Q: How will the law help struggling homeowners keep their homes? A: Through the Federal Housing Administration (FHA), an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages. The program offers government insurance to lenders who voluntarily reduce mortgages for at-risk homeowners to at least 90% of the property's current value. Q: When will the program begin? A: The program will begin on October 1, 2008 and sunset on September 30, 2011. Homeowners in danger of losing their homes before October 1, however, should not wait to contact their loan servicers and should begin applying for federally insured mortgages now. Q: Who is eligible? A: To be eligible to participate in this program, a borrower must: Have a loan on an owner-occupied principal residence. Investors, speculators, or borrowers who own second homes cannot participate in this program. Have a monthly mortgage payment greater than at least 31 percent of the borrower's total monthly income, as of March 1, 2008. Certify that he or she has not intentionally defaulted on an existing mortgage, and did not obtain the existing loan fraudulently. Not have been convicted of fraud. Q: How can a homeowner access this new program? A: Homeowners or a servicer of an existing eligible loan need to contact an FHA-approved lender. The FHA-approved lender will determine the size of a loan that a borrower can reasonably repay and that meets the requirements of the program. If the current lender or mortgage holder agrees to write-down the amount of the existing mortgage and make the new loan affordable, the FHA lender will pay off the discounted existing mortgage. Loans provided under this program must be 30-year fixed rate loans. Q: Are lenders required to participate in this program? A: No. The program is completely voluntary for lenders, investors, loan servicers, and borrowers. Q: How does this law help neighborhoods that have been hit by the foreclosure crisis? A: The impact of the current crisis has not been isolated to individual borrowers or investors, but has been felt broadly by neighbors, communities, and governments across the nation. The law strengthens neighborhoods hit hardest by the foreclosure crisis by providing $3.9 billion in Community Development Block Grants to states and localities to buy foreclosed homes standing empty, rehabilitate foreclosed properties, and stabilize the housing market. Q: Will this law be a bailout for speculators, homeowners, investors, and lenders? A: No. It is narrowly tailored to keep families in their homes. For example: Only primary residences are eligible: NO speculators, investment properties, second or third homes will be refinanced. Investors and lenders must take big losses first in order even to participate. The owner of the old mortgage can get a maximum of 90% of the current value of the home (which presumably will be considerably less than the value of the original loan). In many cases the loss will be significantly greater, but 10% is the minimum. In addition, lenders must waive any penalties or fees, and help pay for the origination and closing costs of the new loans. Most homeowners will have seen the equity in their homes disappear before being able to refinance under this program. In addition, the FHA will get a portion of any future profits on the house, to make sure the government recoups its investment over the long run. Q: Will this law reward families who bought homes they could not afford? A: Many homeowners facing foreclosure were misled, were deceived, or were in other ways the victims of unfair lending practices. To prevent future abuses by lenders, this law will establish a nationwide loan originator licensing and registration system to set minimum standards for all residential mortgage brokers and lenders. It also strengthens mortgage disclosure requirements to help ensure that borrowers understand their mortgage loan terms. Q: How will this law make it more affordable to own a home? A: There are a number of provisions that will make homeownership more affordable: Creates a refundable tax credit for first-time homebuyers that works like an interest-free loan of up to $7,500 (to be paid back over 15 years). Grants states $11 billion of additional tax-exempt bond authority in 2008 that they can use to refinance subprime loans, make loans to first-time homebuyers and to finance the building of affordable rental housing. Raises conforming loan limits for the FHA, Fannie Mae and Freddie Mac to $625,500. Because of the high cost of housing in California, a majority of the state's residents were previously shut out from these programs. Raising these loan limits will lead to lower interest rates on some loans, greater refinancing opportunities, and enable more borrowers in high cost areas to avoid the type of nontraditional and frequently abusive loans that led to the current crisis. Provides couples using the standard deduction with up to an additional $1,000 deduction for property taxes ($500 for individuals). Q: Does the law provide help to those who still cannot afford to own a home? A: Yes. The bill includes a number of provisions to increase the supply of affordable housing, which has been a major problem in California pre-dating the current foreclosure crisis. For example: The bill creates a new permanent affordable housing trust fund – financed by Fannie Mae and Freddie Mac and not by taxpayers – to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas. In addition, the legislation provides a temporary increase in the Low-Income Housing Tax Credit and simplification of the credit to help put builders to work to create new options for families seeking affordable housing alternatives. 