It's a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.
A kitchen is the heart of a home. This is true all across the globe. The old saying that the "stomach is the way to the heart" carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It's the room where we nourish our bodies and our spirits.
Kitchens are integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms. It's because of this that kitchens play such an important role in the buying and selling process.
This one room is the showpiece of the house. You'll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It's not just a new layer of paint.
Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren't willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.
What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.
The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won't find a buyer.
Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions' kitchens look like.
Do area homes have new solid wood cabinets and granite counters in today's designer colors? You'll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?
Are you in a higher-end neighborhood? It's time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don't want to put in the time yourself to make upgrades then you'll have to make concessions in the price.
Don't become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.
The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.
What does your home inspection cover? And who is liable if a problem develops down the road? We'll answer these questions in today's outlook.
You need an inspection on any property you are buying, regardless if it's old or new construction. An inspection is like a check-up for your house.
What repairs will need to addressed now and what might need to be addressed later down the road? This is what you have answered during an inspection.
Having an inspection done prior to signing a contract allows you to negotiate your findings into the deal. Does the roof need replaced? The seller may give an allowance to pay for the repairs. If you don't ask, you'll never know!
Perhaps you've fallen in love with a fixer-upper and are dreaming of doing the repairs yourself. If the inspection discovers hidden damage and costs, you'll be given the option to keep looking for a more suitable house.
Keep in mind, however, that simply because a house needs repairs doesn't mean you shouldn't purchase it.
Nearly every house will have a list of repairs that need to be done to get it "shipshape." It is your decision to choose how much you are willing to spend and how much work you are willing to do.
A home inspection varies depending on what type of property you are interested in.
According to the American Society of Home Inspectors (ASHI), "the standard home inspector's report will cover the condition of the home's heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components."
There are limits, however, to what a home inspection will cover. They aren't required to identify conditions that are concealed or are considered latent defects.
That means if personal property, plants, snow, or debris is covering an issue, the home inspector isn't require to move those items to inspect it and isn't liable if he misses it. They aren't require to make determinations on systems that aren't readily accessible.
And they aren't required to note the presence of potentially hazardous plants and animals. That includes "wood destroying organisms" or even molds.
This means you should find a home inspector that you trust. The ASHI recommends you choose from their list of licensed professionals. "ASHI members know houses, ensuring that you can find a home inspector. They are trained to objectively communicate to you, the home inspection buyer, what the house has to say. ASHI members have demonstrated technical proficiency and report-writing skills, and they have committed to continuing education in order to achieve and maintain their member status."
Having a trusted inspector means that most every problem that can be identified, will be. And inspection is about peace of mind, and a good inspector gives you that.
Today's buyers are looking for turnkey homes. That is, they want to move right in without having to do a lot of work. Buyers with busy lifestyles pay a premium for listings that are in prime condition. Staging can make the difference between a listing selling or not, the time it takes to sell, and the ultimate sale price.
Sellers who are financially strapped often have a hard time accepting that they'll need to invest in preparing a house for sale even though they may sell for less than they paid. Fix-up costs can mount up; your agent can help you prioritize so that you don't waste money. It's important to keep your goal in mind, which is to sell your house in a difficult market.
Recently, a home in Piedmont, Calif., an affluent city neighboring Oakland, came on the market in "as is" condition. It had been lived in for decades without much upgrading. Although located in a desirable area, the listing was vacant, dark and showed poorly. The sellers refused to do any work to improve its appeal.
After months on the market with no significant interest, the sellers pulled the house off the market and made improvements. The wall-to-wall carpet was pulled up to reveal hardwood floors that were then refinished. Painters lightened the interior and a professional stager was hired to bring in furniture, artwork, house plants and accessories. The listing was put back on the market with a fresh look and sold right away.
HOUSE HUNTING TIP: Although listings staged by a good decorator show well and often sell quickly, you don't need to spend a lot to put your home into shape for marketing. Most homeowners have too many personal possessions in their home from a sale standpoint. Decluttering is something most sellers need to do.
This can generate uncomfortable emotional responses. One seller, who was cleaning out the family home of 50 years, found a packet of love letters his father sent to his mother. Of course, he had to read all of them, which delayed his fix-up schedule.
Consider hiring someone to help you sort, pack, donate and recycle items that you no longer want. You may be able to take a tax deduction for things you donate. Make sure to get a receipt. Your real estate agent should be able to recommend someone who can help you clear your house of clutter if you are overwhelmed by the project.
Your agent, or stager, may ask you to put away collections of art, personal photos, etc. This can be difficult for most sellers because, for them, it's part of the emotional appeal of their home. Your house won't look like your home after you've removed personal possessions and moved what's left around to display the house to its best advantage.
That's the point of the preparation process. You don't want prospective buyers focusing in on your personal property; you want them to focus on the house. Keep in mind that how you live in your home and how it should look when it goes on the market are not the same.
Some sellers complain that their house looks too stark without all their possessions. Even so, it helps you to detach yourself emotionally from the property. Also, less personal property usually gives homes a more spacious feel. When buyers are looking for the most for their money, bigger is usually better.
To close the deal, a listing should be spotless and inviting. Bring in new house plants to put in strategic locations, like orchids in the bathrooms. In dark spots that need a dash of warmth and color, use bromeliads.
THE CLOSING: If you can't pull this together yourself, or with the help or your agent, hire a good stager for a consultation or a proposal for full or partial staging.
Staging pro Sharon Brown with Homescapes by Design in Roseville, Minn., offers her clients a checklist before they list their home for sale. The point of the checklist is to make sure the home is show-ready before the for-sale sign goes up and the first potential buyer walks through the door, and even before photos are snapped for the MLS.
