At Home by Madison.com

AT HOME

Tips and tools to guide you through the home buying, selling and remodeling process

AT HOME: Tips for sellers

Before the yard sign goes up By Lee Enterprises newspapers and The Associated Press

any may believe the start of selling a house begins when the “For Sale” goes up in the yard. But really, the process begins several steps before a yard sign and a picture in the newspaper. Here are six moves to make before putting your house on the market.

Find an agent Set up interviews with several real estate agents before choosing one. Here are some of the questions that the National Association of Realtors recommends: What kind of marketing proposals does this Realtorenvision? What’s the average time on market? How does the brokerage support its Realtors? Is the Realtor a full-time or part-time professional? How long have they been in the real estate industry? How often would they expect to hold an open house? How long is an agent’s listing contract?

Know your market

In addition to requesting a competitive market analysis, a report prepared by your Realtor of comparable area properties, here are some other important questions to consider with your agent: What is the average number of days on the market? This will indicate how quickly the average property sells. What is the median home price? This tells you where the “middle of the market” is. What does the competitive market analysis suggest for pricing? Remember, you can ask any price you want, but the longer a property sits on the market, the tougher it can be to sell. What is the average days-on-market for my price range? Are there any incentives that could be offered? For example, a home warranty or a flooring allowance that may entice buyers?

Get inspected

Clean up, move out

Tell your neighbors

Word-of-mouth. It still works, especially when it comes to selling homes. You never know who is looking — friends, friends of friends and family members. Be sure to help your Realtor and help yourself when you’re selling. Make sure you let your acquaintances know your house is going on the market. Make sure you include the things you love about the house or the location. Be sure to include a link to the listing or any information about open houses.

Talk to a lender If you’re looking to sell a house, you’re probably looking for a new one. In addition to getting current loan payoff amounts, it’s also a good idea to pick your banker’s brain. Mortgage lenders have an excellent feel for local housing markets. They understand successful price points, as well as loan programs that may help potential buyers. And, if you’re looking to move out of the area, downsizing or upsizing, a lender can help you find a new loan program and determine what options are available to make that next step.

The National Association of Home Inspectors recommends checking with your state to see if home inspectors are licensed. NAHI recommends checking the credentials and professional affiliations with anyone before letting them check your home. The standard inspection usually includes: Home exterior Building foundation Exterior home walls Roof coverings, flashing and gutters Roof support structure Attic Basement Insulation quality Garage Electrical Visible interior and exterior plumbing Central air and heating system

Show off the space in your house. If walls and rooms have too many personalized things, like pictures or knickknacks, it makes it difficult for prospective buyers to see themselves in a house. Make sure closets and storage rooms feel open, not stuffed full of junk. Rent a storage unit or downsize before listing a home. Consider a staging expert. These home designers can help prepare a home for selling by arranging furniture, decluttering a house, or even renting furniture and other items that help modernize a home or increase its appeal.

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AT HOME: Tips for buyers

What to know before you buy H 1

By Lee Enterprises newspapers and The Associated Press

ere’s the real secret to home buying: The process of buying a home doesn’t start when you find the property you love, it happens long before then. Here are six tips to begin your adventure in home buying.

Check your credit Before you begin the home-buying process, make sure you know both your credit score and your credit history. Your credit score is a credit bureau’s rating of your risk and creditworthiness. The higher the score, the lower the risk. Most experts agree, any credit score below 680 might make it hard to qualify for a loan, or will mean sizable fees, higher interest rates or a higher down payment. A credit score of more than 760 is considered excellent. Your credit history lists your lines of credit (think credit cards and car payments). It also indicates whether you’ve been late making the payments or if you’re current on your loans. It will also list any outstanding balance amount on a credit card. LaToya Irby, a credit and debt expert, listed some common ways credit scores can be hurt: Making late payments. An account that has been sent to collections. Having a bankruptcy or foreclosure.

Find your own agent

Often folks may start looking at houses before contacting a real estate agent. While it’s fine to do a bit of literal window shopping, here are the ways having your own real estate agent can help you: A real estate agent is usually a member of the area multiple listing service, a database of property for sale by real estate brokerages. These powerful databases are usually searchable by an agent for multiple categories, helping you to focus on all the properties that fit your needs. A real estate agent can help get you to the right kind of lender and knows about the different programs that may be available. An agent can help set up home showing appointments and as well as showing potential property. A real estate agent can answer questions about the area market and can provide an analysis of trends, offer perspectives about the inventory and also help with pricing data.

Full disclosure

“Sleeper costs”

Know your limits

Make sure you visit a lender before visiting a home so that you can get pre-qualified for a loan. Know how much home you can afford. Nothing ruins a homebuying experience faster than falling in love with a home you cannot afford. Know your payment limits. Depending on your credit, most lenders will expect to see your house payment to be between 28 to 44 percent of your monthly income. Consider the costs of the loan. Generally speaking, closing costs run between 1 and 2 percent of the loan amount.

