Hurricanes have an Effect in House Buying and Selling in Florida

Hurricane Ian was a devastating event for Florida, and the hurricane’s aftermath has made it difficult for everyone in this state. The scale of the damage and loss of property has made it difficult for many people to afford a quick recovery. 

Even before hurricane Ian, real estate prices in Florida have increased significantly. This has been happening for a while now.

According to an article by CBS News, “Rents, which are rising by double digits nationwide, are positively ballooning across Florida, fueled by a surge of people who relocated to the state during the pandemic. Florida’s population is growing faster than any state but Texas: Between 2020 and 2021, 300,000 people moved to the Sunshine State.”  This makes Florida the least affordable place to live in the U.S.

Imagine the combination of increased real estate prices and hurricane damage; think about how devastating it could be for low- and fixed-income Floridians.  Some people who were interviewed said that their only option is to stay in homes that have been ravaged by water.

But how will this affect those who are planning to sell their house?  A study conducted by Veros Real Estate Solutions showed that property prices in five metropolitan areas hit by major storms increased by an average of 7% above the national average within 12 months. This jump in prices is likely due to the high demand for housing in these areas following the storms.

A study made by the International Journal of Housing Markets and Analysis showed that a hurricane has a pronounced and positive effect on the duration a house is listed for sale in Florida, delaying the sale by an average of five days. Additionally, the research showed that these effects are more pronounced in markets with seasonal housing prices, and that they are transient, fading away over the span of a few months. The results were consistent regardless of hurricane intensity.


When Selling Your House Is The Best Option

A house that we consider home is a meaningful site of security, control, and comfort, but when a house becomes a burden, it may be time to sell.

The question I want to ask in this article is this: Is everyone who owns a house really happy with burdens like mortgage, property taxes, maintenance etc.? When do you know when it’s time to sell your house?

First of all, let me discuss happiness, but take note, I am not a psychologist nor an expert but I feel that this is where we should begin to answer the question above.

According to Wikipedia “the term happiness is used in the context of mental or emotional states, including positive or pleasant emotions ranging from contentment to intense joy. It is also used in the context of life satisfaction, subjective well-being, eudaimonia, flourishing and well-being.”

Looking at this definition, we can all agree that happiness has nothing to do with material things like a house. So you have to put your mind in proper perspective, meaning you should know what really matters most.

I know that feeling when you first thought of buying a house. You can get so emotional that you sometimes leave some details out of the picture like asking yourself, “Can I really afford it?” So when a house becomes too heavy to carry, remember that your happiness does not depend on the house. When a house is not a home-sweet-home anymore, it is time to sell it.

So when do you know when it’s time to sell your house? There may be a lot of reasons why it is best to sell your house but here are my top 3:

If you are paying 30%-50% of your salary for housing cost.

Personal financial management is very important to thrive in life. If 30%-50% of your gross income just goes to amortizations, insurances, home association dues, etc. then it is not practical to keep the house.

Consider this, you are putting half of your income in the house and then try to cover all other personal expenses with the remaining 50% of your income. I’m telling you now, it is not going to work.

My advice is that you sell this fast and get yourself a house at a lower cost. Make sure to count the cost. Don’t get too emotional, be practical.

If you are delayed on taxes.

Especially with Covid-19, it is harder to pay property taxes if you are in a flexible job arrangement or if you lose your job because of the pandemic. It is always good to be logical with this.

Come to think of this scenario: If you don’t pay your taxes then the IRS will be charging a penalty of 0.5 percent for failure to pay up to 25 percent. This is for each unpaid taxes each month. Imagine the headache.

If your house is already damaged.

Imagine having to pay amortization, property taxes, and then worrying about repairs and house damages – that’s going to be crazy.

Sometimes repairs for a damaged house can be very frustrating, not to mention stressful. Most homeowners never really realize how much work their house needs until it’s too late.

The only problem with this is that issues like a leaky roof, dirty floor, a pothole in the driveway, or a damaged foundation may not be attractive to potential buyers. This is where a cash home buyer comes in because they buy your house as-is.

When it’s time to sell your house for these reasons, consider a real estate investor or a cash home buyer. With us, you pay you in cash as fast as possible so you solve your problem the shortest time possible.

At the end of it all, peace of mind is the best way to happiness. Living simple and being practical, that is the best advice I can give you.

4 Reasons Renting & Investing Beats Buying & Owning—Hands Down

4 Reasons Renting & Investing Beats Buying & Owning—Hands Down
2020-02-23 14:53:07

On a daily basis, I speak to people who are caught up in living the “American Dream.”

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The storyline goes something like this:

  1. Finish college
  2. Find a well paying 9-5 job
  3. Get married
  4. Buy a highly leveraged house
  5. Have kids
  6. Find a better paying 9-5 job
  7. Up-size to a bigger house and bigger mortgage
  8. Send kids to college
  9. Down-size to a smaller property
  10. Hopefully live and enjoy life for another 20 years without having a mortgage forcing you to get out of bed every morning

Does this sound like you and your future plans?

In this article, I would like to challenge the above status quo.

Food, clothing, and shelter are the three basic requirements of human beings. After food and clothing have been looked after, most of you start looking for a house to call your own. There’s no question that buying a house makes sense for some people, but it’s certainly not for everyone. Owning a house gives you stability. That’s what people say, at least.

So, when you’re looking for a place to live, a lot of people will tell you about the many reasons why you should buy your own house. However, some people would say that home ownership as a path to wealth generation is nothing but a marketing ploy of the real estate industry. And they do have a pretty good case.

With that thought in mind, renting habits have changed in the last few years, as many people consider this as a viable option. Financially speaking, owning a house is not always the best bet. I’d go even further and tell you that if you’re looking to make money, buying a house to live in is a terrible waste.

Let’s look at the four best reasons why renting is better than owning a property.

