Real Estate Information Archive

he real estate market has improved across much of the country, but homeowners thinking about listing their homes this summer need to stay competitive to attract buyers. Buyers are looking for long-term homes, ones they want to stay in for years while raising their children, or settling down and retiring.

To prepare your home for listing - or simply to enjoy it a few years longer - check out these top five home improvement projects you can do yourself to make your home more attractive to buyers:

1. Give the front door a new look - The front door sets the tone for your home's curb appeal and security, and it signals how well you maintain everything else. Buyers will be walking into your home via the front door, so be sure to give them a good first impression. If your door is in good shape, you might just need to give it a refreshing new coat of paint or new hardware. But if it's seen some wear and tear over the years, consider replacing it with a steel door - one that will show buyers your home is safe.

2. Update the most-used entryway - While the front door needs curb appeal, the garage door is traditionally the most-used door in the home. Old wooden garage doors will start to sag and the paint will peel, giving your home a run-down look. Replacing this door with an insulated steel door will not only improve the exterior look of your home, but also keep the garage space warmer. Finishing off the garage can also be a big draw for buyers, but you probably won't be able to recoup as much of the expense as you would by replacing only the garage door.

3. Add additional living space - You might not think about adding a deck as the same thing as adding an extra room to the house, but if you're selling your home during the warmer months, that's how buyers will see it. They'll be able to picture themselves enjoying breakfast and picnic dinners outside, or curling up on a lounge chair with a good book on a summer afternoon. Realtor.com estimates that homeowners can recoup 87 percent of the investment of adding a deck when they sell.

4. Create a bathroom retreat - As the smallest room in the house, the bathroom tends to cost the least to remodel. If you have a guest or master bath that can use a little help to transform into a relaxing oasis, take the opportunity to replace the flooring, add cushy rugs, paint the walls and replace the accessories with more modern styles. Faucets, showerheads, the mirror and even the toilet can all be upgraded with water-saving and stylish designs. Buyers will take note of a maintenance-free bath, making your home one they'll remember as move-in ready.

5. Turn the backyard into a private paradise - Buyers will be visualizing themselves in your backyard when touring your home. They're looking to see how quiet and secure the space is. Consider adding a beautiful wooden fence to enhance the privacy. It will make the home attractive to families with children and pets, and for couples who aren't interested in having a conversation with the neighbors every time they go outside. (BPT)

Many families plan for their summer vacation months in advance but did you know that you need to prepare your home for your vacation as well?  Below are a few tips on what you should do to prepare your home for your upcoming vacation.   

• Mow your grass before you leave for your vacation.  I would suggest that you set the mower on the shortest cut you can get so that you don’t have to worry about it growing up while you are gone.  If you are going to be gone for an extended period of time you may want to arrange to have a family member mow your yard at least once while you are gone.  Mowing your yard before vacation makes it look like you are still at home and therefore may keep away potential intruders. 
• Another thing you should do before you leave on vacation this coming summer is to contact the post office and have your mail canceled while you are gone.  You can pick your mail up at the post office once you arrive back home and start your service back up.  This may sound like a huge ordeal but it really is an easy way to keep things neat and tidy while you are away from home.  This simple act will also deter intruders.
• If you don’t want your house to stand out as if no one is home, you may need to install a flood light that is activated by motion outside of your home.  This way if someone walks up to your house that is not suppose to be there the neighbors will be able to see them and can report anything out of the ordinary.  Another thing you can do with lights is to set a few inside lights on a timer so that it looks like you are home.
• Some water heaters have a VAC mode otherwise known as a vacation mode. If you have this setting on your water heater it’s a good idea to use it while you are away.  Doing this is not only a good way to save on your bill but it is also a good way to avoid any type of flooding that may occur while you are gone.  The last thing you want to come home to is a flooded house due to a broken or burst pipe.

Hopefully these tips will get you started in the right direction before you set off on your summer vacation and you’ll be able to relax and have fun without worrying about your house! 

