10 Tips for Sellers in a Down Market

While things do seem to be turning around in the Charlottesville Real Estate market, it is still predominantly a “buyers market”. Here’s a great article from Yahoo Homes, offering 10 tips that sellers can do to make their homes stand out in a down market.

“Buyers have the upper hand when purchasing a home in a down market. Sellers need to make the best possible impression to appeal to these picky buyers. When possible, sellers should avoid making changes that will devalue their home or cause buyers to pass on purchasing it.

Before you decide to list your home for sale look at these 10 ways homeowners devalue their homes and consider how to fix these if necessary:

1. Lack of Curb Appeal
The first thing any prospective buyer will see is the front of the home. Everyone wants to live in a home that is beautiful on the outside as well as the inside. A poorly kept landscape, whether overgrown, or non-existent will turn a buyer off. They may fear the cost of redoing landscaping, or be overwhelmed at the thought of it. By planting a few annuals, keeping the grass cut and weeding the flowerbeds regularly you will improve your curb appeal. Front landscaping that is welcoming and has good visual appeal will keep a buyer interested in your home.

 

2. Exterior of the House
Chipped or faded paint, dirty windows, broken railings or busted sidewalks will all devalue your home. Just as a buyer will notice the front gardens, they will also notice the disrepair of the outside of your home. Buyers may wonder if the exterior is so neglected, what has been neglected on the interior. If selling your home is in your future, invest in a fresh coat of paint, wash the windows, and repair any issues with your walkways. Potential buyers will notice the pride you take in your home and will reflect in their offer price.

 

3. Outdated Kitchens
Kitchens can make or break how buyers will perceive your home. They want to walk in and fall in love with your kitchen. Moms want to be able to envision making cookies with their kids or perhaps hosting dinner parties. That vision will not work for them if the kitchen is dark, dingy, or outdated. There are two ways to update a kitchen. A full-blown renovation will update the space to a buyers liking, but at a substantial cost. The good news is you will reap close to a 90% return on investment. A fresh coat of paint on the cabinets, new door pulls and fresh laminate on the counter tops are all options for a small budget.

 

4. Outdated Baths
Outdated bathrooms are certain to affect the sale of a house. Buyers want updated baths just as they want updated kitchens. If you are able to renovate the bathroom from top to bottom, you should recognize an 80% return. If not, make small changes to update it. Add new fixtures, new lighting and if your budget allows, tile the floor. No matter how you update the space, a buyer should walk in to a bathroom that is clean, fresh smelling and well-decorated. These simple changes will do a lot for the buyer’s perception of the space.

 

5. Taste Specific Decorating

Taste is subjective when it comes to decorating a home. What you may love, a buyer may hate. Buyers want to see themselves in the space, and if they walk in to a home with, red walls, shag carpeting and wood paneling, they will have a hard time envisioning themselves living there. Instead, they will see the cost of replacing carpeting, and tearing down the paneling. All of these factors could cause a buyer to offer less than the asking price. Before you sell, paint your home a more neutral color that has a broad appeal.

 

6. Design Specific Renovations
Have you ever wandered into an open house and wondered what the owners were thinking as you faced an ultra-modern kitchen or a futuristic fireplace. These design choices will be difficult to sell to the average buyer with a more mainstream style and most buyers will be thinking about ripping out a kitchen and redoing it to their liking. It will take someone with a similar aesthetic to be interested in a home with such design specific features. Keep that in mind when you contemplate any renovations.

 

7. DIY Projects Gone Awry
DIY projects can be fun to do, but if you riddle your home with projects that are half-done or poorly done, buyers will cringe at the thought of redoing projects or hiring someone to complete them. Buyers who see dollar signs will either walk away or deduct from their bid. A general rule of thumb is to hire someone to manage a project if you lack the confidence that it will look professional.

 

8. Pets
Pets are wonderful additions to a home, but bring unwanted issues when trying to sell. Damage to walls, carpeting or woodwork needs repair before you list the house. A good carpet cleaning will lessen the smell of pet odors too. Buyers would rather not move into a home that has lingering evidence of pets, especially if they have allergies. So, farm Fido out while the home is on the market to ensure the best offer you can get.

 

9. Wasted Square Footage
We like our home to work with our lifestyle and to accommodate specific interests or needs we may turn a bedroom into a closet, or a garage into a gym. While these highly personalized spaces work for a homeowner, the perceived wasted space is a turn off for most buyers. Ultimately, the missing square footage detracts from the value of your home. Changing the space back to its intended use is a huge endeavor; buyers may focus on cost of such a project.