Why Renting & Investing Beats Buying & Owning

1. You don’t have to get a mortgage.

This one is the most obvious but often misunderstood. Although some people are able to just buy a property with savings they have ready to spend, for most, a mortgage is considered the only way to buy a home. Most people don’t have all that money just laying around, and getting a mortgage is the best way to attain it.

So, even when a property is more than what the buyer has in his bank account, they can still spend it on a home of their own. It’s easy to think of a mortgage as a safe option to consider since it gives people the ability to spread that huge cost over a period of say, 25 years.

And that makes it easy, right? All you have to do is make a monthly payment, pay the bank a little extra on top of the original cost, and you’re done.

That small percentage you have to pay in addition to the original sum adds up to a pretty huge amount over this long period in spite of a mortgage interest deduction. Taking the interest into account, it’s easy to have paid twice the amount of the original purchase after 25 years. But all that is pretty well understood.

There’s one thing that’s always forgotten, though. A mortgage is a debt.

So what? You’re making your monthly payments, and they’re possibly even lower than what you would be paying for rent. But rent is an expense and not a debt. And that’s the one thing that makes all the difference.

Buying a house against a mortgage will only increase the debt to the income ratio you already have. This has one major consequence: If you need to borrow money for other essential things like, say, a student loan or a car loan, you’ll find it way harder to get one.

Related: Debunking the Buying a House is a Bad Idea Myth

This means that all that money you had access to for your home is just sitting there and costing you more money. There’s nothing you can do with that money, and you definitely can’t use it to invest and earn more money.

Owning a home will usually cost you more per month than renting anyway. To this day, I still rent and use all of my personal funds for investment purposes.

I like to joke around by calling my personal funds “little soldiers.” They are always out fighting and making me more money instead of being stuck in a bunker (mortgage) and not able to move anywhere.

eental agreement form with signing hand and keys and pen

2. People borrow more than they can afford.

When you’re out to buy something, you simply look at the price attached to it and depending on how much you can spend, you’ll buy it or you won’t. What you can spend in this case is usually whatever you have in your wallet or on your bank account. However, when you’re getting ready to buy your own house, things change. By getting a mortgage, a slight increase in monthly cost can get you a tremendous increase in budget. It’s easy to go too far and get lured into paying more than what you should.

Many folks who are associated with getting you across the line with purchasing a property, like your real estate agent and mortgage broker, can play on your emotions and get you to commit to something that you really shouldn’t. And in any case, you think it’s a good investment, right? Well, reality presents a different picture. Currently more than 10 million homeowners in the US are under mortgages worth more than the actual values of their houses. And they continue repaying these mortgages for years and years. I’m guessing these people no longer think they made a good investment.

With renting, you know what you’ll be paying next month, and you don’t have to worry about paying too much for a property. If for whatever reason you can’t afford to pay the rent anymore, you can find another property with cheaper rent as soon as your lease is up. Another benefit is that the lease is fixed as long as the lease is still active, and if a landlord decides to increase the rent, they’ll have to give you notice. So, no surprises and no headaches.

3. You’re no longer mobile.

With globalization, people have become more mobile. But even when you’re not leaving the country, people shift jobs a lot more than in the past. This is even more the case for the latest generation that has hit the workforce. With all these people switching jobs comes a whole lot of relocating. Many people choose a specific area simply because of how close it is to either the workplace or to the children’s school. If you’re one of those people, it makes a lot of sense to remain flexible with where you live. If you buy a home, that mobility is gone.

This is certainly not the case when you rent. You’re almost as mobile as you want and that has its advantages, probably more so for the younger generations. When you want to make the most out of your life, you need to be able to seize every opportunity you can. When you’re tied down to a home you own, you’ll have to pass on a lot of possibilities. When you’re renting, a whole world of opportunities just lies there for the taking. Look at me, for example. I packed my bags and left Sydney, Australia to move to Kansas City. All this happened within two weeks after making a few minor arrangements.

Related: Are Extra Mortgage Payments Worth It? A Look at the Numbers

4. Houses have operating costs and maintenance.

While the value of a house increases over a certain time period, the life of the equipment present in the house does not. Since properties are valuable assets, the owners try their best to keep their houses well-maintained. That means that owners will spend money on repair, modification, redecoration or annual common service fees in order to keep that property value up.

The cost of ownership is usually something that is overlooked, but it adds up to a considerable sum. A leaky roof, frozen pipes, a pool to take care of or just simple home improvements are some of the expenses that are always on the homeowner’s mind. Apart from this, owners also have to pay annual property taxes and a variety of other miscellaneous expenses.

Now, don’t forget that if you become a landlord and put your little soldiers (money) to good use, you will still get hit with all kinds of expenses, but in this scenario, the properties you own will be tenanted and should be producing large sums of cash flow. In return, paying for expenses shouldn’t have a direct effect on you, as they will be covered by the rent you have received from your tenants.

Despite all this, it is still very common for people to push you to buy instead of rent. Here’s a good way of looking at it. If you’re planning to stay where you are right now and if you’re not looking for financial growth and more freedom, then buying a house might be for you. Everyone else should really reconsider—because owning a home might be costing you way more than your monthly mortgage payment.

And don’t forget about those little green soldiers marching and fighting day and night for you.

Do you agree or disagree? Why?

Leave a comment and let’s discuss!

Selling vs Remodeling

10 Must-Dos Before Listing a House for Sale

10 Must-Dos Before Listing a House for Sale
2020-02-04 16:40:05

Selling your house is exciting! It marks the close to an exciting chapter in your life. And it can take months, so many homeowners are ready to get their house on the market and finish the whole process as soon as possible.

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Don’t rush to list your house if you’re not ready to sell. Unfinished repairs, neglected maintenance, and a bad first impression can all keep your house on the market for a longer period of time.

Use these suggestions as a checklist to complete before you list your house for sale. Some are DIY and some require a call to a professional. Either way, they’ll prepare your home and you for a quicker close at a higher value.

1. Take Professional Photos

Want to reach more potential buyers? Hire a professional to take photos of your home.

Want to sell your home faster? Hire a professional to take photos of your home.

