Misguided house makeover

house makeover
House Makeover (Infographic by Allianz Australia Home Insurance allianz.com.au)

Do you really need to spend money to make money?  Deciding what renovations and updates to make prior to your home sale can be tormenting.  It’s easy enough to say that your home needs a facelift; but, the repairs, updates, and painting costs money – and usually lots of it.  The suggestion of making renovations and updates to your home before you sell is everywhere, it’s on TV, the internet, and magazines.  And if you ask friends and real estate agents, they will also give you a list of “must do’s.”  Regardless of how you decide to do a house makeover before the sale, chances are that you’re not doing it right.

There is no doubt that many home buyers are looking for a turn-key home.  If your home is not “out of the box brand new,” you probably need to freshen it up, as well as make some repairs and updates.  But before you embark on the house makeover by making those renovations, you need to ask yourself two important questions: “How much money can I realistically allot for a makeover?” and “How much am I expecting to net from my home sale?

Does a house makeover really get you top dollar? Spending money on renovations will certainly make the home sell faster, but not necessarily make you more money.  And there is no guarantee that the house makeover renovations you make are to home buyers’ tastes.  So if you’re goal is to get top dollar, don’t look at the sale price.  Instead keep your eye on your estimated net (the amount you’re left with after the sale minus total renovation costs).

Of course, the best way to maintain your home’s value is to perform regular maintenance.  It would certainly make the home prep easier too!  But the reality is that many home owners defer maintenance until they feel it’s absolutely necessary.  Deferring maintenance can actually cost more in repairs down the line, and lower your home sale price.  Spending money to correct all the years of neglected repairs and updates prior to the home sale won’t necessarily get you top dollar.

Not all buyers are looking for renovated homes.  One of Stephen B. Billings conclusions in his recent research (Hedonic Amenity Valuation and Housing Renovations; Real Estate Economics; Fall 2015, 43:652-82) was that during the past “healthy” housing market, there was a balance between renovated and non-renovated homes that sold.  However, he also found there was an increase in renovated home sales during the housing downturn of 2007.

Selling your home “as-is” would certainly decrease your sale price, but could net you the same or even more if weighed against extensive renovations of the house makeover.  Consider that you would only recoup a fraction of the cost of a minor kitchen and bathroom remodel; which averages about $20,122 and $17,908 respectively (according to 2016 Cost vs Value Report; remodeling.hw.net).

Concentrate on the basics of decluttering first. Decluttering can make your home look different and feel larger.  Decluttering can set the stage for fo you decide on renovations, and maybe even home staging.

If you decide on freshening up your home before the sale, start with the basics.  Focus on deferred maintenance, and make necessary repairs.  Consider a fresh coat of paint, and maybe new carpets.  Wood floors don’t necessarily have to be replaced or sanded; flooring professionals use state of the art processes to “renew” wood floors.

If you decide on a house makeover, focus first on making repairs and freshening your home. Work out a budget and get several quotes from licensed contractors.  Don’t automatically go for the cheapest quote, even if you’re on a tight budget.  Focus on quality, even if it means limiting the scope of work.  Poor workmanship can sabotage your home sale by making your home look shabby and in need of additional repairs and updates.

Copyright © Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

After the blizzard home maintenance

home salesThe warm weather that occurred early in the season probably gave many of us a false sense of security, such that we may have put off the pre-winter inspection. The good news is that it’s not too late; and you should check out your home’s roof, gutters, and the surrounding grounds after the blizzard – even if you’ve already conducted a pre-winter inspection.

The blizzard of 2016 dumped a lot snow, and I’m sure you’ve heard about the collapsed roofs. Even if your roof survived, the stress of the accumulated snow may have caused damage that you won’t see unless you inspect the roofing system (including joists and beams). If your roof is already compromised, the amount of snow or ice it can handle is significantly reduced; and can push it toward failing when you need it the most. Don’t think that your home is immune from such damage; I have experienced home inspections that uncovered a cracked roof truss in an otherwise pristine home.

home maintenance
From the Insurance Institute for Business & Home Safety (disastersafety.org)

According to the Insurance Institute for Business & Home Safety (disastersafety.org), the average residential roof is designed to hold 20lbs per square foot of snow; beyond that, the roof system becomes “stressed.” Ten to twelve inches of fresh snow is estimated to apply about 5lbs of stress. And given the equation, the Institute says that an average roof in good condition should be able to withstand the stress of up to four feet of fresh snow. “Old” (compacted) snow and ice applies more force than fresh snow, and should be monitored closely in multiple snow events.