2007 Cost vs. Value Report: It's Payback Time Remodeling magazine’s annual "Cost vs. Value Report" shows exterior and replacement projects bring the biggest return. ADAPTED FROM REMODELING MAGAZINE Home rehabbers who are considering a move in the not-too-distant future should focus mostly on exterior upgrades. That’s the message from REALTORS® who participated in Remodeling magazine’s 20th annual "Cost vs. Value Report," done in cooperation with REALTOR® Magazine. REALTORS® in 65 markets were given construction specs and costs on 29 upscale and midrange projects and asked to estimate the percentage return at resale. Of projects that saw national cost recovery rates of more than 80 percent in 2007, only one — a minor kitchen remodel, with 83 percent of cost recovered — was a strictly interior job. The others were an upscale siding replacement using fiber cement materials (88.1 percent), a wood deck addition (85.4 percent), midrange vinyl siding replacement (83.2 percent), and upscale vinyl and midrange wood window replacements (81 percent and 81.2 percent, respectively). On most projects, the value of remodeling trended down in 2007 compared with 2006. No project exceeded an 88 percent return. The likely culprits for the year-to-year drop: rising remodeling costs and slowing home appreciation brought on by the lackluster housing market in many areas. The story was somewhat different in the Pacific region, however, where REALTORS® estimated cost recovery of more than 100 percent for six projects: a wood deck addition, a minor kitchen remodel, fiber-cement siding replacement, wood window replacement, and an upscale wood and vinyl window replacement. Nationally, projects at the bottom of the cost-recovery ladder included home office remodels (57 percent), installing a back-up power generator (58 percent), and adding a mid-range sunroom (59.1 percent). Put Costs and Values in Context Looked at over a number of years, some projects appear to recoup considerably less than others. Home office remodels, for instance, have been at or near the bottom of the national averages since 2005 when the project was added to the survey. People investing in a home office typically do so to fill a specific need, such as to start a home-based business or telecommute. A prospective buyer with different space needs won’t see the value, regardless of the cost. On the other hand, since minor kitchen remodels were added to the report in 2004, they’ve consistently ranked among the highest-value projects, according to practitioners surveyed. When looking at cost estimates for individual projects, remember that averaging tends to have a leveling effect on job cost data. Also, seemingly small differences in project size and scope, or in the quality of finishes, can dramatically affect final project cost. It’s also important to consider whether a remodeled space reduces the perceived number of rooms or available square footage. For example, carving a half-bath out of unused storage space under a staircase is an obvious gain in usable space. But converting an existing bedroom into a master bath, while a positive development in many respects, may reduce the number of bedrooms below the minimum expectation of some prospective buyers. Similarly, the cost recouped on a given remodeling project depends on a wide variety of factors. These include the condition of the rest of a house, the value of similar homes nearby, and the rate at which property values are changing in the surrounding area. A home’s urban, suburban, or rural setting also affects its value, as does the availability and cost of new and existing homes in the immediate vicinity. Finally, there can be wide regional swings. A midrange bathroom remodel recovers 85 percent of its cost in the South but only 63 percent in the Midwest. Where resale value is a major factor in a home owner’s decision to remodel, the best course of action is to consult with a local remodeler about construction cost — and look closely at the comps and market conditions. Survey Changes Affect Results Some of the volatility in year-to-year comparisons results from two changes to the survey itself. The first is a general overhaul of the project descriptions and cost estimates, begun in 2006 and completed this year. These changes resulted in cost increases larger than would have resulted simply from rising labor and material costs, notably for major kitchen remodels, bath projects, and siding replacements. The construction costs are more accurate than in previous years, but they combine with slower home appreciation to create a lower percentage in the value column. The second change began in 2002 with the introduction of higher-priced upscale versions of some projects. Although the range of costs thus created made the report more useful, it impacted year-over-year comparisons. While the trend of core projects turned down in 2003, the trend for all projects peaked in 2005 before turning downward. As we continue to survey all 29 projects, we expect trend data to become more reliable. Until then, the most useful comparisons are of national data for single projects and of regional cost and value differences. About the Survey Construction cost estimates for the 2007 Cost vs. Value Report come from HomeTech Information Systems, a remodeling estimating software company based in Bethesda, Md., which regularly collects current cost information from a nationwide network of remodeling contractors and suppliers and applies an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, subtrades, and contractor overhead and profit. Over the last two years, project specifications and estimating templates have been updated to clarify dimensions, modify material specs, and ensure that special requirements such as laying tile on the diagonal were properly accounted for. In some cases, this process resulted in prices that are higher than what would be expected from price inflation alone. Although such pricing adjustments affect year-over-year price comparisons, all of the values in the 2007 Cost vs. Value Report are based on the refreshed prices, which we consider to be more accurate than before. For each project, the value data are aggregated from estimates provided by members of the NATIONAL ASSOCIATION OF REALTORS®. E-mail surveys containing project descriptions, construction costs, and median home price data for each city were sent to more than 100,000 appraisers, sales associates, and brokers. Survey respondents were asked to use this information to estimate the value that the remodeling projects would add to the house at resale in the current market, assuming that the project was recently completed. The survey took place over eight weeks in July and August 2007. The survey was administrated by Specpan, an Indianapolis-based market research company specializing in business-to-business Web-based surveys. For the national averages, the confidence level is 95 percent +/–2 percent based on 2,770 survey respondents. This means that 95 percent of the time, national averages for this survey will fall within 2 percent of either side of the results of this year’s survey.