Want to sell your home for more money? You get the picture… (Pun not intended.)

More and more buyers are heading online to look for homes, and if they aren’t impressed with the photos they see, they’re going to start clicking elsewhere. Home listings with professional photos sell 32 percent faster than homes without them.

If your home is valued at over $200,000, professional photos could help you sell for up to $11,000 more. Additional buyers will be looking, visiting, and bidding. It’s a fantastic investment in your property.

man photographer is making arhitecture photography with old film camera in spring,  home and building concept. top view.

2. Make Quick Fixes to Boost Curb Appeal

First impressions are everything—even when selling a house. What will buyers see first when they walk onto your property?

Curb appeal can boost a home’s value—70 percent of NAR members say that curb appeal is “very important” to attracting buyers. Simple fixes like adding shrubs, unclogging the gutters, and staging the front porch could make a home memorable before buyers even walk in the door.

A lot of these quick fixes can be done over the weekend.

3. Stock Up on Light Bulbs

Speaking of quick fixes, put light bulbs on your shopping list. (Many sellers forget this one.) Open houses require all lights to be on throughout the home. Flickering lights are spooky, and lightbulb replacements are an errand that no buyer wants to put on their list.

Have replacements ready to avoid putting buyers in the dark.

4. Call a Handyman for Repairs

You don’t have to call a professional to screw in a lightbulb. In fact, you can probably check a lot of items off your list if you need to tighten loose handles or change AC filters. But it’s important to assess your entire home for any necessary fixes and then do them.

Related: How to Sell an ‘Unsellable’ Home

Clogged gutters, leaky faucets, and squeaky doors only put items on a buyer’s to-do list. Make as many repairs as you can, but don’t hesitate to call in a professional for the rest.

5. Check to Make Sure You Have All Permits

If you did work on your property, you probably needed to get certain permits. If a buyer wants to do some work on your property later, they’ll need to get certain permits. Buyers who plan ahead will probably ask you about those permits.

It’s not only embarrassing to admit that you remodeled your home without the right permits—you might lose a buyer because they don’t want to put more items on their to-do list. Make sure you have all the permits you needed for remodeling that you did in the past and have permits for possible remodeling in the future.


6. Call the Kennel

As much as you love your animals, proof of them in your home doesn’t add value. The right buyer could have allergies or prefer a pet-free life.

Have a pet sitter or kennel’s number on hand for when you’re showing the home. Hide or clean any evidence of your furry friend, including odors.

This might mean calling the professionals for a deep clean of your carpets, but it’s an investment that pays off in the long run.

7. Hire a Housekeeper

While you’re at it, hire a professional to remove evidence of your odors, too. Animal lovers aren’t the only homeowners who should consider deep cleaning. After years in your home or on your property, you might not notice certain stains or smells.

Related: Should You Sell Your House or Rent It?

Buyers certainly will. Invest in a professional housekeeper or cleaner who will scrub everything down and shine every surface.

8. Stash Valuables and Family Photos

Buyers want to step into a house and feel like they live there. Pictures of your family remind them that they’re just looking.

This task kills a few birds with one stone. Removing personal photos and valuables sets the house up for staging. Even if you’re not staging your home, stashing away your stuff also prevents theft. You never know who’s popping into your open house and milling around your bedroom.

Packing these items could also save you time once you’re ready to move!

Girl packing books into a box in a brightly lit living room

9. Rent a Storage Unit

You’ll need to put your family photos and pet cages somewhere. Get a storage unit ready so you won’t have to stress about where to put the items that you’ve packed. If you decide last-minute to stage the house with different furniture or decor, this storage unit will be necessary anyway.

And if all goes well, you’ll be needing a place to put all of your stuff before you know it.

10. Make a List of Anything That Is Coming With You

Eventually, everything is going to go. That might mean light fixtures or curtain rods that might normally be left behind.

Make a list of everything that you are going to take with you and give it to the Realtor. If you’re not present during an open house, your real estate agent will be able to answer all questions that buyers might have about what stays and what goes.

Is there anything you’d recommend adding to this list? 

Leave suggestions in the comment section below!

Selling vs Remodeling

Which Renovations Will Increase Your Home’s Value (& Which Won’t)?

Which Renovations Will Increase Your Home’s Value (& Which Won’t)?
2020-02-04 16:36:05

Homeowners currently in the market are all too familiar with this question: Should you renovate or sell?

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When deciding whether to remodel or list a home “as-is,” there are multiple factors to consider. In fact, there will be a 1.8 percent drop in available homes this year due to high starting prices. While ensuring sellers in the market are receiving top dollar for their homes, taking buyers’ expectations into consideration can help when making the decision.

And although it’s no surprise some properties vanish off the market while others linger for months on end, there may be a cause.

Together, and surveyed nearly 1,000 homeowners to find which buyers are willing to go over budget for a move-in ready home, the most common renovations homeowners make to sell their property, and which improvements might add the most value to the selling process.

Buyer Expectations

The market is constantly changing. Buying a home, regardless of the condition, is a massive commitment. Porch and found this year’s buyers favor a fixer-upper over a move-in ready home—50.7 percent of baby boomers and 56.7 percent of Gen X-ers favor an under-budget home in need of updating.

Overall, millennials prefer to do the renovating themselves, as only 37.6 percent would go over budget for a move-in ready home.

Ranking Priority Renovations

Since today’s buyer favors a fixer-upper, sellers should be inclined to focus on low-maintenance renovations to ensure the best investment. In fact, finds 48 percent of homeowners suggest a kitchen remodel adds the most value to a home, with three in 10 homeowners agreeing a kitchen remodel is essential to get a home off the market.

On the other hand, homeowners also see importance in a bathroom remodel and retouching of interior paint. Survey respondents emphasized these renovations as best to increase the potential of a home sale.

Related: Survey Says: This Is What Today’s First-Time Home Buyers Are Looking For

Although homeowners believe a minor kitchen or bathroom remodel will give sellers an edge in the market, those renovations may not equate to the best return on investment.

