Increasing your home’s appeal
Remember the 8-second rule: That’s all the time you have to create a winning first impression. Here are some simple yet significant ways to maximize your home’s appeal.
Exterior
* Keep the grass cut and remove all yard clutter.
* Weed and apply fresh mulch to flower beds.
* Apply fresh paint to wooden fences.
* Tighten and clean all door handles.
* Clean windows inside and out.
* Powerwash home’s exterior.
* Ensure all gutters and downspouts are firmly attached and functioning.
* Paint the front door.
* Buy a new welcome mat.
* Place potted flowers near the front door.
Interior
* Evaluate the furniture in each room and remove anything that interrupts “the flow” or makes the room appear smaller. Consider renting a storage unit to move items off-site.
* Clean and organize cabinets, closets and bookshelves.
* Clean all light fixtures and ceiling fans.
* Shampoo carpets.
* Remove excessive wall hangings and knick-knacks.
* Repair all plumbing leaks, including faucets and drain traps.
* Make minor repairs (torn screens, sticking doors, cracked caulking).
* Clean or paint walls and ceilings.
* Replace worn cabinet and door knobs.
* Fix or replace discolored grout.
* Replace broken tiles.
* Replace worn countertops.
Special details for showings
* Turn on all the lights.
* Open all drapes and shutters in the daytime.
* Keep pets secured outdoors.
* Buy new towels for bathrooms.
* Buy new bedding for bedrooms.
* Replace old lamps or lampshades.
* Play quiet background music.
* Light the fireplace or clean out the ashes and light a candelabrum.
* Infuse home with a comforting scent, such as apple spice or vanilla.
* Set the dining room table for a fancy dinner party.
* Vacate the property while it is being shown.
Most home buyers don’t know what many investor buyers have faced for years: the requirement from FHA that a house be “held” by an investor for 90 days before being resold. For an investor who wants to buy a foreclosed property, fix it, then resell it or “flip” it, this requirement adds thousands of dollars in costs that come out of the investor’s pocket.
FHA announced it is temporarily lifting this restriction–with some qualification–in order to allow buyers to more easily purchase homes being sold as a result of foreclosure. This is a good move on the part of FHA. It is good news for the real estate market in general. From what I’m hearing, we are likely to be seeing foreclosures continue to flood the market.
Doing away with the 90-day requirement will help the coming trend that shows the foreclosure problem is beginning to move up market as well. As more “middle class” owners face layoffs and unemployment, higher priced homes are coming on the market as foreclosures. For an investor, the higher value in a house the greater the risk of loss and the more need he has to fix it and sell it quickly. These new guidelines will allow investors to fix and flip these higher value homes.
There are some restrictions aimed to limit the predators while allowing legitimate investors to show how they increased the value of a property and justify their profit. This new p0licy will likely not get the media attention the tax credit received, but I believe it may prove to be as effective at helping the market absorb the continued flood of foreclosures.
Click HERE for the full report on the HUD website.
Specific details of this temporary policy are available on the HUD website.
photo credit: fPat
Some lenders are starting to write down the principal for some homeowners in trouble, according to a story in this weeks edition of Business Week. Mortgage work-out solutions in the past have just addressed the interest side of loans, giving very little to homeowners who now owe significantly more than the present market value of their home.
Banks can either forgive part of the principal or merely defer it. If principal is deferred, the homeowner must pay back the full amount of the loan when he sells the house. If the house doesn’t sell for enough to cover the balance, the homeowner has to pay the difference. Such a solution may just push the problem down the road for many people.
It is still rare for banks to forgive or defer principal. But in the 3rd quarter of 2009, 3% of the total mortgages that were modified included principal modification–either reduction or deferral.
The writers of this article didn’t mention the effect of mortgage write-downs on the homeowner’s credit. It is likely such a new concept that the rules of the game have yet to be established. I will venture a guess, however, that the effect will be similar to that of a short-sale: that is, it will not be the train wreck that foreclosure can be. But it will have a significant impact on the credit score.
photo credit: greeblie
Notes from a presentation given by the chief economist of the National Association of Realtors:
1. The market is at the bottom. For those who have been waiting, this is it!
2. Mortgage defaults will continue. For buyers this means prices should stay at a bargain for at least a little while.
3. Foreclosures are moving up the ladder. People who are underwater on their mortgages may walk away rather than keep paying.
4. Mortgage rates are going to rise sometime. As the market gains strength, rates will rise to combat inflation.
5. The buyer’s market won’t continue in all areas. Inventories are starting to shrink.
6. There may be a new loan modification plan coming down the pike. The present one isn’t working as well as hoped.
7. FHA may tighten their standards. Possibly FHA will start requiring a higher down payment.
8. The overall recovery will begin showing in the last half of 2010. (Although there are other experts who say just the opposite.)
9. The tax credit will not be extended again.
10. Residential real estate will start to recover, but commercial real estate and lending will likely not recover until 2012 or after.
