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3 Fast Fixes for the Home Features Millennial Buyers Hate

by Amy McLeod Group


When it comes to selling a house, you want to appeal to as many potential buyers as possible. For years, that meant targeting baby boomers and Gen Xers; but today, millennials are buying homes in larger numbers than ever. In fact, by early 2019, they represented 42% of all new home loans. This means that any seller would be wise to keep millennial buyers in mind when getting a house ready to show.

While there are definitely upgrades that sellers can make to catch the eye of millennial home buyers, there are also some home features that are known to send millennial buyers running. Curious if your own home has any of these features? Check what these real estate agents say repel millennial homes buyers today—and how to fix these problems with minimal money and effort.

1. Wood cabinets in the kitchen

Interior decor choices might seem trivial, but they can have a big impact on buyers. For instance, Yuri Blanco, the owner of Re/Max Executives in Idaho, says that old-fashioned wood cabinetry in the kitchen is a huge turnoff for most millennial home buyers.

Photo by CDH Designs LLC 
 

"Millennials aren’t looking for oak cabinets like we saw in the 20th century," she says. "They like more clean lines and cabinets with flat doors."

Photo by Dawn Hearn Interior Design 
 

The fast fix: If your budget doesn't allow for tearing out dated cabinets, there's still hope. Consider other ways to update the kitchen, such as sanding and painting the existing cabinetry.

2. Closed floor plans

Photo by Roundhouse
 

Blanco says the classic closed floor plan is a turnoff for most millennials, and suggests that sellers take whatever steps necessary to fix the issue.

"Before selling, try knocking out some walls," she says. "Millennials want wide, open spaces."

Photo by Niki Papadopoulos
 

The fast fix: Of course, not everyone can afford to knock down walls when preparing a home for sale.

If your budget doesn't allow for major remodels, do what you can to emphasize the flow between rooms. Removing doors in favor of open archways between common spaces, for example, can help.

3. Formal dining rooms

Some home trends are especially generational—and experts put formal dining rooms firmly in that category. Millennials as a group tend to favor flexible spaces, Blanco explains.

Photo by McCroskey Interiors
 

"A generation ago, formal dining rooms may have been on every buyer’s wish list," she says. "But today there really isn’t much appeal to the formal dining room. An open space that can easily transition from kitchen to TV room is high on the list of the perfect home for young buyers. We are seeing upticks in areas with bar stools and breakfast nooks instead."

Photo by Normandy Remodeling 
 

The fast fix: If your property has a formal dining room and you can't afford to change the layout, consider staging the space creatively to show how it could be used in a more modern, functional way. For instance, you could stage the space as a home office or entertainment room instead.

Looking to sell your home? Contact The McLeod Group Network to find out how much it's worth! 971.208.5093 or [email protected] 

 By: Realtor.com, Kayleigh Roberts

"Millennials aren’t looking for oak cabinets like we saw in the 20th century," she says. "They like more clean lines and cabinets with flat doors."

The fast fix: If your budget doesn't allow for tearing out dated cabinets, there's still hope. Consider other ways to update the kitchen, such as sanding and painting the existing cabinetry.

2. Closed floor plans

Blanco says the classic closed floor plan is a turnoff for most millennials, and suggests that sellers take whatever steps necessary to fix the issue.

How Home Equity Affects College Aid

by Amy McLeod Group


Fall is hunting season across the U.S., a time when high-school seniors target their favorite colleges and their parents aim for financial aid.

One factor to consider when applying: the impact of your home’s equity on financial aid. But prepare yourself. It seemingly takes an advanced degree to calculate eligibility, since formulas vary widely from school to school.

“I wish it weren’t so complicated. I study this day and night,” says Paula Bishop, a college financial-aid adviser in Bellevue, Wash.

Almost all U.S. colleges and universities require financial-aid applicants to fill out the Free Application for Federal Student Aid (FAFSA), which doesn’t ask parents about home equity. However, several hundred schools—many of them elite, private institutions—also require the College Scholarship Service Profile (or CSS Profile), an application created by the College Board for nonfederal financial aid. It asks applicants for the home’s purchase price, purchase year, current value and current debt and determines the home’s equity (value minus debt).

Here’s the catch: Schools that require the CSS Profile handle the home-equity information differently. Boston College, for example, looks at 100% of home equity. Stanford University announced last year that it won’t consider home equity at all. Cornell University will limit home equity to 1½-times the family’s adjusted gross income. So for a household with $800,000 in home equity making $200,000 a year, home equity is capped at $300,000 (200,000 x 1.5).

The school isn’t necessarily expecting parents to tap their home equity to cover their child’s tuition. Instead, the school considers home equity and other assets to determine how much parents can contribute toward college costs. The higher the assets, the more parents are expected to pay. Generally, the parental contribution is calculated at 5% of assets. At Cornell, the family with $300,000 in home equity will be expected to lay out $16,500 a year. Had the “true” home equity of $800,000 been used, the parents would be expected to cover $44,000 in costs a year.

