Can I raise my home’s value?

By Tim Hall | Tuesday, April 22, 2008, 02:11 PM

One of the more common questions that homeowners ask is: “Which home improvements make the biggest difference in the price we can get for a property?”

Good question! Unfortunately, while average dollar amounts and average percentages can’t tell you about your home in particular, they can give you a pretty good idea.

Basically - within limits - anything that increases the home’s size and attractiveness to the general buying public will increase its value. The limits have to do with the initial value of the home (you aren’t going to double it) and with the neighborhood.

Room additions - with proper building permits - tend to get you back all your money when they look like the rest of the house. Those that look “added on” usually don’t fare as well, and rooms not built to code or with the proper permits mean trouble.

Extra bathrooms, quality kitchen cabinets and upgrades, new roofs, roomy closets that don’t reduce the square footage of the house, exterior paint, light-colored or neutral interior paint and small-print wallpaper (sometimes) tend to get you back more than you spent. Watered and treated lawns, a clean driveway (use oil remover) and colorful plants in front are always a big plus. Also, a selection (not a jungle) of healthy house plants usually helps. And anything that makes your bedrooms look bigger is a good idea: for instance, mirrors on closet doors where approriate, light window treatments, or tasteful, sparse furnishings.

Usually, you can hope to break even on new carpets, swimming pools, fireplaces, cabinets, custom curtains and specially blended wall paints.

I do hope this gives you some ideas you can use! Want more tips or an estimate of your home’s value? Shoot and email to info@timhallteam.com and we’ll get right to it!

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Nine Ways to NOT buy a home!

By Tim Hall | Friday, April 11, 2008, 12:48 PM

No matter which way you look at it, buying a home is a major investment. But for many homebuyers, it can be an even more expensive process than it needs to be since they fall prey to at least a few of the many common and costly mistakes which trap them into either:

paying too much for the home they want, or losing their dream home to another buyer or, (worse) buying the wrong home for their needs. A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that´s best for you.

9 Buyer Traps This important report discusses the 9 most common and costly homebuyer traps, how to identify them, and what you can do to avoid them:

1. Bidding Blind What price should you offer when you bid on a home? Is the seller´s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home What are you looking for in a home? A simple enough question, but the answer can be quite complex. More often than not, buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they´re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Unclear Title Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you´re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

4. Inaccurate Survey As part of your offer to purchase, make sure you request an updated property survey which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor´s new fence which is extending a boundary line, etc.). Be very clear on these issues.

5. Undisclosed Fix-ups Don´t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector´s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

6. Not Getting Mortgage Pre-approval Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams. Click Here to Get Pre-Approved Now!

7. Contract Misses If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. After performing inspections, prepare a list of agreed issues, walk through them, and check them off one by one.

8. Hidden Costs Make sure you identify and uncover all costs - large and small - far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

9. Rushing the Closing Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can´t fix without compromising the terms of the deal, the financing, or even the sale itself.

If you have a specific question about real estate, real estate contracts, practices, you name it, please email at blog@timhallteam.com and I will answer as soon as possible!

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Nine Ways to NOT buy a home!

By Tim Hall | Friday, April 11, 2008, 12:48 PM

No matter which way you look at it, buying a home is a major investment. But for many homebuyers, it can be an even more expensive process than it needs to be since they fall prey to at least a few of the many common and costly mistakes which trap them into either:

paying too much for the home they want, or losing their dream home to another buyer or, (worse) buying the wrong home for their needs. A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that´s best for you.

9 Buyer Traps This important report discusses the 9 most common and costly homebuyer traps, how to identify them, and what you can do to avoid them:

1. Bidding Blind What price should you offer when you bid on a home? Is the seller´s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home What are you looking for in a home? A simple enough question, but the answer can be quite complex. More often than not, buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they´re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Unclear Title Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you´re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

4. Inaccurate Survey As part of your offer to purchase, make sure you request an updated property survey which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor´s new fence which is extending a boundary line, etc.). Be very clear on these issues.

5. Undisclosed Fix-ups Don´t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector´s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

6. Not Getting Mortgage Pre-approval Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams. Click Here to Get Pre-Approved Now!

7. Contract Misses If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. After performing inspections, prepare a list of agreed issues, walk through them, and check them off one by one.