Information courtesy of Chester County PA Realtor Scott Darling.

According to Fannie Mae the top five reasons people buy a home:

• To have a better place to raise their children
• A place where their family can feel safe
• To have more space; Freedom to renovate to their own taste
• Being a homeowner is a better investment.

Does this hold true for you? Well, let’s take a look at these reasons to get a broader perspective…then you decide for yourself about being a homeowner.

To have a better place to raise children and family can feel safe…

This can very subjective and involves a lot of factors. It boils down to community and personal preferences. What is the look and feel of a community where you could see yourself living? The school system and convenience to shopping are important. Local government services provided such as emergency services, hospitals, fire, police, utilities, etc. must be considered. Is there a neighborhood watch, public parks, a community center with activities for everyone in the family, etc.? Try making a list of all the things important to you and use it evaluate where you’re searching for real estate.

To have more space…

This is also somewhat subjective, but can be looked at analytically as well. Much depends on your lifestyle and the size of your family. There are large and small apartments, and large and small houses. Much has to do with how much space you would like to have versus how much you can afford. And this also really flows into the next topic…

Freedom to renovate for your own taste…

Whether you want to add on or simply renovate within existing walls, “freedom” is a huge factor in deciding to buy a house. Buying is not for everyone. Renting is a very good option for a lot of people. But the freedom to do as you please with your home is a powerful motivator. Here’s where lifestyle comes into play. It costs more to own a home than to rent. The money saved by renting can arguably be used to support a different lifestyle, which is also a form of freedom. Only you can decide.

Owning is a better investment…

There is no doubt that at the end of a renting cycle you walk away with no financial benefit except for the money you have saved in the process. How that savings compares with what you have when you sell a house you have owned is the question. And the answer is “It all depends.” Being a homeowner costs money. But, a lot of the money spent owning a home potentially can be recuperated. A homeowner is also building equity every month they make a mortgage payment. In that sense home ownership can be viewed as a huge savings fund.

If freedom is your primary key factor, buying real estate and becoming a homeowner is definitely to be considered!

Information provided by Chester County PA Realtor Scott Darling.

If you’ve officially joined the ranks of the empty nesters, one of the first questions that usually comes to mind is should we downsize our home. The kids are gone and we probably don’t need this big house. But is buying a smaller home right for you? Obviously, there are pros and cons to consider about both your finances and lifestyle before making a decision.

Reasons not to downsize:

• The family is spread all across the country and you want to have a place for everyone to gather for the holidays and vacations.
• You’ve been in your current home for many years and have filled it with mementos you don’t want to part with.
• You’re not emotionally ready to pack up and leave a lifestyle you worked hard to create. Leaving family, friends and familiar surroundings is more than you can bear.
• You enjoy the feelings that go along with your larger home. A smaller home will not feel right for your current lifestyle.

Reasons to downsize:

• The lower (or zero) mortgage payment that comes with a smaller home would give you more discretionary funds to travel and enjoy other recreational activities.
• A smaller home means less to maintain and more time to play.
• You and/or your spouse are not able to navigate the stairs like you use. A single level home is more desirable.
• A smaller, newer home is more efficient and cost effective.
• You need to be closer to a family member who needs assistance and your attention.

If you decide to downsize, make sure the new home fits both your lifestyle and pocketbook. Talk with a real estate professional about how much money you will net from the sale of your current home, as well as the costs of buying another one. Look into how much it would cost to move and to maintain the smaller home. Make sure it really is cheaper to live there. Downsize only once you’re satisfied that the finances make sense.

Buy into your new lifestyle

A smaller house in your current neighborhood could be the right decision if your priority is maintaining close ties to neighbors. Just make sure there are amenities like public transportation and stores nearby if your health begins to deteriorate.

A retirement community could be perfect if you never want to move again and you want to focus on travel, hobbies and perfecting your golf stroke instead of mowing the lawn. Talk to current residents to see whether they’re happy with the rules and the way things are run. Another option you may prefer is a condominium to eliminate the maintenance but not be locked in for life like many life care communities.