This formula is actually more complex than I describe because schools consider other assets—not just real estate—and a number of other variables, such as the number of siblings attending college simultaneously.

But the bottom line is that the school’s home-equity formula can have an enormous impact on what parents pay—something Ms. Bishop, the financial-aid adviser, learned firsthand. In 2010, her son applied to American University in Washington, D.C., a school that uses the CSS Profile. At the time, her home equity was $700,000, even though the house had been purchased for $400,000. American says that, as a starting point, its policy is to assess 100% of home equity. Ms. Bishop says she initially received an aid package below what she expected. She appealed to the financial-aid office, arguing that her husband wasn’t working at the time and that increased home values in her area skewed the calculations of her ability to pay the parental contribution. As a result, the school agreed to cap her home’s value at two times her household earnings. Using the lower home equity resulted in an extra $6,000 in financial aid.

Real-estate holdings can affect financial-aid applications in other ways. First, unlike a primary residence, vacation homes are counted as an asset reported in both the FAFSA and CSS Profile applications. The same goes for rental properties—even if it is an apartment inside the family home leased to a nonfamily member.

If an investment property or second home is sold before applying for financial aid, the capital gains may be considered an asset if reported on a tax return and counted as income.

Also, when borrowing against your home, avoid a home-equity loan because the unspent proceeds are counted as an asset, says Julie Gross, a vice president with College Financial Consultants in Livingston, N.J. Instead, she recommends a home-equity line of credit (HELOC), which is the ability to borrow against your home.

A HELOC may also be a smart option for parents who need financing for their child’s education. Currently, HELOC rates are about 5.5% with no or low application fees, according to Bankrate.com.

By comparison, a college PLUS loan, which is a federal loan offered to parents for education expenses, charges about 7% to 8% interest with application fees up to 4% of the total loan.

If parents need to pay down credit cards or make home improvements, a HELOC actually improves their chances of getting financial aid because the line of credit lowers their home equity.


Tips For Applicants

Get the formula: Call the school’s financial-aid office and ask how it calculates home equity. Policies change, so confirm the formula early in the process.

Get an estimate: For a rough estimate of college costs, use the Net Price Calculator on schools’ websites.

Don’t overinflate home value: A high estimate can hurt your chances of qualifying for aid. Use home values based on comparable—and current—real-estate listings in your neighborhood.

Appeal the decision: Contact the financial-aid office and ask if there is a form or process for appeals. Generally, you write a letter explaining your circumstances—a job loss or medical condition—that underscore the need for more aid.

Contact The McLeod Group Network for ALL your Real Estate needs! Reach us at 971.208.5093 or [email protected] 

By: Realtor.com, Beth DeCarbo 

5 Surprising Financial Lessons I Learned About Paying For My First Home

by Amy McLeod Group


I pride myself on being pretty financially savvy—after all, I’m a personal finance writer. I’m well versed in best practices for saving and spending, the ins and outs of HSAs and IRAs, and the basics of investing.

But when it came time to buy my first house, I had to put my ego aside: I was way out of my depth as I navigated the world of mortgages, closing costs, and escrow.

While all of the Budgeting 101 basics still apply to purchasing a home—top tip: Don’t buy anything you can’t afford!—some aspects of the process can come as a surprise to first-time buyers.

Gearing up to buy a house of your own? Get acquainted with these five lessons that I learned the hard way before you start shopping. Then, you’ll be ahead of the curve when it comes time to make an offer on your ideal home.

1. Don't be fooled by your mortgage pre-approval amount

One of the first steps on the road to homeownership was requesting a mortgage pre-approval letter from a mortgage lender. I was shocked when my husband and I received a letter with a much higher number than we had ever considered spending.

The lender thought we could afford a house that cost how much?!

I quickly learned that a pre-approval letter is just assurance from a lender that the buyer is in good financial standing to take on a mortgage of a certain size. Lenders evaluate your financial history to come up with a pre-approval amount. Don’t confuse that number, though, with your actual budget for buying a house. In other words, just because you’re pre-approved for up to, say, $300,000, doesn’t mean a $300,000 mortgage will fit in your budget.

For us, we knew we didn’t want to stretch ourselves thin with a heftier mortgage, even if we were technically approved to take one out.

2. Closing costs can add up—and be complicated

Closing costs include out-of-pocket expenses like title insurance, notary fees, and the cost of the deed—and they can add up quickly. So when we made an offer on our house, we decided to ask for a credit from the sellers toward our closing costs—a common practice in which, typically, the seller advances an amount in cash that's then tacked on to the purchase price. But I was surprised when our Realtor® urged us not to ask for too much from the sellers at closing.

“Some loan programs only allow a certain percentage of the sale price to given to the buyer as a credit,” says Joe DiRosa, a real estate agent with RealtyTopia in Pennsylvania.

That means that if you’re offering $200,000 for a house and your lender only allows you to accept 2% in closing costs, you shouldn’t ask for $5,000—that would be $1,000 down the drain, since you can only accept up to $4,000 in credit. This type of limit on closing cost credits is especially common with government loans, including FHAs, DiRosa notes.

