Which Home Renovations Generate the Highest ROI?


Did you know that not all home renovations affect your home’s value? In other words, your ROI could be next to nothing on some renovations. Even if you do see a return on your investment, it’s sometimes less than half of what you paid.

Was it worth it?

Fortunately, many home renovations provide an exceptional return on your investment. Knowing what they are and how much of a return you’ll get can help you decide. 

Why Home Renovations Affect Your Home Value

Before we get into the list of renovations you should consider, let’s look at why home renovations affect your value.

When you improve your home, you improve its features or its quality, both of which affect the home’s value. Buyers are more likely to pay more for a home that’s recently renovated than one that needs repairs and/or is outdated. But which home renovations should you do?



The Top Home Renovations to Consider

Focus on the areas of your home that need major improvement, especially if safety or stability is an issue. Other than that, consider these renovations to improve your home’s value.

Garage Door

You may not think of the garage door when renovating your home, but it can provide almost a 95% ROI. With an average expense of $3,500, you can improve your home’s value by almost $3,300 with this change. Think of it as improving your home’s curb appeal.

Minor Kitchen Remodel

The kitchen is the heart of the home. Renovating it doesn’t have to mean tearing down walls and reinventing your kitchen. Painting the cabinets, switching out appliances, and updating the faucets or light fixtures may provide an ROI of 77% or more.

New Windows

Windows are another great way to improve your home’s curb appeal, but they also affect the home’s energy efficiency. They can be a hefty investment, but you’ll typically recoup almost 75% of your investment. As a bonus, you’ll likely reduce your energy usage in the home which may further increase the return on your investment.

New Siding or Paint

New siding or a fresh coat of paint are other exterior projects that can increase your home’s value. This is especially true if your siding is damaged and faded, or your paint is cracked and pealing. Replacing and repainting with something fresh is the way to go.

Most siding and paint investments provide a 75% ROI, plus it increases the curb appeal of your home if you choose a color that’s trending right now.

Final Thoughts

Before you make any home renovations, talk to a professional (like me) to see how much of an ROI you’ll receive from the renovations.

Some homeowners renovate their home just to make the home look how they want or to give it features they want. But, you should always have your ROI in mind so you get the most out of your investment. You probably won’t be in your home forever, so why not get the most out of it by improving its value with the renovations you choose?

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My Tips for a Higher Home Appraisal

The home appraisal determines how much you’ll get for your home. You could ask for any price you want, but if your buyers need financing, it all depends on the appraised value. While you can’t control the market value (how much other homes sell for), you can maximize your home’s value with these helpful tips.

Increase your Home’s Curb Appeal

Your home’s curb appeal is the first thing appraisers see. It develops their opinion of your home and may increase your home’s value.

To increase your home’s curb appeal, do typical maintenance tasks including cutting the lawn, planting, and caring for flowers/bushes, and clean the windows. You may also need to do some maintenance such as fixing damaged siding or missing shingles. Most homes can use a fresh coat of exterior paint too.



Deep Clean and Declutter your Home

Even though cleaning a home doesn’t affect its value directly, it helps appraisers have a better view of your home and its worth. Get rid of anything that’s in the way and take the time to clean even the nooks and crannies that get overlooked during your normal cleaning.

Make Necessary Repairs

If there is anything obviously wrong with your home, fix it. This includes things like:

  • Patching holes in drywall
  • Fixing hand railings
  • Replacing/repair damaged flooring
  • Fixing leaking faucets
  • Repairing damaged walls or ceilings from water damage

Look beyond eye level and make sure all areas of your home look well maintained and kept up.

Provide a List of all Upgrades

You never know which upgrades will affect your home’s value, so provide the appraiser with an all-inclusive list of all upgrades you’ve made.

Include small things like a new dishwasher or minor bathroom upgrades to the large renovations, such as adding a room, remodeling the kitchen, or replacing all floors. Provide the appraiser with receipts or contracts to prove the work.

Update your Kitchen or Bathrooms

If your kitchen or bathrooms are outdated, focus your efforts there. You don’t have to do major renovations. Even small changes can affect your home’s value.

Replace old wallpaper, update old faucets, install new lighting, or add a fresh coat of paint. In the kitchen, consider painting your cabinets, updating the lighting, and changing the hardware on your cabinets.

Provide Comparable Sales

If you know of homes that sold recently for a higher price in the area, share the information with the appraiser. If they don’t have the most updated information or you know of a home that sold rather recently that may not be on the appraiser’s radar, share the information to get the most for your home.

Final Thoughts

Your appraisal is based on the recent sales prices of homes in the area but that doesn’t mean you can’t increase it with some effort.

The cleaner, more updated, and accessible your home is, the better picture the appraiser can get of your home. Provide the appraiser with as much detail as you can about the home, the changes you’ve made, or anything you know about the area too.

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When is the Best Time to Sell my Home?

You want top dollar for your house, and you want it to sell fast too. It’s a tall order to fill, but when you know the best time to sell your house, it can happen. While the right time to sell your house is when the house is in great condition, its value is up, and the market is hot, there are certain times of year that you should and shouldn’t sell your home.

What is the Best Month to Sell my Home?

