What To Repair Before Putting Your Home Up For Sale

If you are preparing to put a home on the market, it is expected that a few minor repairs and improvements will need to be done first. But what repairs will translate into the biggest return? Every home is different, but the answer largely depends on a variety of factors, including location, the time of year, how hot (or not) the market is and the competitive inventory.
The goal of most buyers is to move in with minimum costs and headaches. Thus, a home with completed repairs is a big draw. But here is where local market conditions impact the decision to do minor improvements. What needs to get done to be competitive? In a hot sellers market your client might not need to lift a finger, while in a buyers market that list of repairs may grow quite long.
Practical projects that require little of your clients time, effort or money - like applying a fresh coat of paint - can instantly make the home more appealing, helping it sell faster and for more money. So, without question, suggest they complete smaller repair projects like patching cement cracks in sidewalks, caulking windows and doors, replacing old doorknobs and locks, mending or painting fences and resurfacing asphalt driveways.
But what about the larger issues? Before your clients decide whether to fix or merely disclose to buyers, discuss the fact that doing repairs will invariably result in a higher sales price. You can undoubtedly relate firsthand stories of buyers who ratchet up their enthusiasm upon hearing the terms "new" or "just replaced" as you show a home.
Key changes:
• Along with removing old wallpaper, there is no more cost-effective improvement than the application of fresh paint: inexpensive, and relatively quick, painting should be your first suggestion when discussing repairs.

• Buyers typically desire hardwood floors, so it would pay to have your clients old carpeting removed and have the floors refinished. Replace chipped or cracked tiles, and clean or replace the grout, but don't suggest installing expensive ceramic unless it is in a small space, like an entranceway.
• In the kitchen, appliances and cabinets are the big-ticket items to replace. If your clients do not have to upgrade, they will save a lot of money. However, if their cabinets are worn and weathered-looking, the house might not sell as quickly (or at all). Paint might help here too.

• Kitchen remodeling is typically a wise return on investment, but high-end kitchen makeovers do not tend to return as much as mid-range or minor kitchen remodeling. Most buyers will be drawn to "new" but tend to shy away from the top-of-the-line refrigerator, high-end stove or travertine tile floors. Similarly, new counters show well with a simple laminate rather than expensive granite counters.

• Bathroom repairs and renovations are always a solid recouped cost. It is easier for prospective buyers to imagine themselves stepping out of the shower onto pristine new floors, surrounded by new fixtures and lights.
Typically, buyers will want to move into a house that has new appliances, updated plumbing, electrical and HVAC - a home that is ready to be lived in.

MOVE- UP/LUXURY MARKET Showing Signs of Life

Over the past several years, first-time buyers made up about 42 percent of the market. As a result of home buyer tax credits, those first timers represent close to 50 percent of buyers. However, increasing activity in the upper price ranges shows that buyers in the move-up/luxury market are sparking the housing recovery as well.
In Pierce County, pending sales* of entry/first-time/move-up homes (those priced $299,999 or less) were up 72 percent over last March. In the move-up/luxury market ($300,000+), pending sales were up 97 percent over last year. This is clear evidence that the move-up/luxury market is doing comparably well to the broader first-time segment, especially when you consider that this market has not directly benefited from home buyer tax credits like the lower price ranges have.

Why is the move-up/luxury market improving?
• Buyers who are hoping to “time” the bottom of the market
• Low interest rates
• The increased affordability of jumbo loans

At this time last year, interest rates on a jumbo loan were in excess of 8 percent due to a large number of lenders exiting the jumbo market. Today, many of those lenders are returning, which has helped bring interest rates on jumbo loans more in line with conforming loan rates: near 5.5 percent. In addition, Pierce County FHA loan limits are up to $567,500, which means that a buyer can purchase a home with as little as 3.5 percent down payment as long as the loan does not exceed $567,500.
With increasing optimism in employment numbers and consumer confidence, as well as the increasing availability of financing products, the housing market recovery should continue at a steady pace. And as we are already seeing, the recovery appears to be taking place throughout the price points, not just in the markets that have been bolstered by tax credits.

HUD Official going over “How to Properly Complete the new GFE ”

Is The Rumor Fact or Fiction?

Rumor Number One

The new "Cap and Trade" Climate change bill in Congress requires a homeowner to license their home prior to selling it.
FICTION!

There is no requirement in the law to license a home before your clients are allowed to sell their home. In addition, there is not a requirement to make a home more energy efficient before it can be sold.


Rumor Number Two

The recently-passed health care legislation imposes a 3.8% tax on homes sales.
FICTION!

An article has been circulating that mischaracterizes and overstates what is actually in the legislation. Here are the facts.
There is a new 3.8% Medicare tax for "High Income Filers" that goes into effect January 1, 2013 The tax is on unearned income and will apply ONLY to single filers with more than $200,000 of Adjusted Gross Income (AGI) and joint filers with more than AGI of $250,000. Unearned income includes interest, dividends, capital gains and net rents.
Keeping in mind the income limitations above, real estate income that will be affected for high-income filers include:
• Sale of a primary residence: If the gain from the sale of the property is below $250,000 (individual)/ $500,000 (couple) NO tax will have to be paid on the gain. The new Medicare tax would only apply to any gain realized over the $250K/$500K existing primary home exclusion that will bring the filers AGI over the $200K/$250K limits.
• Second Home/Investment property: The additional 3.8% tax will apply to the portion of the gain realized on the sale of a second home or investment property that will bring the filers AGI over the $200K/$250K limit.
• Rental Income: The portion of net rental income that exceeds the $200K/$250K AGI limits will be subject to the new 3.8% tax.

What is HAFA? And What is going on with Short Sales Today?