3. PMI isn’t actually the devil

Private mortgage insurance—PMI for short—is at once a blessing and a curse. Lenders typically require it of buyers who are putting down less than 20% on their mortgage. This puts homeownership within reach for more people, but it also means an additional monthly payment that doesn't add to the new owner's equity.

For that reason, PMI sometimes gets a bad rap—better to shell out the necessary down payment cash (if you can) than waste your money on insurance, right? But in some cases, it’s in your best interest to put less money down and pay the PMI.

That was the case for my husband and me. We decided to hold on to some of the cash we would have put toward a 20% down payment and use that money to renovate our home and pay off other debts with higher interest rates. Our PMI payment has been manageable—we pay about $75 a month—and it's worth it to keep our money in our bank account, where we can use it for projects like replacing the roof, renovating bathrooms, and creating a master suite.

4. You might have to make escrow payments

“Escrow” was a foreign word to me before buying a house. (Confession: I still picture a crow every time I hear it.)

Because we took out a loan with PMI, we were required to pay into an escrow account for our property taxes and home insurance. Escrow simply refers to the separate account where that money is held; basically, our lender sets aside the money for taxes and insurance, which acts as a safety net to ensure that we sock away enough money for those expenses.

While it’s nice to know we’re saving enough for taxes and insurance by paying into escrow, it’s also frustrating for control freaks like my husband and me, who would rather manage our money ourselves—preferably by putting that cash into a high-yield savings account where it can accrue interest. We’re looking forward to canceling our escrow payments as soon as we’ve built up enough equity in our home to remove PMI.

5. You need to budget for surprises (and your own mistakes)

During our home inspection, the inspector ran the dishwasher to make sure it worked—all good. Then, the day after we moved in, we loaded the dishwasher, hit “Start”—and it was dead. After flicking the electrical circuits on and off to no avail, we finally accepted that we would need to replace the dishwasher sooner than we had bargained for.

Several hundred dollars later, we learned that dishwashers are required to have their own wall switch, per local code. It turned out the old dishwasher wasn’t broken after all—the switch was just turned off.

All we could do was laugh, too slap-happy and exhausted from renovating to beat ourselves up much about the mistake. At least we planned to replace the dishwasher sooner or later, and we had enough savings to endure the blow. But the incident was a reminder that costly surprises (and stupid mistakes) are inevitable when you’re new to homeownership—and even when you’re not.

Contact The McLeod Group Network to start the search for your first home! Reach us at 971.208.5093 or [email protected] 

By: Realtor.com, Lauren Sieben

How Does the Supply of Homes for Sale Impact Buyer Demand?

by Amy McLeod Group


The price of any item is determined by supply, as well as the market’s demand for the item. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand).

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 3 of the 50 U.S. states, buyer demand is now very strong; only 2 of the 50 states have a ‘weak’ demand. Overall, buyer demand is slightly lower than this time last year but remains strong.

Seller Supply 

The index also asked: “How would you rate seller traffic in your area?”

As the map below shows, 18 states reported ‘weak’ seller traffic, 29 states and Washington, D.C. reported ‘stable’ seller traffic, and 3 states reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the buyers who are looking for homes.

Bottom Line

Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home for sale, let’s get together to help you capitalize on the demand in our market now.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for ALL your Real Estate needs! 

By: KCM Crew

Don't Fall Short! 6 Home Maintenance Tasks You Should Tackle This Autumn

by Amy McLeod Group


Autumn brings pumpkins and—love 'em or hate 'em—pumpkin spice lattes, sweater weather, and spooky skeletons. But most importantly, fall brings an end to a summer of outdoor adventures—and tedious yard tasks like weeding, mowing, and watering the lawn.

But just because the weather's cooling off doesn't mean your to-do list will, too. Before busting out the cinnamon spice and mulled wine, take on a few home maintenance tasks that will put you in good standing once temperatures dip.

"It's easier to prepare for a winter emergency in the fall," says Jericho McClellan, who works in construction management.

But fear not: We've got you covered with our checklist of home maintenance chores to tackle this season. Read on for details about where to start, and whom to call if you need backup.

1. Properly store your yard equipment

Storage shed
Björn Forenius/iStock

 

One of the best parts about fall: You can usually put your lawn mower into hibernation mode until spring.

But before you forget about that pesky piece of machinery entirely, remember this: Spring will suck if you don't prep your equipment this fall. That's because gasoline reacts with the air in the tank if left long enough, causing oxidation, which creates small deposits that can affect the performance of your mower.

And it's not just gas-powered equipment that needs a fall refresh.

Lester Poole, Lowe's live-nursery specialist, recommends running pressurized air through your pressure washers to remove any remaining water in the system, which will prevent freeze damage to the pumping mechanisms.

If your winter is particularly snowy and gritty, you'll be glad to have your pressure washer on high alert.

