National Association of Realtors is changing their 2019 Mortgage rate forecast to 4.5% (down from earlier 5.5%) and home price forecast up 2.9% (up from 2.2%. Full story here
Personally, I have used a tax professional since in my first job after college, earning $85/wk, I was audited 3 times. But here’s a guide from the National Association of Realtors that may help you know the issues when you meet with him/her.
“Location, location, location” is the stereotypical answer to the question, but location has several important meanings:
Neighborhood – How does this home fit in with other homes in the immediate (4–6 square blocks) area. You don’t want the most expensive home in the neighborhood because you won’t get the value out of it when you sell (which if you don’t your kids will). Today lots of my buyers want to be within walking distance of restaurants, shopping and other services. How important is distance (time) to freeways or public transit to you? Commute time to work? I once found a home that was exactly what my buyer wanted, but it was across the street from a strip club. No sale.
Schools – even if you don’t have school age children today, whoever buys it from you may have, so give serious thought to the quality and distance of public schools.
Architecture – is this a super-modern design in an all-traditional neighborhood, or vice versa? Is it the style that was popular in the 1960’s? 1920’s? 2000’s. Many neighborhoods have a balance of styles, but you probably don’t want the only one of whatever style in the whole neighborhood
Size – You don’t want the largest home in the neighborhood, but you do want one that is appropriate for your family (and an average family when it’s time for you to sell). That’s not just square footage or number of bedrooms. 4-BR in an 1100 SqFt home makes for awfully small bedrooms, and likely no formal dining room or separate family room. I just got a flyer for a 1970 SqFt home with only two BR. Keeping it close to more normal BR to size ratio will mean the home will hold its value.
Siting on the lot – The first question is corner lots, which typically have very small “back” yards, because both “front” and “side” may eat up space without being usable. Too many homes have half the lot as a front yard, again leaving little space for the back yard we all tend to use more.
Floor plan – I once showed a home with three BR’s, all on the second floor, and only one bath, on the main floor. Worse, the only route from the BR to the BA was through the living room, dining room AND kitchen. That (or any floor plan) may be OK for some people, but you want one that works for YOU.
I see lots of real estate flyers that brag about how terrific the home is for “entertaining”, which is great for people who actually “do” entertain frequently, but I suspect for most, “entertaining” only happens 2–3 times a year, so that floor plan may have lots of wasted space for day to day living. When was the last time you “entertained”? How often? If the answer is more than 12 times a year, that may be an important consideration for you.
Age – Victorians can be charming but the older the home the more time and money you’re likely to spend on maintenance. If you have (or plan to have) little children, you might consider post-1978 (when the US outlawed lead paint, which can be poisonous if little ones chew on railings or door frames, or…). Which is not to say everything built in the last five years is maintenance-free, but it is likely to have more energy-efficient furnace and appliances, windows and insulation. I recently worked with a couple who didn’t want to see anything built after 1960, in the belief that the home’s “bones” were likely to be better and anything else (insulation, appliances) could be replaced at reasonable cost.
Price and Financing – Foremost you want to wind up with a payment, including taxes & insurance (and HOA dues if any) that is not stretching every last dollar from the rest of your income. Leave yourself a little to eat out now and then, fly to see the relatives, and God forbid, other emergencies. Just because you can qualify for $X payment and therefore $Y purchase price, you may not want to go that far. When I bought my first house, mortgages were 20% down and everyone got the same rate. You either qualified or your didn’t. Today, there are nearly hundreds of different mortgage programs to fit every conceivable financial situation (and BTW you don’t need that 20% down – 3.5% down mortgages are easily available – 0% if you’re a veteran. A Mortgage Banker or Broker is your best choice for the widest selection.
Discuss all this with your Realtor before you start previewing homes. Most Realtor’s business is built on referrals and we want you to be so happy with your new home (and the buying process) that you’ll tell your friends and family.
How will you know? After we’ve been in a house for 10–15 minutes, I ask my buyers, “Can you see yourself living here?” Most people know by that time, and if the answer is “Nope” then nothing else matters. Go view the next house on your Realtor’s list. When it’s “yes” (or better yet, “YESSS!!!” then you’re ready for the next steps.
How important is “staging” a house before it goes on the market? Do potential buyers really need to see an almost-bare house, stripped of all personal items?
I just answered this question for a Quora writer:
First, staging. Absolutely essential to sell for the highest price in the shortest time. There are two ways to stage. 1) Empty the house of everything personal and hire a professional stager to bring everything from furniture to wall hangings and towels – all in the best, coordinated colors for your house. 2) Hire a consultant to show you how to stage your house with (mostly) your own furniture, wall hangings and towels.
The first method presents a challenge for many sellers to live elsewhere. For those who’ve moved out and moved on, no problem. For those who really need to continue to live in the home, big problem. While the cost for this version is typically less than 1% for the stager, there may be other costs for storing or moving seller’s belongings. Regardless, it’s been proven to get the highest price in the shortest time.
The second method’s challenge is finding the person or firm who can do it that way. I am blessed to have such a person available and I pay her fee for my sellers. She will spend 1–2 hours, depending on the size of the home, going through each room with the sellers, identifying what to do with existing furniture (much usually needs to be removed, lowest cost is to the garage if available) and everything else in the room, (e.g.,“put this pillow on that chair, this painting behind that sofa”, etc) and the next day will provide a detailed check list of every single recommendation. It usually runs about three pages. On rare occasions she will rent 3–4 pieces of furniture to “finish” a living, dining or family room.