There isn’t one specific month you should sell your home, but focusing your selling efforts in the spring and early summer months usually has the best results. Most owners get the most for their homes in June and July, but most of the spring and summer months are great times to sell.

What Time of Year is the Worst to Sell my Home?

There isn’t a certain month that is the worst time to sell your home since you could sell it at any time of year, however, winter months tend to be slower no matter which part of the country you live in.

There aren’t as many people looking to move in the winter months which may bring values down. When there are more sellers on the market, values increase because buyers are willing to pay more when there is competition for the house they want.

What Day of the Week are Most Houses Listed?

The most popular day to list a house is Thursday. It sounds like an odd choice, but here’s why.

Most buyers plan the houses they’ll see over the weekend on Thursday or Friday. Fresh listings will catch their eye faster, and they’ll be more likely to want to see it right away to get ahead of the competition. If you list your house near the end of the week, you’ll have a better chance of it being viewed and even possibly have offers on it faster.

What’s your Equity Situation?

Of course, your equity position plays an important role in when the best time to sell your house is. If values are lower than what you owe on the house, no time is good for you to sell because you’d walk away with a loss.

If you have the opposite situation and values are high and you have a decent equity position that allows you to cover the seller’s closing costs and still walk away with cash in your pocket, it’s a good time to sell your home.

Final Thoughts

Knowing when to sell your home is important. Timing it when values are the highest and demand is high too will help you sell your home the fastest. If you’re wondering when the best time to sell your home is, contact me today and we’ll discuss your situation to see when you should sell your home.

I look forward to working with you and helping you get top dollar for your home!

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If you’re planning to sell this year, you’re probably thinking about what you’ll need to do to get your house ready to appeal to the most buyers. It’s crucial to work with a trusted real estate professional who knows your local market to get your home ready to sell. But there are a few things you should consider when deciding what to renovate and update before listing this season. Here are three things to keep top of mind as you’re making your list of projects to tackle this year.

1. Available Home Inventory Is Historically Low

Housing inventory sits far below what is normally considered a balanced market. In fact, according to the National Association of Realtors (NAR), the latest data indicates inventory is hitting an all-time low. Because there’s such a limited supply of homes available for sale, you’re in a unique position when you sell your house to benefit from multiple offers and a quick process.


But you want to do so while buyers are still scooping homes up as fast as they’re being listed. Spending time and money on renovations before you sell could mean you’ll miss your key window of opportunity. Of course, certain repairs may be important or even necessary. The best way to determine where to spend your time – and your money – is to work with a real estate advisor to confirm which improvements are truly needed and which ones aren’t likely to be deal-breakers for buyers.


2. Consider Selling Your Home AS-IS With No Renovation or Repairs


Today, many buyers are more willing to take on home improvement projects themselves to get the house they’re after, even if it means putting in a little extra work. A recent survey from Freddie Mac finds that:

“. . . nearly two-in-five potential homebuyers would consider purchasing a home requiring renovations.”

If more buyers are willing to tackle repairs on their own, it may be wise to let the future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. Depending on the structural condition of your house, your efforts may be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior to make sure the home stands out. Instead of over-investing in upgrades, the buyer may change anyway, work with a real estate professional to determine the key projects to tackle that will give you the greatest return on your investment.

3. I Can Help You Spotlight the Upgrades You’ve Made

Over the past year, many people made a significant number of updates to their homes. The most recent State of Home Spending report finds:

“Home improvement spending rose 25% year-over-year to $10,341. Homeowners who invested in home improvement did an average of 3.7 projects, up from 2.7 in 2020, . . .”


With more homeowners taking on more projects in the past 12 months, there’s a good chance you’ve already made updates to your home that could appeal to buyers. If that’s the case, your real estate advisor will find ways to highlight those upgrades in your listing.


The same is true for any projects you invest in moving forward. No matter what, before you renovate, contact a local real estate professional for expert advice on what work needs to be done and how to make it as appealing as possible to future buyers. Every home is different, so a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

In today’s sellers’ market, it’s important to spend your time and money wisely when you’re getting ready to move. When you work with me, you'll know exactly where to target your efforts before you list.

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It may seem obvious, but many sellers fail to recognize that a home that feels, looks, and smells welcoming and homey will more likely raise a buyer’s interest when they come for a showing. Of course, you think your home is pretty comfortable and welcoming already, but there are a few things you can do to make buyers feel right at home from the moment they walk in the door.


Lead With The Nose


If your home smells good, it will make buyers want to stick around longer. The sense of smell is the strongest of all the five senses in its connection to our emotions. Certain smells simply make us feel comfortable and at home no matter where we are. There are a few smells that are almost universal. Try a flameless scented burner that is safe but releases a wonderful fragrance in your home. Choose scents like vanilla or spices, smells that remind people of home cooking and sweet treats.


Be sure your fragrance isn’t overwhelming, however, and don’t use it to mask other odors like cat litter or food smells. Buyers will know right away you are trying to hide something!


Let The Light Shine In


Clean your windows and open all of the blinds and curtains to let the sunshine into the home. The warm feeling will make your buyers want to settle in and bask in the glow. A brightly lit home looks bigger, too, while a dark home will appear smaller.