It is a big decision to downsize. So, make it carefully, do not rush, and get professional advice about the real estate and financial aspects of moving.

Information courtesy of Chester County PA Realtor Scott Darling.

The value of home improvements has two primary considerations:

• the tangible dollar value that is added to your home compared to costs
• the intangible value of your enjoyment of the improvement

Most homeowners focus primarily on the costs, and whether they are adding dollar for dollar value to their home for resale. Those are legitimate concerns. Let’s break them down…

The tangible costs of a project have many components to consider:

• The first advice to seek is from a Realtor you know and trust. Ask them for some free advice. You want to know what is the likely increase in value you can expect from a project based on what “comparables” are available. You also want their professional opinion about how the buyers in your market are likely to value the improvement. Lastly, you want recommendations about builders you should talk with.
   
• The next step is to talk with at least two builders/remodelers. Ask them to meet at your home. Describe what you are thinking about doing. Ask for suggests they have and for an estimate of what it is likely to cost. Also ask if they do design work, or do you need an architect?
   
• Here are some general considerations to think about:
  • usefulness of the improvements to a future buyer will effect the value
  • if the house is older consider replacing electric wiring and plumbing
  • make sure everything is done professionally, even if done by the homeowner
  • badly done home improvements can actually detract from the home’s value
     
• Lastly, be very careful about re-purposing a bedroom. It should be able to be re-converted back to a bedroom later. The number of bedrooms has a large impact on the value of a home.

The intangible value of your enjoyment is very important. Try to put a dollar amount on your enjoyment value. What benefits will you and your family gain? How long do you anticipate living in your home? What is your enjoyment worth to you in dollars?

Now you’re in a position to add to the tangible cost estimates you have. Add to the tangible costs the dollar value you place on your enjoyment of the benefits. Then compare that total improvement value to what your Realtor has estimated you can get back at resale. You’re now ready to make a decision whether or not to make the improvements.

Information courtesy of Chester County Realtor Scott Darling.

When it comes to borrowing money, many loans offer benefits beyond simple financing. With that in mind, it’s important to understand how one type of loan may be right for making home improvements, while another may be a better match for financing a wedding. The key is to research the various types of loans, know what services they're designed to provide and then choose the one that best fits your financial needs.

Credit card, personal and home equity loans are all great options to help finance purchases and achieve financial goals. Here's a rundown of how each type of loan works:

Credit card – Many people don’t realize that credit cards are actually loans, and users can make those loans as short-term or long-term as they need. Some credit cards provide low- or no-interest, short-term financing as long as the monthly statement is paid in full and on time. Users also have the option to turn their credit card balance into a longer-term loan, which may result in higher interest rates. Some credit cards may also charge an annual fee. Credit card loans can be used for common household expenses like groceries, gas or even to make automated payments for items like a magazine subscription. And if the user's credit limit is high enough, credit cards can be used to fund larger expenses like furniture or electronics.

Personal loan – Having a balance on more than one credit card can be a burden, especially if the rates are high. To help manage their budget, many consumers opt to use a personal loan to consolidate their higher-interest loans. Using a personal loan to pay down debt may save borrowers on interest payments if the rate on the personal loan is lower than on the credit card. Additionally, personal loans can give people more control over the size and timing of monthly payments.

Personal loans can be used to pay for major events or expenses, such as a wedding, a big trip or those unexpected life moments such as a child’s new braces or an emergency car repair. Additionally, approved borrowers can receive their money quickly.

There are also online resources, such as financial calculators, that can help borrowers visualize what their finances will look like when taking on a personal loan.

Home equity loan – Once a homeowner has earned equity in their home, she or he can use that as collateral to get a loan for large expenses. Many homeowners obtain a home equity loan to finance a very costly home repair or home renovation project. This allows them to use their equity to potentially help increase the home’s value, and may increase resale profits. Other uses for home equity loans include consolidating large debt or paying for major expenses like medical bills. Typically, home equity loans have a fixed interest rate, terms and monthly payments. Interest on a home equity loan may be 100 percent tax deductible. Borrowers should consult their tax advisor about any benefits a loan may bring.