Another source of roof and gutter problems during and after a blizzard stem from ice dams. An “ice dam” is formed by the melting and refreezing of snow (or ice). When an ice dam forms on the roof and/or gutters, the expansion of the ice can loosen shingles as well as create gaps in gutters. Damage from ice dams formed during the blizzard has the potential for future damage from heavy spring rains. Loose shingles and gapped gutters can allow water to penetrate the home via ceilings and walls, in addition to allowing roof water runoff directly towards the home’s foundation.

Inspecting your home after a severe weather event can help identify maintenance issues and prevent future headaches; and in some situations, may uncover an urgent safety issue. FEMA’s 2013 Risk Management Series-Snow Load Safety Guide (fema.gov) lists warning signs of an “overstressed” roof to include (but is not limited to): any sagging of ceiling; sagging sprinkler lines or heads; popping, cracking, and creaking noises; sagging roof members; bowing truss members; doors and/or windows that can no longer be opened or closed; cracked or split wood members; cracks in walls; and/or severe roof leaks. If you observe any of these warning signs, FEMA recommends evacuating the home and consulting a structural engineer to inspect and assess the structural integrity of the home.

The amount of snow that a blizzard delivers can saturate the grounds surrounding your home; and if not drained properly, the ground can become supersaturated during spring showers (which can become a flood risk). Once the snow has melted, check the surrounding yard and remove any debris and downed trees that can impede proper drainage (which can also be a hazard during high winds). Make sure downspouts are secure and functional, so as to deposit water away from the home’s foundation.

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Real estate horror stories question the limits of seller disclosure

real estateProperty disclosure laws are mostly straightforward about making known the physical condition of a home that’s for sale. However, whether or not to disclose other material facts, that may include events that occurred in and around the home, is not always clear. Material facts about a home are often described as information that may sway a home buyer’s decision about the purchase or purchase price. Some of the more familiar material fact cases that are typically reported in the news include haunted homes and unruly neighbors. Yet, these two recent accounts have again raised the question and debate about what the seller and the real estate agent is obligated to disclose.

Sounding like a plot of a horror movie, it is the real estate horror story of a New Jersey family. Philadelphia’s WPVI-TV (New Jersey family says they are being stalked at new home; 6abc.com; June 22, 2015) reported on a family that was allegedly stalked through creepy and threatening letters. The new home owners started receiving these letters several days after closing on their million dollar home.

The letters were described as written by the “Watcher,” who claimed to be the latest of his family to watch the home with such statements as the home has been “the subject of my family for decades…” Other letter statements include “Why are you here? I will find out…” And, “I am pleased to know your names now and the name of the young blood you have brought to me.”

According to Tom Haydon, who reported on the lawsuit for NJ Advance Media (Lawsuit: ‘Bring me young blood,’ stalker told Westfield home buyers;nj.com; June 19, 2015), the new owners were so disturbed by the letters that they never moved into their new home; and have been trying to sell it. The family is suing the seller alleging that the seller knew about the “Watcher” because the seller did not disclose that they allegedly received a similar letter prior to closing.

You’ve heard about “Snakes in a Plane?” This next story is about an Annapolis MD family who experienced “snakes in a house.” David Collins reported for Baltimore’s WBAL-TV (Snake-infested Annapolis home rattles owners; wbaltv.com; June 5, 2015) about the snake infested home. Detailing the new owners’ nightmare; they said they used a machete as defense against snakes that reportedly dropped from ceilings, and slithered from the walls.

To rid the home of the snakes, the owners described how they ripped out walls, and tore up the ground around the foundation. However the report indicated that “experts” told the owners gutting the home may not guarantee the snakes would return because the snake pheromones and musk could attract new snakes; and that the home should be left vacant for fifteen years to rid the home of the musky odors.

The new owners allege that their insurance will not cover a claim, nor is their mortgage lender willing to help. The new owners are suing the real estate agent and broker for allegedly not disclosing the snakes; there are also allegations that the tenants who lived in the home prior to the sale, moved out because of snakes.

Legal experts across the country have weighed in on these extraordinary stories, only to illustrate how a seller’s obligation to disclose varies regionally. If you are selling a home and have questions about your obligation to disclose, consult your real estate agent and your attorney.

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You are more resilient to winter than your home

home salesDid you know that enduring a harsh winter can make you more resilient? At least that’s what University of Buffalo researcher Mark Seery believes. His research on stress and coping reveals that negative events and adversity promotes adaptability and resilience, which benefits your overall wellness (buffalo.edu).

Your home, however, may not be as resilient as your psyche. A severe winter can create the ideal conditions for water penetration into and around your home. Unfortunately, many home owners won’t know that an issue exists until there is a noticeable leak, or water seeps into the basement. Left unchecked, water leaks can not only cause water damage to ceilings, walls, and basements, it can also promote mold growth as well as structural issues in and around the house.

