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3 Steps To Saving For Your Dream Home Feb. 21st 2017
According to Harvard University's "State of the Nation's Housing" report, while more people than ever before want to own their own home, fewer feel financially ready to do so yet. Reasons range from high rents to student loan debt. Millennials, in particular, are waiting longer to get married, start families and purchase their first home. But this is not necessarily bad news for the housing market. In fact, it could mean that the millennial generation has something to teach us all about saving consistently towards a big life goal such as owning your own home! In this article, learn three important steps to take when you start saving for your dream home. Step 1: Pay down your debt to clean up your credit. Your credit score is a tricky business when it comes to saving for your first home. You have no history of carrying a mortgage, so you can't make any real impact there. What you can do is to clean up your overall credit report so your general credit score is as healthy as possible before you apply for your mortgage loan. According to the National Foundation for Credit Counseling (NFCC), a surprising number of Americans think they have "above average" (60 percent) to "very good" (41 percent) credit, although a full 48 percent have not seen their credit score in the past three years or ever. So clearly, this is where you need to start. The best way to differentiate yourself from your competition (other people who are trying to convince a direct lender to give them a mortgage loan) is to pay down your debt, clear up any disputes on your credit report and, in so doing, boost your credit score so you can qualify for the best mortgage at the lowest interest rates. Step 2: Separate and automate your savings. Saving money is never going to be the easiest goal you attempt. In fact, according to The Atlantic, one of the chief reasons that nearly half of all Americans have little or no emergency savings to fall back on is taking on too much mortgage debt. So here is a clear area where you should proceed with caution. First, save. Then, buy a home. The best approach to make saving as painless as possible for you is to automate your savings. You can do this by setting up direct deposit on your paycheck and then regular auto-drafts into a savings account reserved just for dream home savings. This way, you never even touch those funds and feel tempted to spend them instead. Step 3: Downsize to upsize. Finally, one effective change many adults today are making to save more towards their dream home is to downsize while they save. This can mean anything from moving to a smaller apartment to getting rid of your cable television subscription. Also, you must continually remind yourself why you have downsized in order for this step to work well. But the key to making downsizing work to serve your greater goals is to make sure you deposit every cent of what you save into your dream home fund. Referring back to Step 2 here, the easiest way to do this is to calculate for yourself exactly what you are saving by paying less rent, giving up cable, etc., and then setting up a monthly auto draft in that amount to deposit directly into your dream home savings account. By following these three steps, you can make tangible financial progress in saving to buy your dream home. If you can save 20 percent towards a downpayment, you can avoid paying expensive Private Mortgage Insurance (PMI) and you may even qualify for a lower interest rate. Scrimping and saving is never fun or easy, but it will be worth it when your realtor hands you that brand-new set of house keys!
Condo 101: The Governing Documents Feb. 21st 2017
Question: I am interested in buying a condominium, and have just received a package from management containing a lot of documents and information. Frankly it is overwhelming. What should I review? Answer: When you sign a contract to buy an existing condominium, you must be given what is known as a "resale package". If you are buying from the developer, it is a Public Offering Statement (POS). Typically, the sales contract gives you a period of time, usually. three business days, from the day you get the package to cancel the contract and get your earnest money deposit back. I prefer to change this "cancellation period" in the contract before you sign it to five business days, to give you more time to absorb all of the material. The package includes such things as the condominium governing documents,, the current budget, any pending lawsuits involving the association, insurance information and an audit report from an independent CPA. You should carefully review the financials to make sure the association is financially sound and has sufficient reserves for that rainy day. To create a condominium, there must be a law enacted by the state legislature (or the DC City Council). All of the Washington metropolitan jurisdictions have a Condominium Act; in fact, some local counties -- such as Montgomery -- have their own laws that also impact condominiums. In general, the Condo Act has legal priority, and overrides any conflicting legal documents. Although there are some provisions in these laws that are carved in stone -- such as percentage interests cannot be changed without unanimous consent from all owners -- the drafters of the legislation recognized that times and circumstances change. Accordingly, the various condominium laws permit associations to amend their legal documents from time to time as needed. The governing condo documents start with the Declaration. This document literally "declares" the complex to be a condominium. It provides an explanation of the three components of the condo, namely "units", "common elements" and "limited common elements". It also spells out the ownership percentage of each unit (which must total 100 