Related: 6 Signs You Need to Lower Your Asking Price

Getting Your Money Back

Overall, doing smaller renovations to your kitchen could get you the biggest bang for your buck. A minor kitchen remodel can end up costing homeowners an average of $22,507 and net a return of $18,123 or 81 percent. Although a bathroom remodel was referred to as a “must-have” for selling potential, an asphalt roof costing around $22,000 could result in more for your efforts (68 percent) compared to a bathroom remodel (63 percent), where you’ll likely see less return.

If you’re a seller in the market looking to speed up the process, focusing on worthwhile upgrades while staying alert on the changing trends among today’s buyers might be the key.

Which home upgrades do you think are worthwhile?

Share below.

Selling vs Remodeling
2020-02-04 16:36:05

The 9 Most Common Home-Selling Mistakes

The 9 Most Common Home-Selling Mistakes
2020-02-04 15:40:48

I have a confession to make… I used to be Realtor.

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Phew! Glad I got that off my chest. 
Now, I invest in real estate, coach new investors, have a tech company… blah, blah, blah. But I used to be a pretty good listing agent.
You’re here to learn about home selling mistakes though. Man, do people make a lot of them! Let’s dive in.

Don’t Make These Home-Selling Mistakes

Mistake #1: Pricing too high

Some of the sweetest people on earth, who would give their last dollar to help a homeless person, have a huge ego problem when it comes to their house’s value. It’s always the same, old story: “But my house is SPECIAL!”
Give me a break.
While there is nuance to every house’s value, homeowners typically have a tough time remaining emotionally neutral on the issue. In fact, I’ve seen houses sit on the market for years (in hot markets no less!) just because the sellers had an over-inflated opinion of the value of their property.
Buyers are only willing to pay what they think a house is worth. End of story. If you want to save yourself the headache and hassle of being listed for months on end with no offers, please listen to your agent. They are usually your best friend in this situation.
Your Realtor is not the bad guy (or girl). If they say your house is worth X, then it is worth very close to X. The market is the market. If you want to blame anyone, please don’t blame your Realtor. Blame the market. It doesn’t lie.
There are a myriad of pricing strategies. The right fit depends on the type of market you’re in, price point, etc. Here are some considerations.
Needle in the haystack
If you price your home at the tippy top, you’re looking for a needle in a haystack. There might be one buyer out there. And you better hope they’re cash, because when your lender wants to appraise the property, there could be some tears or a cancelled transaction when everyone finds out it’s not worth what you thought.
Market price
This is a fair price, that which the appraiser would probably vouch for. This is fine, but in a seller’s market, there is a better strategy.
Under market
If you price just under market value, buyers feel like you’re giving them a deal. If that’s true for one buyer, isn’t it true for many? It’s possible in this scenario to get multiple offers, pushing the price above market value. Make “cents”?
young man placing sale sign in front of his house

Mistake #2: Hiring the wrong agent

Not all agents are created equal. Some are fantastic buyer’s agents but lousy listing agents. Some could be great listing agents but are stingy and won’t spend the marketing dollars (or the time) to position your house correctly. Make sure you get a Realtor with the combination of a good track record and marketing chops to match.
Related: How to Sell an ‘Unsellable’ Home

Mistake #3: FSBO (pronounced FIZBO) or For Sale By Owner

When selling their property on their own, I see people make tons of mistakes. Typically, they’re overpriced. And they are clearly under-marketed. There might be a picture or two (poor ones at that) and a phone number. Buyers want more than that people!
Sellers who try to sell this way put themselves at risk in other ways, too. Not knowing what disclosures are needed or how the process works puts the transaction at risk.

Mistake #4: Not giving access

This is especially true of investment property with tenants. If a buyer wants to see a property, he or she needs to gain access in a reasonable amount of time (usually 24 to 48 hours). Tenants can be problematic in this regard. 
Tenants have no say in the sales process, nor do they have much of a stake. So, why would they want to cooperate with showings? Make sure, if you’re the landlord, that your lease spells out the tenants’ responsibility when it comes to the sale of a property and showings.
Access can be an issue in traditional resale situations, as well. I’ve encountered sellers who only want to allow showings between 10 and 2 on Saturdays. How is that supposed to help anyone? Buyers typically get frustrated and move on to houses they can see in reasonable timeframes.

Mistake #5: Foul smells

I am not a scientist. But did you know that memory is most closely associated with smell? The first thing people unconsciously (or consciously, if it’s bad enough) pick up on is smell. Sometimes it’s more obvious. 
Make sure, if you’re listing your property, that you’ve cleaned the place thoroughly and that there are pleasant aromas emanating—not unpleasant ones.
Related: Want to Sell Your Home Fast—for the Most Money? Do This

Mistake #6: Offering low commissions

If listing your home in the MLS, make sure you ask your agent what a typical buyer’s agent commission is. Agents can see in the MLS what commission is being offered to them. How eager are they to show your home if you’re below average? And on the flip side, how eager will they be to sell your house if you’re offering a higher commission (or bonus)?

Mistake #7: Not making concessions

Most buyers are going to do a home inspection (which they should). And unless your property is perfect (no one’s is), you’ll need to concede to some items, whether offering a credit or fixing some issues.
Some sellers take it personally when buyers ask for things to be fixed. It’s an insult that they’d even ask! Instead, realize that no home is perfect and that you’ll need to take care of a few things. It’s not worth risking the deal!

Mistake #8: Staging disaster

Some homes are ummmmm… challenging to sell. Hoarder houses, messy tenants, nine kids in three bedrooms. It’s important to stage your house to put it in the best light possible. Pack up everything that’s a distraction. It’s moving anyway, right? People would rather look at a stack of boxes than your stuffed animal collection.

Mistake #9: Pro pics

And last but not least, make sure that professional photos are being taken of your property. Most consumers’ first glance at your property will be online, so make sure it’s a good first impression. Staging, lighting, professional equipment, and editing go a long way to making sure your property is shown in the best light.
Can you think of anything to add that can help a home sell?
I’d love to hear your feedback in the comments!