For Bailout to Work - Housing Market Needs to Mend Washington's financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right? Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it's safe to start doling out money again. The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit. That means it will take several months or longer to pare down the glut of houses built when times were good — and those that have come on the market because of soaring foreclosures — before home prices start appreciating. Housing is a critical component to the U.S. economy and by extension the availability of credit. Roughly one in eight U.S. jobs depends on housing directly or indirectly — from construction workers to bank loan officers to big brokers on Wall Street. A turnaround in housing prices would boost confidence in the wider economy and, experts hope, goad banks into lending again. "Housing traditionally does lead the economy through a recovery. I think it's going to be critical for a sustained recovery in this cycle, too," said Gary Thayer, senior economist at Wachovia Securities. In the meantime, people like Alicia Elliott are adjusting to a new American reality: Life without credit. The 21-year old Morgantown, W. Va., resident just bought a used mobile home, borrowing $4,000 from friends and family because she couldn't get a bank loan. "I tried to. Couldn't do it. It's just hard to get a loan," said Elliott, who works as a cashier at a Lowe's Cos. store. She used to get bombarded with offers for credit cards. Now she can't even get one. "I get denied one after another after another. It doesn't matter if you have a co-signer or not," she said. Trey Simmons, a 31-year-old barber at a Dallas hair salon, said he worries tighter lending standard will squash his goal of buying a home next year. "Credit is a privilege everybody can't get," Simmons said. "I had credit at a young age and messed up." He now operates on a strictly cash basis. "If I don't have it," he said, referring to cash, "I don't spend it." The dilemma boils down to a matter of trust. "Credit, by definition, means trust and faith, and for many reasons trust and faith have been damaged," said Sung Won Sohn, an economics professor at California State University, Channel Islands. Sohn said the near certainty of a recession makes it too risky for the thousands of small and medium-sized banks across the country to lend to people like Elliot. "Banks know the economy is getting worse, so ... they will keep being cautious," said Sohn, a former banking executive. Still, the government hopes that by scooping up billions of dollars in bad mortgage debt and other toxic assets, banks eventually can clean up their shaky balance sheets, crack open the vaults and send money washing through the system again. The rescue plan also raises the federally insured deposit limit from $100,000 to $250,000, a move that could boost banks' reserves and further grease the lending wheels. Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and a key negotiator over the past weeks, said the measure was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort comparable to the New Deal. In the meantime, the Treasury Department is moving swiftly to get the plan started. Treasury Secretary Henry Paulson said Friday he did not wait for final approval of the measure to begin preparation. He has been lining up outside advisers as his staff works out details on a multitude of complex issues. But several hurdles could trip up the plan. For starters, even when the Treasury starts buying bad assets, some banks may hoard the cash they receive in return until they see how the plan pans out. That has the potential to make the lending logjam worse, said Vincent R. Reinhart, former director of the Federal Reserve's monetary affairs division. "They may sit on the sidelines and wait to see (the bailout) get some traction. The problem is if everybody sits on the sidelines, nobody gets in the game. It's a risk," he said. It also creates a vicious cycle: No trust means no lending; tight credit means it's harder to buy a home; the more difficult it is to buy or sell a home, the further home prices will fall; and the further prices drop, the more foreclosures there will be. U.S. home prices — down 20 percent in some areas from their peak in July 2006 — still have further to fall according to some and must hit bottom before demand picks up. The long-awaited bottom in prices could be a year or more away. But Jim Gillespie, chief executive of Coldwell Banker Real Estate, said he hopes that lower prices, combined with the government's actions will jump-start stagnant demand. The federal bailout