Buying a Fixer-Upper

For some home buyers, a fixer-upper is their idea of a dream home. Preparing for the process comes down to creating a plan, knowing what to look for, and understanding what financing options are available.

 

Image Source: Shutterstock

 

Create a plan 

Fixer-uppers require a future-oriented mindset. Knowing the magnitude of the project you and your household are willing to take on will help dictate your budget and expectations as time goes on. Understand that in addition to the down payment and closing fees, the costs inherent in a fixer-upper purchase have the potential to go over-budget easily. Familiarize yourself with permitting in your area to understand how to navigate any legal roadblocks in the renovation process.

 

What to look for 

Location: Whether you are purchasing a fixer-upper with plans to sell it, rent it out, or live in it, consider its location before purchasing. If you’re planning on selling or renting, location is one of the most important factors to making a return on your investment. And if you’re planning to live in your fixer-upper, keep in mind that location will be a large part of your experience in the home.

Scope of renovation: If you are looking for a smaller scale renovation, look for fixer-uppers that require cosmetic projects like new interior and exterior paint, fresh carpeting and flooring, appliance upgrades, and basic landscaping maintenance. More expensive and involved projects include reroofing, replacing plumbing and sewer lines, replacing HVAC systems, and full-scale room remodels.

Inspections: Beyond a standard home inspection, which covers components of the home like its plumbing and foundation, consider specialized inspections for pests, roof certifications, and engineering reports. This will help differentiate between the property’s minor flaws and critical problems, further informing your decision when it comes time to prepare an offer.

 

Financing options

Renovation loans allow buyers to finance the home and the improvements to the home together. Extra consultations, inspections, and appraisals are often required in the loan process, but they help guide the work—and thereby, added value—of your fixer-upper. Talk with your lender about which option is best for you.

 

  • FHA 203(k): The Federal Housing Administration’s (FHA) 203(k) loans can be used for most projects in the process of fixing up a home. In comparison to conventional mortgages, they accept lower incomes and credit scores.
  • VA renovation loan: With this loan, the cost of the improvement projects is combined into the loan amount for the home purchase. Contractors employed in any renovations must be VA-approved, and a construction fee may be charged by the lender.
  • HomeStyle Loan – Fannie Mae: The HomeStyle Renovation Loan can be used by home buyers purchasing a fixer-upper, or by homeowners refinancing their homes to cover the improvements. Funds are distributed directly to contractors via a separate escrow account. This loan also allows for luxury projects, such as pools and landscaping.
  • CHOICERenovation Loan – Freddie Mac: This renovation mortgage is guaranteed by Freddie Mac, allowing projects that bolster a home’s ability to withstand natural disasters.
If you’re interested in buying a fixer upper, talk to your Windermere agent to help you understand the process and discuss what makes the most sense for you.
Originally posted by Sandy Dodge

Posted on September 28, 2020 at 6:41 pm
Elizabeth Dolton | Posted in Buying |

Ready for a change?

We are your local experts in both construction and real estate. Whether you are looking to sell and capitalize on improvements or simply update your home, we provide professional advice to help guide your decision. Contact us for a complimentary consultation today!

Consultation includes: Home Equity Analysis, Remodeling Ideas, Industry Resources, DIY Guidance, Return on Investment advice, Design & Staging Tips, Answers to your home questions!

Posted on September 4, 2020 at 4:09 pm
Elizabeth Dolton | Posted in Buying, Living, Selling |

Buying with Pets in Mind

For many of us, pets play a central role in our home life, so taking into account what is best for them when buying a home is important for both their happiness and that of your entire household.

 

Image source: Canva

 

 

 

Your neighborhood

 

When looking for homes that are well suited to both you and your furry companion, consider the area surrounding the home. If your pet is an indoor/outdoor animal, it’s important to examine the hustle and bustle of the neighborhood. If your pet spends time outside, a busy neighborhood could be dangerous, and depending on the level of traffic, he or she may need to be on a leash at all times.

 

How conducive is the neighborhood for taking your pet on walks? If you frequently walk your pet, look for neighborhoods with sidewalks. If your pet enjoys being off-leash, consider prioritizing homes with green belts, parks, trails, or designated off-leash areas nearby. It’s also a good idea to identify where the local emergency pet centers and veterinarian clinics are to insure there is sufficient medical care for your pet in proximity to where you live.