Selling vs Remodeling

Will Upgrading Your Home Help You Sell It?

Will Upgrading
Your Home Help
You Sell It?
2019-12-18 16:24:51

If you’re putting your home on the market anytime soon, you may want to rethink those plans to bump out the kitchen or add an extra bath.

During the housing boom, such ambitious projects would recoup as much as 90 cents on the dollar. Not today. The resale value of improvements in general is sliding, according to experts. In a departure from recent trends, homeowners are getting the best payback from relatively mundane improvements, such as sprucing up the exterior of their house or putting in new windows.

Contemplating an Extra Room

Homeowners are finding out that big home- improvement projects don’t pay off as much as they once did:

  • Large-scale kitchen and bathroom remodelings — once foolproof ways to increase resale value — are losing ground to more humble projects, such as new windows and backyard decks.
  • Some projects, such as backup generators, have more appeal in certain regions.

After spending $400,000 remodeling the suburban East Greenwich, R.I., home he bought for $820,000 in 2002, Jonathan Salinger learned he probably couldn’t sell it for more than $1.1 million in today’s market. That’s after posh additions that included landscaping, a pool, an outdoor kitchen, first-floor laundry and mud rooms, and custom cabinetry. As a result, the 45-year-old district manager for a mortgage lender recently decided not to list his house for sale and scratched plans to move the family closer to his children’s private school in Providence.
The slumping housing market has made remodeling much trickier. When house prices were climbing ever higher, buyers knew they could spend big bucks to expand their homes and still make a profit when it came time to sell. But today, a buyer who spends unwisely on remodeling may be simply digging a deeper hole when it comes time to move.
Further complicating the equation: Even though housing prices are slumping, construction prices have continued to climb. That means adding that new bath will cost more, even as it contributes less to the resale value.
Homeowners have taken note. Remodeling activity peaked in 2006 before slowing last year. And it is expected to fall 4.8% this year, according to a report by the Harvard Joint Center for Housing Studies released last month.
Since many homeowners remodel using borrowed money, tighter credit means it’s also harder for many homeowners to afford big projects. Still, American homeowners will spend an estimated $166 billion on remodeling this year, according to the Harvard housing center.

Considering a Home Improvement?

Have you put off a home remodel because of the havoc it would wreak at home? Join a discussion about managing home construction along with work and family on The Juggle, the Journal’s work and family blog.

Nationally, returns for all major home-improvement projects are fetching 70 cents on the dollar, according to a Remodeling magazine survey of real-estate professionals conducted late last year. That’s down from 80 cents in 2004. Back then, a minor kitchen remodel cost an average $15,300 and recovered an estimated 93% if the home was resold within a year. Today, a similar remodel costs $21,100 and would recoup only about 83%.
This doesn’t mean all remodeling is a waste of money. Home improvements that help a property stand out in a glut of newly built houses and foreclosed properties are most likely to pay off now, as are those that make a house lower-maintenance or more energy-efficient.

“Make the outside of the house look really great so that people fall in love between getting out of the car and the front door. That is money that is worth spending,” says Diane Saatchi, senior vice president at the Corcoran Group real-estate agency, who sells high-end properties in the Hamptons of New York’s Long Island.
Freshly painted trim and new hardware also help a home show well, says Ms. Saatchi. And landscaping, including well-manicured trees and shrubs, can help older homes compete against new ones that lack mature vegetation, she says.
New windows and doors and siding help homes look well-tended and spiffy from the street. They also help make houses more energy-efficient, which increasingly matters to buyers grappling with rising fuel and air-conditioning costs, experts say.
Some elaborate remodels, though, may actually make your home harder to sell, says New Mexico builder Lonny Rutherford. He notes that lenders are nixing higher-than-normal appraisals, and that many buyers are looking for a deal. Even if someone wanted to pay extra, they “would have a hard time financing the house unless they have a lot of cash,” he says.
Inferior remodeling work may be worse than none at all. Cheap cabinets and poor workmanship won’t fool buyers as they might have a few years ago, when many had to make snap decisions about buying a house, says Anslie Stokes, a real-estate agent in Washington, D.C.
“Buyers can spot shoddy renovations, and they aren’t willing to pay for it anymore,” Ms. Stokes says.
Some improvements have regional appeal. Backup power generators bring greater returns in the West and Southwest, following several seasons of extreme weather that can knock out electrical power, than in New England. Steel replacement roofs bring greater returns in wildfire-prone California than in Iowa or Minnesota, according to the Remodeling magazine survey. As for interior amenities, home buyers in some high-tech-focused cities find “wired” homes very desirable, but they aren’t in demand everywhere.
“People are looking for broadband access and alarm systems,” says Jim Amorin, a real-estate appraiser in Austin, Texas. “That is almost getting to be a necessity in my market.” He says barbecues, pools and other home-entertaining amenities are also in demand in his part of the country. “In downward-trending economies, people spend more time at home, so they like things that make that more enjoyable.”
Despite the real-estate meltdown, some homeowners are still putting their faith in renovations. Susie Hastings, a 61-year-old homemaker, recently spent $60,000 upgrading her mother’s 1948 four-bedroom house in Farmington, N.M., for possible resale or rental. Ms. Hastings replaced all the windows and doors with double-paned energy-efficient ones, redid the stucco exterior and added a high-efficiency boiler to slice the utility bill. Now she hopes the house will sell for more than its previous appraised value of $220,000.
“It has made a big difference in the look,” she says.
Write to M.P. McQueen at [email protected]

How to Sell an ‘Unsellable’ Home

How to Sell an ‘Unsellable’ Home
2019-11-20 15:20:08

You just have to find the right buyer. This is not a slight-of-hand answer. This is a core truth.

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Shift your mindset. In sales and marketing, we have a motto: “You have to meet your audience where they are.”