plan, he said, "will give people reassurance that mortgage money is available." Jobs are another big concern. The stranglehold on credit has choked companies big and small that depend on regular inflows of borrowed money to pay employees and stay afloat. The Labor Department said Friday that employers cut 159,000 jobs in September, the fastest pace of losses in more than five years. Experts say that number will grow as the effects of the credit gridlock course through the economy in coming days and weeks. The nation's unemployment rate is now 6.1 percent, up from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million. The unemployment rate could rise to as high as 7.5 percent by late 2009, economists predict. If that happens, it would mark the highest since after the 1990-91 recession. Boosting employment is critical to kick-starting lending because "if jobs are growing, then incomes are a growing, and if incomes are growing then people are consuming," Reinhart said. Consumers and businesses have retrenched so much that some analysts fear the economy stalled or shrank in the third quarter that ended last week. The Labor Department report Friday showed wage growth for workers is slowing, meaning they'll be more hard-pressed to spend, especially for something as expensive as a home. Many economists predict the economy will contract in the final quarter of 2008 and the first quarter of next year. That would meet the classic definition of a recession — two consecutive quarters of a shrinking economy. One bright spot: optimism hasn't been totally squashed yet. Morgan Cavanaugh, proprietor of Moriarty's Pub in downtown Cleveland, has been trying to sell another bar he owns to ease his workload, but the prospective buyer hasn't been able to raise the money. Now that the bailout legislation has the green light, he's hopeful he'll get a deal done. "It passed. Let's work something out," Cavanaugh told the man over a cell phone Friday just after the House approved the plan. He flipped the phone shut and smiled from behind the weathered mahogany bar of his 75-year-old Irish pub. "He's going to put the loan request in again. It's looking up," Cavanaugh said. 2007 Cost vs. Value Report: It's Payback Time Remodeling magazine’s annual "Cost vs. Value Report" shows exterior and replacement projects bring the biggest return. ADAPTED FROM REMODELING MAGAZINE Home rehabbers who are considering a move in the not-too-distant future should focus mostly on exterior upgrades. That’s the message from REALTORS® who participated in Remodeling magazine’s 20th annual "Cost vs. Value Report," done in cooperation with REALTOR® Magazine. REALTORS® in 65 markets were given construction specs and costs on 29 upscale and midrange projects and asked to estimate the percentage return at resale. Of projects that saw national cost recovery rates of more than 80 percent in 2007, only one — a minor kitchen remodel, with 83 percent of cost recovered — was a strictly interior job. The others were an upscale siding replacement using fiber cement materials (88.1 percent), a wood deck addition (85.4 percent), midrange vinyl siding replacement (83.2 percent), and upscale vinyl and midrange wood window replacements (81 percent and 81.2 percent, respectively). On most projects, the value of remodeling trended down in 2007 compared with 2006. No project exceeded an 88 percent return. The likely culprits for the year-to-year drop: rising remodeling costs and slowing home appreciation brought on by the lackluster housing market in many areas. The story was somewhat different in the Pacific region, however, where REALTORS® estimated cost recovery of more than 100 percent for six projects: a wood deck addition, a minor kitchen remodel, fiber-cement siding replacement, wood window replacement, and an upscale wood and vinyl window replacement. Nationally, projects at the bottom of the cost-recovery ladder included home office remodels (57 percent), installing a back-up power generator (58 percent), and adding a mid-range sunroom (59.1 percent). Put Costs and Values in Context Looked at over a number of years, some projects appear to recoup considerably less than others. Home office remodels, for instance, have been at or near the bottom of the national averages since 2005 when the project was added to the survey. People investing in a home office typically do so to fill a specific need, such as to start a home-based business or telecommute. A prospective buyer with different space needs won’t see the value, regardless of the cost. On the other hand, since minor kitchen remodels were added to the report in 2004, they’ve consistently ranked among