Be sure you replace burnt out light bulbs so your home will be fully lit and have a welcoming glow even in the evening or on a cloudy day.


Set The Table


It may seem odd, but a table set as though a family is about to sit down to a meal makes the home feel lived in and comfortable without being cluttered or too personal. Set the table with matching dishes and a nice but simple centerpiece, to give the dining room that ready to sit down feel.


Making buyers see your house as a home is important in getting them really interested in making it their home. With just a few simple adjustments, you can create a feeling that welcomes buyers to settle in—they will want to make an offer so they never have to leave!

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What Is Your Home Actually Worth? 

Discover What Buyers Will Pay in Today’s Market


It’s easy to look up how much money you have in your savings account or the real-time value of your stock investments. But determining the dollar value of a home is trickier. As a seller, knowing your home’s worth helps you price it correctly when you put it up for sale. If you price it too high, it may sit on the market. But price it too low and you may be losing out on a good chunk of money (nobody wants that!). For buyers, it’s important to know a home’s worth before you make an offer. You want your offer to be competitive, but you don’t want to overpay for the property. 

Even if you’re not a buyer or seller right now, as a current homeowner you might just be curious about the value of your home. Keeping track of your home’s worth year over year helps you understand the trends in your market. So when you are ready to sell, you can take advantage of a good window of opportunity. 

The good news is, a trained real estate agent—who understands the nuances of your particular neighborhood—can determine the true market value of your property … and at no cost to you! 


THE THREE TYPES OF HOME VALUES


When you start the process of buying or selling a home, you’ll frequently hear the words appraised value, assessed value, and true market value. It’s important to know the difference between each one so you can make better, informed decisions.


Appraised Value

A professional appraiser is in charge of determining the appraised value of a home. These appraisals are typically required by a lender when a buyer is financing the property. And while the lender is the one requiring this information, the appraiser does not work for the lender.1 Your appraiser should be an objective, licensed professional who doesn’t have allegiance to the buyer, seller, or lender—no matter who is paying their fee. 

The number the appraiser comes up with (the appraised value) assures the lender that the buyer is not overpaying for the property. For example, imagine a seller lists a home for $400,000. They reach a deal with the buyer to sell the home for $375,000. However, if an appraiser evaluates the property and determines that the appraised value is actually $325,000, then the lender will not lend for an amount higher than that appraised value of $325,000.2 

When figuring out this number, an appraiser will compare the property to similar homes in your neighborhood, and they’ll evaluate factors such as location, square footage, appliances, upgrades, improvements, and the interior and exterior of the home. 

 

Assessed Value

The assessed value of a home is determined by your local municipal property assessor. This value matters when your county calculates property taxes each year. The lower your assessed value, the less property tax you’ll pay.3 

To come up with this value, your assessor will evaluate what comparable homes in the neighborhood have sold for, the size of your home, age, overall condition, and any improvements or upgrades that have been made. However, most assessors don’t have full access to your home, so their information is limited. 

Assessments are done annually to determine how much property tax you owe. Many counties use a multiplier (typically between 60%-80%) to calculate the final assessed value. So, if the assessor determines that the value of the home is $300,000, but the county uses a 70% multiplier, the assessed value of the home would be $210,000 for tax purposes.4 

If your assessed value isn’t as high as you envisioned, don’t sweat it. Many homeowners appeal their assessment in favor of a lower valuation so that they can save money on property taxes. If you’re interested in appealing your property tax assessment, let us know. We offer complimentary assistance and would be happy to help you build your case.


True Market Value

True market value is established by your real estate agent. It basically refers to the value that a buyer is willing to pay for the property. A good real estate agent is an expert in determining true market value because they have hands-on experience buying and selling properties. They understand the mindsets of buyers in your market and know what they’ll pay for a desirable house, townhouse, or condo. 

As a seller, knowing your true market value is important because it helps you choose how much to list your property for. It can also help you decide if you want to make any improvements to your home before putting it on the market. Your agent can help you figure out which updates and upgrades will have the biggest impact on your true market value. 

 

WHAT’S THE DEAL WITH ONLINE CALCULATORS?


When figuring out your home’s value, you might be tempted to see what popular real estate sites like Zillow, Redfin, and Trulia have to say. When you use an online calculator to determine your home’s value on these sites, it is just an estimate. It’s not an actual appraisal or the “true market value.” These sites all have their own algorithms for coming up with their estimates. For example, Zillow comes up with their “Zestimates” by calculating “public and user-submitted data, taking into account special features, location, and market conditions.” 5 

These online estimates can be a great starting point for opening up the conversation with your real estate agent about your home’s worth. But even Zillow recommends that you use a real estate agent for coming up with the actual market value of your home. The site says that once you get your “Zestimate,” you should still get “a comparative market analysis from a real estate agent.” 

Having an agent involved in this process is essential because they understand the market better than a computer ever could. They’re showing property in your city every single day, and they know the particular preferences of buyers and sellers in the area. Young professionals, large families, empty nesters, and other groups are all looking for different things in a home. A local agent has most likely worked with all of them, so they understand what every segment in your market is specifically looking for. 


 

HOW AN AGENT FINDS YOUR HOME’S TRUE MARKET VALUE


So, how does an actual real estate agent determine true market value? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:6 

      Neighborhood sales - Your agent will look at similar, recently sold homes in your neighborhood to see what they sold for and what they have in common with your house.