8. Hidden Costs Make sure you identify and uncover all costs - large and small - far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

9. Rushing the Closing Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can´t fix without compromising the terms of the deal, the financing, or even the sale itself.

If you have a specific question about real estate, real estate contracts, practices, you name it, please email at blog@timhallteam.com and I will answer as soon as possible!

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Buying a Home: Do your homework first!

By Tim Hall | Thursday, March 20, 2008, 05:42 PM

Hello all. I’m back and ready to roar! Thanks for your patience as I have been silent for a while, but now my writing cup runnethover! The next few posts are for buyers. Buying is the fun part of this business, we Americans love to shop! So take a read, offer a comment and look for more to follow!

If you´re like most home buyers, you have two primary considerations in mind when you start looking for a home. First, you want to find a home that perfectly meets your needs and desires, and secondly, you want to purchase this home for the lowest possible price.

When you analyze those successful homebuyers who have been able to purchase the home they want for thousands of dollars below a seller´s asking price, some common denominators emerge. Although your agent’s negotiating skills are important, there are three additional key factors that must come into play long before you ever submit an offer.

These Steps May Help You Save Thousands When You Buy a Home Make sure you know what you want … As simple as this sounds, many homebuyers don’t have a firm idea in their heads before they go out searching for a home. In fact, when you go shopping for a place to live, there are actually two homes competing for your attention: the one that meets your needs, and the one that fulfills your desires. Obviously, your goal is to find one home that does both. But in the real world, this situation doesn’t always occur.

When you’re looking at homes, you’ll find that you fall in love with one or another home for entirely different reasons. Is it better to buy the 4- bedroom home with room for your family to grow, or the one with the big eat-in kitchen that romances you with thoughts of big weekend family brunches? What’s more important: a big backyard, or proximity to your child’s school? Far too often people buy a home for the wrong reasons, and then regret their decision when the home doesn’t meet their needs.

Don’t shop with stars in your eyes: satisfy your needs first. If you’re lucky, you’ll find a home that does this and also fulfills your desires. The important thing is to understand the difference before you get caught up in the excitement of looking.

Find out if your agent offers a “Buyer Profile System” or “House-hunting Service,” which takes the guesswork out of finding just the right home that matches your needs. This type of program will cross-match your criteria with ALL available homes on the market and supply you with printed information on an ongoing basis. A program like this helps homeowners take off their rose-colored glasses and, affordably, move into the home of their dreams. This also alerts home buyers the very hour a new matching home comes on the market. BTW all members of the Dayton Area Board have this tool, it is called the Flash Tool. If your agent hasn’t offered you this service, well, um…. maybe they aren’t the right one for you. Just a thought.

To help you develop your home buying strategy, use this form:

What do I absolutely NEED in my next home:

What would I absolutely LOVE in my next home:

How Sellers Set Their Asking Price For you to understand how much to offer for a home you´re interested in, it´s important for you to know how sellers price their homes. Here are 4 common strategies you´ll start to recognize when you begin to view homes:

1. Clearly Overpriced: Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for your listing, an easy way to win the battle is to overinflate the value of your home. This is done far too often, with many homes that are priced 10- 20% over their true market value.

This is not in your best interest, because in most cases the market won’t be fooled. As a result, your home could languish on the market for months, leaving you with a couple of important drawbacks:

your home is likely to be labeled as a “troubled” house by other agents, leading to a lower than fair market price when an offer is finally made

you have been greatly inconvenienced with having to constantly have your home in “showing” condition … for nothing. These homes often expire off the market, forcing you to go through the listing process all over again.

1. Somewhat Overpriced: About 3/4 of the homes on the market are 3-5% overpriced. These homes will also sit on the market longer than they should. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there’s a lot of emotion caught up in this issue), OR you’ve left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received

2. Priced Correctly at Market Value Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.

3. Priced Below the Fair Market Value Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.

I hope these tips shed some light on the process. Next Post: How to write an Irresistable Offer!

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Montgomery County 2007 Housing Permits Down 29%

By Tim Hall | Friday, February 15, 2008, 02:01 PM

I recently received an informal report from a vendor in the real estate services industry, where they gathered the county information regarding home construction. This helps them in establishing thier forecast for 2008.