Loans can help borrowers regain control of their finances but are not “one size fits all.” Different types of loans should be used for different types of expenses. The key is for borrowers to consider the type of expense they are looking to fund, the available loans and lender offerings, and determine which type of loan is most suitable for them. (BPT)

Information courtesy of Chester County PA Realtor Scott Darling.

Families can decorate their homes with colorful flowers and bring healthy, home-grown foods to the table with gardens. Gardening, however, can use quite a bit of water, and in states struck by drought it’s important to conserve as much water as possible. However, you can still have a garden if you carefully plan what you plant, how you plant it, and how you give it the water it needs. Here are some water-conservation tips for growing a garden and using the least amount of water possible:

• Choose plants that thrive in drier conditions. Vegetables like corn, spinach, mustard greens and some beans are drought-tolerant, and desert rose and snake plant are beautiful landscaping plants that need less water.
• Water only where it's needed so it doesn't go to waste. When you use a lawn sprinkler to water your garden, much of the spray misses your flowers and vegetables and ends up on the grass, the sidewalk or the neighbor's yard. Make certain the water gets to the roots of your plants via a drip-irrigation system. Drip irrigation uses 70 percent less water than underground sprinklers and frees the user from constantly hauling around hoses because the system stays in your garden all summer long.
• Water at night or in the early morning when the sun is least likely to evaporate the moisture. This allows as much of the water to penetrate to your plant's roots instead of evaporating.
• Build beds that encourage soil to stay damp as long as possible. Some ways to do this include digging the bed deeper to help loosen the soil prior to planting. This gives roots the chance to go reach deeper and gain access to where water might be more available. Also, once planted, cover the bed with a good layer of mulch or compost. This will help keep the soil good and moist.
• Raise vegetable crops during the rainy season. Many areas of the country have a cooler rainy season. Peas, leafy greens, radishes and other vegetables with short growing seasons are great for planting early in the spring and sometimes again late in the fall. Because temperatures are cooler and the early and late seasons tend to produce more rainfall, you can grow vegetables using less water.

Drought affects all areas of the country during different years, so even if you aren't living in a drought situation now, you could experience one next year or several years down the road. It's important to know what steps you can take to be more water conservative when it comes to your garden. Apply these tips to your vegetables and flowers this year to see how successful you can be at reducing the amount of water needed to grow your plants. (BPT)

Information courtesy of Chester County PA Realtor Scott Darling.

Homeowners have a variety of reasons for refinancing their homes. Before you make a decision about refinancing your home, you might consider the following questions. Below is a summary of an article in RISMedia by Michele Lerner, a writer for Bankrate.com.

1. What are my financial goals? Are trying to lower your monthly payment? Check out an online mortgage calculator to estimate your new payment. Other homeowners are choosing to refinance for a shorter term to pay of their mortgage faster and save interest.

Before you make the decision to refinance, the professionals advise making sure you contribute to retirement savings and college savings, pay off high-interest debt, and save 6-12 months of expenses, because reducing your mortgage payment period will increase your monthly payment.

2. Do I have equity in my home?

You need at least 20% equity in your home to qualify for a new conventional loan without payment private mortgage insurance. The alternative might be applying for an FHA loan that requires much less equity.

3. Do I have good enough credit?

Credit scores are critical under the new federal lending guidelines. Below a score of 620, you will have trouble qualifying for a new loan at all. It takes a score of 720 or better to obtain the best interest rates.

4. How long do I plan to stay in this home?

Mortgage professionals general tell borrowers to expect to pay 3% to 6% of the loan amount for a refinance. If you divide that loan cost by the annual savings you expect by a reduced mortgage payment, you can find how many years it will take to breakeven. Do you expect to stay in your home long enough to break even?

5. What are the terms of my current loans?

Make sure you know the terms of your current loan. Especially, make sure your existing mortgage does not have a prepayment penalty.