 

10. Water Features
You may love your pool, covet your hot tub or adore that waterfall, but for a buyer water features are another expense that will be incurred to maintain the home. Over time, in-ground pools will need to be resurfaced and resealed at an additional cost to the buyer. Families with small children will see the pool as a potential danger as well. A buyer may love everything about your home, except the pool and request it removed or filled in before closing on the sale.

 

From kitchen renovations to wasted space to basic home maintenance, it’s often the simple things that devalue your home. Applying a little forethought and practicality will help you reap the most value from the sale of your home.”

(all photos: Freshome)

If you are looking to sell your Charlottesville area home, contact Silvergate Realty today! We would love to help!

 

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Why do you need a Realtor?

Thinking about buying or selling your Charlottesville area home, but don’t truly understand the value of hiring a Realtor to represent you? Check out this great article from Realtor.com explaining 12 reasons why we can help you! Let the Realtors at Silvergate Realty help! Contact us for all of your Charlottesville Real Estate needs!

“Realtors are committed to treat all parties to a transaction honestly.  Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84 percent of home buyers would use the same Realtors again.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Realtors.
But if you’re still not convinced of the value of a Realtors, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50 percent of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82 percent of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).”

Glossary of Loan Terms

Trying to get a loan and get confused about what the heck the Lender is talking about?? Here’s a great glossary of terms associated with loans from bankrate.com.

To read all of the terms, visit: http://www.capstone-mortgage.com/help-center/glossaryofmortgageterms

Here are some common ones:

  • Adjustable-Rate Mortgage (ARM) – a mortgage with a variable interest rate, which adjusts monthly, biannually, or annually. Option-arms and hybrid mortgages are also considered adjustable-rate mortgages.
    – the way a loan is paid off over time in installments, detailing how much goes toward interest, and how much is paid toward principal.
  • Annual Percentage Rate (APR) – the actual interest rate you pay on your mortgage, which factors in fees, points, and other costs associated with the loan.
  • Closing – the final step in the loan process when loan documents are signed at an escrow or title company.
    Closing Costs – Closing costs are the fees you pay at or before closing that are required to process, approve and close your loan. They include lender fees, attorney fees, appraisal fees, title fees, pre-paid taxes and other fees.
  • Conventional Mortgage – any mortgage loan that is not insured or guaranteed by the federal government.
  • Down Payment – an upfront payment made by the home buyer toward the property purchase price, usually ranging from five to 20 percent. The remainder of the sales prices makes up the mortgage loan amount.
  • Earnest Money – a deposit paid to the seller by the buyer as a pledge to complete a real estate transaction. If the seller accepts the offer, the deposit is held in escrow and applied to closing costs when the deal is closed.
  • FHA Loan – a program originated during The Great Depression that allows lower income borrowers to qualify for mortgages as long as they fit certain criteria set forth by the Federal Housing Administration who insures them.
  • Mortgage – a temporary loan used to finance the purchase of real property, also known as a home loan.
  • Points – stands for a percentage point of the loan amount, typically makes up the origination fee, which can be a fraction of a point to multiple points.
  • Pre-Approval/Pre-Qualification – processes to determine what you can afford to ensure you can obtain mortgage financing when purchasing a property.

Looking to buy or sell a home? Let the Charlottesville real estate agents with Silvergate help! Contact us today to discuss your needs!

-Paul and Jamie

Looking to Buy in 2013??

A lot of people make resolutions going into the new year.  If one of your resolutions for 2013 was to buy a home, we’ve put together a list of things to think about and hopefully help you realize that goal!

1. The first thing you should do is check your finances. You need to talk to a lender and figure out what you can afford before you begin looking. Your bank is a good place to start. See if they offer mortgage options. If not, Silvergate Realty is happy to share with you some local lenders we like to work with!  Once you meet with a lender and get pre-approval, then it’s on to the fun part… the search begins!

2. Decide what you want. You may not know, and that’s ok. It is a process. But try to come up with a general list of your “must-haves”. How many bedrooms/bathrooms, how much land, areas of the city/county you might be interested in, schools, etc. Your Realtor can help you narrow down the options once we know a little more about what you want.

