total housing starts. This will be a substantial percentage gain over 2012, but remember that a 30 percent gain from diddly squat is still not too far away from diddly squat.

Home prices will rise in 2013, but only modestly. The most recent data suggest that national average housing prices are rising by roughly five percent annual rate. That’s too optimistic a projection for the next few years, however, because there are many owners of multiple underwater properties who will sell as soon as they don’t have to lay out cash. That increased number of houses on the market will limit price hikes.

Business cycles aside, there is not much reason for housing price to appreciate by more than three percent plus inflation, or about five percent in this current environment. Periodic booms and busts will push price gains above or below trend, and a change in tax laws that favors or disfavors real estate will cause one-time price changes. Ten-percent appreciation expectations are fanciful on a long-run basis.

Businesses in the home construction supply-chain should prepare for a nice increase in sales volume in 2013, which will bring the usual boom-time challenges: finding good workers, ensuring an adequate supply of product from vendors, securing the working capital needed to grow production. (See my article on vendor performance and my video about working capital for growing businesses.)

Apartment investors (and landlords of single family homes and condos) will find that their little boom does not strengthen much further. Rents have risen so much that owning is becoming cheaper than renting in many cities. Add in the expectation of price appreciation and we’ll soon see renters itching to buy their own homes. Times will not be hard for landlords, but they should not project further gains beyond what they secured in 2012.

Written by: Bill Conerly

Six Money Saving New Year's Resolutions

“I will pay less tax” may sound like a good New Year’s resolution, but it may not be possible in 2013... Besides, resolutions should be manageable and concrete. Here are six that will save you money in 2013 and beyond.

1. I Will Consider Taxes Before Signing Agreements: Most agreements you sign in business have a tax angle. Many in your personal life do too. Settlement agreements resolving litigation, a sale agreement for a company or real estate, a lease for office space, an option to buy property, or a license agreement to use property can all have a tax impact. Consider taxes before signing and negotiate what you can.

2. I Will Pay Attention to Every Form 1099:  Each one of these slips of paper bears your Social Security Number and will be matched to your tax return. Their importance is increasing. It’s almost January when the ubiquitous forms show up in the mail so get ready. Pay attention to these forms–the IRS does. 

3. I Will Keep Good Records:  Good records make any tax matter vastly easier. Keep proof you timely mailed returns, protests, correspondence, etc. So you can prove when you sent it, send it certified, FedEx or other approved provider that proves timely mailing and receipt. 

4. I Will Consider Taxes Before Hiring “Independent Contractors”: Few consumers consider whether the plumber doing a one-time task is an employee or independent contractor. But if you’re in business and have continuing relationships with workers, consider whether an independent contractor relationship will stand up. 2013 could be a big year for reform.

5. I Will Handle Tax Notices Promptly: Many tax lawyers and accountants find that many clients do not deal with problems promptly. Often, tax professionals could achieve a better result if they were brought in earlier. Whenever possible, be prompt. When you need an extension, get it in writing.

6. I Will Run Numbers: Often, there’s no way to know if you’re getting a tax benefit from a deduction without running numbers. Whether you prepare your own return or have a preparer, running numbers will help you make better and more informed decisions. Multiple scenarios are especially helpful with AMT.

Whatever your New Year’s resolution, 2013 promises to be a year with major tax developments.