It is NOT necessary to stage every room (with either method). Living room, dining and kitchen are most important, then family room, master bedroom & bath.
It IS necessary to remove anything personal – family photos are #1, but also certificates, licenses and especially anything that displays an extreme interest (mid-century motorcycles may be your passion, but photos and artifacts of such would be a distraction to a buyer. The goal is to allow a prospective buyer to imagine their own life in your home.
Now for your question about stripping a house bare.
Regardless of which method you choose (or neither) it is EXTREMELY IMPORTANT to “declutter” the entire house. As I write this in my home office, on the shelf above my desk, there are: modem, router, three lamps, clock, two greeting cards, coffee mug, old nameplate, sleeve of gift golf balls, small seagull carving and large pine cone. Every one of those has use or meaning to me. NONE has use or meaning to a prospective buyer. Were I staging this house, ALL except one desk lamp would be gone. Be brutal when you declutter. If in doubt, take it out.
About the Author
Here’s my answer to that question just asked on Quora
Owning your house is the biggest and best benefit. It means you can paint the bathroom whatever color you want, remodel the kitchen, plant what you want in the yard, and on and on…all for your personal comfort and enjoyment.
If you have a mortgage, the interest you are paying is tax deductible (and for about the first 15 years of a typical 30-year mortgage your payment is more than half interest if you don’t pay taxes and insurance from the same payment. And the property taxes are probably deductible whether you paid with your mortgage payment or separately. No part of rent payments are deductible.
Besides that, owning a home has been a good investment over a long period of time. Yes, there are times when the value of a home may go down, but you only “lose money” if you see during one of those times. In 1950 the median (half were more, half were less) home price in the U.S. was $7,354. By 2000 it was $119,600 and today is $236,400. But be careful here, that 1950 house was less than 1,000 square feet with two bedrooms and one bath. Today it’s just short of 2,500 square feet and the majority have at least four bedrooms and three baths.
Nevertheless, buying a home (and living in it) has almost always been a good investment. One way to lose money on a house is to sell it one or two years after you buy it. If you’re likely to live there for at least two years, my advice is rent.
Here’s answer I wrote recently to that question on Quora:
I’d guess flipping shows the greatest short-term potential, but as with most investments return is related to risk, and there is certainly risk in flipping. For example, what if in the remodel process you discover something not in your original estimate? What if the market turns between the time you buy and finish the remodel? What if the adjacent property is bought for something undesirable – pig farm, shopping center, fast-food restaurant, 10-story condo or apartment
Buying something to rent is lower risk but you need to be in it for the long haul. Investors I’ve worked with look at it for a minimum five year project and, depending on cash flow and their financial situation probably longer. The biggest single advantage to buying investment property is in the depreciation, but that’s not of as much value if you don’t have other income on which it can offset your tax bill. Cash flow depends as lot on how tight the rental market is. Portland right now is super-tight, but the City of Portland also prevents no-cause evictions and/or rent increases of more than 10%/yr without paying relocation costs to the tenant which range from $2900 (1-BR or SRO) to $4500 (3-BR or more). This does not apply to Portland area properties outside the Portland city limits
If you’d like the same patient, professional help I’ve given other real estate investors, please contact me.
With mortgages, there is no “one-size fits all”. Mortgages (and the rates) vary according to your personal situation: income, debts, down payment, credit score and so many more items. Your best source for mortgage information is a local, experienced, mortgage broker. If you don’t know one, contact me for an introduction to my preferred lender.
Fannie Mae, which indirectly finances the fast majority of mortgages in the US, recently did a study on the most influential sources of mortgage information. Here’s what they found
This shows we have a lot of smart people in this country. Almost one third relied on a mortgage lender. Slightly fewer named their Realtor. Before I get too flattered with that, a Realtor is not the best source of mortgage information. If you ask me about mortgages I’ll tell you exactly that and introduce you to my preferred lender, who is a mortgage broker. Next most often used, family and friends, may be a good source if they’ve recently financed a home purchase (but the best mortgage for you is almost certainly not the same as the mortgage your family or friend got). The best source remains a mortgage broker. The reason is that mortgages are so varied and complex (and changing) today that you have to be in the business every day to have good, up to date, knowledge of what’s available that best matches for a particular borrower. A mortgage broker has access to dozens of mortgage sources and probably works with 8-10 on a daily basis. They are the best place to find the best mortgage for you.
In the winter issue of Windermere Living, we highlight some of Maui’s top spots and adventures. We also go behind the scenes with celebrity chef Giada de Laurentiis, who reveals her top five tips for cooking pasta. And don’t miss the new Destination GPS, which spotlights some of the vibrant communities where Windermere has offices. And of course, the homes. Pages upon pages of beautiful homes in Washington, Oregon, Utah, Colorado, California, Hawaii, and Mexico. Click here
Staged homes sell faster and for a higher price. If sellers who list with me prefer, I provide a complimentary staging consultant who will show you how to stage with your own furniture. The four other items in this article are also worth the time & cost. If you’d like to know what your home might sell for, contact me. No obligation, no pressure.