What if your dream home just happens to have ancient wiring and a cracked foundation?
So you’ve set your sights on a home that, to put it mildly, needs a little repair work. The stairs are creaky, and you’ve noticed a leak (or three).
Still, your mind is made up. What’s a love-struck home buyer to do?
If your heart is set on a fixer-upper, this advice from real estate experts can help you make that “needs-work” house a home.
Check the zoning
“Any municipality has zoning districts, and you need to know what uses are permitted,” says George Vanderploeg, a luxury real estate broker with Douglas Elliman in New York. Knowing the zone is important because it will tell you what you can and cannot do to the home.
For instance, when interiors photographer Josh Gibson decided to renovate his 19th-century cottage in Beaufort, SC, he had to contend with the historic district landmarks commission, which required hours of research and visits downtown. Among the many requirements he had to adhere to were installing single-pane windows and maintaining the home’s unique brick-pier structure.
To research your prospective home’s zoning requirements, you can visit its municipality’s website, or arrange to meet with a staff member, who can walk you through the legalities.
Bring in a home inspector
Once you’ve made a verbal agreement to buy the house and are waiting for the contract to be drawn up, you’ll want to hire a home inspector.
A home inspector will look for structural issues and advise you on things that may or may not need to be replaced, such as plumbing, electricity, and roofing.
Your broker can refer you to an inspector, but it’s important that this person not be biased, as you’ll need an objective opinion. With this in mind, Vanderploeg advises finding someone who will work for you — not for the broker or seller.
Be sure to set aside about an hour or two to walk through the building with the inspector and ask questions. “This allows the buyer to get to know the house really well before they buy it,” Vanderploeg says.
Home buyers tend to ask questions about asbestos and termites, but Hal Einhorn, the principal inspection consultant for Old House Inspection in New York, says it’s equally important to ask about the “general age of certain systems,” as those will indicate when they’re nearing replacement. A 26-year-old boiler, for instance, is likely to go kaput soon, whereas a newly-installed air conditioning unit probably won’t be a problem for the next 20 years.
Depending on the home’s location, you may also want to ask about issues specific to its region, Einhorn says. In New York City, for instance, where the water mains tend to be dated, you’ll want to clarify that the one in your coveted home isn’t made out of lead.
And with today’s families using more electricity than ever, you’ll need to find out if the amount of power coming to the house is suitable, or needs an upgrade. Doing a little research online can be helpful.
Another important topic to bring up is any work you’re preparing to do, like upgrading the bathroom or turning a one-bedroom home into a two-bedroom, Einhorn says.
Find out the agency requirements, and if the home is in a landmarked district, make sure you know the ramifications. Will your project require filing documents, and if so, what is the process?
Hire an architect and/or contractor
Hiring an architect is important because you’ll want their take on what you can do from a design perspective, says Vanderploeg.
The architect will also be able to point out the home’s load-bearing walls, which will determine whether they can be moved around or not, says Scott Oyler, a broker with Coldwell Banker in Cincinnati.
When hiring a contractor, be sure to do your homework so you find someone you can trust. “I’ve heard of horror stories where contractors left in the middle of the job and never came back,” Oyler says — so make sure your crew has good references.
Also be sure to recruit more than one, he adds, as you can never have too many opinions.
Research tax incentives
Depending on where you live, you may eligible for a tax abatement, a tax credit for homeowners who improve their property’s value, Oyler says.
Philadelphia offers one; Cincinnati does, too. Check to see what’s available in your area.
If you decide to buy and improve a fixer-upper, have patience. Once the sawdust clears, you may just find the home of your dreams.
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Find out if teaming up to buy a second home is right for you and your pals
Given the current strength of the dollar abroad and the fast-moving real estate market at home, you may be thinking about buying a second home at your family’s tried-and-true vacation spot, on a sunny beach, or near your favorite ski destination. But what can your budget realistically get you?
If what your vacation-home fund allows is more fixer-upper than dream home, going in on a purchase with friends or family could be a great way to get much more home for your money. If you’re considering going this route, here’s how to get started.
1. Decide if it’s right for you
“The number-one reason to consider buying a house with friends is that it lowers your investment amount,” advises Bryant McClain, director of sales and marketing at Itz’ana Resort & Residences. “Unlike timeshares or fractional ownership opportunities, when people go in together and buy a property at market price, they enjoy the equity gains of the traditional real estate market.”