      The exterior - What does your home look like from the outside? Your agent will factor in curb appeal, the style of the house, the front and backyard, and anything else that impacts how the house looks to everyone walking and driving by.

      The interior - This is everything inside the walls of the house. Square footage, number of bedrooms and bathrooms, appliances, and more all influence the overall market value.

      Age of the home - Whether you have a newer or older home affects the number your agent comes up with as part of their assessment.

      Style of the home - The style of your home is important because buyers in different markets have different tastes. If buyers prefer ranch-style homes and you have one, then your home may sell for a premium (aka more money!).

      Market trends - Because a local agent has so much experience in your market, they have their finger on the pulse of your area’s trends and know what buyers are willing to pay for a property like yours.

      Location, location, location - This one’s probably the most obvious. Your agent will think about how popular the area is, how safe it is, and what schools are like. 

A computer algorithm simply can’t take all of these factors into account when calculating the value of your home. The reality is, nothing beats the accuracy of a real estate agent or professional appraiser when it comes to determining a home’s true market value. 


YOUR AGENT IS THERE EVERY STEP OF THE WAY


Determining a home’s true market value is a real estate agent’s forte. If you’re a seller, your agent will help you find your home’s market value so you can list it at the right price. 

For buyers, your agent will help you determine the value so you can come up with a fair offer. Your agent can also set up a personalized home search on the Multiple Listing Service (MLS) for you so you’ll receive emails of listings that meet your criteria. This will help you see what’s out there in your city and how properties are being priced.


Get a Complimentary Report With Your Home’s True Market Value

Curious about your home’s true market value? Call us to request a free, no-obligation Comparative Market Analysis to find out exactly how much your home is worth!



Sources:


  1. Chicago Tribune -

    https://www.chicagotribune.com/suburbs/chi-ugc-article-what-is-the-difference-between-market-value-a-2013-09-30-story.html

  2. SFGATE -

    https://homeguides.sfgate.com/market-value-vs-appraised-value-1206.html

  3. ValuePenguin -

    https://www.valuepenguin.com/mortgages/what-is-the-assessed-value-of-a-house

  4. Movoto -

    https://www.movoto.com/blog/homeownership/assessed-value-vs-market-value/

  5. Zillow -

    https://www.zillow.com/how-much-is-my-home-worth/

  6. Realtor.com -

https://www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/

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5 Step Strategy for Downsizing Your Home


In our “bigger is better” culture, there’s an expectation that each home should be larger and grander than the last. But life changes like divorce, kids leaving for college, or even the simple act of growing older can prompt us to find a smaller home that better suits our shifting needs and lifestyle.

In fact, the advantages of downsizing are being increasingly recognized. A “tiny house movement” has gained passionate advocates who appreciate the benefits of living simply at any age and stage of life. Not only does a smaller home typically cost less, it also takes less time and effort to maintain.1

Whatever your reasons are for downsizing, the process can seem overwhelming. That’s why we’ve outlined five steps to guide you on your journey. And in the end, we hope you’ll find that less is more … more comfort, more security, and more time and energy to spend on the activities and the people that you love.

5 STEPS TO DOWNSIZING SUCCESS

  1. Determine Your Goals and Limitations

The first step is to figure out your goals for your new living environment. Do you want to live closer to family? Are you hoping to cut down on home maintenance? Are you looking for a community with certain amenities?

You should also consider any limitations that will impact the home you choose. For example, are stairs an issue? Do you need access to medical care? In the case of divorce, are there child-custody issues you need to take into account?

Estimate how long you plan to stay in your new home. Do you expect your needs to change during that time?

Make a “wish list” of features and prioritize them from most to least important. If you’d like any assistance with this process, give us a call! We’d be happy to sit down with you for a free consultation. We can also help you assess the value of your current home so you can set a realistic budget for your new one.

  1. Find the Perfect New Home

Once you’ve established your “wish list,” we can begin the search for your new home. As local market experts, we know the ins and outs of all the top communities in our area. We can help you determine the neighborhood and type of home that will best fit your wants and needs.

From family neighborhoods to retirement communities, we serve clients in all stages of life. If you or a loved one are in need of extended support, we can also share our knowledge of the assisted living facilities in town and help you identify those that offer the optimal level of care.

Are you planning to relocate out of town? We can refer you to a trusted real estate professional in your target area who can help you with your search.

  1. Sell Your Current Home

If you’re ready to sell your current home, we’ll begin the process of preparing to list it as we search for your new one.

We have a special interest in helping homeowners who are facing major life transitions, and we offer a full-service real estate experience that aims to remove as much of the stress and hassle of selling your home as possible. We also understand that many of our clients choose to downsize for financial reasons, so we employ tactics and strategies to maximize the potential sales revenue of your home.

We do this by employing our proven three-part approach, which focuses on optimum preparation, pricing, and promotion. As part of that plan, we invest in an aggressive marketing strategy that utilizes online and social media platforms to connect with consumers and offline channels to connect with local real estate agents. This ensures your property gets maximum exposure to prospective buyers.

