Monthly Archives: February 2013

Feeling Lucky?

Realtors have many tools at their disposal in setting your home’s listing price: comparable sales (“comps”); market conditions; detailed knowledge of the neighborhood and area. But they just might have something else: lucky numbers.

According to data compiled by Trulia, depending on the area, choosing the right number might attract more buyers.

8 is great. In regions with a heavy Asian-American presence, fully 20% of all listings have a final non-zero number of eight (for example, $378,000). Why? Eight is a lucky number is Asian (especially Chinese) cultures, whereas four is deemed unlucky.

777

Lucky 7. No surprise here: the odds of a listing including a 7, or even a 777, in Las Vegas and Reno are much higher than the rest of the country.

Unlucky 13. The supposedly unlucky 13 appears far less often than 12 or 14, so you’re much more likely to see a $314,000 listing, as opposed to a $313,000 tag.

Repeating 9. Like any other product, an ending 9, or 999, psychologically lessens the impact of the price, just like a $39.99 drill sounds less expensive than a $40 one. But this illusion only lasts for so long, phasing out once listing prices hit $1,000,000.

5: Splitting the difference. A final non-zero 5 gets you a slight lead over your competitors. A listing for $304,550 gets you in front of the repeating 9 sellers listing for $304,999 or $309,999. Plus, 4 and 5 help prevent sticker shock by causing people to automatically round down. So your $304,550 seems more like $300,000 than $310,000, even though it’s almost exactly in the middle.

Picking Paint

Sprucing up your home with new paint is a great way to freshen up a stale room. It’s also a great way to stage your home for sale. Regardless of the reason, picking the right color and sheen can be a little confusing. Here’s a handy guide:

Sheen

Sheen is the paint’s texture, or finish, ranging from high-gloss to flat. Choosing the right one depends on the look you want and the room it’s covering.

High-gloss. Durable and easy to scrub, but also extremely shiny. Great for kitchen walls–the durability will come in handy when you’re wiping those grease stains! High gloss also adds a pop to door and window trim.

high-gloss Semi-gloss. Similar to high-gloss in its durability, but not quite as bright. Works well in kitchens and bathrooms, where moisture accumulates.

Satin. Good luster that’s not quite as shiny as high-gloss or semi-gloss, but more reflective than eggshell or flat. Perfect for high-traffic areas like halls, family rooms, bedrooms, and dining rooms.

Eggshell. Not much shine or reflection, but covers imperfections well. Also great for family rooms, living rooms, dining rooms, and bedrooms.

Flat. The dullest of the sheens covers imperfections very well, but won’t reflect much light.

Color

Lights. Whites, creams, off-whites, and cool colors (light blues and greens) make spaces look larger and ceilings look higher. Steer toward a lighter color to make small rooms appear bigger or more light-filled.

paint

Darks. Darker or warmer (reds and oranges) colors make spaces feel smaller. Use these in massive rooms that need to be more cozy and inviting. Don’t be afraid to use a dark color on a vaulted ceiling to close the room in a bit.

Stripes. Go bold with alternating colors, or create an elegant, understated look with vertical or horizontal stripes just shades apart. A vertical stripe will draw the eye up, making the ceiling look higher, while horizontal stripes will draw the eye around, visually enlarging the room.

Trim. Make trim pop by covering it with a glossy white, or make it blend in by painting it a color similar to the wall it frames.

Love Thy Neighbor

Fights between neighbors have been around as long as neighbors themselves. If you have contributed to one, you may want to consider calling a truce. At least if you plan on selling your home anytime soon.

Living in close proximity to other people creates natural tension, whether it’s a neighbor who throws loud parties or the folks across the street who treat their front lawn like a junkyard. But defusing those situations early will ease any later interactions, like when the time comes to sell your house.

messy yard

You can try your hardest to spruce up your own yard, but you can’t control your neighbors. If you live in a development with a homeowners’ association, they can prod the messy-yard owners to clean up. If not, you may be flying solo. And that could require some old-fashioned charm.

If your house needs to look presentable, ask your neighbors to help you out by making theirs look presentable as well. Offer to help tidy up their lawn or trim dead tree limbs. If it’s bad, or they really need the help, pitch in and plant some flowers or spread some mulch with them. They will be grateful and your house will gain instant curb appeal. But they are likely to spurn your request if you have been fighting like cats and dogs since you moved in next door.

Consider the small gestures of courtesy before you need their help. Are newspapers piling up while your next-door neighbor is away? Pick them up. Did their trash can tip over on pick-up day after they left for work? Stand it up. They’ll appreciate the little things and be much more likely to cooperate when you need help.

Like it or not, you may need your neighbors’ help to sell your place. And a little generosity along the way will make your life much easier.

First-Time Home Buyer? Don’t Forget the Maintenance

Buying your first home is filled with excitement, anticipation, and plenty of tasks to keep you busy.