the highest-value projects, according to practitioners surveyed. When looking at cost estimates for individual projects, remember that averaging tends to have a leveling effect on job cost data. Also, seemingly small differences in project size and scope, or in the quality of finishes, can dramatically affect final project cost. It’s also important to consider whether a remodeled space reduces the perceived number of rooms or available square footage. For example, carving a half-bath out of unused storage space under a staircase is an obvious gain in usable space. But converting an existing bedroom into a master bath, while a positive development in many respects, may reduce the number of bedrooms below the minimum expectation of some prospective buyers. Similarly, the cost recouped on a given remodeling project depends on a wide variety of factors. These include the condition of the rest of a house, the value of similar homes nearby, and the rate at which property values are changing in the surrounding area. A home’s urban, suburban, or rural setting also affects its value, as does the availability and cost of new and existing homes in the immediate vicinity. Finally, there can be wide regional swings. A midrange bathroom remodel recovers 85 percent of its cost in the South but only 63 percent in the Midwest. Where resale value is a major factor in a home owner’s decision to remodel, the best course of action is to consult with a local remodeler about construction cost — and look closely at the comps and market conditions. Survey Changes Affect Results Some of the volatility in year-to-year comparisons results from two changes to the survey itself. The first is a general overhaul of the project descriptions and cost estimates, begun in 2006 and completed this year. These changes resulted in cost increases larger than would have resulted simply from rising labor and material costs, notably for major kitchen remodels, bath projects, and siding replacements. The construction costs are more accurate than in previous years, but they combine with slower home appreciation to create a lower percentage in the value column. The second change began in 2002 with the introduction of higher-priced upscale versions of some projects. Although the range of costs thus created made the report more useful, it impacted year-over-year comparisons. While the trend of core projects turned down in 2003, the trend for all projects peaked in 2005 before turning downward. As we continue to survey all 29 projects, we expect trend data to become more reliable. Until then, the most useful comparisons are of national data for single projects and of regional cost and value differences. About the Survey Construction cost estimates for the 2007 Cost vs. Value Report come from HomeTech Information Systems, a remodeling estimating software company based in Bethesda, Md., which regularly collects current cost information from a nationwide network of remodeling contractors and suppliers and applies an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, subtrades, and contractor overhead and profit. Over the last two years, project specifications and estimating templates have been updated to clarify dimensions, modify material specs, and ensure that special requirements such as laying tile on the diagonal were properly accounted for. In some cases, this process resulted in prices that are higher than what would be expected from price inflation alone. Although such pricing adjustments affect year-over-year price comparisons, all of the values in the 2007 Cost vs. Value Report are based on the refreshed prices, which we consider to be more accurate than before. For each project, the value data are aggregated from estimates provided by members of the NATIONAL ASSOCIATION OF REALTORS®. E-mail surveys containing project descriptions, construction costs, and median home price data for each city were sent to more than 100,000 appraisers, sales associates, and brokers. Survey respondents were asked to use this information to estimate the value that the remodeling projects would add to the house at resale in the current market, assuming that the project was recently completed. The survey took place over eight weeks in July and August 2007. The survey was administrated by Specpan, an Indianapolis-based market research company specializing in business-to-business Web-based surveys. For the national averages, the confidence level is 95 percent +/–2 percent based on 2,770 survey respondents. This means that 95 percent of the time, national averages for this survey will fall within 2 percent of either side of the results of this year’s survey.