percent) on which voting and condo payments are based. It should be noted that although a few associations have one-unit-one-vote, the majority of condominiums base voting and assessments on percentage interests. Each unit's percentage interest is shown at the end of the Declaration. The "bible" of a condominium is the Bylaws. It sets forth the way board members are elected and what they can -- and cannot -- do; it contains restrictions on such issues as pets, parking, leasing and payment of condo fees. While I always strongly urge potential buyers to read all of the condo documents, at the very least one must carefully read the Bylaws to make sure this is where you want to live. You should, of course, also review the financial status of the association; you don't want to buy into a place where there are too many delinquencies, where the reserves are too low, or major repairs are upcoming with no funds available to pay for them. There often are Rules which are adopted by the Board of Directors. They deal with a host of issues, often interpreting or expanding on provisions contained in the Bylaws. For example, if the Bylaws permit dogs, the Rules may spell out that dogs must be on a leash while on common grounds, or that owners must pick up their dog waste. On the other hand, if the Bylaws prohibit dogs, the Board cannot override that by enacting a Rule. Another document is the Plat and Plans. This is often called the "condo map". It is an architectural drawing -- recorded among the land records in the jurisdiction where the condo is located -- that is a floor plan of each unit, showing what is a general common as compared to a limited common element. General common elements are for everyone's use, such as elevators or hallways. Limited common elements are reserved for less than all unit owners. Limited common elements can include a balcony, deck, patio, storage space and even parking spaces. If you are buying in the District of Columbia, the Plat and Plans must be included in the resale package. They are not required in Maryland or Virginia, but if you are buying in those states, I would ask to get a copy before you decide to buy. I use the concept of hierarchy -- priority of legal condominium documents. The condo law in your jurisdiction trumps everything. If state law says you need a super-majority vote in order to amend the Bylaws, that requirement can only be amended by the legislative body. Next in priority is the Declaration. Referring again to pets, if the Declaration says "no pets", that is the law. The Board cannot allow pets unless the Declaration is amended, and that will take a 66-2/3 vote or higher of the membership, depending on what the Declaration states. The Bylaws fall in place under the Declaration and then, in last place -- but still very important -- are the Rules and Regulations. Buying a condo unit requires lots of reading, consulting with current owners, management, your lawyer, and financial advisors. This may be the biggest investment you will ever make; do your homework, with a good place to start being the condo documents, since they will govern you if you purchase.
Clean Out Your Closet And Help A Charity Feb. 20th 2017
When you clean out your closet (or your whole house), the "donate" pile can get pretty big. But there's no need to worry about lugging everything to a donation centre. Clothesline will send a truck right to your door to pick up your gently used clothing, electronics and small household items for free. The proceeds will go to the Canadian Diabetes Association (CDA) to support its research, education and advocacy programs. Each year, Clothesline, a national Canadian program, raises more than $10 million and diverts more than 100 million pounds of clothing and household items from landfill sites across the nation, something else donors feel good about. The CDA started the program in 1985 as an innovative way to raise funds while making a positive impact on the community, says Janelle Robertson, general manager of Clothesline, one of the longest running programs of its type in North America. In addition to clothing, the donations accepted for pick-up include towels, draperies, shoes, dishes, cloth items, post secondary textbooks, kitchenware and toys. The not-accepted list includes large appliances, sofa beds, newspapers and food. Clothesline has more than 110 trucks that pick up at 1.7 million households each year across Canada, Robertson says. The organization also has more than 3,000 clothing donation boxes, as well as 30 offices or donation centres where items can be dropped off. Clothesline solicits donations, picks them up and delivers them to Value Village stores. Value Village pays for the volume of goods delivered. The two organizations have enjoyed an exclusive mutually beneficial partnership since Clothesline's inception. By having a business arrangement with Value Village, the CDA receives much-needed funds to support its programs and supplement the monetary donations it receives directly from the public. "Our relationship with Value Village is longstanding and we would not be able to raise $10 million annually to support those living with, or at risk of diabetes, without their support," says Robertson. "We grew the Clothesline program quite quickly because we recognized this partnership as an opportunity to generate revenue though a social enterprise. Our growth followed Value Village." Donors can drop off reusable items at a Clothesline Donation centre or donations box, or by scheduling a free household pickup online or by calling toll free at 1-800-505-5525). "By donating directly to Clothesline, CDA receives proceeds from Value Village. It does not benefit from items dropped off directly at Value Village," says Robertson. In addition to support from individuals, the Clothesline program needs help from corporations, local businesses, schools and communities. "You