One common question home sellers ask is, “what should I do to get my home ready to sell?” This is a loaded question because the answer depends on their timeline, their budget, and the current market (sellers, neutral, or buyers). The answer for you will also depend on these factors.
No matter how much money you have allocated to get your home ready to sell, it’s your timeline sets the stage for what you are able to accomplish. If you need to sell quickly, forget the major upgrades and try to accomplish as many deferred maintenance items as possible, while considering what refresh items will provide the most benefit. Your real estate broker and their team will be able to help you create a punch list and prioritize the items based on your situation.
There are three areas to focus on when it comes to pre-listing home prep:
1. Major upgrades
What they include:
Major upgrades include large projects such as a kitchen remodel, renovating a master bedroom/bathroom, or adding a backyard patio.
Who should do them:
Typically, these work best for those with a hefty budget and lots of time on their side before looking to list.
Best time to do:
A great time to do any major upgrade is right after you buy the home, especially if you know you might sell it within the next 5-10 years. Who better to enjoy the upgrades than you! If you are going to end up footing 1/2 the bill you might as well get some enjoyment from it!
These types of projects will give you about a 50% return on investment. While it will make your home more appealing and raise the list price, you may end up a little disappointed at closing.
2. Deferred Maintenance
What it includes:
Think smaller when it comes to deferred maintenance. Instead of the “oohs and ahs” that major upgrades provide, these are the little items that show buyers you’ve tenderly cared for your home — leaving buyers questioning less about the condition of your home. (more…)
By LYH broker Rhyan Diller
Being a homeowner, whether new or seasoned, comes with its responsibilities! These are some of our recommendations to make sure your home and investment stays in tip-top shape.
Service Your HVAC
It is typically recommended to have an HVAC (heating, ventilation, and air conditioning) contractor clean and service both systems annually. This will help ensure the longevity and efficiency of your HVAC system. Scheduling this in the fall before you find your heat isn’t working (or in the spring before you find the a/c isn’t kicking in) will save some discomfort (and possibly some cash).
Winterize Your Sprinklers
If you own a home in Colorado and have a sprinkler system, you need to get it winterized! If your sprinkler system does not get winterized, you run the risk that water will freeze in the irrigation valves, pipes, and sprinkler heads, which could lead to a hefty repair bill. In Colorado, it’s best to winterize your system a few weeks before the first freeze/snow is expected. It is typically easiest to hire a professional landscaper to winterize your system if you are not familiar with how to do so.
Clean Your Gutters
If your gutters are clogged, water will not be able to properly divert from your home, which can lead to a number of issues. It is typically recommended to clean your gutters twice per year, once in the late spring and once in the early fall. However, if you have lots of trees and foliage, you may need to clean them more often. Gutter guards can be installed to prevent gutters from clogging in the first place, which will reduce your maintenance costs and clean-up time.
Check Your Downspouts
While you’re cleaning your gutters, check in on your downspouts. They play an important role in protecting your foundation by diverting water from your home. Make sure that your downspouts are diverting the water at least three feet away from the home. If your downspouts are pouring out directly on the side of your home, purchase some downspout extensions from your local hardware store.
Change Your Furnace Filter
A good rule of thumb is to change the filter in your furnace at least every three months or whenever the filter is visibly dirty. If you have household pets who shed a lot or have had poor air quality due to wildfires, you may need to do this more often!
Check Your Smoke Alarm and Carbon Monoxide Detectors
Test to make sure all smoke alarms and carbon monoxide detectors are in good working order, with fresh batteries, at least quarterly! Colorado law states that homes must have a carbon monoxide detector on each level of a home and within 15 feet of an entrance to each bedroom. Smoke detectors are required in every bedroom, outside each sleeping area, and on every level of the home including the basement.
Over 4 million Americans have put their loans into forbearance.
Up until recently, there has been a lot of uncertainty about what it means when a borrower’s loan goes into forbearance. Will there be a huge lump sum owed at the end of the forbearance period? Will it have an impact on credit? Will people be able to purchase or refinance in the future if a loan has gone into forbearance? Initially, the CARES Act did not provide clear guidelines or statements regarding any of those questions, resulting in many borrowers unable to take advantage of record low rates and uncertain if the forbearance policies in place would cause more harm than good.
Now for the good news. On Tuesday, May 19th, the Federal Housing Agency (Fannie Mae and Freddie Mac) provided clarity regarding what forbearance means to borrowers, and gave guidance on how Fannie Mae and Freddie Mac loans will handle repayment, as well as how it will affect a borrower in the future.
Here’s what it means for you.
Let us start by saying, if you’ve not been impacted financially by COVID-19 and can keep paying your payments on time and in full, you should. Forbearance or deferment is not forgiveness, and that money does not go away. So, if you can still pay, that is your best option.
Can you purchase or refinance in the future? Yes! Fannie Mae and Freddie Mac borrowers will be allowed to purchase a new home or refinance their current mortgage even if a loan has gone into forbearance. The borrower must show three consecutive months of payments after the forbearance period has ended. Additionally, if your loan has gone into forbearance accidentally (many Fannie Mae and Freddie Mac loans were being placed into forbearance, if a borrower even breathed the word), you can purchase or refinance immediately if your payments are up to date, without having to wait the three-month period.
Will you have to owe a lump sum at the end of your forbearance period? Not unless you want to. Here are a few ways borrowers can exit a forbearance plan:
- A borrower can pay the sum of the missed payments in full when their forbearance period ends.
- A borrower can defer the payments to the end of the loan. For example, if you were in forbearance for six months, you could tack those six months onto the end of your loan, adding an additional six months of payments before maturity. You can do this for up to 12 months, per the Federal Housing Finance Agency.
- A borrower can use a repayment plan. They can pay the amount due or missed payments, over the course of 36 months or until they are up to date on their payments.
At Love Your Hood, we’re committed to being a resource for you and all of your housing needs. Please don’t hesitate to reach out to one of our trusted realtors if you have any questions regarding forbearance, or buying and selling in the current climate.
Source: National Association of Realtors
The Tax Cuts and Jobs Act was finalized on December 20, 2017 and went into effect after December 31, 2017. So what does this mean for you, as a current or potential homeowner? We give a breakdown on important numbers for current and potential homeowners here:
- $750k = limit on mortgage interest deduction (for mortgages issued after Dec. 15th, 2017)
- $10k = state and local deduction for income, sales, & property taxes
- $12k = standard deduction for single filers
- $24k = standard deduction for married filing jointly
- $0.00 = personal exemptions
- 2 out of 5 years = how long you have to live in a primary residence to qualify for capital gains exclusion
- 15% = max rate on capital gains (generally speaking)
Source: Samantha Sharf at Forbes
Trump’s Tax Cuts & Jobs Act was released at the beginning of November (follow the live coverage about it on The Wall Street Journal’s website). Three major components of this Reform that are relevant to buyers, sellers, and investors are:
- the mortgage interest deduction will go from $1million to $500k,
- a new cap on property taxes, and
- capital gains limitations.
These all become more concerning as the median home price is approaching $500k in Denver.
Source: Aldo Svaldi at The Denver Post