Learn about energy efficient appliances
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More Than Minutes - How Your Attitude Impacts Time Management Did you know that 95% of the problems that you and I have in the area of time management are not really about managing time at all? What most of us call time management is really about managing our attitude. Time management is really an attitude issue, not a technique issue. By attitude, I’m talking about being truly focused on and enthusiastic about your goals. When you’re really passionate about your goals, your vision, your next level, etc., you’ll automatically do the most productive things to achieve those goals. Without the proper attitude, the best techniques in the world won’t have much impact. Fundamental Concepts of Time Management 1. Think self-management, not time-management. Time management isn’t real. You can’t manage a second or a minute. Time just is. But what we can manage is ourselves in that time. We can manage our actions. 2. Work by objective, not by crisis. Working by crisis might mean that there is no money in your bank account. Now we’ve got to go out and list and sell to get some money to get out of crisis. Working by objective, on the other hand, is having goals, designing who you are, determining your next level and living from that. When you do that you have less stress. So, the concept is to consciously manage your actions. What determines the actions one takes? What you’re committed to (your objectives, goals and commitments). For example: Have you ever cooked for a family event? You have so much to do -cook loads of food, clean the house, etc. When you’re in action, there are no thoughts, judgments or opinions getting in the way. Ten times more is done in this short period of time because you’re working with this objective, this goal of what you’re committed to. Take that concept and apply it to your career. When you’re committed to something happening in your career and you’re crystal clear about it your actions will automatically flow. Time goes by quickly and you get the results to show for it. 3. Time management is a system of organized activities. We have this in certain areas of our personal lives; they’re called routines. Routines are useful to establish positive behavior patterns that bring about the results we desire. 4. Time can be invested. You can invest your time. It’s like when you invest five dollars and make ten back. You can invest five minutes of your time and get back great results. You’re in the office from six to seven. You can return phone calls, clean your desk or pick up the phone to schedule listing appointments. What would be the best return on your time invested? Start to look at your time as a valuable commodity. Invest it as you would invest in stocks or bonds - like you would invest in anything that would give you a positive return on your investment. 5. You can’t get it all done! This is a truism. You can’t. At the end of the day you’re going to still have things that you didn’t get finished, so stop trying to get it all done in 24 hours. It’s like a rat on a wheel in a cage. We work longer hours, we come home stressed, we unload it on our spouse, and so on. You’ll get as much done as you get done. Period. 6. Do something as opposed to nothing. This is for the procrastinators. Get busy. If you’re sitting in your office taking papers from one side of the desk and moving them to the other side and then back again, you’re procrastinating. If you’re sitting in the office at six o’clock, trying to think of what would be the most productive thing to do at this time … you’re thinking and thinking, and looking and searching…. stop all that nonsense and just get busy. 7. Live a balanced life. How many hours are there in a week? 168. We have career, family, personal obligations - including sleep. According to Alan Lakin, who wrote “How to Manage Your Time and Life,” a good workweek consists of two twelve-hour days, three nine-hour days and one four-hour day. That’s a total of 55 hours per week. If you spend 55 hours in business and 73 personal hours (including sleep), that would leave you 40 hours for family. That would total 168 hours. What most of us in the real estate profession do is work more than 55 hours, and then we take the extra hours from somewhere else, typically our family. 8. Work a schedule. In my travels I’ve met many top-producing sales people. What makes them top-producing sales people is that they work a schedule. If something falls outside of their schedule they do one of two things. They’ll either not do the business or they’ll do the business, knowing that they have to make up for it somewhere else. What I recommend (especially if you’re having struggles at home) is to make up a work schedule from Monday through Sunday and give it to your spouse and your manager and tell them that this is what you’re committing to. In one of my training programs, an agent from Austin, TX was the top-producing agent in the whole program for a three-month period. What was really interesting is that he was a part-time agent and he listed more houses than any other full-time agent in this program. Why do you think that was? Because he managed his time. So, when you set a schedule for yourself and you’re serious about keeping it, I promise you that you’ll be more productive.