can help by becoming a drop box host, sponsoring a community clothing drive, becoming an apartment/condominium building pickup co-ordinator or arranging for your business or school to conduct a clothing drive on our behalf," CDA says. Through the In The Bag program, schools, clubs and communities across Canada can raise funds for trips, equipment or other projects. Clothesline pays for each garbage bag (67L) of clothing collected. Clothesline will provide step-by-step guidelines, a list of acceptable items, a checklist and tips to make your In The Bag event a success. Furniture is accepted at only specific locations, so if it is not collected in your area, there are other options. Furniture can be donated to other charities, such as the national organization, Furniture Bank. Another option is the Salvation Army Thrift Store. It accepts "gently used" clothing and household items and in some locations it offers a pick up service for larger items. The organization says that for sanitary, health and safety concerns, it is unable to accept donations of used mattresses and box springs, used carpets, hazardous materials (such as paints), propane tanks, barbecues, infant equipment (such as car seats, cribs and strollers), tires and auto parts. The Salvation Army supports many programs and services including food banks, shelters, children's camps, addiction treatment facilities and other community programs. It says it is Canada's largest non-governmental provider of social programs. Visit https://thriftstore.ca/ for the closest location. Some Canadian cities, such as Calgary, offer a municipal textile recycling service. City landfill facilities there have Throw ‘N' and Go areas where residents can dispose of used clothing and textiles, even if they are damaged. "If the item isn't reusable, it can still be recycled," says the City of Calgary website. "Textile recyclers turn old clothing, shoes and fabrics into new products. Materials are sorted, cleaned and can be turned into wiping rags or shredded down for upholstery stuffing or fibre recycling." All proceeds from the revenue of the recycled textiles support the charity Haiti Arise.
California Broker-Owned Escrows Need To Submit Activity Reports Feb. 20th 2017
There is still time left -- but not much -- for affected California brokers to submit their annual Escrow Activity Report to the Bureau of Real Estate (BRE). This applies to firms that operate a "broker-controlled escrow" that engaged in five or more transactions or whose escrow activities exceeded $1 million in the past calendar year. Not every California Broker has an escrow division. Many own escrow companies that operate under the Department of Business Oversight (DBO). Many others simply have no ownership interest in any escrow operation. Then, there are those who operate a "broker controlled escrow", pursuant to their real estate broker's license. These escrows are restricted to transactions in which the relevant brokerage must be a party or an agent in connection with the escrow and performing services requiring a real estate license. Broker-controlled escrows are, then, significantly restricted as to their potential market when compared to the more common escrow company operating under the DBO. Nonetheless, broker escrows require less capitalization and can still bring a decent profit into a brokerage. In October of 2011, Senate Bill 53 (Calderon) was signed into law adding section 10141.6 to the Business and Professions Code. It set forth filing requirements for broker-controlled escrows. If such operations conduct escrow activities for five or more transactions in a calendar year, or whose activities equal or exceed one million dollars in a calendar year, it is required that a report be filed within sixty days following the completion of the calendar year. Except for leap years, the deadline is March 1. As I said, there's not much time left. The report is submitted on the Bureau's form RE 890. It is neither particularly burdensome nor time-consuming to complete. In addition to asking about the number and dollar volume of escrow transactions, it requests the location of escrow offices and basic information regarding the escrow officers and escrow trust accounts. If anyone has difficulty with the form, they may contact the CalBRE Mortgage Loan Activities section at (916) 263-8941. It has been a source of particular annoyance to the Bureau and its Commissioner that, so far, there appears to be a serious lack of compliance with Business and Professions Code 10141.6. In the first year the requirement went into effect, for calendar year 2013, 206 real estate brokers reported broker escrow activities totaling $8.63 billion. In the next year, for calendar year 2014, 161 real estate brokers reported broker escrow activities totaling $5.52 billion. For calendar year 2015, 143 brokers reported broker escrow activities totaling $8.45 billion. That is, in the first three years the number of brokerages reporting actually declined. At the Commissioner's recent forum in Indian Wells, it was reported that, last year, 170 brokers submitted reports showing total activity of $10.3 billion. While 170 reports is an improvement over the initial response to the reporting requirements, it still remains woefully inadequate. The Bureau estimates that more than 700 brokerages should be submitting reports. Fines for failing to submit a timely report can run up to $10,000. There can also be non-monetary penalties as well as the often-substantial cost of a BRE audit. The Bureau's Audit section is actively pursuing brokers to determine if they have met their reporting requirements, if any. Brokers who have escrows that meet the relevant activity levels are advised to file with the BRE if they have not already done so. Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way. His email address is firstname.lastname@example.org.