Here, sans any interpretation, are the numbers:

Permits Issued by County

2007 Montgomery 553 units. Net change -29% from 2006 and -44% from 2005. 2007 Warren 1100 units. Net change -34% from 2006 and -56% from 2005. 2007 Greene 593 units. Net change -20% from 2006 and -57% from 2005. 2007 Butler 976 units. Net change -44% from 2006 and -65% from 2005. 2007 Hamilton 907 units. Net change -40% from 2006 and -57% from 2005.

Total 2007 4129 units. Net change -36% from 2006 and -58% from 2005.

I welcome your comments. In a previous post I stated that things would rebound once inventory is worked through. What do you think?

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Do FED rate cuts lower mortgage rates?

By Tim Hall | Monday, February 4, 2008, 02:57 PM

Mortgage 101

Q. What is the most reliable predictor of Mortgage Rates? A. The Ten Year Treasury Note (Stock Symbol TNX)

Q. Do FED rate cuts lower mortgage rates? A. Let’s find out together! See the Six Month TNX Chart below. See the green circles? These mark the dates that rates were lowered by the Federal Reserve. Without exception, the TNX seems to follow. I was speaking with Mike Zimov, my son in law who is a loan officer with E-Loan. He gets rate updates typically twice daily. They tend to travel in LOCKSTEP with the TNX.

So if you want a hint as to the direction rates are going, look there first!

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FED Targeted to lower rates on Wednesday

By Tim Hall | Tuesday, January 29, 2008, 04:37 PM

FED Targeted to lower rates 1/2 point on Wednesday

Last week, the Federal Reserve cut their key interest rate by three quarters of one percent, down to 3.5 percent. It is anticipated that there will be another cut of 1/4 to 1/2 after the meetings conclude Wednesday.

As I told you in the last post, it is difficult if not impossible to PERFECTLY time locking a rate on a loan. The rates fluctuate constantly. So by the time the rate reaches your target level, it is too late to start the process. Refer to the last post on how to win in this scenario.

Moving UP in a DOWN Market

So what to do in the interim? Start shopping! The softening of the overall market has made for some irresistable deals, in otherwise solid areas. Here’s a thought: Perhaps you can buy “up” a couple levels without paying any more than you would have for a base home just 18 months ago. We recently concluded negotiations for a family that will end up living in an awesome home, golf course community, for a substantial discount. It helped that the “seller” was a relocation company. This is a well known source for better than market deals, even in a stronger market!

It doesn’t mean that you can’t just sit tight, refi your home and pocket the savings because you surely can! But, honestly, it also could mean buying up at a nice discount. If under more normal conditions your home is worth $150K, and we assume you have to discount by 10% due to the soft market, that nets you out at 135K before expenses. Assume you wanted to buy a home for 225K. If that seller must offer a similar discount to move the home now, then you could buy it for $202,500. So you sacrificed $15,000 to save $22,500.

Now reverse the situation. Your home appreciated 3% so instead of $150,000 it can sell for 1$154,500 for a GAIN of $4,500. That same move-up home appreciated for 3%. It is now going to sell for $231,750 or a GAIN of $6,750. So you gained $4,500 but lost $6,750. Can you see why people move up in down markets?

What if you don’t know what you can get out of your home, realistically! Great question. Sometimes, as a broker, I will take offers based upon my seller finding, and contracting, on a home of their choice within a certain number of days, usually not more than a week. since the inventory is plentiful, there are many great homes to chose from, and this can work out quite nicely.

Food for Thought!

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Rates Falling, Refi’s Rising ! Bernanke economic “Stimulus Package”

By Tim Hall | Thursday, January 17, 2008, 12:29 PM

According to the Inman News Service, an excellent real estate centric reporting agency, mortgage application volume during the second week of January posted a huge increase as interest rates continued to decline, per the Mortgage Bankers Association report released last night. Why, because the SMART MONEY takes advantage of short-term opportunities!

An excerpt of the article follows. Now COMBINE this with the highly anticipated Fed economic stimulus package and you get a “Grand Slam” for existing home owners.

Let me explain.

1. Congress passed legislation to soften the tax impact to home owners forced to sell their homes via short sale, or forclosure. This will speed up the transition to a blanced supply.
2. Home builders have reduced their new construction over 60% from the highs of 2005; 700K new homes in 2007 versus 1.7 million homes in 2005.
3. Rate cuts, BIG cuts, are ahead.

Here is how to make the most of this opportunity. If you don’t have to sell, don’t. If you have a mortgage, find out TODAY what the terms are. You need to know the balance, the interest rate, the years remaining and if you have any pre-payment penalty.