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Preparing a House to Sell Many buyers peruse neighborhoods looking at listed properties from the outside before inquiring with the listing agent to show them the inside. A first impression is hard to shake and if the prospective buyer doesn't like the house from the outside, they probably won't inquire at all. To get them past the front door, you need to add some curb appeal. Here's a list of items that will definitely add value to your home. Outside Maintenance Clear your gutters and downspouts of debris (leaves, sticks, etc.) that may block the flow of water from your roof. Properly grade the area under your downspouts and around your house, so rainwater flows away from your foundation. Splash blocks can help rainwater at downspouts flow in the proper direction. If necessary, add extensions to your downspouts. Plantings should be set away from the foundation to ensure regular watering does not add to soil moisture around the basement. Lawn sprinklers should not hit the house or the area next to the foundation. Ensure that landscaping around the foundation (sidewalks, patios, gardens, etc.) starts at 8 inches down from the top of your foundation wall and slopes away from the home. Failure to do so may cause moisture to build up at or around the foundation and promote the environment for mold growth. Keep mulch, dirt and other landscaping material away from veneer drainage system weep holes commonly found on, but not limited to masonry and stucco homes. The veneer drainage system diverts water away from the interior of the exterior wall system and the weep holes allow the water to escape the wall. If the weep holes are blocked or clogged with debris, mold may form on the interior of the exterior walls. The weep holes are found at the bottom of the finished veneer. Sidewalks, steps and exterior foundation cracks should be filled or parged to bring up to date. Caulking around windows, doors, chimney/siding cavity, foundation, and other common leakage points is necessary to prevent any moisture intrusion. Inside Maintenance Clean everything in sight. The kitchen, bathroom, bedrooms and general living spaces, and clean/test household appliances and equipment. No matter what physical condition the property is in, it should be clean, tidy and uncluttered. You want buyers to view your home as their potential home. Therefore put away family photos, sports trophies, collectable items, knick-knacks and souvenirs. Put them in a box or a rented storage area for a few months. Shampoo rugs and wax floors. Wash walls and use a broom to clear cobwebs from the corners of rooms and closets. Wash windows and clean blinds or draperies. Repair those small things now, like leaky faucets, missing tiles or broken screens. Replace all burned-out light bulbs. Properly insulate (12" of blanket or 8" of blown-in insulation) and ventilate the attic of your home. If you are a smoker, clean, prime and paint any nicotine stained walls and ceilings thoroughly and refrain from smoking in the home. Basement Neaten up the basement. Clean up and correct any water problems in your basement, iincluding upgrading the foundation with a mortar parging at all loose cavities and cracks. Test sump pump. The Day of the Showing Before you leave, turn on all lights, open all curtains and shutters to let in as much light as possible but screen out unappealing views.
Ten Things You Should Know About Mold 1. Potential health effects and symptoms associated with mold exposures include allergic reactions, asthma, and other respiratory complaints. 2. There is no practical way to eliminate all mold and mold spores in the indoor environment; the way to control indoor mold growth is to control moisture. 3. If mold is a problem in your home or school, you must clean up the mold and eliminate sources of moisture. 4. Fix the source of the water problem or leak to prevent mold growth. 5. Reduce indoor humidity (to 30-60%) to decrease mold growth by: a. venting bathrooms, dryers, and other moisture-generating sources to the outside; b. using air conditioners and de-humidifiers; c. increasing ventilation; d. and using exhaust fans whenever cooking, dishwashing, and cleaning. 6. Clean and dry any damp or wet building materials and furnishings within 24-48 hours to prevent mold growth. 7. Clean mold off hard surfaces with water and detergent, and dry completely. Absorbent materials such as ceiling tiles, that are moldy, may need to be replaced. 8. Prevent condensation: Reduce the potential for condensation on cold surfaces (i.e., windows, piping, exterior walls, roof, or floors) by adding insulation. 9. In areas where there is a perpetual moisture problem, do not install carpeting (i.e., by drinking fountains, by classroom sinks, or on concrete floors with leaks or frequent condensation). 10. Molds can be found almost anywhere; they can grow on virtually any substance, providing moisture is present. There are molds that can grow on wood, paper, carpet, and foods. Home Inspection Tips For Home Buyers, Sellers and Real Estate Professionals The National Association of Certified Home Inspectors is a non-profit organization helping home inspectors maintain inspection excellence through education and testing.
