Protecting your investment in your home

It happens every year…mother nature produces weather that’s a bit rough…and as a result, homes get damaged. And, that costs money.  And, of course it can be incredibly time consuming.  And, it often happens at the worst time…when you can’t afford it.

 

Now, it’s super important to have a good insurance policy, so if/when something happens, your insurance company will reimburse you for the damage (or at least most of it…as most policies have some sort of deductible).

 

But, importantly, there are many things you can do to protect your home so that you either prevent or minimize the damage that could happen to your home.  I’ve recently written some articles that provide advice on preventative maintenance as well as what to do if you do get hit.

 

First, don’t forget that winter is right around the corner, and fall is the time to prepare your house to avoid winter problems.  Check out this article with Tips to prevent ice damming.  Thankfully, ice damming is preventable.  This article shows you the signs to look for that could cause a problem.

 

Water does a lot of damage to homes in our area.  In fact, water is responsible for the majority of insurance claims (way more than fire).  Here are some tips to prevent flood damage in your home.  Of course every once in a while, we get a big storm in the form of a hurricane.  These are never fun, and when they happen, houses that have typically been fine for 30+ years get some major damage.  So if this happens to you, you should find these tips helpful – How to recover and sell your house after a hurricane.

 

Preventative maintenance can go a long way to help preserve the value of your home and minimize damage.  I put this checklist on home maintenance tasks to do throughout the year.  While it’s specifically written for vacant homes, you’ll see that most of these tasks should also be done for occupied homes.

 

I hope this info comes in handy.  An ounce of prevention can go a long way.

How to choose a realtor to sell your house

When it comes time to sell your house, choose your real estate agent wisely.  I see so many people selling their houses where they take the “easy way out.”  I’m here to advise you that’s often not the best choice.

 

For most home owner, their house is their largest asset.  And, you don’t just want to entrust the task of selling it to just anyone.

 

Here are the 2 most common mistakes I see home sellers making:

MISTAKE 1:  Choosing a realtor based on the one who gives you the highest list price.  Big mistake!  In fact, this is probably the biggest mistake.  Most people do this, because they “hear what they want to hear.”  The highest price sounds the best, right?  Well, often the opposite is true.

FACT:  The realtor does not set the market price!  The market (or the buyer(s) set the market price!  Just because a real estate agent tells you they can get a higher price doesn’t mean it’s true.  Rather, the realtor usually sets (or recommends) the list price.  There is a BIG difference.

If the list price is too high, you will have fewer buyers even looking at your house…and your house will stay on the market longer and ultimately (because of this), sell for a lower price.

If your list price is in the bull’s eye area (or even slightly below), you are likely to attract the right type of buyers (i.e. those that will actually have an interest in your house and those that are likely to make offers).  And, at times, you may even be able to attract multiple buyers at the same time and get a bidding war (which can raise the price).

Selecting a list price is about strategy.  And, some agents know better than others.  They know what your house is ACTUALLY worth (and worth right now), and they know how to STRATEGICALLY price it to get it sold fastest and for the highest amount.

So, don’t be fooled by the agent who tells you the highest price.  Chances are, they are more desperate for business and telling you what you want to hear (vs. what will actually happen).  For many, the only way they can win a listing is to tell you a higher price so you’ll choose them.

 

MISTAKE 2:  Choosing a realtor because you know them (e.g. they are a friend, relative, etc.). No, no, no.  Choose the BEST PERSON for the job, regardless of whether you know them or not.  Sometimes, that may be a friend (but chances are it isn’t).

I won’t even get into the whole thing about potentially ruining your friendship (i.e. mixing business and friendship…e.g. what if the house doesn’t sell or it won’t sell for the price you want, or something goes very wrong, and do you want your friends/family to know your financial situation?).

Rather, simply choose the person that you think it the best to get the job done the best.  That may be your friend or may not be.

So interview a few agents to get opinions and advice and carefully make your selection.