6 Show-Stopping Ways To Use Blue In Your Home Feb. 19th 2017
Color trends may come and go, but primary colors like blue never really go out of style. And whether you use it sparingly - an accessory here and there, or maybe a piece of art with just a splash - or wash entire rooms in the color, blue can have a great impact on how your space looks, and how it feels. "Blue represents both the sky and the sea, and is associated with open spaces, freedom, intuition, imagination, expansiveness, inspiration, and sensitivity," said Bourn Creative. "The color blue has positive effects on the mind and the body. As the color of the spirit, it invokes rest and can cause the body to produce chemicals that are calming and exude feelings of tranquility. However, not all blues are serene and sedate. Electric or brilliant blues become dynamic and dramatic, an engaging color that expresses exhilaration." If you're looking to incorporate the color into your home, you can't go wrong with any (or all!) of these tips. Bring it into your kitchen Blue is a great option for kitchen cabinets if you want something other than white. A powdery blue allows you to stay neutral-ish, and easily accommodate adventurous finishes like patterned floor tiles and black counters, if you so wish. House And Home Or, take it deeper - waaaaaaay deeper - to create a space that will wow. Cobalt or navy can make a kitchen look incredible, regardless of the size. But if you want to make sure it keeps an airy feel instead of feeling closed in, go for marble slabs and forgo the upper cabinets, like in this gorgeous room. Pinterest Use its peaceful quality to your advantage in the bathroom Because blue is known to be a calming color, it's a smart choice for a bathroom if your goal is to impart a spa feel. But that doesn't mean your choices have to be sedate. Here, a standout tile brings the wow factor to an otherwise neutral bathroom. digsdigs.com There's nothing boring about this bathroom, where the deep hue and ultra-glam finishes create a knockout space. digsdigs.com Swap out your furniture Because blue is a hot color right now, there are numerous options if you want to bring the color into your furniture or furnishings - and you don't have to look too hard to find something great. We love Rooms To Gos's Monaco Court Indigo series, with its saturated color, tufting, and naiheads. The set is surprisingly inexpensive ($1,655 for five pieces, or you can split it up), and it's part of the store's Sofia Vergara Collection, which probably explains why it's so chic. Rooms To Go Hang it on the wall Art can move us in so many ways, and a piece that allows you to sink into it, like this Shawn McNulty piece, does more than just look pretty on a wall. /shawnmcnulty.com Go blue on blue on blue Who says you need to add contrast to achieve design greatness? This bedroom with varying shades of blue manages to be dramatic and serene at the same time. www.hgtv.com Add a bright pop As vibrant as it is, a bright pop of turquoise can fit in almost anywhere, no matter the style or color scheme. In this otherwise Earth-toned space, the turquoise side table is as eye-catching as it is functional. www.hgtv.com
How To Add Moroccan Flair To Your Home Feb. 19th 2017
It's vibrant. It's exotic. And it's one of the hottest design styles today. It's Moroccan design, and it's easier than you think to add to your home, giving it unexpected style and vibrant flair. "Throughout history, the North African nation of Morocco has played host to a wide range of cultures, civilizations and even religions. From the indigenous Berbers to the Arabs and from the Romans and Spanish in the North to those from Sub-Saharan Africa, the country has welcomed a wide variety of visitors who have made it their home," said Decoist. "It is no wonder, then, that Moroccan-style design, decor and architecture is so rich, vibrant, varied and inspirational." If you have the opportunity to travel to Marrakech, Casablanca, or another Moroccan city that offers an impossibly rich landscape steeped in history and culture, it's easy to pick up some fabric or a few accessories at one of the souks (open markets). But with Moroccan décor continuing to grow in popularity, finding a great piece can be as easy as hitting one of your favorite stores, like Home Goods and World Market. This Moroccan-style pouf is $199 at World Market. worldmarket.com A pouf can serve as extra seating and also adds a little flair, as you can see in this eclectic living room, where it serves as a focal point that adds texture and interest. hgtv.com One of the hallmarks of Moroccan design is the variety of unique shapes found in the architecture and décor. This is often exhibited in mirrors and tables, both of which are used here. The vibrant pink and red colors and unique shapes on the tables are unexpected and beautiful. The graphic patterns on the pillows are also reminiscent of Moroccan style. decoist.com