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Judy Reed

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If you’re into renovation projects, then updating and revamping your home can be a lot of fun. But before you get too excited about knocking down walls and setting up a custom movie room, you might want to consider resale value. Flashy renovations don’t always yield the best returns, so you’ll need to take care when picking projects.

To make things easier for you, here are four remodels to avoid and four to invest in.

Remodels to Avoid

Luxury Rooms
An indoor basketball court, wine cellar, sauna, or even a movie theater won’t often recoup the high building costs. Luxury add-on rooms are hard to pitch to buyers unless you’re living in an upscale housing market—the average homebuyer won’t be willing to pay for them. Further, rooms that depend heavily on wired electronics, like home theaters, are hard to keep current because TVs and speakers are constantly advancing.

Swimming Pool
The average cost to build a pool is $39,084—a hefty price tag that is seldom recovered once the home is sold. It’s widely accepted throughout the industry that a homeowner will lose money by adding a swimming pool. Homebuyers don’t want to deal with the maintenance cost of a pool (which can cost as much as $2,000 a year), the added insurance premiums, and—if they have young kids—the safety issues.

Gaudy Accents
Though gold-plated crown molding or mosaic-tile backsplashes may feature prominently in your ideal vision for your home, they often turn out to be the average homebuyer’s worst nightmare. Passing fads or niche trends rarely stick around long, so if you miss the brief window when your remodeling choices are in, you’ll end up paying for it later.

Changes Contrary to Area Standards
If you aren’t watching the trends common to your area, you could end up losing a lot of money. A home that totals $600,000 after all the renovations won’t sell in a neighborhood where homes are netting half that price. Likewise, knocking down the walls of extra bedrooms for an open layout won’t be appealing in a family-oriented neighborhood.
Remodels That Pay

Steel Doors
You don’t want to go cheap on a standard front door. At roughly $1,000, steel doors are comparatively affordable, durable, low maintenance and burglar resistant. As an added bonus, the National Association of REALTORS® reports that steel door upgrades show the highest return on investment of any home remodel, at over 100 percent of the cost.

Solar Panels
As the price of solar panels continues to drop, the energy payback on installing them is becoming greater and greater. The average rooftop solar system is now paid off in seven-and-a-half years. After that, panels are a big money-saving asset. A study by the Lawrence Berkeley National Laboratory notes that homebuyers “consistently have been willing to pay more for a property” with solar panels—a premium of around $4 per installed watt, on average.

New Siding
The exterior of your house is the first thing potential homebuyers see, and you want to make the best first impression. This is part of the reason redoing your siding is so profitable. New siding recoups around 80 percent of the initial cost, according to the National Association of REALTORS®, thanks largely to the increased curb appeal and improved energy efficiency it provides.

Broadband Access
Access to broadband speeds is considered an essential utility for today’s connected homebuyer. Research shows that faster internet speeds increase your home value by as much as 3 percent. Homeowners can prepare their homes for higher broadband connectivity by working with area providers to install requisite equipment and wiring. Building out wall ports and cable-hiding baseboards is a good move to attract buyers, too.

Even if you’re not considering selling your home just yet, keep potential selling benefits in mind. Intrepid homeowners know that the best remodels will increase both quality of life and listing price, so take care to invest in projects that will net the biggest returns.

Purchase A Bigger Home With NO MORTGAGE PAYMENTS!

by Judy Reed

​Whether you're housing an elderly relative, a recent grad, or out-of-town visitors, an accessory dwelling unit can be a real asset.

The term “mother-in-law apartment” seems straight out of the Don Draper era — a sardonic reference to strained relations between married couples and parents. These days, many homeowners are turning to these separate-but-joined living quarters as a way to reduce friction in their daily lives, not increase it.

“Mother-in-law apartment” is one of the many nicknames for something known in government circles as an accessory dwelling unit, or ADU. They’re also called granny flats, garden suites, carriage houses and sidekicks. Whatever you call it, an ADU expands a home’s living space through renovation or by adding a separate structure.

The purposes and desired rewards of ADUs vary. You could use the extra space to house an aging family member, an arrangement that offers convenience, peace of mind and an alternative to pricey senior housing.

Got a Boomerang Kid who’s back at home after finishing college? An individual living space can supply some adult-level privacy as he or she figures out a career strategy.

For homeowners without familial obligations, renting out their ADU is a way to earn extra income.

The potential benefits of a mother-in-law apartment are clear. But before you start thinking about floor plans and furnishings, make sure you also have a clear understanding of the work involved

Get ready to spend

ADUs typically fall into two categories: attached (a converted garage or basement, for instance) or detached (such as building a free-standing cottage beside your home). Whichever route you take, be prepared to spend some money and navigate your way through some red tape.

