BUYER TIP #2: A house with no curb appeal? Don't dismiss it just yet-

..So your agent drives up to a house  and you take one look at it and think to yourself- NO WAY. You tell your agent that you don't even want to go in. Has that ever happened to you?

Well, let me tell you about that house with no curb appeal- The inside could be absolutely beautiful- you won't know unless you look. If your agent knows you well enough, and I assume he/she would, there is a reason why they made an appointment to see that house. Maybe the inside has everything you want, and more. If it's just a matter of replacing shutters, adding some landscaping or another minor fix, GO inside.

Do you realize how much of a discount that house probably has, just because it doesn't look absolutely beautiful on the outside? There are not many buyers that can see past the outside appearance, and would probably do the same thing that  you were about to- not even go inside. So the seller has had to reduce or discount the property to get people to even go inside. Take advantage of that! Almost always, the outside can be spruced up very inexpensively.  Would you rather buy a house that looked gorgeous outside, but the kitchen needed remodeling? what's the cost of remodeling a kitchen as opposed to a little something outside? Big difference, right? Outside will be a lot less. Remember, you LIVE inside the house- enjoy the beauty of the interior, and work on the outside later.  So the next time your agent takes you to that ugly house, just go in. You might be surprised at how nice the inside is, and you'll be VERY happy for the thousands of dollars you can save because of it.


What to know when buying a home that needs "systems" repairs

Last night I got a call  from a buyer who wanted to see a foreclosed home. She had called the listing agent, and the agent told her the house was a mess, and discouraged the buyer from even seeing it. Turns out that this buyer is not currently represented and knows a friend of mine, who told her to call me. So we set up an appointment to see the house this morning.

I'm not even going to rant about how that agent broke ethical code to her seller by dissuading a potential buyer, I'll just tell you about the house that we saw. The previous owner had purchased this home to make "a quick buck", and was going to remodel it and re-sell it. Unfortunately, he overspent for the house in the beginning, and midway through the renovations, he ran out of money, and the market turned. He tried to hold on to it with the bank, but it ended up being foreclosed.

When we arrived, the back door was unlocked and open, and the garage door was unlocked, and we had the contractor go into the house just to check that there were no unauthorized residents inside. The coast was clear, and the kitchen was nice enough- that made it through the  remodel. The hardwood floors were re-done, however they were somewhat wavy and buckled due to moisture and what have you. Not a big problem there- some sanding ought to handle that. The bathroom was remodeled, too, and essentially the house was pretty much ok... until we went into the basement to check out the componenets of the house.

The furnace was in pieces, and obviously not operating, and there was a BIG NOTE attached to the wall that the septic tank was not operational.   (It would have been nice if the agent mentioned that in the listing, but that wasn't the case- she did not even mention it on the phone with the buyer, either.)

As far as getting a mortgage on a home, the home has to be functional (heating, water and sewage systems need to be working) in order to obtain any type of conventional loan. So what does that mean for this buyer, or for you, given the same or similar set of circumstances? It means that besides having your downpament monies, you will need to have enough to fix the necessary components of the home as a contingency of getting the loan... or you would have to apply for a specific type of loan offered through the FHA, (called a 203K) where you get incremental amounts of money to re-hab the property. In that case, the property will have to appraise for the total amount of not only the purchase price, but the rehab costs  as well. A headache for most buyers. Not to get discouraged, though- all foreclosures are not in this bad of shape, just be prepared in mind and wallet for what comes ahead.

Return on Investment for Home Remodeling and/or Renovations in CT

You may have heard that when you remodel a kitchen or bath you get all (or most) of that money back when you sell. Really that depends on how much money you spend on the kitchen or bath, when you sell your home, and how marketable the remodeling is (colors, current  trends (but not fads), aesthetics, and functionality.  Overspending for your area is not ever a good idea, so if you have a question as to whether your proposed remodeling project  would be worth the money or if you are better off moving to a new location, call me. I'll give you an honest assessment- no charge.
If you are considering buying a home that needs a renovation, your agent should also help you with the cost vs. value of the proposed renovation, and whether or not that particular home makes good fiscal sense for you considering the amount of remodeling that you want to do. I  will always do that for a client, I assume that most agents will.

A few respected sources put out reports on the average ROI (return on investment) for all types of renovation and remodeling jobs.  Realtor magazine is a good source for national averages, but if you want something a bit more specific for our state, Remodeling magazine gets into bigger detail, and its geographically relevant.