No home is perfect. Before buying, be sure to read through any state-mandated disclosures. Most states require home sellers to answer a series of disclosures which tell potential buyers about major problems in the home; for example, if there’s been water damage or mold. Keep in mind, if sellers haven’t owned the property for long, they may not know how to answer some questions completely. Some states require inspections to be completed on the roof, septic system or even trees or plants. That’s why it’s a good idea to have a real estate agent who can help navigate these. After an offer has been made and accepted, it’s essential to complete these inspections and tests within a time period set by the contract.

Don’t just consider your mortgage payment. Here are other costs that you should factor in when buying a home: Property taxes Mortgage insurance (required for some loans) Home insurance Homeowners fees (in some subdivisions and building projects) Utilities for a house, versus rent

Get the down low on a down payment Many home loans require a down payment, money that will go directly toward a purchase of a house. For first-time homebuyers, this can be daunting or may require savings. Financial gifts from family members can be used, but there are usually guidelines that vary depending on the loan. Don’t forget about other costs related to the loan; for example: a loan origination fee, appraisals, required inspections and tests (for example, if the home is on a septic system, it may have to be certified). These additional costs can add to the amount of money you’ll have to bring to the closing table. Generally speaking, the bigger the down payment, the better the loan terms (and the lesser the monthly payment). Remember, it’s not just about whether you can afford the monthly mortgage payment, it’s also about having the cash to complete the purchase.

AT HOME: Tips for selecting a real estate agent

Experience key to success

S 1

By Lee Enterprises newspapers and The Associated Press

o, you need a real estate agent. How do you choose? There are so many signs and brokerages, but which one is best for you? Here are some tips to help you find the right one:

Right person, right fit

Of course you want someone with experience; someone who knows the market; someone who is a keen negotiator. But, one of the most important factors is finding a real estate agent you trust. This person will help you navigate the largest purchase you’ll likely make. You want someone you feel comfortable with, and someone who will focus on you. You’ll also want to choose someone who can give you honest feedback, for example, what needs to be improved in the house or what the market is really doing. Some agents may try to “buy the listing” by proposing a high listing price. But, that may be a way to grab your attention while turning prospective buyers away.

Specialties Some real estate agents may also specialize in certain types of properties or buyers. For example, some might help first-time home buyers, while others may assist seniors in housing needs. If you have special buying or selling needs, research if real estate agents have any specialties or training to help.

If you have had a good experience with a real estate agent, then your job may be easier. It may be an easy choice to use an agent from a previous experience. House selling or buying can be a stressful situation, even when everything is going well. The most important thing is that it is a person you can trust and feel comfortable with giving feedback.

Questions to consider

Homeowners are becoming better educated and more sophisticated. Here are some things to consider: How many homes has the agent sold? How many transactions (sales, rents, or listings) has the agent been a part of in the past year? What is the agent’s average days on market for a listing? How does that compare with the overall market average? What is the average difference between the agent’s listing price and the sale price? (If it’s more than 20 percent, that may not be a good sign.) How long is the listing agreement? How long is the buying representation good for? How does the agent handle negotiations if they represent you as a buyer, but you’re interested in one of their listings?

Know the letters

Real estate agents can have a lot of letters behind their names on a business card. Know what some of those certifications mean. For example, there are real estate agents, Realtors and brokers. Some agents specialize in certain transactions. Some agents work in different real estate arenas, for example rental properties, commercial properties, as buyers agents or listing agents. When you interview agents, understand what certification, training and expertise they may have. Don’t be afraid to ask for references from other clients. Here are some common acronyms: ABR — Accredited Buyer Representative ACR - Accredited Seller Representative CRE - Counselor of Real Estate CRS - Certified Residential Specialist GRI — Graduate Realtor Institute

History is the best indicator

Word of mouth

Like any business or profession, wordof-mouth is also effective. If your friends or family have had positive interactions with a real estate agent, that can be a good sign. Ask to find out which real estate agents have good reputations. Again, in any market, there are talented, capable agents. The question becomes the right fit for you.

AT HOME: Tips for making upgrades

Add value with improvements By Lee Enterprises newspapers and The Associated Press

t may seem a bit counterintuitive, but sometimes you have to fix your house just to sell it. Or, you may want to consider upgrading to bring that top-dollar price or move the property faster. Here are some of the home remodeling tips provided by Remodel magazine in its annual 2015 “Cost vs. Value” report.

Cost vs. value

Cash upfront

Before beginning a remodeling project, do the math, the report says. That’s because what a remodeling project may cost may be much different than the value it adds to the home. For example, if installing a sauna in your home would cost $30,000, a potential buyer may not give you an offer $30,000 higher than your asking price after installing the sauna. In 2015, the cost-to-value ratio is 63 percent, meaning that the average home remodeling project will recoup 63 percent of its cost in value. Using our sauna example, the asking price (using the 63 percent average) would have increased the value of the home by only $18,900.

Bathrooms and kitchens

Doors

Remodeling shouldn’t just happen when a home is going on a market or right after it’s purchased. Instead, home owners should always be investing in their house, planning upgrades or changes that they can reap the benefits from, while still considering how the remodel affects the value. Keep in mind, many of the remodeling projects that can add value to the home also require cash that could strain budgets, especially if purchasing another property.