Seriously, I believe that the INSTANT there are signs of the housing slump hitting bottom, that the cost of mortgages goes back up. The FED doesn’t want a repeat of what got us into this mess to begin with. SO, you win if you are thoughtful enough to gather the above information and watch rates. I happen to own some rentals, my personal residence and a commercial building. I can’t watch rates constantly so I leave that to my banker. If you want him to watch rates for you, send me your contact info at tim@timhallteam.com and he will get in touch. These rates can turn on a dime, and my goal is to catch historic lows, just like I did in the past.

Tim

Here’s the excerpt

Home loan apps jump 28%

Refis see another large gain as interest rates slide

Inman News

Mortgage application volume during the second week of January posted a huge increase as interest rates continued to decline, the Mortgage Bankers Association reported today.

The group’s market composite index, a measure of home loan application volume, climbed 28.4 percent on a seasonally adjusted basis between the first and second weeks of January. This double-digit gain comes on the heels of a 32.2 percent rise in the index one week earlier, the largest in four years.

The index that tracks refinancings posted the largest gain, rising 43.4 percent last week on a seasonally adjusted basis from the week before, while the index tied to purchase loans grew 11.4 percent.

According to MBA, the average contract interest rate on 30-year fixed-rate mortgages sank to 5.62 percent from the previous week’s 5.73 percent, and the average rate on 15-year fixed loans dropped to 5.07 percent from 5.21 percent. Rates on adjustable-rate mortgages (ARMs) fell sharply during the period, with the average one-year ARM tumbling from 6.04 percent to 5.77 percent.

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FED Cuts rate .25 point!

By Tim Hall | Tuesday, December 11, 2007, 02:41 PM

The Federal Reserve just cut rates again .25 points. This is less than many expected, so there will be some fallout on Wall Street, but just exactly what our market needs to infuse more buying power for todays’ buyer!

I’ll comment more a bit later today. Stay tuned!

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U.S. National Home Price Index Posts a Record Annual Decline

By Tim Hall | Tuesday, November 27, 2007, 11:17 AM

The S&P/Case-Shiller® Home U.S. National Home Price Index Posts a Record Annual Decline in the 3rd Quarter of 2007. Here’s the link: http://www2.standardandpoors.com/spf/pdf/index/CSHomePriceRelease112766.pdf

We haven’t hit the bottom yet. The FED is virtually certain to move rates down further. We are witnessing a unique set of economic factors that can actually help as many people as it hurts. Let’s take three common scenarios.

A home owner relocating to a different area that must sell their home.

A homeowner that has an adjustable rate loan, and does not want to move.

A first-time buyer.

1. The relocating homeowner will discover that, with few exceptions, they are moving FROM a buyer’s market TO a buyer’s market. They will need to price their home here aggressively, but they can bank on getting a fair price on the home they wish to buy. A little common sense goes a long way here. Ask your Realtor to show you homes that are vacant, or are part of a corporate relocation package. These can be a great value at this time. Again, the key is to offer a good value on the home here to secure your buyer, then you can go shopping!

2. Lowering interest rates will diminish the impact of an Adjustable Rate Mortgage (ARM) but more importantly it can make it easier for the borrower to qualify, so they can convert to a fixed loan. The key is to get in to a lender NOW and really go through a complete process to be sure you are ready. Many people have errors on their credit reports and almost everyone can take corrective measures so they can find alternatives to staying in an ARM. Need a great lender referral? Email me at blog@timhallteam.com. I always give out 2-3 to chose from, and they know I expect GREAT customer service!

3. A first-time buyer needs to spend MOST of their energy on ONE thing: EDUCATION! Learn how to understand community pricing, learn how to leverage their offer, learn how to buy a home that is virtually GUARANTEED to not lose value long-term. Buyers are having a hard time in the market right now. They are trained by the barrage of negative news, to offer low offers. Frankly, when tow homes are for sale and they are, for example, $10,000 apart in price but one is in great shape and the other isn’t, it pays to spend more. I have seen it over and over where a family says “I can do this or that, I’ll do it as a weekend project”. And five years later, they still haven’t done any of it. Right now a buyer can demand a good price and a GREAT home.

That’s it for now. Please feel free to comment. Sometimes I wonder if people are finding this blog helpful and I could use the encouragement from time to time!

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