DIY: This project is easy to do yourself—just get rid of any spare gasoline. Many cities and counties have hazardous-waste programs, or your local auto parts store might take the old gas for you, too.

2. Protect your pipes

When temps dip below freezing, unprotected pipes can burst from exposure. Guard against burst pipes by wrapping them in foam insulation, closing foundation vents (more on that below), and opening cabinet doors under sinks to allow warm air to flow around supply lines. And make sure to keep your thermostat at 60 degrees or higher overnight.

If you haven't tracked down your home's water shut-offs yet, now's the time. They might be located outside your house or in your crawl space. Once you've found them, give them a test.

"The winter is not a fun time to try to figure that out, especially should a pipe burst," McClellan says. (More on that, too, in a minute.)

Now's also a good time to drain all of your exterior water hoses to prevent an icy emergency.

DIY: If your pipes do freeze, leave the affected faucets on and turn off your water supply, says Jenny Popis, a Lowe's Home Improvement spokeswoman. Then locate the freeze point by feeling the length of frozen pipes to determine which area is coldest. You can attempt to thaw it by wrapping the frozen section in washcloths soaked in hot water—then thaw until you have full water pressure.

Call in the pros: If you can't locate the freeze point or your pipes have burst, call in a licensed plumber, which will run $150 to $600 on average(depending on the severity of the leak).

3. Clear out your crawl space

While you're winterizing your pipes, peek around your crawl space. Is your HVAC system blocked by boxes of 50-year-old Mason jars? Can you get to any leaking pipes quickly?

DIY: While it's still warm, clear out any debris from your crawl space to ensure clear passage when winter's worst happens.

Call in the pros: Creeped out by the idea of crawling around under your house? Professional crawl space cleaners charge about $500 to $4,500, depending on the size of your house and the state of the space.

4. Close your crawl space vents

During your crawl space expedition, this is a must-do: Close the vents that circle your home's perimeter.

"The vents were placed there for a functional reason, not just aesthetics," says real estate agent, broker, and construction expert Ron Humes. "The problem is that most homeowners have no idea why they are there."

Here's why: In warm, wet seasons, crawl space vents allow airflow, which prevents moisture buildup. But if you leave them open during cold, dry weather, that chilly air will cool down your floorboards—making mornings uncomfortable.

DIY: "When the temperatures drop, slide those crawl space vents closed," Humes says. "Just remember to open them again in the spring."

If one of your vents is broken, replacements range from $20 to $50.

Call in the pros: If your crawl space stays damp through the fall and winter, you might want to consider waterproofing, dehumidifying, and sealing off your crawl space to prevent wet air. This can cost $1,500 to $15,000.

5. Kick-start your composting efforts

Compost bin in the garden

fotomem/iStock

Now's the perfect time, with all those leaves and dead plants, to start a compost pile. You don't even need a fancy compost spinner; sectioning off a corner of your yard is enough.

"Put yard waste to work by piling green leaves and clippings into a pile near your garden," Poole says. Next, layer with brown materials such as soil, dead leaves, and coffee grounds. Next up: kitchen scraps.

"Through the season, turn your mound using a pitchfork to expose oxygen to all ingredients and use it in the spring for fertilizer," Poole says.

Next year's tomatoes will thank you.

DIY: If your yard lacks space for a compost corner—or you have no interest in regular pitchforking—consider a tumbling composter. 

6. Protect your trees

Not all species of trees are winter-hardy—especially thin-barked ones like beech, aspens, or cherry trees. For these varietals, "sun-warmed sap quickly freezes at night and causes bark to split," Poole says.

He recommends wrapping your tree trunks with paper tree wrap, covering the entire bark from an inch above the soil to the lowest branches. Adhere the wrapping to the tree using duct tape to keep your trees in tiptop condition.

DIY: You can find 150 feet of paper tree wrap on Amazon for $18, although you may need a few rolls depending on how many trees need winter protection.

Call in the pros: Are your trees already looking the worse for wear? A tree service can help you sort out what's wrong. Pruning costs anywhere from $75 to $1,000.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for ALL your Real Estate needs! 

By: Realtor.com, Jamie Wiebe
Holly Amaya contributed to this article

5 Indications That You Could, in Fact, Afford to Buy a House Now

by Amy McLeod Group


So you're ready to ditch your landlord and the noisy neighbors who live above you. But instead of seeking out another place to rent, have you considered (like, seriously considered) buying?

For many people, purchasing a home is one of those bucket-list items—something you'll accomplish down the road—so the idea of starting the process here and now may seem out of the question. But there's a chance you're actually in a better position than you think.

Of course, every local real estate market is different, and your dollar will stretch further in certain cities. Half a million dollars in Waco, TX, will get you a heck of a lot more than $500,000 in San Francisco. Therefore, it's important to be realistic when choosing between renting or buying. In cities like San Francisco or Los Angeles, renting may make more financial sense than buying. Take a look, though, at the average home price in your neighborhood—maybe you can afford to buy after all!