Moroccan-style mirrors really stand out in the bathroom, especially when placed over a wall featuring Moroccan tile. wearefound.com Want to go full-blown Morocco in the bathroom? Think color, texture, tile, and architectural detail. "Moroccan furnishings often draw from the country's captivating architecture," said HGTV. "In this dramatic powder room, the hand-painted porcelain ‘Marrakesh' sink by Kohler was inspired by mosaics found in a quaint Moroccan courtyard. The arches and double doors on the mirror above evoke an entrance to an ornate Moroccan palace." hgtv.com Rugs Rug-making in Moroccan has been a tradition for centuries, and one that has inspired homeowners and interior designers for nearly as long. Today, you can find thousands of rugs from authentic pieces hand-woven by Berber women to inexpensive reproductions. Lights A Moroccan-style lantern could be the finishing touch in a room or it could be what it takes to reenergize a space. "Moroccan lanterns are usually made with a variety of different colored glasses, making each one completely unique," said Treasures of Morocco. "The colors allow the light projected from the lanterns to glow differently than the conventional bright white light from most lamps. The lanterns are often crafted using a metallic framework with a lattice pattern." treasuresofmorocco.com Tile Moroccan tile is one of today's top interior design trends for floors and backsplashes. With abundant colors and shapes, it's possible to bring a truly unique look to your space, like in this gourmet kitchen. elledecor.com
Light Up Your Home Movie Room by Creating a Star-filled Ceiling Feb. 16th 2017
Can you imagine the look on the faces of friends and family when they walk into your home theater room, look up at the ceiling and discover that it's covered with twinkling stars from wall to wall? If you're not afraid of DIY projects involving power tools and if you have the patience it takes to wire up a large ceiling to make this dramatic focal point, you're ready to begin a project that adds a perfect finishing touch to a room you've already fitted with a sound system, flat screen TV, theater seating and creature comforts. Where to begin? By recruiting an equally-handy friend who's willing to help you get this surprisingly easy-to-accomplish project off the ground, both literally and figuratively. It's going to take time to do this job right, but once you're done, expect to be thrilled every time you walk into your four-star theater. 8 Decisions to make before you begin: 1. Will you cover the entire ceiling with stars, just the center or the periphery? 2. Do you prefer twinkling stars, static ones or will you be just as happy with either? 3. Are you more comfortable using cable or do you prefer to use fiber optic filament? 4. Would you like a sky that's densely crowded with stars or just sprinkled across the ceiling? 5. Will you have to install a dropped ceiling over the current one or do you have access to an attic? 6. Will the illuminator you install to power the stars require a dedicated outlet? 7. Is your ceiling area so large, you'll need more than one illuminator to handle your field of stars? 8. Do you have the time and patience to undertake an installation that could run 30 to 40 hours in total? Finances, kits and options Your ceiling size determines the amount of money you'll spend on your project, but if you're looking for a ballpark figure to decide if it's worth your while to undertake this challenge, expect to achieve a 4-to-1-star ratio on the ceiling of a small theater room using 1000-feet of .50mm fiber optic filament and an illuminator (this unit provides the light), with or without a twinkle wheel, for about $500. Make life simple by purchasing a kit that includes the items you need as well as instructions for undertaking this ceiling remodel. Alternatively, hire a contractor to do the job for you using the following suggestions, but this is a time-intensive job, so keep the checkbook near. Basic instructions While you can tackle this job on your own, things could get tedious as you methodically drill into your room ceiling from your attic access to thread filament into holes, so a helper can save you time and frustration. Using single strand filament costs less money and there's less waste, too. Follow these steps to do the job: Mark ceiling joist locations with a pencil so you avoid cutting into them when you drill your holes. Use a bright room light to illuminate the ceiling from the floor so those pencil marks are visible. Drill each hole "up" from the theater room rather than down from the attic to avoid ragged holes. Thread a length of continuous thread optical fiber into each hole. Secure each "star" in pace with a drop of epoxy to keep it stationary. Once all fibers are installed and sealed, collect them and attach them to the illuminator. Plug or wire the illuminator to your electrical system, adding