3. Contact your Realtor. Why do you need a Realtor to represent you when you buy a home? It may seem like with all of the opportunities to search for a home on the internet these days, that it would be easy to purchase a home on your own.  But you may not realize that buying a home is very complex. No two homes are alike. There are contracts and inspections and financing and contingencies and clauses and fixtures and tax costs and… you get the point. Silvergate’s Realtors are trained professionals and will help you every step toward finding THE perfect home for you.

4. Obtain your financing. Once we have targeted a house that is perfect for you, we can make an offer. The seller can either accept your offer or make a counteroffer, which you can accept or counter again. Once the terms and contingencies are agreed upon, you enter into a ratified contract. At this point, you will secure your financing with your lender. Silvergate Realty will help you along the way and make sure the Lender’s requests are being satisfied.

 

Ready to buy or sell? Let Silvergate Realty’s real estate agents help! Contact us today!

10 Real Estate Tips for 2013

10 Real Estate tips for 2013:
“Tip 1: Get off the sidelines
For good-credit buyers waiting for the bottom of the market, it has passed, but the good news is that home prices and interest rates are still quite low. For sellers waiting for market improvements, they’re here. Stretch, take a deep breath and jump back in the game if your budget allows. The rules have changed a bit, however, and lenders want buyers to put a little more skin in the game. So expect to make higher down payments than in those pre-bust years. Another caution: Sellers will likely find that buyers have a harder time qualifying for mortgages.”

Read the entire article and get all 10 tips here: http://www.bankrate.com/finance/real-estate/tips/default.aspx?ic_id=Top_Financial%20News%20Center_link_3
Ready to buy? Let Silvergate Realty’s Charlottesville real estate agents  help! The spring market is here!

The “Fiscal Cliff” Effect on Real Estate

Good news! Provisions in the recent legislation passed by Congress provide confidence for prospective home buyers. From Realtor.org, here are five reasons it’s prudent not to wait and buy now:* Prices are going up due to lower inventories and several years of low housing starts.
* Mortgage rates are at all-time lows, making payments more affordable.
* The house payment with taxes and insurance is probably cheaper than the rent.
* The mortgage interest deduction is intact for the majority of taxpayers.
* The capital gain exclusion for principal residences up to $500,000 remains in place.

Here’s the whole article from realtor.org:

“Real Estate Provisions in “Fiscal Cliff” Bill

On Jan. 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff.” The bill was signed into law by President Barack Obama on Jan. 2.

Below is a summary of real estate related provisions in the bill:

Real Estate Tax Extenders

  • Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
  • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
  • 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
  • 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012

Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers.  These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000.  These thresholds have been increased and are indexed for inflation and will rise over time.  Under the formula, the amount of adjusted gross income above the threshold is multiplied by 3 percent.  That amount is then used to reduce the total value of the filer’s itemized deductions.  The total amount of reduction cannot exceed 80 percent of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years.  They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012.  Had we gone over the fiscal cliff, Pease limitations would have been reinstituted on all filers starting at $174,450 of adjusted gross income.

Capital Gains

Capital Gains rate stays at 15 percent for those in the top rate of $400,000 (individual) and $450,000 (joint) return.  After that, any gains above those amounts will be taxed at 20 percent.  The $250,000/$500,000 exclusion for sale of principal residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax.  After that the rate will be 40 percent, up from 35 percent.  The exemption amounts are indexed for inflation.”

 

Ready to buy or sell? Let Silvergate Realty’s real estate agents help! Contact us today!

Homeowners Guide to Taxes!

Tax time is upon us! Love this article from House Logic on what you can deduct or claim as a credit related to your home.

“Tax season can be a real pain in the wallet, but if you’re a home owner, tax deductions and credits can lessen the blow. We’ll help you find all the opportunities to maximize your return.

Did you know you may be entitled to a deduction if you sell your home after making improvements?

Tax rules let you add capital improvement expenses to the cost basis of your home. Why is that a big deal? Because a higher cost basis lowers the total profit—capital gain, in IRS-speak—you’re required to pay taxes on.

The tax break doesn’t come into play for everyone. Most home owners are exempted from paying taxes on the first $250,000 of profit for single filers ($500,000 for joint filers). If you move frequently, maybe it’s not worth the effort to track capital improvement expenses. But if you plan to live in your house a long time or make lots of upgrades, saving receipts is a smart move.”

For more information on this deduction and others, read the full article here.