Then, check out the following explanations, which will help you ponder your financial snapshot. You never know: You may be calling yourself a homeowner much earlier than you ever thought possible.

1. Your salary qualifies you for a mortgage

When determining if you can buy a house, your salary is one of the first figures you should take into account. But don't trick yourself into thinking that you can't afford a house simply because you don't make a six-figure salary! Use this quick equation from Lauren Anastasio, a certified financial planner with SoFi in San Francisco, to determine a realistic mortgage amount:

Multiply your annual income by 2.5, and then add your down payment amount to that figure. Your total amount is the max mortgage you should shoot for.

For example, if you make $80,000 a year, you're looking at a safe bet of a $200,000 mortgage, plus whatever you think you can save up for that down payment.

Anastasio says you should also take into account the regular housing expenses that come after the deal is done, including taxes, insurance, maintenance and repair, and homeowners association fees.

2. You can afford to put down at least 3%

Most first-time home buyers are intimidated by the idea of having to put down a large chunk of change. However, the traditional 20% down isn't your only option.

"The ideal down payment amount is 20% of the price of the home, because that's the minimum amount required to avoid paying private mortgage insurance (PMI). But that's not realistic for most home buyers, and shouldn't stop them from pursuing homeownership," says Candice Williams, a real estate agent with Re/Max Space Center in League City, TX.

Other paths to mortgages include conventional loans, which require a minimum of 3% down, and Federal Housing Administration (FHA) loans, which can go as low as 3.5% down. And if you're a veteran, you can qualify for a VA loan with no down payment. So take a look at your savings account and browse the home listings in your area. You might just find that your years of saving have actually put you in a position to qualify for a mortgage.

3. You have a little bit of debt

Another common misconception among first-time home buyers is that future homeowners must be debt-free in order to get approved for a mortgage loan. But don't worry—you can still buy a home even if you're still paying off your student loans.

"Lenders like to see a little debt. By paying down a car loan on time, you're showing the bank that you are a responsible borrower," says Andrew Helling, editor at REthority.com.

That being said, Williams points out that while it's fine to have current debts, first-time home buyers shouldn't be looking to add a mortgage if their current debts exceed 7% of their monthly income. That's because most lenders won't approve loans of more than 28% of a borrower's monthly income, and they're legally prohibited from handing out mortgages that are the equivalent of more than 35%.

"Either pay down those debts, or increase your income, in order to get loan approval," says Williams.

4. Your credit score is over 580

Another number lenders look at to determine your creditworthiness is your credit score. A perfect credit score is 850, and any score over 740 is considered to be great, but you don't need to fall in this range to be approved for a loan.

You can "absolutely" get a mortgage, Helling says, "as long as your credit is above 580—the cutoff for most loans—and you have enough money left over to make the mortgage payments and the debt payments."

If your credit score falls below 700, lenders will start to question whether you’re a risky investment as a potential borrower, and getting a mortgage will be more challenging. But, if your score is above 580, there's still hope in the form of an FHA loan or another type of conventional loan. The FHA requires a minimum 580 credit score (and other requirements) to qualify. Having a poor credit score means you'll probably be required to pay PMI, but the benefits of owning a home will far outweigh the negatives.

5. A starter home (if not a forever home) is within reach

Some first-time home buyers make the false assumption that the first home they invest in needs to be their forever home. But don't let that idea deter you from purchasing a modest starter home, even if you soon outgrow your new digs.

After a few years of homeownership, you will hopefully start to build equity, either through an increase in your property's value or by reducing your debt. Then, when your family expands and you need to buy a bigger house, you will have a quantifiable asset that you can use on your next property purchase.

What you shouldn't do is buy a house that you can't yet fill, hoping that your lifestyle later catches up. That can be a recipe for disaster.

"Never buy outside your means," Helling says. "Don't buy a home you can't afford, under the assumption that a promotion you expect in a few years will eventually pay the mortgage."

Contact The McLeod Group Network at 971.208.5093 or [email protected] to start the search for your new home! 

By: Realtor.com, Kristine Gill 

5 Crucial Questions to Ask Before You Buy a Fixer-Upper

by Amy McLeod Group


Thinking about buying a fixer-upper? Join the club. Blame it on the popularity of renovation reality TV or just the fact that people are searching for deals, but many home buyers are willing to purchase a property in need of major repairs. One survey by Clever Real Estate found that 67% of millennial home shoppers in the United States said they would put in an offer on a home with serious flaws that need to be fixed.

Purchasing a home that needs serious remodeling, though, isn’t a decision you should make lightly. Here are five questions to ask yourself before buying a fixer-upper.

1. What’s my motivation?

Reviving a rundown home is always a challenge, no matter how many houses you’ve flipped or episodes of “Fixer Upper” you’ve seen—and that's why it’s important to assess your motivations before you dive in, says Joshua Jarvis, founder of Jarvis Team Realty in Duluth, GA.

Simply enamored by what you’ve seen on HGTV? Newsflash: “Reality TV is not reality,” says Jarvis. “I hate to shatter people’s dreams, but there’s a lot more work involved than people think.”