  1. Sort and Pack Your Belongings

Even before you find your new home, you can begin preparing for your move. A smaller home means less space for your furniture and other possessions, so you will need to decide what to keep and what to sell or donate. Sorting through an entire house full of belongings will take time, so begin as early as possible.

Parting with personal possessions can be an extremely emotional process. Start with a small, unemotional space like a laundry or powder room and work your way up to larger rooms. Focus on eliminating duplicates and anything you don’t regularly use. If you have sentimental pieces, family heirlooms, or just useful items you no longer need, think about who in your life would benefit from having them. For large collections, consider keeping one or two favorite pieces and photographing the rest to put in an album.2

Make sure the items you keep help you achieve the goals you outlined in Step 1. For example, if you want a home that’s easier to clean, cut down on knickknacks that require frequent dusting. If you’re moving to be closer to your grandchildren, choose the shatterproof plates over the antique china.

Allow yourself time to take breaks if you start to feel overwhelmed. If you’re helping a loved one with a move, try to be a patient listener if they want to stop and share stories about particular items or memories throughout the process.3 This can be therapeutic for them and an opportunity for you to learn family history that may otherwise have been forgotten.

  1. Get Help When You Need It

Moving is stressful in any situation. But if you’re downsizing due to health issues or a major life change, it can be an especially tough transition. Don’t be afraid to ask for help.

Seek out friends and family members who can assist with packing and decluttering. If that’s not an option, or if you need additional help, consider hiring a home organizer, full-service moving company, or even a senior move manager, which is a professional who assists older adults and their families with the physical and emotional aspects of relocation.4 You can find one accredited by the National Association of Senior Move Managers at https://www.nasmm.org/find/index.cfm.

If financial constraints are holding back, let us know. We can help you explore the possibility of tapping into the equity in your current home now. That way you can afford to get the assistance you need to make your transition as smooth as possible.

ARE YOU LIVING YOUR BEST LIFE?

If your current home no longer suits your needs, maybe it’s time to consider a change. We would love to help you explore your options. Contact us today to schedule a free, no-obligation consultation.

Sources:

  1. The Tiny Life -
    https://thetinylife.com/what-is-the-tiny-house-movement/
  2. My Move -
    https://www.mymove.com/moving/senior-guide-downsizing/
  3. Daily Caring -
    https://dailycaring.com/5-tips-to-downsizing-for-seniors-keepsakes-mementos/
  4. National Association of Senior Move Managers -
    https://www.nasmm.org
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** STOP - BEFORE YOU READ ANY FURTHER ** I can now offer you a direct iBuyer option, when you list your home with me. No upfront cost and NO COMMISSION PAID BY YOU! CONTACT ME ASAP TO DISCUSS ALL OF YOUR OPTIONS.




Everything You Need to Know About iBuyers and the “Instant Cash Offer” 


Technology is changing the way we do almost everything, and real estate transactions are no exception. In fact, a new crop of tech companies wants to revolutionize the way we buy and sell homes. iBuyer startups like Zillow, Opendoor, Offerpad, and Properly are rapidly expanding into new territories, and now established players, like Zillow, are starting to get in on the action. Also known as Direct Buyers, these companies use computer algorithms to provide sellers with a quick cash offer to buy their home. While the actual market share of iBuyers remains small, their big advertising budgets have helped create a noticeable buzz in the industry. This has left many of our clients curious about them and how they work. In this article, we explain their business model, weigh the pros and cons of working with an iBuyer, and share strategies you can use to protect yourself if you choose to explore this new option to buy or sell your home. 


FIRST, HOW DOES THE iBUYER PROCESS WORK?


While each company operates a little differently, the basic premise is the same. A seller (or seller’s agent) completes a brief online form that asks questions about the size, features, and condition of the property. Some also request digital photos of the home. The iBuyer will use this information to determine whether or not the home fits within their “buy box,” or set of criteria that matches their investment model. They are generally looking for houses they can easily value and “flip.” In most cases, their ideal property is a moderately priced, single-family home located in a neighborhood with many similar houses. The property shouldn’t require any major renovations before listing.1 These qualities make it easier to assess value (lots of comparable sales data) and help to reduce risk and minimize carrying costs. Once the iBuyer has used their algorithm to determine the amount they are willing to pay, they will email an offer to the seller, usually within a few days. The offer should also disclose the company’s service fee, which is typically between 7% and 12% of the purchase price.If the seller accepts, an in-person visit and inspection are scheduled. The iBuyer will ask for a reduction in price to cover any defects they find during the process. Once the sale closes, they will make the necessary updates and repairs and then resell the home on the open market. 


WHAT ARE THE PROS AND CONS OF SELLING TO AN iBUYER?


Of course, the biggest benefit of selling your home to an iBuyer is convenience. For some homeowners, the stress and disruption of preparing and listing their home can feel overwhelming. And what busy family with kids and pets wouldn’t want to skip the hassle of keeping their house “show ready” for potential buyers? Additionally, many sellers like the predictability of a cash buyer and the flexibility to choose their closing date. However, this added convenience does come at a cost. An iBuyer is an investor looking to make a profit. So their purchase offer is usually below true market value. When you tack on service fees of up to 12% and deductions for updates and repairs, studies show that sellers who work with iBuyers net a lower amount than those that list the traditional way.In fact, a MarketWatch investigation found that transactions involving iBuyers net the seller 11% less than if they would have sold their home with an agent on the open market.2 



WHAT ARE THE PROS AND CONS OF BUYING FROM AN iBUYER?