2007 Cost vs. Value Report: It's Payback Time Remodeling magazine’s annual "Cost vs. Value Report" shows exterior and replacement projects bring the biggest return. ADAPTED FROM REMODELING MAGAZINE Home rehabbers who are considering a move in the not-too-distant future should focus mostly on exterior upgrades. That’s the message from REALTORS® who participated in Remodeling magazine’s 20th annual "Cost vs. Value Report," done in cooperation with REALTOR® Magazine. REALTORS® in 65 markets were given construction specs and costs on 29 upscale and midrange projects and asked to estimate the percentage return at resale. Of projects that saw national cost recovery rates of more than 80 percent in 2007, only one — a minor kitchen remodel, with 83 percent of cost recovered — was a strictly interior job. The others were an upscale siding replacement using fiber cement materials (88.1 percent), a wood deck addition (85.4 percent), midrange vinyl siding replacement (83.2 percent), and upscale vinyl and midrange wood window replacements (81 percent and 81.2 percent, respectively). On most projects, the value of remodeling trended down in 2007 compared with 2006. No project exceeded an 88 percent return. The likely culprits for the year-to-year drop: rising remodeling costs and slowing home appreciation brought on by the lackluster housing market in many areas. The story was somewhat different in the Pacific region, however, where REALTORS® estimated cost recovery of more than 100 percent for six projects: a wood deck addition, a minor kitchen remodel, fiber-cement siding replacement, wood window replacement, and an upscale wood and vinyl window replacement. Nationally, projects at the bottom of the cost-recovery ladder included home office remodels (57 percent), installing a back-up power generator (58 percent), and adding a mid-range sunroom (59.1 percent). Put Costs and Values in Context Looked at over a number of years, some projects appear to recoup considerably less than others. Home office remodels, for instance, have been at or near the bottom of the national averages since 2005 when the project was added to the survey. People investing in a home office typically do so to fill a specific need, such as to start a home-based business or telecommute. A prospective buyer with different space needs won’t see the value, regardless of the cost. On the other hand, since minor kitchen remodels were added to the report in 2004, they’ve consistently ranked among the highest-value projects, according to practitioners surveyed. When looking at cost estimates for individual projects, remember that averaging tends to have a leveling effect on job cost data. Also, seemingly small differences in project size and scope, or in the quality of finishes, can dramatically affect final project cost. It’s also important to consider whether a remodeled space reduces the perceived number of rooms or available square footage. For example, carving a half-bath out of unused storage space under a staircase is an obvious gain in usable space. But converting an existing bedroom into a master bath, while a positive development in many respects, may reduce the number of bedrooms below the minimum expectation of some prospective buyers. Similarly, the cost recouped on a given remodeling project depends on a wide variety of factors. These include the condition of the rest of a house, the value of similar homes nearby, and the rate at which property values are changing in the surrounding area. A home’s urban, suburban, or rural setting also affects its value, as does the availability and cost of new and existing homes in the immediate vicinity. Finally, there can be wide regional swings. A midrange bathroom remodel recovers 85 percent of its cost in the South but only 63 percent in the Midwest. Where resale value is a major factor in a home owner’s decision to remodel, the best course of action is to consult with a local remodeler about construction cost — and look closely at the comps and market conditions. Survey Changes Affect Results Some of the volatility in year-to-year comparisons results from two changes to the survey itself. The first is a general overhaul of the project descriptions and cost estimates, begun in 2006 and completed this year. These changes resulted in cost increases larger than would have resulted simply from rising labor and material costs, notably for major kitchen remodels, bath projects, and siding replacements. The construction costs are more accurate than in previous years, but they combine with slower home appreciation to create a lower percentage in the value column. The second change began in 2002 with the introduction of higher-priced upscale versions of some projects. Although the range of costs thus created made the report more useful, it impacted year-over-year comparisons. While the trend of core projects turned down in 2003, the trend for all projects peaked in 2005 before turning downward. As we continue to survey all 29 projects, we expect trend data to become more reliable. Until then, the most useful comparisons are of national data for single projects and of regional cost and value differences. About the Survey Construction cost estimates for the 2007 Cost vs. Value Report come from HomeTech Information Systems, a remodeling estimating software company based in Bethesda, Md., which regularly collects current cost information from a nationwide network of remodeling contractors and suppliers and applies an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, subtrades, and contractor overhead and profit. Over the last two years, project specifications and estimating templates have been updated to clarify dimensions, modify material specs, and ensure that special requirements such as laying tile on the diagonal were properly accounted for. In some cases, this process resulted in prices that are higher than what would be expected from price inflation alone. Although such pricing adjustments affect year-over-year price comparisons, all of the values in the 2007 Cost vs. Value Report are based on the refreshed prices, which we consider to be more accurate than before. For each project, the value data are aggregated from estimates provided by members of the NATIONAL ASSOCIATION OF REALTORS®. E-mail surveys containing project descriptions, construction costs, and median home price data for each city were sent to more than 100,000 appraisers, sales associates, and brokers. Survey respondents were asked to use this information to estimate the value that the remodeling projects would add to the house at resale in the current market, assuming that the project was recently completed. The survey took place over eight weeks in July and August 2007. The survey was administrated by Specpan, an Indianapolis-based market research company specializing in business-to-business Web-based surveys. For the national averages, the confidence level is 95 percent +/–2 percent based on 2,770 survey respondents. This means that 95 percent of the time, national averages for this survey will fall within 2 percent of either side of the results of this year’s survey.
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