The costs of planning, designing and constructing an ADU can vary a great deal, mainly depending on whether you want to add to an existing home or build from the ground up.

Converting a garage into a separate living space could cost as little as $40,000. Building a detached structure tends to be more expensive, with costs that could approach $100,000 or more. Advocates say prefabricated cottages offer an affordable option, but any ADU is a serious investment.

Think about how you plan to use the unit — as living space for a family member or as a source of income — and spend your money in the way that makes the most economic sense.

What about regulations?

Like any other living space, your ADU will have to comply with local and/or state housing regulations. Fortunately, many urban planners like the ADU concept because it can provide affordable housing options without the negative effects of large-scale residential developments.

In California, some state and local officials have even taken steps to ease restrictions on ADUs. For example, Placer County regulators voted earlier this year to decrease the minimum lot size for accessory units from 10,000 square feet to 5,000 square feet. And State Sen. Bob Wieckowski recently sponsored legislation that includes the elimination of certain fees.

Just like the cost of an ADU, the regulatory landscape can vary by location. Contact your city’s zoning department, or its equivalent, to learn about the requirements in your community.

Protecting your investment

The prep work doesn’t end with blueprints and building permits. You should also make a plan to insure your ADU so that the property and people have adequate protection.

Coverage options may vary by provider and policy, which makes it important to consult with your home insurance agent about questions, such as:

  • Will this unit need its own insurance or will your existing homeowners policy cover it?
  • What are the liability implications of adding an ADU to your home?
  • If you’re renting out the unit, will you need to get landlord insurance?
  • Should you require tenants to have renters insurance to help protect their belongings?

Consider the answers carefully, because they could directly influence your decision.

Don’t forget the due diligence

“Mother-in-law apartment” may have some snarky undertones, but a well-planned and well-executed ADU could seriously improve quality of life for you and your family.

Just make sure that you do your homework — exploring the costs, regulations and insurance requirements — before you start working on your home.

Should I Buy a Home Now?

by Judy Reed

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Pros and Cons of Buying a Foreclosed Home

by Judy Reed

Five years ago, a home buyer could spot a bank foreclosed home a mile away. They were abandoned structures, stripped of all appliances and fixtures, with unkempt landscaping and falling down “For Sale” signs.

Today, banks often renovate their REOs (also known as bank real estate owned) before listing in hopes of selling to end users, not contractors or investors who will capitalize off the bank’s loss.

Banks know the market has improved, and they aren’t as desperate as they used to be. They want to minimize their loss on each sale — not simply sell as quickly as possible. This creates some potential risks and rewards for home buyers considering purchasing a foreclosed home.

To help you make a smart decision, here are some pros and cons for buying a foreclosed home in today’s market.

PRO: They are still cheaper

Today, bank foreclosed homes are typically about five percent below a comparable house in the same location that is not a foreclosure. In previous markets, they were often in horrible condition and about 15 to 20 percent below market.

While many new buyers set out in search of the deal that comes with these sales, many REOs should be left to more experienced home buyers.

CON: Foreclosed homes can be very risky

Even though they are priced higher today, REOs still come with baggage. Many banks will invest money to make the listings look nice and get the prices up. In return, they are less flexible on price and less eager to sell in general.

Behind the scenes, these are still risky sales. You don’t know about the history, and there are no disclosures about leaky roofs, mold or crime. And you are forced to buy the home “as is,” without any recourse if things go wrong.

Investors were once fine with this risk, but they are less interested today because the “deals” are gone.

CON: Many are not in prime locations

Many of today’s foreclosed homes are in less desirable parts of towns or school districts. If you see an REO and the price looks good, remember that it may not be the foreclosure that makes it such a great bargain. It could be location, and you don’t want to get stuck unloading a home in a bad location in a few years. Foreclosed homes in good locations will sell quickly.

CON: Banks aren’t people

Consider that you are negotiating with a spreadsheet. Unlike a typical seller who may care about your situation, your personal background or market history, banks don’t. Your offer is likely submitted electronically and placed into a cell on a spreadsheet for an asset manager to consider. If the numbers don’t work, expect a big rejection. Never get your hopes up.

Buyers today can’t assume that a bank-foreclosed home is a good deal. While you can still find a needle in the haystack, they are fewer and farther between.

Banks want top dollar out of their foreclosure inventory. They are sellers just like anyone else. They watch the market and read the headlines. Foreclosed homes will be priced slightly lower than the market, but they are still as-is, take it or leave it with some risk associated.  

 
 

 

Buying a home is one of the biggest and most important decisions you’ll ever make. Whether you are a first-time buyer, or a veteran homeowner looking to trade up or make a new start, you will inevitably be faced with a number of questions. Your answers will lead you to the home that’s right for you.