While it’s always fun to shop for, design, and create your own space, be careful that it doesn’t completely overshadow the not-so-fun parts, like the maintenance and upkeep you will need over the years. If you’re accustomed to renting, the price tag for your first major repair as a homeowner could come as a shock. Inevitably, appliances fail, pipes leak, and roofs fade. So make sure your bank account is ready when you need a handyman fast.

home repair

A popular rule of thumb says to set aside about 1% of your home’s cost for maintenance each year. For example, if you paid $240,000 for your house, plan to spend about $2,400 a year (or $200 a month) on maintenance, repairs, and general upkeep. That number will vary depending on the age and condition of the house and whether any items are covered by warranties, but, chances are, it won’t be much less on average.

You can try to keep the costs under control by making minor repairs yourself. With plenty of how-to videos on YouTube and great websites for homeowners, small stuff shouldn’t make you sweat. But unless you can replace an entire HVAC system or rewire electrical systems, you will need an expert at some point.

Consider setting aside a small amout each month to soften the blow when something major goes haywire. If you just bought your $240,000 house, try setting aside $200 a month in a separate account for home maintenance. Because the plumber won’t care that you spent all your spare cash on new furniture; he won’t work without being paid.

Easy Staging Ideas to Impress Buyers

If outdated styles and sloppy houses don’t appeal to you, they surely won’t appeal to your potential buyers. Buyers might not be willing to look past your family’s oversized, matching-sweater portrait proudly displayed above your fireplace or your “bonus” room filled with decades of accumulated odds and ends. Buyers need a clean, attractive, impersonal space to picture themselves living there.

A professional staging company may help. They can transform your house into a buyer’s dream, but you’ll have to pay for their expertise. If you’re already strapped for cash, try some of these simple DIY solutions to get your house in great shape:

Staged Home JPEGCLEAN! By far the easiest, most cost-effective, and needed task before showing anyone your house. Go through everything in your house and purge what you don’t need. Tidy up what you do need. And give the entire house–inside and out–a thorough scrubbing. Nothing will drive a buyer out quicker than a dirty, cluttered house.

Update as much as possible. Wood paneling and brass fixtures went out of style years ago, and they’re not coming back anytime soon. While some daunting tasks may not make the final cut, a number of easy, inexpensive solutions will create a fresher space. Remove or fill in wood paneling and paint over it. Be on the lookout for inexpensive light fixtures, faucets, door handles, and other small touches you can add along the way. Liven up spaces with new paint.

Increase your curb appeal. Nothing creates a better first impression than a house with great curb appeal. Help by powerwashing your house, cleaning up your yard, mulching and planting some bushes or flowers, and mowing the lawn. If your shutters or door are faded, give them a fresh coat of paint.

Show off your space. Make sure each room serves a purpose. If a spare room has served as an oversized closet, make it shine by giving it a table, shelves, and storage organizers, highlighting its function instead of letting it drag you down.

If you’ve staged the house correctly, buyers won’t even notice–they’ll be too busy taking in all the great aspects of your home!

Do I Really Need Title Insurance?

half houseBuying a home is a steep investment. And, as every buyer knows, the closing process can be pretty overwhelming, so you’ll be forgiven for not noticing one of the line items: title insurance. Never heard of it? You’re not alone.

If you’re getting a mortgage, the bank will require you to get both an owner’s policy and a lender’s policy. One protects you as the owner; the other protects the lender because its loan is secured by the house. The agency issuing the policy will perform a title search on the property, going over the county land records to verify that the seller is the true owner and that no liens exist. If a problem arises, it must be fixed by closing. 

But if someone misses something along the way–there is a lien or long-lost heir or forged document–your title insurance policy will reimburse you for any loss, generally up to the cost of the home. For instance, if the seller’s Old Uncle Charlie shows up and can prove he owns part of the seller’s inherited house, suddenly you may only own half of your house. That’s a problem. So your title insurance policy will compensate you (or your bank) for any loss.

Without title insurance, you would be stuck repaying your entire mortgage for a house that’s not yours. And, since you may not be able to repay that loan, the bank would lose its money as well. So at your next closing, when you see the “title insurance” line item, consider it a small cost for avoiding potentially devastating problems down the line.

Three Simple Steps to a Smooth Move

You searched high and low, negotiated just the right price, signed all your closing paperwork, and had the keys to your new home jingle in your pocket the whole car ride. You’re excited to move in and start decorating. You turn the key, stride over the threshold into your new space, and flick on the light switch. And nothing happens.

headache

It’s easy to overlook one of the many details involved in buying a new home. Here are a few simple steps to make sure you don’t get left out in the cold.

Change the utilities. The seller will have the power, gas, and everything else shut off as of the closing date. Make sure you work with the power company before closing so the utilities seamlessly transfer from the seller to you. It’s a little easier to move your things with the lights on.

Change the locks. Remember the copies of your house keys you made for your mom, neighbor, contractor, and best friend? Well, odds are they still have those keys after you’ve moved out. Now replace yourself with the seller of your newly purchased home, and that means several strangers are probably walking around town with keys to your new house. Make it a priority to change the door locks as soon as possible.