This is an extremely powerful fact to imprint on your selling consciousness. It reminds you that your audience is not always someone like you.

You Are Not Your Customer

It is very common to craft a sales plan, look at it, and think, “Yeah, I’d buy that!”

But to reach your strongest selling position, you need to understand your product from your target buyer’s point of view. This may differ a little or a lot from your own point of view. When you are selling, you need to get out of your own head. You need to think like your potential buyer, who might be—and very likely is—nothing like you.

So, if you think the house is “unsellable,” that tells you that you are looking at it from your personal point of view—the angle of why you would not choose to buy it. And if you only focus on pitching the sale to an audience of buyers who think, act, shop, and buy like you, then you are absolutely right, it WOULD be “unsellable” to someone like you.

Don’t pitch the sale to you. Find the buyers who would want that house. Position the product you are selling, in this case a house, to the buyers who would value what that product offers.

hoarder property filled with junk

Shift Your Mindset

To do this, you have to step away from the limitations you placed on that house. Change your mindset so you begin seeing it as a highly sellable house. Think outside the box and brainstorm who might want the property with the “flaws” you perceive it has—or better yet who would not even consider those things “flaws” and might even perceive them as strengths.

Now, I am not speaking about issues of pricing here. You can always change a price. So, if you are judging a house to be “unsellable” solely based on the issue of pricing, that fix simply requires altering your mindset about what kind of profit or loss you are willing to accept.

I am addressing broader issues about a property that can cause it to seem undesirable or to be seen as a potential liability (for reasons of location, condition, rehab-gone-wrong, etc.).

Let’s talk about how perception of a property affects its value, negotiations, equity, and success. At the same time, I’ll give you a little twist on the idea of “unsellable” and how that works differently depending on how you pivot the concept.

The Story of the Forgotten Carriage House

An investor I know, Tim, found a property that had been on the market for about 12 years. (Yes, you did read “12 years.”) If you saw the property, you would understand why it was on the market for that length of time.

It had originally been a carriage house, a term coined to describe buildings where literal carriages were stored in prior centuries (essentially a garage for horse-drawn carriages). Often there was a living area above it that was occupied by the coachman. The horses themselves were usually housed in a separate barn building.

Nowadays, the term is used to describe buildings on a property that were used as additional quarters for various purposes.

This particular carriage house had once belonged to a much larger estate. Over the years, parcels of the estate had been acquired by different developers and multiple neighborhoods had gone up on that land. But this carriage house had been left out of the mix.

So, it sat for decades, a deteriorating eyesore outside all these lovely neighborhoods of various ages.

Related: How to Think Like a Buyer When Getting Your Property Ready to Sell

Eventually whoever last owned it passed away, and no one inherited the property. It reverted to being city-owned, where it sat on the books for a very long time. At a certain point, the city decided they should get on with selling the property. They listed it for sale on a city-maintained website. That is where it sat for 12 years.

During this time, the property had fallen into a state of complete disrepair. Tim drove by the house frequently over the years, each time thinking of the unique ways this building could be refurbished.

But his curiosity about the house and his search for the owner led him to the city’s website. He submitted a bid.

Now, here is the original stance on the mindset of “unsellable.”

As the listing had been sitting on the city-maintained website for 12 years, the city had come to view the property as “unsellable.” In truth, however, they were not thinking creatively about how to market it to attract an appropriate buyer. So, with each passing year, it actually became more and more difficult to sell. A vicious cycle, their perception that it was “unsellable” caused them to shut down their creativity and with it any unique possibilities.

How a Buyer Can Use “Unsellable” to Their Advantage

Because the city had come to perceive the carriage house as “unsellable,” Tim was able to use their own negative perception of the property in his negotiations. Hence, Tim negotiated the purchase of the property for less than 5 percent of the asking price.

Tim did not view the property as “unsellable.” He viewed it as having “incredible potential.”

Tim was correct. He bought it for $1,800.

At that price—and with a solid plan for the building—it was easy to get financing for a complete rehab. He brought in a partner. They made changes to the existing house, turning it into a thriving multi-unit short-term rental property in the heart of the city.

The equity value is currently 244 times what Tim paid for the property. The carriage house is now valued at $440,000.

In addition, as a short-term rental, the house is currently turning more than a $100K a year in profit.

All this from an “unsellable” property.


Learning from the City’s Errors

What the example of the city’s experience teaches us is that, once you place a label on something, you will respond and act upon it with the label you have assigned to it. Don’t make the same mistakes the city made.

Once they assigned the label of “unsellable” to the carriage house, the city began to believe and act on that perception, causing them to commit the following errors in judgment:

  • They relied on limiting assumptions about how to value the property
  • This blinded them to the potential value of the property
  • Thereby, this caused them to judge the property to be “worthless”
  • This eliminated any attempt they might have made to market the property effectively
  • Which, in turn, allowed an investor to pick it up for a song

The “unsellable” label they assigned the property limited their vision and therefore their potential for profits.

Kicking “Unsellable” to the Curb

What the example of Tim’s experience teaches us is to look at the property with fresh eyes. Make a very detailed list of all the pros and cons of the house and the surrounding yard.

Be objective. Be specific. Be alert. The more detailed you are, the greater your chance of finding the hidden marketing gems you might otherwise miss.

Also, be willing to step outside yourself and your own perceptions. Call in a friend, mentor, or colleague who you know can always find the good in everything. (By the way, if you don’t have anyone like that in your life, start cultivating those relationships.) Positive thinkers and outside-the-box thinkers will spark creativity.

Walk the property with them. Get out of your own way. Listen to what they say.

If they say they like some aspect of the property, whether the yard or the house, don’t bring up objections! Ask them why they like that item or feature. Delve into what benefit or value that detail adds to the property for them.

Next, let go of the idea of “problems.” Every problem is an opportunity.

So, look carefully at the “cons” or the negatives on your list. This is when your true creative power switch gets turned on. Open your mind and come up with a positive slant for EVERY “con” on your list. I mean it.

