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YOUR COMPLETE GUIDE TO SELLING A HOME
When it comes time to sell your home, you will likely be put in a situation where home updates, repairs, and upgrades are recommended in order to boost the value of your home for maximum returns! Now before tearing down a wall or throwing your money at everything it's important to understand not all home renovations are equal. Below you will find a list of the top 5 home renovations that have significant impact on your selling potential:
1. Improve energy efficiency
This one is often a surprise to people - when you think of home improvements, they are generally the physical changes you see with your eyes. The secret is that potential buyers are taking energy efficiency very seriously when making considerations on what to buy.
Just to give an example, attic insulation projects return approximately 120% of their costs! Other energy-efficiency upgrades that are effective include updating HVAC, water heaters, and windows. If you do these changes early in the process (enough to get utility bills), your real estate agent can show potential buyers the difference between the monthly costs before and after the upgrades!
2. Spruce up your curb appeal
First impressions matter, and it starts the moment a potential buyer lays eyes on your home. These exterior improvements don't need to be radical either, there are many subtle touches that have huge impact. Some examples include power washing the home exterior, re-painting window frames and doors, and installing some pot lights. If your property has abundant green space, you should consider landscaping services which beautify the lawn with mulch, shrubs, and planting seasonal colorful plants. If you have the means for it, adding new stone veneers, entry doors, and garage doors almost always recoup 100% of their cost.
3. Minor kitchen remodeling
The heart of the home; the kitchen. Buyers often report that the kitchen is their favorite room - and so it's easy to see how a gorgeous kitchen can entice even the most reserved buyers. In fact, if the kitchen is impressive enough, buyers may be more forgiving to other outdated spaces.
As the title suggests, I'm not recommending that you spend tens of thousands to improve the kitchen. I'm talking about the minor renovations that bring the most impact. Some examples include re-painting cabinets, installing new handles, installing stainless steel appliances, upgrading countertops, and putting up a new backsplash!
4. Bathroom remodeling
Next to the kitchen, buyers will zipline to bathrooms to develop their opinion of the home. Studies have shown that a minor bathroom remodel can provide a 102% return on investment - consider re-grouting tile and replacing the caulk around the shower, tub, and toilet. In some cases it may be best to replace the toilet - accomplishing both a modern look as well as energy efficiency (remember, energy-efficiency is a huge selling point).
5. A fresh coat of paint
A clean coat of paint is the facelift every seller can benefit from - we are talking 109% returns on investment here! New paint will lighten rooms and hide any defects. If your home has rooms with non-neutral paint colors, then painting over those spaces with neutral tones can have huge benefits! Ther buyer wants to enter the home and impose their personality within it, and areas with too much personality often work against your goal of selling effectively.
YOUR COMPLETE GUIDE TO BUYING YOUR HOME
STEP 1: DETERMINE HOW MUCH YOU CAN AFFORD
Before you start looking through listings in the hope of finding your dream home, conduct a personal audit of your finances. Taking a serious look at all of your finances will prepare you for this huge step. You will be better able to know how much of a house payment you can afford and if you can cover the ongoing expenses of owning a home. A self-audit of your finances includes these three steps:
- How much savings do you have? Before you consider purchasing a home, you should make sure you have a solid savings plan in place. You also need to have two to four months of living expenses already in savings. These funds can help pay some of the initial expenses like a down payment and closing costs. Lenders will want to see that you are responsible and have a savings plan that works.
- What does your current spending look like? It’s important to know how much you spend every month. You also need to know exactly where your money is going. This step is essential for calculating how much of a mortgage payment you can afford. Make sure to account for all of your expenses, including everything from utilities to groceries and clothes to student loans. Count retirement funds, regular savings, entertainment, and kid’s activities.
- How is your credit? To qualify for a home loan, you will need a good credit score, a solid history of paying bills on time, and a debt-to-income ratio (DTI) of about 43%. Lenders usually consider the ongoing expenses of owning a house to be about 1/3 of your monthly gross income.