Buying a home from an iBuyer is a lot like buying a home from any investor. The pros are that it’s usually clean, neutral, and moderately updated. You’ll often find fresh paint and modern finishes. And because it’s uninhabited (no one is living there), you don’t have to work around a seller’s schedule to see the home. However, there are some pitfalls to avoid when working with iBuyers. Speed is of the essence, so sometimes the renovations are rushed and the quality can suffer. Also, their investment margins don’t leave much room for negotiating a price reduction or additional repairs. That leaves buyers —who have already invested hundreds of dollars in an inspection—little recourse if any issues are uncovered.That’s one of the reasons we always recommend viewing properties with an agent. During your visit, a real estate professional can point out any “red flags” at the home, provide background information about the neighborhood, and help you assess its true market value. That way, you don’t invest time and money in a high-risk or overpriced property. Safety is also a concern. Some companies allow buyers to access their homes via a smartphone app. While it may seem convenient, it provides an easy way for squatters and others to enter the home illegally.Luckily, since most iBuyers (and traditional sellers) pay a buyer agent’s commission, you can benefit from the guidance and expertise of a real estate professional … at no cost to you! 



HOW CAN I PROTECT MYSELF IF I CHOOSE TO WORK WITH AN iBUYER?


While it may seem like the “quick and easy” way to go, working with an iBuyer can present some unique challenges. For example, they are notorious for presenting a strong initial purchase offer and then whittling it down with a long list of costly updates and repairs once they complete their inspection.2 And unlike a traditional buyer who is incentivized to make a deal work, iBuyers can easily walk away if you don’t meet their demands. Just like you wouldn’t go to court without a lawyer, you shouldn’t enter into a real estate transaction without an advocate to represent you. Having a professional agent on your side can be especially important when negotiating with an iBuyer. Remember, they employ sophisticated representatives and a team of lawyers who are focused on maximizing their profits, not yours. You need someone in your corner who has the skills and knowledge to ensure you get a fair deal and who understands the terms of their contracts, so you don’t encounter any unpleasant surprises along the way. Overall, we think the emergence of new technology that helps to streamline the real estate process is exciting. And if we believe a client can benefit from working with an iBuyer, we present it as an option. But there is—inevitably—a cost to the convenience. After all, most iBuyers eventually list the properties they acquire on the open market, which is still the best place to find a buyer if you want to maximize the sales price of your home.


EXPLORE YOUR OPTIONS
 
Do you want to learn more about iBuyers and other options currently available in our area to buy or sell your home? We can help you determine the best path, given your unique circumstances. Contact us to schedule a free, no-obligation consultation!


 

Sources:

  1. The Dallas Morning News -
    https://www.dallasnews.com/business/real-estate/2019/07/11/so-called-ibuyer-real-estate-firms-pitch-programs-to-buy-your-house-help-you-hunt-for-another/
  2. MarketWatch -
    https://www.marketwatch.com/story/selling-your-home-to-an-ibuyer-could-cost-you-thousands-heres-why-2019-06-11
  3. Forbes -
    https://www.forbes.com/sites/alyyale/2019/08/16/study-shows-ibuyers-cost-home-sellers-thousands-is-convenience-worth-the-price/#697ac0c42269
  4. US News & World Report -
    https://realestate.usnews.com/real-estate/articles/what-to-expect-when-buying-a-home-from-an-ibuyer
  5. Inman -
    https://www.inman.com/2019/09/11/police-arrest-couple-found-squatting-in-opendoor-home-with-their-kids/
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9 Tips for Buying and Selling Your Home at the Same Time


Selling your home when you still need to shop for a new one can feel daunting to even the most seasoned homeowner––especially when the demand for new homes keeps rising, but the supply feels like it's dwindling.¹ You're not alone either if you're already feeling drained by the complex logistics of trying to sell and buy a new home all at once. 

Searching for a new home can be exciting, but many homebuyers admit that it can also be stressful, especially if you live in an unpredictable market with plenty of competitors. Unfortunately, waiting out a competitive housing market isn’t always the best idea either since listings are expected to remain limited in the most coveted neighborhoods for some time.² 

That doesn't mean, though, that you should just throw up your hands and give up on moving altogether. In fact, as a current homeowner, you could be in a better position than most to capitalize on a seller’s market and make a smooth transition from your old home to a new one. 

We can help you prepare for the road ahead and answer any questions you have about the real estate market. For example, here are some of the most frequent concerns we hear from clients who are trying to buy and sell at the same time.  


“WHAT WILL I DO IF I SELL MY HOUSE BEFORE I CAN BUY A NEW ONE?” 


This is an understandable concern for many sellers since the competitive real estate market makes it tough to plan ahead and predict when you'll be able to move into your next home. But chances are, you will still have plenty of options if you do sell your home quickly. It may just take some creativity and compromise. 

Here are some ideas to make sure you're in the best possible position when you decide to list your home: 


Tip #1: Flex your muscles as a seller.