 

Flipping an outdated house in order to make a profit, though, is a sound reason to buy a fixer-upper, Jarvis says. After all, home flips in 2018 returned an average gross profit of $65,000, according to ATTOM Data Solutions.

Purchasing a fixer-upper can also be a good idea if you’re looking to make a home your own without building one from scratch, or if you’re simply looking for a great deal. Indeed, people shopping for a fixer-upper can expect to spend 20% to 25% less than what they'd have to shell out for comparable homes that are move-in ready, says Dan Bawden of the National Association of Homebuilders. (Homes with serious issues—such as cracks in the foundation or a major mold infestation—can command even deeper discounts, Bawden says.)

Fixer-uppers are also good options for DIY buffs—your sweat equity will buy you bragging rights. What’s sweeter than being complimented on your kitchen and being able to say, "Thanks, I did it myself"?

2. Where am I going to live during the renovations?

Unless you’re planning to live in your new home while the renovations are underway, you’re going to need a place to stay until the house is ready. This can be a financial challenge, Bawden notes, since you have to factor in the time you'll be paying the mortgage and bills without being able to live in the home. Read: Six months of paying rent on top of your house payment can quickly eat into what you saved on your "great deal."

3. What’s my remodeling budget?

The best fixer-uppers are ones that mostly need cosmetic updates—things like kitchen and bathroom renovations, new floors, siding repair, or wallpaper removal—since major flaws can quickly eat up your remodeling budget. But, regardless of how much (or how little) work you’re going to put in, you need to have enough money to pay for the renovations.

Need help setting a budget? Have several contractors give you in-person estimates. That way you’ll have a rough but accurate idea of how much it’s all going to cost you. The caveat: You may have to pay the professional a few hundred dollars to walk through a potential home and estimate the renovation costs, but it's worth it.

4. How am I going to pay for everything?

Now that you know how much the renovations are going to cost, you have to figure out how you’re going to pay for everything. Unless you’re sitting on a mountain of cold, hard cash, you’ll need to obtain a home loan that allows you to spend a portion of money on home improvements. The good news: A home that requires major renovations can qualify for a special type of financing called a home improvement loan. There are two main types of home improvement loans.

The first is a FHA 203(k). This is a loan from the Federal Housing Administration that lets you put as little as 3.5% down. There are a couple of restrictions, though. The original foundation must remain, says Suzanne Caldeira, vice president at mortgage lending company Shamrock Financial Corp. Also, the upgrades you make cannot be “luxury” items, like adding a pool or fire pit. Third, the work must be completed within six months.

To qualify for a 203(k) loan, homeowners have to provide a bid from an approved contractor to make the upgrades they want with their loan paperwork. An appraiser reviews the home and the submitted bid, and appraises the estimated value of the home post-renovation. Once the loan is approved, the money for the renovation is put into escrow. After the work is completed—the deadline is six months—an inspector visits to determine that it's been done correctly, and then the money is released to the contractor. In the same way as with traditional FHA loans, you can pay the money back over 15 or 30 years.

The second type of home improvement loan is a Fannie Mae HomeStyle loan. It’s similar to a 203(k) loan, but it requires a down payment of at least 5%. Another difference: There's no limit to the kinds of renovations you can do, as long as everything is permanently affixed to the home and adds value.

Like a 203(k) loan borrower, you will need to hire an approved contractor and submit a bid for the project with your loan paperwork. You then have an appraiser determine what your home will be worth after the renovations. Once you've got that number, you can borrow up to 50% of that appraised value to work on the renovation. As with a 203(k) loan, the money for the renovation is held in escrow until the work is completed and inspected and is then released to the contractor. However, with the HomeStyle loan, you get 12 months to complete the renovation, instead of six. You then pay it back over a period of 15 to 30 years at either a fixed or adjustable rate.

5. Am I prepared to manage this project?

From finding the right house and negotiating a deal, to hiring contractors and securing permits, there will without a doubt be plenty of moving parts for you to oversee during this whole process. That will mean you need to ask yourself whether you have the time and the patience to manage everything.

While hiring a general contractor to oversee the renovations can help lighten the load, reviving a fixer-upper is still a huge commitment, so make sure you know what's required before you dive in.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for all your home-buying needs! 

By: Realtor.com, Daniel Bortz

Small Kitchens Can Be Chic! 5 Ideas to Try Based on Your Design Style

by Amy McLeod Group


Small kitchens
 may not cater to the taste of every homeowner, but they certainly have their benefits. In a compact kitchen, there are fewer surfaces to clean, and everything you need—from olive oil to an extra hand towel—is within arm's reach.

And while living with a small kitchen means that you have less space to play with the decor, you can still make your mark. The trick, according to Karen Gray-Plaisted of Design Solutions KGP, is to keep it simple.

"Don't overdo the finishes and surfaces," she says, "otherwise it'll look too cluttered. For example, if you have a stainless fridge, install the hardware around it in a similar-looking finish. And keep cabinetry and counters in the same color family, so your kitchen feels more spacious."