a dedicated switch. Make your theater room a "one of a kind" creation Finish your home theater room by adding drama worthy of any blockbuster. Assuming you've money left in your movie room budget, go further with your design scheme by adding touches of authenticity. For example, "Architectural Digest" magazine featured an over-the-top movie room design sure to be coveted by movie fans everywhere. Designers started with a ceiling filled with twinkling stars and then installed the trappings of a drive-in movie theater, complete with refreshment stand, theater seating that mimics vintage cars and cut-out palm trees that bring Hollywood to mind. You may not wish to go to this extreme or plunder your child's college savings to replicate this ultra-cool environment, but you should be prepared for guests who drop by and refuse to leave, even if you cut off their popcorn supply!
Can You Trust Zillow's Home Price Zestimate? In a Word: No. Feb. 15th 2017
I got an email from Zillow last week. Seems my house has gone up in value another $2,000+ dollars in the past 30 days. And it's going to rise another 3.5% in the next year, according to their Zestimate®. Fab! Except that it's just speculation. When it comes to Zillow's Zestimates, you have to take the numbers with a grain of salt. Make that a big shake of salt, right over your shoulder. And maybe a stiff drink. And a frank conversation with your real estate agent. "Shoppers, sellers and buyers routinely quote Zestimates to realty agents - and to one another - as gauges of market value," said the Los Angeles Times. "If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers' list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000. Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are ‘the bane of my existence.'" Are faulty Zillow estimates irritating, dangerous, somewhere in the middle? It all depends on your personal situation. A real estate investor, a seller in a high-end neighborhood, or an obsessive real estate watcher (ahem) may be able to brush off a $15,000 error. But for many people across the country, the word of Zillow might as well be the word of God. So, yeah, dangerous. Price errors Errors in sales prices are one of the issues Investopedia pointed out in its look at Zillow's Zestimates. spoty "Zillow factors the date and price of the last sale into its estimate, and in some areas, these data make up a big part of the figure. If this information is inaccurate, it can throw off the Zestimate," they said. "And since comparable sales also affect a home's Zestimate, a mistake in one home's sales price record can affect the Zestimates of other homes in the area. The Zestimate also takes into account actual property taxes paid, exceptions to tax assessments and other publicly available property tax data. Tax assessor's property values can be inaccurate, though. The tax assessor's database might have a mistake related to a property's basic information, causing the assessed value to be too high or too low." In June, Zillow's much-maligned (by industry experts, anyway) Zestimates got an upgrade with a new algorithm. Zillow CEO Spencer Rascoff has famously called his company's price estimates, "a good starting point" and copped to a median error rate of approximately 8%. With their new algorithm, they say it's dropped to 6.1%. Marketwatch John Wake, an economist and real estate agent from Real Estate Decoded, applied Zillow's updated 6.1% margin of error to "Zillow's own estimate of the median sale price in the U.S. in May 2016 of $229,737 and got a typical error of $14,000. He then took a sample city, Denver - a city in which estimates are actually more accurate than average" - and found "the error spread in 2016 is a lot tighter and more focused on the bullseye of the actual sales price," but that "their Zestimates are scattershot." In his example, "a Denver home has a fair market value of $300,000. According to Zillow's Zestimate Accuracy Table, 10% of their Zestimate prices were off by more than 20% from the actual sale prices. Half of that 10% are Zestimates that are too high by 20% or more, and half are Zestimates that are too low by 20% or more. That means you have a 5% chance Zillow will give you a Zestimate of $360,000 OR MORE, and a 5% chance Zillow will give you a Zestimate of $240,00 OR LESS. Yikes!" Missing data It gets even more complicated without all the data that gets fed into Zillow's algorithm. Limit the available info and the margin for error grows. That same email I received included a couple of new listings and info on recent sold homes in the area. Notice anything interesting about these recent sales? Yep, no sales prices. Texas is one of about a dozen states without a mandatory price disclosure law, which makes property appraisals challenging and which makes it even more difficult for Zillow to come up with an accurate Zestimate since it eliminates one of their key data points. In the