Ice dams are often the cause of water finding its way into the home. Occurring on exterior coverings, ice dams typically occur through the melting and rapid freezing of snow or ice, which can lift and separate the covering giving water a pathway into the house. Ice dams are common on the roof, lifting shingles and separating chimney flashing; but can also occur on siding and exterior trim as well.

Rather than taking water away from your home’s foundation, blocked gutters and downspouts can be the cause of water penetration into the basement. Gutters and downspouts can become blocked with debris any time of year; however, winter presents additional issues. Snow and ice covered downspouts are sometimes shifted or damaged; while eroded grading can redirect water toward the house.

Part of the home’s drainage system, a sump pump helps to keep water from penetrating into the basement. It is designed to collect water in a basin and pump it away from the home. After severe winter weather, a large volume of melted snow and ice can saturate the grounds and fill the basin quickly. If the pump is not operating properly (or the pump drain is blocked), water can unknowingly seep into the basement.

Winter weather can also affect the home’s walkway and driveway. Freezing water can expand existing cracks, while snow removal and ice treatments can deteriorate the stability and integrity of the materials. Not only can the sidewalk and driveway become unsightly, they can also become a trip hazard.

You may be able to examine much of your home’s exterior by walking around the perimeter. However, it may be necessary to have a licensed contractor to inspect/repair the roof, gutters, and other areas. Although your home may not need maintenance, common items that may need to be addressed include repairing/replacing lifted or missing shingles; repairing flashing; realigning gutters and downspouts; re-grading; testing the sump pump; repairing/replacing broken or missing siding and/or exterior trim; repairing window and door seals; repairing/replacing fascia boards; repairing and/or sealing walkway and driveway; and touch-up painting.

Even if your home escaped busted pipes (which many home owners experienced this year), a leaking roof, or other cold weather crises this winter; it still may be in need of urgent maintenance. As the weather warms, taking the time to check your home’s exterior and making necessary repairs could not only improve your home’s aesthetics, but may also help prevent potential issues and impede developing damage. It should go without saying that this is a priority if you’re planning to put your home on the market this spring/summer.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

How long before your home is obsolete?

home mainetanceHow long can your home remain livable? According to a study by the National Association of Home Builders / Bank of America Home Equity titled Study of Life Expectancy of Home Components (February 2007), “The life expectancies of the components of a home depend on the quality of installation, the level of maintenance, weather and climate conditions, and the intensity of use. Some components may remain functional but become obsolete due to changing styles and preferences or improvements in newer products while others may have a short life expectancy due to intensive use…The average life expectancy for some components has increased during the past 35 years because of new products and the introduction of new technologies, while the average life of others has declined…” (nahb.org).

Throughout a home’s lifespan, a home may be considered obsolete in a number of ways. A home is often considered functionally obsolete when it is deficient of items that are considered to be required in the present marketplace, and/or no longer conforms to modern building standards. Because building standards change over time, it is not uncommon for older homes to be considered functionally obsolete because it lacks up-to-date and/or enough amenities. Even modern homes can become functionally obsolete if maintenance issues deteriorated the home’s systems (such as during a fire, or severe hoarding cases).

The decrease in maintenance spending during the Great Recession has many wondering about today’s housing stock’s functional obsolescence. A February 2013 article by Kermit Baker for the Harvard Joint Center of Housing Studies entitled “The Return of Substandard Housing” highlighted the relative considerable reduction in maintenance spending by home owners (housingperspectives.blogspot.com). He stated that “improvement spending” decreased 28% between 2007 and 2011, and concluded that this “crisis” requires attention. He stated; “The longer-term fate of the current slightly larger number of inadequate homes [functionally obsolete] is unknown. Many of these homes likely will be renovated to provide affordable housing opportunities. However, many may not recover without extra help. Given the extraordinary circumstances that many homes have gone through in recent years, particularly foreclosed homes that often were vacant and undermaintained for extended periods of time as they worked their way through the foreclosure process, they may be more at risk than their inadequate predecessors…

Economic or external obsolescence is often considered when influences, other than the structure, impact a home’s value. For example, the value of a well maintained home can be impacted when many community homes are vacant: due to foreclosure; or when there is a major relocation, such as when a small town’s manufacturing plant closes. Environmental issues can also be considered a factor in external obsolescence; you can bet that the homes around the Chernobyl nuclear plant were affected immediately following the 1986 disaster.

Although the remediation of external obsolescence is often complicated, the good news is that many functionally obsolete homes can be repaired extending their life; renovations are common, upgrading the homes to meet modern building codes and with modern amenities.   However, a restoration is sometimes completed to return a home to its original condition – but with modern conveniences; these homes typically have historic significance.

And of course, functionally obsolete homes are sometimes sold as a “tear down”; with the intention to replace the structure with a modern home that not only meets current building standards, but meets consumer trends in home design, size, and function.

© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. This article was originally published the week of June 2, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.