And if any one of those “cons” really stumps you, pull in that positive-thinking friend again—maybe even make them a partner.

No matter the reason(s) for perceiving a house as “unsellable”—whether you think your property is in an undesirable location, someone died in the house, there are condition issues (deferred maintenance, pet smells, water damage, mold, lead), there’s a lack of amenities, it’s inconvenient architecture, has outdated appliances or decor, or any other “unsellable” feature—let go of viewing it as a limitation. Shift your viewpoint.

Related: How to Save Your House Flips When They Don’t Sell

It’s Your Choice

Stop assuming a challenge is a barrier when it is only a hurdle. Jump over it, go around it, go under it, maybe just smash through it. But look for the opportunity.

As we say in marketing, find the hook. Find the take. Find the slant.

In other words, find the opportunity.

Keep your eyes open and your creativity flowing. This is the beauty of real estate investing: One person’s shanty is another person’s castle. It is all in the perception.

Change your attitude and you change your options!

Do you agree or disagree with my points about perception? Can you think of an instance in the past in which you could’ve benefited from adjusting your viewpoint? 

Weigh in with a comment below.

Selling vs Remodeling
Buying & Selling Houses

Should You Remodel or Move?

Should You Remodel or Move?
2019-11-06 14:08:22

If you’re asking yourself if you should remodel your home or just move on to a new one, there are probably a few things about your home you don’t love — and that’s no surprise. No home is perfect! But when you’re asking yourself that question, you’re really asking: Can my dislikes be changed with a remodel? Would that make financial sense? Is remodeling worth the hassle?
With low inventory nationwide, more homeowners are renovating their current homes instead of moving. According to Zillow research, 76 percent of Americans surveyed would rather use a set amount of money to upgrade their home to meet their needs rather than use it as a down payment on a new home.
Everyone’s home, budget, real estate market and priorities are different. So, settling the remodel-versus-sell debate always varies, depending on who you ask. But, if you’re trying to make the decision for yourself, follow these five key steps.

1. Determine whether remodeling or moving is more cost-effective

You’ll incur costs no matter which path you decide to take, and what makes sense for you might not make sense for another homeowner. For some homeowners, moving is cheaper. For others, it makes more financial sense to renovate the house they already have. To find out the more affordable option for you, make sure to consider all possible expenses in order to make an accurate side-by-side comparison.

Costs of selling

Most sellers are focused on the profit they’ll make when they sell, and they sometimes overlook all of the expenses related to selling. Keep in mind the following common expenses.

Agent commissions

If you’re selling with a full-service listing agent, and if your buyer is using their own agent, be prepared to pay 6 percent of your sale price in agent commission. You can cut back on some of these expenses by using a discount broker, but you’ll have to do much more of the work yourself.

Moving costs

Whether you’re doing a DIY move (and paying for boxes, storage and a rental truck) or a full-service, cross-country move with a professional moving company, everyone pays moving costs in one way or another.

Minor repairs

Even if you’re not planning on making any sweeping changes to your home to get it ready for listing, there are always touch-ups and minor repairs that need to be done so your home can attract buyers that will pay your desired asking price. According to Zillow research, U.S. homeowners spent an average of $6,570 getting their homes prepped for selling. This includes things like carpet cleaning, painting, lawn care, staging and cleaning.

Cost of a new home

Unless you’re deliberately downsizing, you may be considering trading up to a more expensive home. If you decide to sell instead of remodel, and if you want to stay in your same neighborhood or a comparable one, you may find yourself spending more money when you factor in the down payment, monthly mortgage payment and taxes.

Upsizing cost

Another often overlooked factor to trading up is the cost of both utilities and maintenance, compared to your old home. More square footage? Expect to spend more money heating and cooling your home. Moving from a condo to a single-family home? You’ll probably spend more in lawn care and exterior home maintenance.

Costs of remodeling

Compared to selling, the costs associated with remodeling are a bit more straightforward. It’s all about how much the renovation is going to cost you when all is said and done. And speaking of costs, you’ll want to make sure you set a budget and avoid overspending on the room you’re remodeling. Here’s an example: If your home is worth $200,000 and your kitchen is 10-15 percent of your square footage, you shouldn’t spend more than $20,000-$30,000 remodeling it.
The first step in figuring out how much your renovations will cost is to get an estimate (or three) from a contractor. Make sure you have a specific estimate for each of the following items.


Depending on regulations where you live, you won’t usually need a permit for interior cosmetic fixes, like painting or refinishing floors. But you probably will need a permit if you’re making structural changes, adding square footage, or making updates that involve plumbing or electrical. Also, if you live in a community that regulates the look of your home’s exterior — like paint colors — you’ll need to check into permits and restrictions. In general, your contractor should know which permits are required based on the work you’re requesting.

Architectural plans

When you do a project that requires a permit, you’re often also required to submit architectural plans to the city, so make sure to account for these costs. And if an HOA board is reviewing your renovation plans (say, if you live in a condo), you may need to submit plans to the board, even if the city doesn’t require them.


The materials you choose for your renovation project can dramatically increase the cost of your renovation. Dreaming of an upscale kitchen with quartz countertops and custom cabinetry? It’s going to cost a lot more than laminate countertops and builder-grade cabinets. And make sure you decide on exactly what you want before construction starts. If you change your mind mid-project, it’ll cost you.


If your upgrade is anything more than a small DIY project, you’ll probably hire a professional, whether that’s a plumber, electrician, landscaper or general contractor. Labor costs can add up quickly, so keep an eye out for costs you haven’t planned for, like demolition, or time-intensive requests, like intricate tile work.

Additional expenses

You’ll want to plan ahead for other renovation-related expenses, like a hotel room if you need to temporarily vacate the home for major work, off-site storage space if you’re refinishing the floors, or dining out if your kitchen is unusable.