STEP 2: FIND A REAL ESTATE AGENT
Most people work with a real estate agent when purchasing a home. They are your representative and will look out for your best interests. An agent will help you find homes with the features you want, help you get showings, and help you make offers and negotiate. You generally do not have to pay for a Realtor’s assistance. The seller pays them a commission, usually about 3% of the purchase price. Real estate agents know how the process works and offer their help as you work through the steps of making the purchase. Some of the ways a real estate agent can help you when purchasing a home include:
Knowledge of Market Trends: Agents identify home value trends, buyer demand, the overall state of the market, and new developments.
Price and Value: An agent knows what a home is worth and can help you with a reasonable offer price.
Negotiations: They will know when a lower price is appropriate and argue to negotiate prices based on repairs needed or other contingencies.
Insider Tips: An agent is familiar with localities and can offer tips about schools, neighborhoods and how those may influence property value.
Professional Recommendations: If you need a lender, contractor, attorney, or another vendor, an agent will make referrals.
Experience: The agent is familiar with the process and brings their expertise to the table to help handle the process and oversee paperwork to ensure you stay ahead of due dates.
STEP 3: OBTAIN A PRE-APPROVAL FOR A MORTGAGE
Getting a pre-approval from a lender removes a lot of the hassles from the home buying process. Your lender will provide a pre-approval letter stating how much you are approved for. This will be based on your credit standing, income, and present assets. The pre-approval letter will help your agent find homes within your budget and proposed loan amount
STEP 4: START VIEWING HOMES WITH YOUR REAL ESTATE AGENT.
The agent will recommend properties that have the features you want and are within your budget. Don’t get discouraged if you don’t find the perfect match right away. You may need to look at several options before finding the one that is right for you. Most of the time, the agent will have a handful of homes for you to preview to see if you like them or not. Be patient; your agent will help you find what you want. You may see several homes so it’s a good idea to take photos or videos so you can remember each one.
STEP 5: MAKE AN OFFER
Once you are sure of the home you want to buy, work with your real estate agent. They will help you negotiate an offer based on the fair market value of comparable homes in the same neighborhood. When you and the seller agree on a price, the home goes into escrow while the home buying process gets completed. Don’t get discouraged if the offer doesn’t work out. Sellers have the option of rejecting or accepting offers. Sometimes, several offers are made until successfully closing on a home. Once you make an offer, several things can happen.
The seller may accept the offer, and you’ll begin the process of finalizing the paperwork to complete the purchase.
The seller may reject your offer.
The seller may counter back with another offer. They may not like the price or some other part of your offer. They will request changes and then accept the amended offer.
STEP 6: SCHEDULE A HOME INSPECTION
If you know a home inspector, you can hire them to conduct the inspection. Your real estate agent may also be able to recommend a reputable inspector. Having the home inspected will give you a better idea about the inner workings of the home. After the official inspection, you’ll be given a detailed report with the findings. Discuss these with your agent. If there are issues found that are more than just a cosmetic problem, negotiations can be reopened. The seller can be asked to fix any issues before closing on the house. Sometimes, they will give you credit so you can make the repairs after you have made the purchase.
STEP 7: COMPLETE THE FINANCIAL PAPERWORK
Once the seller accepts your offer, you will work with your lender to complete the mortgage paperwork. The lender will usually request an independent appraisal of the property. This step protects both the lender and you. It’s important to ensure that you are getting a fair price for the home. Three things can happen after the appraisal.
The appraisal matches what you offered, and the lender will clear the loan so you can close on the property.
The appraisal is more than what you offered. This will indicate you are getting a good price for the home, and that means you’ll have instant equity.
The appraisal comes in below your offer. In this case the lender will not approve the full amount of the loan. You may need to make up the difference or try to renegotiate with the seller to get a better price.
Once the lender approves your loan, they will arrange for a title company to handle the paperwork. The title company will check to make sure the seller has the right to sell the house. Once the title search has been completed, you will pay your down payment and closing costs. Then you will sign your mortgage and get your move-in date.
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