 

Your House

 

  • Size: Is the house big enough? Depending on the type of pet, or breed of animal, space may be the most important factor in picking a pet-friendly home. If you are moving into a bigger space than you were in previously, understand your pet will likely take to the additional room differently. On the flip side, if you are downsizing, be mindful of how it might impact your pet.
  • Yard: If you have a pet that spends time outside, it’s important to pay particular attention to the yard. Is it large enough? Does it have a secure fence? Is there easy access between the home and the yard?
  • Flooring: Pet-friendly flooring can be tough. Surfaces that can be repaired or refinished when scratched are typically the best options for homes with pets. Sealing additional layers will build up the resistance to damage from paws, claws, and general pet wear and tear.
  • Carpet: Cats are notorious for clawing and scratching at carpet, and dogs are infamous for bringing the outdoors in with them. Consider carpeting of a lesser quality in the area where your pets spend most of the time, or search for carpets that are stain resistant and easy to clean.
  • Stairs: Older pets and multileveled homes are at odds. Consider the age of your pet and how active you expect them to be so that you don’t find yourself in a position where you’re having to carry your pet between floors.

 

HOA?

When looking at a home, ask whether or not it is a part of a Homeowners Association and what restrictions may apply to the property. For instance, certain HOA developments limit the number and/or type of pets per household.

 

Most pet owners take the needs of their pets seriously. In fact, in a recent Realtor.com survey, 75 percent of the respondents said they would not accept an otherwise perfect home if it didn’t meet the needs of their pet. When it comes down to it, prioritizing your pet when buying a home not only insures your pet’s well-being, but that of your household, as well.

Originally posted by Sandy Dodge

Posted on August 14, 2020 at 6:34 pm
Elizabeth Dolton | Posted in Buying, Living |

Questions to Ask During Your Virtual Home Tour

Thanks to COVID-19, the new reality is that many open houses and home tours are being conducted virtually. For prospective home buyers, this new territory brings an added element to prepare for in the home buying process. Some of the questions that should be asked in a virtual home tour parallel those of in-person tours, but others are unique to today’s virtual world.

Image Source: Canva

Could you zoom in?

  • Sometimes it can be difficult to get a true glimpse at what you want to see in a room. Asking the agent to zoom in on specific features is commonplace in virtual home tours, and they understand this is part of the viewer experience. Don’t hesitate to ask multiple times. Getting a better look at everything you want to see will help you feel like you’ve gotten the most out of your virtual tour.

 

How many square feet are in this room?

  • Virtual tours can slightly distort space, making it tough to gauge the size. The room-to-room square footage is information the agent is sure to have handy. Since you can’t be there in person, it will help you piece together the virtual visuals with the sense of physical space that we’re all accustomed to feeling in the places we live.

 

What color is that?

  • In the smartphone era, and computer era at large, we have come to understand that digital representations of color are not always true to the eye. Ask the agent to confirm specific colors so you can plan accordingly. Have a color swatch on hand or look the colors up online as you go through the tour.

 

When were the appliances last updated?

  • The importance of this question rings true in past, present, and future. Knowing the state of the home’s appliances, and the likelihood and timing of when they will need replacement, is vital information for both assessing the move-in readiness of the home and understanding what costs might lie ahead.

 

Has the seller provided an inspection?

  • This is another example of a critical question, whether your home tour is virtual or physical. If the seller has already done an inspection, ask the agent to lead you to any areas of concern based on the inspector’s findings. If there is anything that has not yet been addressed by the seller, have your agent ask what their plan is for making the necessary repairs/updates.

 

When is the offer review date?

  • Understanding the seller’s timeline for reviewing and accepting offers will help guide your decision-making process and allow you to strategize based on the timeline.

 

Whether your home tour is physical or virtual, getting the information you need to make an informed decision remains paramount. Although there is no substitute for physically being in the home you are looking to buy, keeping these questions in mind will position you well as you progress through the home buying journey.