McClain also points out that the best candidates for shared property are those who want to use the home a few weeks a year, then rent out the home the rest of the time. (Just be sure you’re correctly set up to do so.)
Owners also have to be comfortable sharing ongoing expenses, like property management fees, utilities, insurance, and repairs.
2. Lay the legal groundwork
To protect all owners when the unexpected happens, and to avoid hurt feelings and strained friendships, McClain recommends hiring an attorney to set up an LLC, then purchasing the home through that company.
“Owning a property with friends or family is all fun and exciting on the front end, but what happens three years later when somebody wants out?” says Bryant.
Your attorney can draft an operating agreement that clears up expectations on everything from how utilities are shared to how a buyout would work if one owner wanted to sell and the others didn’t.
3. Start searching
Keep in mind that the vacation-home market moves quickly, and with multiple stakeholders needing to agree that a property is the one, it’s best to decide on your shared criteria before you start looking.
This is especially important if you’re searching from afar or if one person will be doing most of the home touring on behalf of the group. That way, when you find the right home, you can put an offer together quickly.
“Treat the whole transaction like a business,” suggests Bryant. “Make a spreadsheet with potential homes, list pros and cons, and ask everyone to vote — that’s where having an odd number of owners comes in handy.”
You should also enlist a local real estate professional with expertise in the destination where you’d like to buy. That person is best qualified to help you identify homes that are a good value, that will perform well in the local vacation rental market, and that are in locations likely to appreciate.
There’s plenty of legwork between “Hey, maybe we should buy a home together” and signing on the dotted line, but if you find the right people to partner with, approach it like a business transaction, and act quickly when you find the perfect home, you’ll be sitting back and enjoying your dream home before you know it.
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Follow these 10 tips to make the home-buying process a happy one.
The arrival of spring means it’s time to start fresh. Along with pulling out your warm-weather wardrobe and tackling spring cleaning, you may have a bigger project on your to-do list: buying a new home.
Before you start on your home-shopping journey, check out these 10 home buying tips to save you both time and money.
Find the right agent
Real estate expert Joe Manausa says the key to happy spring home buying is finding the most qualified agent to guide you through the process.
With reviews available at your fingertips, finding a real estate agent you trust can be easy — provided you take the time to do some research.
Check for agents with the best reviews, and give them a call. They’ll relieve some of the pressures of home buying, and walk you through all the necessary steps.
Sure, the three things that matter most in real estate are “location, location, and location.” Nonetheless, some buyers end up purchasing a home in a location that’s not right for them, simply because they make their choice for all the wrong reasons.
“They’re looking at a house in the wrong area or the wrong school district, but they buy it because they like the kitchen,” Manausa says.
Use the new open house
The internet has completely changed the home-buying process, making it easier to choose which homes to go see in person.
With 3-D tours available on the web, buyers can tour a home from their mobile device or a computer. Home buyers use online resources during their home search.
Buy a home, not a project
Buyers who purchase a fixer-upper can end up spending the same (if not more) than they would on a new home.
“When buying a home, pay close attention to the ‘bones’ … and avoid getting caught up in the cosmetic features,” advises Dan Schaeffer, owner of Five Star Painting of Austin.
If the kitchen cabinets are in good shape, but you want the space to be brighter, adding a fresh coat of paint is easier and less expensive than replacing all the cabinets.
Ka-ching! Be a cash buyer
Sellers are more likely to choose the buyer who already has money in hand over an offer that’s contingent on a mortgage loan.
But if you can’t pay cash, getting pre-qualified for a loan can help the seller feel more confident that you’ll be able to secure financing.
Avoid disaster — get a warranty
The last thing you want after buying a home is for something to go wrong. You protect your car, so why not your home? Manausa recommends purchasing a home warranty: “[They’re] very affordable, and cover all the things that go wrong.” Your wallet will thank you.
Make inspection time count
Small problems eventually turn into big problems. The wood could rot, drains could leak, or the electrical panel may not be up to code. “Hire experts, and always get your home inspected,” adds Nathanael Toms, owner of Mr. Electric of Southwest Missouri.
If the inspection reveals issues, be sure to deal with them effectively. For example, “it’s very important that a licensed electrician makes sure all circuits work properly,” say Dana Philpot, owner of Mr. Electric of Central Kentucky.