The following are the changes Brown most recommends to her clients in getting a home ready to list:
1. De-cluttering and removal of all personal pictures and items. Have the buyer to see the space as something they could own. Too many personal items crowded in a space makes that a challenge for buyers and clutter can detract from the features of a home.
2. New neutral, good quality rugs.
3. Re-painting several rooms into neutral colors, if needed.
4. Replacing and updating lighting fixtures.
5. Make any small repairs (or big ones if needed).
6. Purchase of matching appliances in the kitchen for a cohesive, finished look.
7. Update major furniture (furniture can be rented for the duration of the sale).
8. Move furniture to show the rooms to their best advantage, including moving very large furniture out of rooms to give them a more spacious feel
9. Incorporate decorative details that help give the home an inviting, finished feel. See the before and after photos below.
Before: Over-cluttered family room, with outdated furniture
Photo Credit: Florida High Performance Green House, www.flgreenhouse.com
After: Staged, de-cluttered room with more updated furniture.
Before: Overloaded kitchen counters and dated decor
On October 31, 2011, in Breaking News, Mortgage Financing, by Robert Freedman, Senior Editor, REALTOR® Magazine
Well, there’s at least one big Wall Street banker that’s betting on the United States becoming a “rentership” society: Morgan Stanley.
The company released a report just a few weeks ago saying now is a great time for institutional investors to snap up distressed single-family homes and turn them into long-term rental units. The company says the properties don’t compete with the classic apartment rental property, so investors don’t have to worry about cannibalizing their multifamily rental investment portfolios to take advantage of the huge opportunities in single-family rental property ownership. What’s more, Morgan Stanley doesn’t see this shift to rentership as a temporary waypoint while the country sorts out its housing problems; it sees this as a fundamental shift in how the United States will define itself into the future.
“America is moving away from a home ownership society and towards a rentership society,” the company says in its report.
To emphasize the point, one of the report’s authors, Oliver Chang of Morgan Stanley’s Housing and Securitized Products Strategy division, said in a video interview (above, after a 30-second commercial), “This is really the first time in history where there’s an opportunity for institutions to own single-family rental properties as part of a larger asset allocation strategy.”
The reason for the shift to rentals, according to the company?
■Home price declines: not only are millions of homes available to investors at deeply discounted pricing but the low prices are changing consumer attitudes on housing as an investment
■Hurdles to buying: down payment requirements, higher FICO score thresholds, and income verification are making it harder for households to even consider buying
■Costs of ownership: without home price inflation, costs like property taxes, home owner association dues, maintenance and repair make ownership less attractive
■Demographic effects: Gen Y growth is heading up while baby boomer households are downsizing
■Unemployment, labor insecurity and mobility: long unemployment durations make labor mobility (and thus renting) more important
Morgan Stanley says the U.S. home ownership rate, which has fallen to about 64 percent from close to 68 percent at its peak, is really closer to 60 percent when you factor in home owners who’ve stopped paying on their mortgage and only remain in their house because the bank hasn’t finished processing their foreclosure yet. Once these cases make it through the system, they’ll move to the renter side of the equation.
When they do move to the other side of the equation, they’ll become renters of single-family houses, not of multifamily apartment units. That’s because these households, which tend to be a little older and often with children, want a single-family house in the suburbs, not a unit in an apartment building in the city. So, these households will be providing a big share of the demand for single-family rental houses into the future without necessarily adding demand to apartment rentals in the city.
To be sure, many of these households might like to buy again rather than rent given the historically low interest rates and deeply discounted home prices, but the reality is that many of these households simply can’t pass the credit score threshold. Financing is hard to get for the most creditworthy households today, so for credit-impaired households, renting is the only option.
Morgan Stanley projects some 7.5 million more foreclosures over the next five years, what it calls “liquidated” houses, providing a golden opportunity for institutional investors to snap up properties for their portfolio and get into the long-term single-family rental business.
If the company is right, then this is a great opportunity if you work with institutional buyers of real estate, whether on the buying, selling, or property management side. You have tons of inventory coming onto the market to sell to big buyers who will turn these into long-term rentals.
But you might also challenge the company’s basic premise. Is the American Dream really transitioning into a “New Pragmatism,” as the company calls it, under which rental housing is the way of the future?
The fact is, if lenders simply dialed back their underwriting requirements to the sound policies they used before the housing boom, home sales would pick up, inventories would shrink, prices would start heading up in more than a few markets, and that 7.5 million in foreclosed houses Morgan Stanley predicts over the next five years will be a smaller number. And those that want to rent can rent and those that want to buy can buy rather than having to rethink their priorities in a new rentership society.
In any case, a survey that just came out today from Meredith Corp., one of the biggest magazine publishers in the country, finds that home ownership remains all-important to most households. Some of its findings:
■86 % of homeowners polled still feel owning a home was a good investment.
■85 % say they feel, “owning a home is one of their proudest accomplishments.”
■Of Americans that don’t currently own a home, 69 % agree, “No matter what happens in the U.S. housing market, owning a home is still an important goal in my life.”
The Morgan Stanley report is called “Housing 2.0: The New Rental Paradigm,” and it’s dated Oct. 27, 2011. If you can’t find the report or a summary, you can hear Oliver Chang talking about it in the video above although you have to watch a 30-second commercial before the video comes on.
Just a Reminder- Don't forget to Turn your clocks back tonight!! Turn your clocks back one hour at 2:00am (or before you go to sleep).
... One more hour, WHOO HOO!!
That's one extra hour of sleep!
One extra hour of partying!
One extra hour of facebooking!
One extra hour of reruns!
One extra hour of time to work!
One extra hour before that paper is due!
One extra hour before it's Monday!!
So ENJOY your one extra hour, whatever you may be using it for =)