To get you started, we've come up with five fun styles for a small kitchen, with recommendations on how to achieve these looks. The result? Easy upgrades that'll make your small kitchen a space where you love to spend time.

Modern farmhouse


Photo by G.W. Smith Lumber Co. 

Yes, you can channel Joanna Gaines and her wildly popular decor of choice, modern farmhouse, in a small kitchen. Jamie Novak, an organizing whiz and author of "Keep This Toss That," recommends a white color palette and opening shelving. "This type of shelf actually makes a small kitchen appear larger," she says. Incorporate wood tones into a modern farmhouse kitchen by installing rough planks as shelves, or try an industrial-style rolling cart made from wood, says Julie Coraccio of Reawaken Your Brilliance.

Stick to a simple palette of grays, taupes, and charcoal paint on the walls, and complete the look with a subway tile backsplash, a farmhouse sink, Shaker-style cabinets, and vintage accoutrements such as a clock or a worn wooden sign.

Feminine


Photo by The ABL Group 

Contrary to popular belief, you don't have to include a single pink element to achieve a feminine-style kitchen. For this look, choose elegant metallic fixtures for the sink, drawer and cabinet pulls, and lighting.

Novak says your window treatments and dish towels are great ways to incorporate delicate touches like ruffles or floral prints. "But steer clear of small prints, as they'll make the space feel cramped and cluttered," she says.

Coraccio recommends artwork to bring a feminine style to the fore. Or consider a dramatic chandelier over the kitchen island and fresh flowers or potted herbs to brighten up the room.

Rustic


Photo by Laura Medicus Interiors

A rustic kitchen is characterized by lots of wood (on floors, cabinets, the table, and countertops), but beware: It could look heavy in a small space. To lighten up this look, Novak suggests choosing paler versions of these materials. For example, if you have wooden countertops, consider painting your cabinets white.

Chunky drawer pulls and wrought-iron brackets to prop up shelves are two smart additions.

And don't forget texture in a rustic space. Leather door pulls, woven wicker baskets for fruit and veggies, and touches of metal and stone (a copper faucet or earthenware dishes) will enhance this design. "A butcher block or live-edge counter, black or rubbed-bronze fixtures, and farmhouse sinks are also common components in this kitchen style," says Gray-Plaisted.

Modern


Photo by Vertebrae Architecture 

Minimalism is the name of the game when it comes to designing a modern small kitchen. Shoot for a monochromatic color scheme, contrasted with pops of an edgy shade like orange, turquoise, or lime green. "Sleek hardware and flat panel cabinet doors are also appropriate," says Novak.

Forgo anything that could be misconstrued as clutter. Excess decor and too many countertop items are a definite no-no when going modern. Instead, invest in shiny finishes, frosted glass on cabinet fronts, and industrial light fixtures and bulbs to channel a modern vibe. Gray-Plaisted says matte black finishes, as well as cement flooring and countertops, are trending in modern kitchens.

Shabby chic


Photo by Big Chill 

Shabby chic style is all about showcasing timeworn treasures that look as if they were sourced from an antique shop. The color palette is always light and bright, so when painting your walls or cabinets, choose cream, off-whites, or pastels like robin's-egg blue, soft pink, or buttery yellow.

Don't be afraid to use mismatched dishes, mugs, and serving ware. "Vintage hand-me-downs and rescued items that you refinish yourself help with this eclectic, mismatched look," says Novak. Hit up a flea market for hand towels covered in Battenberg lace, delicate embroidery, or a floral pattern. A vintage metal sign is also a quintessential shabby chic accessory. Extra points for sourcing a retro stove or refrigerator! Just make sure it's fully functional.

Get tips on remodeling and design inspiration by contacting The McLeod Group Network at 971.208.5093 or [email protected]

By: Realtor.com, Jennifer Kelly Geddes 

Help, We Have a Leaky Roof! What to Do If This Happens to You

by Amy McLeod Group


I’ve known we needed to replace the roof above our front porch for some time now. It’s flat (water doesn’t drain well from it); we live in Florida (there are downpours nearly every day); and I can see the spreading stains on the stucco from my office window. It’s been on my expensive-things-we-should-do list for a while.

As we started to gather estimates on the repair job, however, we began wondering if we should replace the roof on our entire house instead. It’s already 20 years old, and even though it’s largely in good shape now, we know it has to be done sooner or later. Since roofers would be up there anyway, maybe it was the right move, even though the idea of spending money on something so boring—yes essential, but boring—wasn’t on my things-I-want-to-spend-money-on list.

How much does it cost to replace a roof, anyway?

If you had asked me what a new roof might cost a month ago, I would have given you an estimate so laughably short of the mark that Bob Barker would have forever banned me from the “Price Is Right." The initial quotes we got for a new roof were jaw-dropping—upward of $50,000 jaw-dropping.

Of course, there are many variables when it comes to cost, including the type of roof, where you live, and the size of your house.