Originally Posted by Sandy Dodge


Posted on May 21, 2020 at 4:52 pm
Elizabeth Dolton | Posted in Buying |

Saving to Buy a Home During COVID-19

The COVID-19 pandemic is changing the way people plan for their future. For those saving to buy a home, the landscape may seem daunting. However, this new world of social distancing and stay at home orders is an opportunity to rethink your spending and saving plans. Keeping the following suggestions for your budget and finances in mind can help make your dream of buying a home a reality.

Image Source: Canva

Rethink your budget:

If there have been changes to your income amid COVID-19, adapting your budget is a logical and necessary step. If your income has gone unchanged, certain tweaks to your budget can yield significant savings. Knowing the leisure portion of your normal expenditure has been removed for the time being is a great starting point for reassessing your spending.

 

  • Begin with your income and assets
  • Determine your household’s new baseline and arrange your new budget accordingly
  • Divide your budget expenses out into Fixed and Variable
  • Adjust for changes in essential costs—Housing, Utilities, Insurance, Food
  • Put into savings what normally would have been your leisure spending money

 

As the stay-at-home lifestyle continues, take a look at your unnecessary costs for such things as memberships, subscriptions, and online shopping. Reach out to the subscription organizations and see if they are offering any options to delay your membership until a later date.

 

  • Categorize all active memberships as Cancel, Adjust, or Keep
  • For live entertainment, research how far out the venues have postponed shows
  • Adjust your online shopping needs for your current lifestyle
  • Reassess the must-haves of your new stay-at-home daily life

 

Review your finances:

If you’re planning on buying a home in the near future, you are likely already on your financial planning journey. With added uncertainty around COVID-19’s effective timeline, the more information you can gather, the better. In these unprecedented times, flexible solutions are being provided to customers. Exploring what options your banks and issuers are offering will keep you informed and prepared while keeping your finances in order.

 

Contact your credit card issuer to see if they are offering any of the following options to customers:

  • Payment deferral or forbearance
  • Flexible fee policies
  • Lowering your monthly payment or interest rate temporarily
  • Forgiveness or relief from late fees

 

Following the steps outlined above can go a long way towards helping you save for a home. As your finances are impacted by the COVID-19 pandemic, take time to adjust accordingly. Continuing to gather information and developing a strategy will help you steer your eventual home purchase in the right direction through these uncertain times.

 

Originally posted by Sandy Dodge


Posted on April 20, 2020 at 4:22 pm
Elizabeth Dolton | Posted in Buying, Living |

Coronavirus Protections for Home Buyers

As the situation develops with the COVID-19 pandemic, Windermere Real Estate is dedicated to taking steps to reduce the spread of the virus while continuing to work with home buyers. To help with this process, here are some ways you as a home buyer can keep yourself and others safe during the buying process.

 

WHEN TOURING HOMES

❱ Only tour the property if you feel healthy.

❱ Ask your Windermere agent to show you the property instead of attending an open house.

❱ Drive separately from your agent to the property.

❱ Be considerate of the seller’s home and wash or sanitize your hands before entry, touching as little as necessary. While many sellers will likely provide it, bring your own hand sanitizer and use before and after you tour the home. You might also consider wearing disposable gloves for further safety.

❱ Ask your agent to confirm with the seller’s agent that they have not recently been sick or in contact with someone suspected of having COVID-19.

❱ Sellers often ask you to take off your shoes when you tour their home or wear protective booties that have been provided. Consider bringing your own booties and throwing them away when you’ve finished touring.

❱ Be mindful of how much you touch things in the home and minimize contact with doors and hand railings.

❱ Reduce the amount of time spent with other people in the same room. This “social distancing” practice can curb person-to-person spread.

DO NOT TOUR HOMES IF

❱ If you are currently self-quarantined because of illness or other reasons, you should not tour homes in person. Ask your Windermere agent to video chat with you while they tour the home so you can see it virtually.

❱ Do not view homes when you’re sick, feeling like you’re about to be sick, or getting over an illness.

❱ We do not recommend touring homes after returning from international travel or travel that exposed you to a large group of people in close quarters, like large events.