 

ADVICE ON SELECTING A REALTOR:

1. Choose a neighborhood expert – someone who knows YOUR area and hence knows how to price your house well.  They know the inventory, they know what it will take to get the house sold.

 

2.  Choose someone with a proven track record – Yes, experience counts in this industry (probably moreso than other industries).  Remember, this is your largest asset.  Don’t gamble with it.  Look at the person’s experience.  Look at how well they have done in YOUR area (not necessarily the county).  Look at well they do with LISTINGS.  Look at how long their listings stay on the market (what is the average days on market?)  And, importantly, look at the ratio of list price vs sold price.  This will help you ferret out those that inflating a price to tell you what you want to hear.

 

3.  Ask them about their marketing plan.  How will they market your house.  How do they do it differently/better than the others?

 

4.  Pick someone you feel comfortable with and trust.  I’ve said this a few times, but this is your largest asset.  You need to trust your agent.  They have a fiduciary responsibility to you. You will be working with them throughout the process.

 

5.  Check to validate that they have a proven record.  Check the facts, read reviews and think thing through.

 

Don’t just go with the agent you find.  Go with the BEST agent you find.

 

I hope this info is useful. I’ve worked with so many real estate agents (as a contractor) and I can clearly see that there are great agents, so so agents and bad agents (just like any other profession).  So choose wisely.

Hidden Costs of Owning a House

Personally, I think home ownership is great.  But, it’s not for everybody, and I’m not here to make judgments on that.

 

One thing I have seen over the years is that many first time home buyers don’t realize the full costs of owning a house on Long Island.  They initially look at the price of the house and do some math/division and figure that it’s no problem to pay for that.  They quickly learn that there are many other costs they need to consider.

 

Of course on top of the principal, there is interest.  Most people get this.  Then, they learn that there are other monthly costs such as Private Mortgage Insurance (PMI) if they put less than 20% down payment.  There also need to consider taxes and Home Owner’s insurance.  And, then for some homes, there may be Home Owner Association fees or Common Charges (especially if you live in a condo, town house or Co-op).

 

Then, they quickly learn that there are closing costs (thankfully these are just a one time expense).  So, there are costs for inspections, attorney and bank fees.  And, you often have to contribute to the taxes that will be paid and put into escrow.  Here in NY state, there is also a mortgage tax, and this can be pretty high.  I believe it’s around 1.1% of the cost of the mortgage.

 

Once you get past that, you need to contend with “move in” costs which would include moving, and one time deposits for various utilities (e.g. cable, heat, phone, etc.).  And, many new homeowners also need to (or want to fix up the place before they move in (e.g. sanding the floors, replacing the carpets, painting, adding hardwood, and often many other items).  Most new home buyers quickly learn these costs are more expensive than they expected and more than they have in the budget, so they need to make some challenging choices and prioritize.  The good news is that there is plenty of time to space these costs out over time.

 

Another big piece that people overlook is that there are ongoing maintenance costs.  Things break.  Things get worn down.  Accidents happen.  Sometimes these issues happen at inconvenient times.  Replacing your roof can be expensive.  Appliances often wear out (and sometimes, when they break they can have a domino effect and cause additional damage – think about what happens when your water heater breaks and you have water all over the floors.  So, plan ahead as you will have ongoing costs.  Hopefully, they don’t happen right away, but sometimes unexpected things happen, especially if there is a big storm.

 

So, when you are deciding whether or not to buy a house (or how big or expensive a house you can afford), remember all of these added costs and factor them into your budget.  You don’t want to house poor…or worse…and find yourself in a bad situation where you can’t afford everything.

 

Those are my thoughts for the day.

Quick staging tips to sell your New York house

Tips for selling your house faster and for a higher value

I’ve worked with so many buyers and sellers, and it’s fascinating to watch home sellers prepare their houses for the market.  In some cases, the sellers are leaving a lot of money on the table by not investing in fixing and prepping their home; in other instances, I see people over spending and not getting their return on investment.

 

(And, of course there are times when sellers acknowledge that making some improvements will have a positive ROI, but it doesn’t matter as they don’t have any money to invest).