Put safety first
No matter the neighborhood or the home, your family’s safety should always be the number one priority after purchasing a home.
“Even if the previous owner promised to return the copy of every key, it’s always a good idea to change the locks throughout the exterior of the home,” says J.B. Sassano, president of Mr. Handyman. “If the house has an alarm system, remember to change the code — and don’t forget the garage door.”
Fix common repairs
Repairs may come in the form of patching up small nail holes or weatherproofing electrical outlets. Whatever the need, Schaeffer recommends fixing the repairs before moving in your belongings. “An empty house is easier to maneuver and clean,” he says.
For bigger jobs, find a professional to complete the repairs. Sites such as Neighborly can help you find home services providers.
Add the finishing touches
The best part about buying a new house is making it a home. Change the color of the walls, update the lighting, or add a more personal touch with a photo gallery wall.
“It’s important to find the right gallery layout by measuring the wall space, which determines the size of photos you can use,” Sassano says. “Lightweight frames are the safest option, especially when hanging on drywall.”
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Once you've got the basics, it's time to do a little more digging.
Nearly every home search starts online these days. Sorting through listings, photos, floor plans and descriptions is a great way to feel out the market for those who are in the earliest stages of the home search.
When you find a home you’re ready to bid on, it’s incredible how much background information you can find online. The Internet is full of data on past home sales, recorded sales prices, and the history of each sale, plus information that may not be as obvious — such as the safety of the neighborhood you’re considering buying into.
Here are three ways to use online tools and real estate mobile apps to get more details about the home you want.
Check building records
Nearly all public information and documentation is now available online, and most municipalities provide web access to building permit history. Although the law requires most sellers to disclose previous work done on the property, there may be a history of earlier work the seller didn’t know about.
For example, if there is a newer bathroom or kitchen but no history of a permit for the work, there is a chance someone did the work without a permit — and potentially not to health or safety code. And if you become the owner, this unpermitted work becomes your responsibility.
To begin your search, type “building records,” plus your city’s name into your favorite search engine. Example: “building records Seattle.”
Use Google Street View
Researching an address using Google’s Street View can be one of the most revealing options available. Street View provides a snapshot of a property at a particular moment in time, which can provide insight into the recent history of the property or neighborhood.
Be aware, however, that the image you see may not accurately reflect the home’s current state. For example, I helped a homeowner list and sell a home in San Francisco’s Lower Haight neighborhood a few years back. We planted a beautiful garden area to create a buffer between the sidewalk and the windows. But a search for the property on Google Street View revealed the windows with bars on them, and no garden. The previous owner had bars on the window, and someone had removed the bars to make the property look more inviting.
Seeing the windows with bars on them in Google Street View could raise questions for potential buyers: Is the neighborhood unsafe? Was there a history of crime in the community or on the property? Are the street-level windows safe?
Consult a neighborhood crime app
A variety of crime reporting apps for mobile devices show on a map recent crimes that have been reported, including assault, theft, robbery, homicide, vehicle theft, sex offenders, and quality of life (which often means noise complaints). It’s an easy way to get a quick overview of how safe or unsafe a neighborhood is.
So much information is available to buyers these days. You don’t need to rely solely on the seller’s or the real estate agent’s disclosures. Use online resources to find out as much background information on a property as you can, either before making an offer or during your contingency period. It is best to do as much research as possible, in order to make an informed final decision.
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Save some room in your budget for expenses after move-in
By the time you get the keys to your new construction home, you might feel stretched thin in the finance department. From earnest money and design center upgrades, to closing costs and moving expenses, buying a brand-new home is never cheap.
As you take a look at the costs on the horizon, it’s wise to look a little past your closing date. There are a few post-closing costs that are unique to brand-new homes and some that are familiar to all new homeowners.
Set aside a little money for these expenses now, and it’ll be smooth sailing once the “sold” sign is out front.
Unless you’ve negotiated a washer and dryer into the price of the home with your builder, your new laundry room will likely be a big empty space when you move in — no washer and dryer to be found.
Many builders don’t include a refrigerator either, opting instead to let homeowners choose a style that suits their needs.
Here’s a tip to ease your wallet woes: Start shopping appliance sales once you know your approximate close date. Many appliance stores will let you purchase ahead of time to take advantage of a good price, then delay your delivery until you move in.