One of the most fundamental questions all homeowners face is whether to buy a condo or single family house. There are advantages and disadvantages of each and only you can know what’s right for you.
For Boston newlyweds Michelle and Kevin Millsom, 31 and 36, it was an easy decision. With high-powered financial careers and no children, they were drawn to the excitement of the city and wanted their fingers on the pulse. They bought a penthouse apartment with a breathtaking view of Boston’s famous esplanade and Charles River.
“We enjoy everything the city has to offer—the restaurants, theatre, outdoor concerts. We walk everywhere and find the easy access to the airport to be a plus since we travel frequently for work,” said Kevin. “When we have children, we may think about a house in the suburbs, but for now this is where we want to be.”
Like all things, living in the heart of the city comes with tradeoffs. For the price of their two-bedroom/two-bath condo, they could buy a home three times the size, just a short 20-minute commute away. They share decision-making for their building with fourteen other tenants and pay pricey condo fees to cover the costs of insurance and upkeep. Their car sits idle most of the time in a $300 per month rented parking spot only to leave for short jaunts to the grocery store or visits to see family. But for Kevin and Michelle who want to spend their spare time out and about, the location and convenience can’t be beat.
On the other hand, Adriana Forte, 62, lives in a condo in the Boston suburb of Arlington and misses all that a single-family home has to offer. Six years ago, after her divorce, she bought a “condex,” (a two-family home with a shared wall) with the belief that managing a home would be too much for her alone. But it turned out to be the wrong decision for her. Now, she is desperately seeking a single-family house to call her own.
“It’s difficult to live with neighbors so close,” Forte said. “First there was the noise. My neighbors are night people, and every night they are just getting geared up when I’m trying to sleep. Then I found myself handling 100 percent of the finances and maintenance of the duplex—without compensation. I may as well be living in my own house!” Forte also misses the fresh air and private outdoor space. For her, maintaining a home and garden is pure enjoyment. The privacy is what she misses most.
What is most important to you? Give consideration to the following:
  • Location – Where do you want to be? Are there options for both condos and single-family houses in this area?
  • Privacy – Is it important to you to have complete privacy or do you find close neighbors to be a comfort?
  • Responsibility – Do you need total control over decisions affecting your home or are you attracted to the idea of sharing decision-making with your neighbors?
  • Maintenance – Are you a homebody who enjoys getting dirty in the yard or are you delighted with the idea of never having to cut a blade of grass again?
  • Budget – How much do you have to spend? Depending on where you want to live, a condo may be the only option that meets your budget.
These considerations and others will help you determine the best choice for you now. And just remember, if your interests and priorities change in the years ahead, you can always sell your home and make a move, this time with experience as your guide.

Many homeowners today face a serious housing dilemma. They love their home, its location, and even their neighbors. But they’ve outgrown the space. Do they trade up to a bigger or better house, thus entering a busy real estate market, or stay put and renovate?

Most homeowners have never sold and bought at the same time, nor have they lived through a renovation. Both experiences are incredibly stressful, and many people don’t know what to expect. Here are some tips for making an informed decision.

Know what you’re getting into

It’s helpful to know that it is cheaper to stay in your current home and renovate than it is to sell your home and buy a bigger one. And renovating isn’t as big a deal as one may think.

If you go into it with an open mind and full awareness, it’s not so bad. However, some people are just not cut out for living with dust, disruption, and a little bit of chaos.

Living through a renovation means a constant stress is hanging over you. If you can’t take that in your life, don’t fool yourself.

Check your finances

The most important thing you need to do is understand your home financial situation. Do you have equity in your home? If so, how much, and would you need those funds to either renovate or purchase the new home?

Is a home equity line of credit available to you? Using that money provides the mortgage tax benefit for the interest, which makes an equity line a no-brainer.

What would you need to spend on a new home in your desired location? Just like when you first got pre-approved to purchase the original home, you need to get pre-approved and run the numbers. You may find that the house you can get isn’t much bigger than where you are, or that you have to change areas to get more space.

Define your renovation requirements

What exactly is it that you need? An extra bedroom or bath, more family or community space, a larger kitchen or a master bath? Put it all out there and prioritize.

Can these changes be made within the envelope of your current home, or would you have to expand outside your walls? Renovating inside might mean that you need to leave the home for some time, while an expansion might allow you to stay in the home during the renovation.

Research zoning and building codes

Learn how building and zoning laws will affect your plan to renovate. Find out if expansion is even a possibility.

Many people think that finishing the basement is as easy as putting up some walls and carpet and moving the TV downstairs. But did you know that you likely need two forms of egress or certain height and insulation to make a finished basement meet code? A few hours of an architect’s time can help get you the information you need.

If you want to add on, make sure that your lot is big enough. Town zoning laws only allow a certain percentage of the lot to be covered. If you’re at your max, you’re out of luck.

