And just like that…It’s February!
January has come and gone, and things are looking good! As expected, many homeowners decided it was a good time to sell. Pricing has remained strong going into the new year, in fact the lower priced homes came and went in short order. No doubt you have heard on the news that there is a housing shortage at certain levels.
This is always a hard situation to navigate when pricing a home for sale, especially when you know you have a hot commodity. For example, it’s very hard to find a decent home in our area priced at $300K or less. Those homes go so fast that they sometimes don’t even make it to the MLS. So, what do you do? Do you list at the assumed appraisal price and just get what you can get, or do you test things out and push the market? I don’t know about you, but I test things out. What has been happening in the last two instances caught me off guard. As you already know, a lot of people finance their purchase and, in most cases, that means appraisal. If you are pushing the value, the chances of an appraisal blowing up your deal are quite high. The reason appraisal matters is because the bank will only lend a percentage of the value and a maximum of the appraised value. For example, if you contract is for $275K and the appraisal is $265K, the bank will only lend up the $265K. That means $10K has to be made up in some way. How that happens can vary, but my point to this whole situation, is that it’s not uncommon for a seller to not explore the higher value, simply because their agent has told them it will never appraise. What you might not know is that are some lenders out there who will sometimes give a waiver to the appraisal and not even conduct one! I had this happen in December and January. Both times, my sellers were in a situation where the inventory was going to be only them and we were confident there would be plenty of buyers willing to pay more. We listed higher, in fact $10K higher than the last sale, which was also bigger, and had multiple offers within 24 hours, all at full price. What to do? When it came time for the appraisal, the bank waived the appraisal. I have no idea why, but then it happened on the second home! So, basically had we gone in at the market value, we would have left $10K on the table. Don’t be afraid to take chances! Keep a realistic number in mind, but shoot for the stars. Need to know your home value? Don’t just use an automated webpage, email or call me. I promise it will be worth your time.
The things they don’t tell you when remodeling…
With tax season coming up, some of you might be thinking about what you want to do with your refund. Maybe you have a trip in mind, or perhaps you are thinking about doing a home improvement. Personally, I love to do a remodeling project. What I don’t love are the unexpected things that can happen during one. So, for this month I thought I would give my two cents on a few positives and negatives of making improvements to your home!
First, you should know I have definitely done a remodel before, and not just a small space! In 2012, what started as a kitchen remodel, ended up as home remodel, with the exception of the bedrooms. This can happen with even the simplest project because often times, one thing connects to another. Take flooring for example. If you want to redo your kitchen and the layout will be different, but you like the tile you have, chances are that your tile only extends to the edge of your kitchen footprint. So, to fix this, you will need new flooring, which in my case, connected all the way to the front of the house and the hallways. You can see how this quickly changed my kitchen remodel, to so much more. That tile also went into 2 bathrooms. Planning with a professional is crucial if you want to control costs and save time. Keep in mind that while you may have a budget in mind, it will often run over. Also, even though you think you may want to do just the one thing, it might make better sense to do a few others at the same time while you have the crew. A lot of times things are connected even though it’s not obvious. You might be thinking you just want to do “X”, and do the rest later, but when it comes time to do the other thing, you might have to undo what you did prior. Always be thinking of the big picture!
As for going through the process, all I can really say is be patient and hire the right people the FIRST time! Don’t rush a big project. It can end up costing you more and causing undue stress. Also be prepared to have your home life thrown upside down. There will be dust, debris and nothing will be where you think it is. You will find dust for months after the fact and even in the boxes you thought you packed properly. It’s okay and hopefully worth if you did your job properly!
Finally, here is my opinion on what to do for renovations. If your goal is to prep a home for a future sale, get lots of quotes and also bring in an agent to weigh in on whether or not the improvements will help add value to the sale. I can’t tell you how many times people do something for the sale only to realize it added no value, and we are talking thousand of dollars wasted. On the other hand, if you love your home and have no immediate plans, do what will make you happy! I tell people all the time that the only way I am moving from this house, is in a wooden box! That being said, I have updated my kitchen to fit my wants and added Astro turf for the dogs. Not a big return on investment, but sometimes, we do things to be happy! So, happy home improvement and don’t be shy about asking for opinions! I love to see renovations! Take care.