case of my home, they're a good $11,000–15,000 high on their sales price estimate. And that's based on my direct knowledge of sales prices in my neighborhood—not list prices, not tax assessments, and not assumed sales prices based on trends. Which brings up another issue that leads to inaccurate estimates. In many neighborhoods, sales trends and prices vary street to street. But Zillow's estimates are a one-size-fits-all program. In my masterplan, the building of high-density units on the southern edge of the community a few years back took a bite out of the value of homes on the perimeter streets. Sales of homes with a first-floor master also get a bump here. And then there's the fact that this community is also split between two elementary schools. Zillow wouldn't know which one buyers prefer and wouldn't account for a difference in sales price between two otherwise comparable homes. But, people who live here would, and so would the local real estate agents. Which only reinforces the importance of working with one, BTW.
Maximize Your Listing Price While Minimizing Your Expense Feb. 15th 2017
It’s almost spring and in many parts of the country the housing market is already starting to thaw. Some markets like Denver, Seattle, and Portland are red hot. According to the S & P CoreLogic Case-Shiller National Index, prices nationwide are up 5.6 percent as of November 2016. Pricing your house correctly and increasing appeal with low-cost, high-value upgrades can mean more offers. The Price is Right There’s generally two schools of thought in regard to listing price. One philosophy is to list at top price and lower the price progressively until it sells. Sellers who choose this strategy are usually in less of a hurry and more risk averse. A second strategy is to list slightly under expected sales price. These sellers are usually trying to sell faster and hope to bring multiple offers, boosting the final selling price. The latter is, counterintuitively, the better strategy for getting the most money for your home. Here’s how to do it: Price Under a Typical Search Limit If you home is worth $400,000, set your listing price at $399,000. This way, you capture everyone who might be setting their search ranges at $400,000 or less. Like how products are priced at retail stores, psychologically, a price that ends with 99 appears to be a better value. Better yet, such that it deviates from both, such as $397,400 which studies have shown also increase the perception of value. Create Demand It might seem risky to underprice your home — what if your home is worth $400,000, you list for $375,000, and the offers all come in at only $375,000? First, that’s your home’s actual market worth. Two, if you receive offers you don’t like, you can counteroffer or decline them. Listing your home under value creates a psychological sense of urgency. You want buyers to visit your home and become attached enough to put in an offer. If enough people do this at once, you have created a buyer frenzy and increased your chance for multiple offers and escalated prices. Use Comprehensive Comparables Your agent should create a comparative market analysis of recently sold homes but also those currently active, expired and off-market. What is selling is as important as what is not. According to Zillow, ensure your home is priced within 10 percent of the average home price in your area. If there are few sold comparables nearby, price your home 10 percent under any currently active or expired listings. Home Improvements Before Listing There are many home improvements that might enhance your home’s value, such as putting in an expensive new kitchen or bath, but stick to the lowest cost for the highest possible value. Your goal is to make a positive first impression and sell your home quickly. Replace Tired Flooring If your carpet is more than five years old, has unsightly stains or is starting to buckle, it’s time to replace it. You can replace carpet with carpet but today’s buyers see more value in hard floors. Buyers with kids or pets tend to prefer engineered floors, bamboo, or cork for their sustainability. One continuous floor of the same material also creates the appearance that the home is bigger, creating an impression your home is worth more. Paint, Paint, Paint A coat of paint can cover scuff marks and dirt and brighten a room. Did you love flamingo pink for your hallway and forest green in your kitchen? That’s great! But chances are buyers won’t have your tastes so instead opt for neutral colors such as grays and earth tones when readying your home to sell. Revitalize Your Kitchen Fully remodeled kitchens are a great return on investment but don’t spend the money if you are looking to sell. Instead, paint them with Annie Sloan chalk paint. Chalk paint looks so good the buyers will barely be able to tell it’s not the original finish. For about $500 you can transform your kitchen in a weekend.