Bedrooms in attics and basements Though costly, additional bedrooms usually mean a boost in the home’s value. However, just calling a room a “bedroom” doesn’t work. Bedrooms have to meet local and state codes to be counted (the same is true on appraisals). Realtors, in Remodel Magazine’s annual survey, noted a stronger trend toward adding basement or attic bedrooms.

The old rule of remodeling says that bathrooms and kitchens pay to remodel. In other words, most improvements done in those areas pay off in added value. But, that’s only true to a certain extent. Often, updates to kitchens and bathrooms are a wise investment, especially replacing outdated appliances, flooring or countertops in those areas. However, as the cost of these remodels has increased, not all remodeling is the same. Here are some convenient dos and don’ts: Do replace outdated fixtures or appliances. Consider replacing outdated, broken or worn counters or cabinetry. Don’t look to get value from premium or professional lines of appliances, like professional grade ranges or refrigerators. The extra cost may not be valued by the potential buyer, lessening your return on your investment. Consider whether you’re designing the remodel for you or for the next home owner. If it’s for you, design the home you want. If it’s for increasing the value, stick with a more neutral, conservative design that will have a larger appeal. Beware the trends: Several years ago, after hurricanes and weather, back-up generators were in demand. So, too, were jetted bathroom tubs. While demand for those items is still present, the return on those investments has dropped considerably in the past few years. If it’s possible, consider adding a bathroom to your home, especially if the home is older than 25 years, when the trend in increasing the number of bathrooms in homes started.

Two types of doors showed very good return on the investment — steel gauge entry doors and replacement of garage doors. As more people look to upgrade the curb appeal of the house, the front door becomes a focal point. Replacing weather-worn or old front doors is one of the lesser expensive ways to upgrade a house. In many cases, replacing an existing door with a steel entry door brought as much value as the cost. Replacing garage doors, likely because they are often seen first, was second on the annual list with an average rate of return of just above 92 percent.

Roofing It can be a big-ticket item, but replacing the roof of a home was also a good way to make remodeling pay. But be careful, experts warn, because some areas hit by hail, hurricanes or other weather may have roofing contractors and materials at a premium. On the other hand, problems with roofing can be costly to fix if a sale is pending and can be a deal-breaker. A new roof isn’t just functional, it adds peace of mind for any potential buyer.

AT HOME: Tips for investing in real estate

How to buy rental property By Lee Enterprises newspapers

o, you’re ready to become the next Donald Trump and embark on your real estate empire. Or maybe you’re just looking to diversify your investment portfolio. Here are nine tips to consider when buying investment property:

Know the market

Up to code

Look at the area’s rental vacancy rate. If it’s below 5 percent, it’s a “landlord’s market.” If the rate has been declining, that’s also a good sign. Anything above that may mean there’s adequate rental housing on the market and your property could sit vacant between renters.

How close is it to amenities like parks, shopping areas and grocery stores? And what kind of parking does it have (for example, a garage)? Is it located in a quiet area or on a busy street? All of these factors will determine how easy it is to rent and what other properties you’ll be competing against. You may also check on the crime rate, which could mean you’ll have to discount the rent.

Consider how much the property would take to bring to code. Once you flip a house or property to rental, it may need work to bring it to code instead of having it be a primary residence. Calculate the cost of repairs and what you’d have to charge in rent by looking at comparable properties. If the math doesn’t add up, it’s not a good buy.

Save and buy

Managing

Paperwork

Not your typical loan Don’t expect a typical mortgage. Banks reason: If you have cash flow problems, which mortgage are you likely to pay first — your home that you live in or your rental property, said First Interstate Bank Vice President Brian Brown. Most banks consider loans for investment properties higher risk and require: Good credit scores 25 percent downpayment. Five to six months of reserves in the bank.

Five plus

Banks may look more favorably on properties with more than four units because they carry less vacancy risks. But experts say: With more units comes more management. Be sure you’re ready to meet the needs of four or more tenants which may require more maintenance, regular upkeep and paperwork.

Know the neighborhood

Counting the cost

Real estate author and expert Brandon Turner said that in addition to having an investment plan with an exit strategy, some landlords don’t consider all the costs of ownership before determining feasibility. Those costs include: Water and sewer Garbage (possibly commercial service for larger properties) Legal fees (including eviction) Other utilities — electric, gas, Internet Vacancy costs Scheduled maintenance (heating, cooling, roofing) Capital improvements

Don’t just consider the upfront costs to purchasing rental properties. Walter Molony, an economic spokesperson for the National Association of Realtors, said a property owner should have six months of “caring costs” saved to cover expenses if properties become vacant.

Some investors don’t want the hands-on aspects of being a landlord. Property management firms can manage your property and may take care of arranging showings, leasing and other maintenance issues that arise. However, the landlord will still be responsible for the costs, and property management will likely run between 7 to 10 percent of the monthly rent.

Whether you select a property management firm or do it yourself, expect more paperwork. You’ll now have to keep careful records of rents, leases, expenses, maintenance and deposits. Even if you have a bookeeper or accounting service (which adds to your expenses), tracking down the paperwork adds time, and will be required for tax purposes.

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