Set-back laws might mean that you can only expand in the front or on one side of the property. You may find out immediately that what you want to do simply isn’t possible, and the decision is made for you.

Don’t over-do for the neighborhood

You need a master bathroom and family room or some extra square footage, but will the neighborhood support it? You don’t want to be the biggest or best house on the block when you go to sell. A big master suite or designer kitchen may be just what you want, but will future buyers pay for it?

Do some research, talk to a The Judy Reed Team and attend open houses in your neighborhood. If you don’t know, ask. But do not embark on a large renovation project if you can’t get your money back when it’s time to sell.

A different kind of stress if you move

Purchasing a new home and selling your existing one simultaneously means instant stress that is intense and compacted in a short period. The stress may come in the form of carrying two mortgages, getting a bridge loan or waiting for your home to get an offer.

Remember how you felt when you purchased your first home? Now double or even triple that.

Expect the expenses

When you sell your home, you need to pay the real estate commission and transfer tax on the sale, and you may be taxed on any gain. When you get a mortgage for the new home, expect more loan and title fees upfront.

While many closing costs and transfer fees are tax deductible, you don’t realize anything from these expenses. The $10,000 in fees might be better spent toward a new bathroom. Before you decide to explore this path, gather some information about costs.

Deciding whether to trade up or sell and buy is incredibly personal. The most obvious thing to do is to check your finances, and see what is out there on the purchase market. Learn what’s happening and understand how you would fare. And even if it’s intimidating, seriously consider renovating. It is incredibly rewarding to be able to make your home even more custom to you.

Preserve Curb Appeal During Summer Storm Season

by Judy Reed

curb appeal

Along with the natural beauty of summer comes rumbles of thunder, high winds, flashes of lightning and heavy rain —all of which wreak havoc on properties. Wind can completely uproot saturated trees and break branches when summer storms hit. A hazardous tree that is sick or damaged can cost potential homebuyers thousands. Not to mention the severe impact on the landscape—one of the biggest contributors to a home’s value.

Identifying common defects in trees before a storm hits is crucial to preserving precious curb appeal. Homeowners can prevent damage to their property in a few simple steps.

Branch Out 

Look for clear signs of damage. A tree with an abundance of dead branches has a higher potential to be impacted by stormy weather.  Deep splits and cracks that extend through the bark and into the trunk signal signs of severe damage. In advanced stages, decay, wood cavities and cankers can create hazardous conditions. Weak branch unions that are fused by bark also signal declining tree health.

Poor Architecture

When it comes to stormy weather, heavy tree canopies act as sails that catch wind. Branches and heavy limbs could barrel toward the home if not properly cared for. Poor tree architecture is characterized by excessive leaning or branches growing out of proportion with the rest of the crown. Odd growth patterns may indicate general weakness or structural imbalance.

Get to the Root of It

Without a strong root system, trees are more likely to blow over in stormy weather. Look out for nearby construction that may sever large roots or compacted soil that doesn’t allow for healthy root growth.

The solution to keeping happy and healthy trees is simple: proper care and tree maintenance. Regular pruning thins the tree canopy, allowing wind to blow through it instead of against it. Pruning also removes potentially hazardous dead or weak branches.

Landscape inspections are crucial when it comes to increasing curb appeal. Schedule a consultation with a certified arborist to evaluate tree species, soil conditions, wind exposure, defects, overall health, and to determine a tree’s hazard potential.

4 Ways to Tell How Fast Your Home Will Sell

by Judy Reed

for sale

It’s not just location, location, location — although location is certainly important. Lots of other factors make one house hot and another one not.

Here are data-driven pointers from Zillow Research that help identify which homes are likely to fly off the market (in 60 days or less):

  • Keep calm and price it right. The housing market is improving, but take care not to overheat your listing price. Homes priced more than 12 percent above their Zestimate® home values are almost half as likely to sell in 60 days as those priced closer to their estimated values. The sweet spot is between the Zestimate and six percent above it — a range where homes sell about as quickly as those priced below their Zestimates.
  • Take a picture, but not too many. The optimal number of listing photos is 16 to 21, but it’s better to have too many than too few. Having fewer than nine photos lowers your chances of selling in 60 days by two percentage points.
  • Size matters. As a rule, smaller homes (under 1,100 square feet nationally) sell the fastest — about nine percentage points faster than the largest homes in a 60-day window — but that doesn’t hold true for all markets. In San Francisco and Indianapolis, for example, small homes take the longest to sell.
  • Get the word out. Page views on Zillow are a strong indicator of how quickly a home will sell. Listings with 280 or more page views in the first week were three times as likely to sell in 60 days as those with fewer than 100 views. That’s powerful incentive to make sure your agent spreads the word early by posting your listing online.

Feeling Like Packed Sardines?

by Judy Reed

Displaying blog entries 1-10 of 53