 

Find our Coronavirus Protections for Home Sellers here:

Originally posted by Sandy Dodge


Posted on March 18, 2020 at 8:57 am
Elizabeth Dolton | Posted in Buying |

How to Handle a Home Inspection

For many people, a home inspection is a hurdle that every homeowner must overcome during the process of selling a home, but it’s a useful tool for sellers looking to get the greatest possible value from their home.

Image Source: Canva

 

 

Finding Issues

When you’re selling a house, a pre-sale inspection can be particularly useful. By uncovering any potential problems your house may have, an inspection can give you an opportunity to address them before your first prospective buyer arrives.

In any market, a pre-sale inspection can give your home a competitive edge. Potential buyers are likely to find the kind of detailed information an inspection provides reassuring—and are encouraged to give your home a closer look.

 

When does a home inspection make sense?

In addition to routine maintenance and pre-sale inspections, there are a number of circumstances in which a home inspection could greatly benefit a homeowner. If you are not sure, here are a few simple questions to ask yourself:

  • Was your home inspected when you bought it? If not, an inspection would be beneficial even if your home was a new construction at sale.
  • If you are an older homeowner who intends to make upgrades in order to stay in the home, it makes sense to hire a professional who can inspect difficult-to-reach areas and point out maintenance of safety issues.
  • An inspection can alert you to any potential safety issues that could possibly affect a growing family, such as mold, lead, or structural problems. If mold or lead is present, be sure to rely on technicians or labs with specialized training in dealing with these conditions.
  • Are you buying a home that’s under construction? You may want to hire an inspector early on and schedule phased inspections to protect your interest and ensure that the quality of construction meets your expectations.

 

What doesn’t your home inspection cover?

For a variety of reasons, some homes will require special inspections that are not covered by a typical home inspection. A specialty inspection might include a sewer scope, septic system, geotechnical conditions (for homes perched on steep slopes or where there are concerns regarding soil stability) or underground oil storage tank. If you have any questions about whether your home needs a specialty inspection, talk to your real estate agent.

 

Hire a professional

If you decide to hire a home inspector, be sure they’re licensed in your state. They should be able to provide you with their license number, which you can use to verify their status with the appropriate government agency. It’s also helpful to ask for recommendations from friends and family members. Even among licensed and qualified home inspectors, there can be a difference in knowledge, performance and communication skills, so learn what you can before you hire a home inspector to ensure that you get the detailed inspection that you want.

 

What to ask your home inspector

Ask the right questions to make sure you are hiring the right professional for the job.

What does your inspection cover?

Insist that you get this information in writing. Then make sure that it’s in compliance with state requirements and includes the items you want to be inspected.

How long have you been in the business?

Ask for referrals, especially with newer inspectors.

Are you experienced in residential inspections?

Residential inspection in a unique discipline with specific challenges, so it’s important to make sure the inspector is experienced in this area.

Do you make repairs or make improvements based on inspection?

Some states and/or professional associations allow the inspector to perform repair work on problems uncovered in an inspection. If you’re considering engaging your inspector to do repairs, be sure to get referrals.

How long will the inspection take?

A typical single-family dwelling takes two to three hours.

How much will it cost?

Costs can vary depending upon a variety of things, such as the square footage, age, and foundation of the house.

Can I be there for the inspection? Will you go over the inspection report with me?

This could be a valuable learning opportunity. If your inspector refuses, this should raise a red flag.

Are you a member of a professional home inspector association? What other credentials do you hold?

Ask to see their membership ID; it provides some assurance.

Do you keep your skills up to date through continuing education?

An inspector’s interest in continuing education shows a genuine commitment to performing at the highest level. It’s especially important in older homes or homes with unique elements.

 

Originally posted by Meaghan McGlynn


Posted on March 2, 2020 at 5:55 pm
Elizabeth Dolton | Posted in Buying, Selling |

Vacation Home or Income-Producing Investment

Whether you’re a skier who loves the mountain slopes of Colorado, a lover of the beaches of Southern California, or a potential retiree seeking to escape the snow-laden Northeast for the wide-open, sunny lands of Arizona, there are homes available to meet a wide range of budgets. The biggest decision a potential second homeowner must make is whether they are going to solely own their vacation home or turn it into a vacation rental. Here are the advantages and disadvantages to both options:

 Image Source: Alex Master Shutterstock

Investing in vacation rentals

  • Pros:
    • A good vacation rental property generally provides a healthy rental revenue which could potentially cover mortgage payments while also generating healthy additional profit.
    • Using an online short-term rental service like Airbnb makes it convenient to manage your rental property. Their website interface makes pricing, marketing, and communication with potential guests quite straightforward and easy. Airbnb will also oversee the billing process for you.
    • You may qualify for federal tax breaks and deductions related to your investment property. Everything from professional fees or commissions – including property management services- to cleaning and maintenance are potential tax write-offs.
  • Cons:
    • Vacation rentals can be costly to manage, both in terms of time and money. These properties may require seasonal upkeep and special maintenance considerations. You may even incur costs to maintain or monitor the property even when it’s not actively being utilized.
    • Vacation rental properties are particularly sensitive to seasonal fluctuations and economic downturns, which could leave you financially exposed if you suffer a lack of booking revenue.
    • Many states and cities are cracking down on short-term rental services. In California, for example, the fight has been primarily local, reaching a fever pitch in the San Francisco Bay Area. Increasingly state and local municipalities are seeking to reign in short-term vacation rentals, which could put a damper on potential revenue from these properties.
    • You may experience higher renovation and repair costs on a short-term rental. Most travelers expect the latest appliances and furnishings, so you will have to update every few years. Unfortunately, short-term renters are less likely to report any necessary repairs and guests are far less likely to treat the property with respect since there’s no sense of ownership or obligation.

 

Owning a vacation home

  • Pros:
    • Long-term profits: While assets fluctuate in value in the short term, vacation properties are more likely to retain their value and appreciate because they are located in popular areas with a geographically limited supply.
    • Familiarity: Returning to the same place time and after time can be comforting as you become familiar and comfortable with the location. It allows you the freedom to be yourself and the opportunity to expand long-term friendships with residents.
    • Convenience: The ability to conveniently store items that are used exclusively at the second home simplifies travel and packing.
    • Retirement head starts: Though we may love where we work and live, every place has its drawbacks. A common goal of retirement is to have a place to retreat for the times of the year we dislike the most at our main residence. Locating and buying a second home prior to retirement enables you to experience the benefits of a refuge before actual retirement, a time to correct and amend your plans if the reality is different than the dream.
  • Cons:
    • Initial purchase costs: Most people have higher expectations for a property that they intend to own, rather than to rent. These expectations can translate into high prices.
    • Home maintenance: As the homeowner, you are responsible for all home maintenance work.
    • Travel time: A second home will be located hours from your primary residence, requiring either long auto trips or airline flights.
    • Inflexibility: If you are paying a significant amount of money each month for a second home, you may feel that you need to constantly visit the property to justify your investment.

 

Originally posted by Meaghan McGlynn


Posted on February 18, 2020 at 5:16 pm
Elizabeth Dolton | Posted in Buying |

Is it Time to Downsize?

Choosing less space often has to do with a desire to live a life that’s simpler. Whether you’re retiring, want an eco-friendly, low-maintenance lifestyle or your children have moved away, downsizing might be the best option for you. Here are the advantages and disadvantages to consider before making the move and questions to begin asking yourself now.

Image Source: Shutterstock 

 

 

 

Advantages

  • Increased cash flow.
    • Spend less on your mortgage payment and you are likely to have more money leftover for other needs or desires.
  • More time.
    • Cut down on time spent on household chores such as cleaning and vacuuming which will leave you with more hours in the day to do something more enjoyable.
  • Lower utility bills.
    • Costs less to heat and air condition a small home.
    • Less square footage decreases the amount of energy expended.
    • Reducing energy is better for the environment and it helps keep your home green.
  • Reduced consumption.
    • You would likely buy less since you won’t necessarily have the room for it.
  • Minimized stress.
    • Homeowners who have successfully downsized often feel happier because they are no longer overwhelmed by the demands of a larger home.
    • Less responsibility, less housework to do, increased cash flow and flexibility equals reduced stress.

 

Disadvantages

  • Fewer belongings.
    • Moving into a smaller space would mean you would need to give away or donate furniture, books, kitchen supplies, etc.
  • No room for guests.
    • Hosting holiday dinners might be out of the question for a smaller home.
  • Space restrictions.
    • Less space means you could feel cramped.
  • Lifestyle changes.
    • For long-term homeowners, downsizing means changing a lifestyle.

