How often should your agent conduct a market analysis of your home?

The real estate market changes daily, and certain local, national or even global events can affect your market value.There could be a recent sale that strengthens or even enhances your position in the marketplace, or a recent sale that hurts your possibility of obtaining the price that you and your agent once considered appropriate.

When a bank requests an appraisal (either for a buyer or for a re-finance) the appraiser is instructed to utilize only up to 6 months of prior sales.  So an appraisal conducted last year on your home is not an appropriate analysis for today.  If you look at my market statistics reports, you'll see that  there are changes weekly, and those changes need to be addressed as they pertain to your home's value. So the short answer is AS OFTEN AS NEEDED. That could be 15 days from the time you list your home, or every 30 days that your home remains unsold.

When is it time to reduce the price of your home?

Your home has been on the market for two months. You've had some showings, but no offers. Is it time for a reduction? and how much do you reduce the price to?

You might think to yourself, "well, the market is slower right now, my home is priced fairly- it's just a matter of time and having enough buyers come to see my house. Change your mode of thinking!

I don't care what type of market we're in, if your home does not have an offer within two weeks- a month AT MOST, reduce the price. Buyers flock to a new listing- they are actively looking and any time that something new comes on the market, they will want to see that home if it fits their criteria. Your best opportunity for an offer resulting in a sale comes when your home is first listed.

After that, you just wait for new buyers to come into the market. Your biggest pool of buyers occurs when your home is first listed. The next biggest pool of buyers comes when you reduce the price, and that has to do with two things. Buyers that may have seen your home come on the market  and felt that your price was just a little rich for them and were hoping it might come down, and the buyer pool in your new price range.

As fas ar how much to reduce, here are the hard facts. You may not like it, but here it is. 27 years worth of experience has taught me this much at least. Reduce your home by a minimum of 5% for it to make any dent.

Here's why- A lot of buyers will consider offering 90% of asking price for a home, and they do not feel like it's a lowball offer,- most houses sell at an average of 95% of asking price anyway in our area. If  your house was priced "right on the money",  they would have offered something already by this time. So, reducing your price by that 5% will surely incite someone to make an offer, where you can start to negotiate. No one says that you have to give your house away, and no agent should ever push you into accepting an offer that you are not comfortable with. I know I wouldn't. Just remember,  buyers ultimately determine market value.  

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.

Your real estate transaction in CT and... the bank appraisal

When a buyer applies for a mortgage, the lender requires a bank appraisal.  This is an independent third party licensed appraiser who values your home as a "disinterested party", so to speak. Really , what the bank is doing is protecting their own investment for when they grant   the loan.

The underwriters want to make sure they are giving a loan based upon current market value, and not lending too much money on a property that is not worth it.  The bank appraisal is ona standard form, costs anywhere from$300- $500 and  is paid for by the buyer,  for the benefit  of the bank to ensure that the  property value is in line with what the purchase price for the property and the loan to value ratio.
So  even if a buyer was going ready and willing to overpay for a property, and wanted to obtain a loan from the bank to do so, the appraisal and the loan to value ratio would be deciding  factors in whether the buyer would obtain the loan. So the appraisal is a good thing. It's an unbiased check and opinion of value.

TIP: Buyers, remember,you must ASK the bank for a copy of the appraisal that YOU paid for, or you will most likely never see it. Expect a nominal charge of $5 to $10 for your copy.