 

The advice in this article assumes that the the seller does in fact have some money to prep their homes.  And, of course all houses and circumstances are different, so this article makes some generalizations.

 

The goal here is to balance what will give you the best value/return for your money and sell your house faster.

 

1.  Hire a Stager for a consultation.  This small investment for an outside consultant is usually worth its weight in gold.  The good stager should be able to help you prioritize the most important items during the consultation.  They can also give you good advice on color selection for whatever changes you may make (e.g. paint colors, floor colors, etc.)  Note:  There are many ways to stage, and many levels.  Getting a staging consultation is very different than renting furniture to stage your house.  Start with the consultation.

 

2.  If you have hardwood flooring under your carpet, you should refinish them.  Hardwood flooring is the preferred flooring surface in the New York Metro area.  If you have hardwood floors, by all means rip up the carpet and refinish the floors.  This is one of the strongest return on investment items you can find.  You will instantly improve the value of your home and it will help you sell it much faster.

 

Usually, sanding and refinishing costs less than what most people think, so you may be pleasantly surprised with the price.  Conversely, buyers often think it costs more to refinish than it really does…so if you don’t do it, they will and they’ll deduct that perceived price from their offer (and they’ll capture that added value).  Check out this article on hardwood flooring colors and trends to see what’s most popular.

 

3.  Generally, adding a fresh coat of paint will have a positive ROI.  If you have dark colors or taste specific colors, you should strongly consider repainting and going with a more neutral color (e.g. light gray, light beige or even an off white.  This will make your space more neutral and attractive and will also make your space look larger and more inviting.  And, the more consistent you can be with colors across rooms, the better off you’ll be.

 

If you already have neutral colors, great.  But, look at the condition of your walls and moldings.  Do they look clean and bright, or have they seen their better days.  If they look tired or dirty, it’s probably smart to add a fresh coat of paint, even if you do it yourself.

 

4.  Clean, clean, clean.  I think this one goes without saying.  Just do it!

 

5.  Clear the clutter and open up your space as much as possible.  This may include eliminating furniture, as well as extra “stuff.”  Less is more for sure.  A stager can help you determine which items should go (as well as ideal ways to arrange your furniture.

 

6.  Do any obvious repairs.  This is a general statement.  If you have broken items, either repair or replace them.  In particular, if you have any areas damaged from water, fix the issue and the area.  These are red flags for buyers (and inspectors).

 

7.  Replace or clean any carpets that are visually dirty or smelly.  Generally smelly ones will need to be replaced (especially if it’s pet damage as that has usually penetrated into the carpet cushion beneath.  If it’s surface dirt, carpet cleaning may take care of it.

 

Generally, you will not get your return on carpeting if you replace it…but sometimes you have no choice and if you don’t replace it, it will simply reduce your selling price.  However, as mentioned above, if you have hardwood underneath your carpet, you will get a positive ROI if you refinish the floors (and this is less expensive than replacing the carpet).

 

8.  Make sure you have strong curb appeal.  This is the first impression for your potential buyers, so make sure it’s a good one.  Make sure that the driveway and walkways are clear (and safe).  Make sure they look nice too (trim trees/shrubs if needed).  Add flowers.  Make sure your front door looks great (consider a fresh coat of paint if it needs it).

 

9.  Be careful about how much you spend on the kitchen and bathrooms. While they say kitchens and baths sell homes (and this is true), most neglect to tell you that you generally do not get your return on investment on them.  Generally kitchen remodels have a 70% ROI and bathrooms have a 60% ROI.  So, try not to spend too much here and go for easy and inexpensive wins here (e.g paint the cabinets/replace the hardware rather than replace them, reglaze the pink colors rather than retile the bathroom).

 

I hope these quick selling tips will help you when you are preparing to sell your New York home fast.  Remember, you can’t do everything.  You want to do enough to get your home in good shape so that potential buyers will want to make an offer.  If your house needs “too much work” and you just sell your house “as is,” most will just pass (as they don’t have the available cash to get the house ready).