 

What to consider before downsizing

These questions are important to ask yourself because for some people, downsizing may not be the best option for them.

  1. Does size matter to me?
    1. Think about how much your identity is wrapped in your house.
    2. Is it important for you to have a guest room or a second bathroom?
  2. Will I miss some important things about a more spacious home?
    1. Will moving into a smaller home feel like a step backward?
  3. How will other life events affect my living in a smaller home?
    1. Consider possible scenarios you may not expect such as adult children moving back home or if you plan to add a child.

 

The Cost to You

  1. How much will it cost to replace the furniture?
    1. When you move into a smaller home this means you might have to downsize your furniture to make room.
  2. How much will it cost to get rid of the stuff I don’t need or won’t fit?
    1. It’s important to have a plan for how you’re going to sell or give away the things you don’t need.
    2. Consider things like family heirlooms. What are you going to do with all your antiques or treasures that your smaller home may not be able to accommodate?
  3. How much will I get when I sell my current home, and will it help cover the cost of buying my new home?

 

If you know downsizing is the right option for you, you’re probably asking yourself, “Should I sell first and then buy or buy first and then sell?”. When you’re ready to discuss your options, talk to an experienced Real Estate Agent. 

Originally posted in by Meaghan McGlynn


Posted on February 3, 2020 at 8:07 am
Elizabeth Dolton | Posted in Buying, Selling |

So you bought an investment property, now what?

Investing in a home is a great way to build passive income but earning from your investment will take a little groundwork to become a well-oiled machine. This is your beginner’s guide to owning an investment property so you can set up that foundation properly to avoid future headaches.

Image Source: Christopher Harris on Unspash

 

 

Make sure it’s livable

It’s important to start with your home inspection before you start making plans. Use the inspection report to prioritize the maintenance issues.

Before a tenant moves in, make sure the home is livable. Handle the important items that affect the livability of the property, either now or in the near future. If the inspector noticed a leak in the roof or holes that could lead to infestation, take care of those first. Other maintenance issues to prioritize are the fuel and the hot water source.

If your city has inspection and registration requirements, be sure to cross check those inspection checklists with your current property. If the property wouldn’t pass now, make sure it will pass by the time the city sees it.

 

Upgrade the space

Once your property is in livable condition, it’s time to upgrade. If you have any left-over budget after the necessities are handled, consider adding a bedroom or a bathroom where you can find the space. These rooms heavily impact the rental price, and the more you have the higher the price. If there’s no space for another bed or bath, think about finishing the basement or upgrading some of the appliances to make the property more attractive to potential tenants.

Use similar properties in your neighborhood as your inspiration. These units are your competition, think about what you can add, or even take away, that would help you compete. Ask yourself what about your home is unique and in what ways does that affect your rentability? If every unit in your area has hardwoods, how can you make your carpeted home appealing? Maybe new carpet? Or is switching to hardwoods, or vinyl laminate that looks like wood, worth it?

 

Market it to future tenants

You need two things in your listing: 1) Great Photos 2) An Amazing Description

After you’ve perfected the property, it’s time to tell potential tenants that it’s available. Creating the listing is essential in drawing eyes on the unit so you can show it to as many people as possible.

Renters looking to move are quick to make their first impression of a property with thumbnail photos on a map. So, take lots of great, bright, photos of the entire place to showcase the amenities and show potential tenants what it looks like, then choose the best photo to be the first in the lineup. Remember to get the lighting is just right to show every corner of the listing. Dark photos scare tenants away, making them think the unit is dingy and dirty. Light and bright photos show a clean home that’s move-in ready. They can imagine themselves living there a lot easier than in dark and cramped looking units.

Next, they’ll read the description. This is again where other listings in your area can help you.

Read other listings to structure your description and to draw inspiration on what tenants might think is important. Find the selling points and emphasize those above the unique features, especially if those unique features are obvious in the photos.

 

Originally posted by Meaghan McGlynn


Posted on December 12, 2019 at 8:08 am
Elizabeth Dolton | Posted in Buying |