If you’re upgrading to a larger home, your utilities will likely increase, especially heating and cooling. And if you’re moving to a new city or a location with a different utility company, you may have to pay a deposit to start service.
If you’re interested in services like cable, satellite TV, or Internet, you may have to install some equipment that would already be installed if you were buying a pre-owned home.
Look at all those big, beautiful windows in your new home! And then notice that they’re bare — no blinds or curtains in sight.
Most new homes do not come with window coverings, and they’re definitely something you’ll want to quickly look into when you move in. There are better ways to introduce yourselves to the neighborhood than through wide-open windows — or bed sheets pinned up for privacy.
There’s nothing more exciting than picking up some great new furnishings and decor for a brand-new space. You may have pieces that worked well in your old space but don’t fit your new home’s layout.
Or maybe you have a new guestroom to furnish, a deck that is begging for patio furniture, or beautiful hardwood floors that need area rugs. Set aside some money now so you can start decorating right after move-in day.
Did you know that some builders only landscape the front yard, leaving the backyard unfinished and unfenced? And, if your new neighborhood has a homeowner’s association, the rules may require you to finish your yard within a certain time period.
That means you foot the bill for landscaping your new home’s yard, and whether you do it yourself or hire a professional, it’s still an expense you shouldn’t overlook.
Setting foot in your brand-new, just-finished home is an exhilarating experience, and something you won’t soon forget. With just a little planning and saving in advance, you can spend more time making your new house a home, and less time stressing over how you’re going to pay for it all.
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Shopping for a home has evolved over the years. Here's what you need to know about the new generation of buyers.
For years we’ve seen the shift in Baby Boomers ditching their large suburban homes for the excitement of urban life. And we’re noticing the reverse from millennials: leaving behind small spaces along with the hustle and bustle of the city.
They’re open to a new world of suburban living, with single-family homes, more storage and closet space, and some outdoor space all their own.
These millennials, born between the mid ’80s and the late ’90s, came of age in a shifting cultural and social environment. Their experiences aren’t the same as their Baby Boomer parents, and as such, their preferences differ from those of their parents, who bought a generation ago.
Here are some real estate considerations to help you sell to millennial buyers.
Millennials are busy
Today’s young people work long hours, and they want to spend the free time they have with friends and family.
They’re also more transient than their parents’ generation. So, when it comes to real estate, many of them seek turn-key homes for quick and easy move-in. They can’t fathom taking the time to undertake renovating a bathroom or kitchen.
No matter how great the opportunity, many of today’s buyers aren’t interested in painting or “making it their own” as our parents did when they moved into homes they planned on living in for 30 years or more.
Home searching is like dating
Millennials grew up attached to their phones. They hail a car and order food with their fingertips. And now, instead of meeting at a bar, they date with their thumbs. Swipe right for the potential mate, or reject them by swiping left.
When it’s time to buy a home, their experience is much the same, thanks to smartphones and real estate apps. As a home seller, you and your agent must invest an incredible amount of time and money on your home’s photo shoot. If you don’t, you may never get a first “date” with your prospective suitor. If the buyer isn’t drawn to your photos, they’re on to the next place.
Bigger is no longer better
In the ’80s, a McMansion with quadruple master closets, oversized Jacuzzi tubs, formal rooms, and large basements were a sign of success, and coveted by home buyers.
Today, millennials want smaller and simpler homes on smaller parcels. Bigger houses or any land more than half an acre equals more work and maintenance to these first-time buyers, accustomed to the easy life.
You can’t make your home smaller, but if you are serious about selling and want to account for this trend, your price will need to meet the market.
Location matters more than ever
Millennial buyers want the urban experience, as best as they can get, in the ‘burbs. This means homes that are walking distance to a village or town, near the train, and in bustling neighborhoods are among the most popular.
While being away from town, secluded, and with more land was a status symbol in the ’80s, it’s a deal killer today. Unfortunately, you can’t move your home to a better location — but you can adjust your price to meet the market.
If you’re a Boomer selling a long-time family home now or in the future, and the millennial is your potential buyer (think: customer), you need to adjust your mindset to meet theirs. You can’t assume that anything related to your original home search applies today. Get ahead of it, or your home may spend many months (or even years) on the market.
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