Make sure repairs are done before closing. If you and the seller agreed on certain repairs, make sure they’re actually done before signing any closing paperwork. Take a walk through the property after the repairs, but before closing, to make sure everything is finished and ready to go. Don’t wait until after closing to find out the painter never got around to painting.

Obviously there’s much more, but these simple steps will make sure you don’t overlook something entirely preventable.

Getting Inside the Seller’s Mind

home saleLast time we reviewed what today’s sellers need to know about today’s buyers. Now it’s time to view the sale from the other side of the front door.

While the housing market is making a steady comeback, it’s not the same as years past. Home prices are inching up, and interest rates remain low. Sellers are finally seeing some relief after years of tumbling prices and stricter lending to potential buyers. So what do buyers need to know about today’s seller?

The worst is in the past. Buyers shouldn’t expect to swoop in and make a rock-bottom offer to sellers grateful to have someone–anyone–looking at their house, especially in the Hampton Roads area, which was largely insulated from the massive crash of real estate values felt elsewhere. True, some sellers may be in a desperate situation, but with the market strengthening and financing available, another solid buyer may soon emerge. Things aren’t as bleak and uncertain as they once were, so many otherwise stable sellers don’t need to cash out for a big loss to avoid further instability.

Find out their motivation. If sellers are willing to share, buyers can find out a lot about their reasons or motivations for selling. Is it a short sale? Are the sellers retiring and ready to downsize? Do they own the house free and clear? Are they underwater? Are they relocating? Are they buying a different house? If they are moving soon, or need to tap their equity for a new purchase, the sellers may want a quick closing and could value that over the highest price. If they’re retired, don’t have a mortgage, and are flexible, they may hold out for a higher price or better terms.

Sellers are usually also buyers. Often, sellers are listing their home to buy a new one. So they know the general state of the market, and are often in the same position as their buyer, especially if they’re looking in the same area. They know the overall feel of what’s reasonable (especially if they’re working with a good realtor!), and know what it takes to close a deal. Don’t try to pull a fast one over on them.

The recent market has placed buyers and sellers on more equal footing. Both sides should expect a reasonable deal with some negotiation, especially as the market continues to stabilize.

Getting Inside the Buyer’s Mind

With confidence returning to the ailing housing market, the long-forgotten phrase “seller’s market” is slowly returning to our collective vocabulary. But while interest rates are still at all-time lows and home prices have consistently ticked up over the last year, sellers still need to remember how buyers are approaching their purchase. red house

Gone are the boom days of staking a sign in the front yard and relaxing while multiple offers shoot past the asking price. After having watched the last decade’s fireworks fizzle out, buyers are still eager, but cautious and ready to negotiate. So how do sellers attract buyers who can seal the deal?

Treat buyers fairly and honestly. Most, if not all, buyers have heard at least one story of a less-than-forthcoming seller eager to flip a house at the height of the market. Don’t be surprised if those anecdotes leave a bad taste in buyers’ mouths. How can you avoid a similar fate? Be open and honest during the process, and don’t make the buyers feel like you’re holding back or being less than truthful. With an abundance of homes on the market, buyers have an easier time walking away if something smells fishy.

Buyers have plenty of options. This goes hand-in-hand with the first: lots of willing–and sometimes desperate–sellers are willing to go to great lengths to sell their house. They are your competition. You don’t have to cave in or give away the farm, but remember that your neighbor down the street just might.

Be willing to negotiate. A seller’s desire to set the terms–take them or leave them–and expect a line of buyers isn’t realistic anymore. Working with a buyer may require more negotiation and wiggle room to make the sale. Don’t be afraid to engage in a little give and take.

Next up, what buyers need to know about sellers!

Homeownership and Taxes

A major consideration in renting vs. buying is the advantage ownership gives at tax time. Being that time of year again, a simple refresher is in order to make sure you keep some money in your pocket.

irsMortgage Interest

Probably the biggest tax break afforded homeowners, the mortgage-interest deduction can greatly reduce your taxable income, especially for new homeowners who pay almost exclusively interest for several years. This tax break can let typical homeowners deduct up to $10,000 or more while doing their taxes. 

Remember that mortgage interest on rental or investment property is deductible as well.

Your mortgage company will send you a statement each January showing how much mortgage interest you paid the year before.

Property Taxes

Another potentially significant tax break is the local real estate tax homeowners pay each year. The tax is generally part of your mortgage payment, so you may not even notice it, but it’s there. You can deduct any real estate taxes you paid throughout the year. Depending on your locality’s tax rates, this can usually reach into the thousands of dollars each year.

Tax Credits for Energy Efficiency

Federal tax laws encouraging homeowners to install energy-efficient materials and appliances can rack up other tax breaks. Credits are available for the purchase and installation of certain energy star-rated appliances, windows, doors, skylights, and other materials. While the credits are capped at certain amounts, they can definitely help if you’re replacing appliances or windows anyway. (And they can reduce your electric bill!)

What’s Not Deductible

Despite the tax advantages of buying, the IRS still won’t cut you any slack on certain things. Normal household repairs, homeowners’ association dues, and homeowners’ insurance don’t get any special tax treatment.