Financing costs

You should also decide how you’re going to pay for the remodel. If you’re not paying in cash, calculate how much you’ll pay in interest and how it will affect your finances in the long term. Some of the most common ways people pay for renovations are:

  • Refinancing: Depending on your current interest rate, you may be able to refinance into a lower rate, which could help you save for renovations.
  • Cashout refinancing: If you have enough equity, you could consider doing a cash-out refinance, which lets you refinance at an amount higher than what you owe, essentially giving you access to some of the equity in your home without selling.
  • HELOC: A home equity line of credit (HELOC) is a revolving line of credit secured by the equity in your home. You are charged interest on the amount you use, much like a credit card.
  • Home equity loan: A bit different than a HELOC, a home equity loan (also called a second mortgage) is a loan you take out on your home, in addition to your existing mortgage.

Hidden costs

No home renovation project is without hiccups, so always factor in a cushion of between 10 and 20 percent, just in case you uncover unexpected issues along the way.

2. Research your real estate market

Your local real estate market, and even your specific neighborhood, can make a difference when it comes to deciding whether to sell or renovate. If you live in a hot real estate market, it may make more sense to sell. Here are a few ways to gauge the state of your market:

  • Research the area: Recent comps should help shed light on what you can expect to sell your house for.
  • Assess your home’s marketability or appeal to buyers: Does your home need a lot of work before listing? A home in good condition usually sells faster than a fixer-upper, even in a sellers market.
  • Speak with an agent: An experienced local agent can give you an expert opinion on what your home would sell for.
  • Consider the neighborhood you’re moving into: If your home has gained lots of value but you want to move to a new house in the same neighborhood, keep in mind that those homes have gone up in value, too, so your equity might not go as far as you think.

3. Evaluate your emotional attachment to the community

There’s more to your sell-versus-renovate decision than just money. If you’ve put down roots in your current neighborhood, moving might not be the best idea. Consider these factors:

  • Kids: You’re in a desirable school district, and your kids have friends and activities nearby.
  • Sense of community: You like your neighbors and have good rapport with the community — that can be hard to find.
  • Distance to work: Your commute time is low, and a move might require a longer commute.
  • Activities and fun: Your favorite restaurants, shops, parks and activities are nearby.
  • Family: You have family nearby, especially if you count on them for child care or if you have an elderly relative to care for.

4. Consider your timeline needs, whether you want to move or improve

When you decide to move and once you get an offer, the timeline is pretty much set, with the exception of an unexpected change to the close date. Get a feel for the average time it takes to to sell a house by observing your local real estate market. The biggest question mark is typically how long it’ll take to get an offer. Once your home is under contract, you should be able to predict the time to close with relative certainty.
But remodeling requires more patience and flexibility. Your contractor might tell you the renovation will take eight weeks, but could then end up extending it if they run into changes, issues or delays.
If you’re leaning toward moving for timing reasons, but the prepping, listing and negotiations still seem like a lot of work, consider selling your home through Zillow Offers. We’ll make you a cash offer on your home, and you can schedule a close date so the timing works well for you.

5. Be realistic about what a renovation will solve

It’s easy to think that a remodel will solve everything you don’t like about your home, but in reality, it’s not a magic bullet. There are some things that a renovation just can’t fix.

  • Neighbors: If you have loud or inconsiderate neighbors, no renovation project can make them move away.
  • Unfavorable school district: If your kids go to public school, you’ll have to send them to their neighborhood school, unless private school is an option.
  • Home type: If you’re living in a condo but what you really need is a single-family home with a yard and a garage, that’s not something that can be fixed with a renovation.
  • Square footage: Here’s one more piece of home renovation advice. Adding square footage to a home can be really expensive — and that’s if the city will permit it and if your lot is big enough. If you need a home much bigger than the one you’re living in now, moving may be more cost-effective.

6. Calculate your remodeling return on investment (ROI)

Of course, you’re renovating your home so you can enjoy living in it, but someday you’ll probably want to sell, so factoring in how much of your remodeling budget you’ll recoup at resale is important to deciding if you should remodel or sell.
One helpful tool in calculating which renovations will give you the most bang for your buck is the 2018 Cost vs. Value Report, which can be filtered by region. Search through 21 common home improvements to find the ones that will be the most worthwhile in terms of resale value. In the tables below, we’ve chosen mid-range improvements — renovations with middle-of-the-road materials, not luxury finishes.

Most cost-effective mid-range home improvements

Project Cost Resale ROI
Manufactured stone veneer $8,221 $7,986 97.10%
Entry door replacement (steel) $1,471 $1,344 91.30%
Deck addition (wood) $10,950 $9,065 82.80%
Minor kitchen remodel $21,198 $17,193 81.10%
Siding replacement $15,072 $11,554 76.70%

Least cost-effective mid-range home improvements

Project Cost Resale ROI
Backyard patio $54,130 $25,769 47.60%
Master suite addition $123,420 $69,807 56.60%
Major kitchen remodel $63,829 $37,637 59.00%
Bathroom addition $44,717 $26,769 59.90%
Deck addition (composite) $17,668 $11,239 63.60%

When to prioritize personal needs

Your ROI is important, but so is your happiness, so keep that in mind when deciding on your renovation project. If you love to garden and would get endless hours of enjoyment out of a backyard greenhouse, but it’s not likely to be a feature that appeals to the majority of buyers down the road, that’s OK — you should enjoy your home while you’re living in it.

7. Understand the risks of over-improving

If your tastes have outgrown your local market, it might be time to consider a move. There are financial risks in creating an extravagant luxury home in a mid-priced neighborhood — when it comes time to sell, you’re unlikely to recoup very much of the money you put into the project.

Should I remodel or move to a luxury home?

If a top-of-the-line, luxury or custom home is what you’re dreaming of, you might think twice before renovating your existing home, because there’s a financial risk in over-improving for your area.
Unless you live in a pricey neighborhood already, you can easily over-improve your home, which means that when you go to sell it, you’re unlikely to recoup much of your cost. If you want that high-end home and you can afford it, you might be better off moving into a luxury home in a neighborhood where the market can support the price.

Selling vs Remodeling
Home Sellers Guide