We happen to have a concrete tile roof, and our home is over 3,000 square feet. So, we’re on the high end when it comes to roof replacements, but it's a big expense any way you look at it.

On average, the cost of a new roof ranges from about $22,636 for asphalt shingles to $38,600 for a metal roof nationwide, according to Remodeling magazine.

With these figures burning my eyes, my next question was: Do we really need to replace the whole roof? Or could we do just the necessary repairs?

How long does a roof last?

Complicating this decision, we’d like to sell this house in the near future so we can move closer to a new job. So, can we just wait it out and hope for the best?

Experts say most roofs last between 15 and 40 years, while some, such as those made of tile shingle, are meant to last hundreds of years. However, how long a roof is meant to last and how long it actually lasts are often two very different things.

For example, Connor Sullivan, a storm restoration specialist with American Roofing, says a three-tab shingle roof is supposed to last 20 to 25 years, but most last only 12 to 15 years due to weather, improper installation, and lack of ventilation. An architectural shingle roof is designed to last up to 40 years, but he says most usually last only 25 to 30 years.

That means we could have 10-plus more years with this roof—or not.

To reroof or repair?

It all seems like an expensive gamble, but industry experts say there are some important factors to consider.

“If you're only going to be living there for a couple more years and then selling, it may make sense to make minor repairs and move on, assuming the roof is in generally good shape,” says Corey Crossman, a real estate agent and broker in Raleigh, NC.

“If you plan on staying for the long haul and your roof is giving you trouble, it's better to replace it right away and enjoy years of a good roof rather than put it off and battle roof leaks and other problems.”

He says what you don’t want to do is continue repairing a roof that has outlived its life expectancy.

“Many homeowners would rather spend a few hundred dollars here and there to make repairs than take the big hit and spend several thousand for a new roof," he says. "But in most cases, they'd be better off investing in a roof replacement, enjoying the best years of the roof, and then reaping the rewards if and when they sell the home.”

If your roof has been damaged due to weather, don’t forget to contact your insurance company, as some repairs or replacements may be covered under your homeowners policy.

“Going through insurance should always be your first option to save you from spending an arm and a leg on something your insurance should be helping you with,” Sullivan says.

We did indeed contact our insurance company, and it deemed a small portion of our porch roof damage to be weather-related. We got a small check to help cover the cost of repairs.

What's the ROI on a new roof?

The question of a new roof’s return on investment,or ROI, is a big variable to consider as well. Of course, there are no guarantees, and experts have varying opinions on the ROI of a new roof. Most say it’s not 100%, but it can make a significant difference when it comes to selling a home.

“If your house needs a new roof and the roof costs $10,000, it probably doesn't mean you'll be able to sell the home for $10,000 more than your competition,” Crossman says.

“However, where you can really cash in is the speed at which your house will sell. A home with an old or failing roof just begs for lowball offers and will likely be sitting on the market for quite some time before a buyer is willing to step in and pay market price for it," Crossman continues. "If you don't want to sell your home at a discount and you want to sell fast, opt for the new roof.”

Demetrius Gray, former roofing company owner and CEO of WeatherCheck, a technology startup that monitors properties for hail damage, offered this insight. “The ROI can vary a lot because a bad roof can be a deal breaker when it’s time to sell because they cause appraisals to fail,” he says. “A new roof should be about a 5% increase in value, and more if the workmanship and material warranties are transferable.”

Repair or replace: What we did with our roof

In the end, we decided to repair our roof where necessary and focus our funds on other home improvement projects. We’re painting the exterior, replacing the outdoor lights and fixtures, getting a new front door, and doing some other cosmetic changes to make the house look more modern. We’re hoping this adds some value and curb appeal and will allow us to enjoy the house more for the remaining time we spend in it.

We don’t assume the ROI on these improvements will be as high as that for a new roof, and we realize we may end up having to replace our entire roof down the line. In the meantime, we’re excited about our home makeover, crossing our fingers we made the right decision and hoping the hurricane seasons are mild.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for ALL your Real Estate needs!

By: Realtor.com, Julie Ryan Evans

Home Sales Expected to Continue Increasing In 2020

by Amy McLeod Group


Freddie Mac
Fannie Maeand the Mortgage Bankers Association are all projecting home sales will increase nicely in 2020.

Below is a chart depicting the projections of each entity for 2019, as well as for 2020.

As we can see, Freddie MacFannie Mae, and the Mortgage Bankers Association all believe homes sales will increase steadily over the next year. If you’re a homeowner who has considered selling your house recently, now may be the best time to put it on the market.

 

Contact The McLeod Group Network at 971.208.5093 or [email protected] for ALL your Real Estate needs!

 
By: KCM Crew

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The McLeod Group Network
Keller Williams Capital City
1900 Hines St SE #220
Salem OR 97302
971-208-5093
Fax: 971-599-5229

**Disclaimer: Amy McLeod, and her team, do not initiate, process, or service mortgages.  And provide this information only as a service.  You should confirm information here with your Licensed Mortgage Lender.