In a competitive market, buyers may be willing to make significant concessions in order to get the home they want. In some cases, a buyer may agree to a rent-back clause that allows the seller to continue living in the home after closing for a set period of time and negotiated fee. 

This can be a great option for sellers who need to tap into their home equity for a down payment or who aren’t logistically ready to move into their next home. However, many lenders limit the duration of a rent-back to 60 days, and there are liability issues to consider before entering into an agreement. A contract and security deposit should be in place in case of any property damage or unexpected repairs that may be needed during the rent-back period.³ 


Tip #2: Open your mind to short-term housing options.


While it can be a hassle to move out of your old home before you’re ready to move into your new one, it’s a common scenario. If you’re lucky enough to have family or generous friends who offer to take you in, that may be ideal. If not, you’ll need to find temporary housing. Check out furnished apartments, vacation rentals and month-to-month leases. If space is an issue, consider putting some of your furniture and possessions in storage. 

You may even find that a short-term rental arrangement can offer you an opportunity to get to know your new neighborhood better—and lead to a more informed decision about your upcoming purchase.


Tip #3: Embrace the idea of selling now and buying later.


Instead of stressing about timing your home sale and purchase perfectly, consider making a plan to focus on one at a time. Selling before you’re ready to buy your next home can offer a lot of advantages. 

For one, you’ll have cash on hand from the sale of your current home. This will put you in a much better position when it comes to buying your next home. From budgeting to mortgage approval to submitting a competitive offer, cash is king. And by focusing on one step at a time, you can alleviate some of the pressure and uncertainty. 


“WHAT IF I GET STUCK WITH TWO MORTGAGES AT THE SAME TIME?” 


This is one of the most common concerns that we hear from buyers who are selling a home while shopping for a new one, and it’s realistic to expect at least some overlap in mortgages. To make sure you don't get into a situation where you are carrying dual mortgages for longer than you can afford, examine your budget and calculate the maximum number of months you can afford to pay both.⁴ 

If you simply can’t afford to carry both mortgages at once, then selling before you buy may be your best option. (See Tip #3 above.) But if you have some flexibility in your budget, it is possible to manage both a home sale and purchase simultaneously. Here are some steps you can take to help streamline the process: 


Tip #4: As you get ready to sell, simplify.


You can condense your sales timeline if you only focus on the home renovations and tasks that matter most for selling your home quickly. For example, clean and declutter all of your common areas, refresh your outdoor paint and curb appeal, and fix any outstanding maintenance issues as quickly as possible. 

But don't drain unnecessary time and money into pricey renovations and major home projects that could quickly bog you down for an unpredictable amount of time. We can advise you on the repairs and upgrades that are worth your time and investment. 


Tip #5: Prep your paperwork.


You'll also save valuable time by filing as much paperwork as possible early in the process. For example, if you know you'll need a mortgage to buy your next home, get pre-approved right away so that you can shorten the amount of time it takes to process your loan. 

Similarly, set your home sale up for a fast and smooth transition by pulling together any relevant documentation about your current home, including appliance warranties, renovation permits, and repair records. That way, you're ready to provide quick answers to buyers' questions should they arise. 


Tip #6: Ask us about other contingencies that can be included in your contracts.


Part of our job as agents is to negotiate on your behalf and help you win favorable terms. For example, it’s possible to add a contingency to your purchase offer that lets you cancel the contract if you haven't sold your previous home. 

This tactic could backfire, though, if you're competing with other buyers. We can discuss the pros and cons of these types of tactics and what’s realistic given the current market dynamics. 


“WHAT IF I MESS UP MY TIMING OR BURN OUT FROM ALL THE STRESS?” 


When you're in the pressure cooker of a home sale or have been shopping for a home for a while in a competitive market, it's easy to get carried away by stress and emotions. To make sure you're in the right headspace for your homebuying and selling journey, take the time to slow down, breathe and delegate as much as possible. In addition: 

Tip #7: Relax and accept that compromise is inevitable

Rather than worry about getting every detail right with your housing search and home sale, trust that things will work out eventually––even if it doesn't look like your Plan A or even your Plan B or Plan C. Perfecting every detail with your home decor or timing your home sale perfectly isn't necessary for a successful home sale and compromise will almost always be necessary. Luckily, if you've got a good team of professionals, you can relax knowing that others have your back and are monitoring the details behind the scenes. 


Tip #8: Don't worry too much if your path is straying from convention


Remember that rules-of-thumb and home-buying trends are just that: they are estimates, not facts. So if your home search or sale isn't going exactly like your neighbor’s, it doesn't mean that you are doomed to fail. 

It's possible, for example, that seasonality trends may affect sales in your neighborhood. So a delayed sale in the summer or fall could affect your journey––but not necessarily. According to the National Association of Realtors, the housing market tends to be more competitive during the summer and less competitive during the winter.⁵ But it's not a hard and fast rule, and every real estate transaction is different. That's why it's important to talk to a local agent about your specific situation. 


Tip #9: Enlist help early.


Which leads us to our final tip: If possible, call us early in the process. We'll not only provide you with key guidance on what you should do ahead of time to prepare your current home for sale, we'll also help you narrow down your list of must-haves and wants for your next one. That way, you'll be prepared to act quickly and confidently when it’s time to list your house or make an offer on a new one. 