I'll include a few ROI's on more upscale improvements below for your convenience -  These figures are from 2009-2010, and  very relevant

90.7%     Siding Replacement
84.9%     Siding Replacement
78.8%     Window Replacement (vinyl)
70.2%     Window Replacement (wood)
62.8%     Major Kitchen Remodel
59.2%     Roofing Replacement
56.7%     Bathroom Addition
49.8%     Master Suite Addition

Also, according to Remodeling Magazine, a mid-range remodel would net on average the following ROI

117.8%    Entry Door Replacement (steel)
 86.0%     Vinyl Siding Replacement
 84.1%     Wood Deck Addition
 83.6%     Attic Bedroom
 82.3%     Vinyl Window Replacement
 81.5%     Minor Kitchen Remodel
 72.9%     Major Kitchen Remodel
 69.5%     Two-Story Addition    
 68.6%     Bathroom Remodel
 67.4%     Roofing Replacement    
 64.0%     Basement Remodel 
 63.4%     Master Suite Addition
 62.3%     Family Room Addition
 61.1%     Garage Addition
 58.3%     Bathroom Addition    
 47.8%     Home Office Remodel  

How the property tax is figured on your Fairfield County home

Property tax is figured by the value  (assessment) of the property, but it's not all that simple, or cut and dry. The reason you have an assessment of your property is to calculate your fair share of  taxes in order for the town to have enough income to run all of its departments. By law, each of Connecticut's 169 towns and cities have to re-valuate properties every four years. Let me debunk one popular myth: Your assessment doesn't change based upon the purchase price of the home- (otherwise, people would sell their home for a dollar, and pay virtually no tax)

The reason for the four year re-valuation is because both residential and commercial property values fluctuate  and cause an imbalance in appropriate rates for both. So in order to keep things in line, the re-assessment  is necessary.

The tax assessment for your home  is based upon a calculation  of square footage, amenities in the house, and location- much like a real estate appraisal, but there are a few major differences that I will try to explain to help you understand.

Here's an example: The town assesses your home at $700,000, and you just bought it for $1,000,000. Did you over pay for the house?  The bank appraised it at $1 million! So what gives? The town thinks your home is worth 30% less than you think it is, and somebody has got to pay!  There IS a simple answer as to why, so don't try to set things straight  at the assessors office. Complain to the tax assessor about being valued too low, and you might just be rewarded with higher taxes. 

The assessment that you receive on your house is 70% of the market value, so if your assessment is $700,000, the town believes it's value to be $1,000,000. The assessment figure and the appraisal figure are NOT THE SAME. The next time you receive your new assessment, if you look closely, there will be an appraisal  amount there, too. They are both on file with the town, and are considered public information.
 
When the town puts together its annual budget, and compiles all of the values, and expected taxes (a/k/a income) the mil rate is set to cover the budget based upon that income to the town. If the town is  coming up short with the budget, then you will see an increase in the mil rate, and an increase in property taxes. I could go on and on about this subject but my post is long enough. I have helped a few clients fight an asessment that was too high, and WE WON. But that's another post for another time.

The best time time to conduct a final walk through on your new home

There can be a lot of time between the moment that  you make your offer on a home unitl the time that you close. The time frame can be anywhere from 45 - 60 days on average in Fairfield County, but closings can happen at whatever time frame  is agreed upon  between seller and buyer.

The reason for a final walk through is to make sure that the home is in the same condition as it was when you initially put the offer in,  ensure that it's  clean and free from personal  effects, and to make sure that the inclusions that were agreed upon  are present. If there  are any concerns, you MUST tell your attorney immediately following the walk through, and they should be handled prior to closing. Once you close on the property, its a whole different ball game, so to speak.

There are varying opinions as to exactly when to do the inspection. Some agents like to  do it a few days before, the night before, or the morning of the closing. Forget about whether its convenient or not, my advice is to do the walk through  (or final inspection) JUST PRIOR to the closing. By just prior, I mean do your  final walk though on the way to the attorneys office to sign all the papers and close. Oh, yes- there's a reason, and it's a very good one.

I have represented hundreds of buyers, and it 's pretty commonplace to do the walk through the night before. It wasn't until about 15 years ago when  we conducted a final walk through as usual the night before. Seemed reasonable, and everything was fine at the house- except for one thing- the 80 gallon hot water heater blew up that night, AFTER WE LEFT.  My buyers went to their new house the next day  immediately following the closing to find a flooded basement. Luckily, the attorneys had not completed doing the transaction and accommodations were made. But guess what? It could have been a big legal mess. Whew!!!

So after that I figured that things can happen at anytime,  and it's best  to double check the house  just prior to the closing. I actually advise two walk throughs- what I call a preliminary the day before, (in case there are any major problems that need time to rectify) and the final walk through just prior to the actual closing. There are a number of  horror stories  for the buyer that were averted by  doing the walk throughs this way, and for that I am proud.  And maybe it takes just a little more time- thats okay with me. I want it done right. Don't you?