6. Do I have a second mortgage or a line credit?

If you do, there is added complexity to refinancing. You will have to either pay off the second loan or combine the two into one mortgage when you refinance.

Lenders have tightened up the approval process. Be sure to get professional advice from a lender about what levels of income, credit score, and equity you will need to refinance in your specific situation.

Information courtesy of Chester County PA Realtor Scott Darling.

The death of one partner in a marriage can have significant consequences for a mortgage.  Exactly what effect it has will depend on whether it is a single or joint mortgage, what balance remains on the mortgage, and other debts and assets of the deceased.

• In the case of a couple having a joint mortgage, the death of one spouse will simply mean the other spouse becomes the sole mortgage-holder. As long as she can continue making the payments, the property will be unaffected.  Federal law prohibits the lender from calling the entire mortgage due because one spouse has passed away.
   
• If the mortgage is only in the name of the deceased and she had more assets than debts, then the state will pay off the mortgage as part of the probate process. The worst-case scenario is that the house may have to be sold to pay the mortgage off if there aren’t enough other assets to cover the outstanding amount. However, when there is no will and assets are distributed to heirs according to the intestacy laws of the state, the surviving spouse is always one of the first in line to receive the remainder of the deceased’s assets after debts, taxes, and funeral expenses are paid. If the mortgage can be paid off through other assets, in many cases, the spouse would receive the paid-off home as his share of the estate.
   
• If the surviving spouse sells the house within two years of the death, has not remarried prior to the sale, and meets required conditions, she has the right to exclude up to $500,000 of her profit from the transaction.  For further information read US Government Publication 523.
   
• If the surviving and now sole-owner of the home realizes he is not going to be able to continue make mortgage payments for a long period of time, he may want to look into a reverse mortgage.  A reverse mortgage is a loan for senior homeowners that uses a portion of the home’s equity as collateral.  The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance.

Information provided by Chester County PA Realtor Scott Darling.

There are many factors that go into the decision to buy a home. One of those factors is how long you expect to stay in the home. This applies whether you are a first time homebuyer or stepping up to a larger home. The length of time you stay in a home affects the financial outcome of that ownership.

Here’s a summary of some thoughts from moneyning.com and the 5-year rule for buying a home. There is a tendency for younger buyers to go through 3-year upgrade cycles. Why? Newer and younger buyers typically experience significant increases in income in their younger years.

As income increases their ability to afford a larger mortgage increases and the desire for a larger house sets in. There seems to be an assumption that buying is more cost effective than renting. Click here for a perspective on ownership costs vs. rent. That thought process occurs, on average, every three years.

The 5-year rule states that generally you should plan to stay in a home you’re buying for at least five years. That is for two primary reasons…

• The first reason is closing costs. Every time a home changes hands both the buyers and the sellers put money on the table just to make the transaction happen. These costs can easily add up to thousands of dollars. Those dollars provide no real financial benefit to the buyers or sellers except to allow the transaction to happen.
   
• The second reason is the payment of interest on the mortgage. A mortgage payment has two components – payback of the principal of the loan borrowed and interest on the amount borrowed. Because typical mortgage payments remain the same during the life of the loan the proportion paid on the two components changes. In the early years the payment is almost all going to pay interest and very little to principal. As the principal is gradually paid down the portion going to interest diminishes and the portion going to the principal increases.

According to author Thursday Bram “it isn’t until you’re about five years into paying down your mortgage that you’ve made enough progress on the principal to make it a better deal than paying rent each month.”

Here’s how to beat that average…don’t buy the biggest house you can just because a lender tells you what you can afford. Instead, consider buying smaller and then adding extra money to your monthly payments. That extra money will go entirely to paying down the principal loan – that means you will pay less interest over the life of the loan and you will create more equity because you are diminishing the principal balance faster.

However, if you’re not going to stay in your home five years you should probably consider renting.

Information courtesy of Chester County PA Realtor Scott Darling!