It's our job to guide you and advocate on your behalf. So don't be afraid to lean on us throughout the process. We’re here to ease your burden and make your move as seamless and stress-free as possible.  


BOTTOMLINE: COLLABORATE WITH A REAL ESTATE PROFESSIONAL TO GET TAILORED ADVICE THAT WORKS FOR YOU 


Buying and selling a home at the same time is challenging. But it doesn't have to be a nightmare, and it can even be fun. The key is to educate yourself about the market and prepare yourself for multiple scenarios. One of the best and easiest ways to do so is to partner with a knowledgeable and trustworthy agent. 

A good agent will not only help you evaluate your situation, we will also provide you with honest and individually tailored advice that addresses your unique needs and challenges. Depending on your circumstances, now may be a great time to sell your home and buy a new one. But a thorough assessment may instead show you that you're better off pausing your search for a while longer. 


Contact us for a free consultation so that we can help you review your options and decide the best way forward.



Sources:

  1. Board of Governors of the Federal Reserve System, FEDS Notes - https://www.federalreserve.gov/econres/notes/feds-notes/housing-market-tightness-during-covid-19-increased-demand-or-reduced-supply-20210708.htm
  2. Federal Reserve Bank of St. Louis, FRED Economic Data - https://fred.stlouisfed.org/series/MSPUS 
  3. Realtor.com - https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement/
  4. Bankrate.com - https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/
  5. National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/seasonality-in-the-housing-market 
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10 Advantages of Listing Your Home With Ron Evans


A.  Superior Knowledge and Experience, Target Marketing and Personalized Representation of your Home lead to:


1.  High Sales Price I am a full time real estate professional with several years of local real estate sales experience. I preview, show, market and sell property throughout Orange County, on a daily basis. I stay up-to-date on current market trends. By comparing your home, both with computerized MLS details AND with my years of experience and knowledge, I can most accurately set as high an asking price for your home as possible, and be sure you are not leaving money on the table.

2.  The Best Buyer for your Home through Target Marketing With experience comes knowledge. I have a good idea of the type of Buyer(s) who will be most attracted to your home. I highlight and emphasize the hot points to attract these Buyers, to help find the BE$T buyer for your home.


3.  Protection for You and Your Equity I have a wealth of knowledge to draw from, to take you through the escrow process and guide you through the contracts and required disclosures. Each escrow has the potential to present challenges, some major. I have the experience to recognize a potential problem and head it off at the pass, long before it can affect you and your pocketbook. I have the know-how and experience to protect you and your equity.


4.  Fewer Low Appraisals After getting your high sales price, I need you to keep it! I know which comparable sales will best support your high sales price. I work extensively with the appraiser to meet that goal. (Three examples: appraisal went from $792K to $830K; another from $700K to $749K with the comparable sales and detailed explanations I provided the appraiser. Another, where appraisal came in at $1,297,000 and I justified the price of $1,350,000 to the Buyer who continued and closed the sale. This Seller put an extra $53,000 in their pocket!) 


B. Expert Representation of your Home to the Buyer Community Helps you get Top Dollar!


5.  Agents with Neighborhood Knowledge I know the area- I live here! With first-hand knowledge of the community and neighborhoods, Buyers get their questions answered quickly and informatively by holding and building interest in your property. Neighborhood tracts, builders, floor plans, neighborhood characteristics, demographics, homeowner associations, community attractions and events, shopping and restaurant recommendations, best commuter routes & times, local organizations; I have the answers to questions most often of interest to Buyers.


6.  Schools: I have the resources to assist Buyers regarding local schools. As a parent of school age children, I know how important schools are to the buying community. I have first-hand knowledge of many of the schools, and access to the information Buyers want. 


7.  Getting You Top Dollar I stay informed and I do my homework. With detailed knowledge of area home sales, pending sales, homes on the market, current market conditions and future market trends, I can accurately and helpfully explain your pricing to prospective Buyers and their agents.  This helps get you a higher price.


8.  Credibility Having your home represented by a top producing real estate team with a top real estate company adds credibility to your listing. Buyers and their agents have a higher level of trust and confidence knowing an experienced professional will be handling the transaction. 



C. Not Just a REALTOR® - A Dedicated Professional Real Estate Team Makes a Difference:


9.  Respect within the Brokerage community. There are a few REALTORS® within our local real estate community who stand out as true professionals; who are fair, honest, hard working and with whom you would welcome doing business in the future. I have been told I am such REALTOR®, and I hold that title with extreme honor. Not only is it a great compliment; more importantly it means the homes I represent are seen in a positive light and in the end, our Seller's benefit.



10.  Dedication When you make the choice to work with Ron Evans, I take this responsibility seriously. I owe it to you to get you the highest price possible, with the least amount of hassle - to provide excellent service, and always respect your investment and your needs. Your business is extremely important to us, and greatly appreciated. I strive to earn your future business and referrals. I can only do this through your complete satisfaction and recommendations. I am dedicated to serving you. Thank you for your trust!



I would be honored to speak with you and answer any questions you may have. Contact me today, to get started.

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