Condo Renters: A Potential Asset Feb. 14th 2017
Question: We have been renting a condominium unit in a fairly large complex for the last several years, and our current plans are to stay here for several more years. For financial and other personal reasons, we do not want to buy. However, quite frankly we feel that we are second class citizens in this condominium complex. We recognize that we cannot serve on the Board of Directors. However, we want to get involved in various condominium activities, including the budget, grounds and maintenance, and a newsletter, but the Board is adamant against our involvement. We believe we can be more productive for the condominium than many of the owners, but we are treated as if we do not exist. Is there any legal reason why we cannot get involved? Answer: This is a very touchy and sensitive issue in the condominium community. Many condominium boards of directors have the attitude that owners are good and tenants are bad. But people are people. I have known many owners who not only do not cooperate with their Association, but indeed are downright destructive. I have known many tenants who take better care of their property than do their counterpart owners. Unfortunately, there is a stigma attached to a tenant. The general philosophy is that "I bought into this complex, and accordingly I have a greater involvement in protecting my investment." However, getting these people to serve on boards of directors, or to participate in the numerous condominium activities is often quite difficult. Apathy is rampant in most condominium associations. There have been many occasions where boards of directors have pleaded with owners to attend an Annual Meeting -- or at least give a proxy -- so that a quorum could be reached. Many years ago, there were secondary mortgage market restrictions on the number of tenants that could be living in any condominium community. Generally speaking, if the level of tenants reached 30-40% of the entire membership, lenders would be reluctant to make loans on individual condominium units. While these restrictions still apply for newly constructed or newly converted condominiums, for all practical purposes most condominium associations do not have to worry about these rental restrictions, unless the ratio starts to come close to 50 percent. Indeed, I believe that even the financial community is beginning to understand that sometimes a tenant can be a better asset to a condominium than an apathetic occupant-owner. Any legal question involving condominiums requires an evaluation of the "power source." The highest authority in any jurisdiction is the applicable state condominium law. The condominium laws throughout the country are different, and everyone has to understand the law in which your condominium is located. The second level of authority is the Declaration, which is recorded among the Land Records in the city or the county where the property is located. This, in effect, is a document that declares that there is a condominium created, and outlines certain important aspects, including a legal description of the complex. In any condominium, there are three components: general common elements, limited common elements, and individual units. The Declaration attempts to define each of these components. The third power source is the Bylaws of the Condominium. In some states these Bylaws are recorded among the Land Records, and in other states they are not. But whether or not they are recorded, the Bylaws spell out the basic operating guidelines under which the Association is to function. Bylaws always provide the requirements for the Board of Directors, and will spell out who can serve on the Board. Here is where the legal authority can be found as to whether or not you can serve on the Board if you are not an owner. The Bylaws will also establish the types of committees that are to function in the Condominium Association. For example, one important committee is the architectural control committee. This committee determines whether a unit owner can make improvements or alterations to the exterior of their unit. This architectural control committee serves an important function in a condominium. Often, however, it becomes a bottleneck to legitimate and needed improvements within the complex. Indeed, the architectural control committee of many associations has been referred to as the "local KGB." Here is a suggestion. If the Bylaws do not require owners to serve on the architectural control committee, this might be a very good place for you to get involved. Because you are not an owner, you do not have any vested interests, nor do you have any ax to grind. The architectural control committee members should be objective and impartial, and it sounds to me as if you meet these tests. Additionally, if you have any writing skills, you may be able to assist (or edit) the community association newsletter. Or if you have any accounting background, you should be able to serve on the finance committee. Ask for a meeting with your Board of Directors. Convince them that you are sincere, and truly want to participate in the affairs of the Association. Directors should be able to tap all the resources within the community -- whether they are owners or tenants. I cannot promise instant success, but a competent Board of Directors should be willing to jump at this opportunity to get able and interested volunteers.