Does Homeownership Education Make a Difference?

If you’re a first-time buyer, you may have encountered lenders who either suggest or require you to take a homeownership education course in order to be approved for a loan. Homeownership, or homebuyer, education won’t help you find an affordable house in a tight market or outbid another buyer for the home of your dreams. Its goal is not so much to help you buy a house as it is to help you keep it.

Buying and selling homes are the most expensive transactions most Americans encounter in their lifetimes. Homeownership requires going into debt to the tune of hundreds of thousands of dollars― mortgages turn new homeowners into debtors for decades. One or two mistakes in the planning and process of buying a home could leave you so financially strapped that you must live “house poor” for years. One or more irresponsible lapses in money management in the years that follow, such as cashing out too much equity and leaving yourself vulnerable to the next housing downtrend, will spell trouble and could cost a family their home.

Young entrepreneur sitting at a table at home using a laptop and reading paperwork while preparing packages for delivery to customersYoung entrepreneur sitting at a table at home using a laptop and reading paperwork while preparing packages for delivery to customers

What Homeowner Education Involves

Homeownership education courses can be taken either online or in person. The average course takes about four to six hours to complete and can be completed in one Saturday afternoon.

The National Industry Standards for Homeownership Education and Counseling, which approves courses and educators, recommends a standard format, covering:

  • Assessing homeownership readiness
  • Budgeting and credit
  • Financing a home
  • Shopping for a home
  • Maintaining a home and finances

Does Homeownership Education Work?

Beginning In 2014, HUD launched a large-scale experiment to assess the impact of homebuyer education and counseling for a diverse sample of more than 5,800 low-moderate and middle-income prospective first-time homebuyers in 28 U.S. metropolitan areas.

Preliminary findings covering the first released in June 2019 found mixed evidence of the impact of homebuyer education and counseling. No impact was detectable on the study’s main gauge of “success”—the 60-day mortgage delinquency rate-bur early results did show that homebuyers were more prepared and more successful in-home search. Results included:

  1. Greater confidence in the ability to find needed information.
  2. Higher rates of home purchase by young adults. For those aged 29 or younger at the time they enrolled in the study, the treatment group had higher rates of homeownership than their control group counterparts.
  3. Greater satisfaction with the homebuying process.
  4. Greater likelihood of having their mortgage payments automatically deducted from their bank accounts.

On the other hand, the study found:

  1. No detectable impact on loan performance measures. No impact was detectable on the 30-, 60-, or 90-day delinquency rates;
  2. Higher levels of debt. The treatment group experienced higher levels of non-housing debt—primarily student loan debt—had a slightly higher monthly debt-to-income ratio than the control group (0.27 versus 0.26), although the treatment and control groups were equally likely to have debt-to-income ratios that exceeded 0.43, the upper limit specified by FHA guidelines.
  3. Greater prevalence of high monthly housing costs relative to income. Overall, treatment group members more often had housing costs that exceeded 30 percent of their household income than did the control group.
  4. Lower reported ability to cover all bills. Overall, a higher proportion of the treatment group than the control group reported occasionally not having enough money to cover bills. Treatment group members offered remote services were more likely to say they would contact their lender if in financial distress.
  5. Treatment group members offered remote services reported higher student loan balance and several other outcomes, particularly on those in the domains of preparedness and search and financial capabilities.

When the final report is available in 2021, it is expected to have long term data, especially results on the impact homeownership education has on 30 to 90-day delinquency and default. At least until then, homeownership education and counseling will play a vital role in preparing new buyers for the financial costs of homeownership.


Steve Cook is the editor of the Down Payment Report and provides public relations consulting services to leading companies and non-profits in residential real estate and housing finance. He has been vice president of public affairs for the National Association of Realtors, senior vice president of Edelman Worldwide and press secretary to two members of Congress.

Source: homes.com

Investing in a College Town Rental Market: Ann Arbor, Michigan

College towns are attractive markets for investors in rental properties for several reasons. Students and faculty create large and dependable markets of tenants. Local economies dominated by academic institutions are remarkably stable compared to those based on manufacturing or agriculture. Larger universities create hundreds of non-academic jobs in research centers, medical facilities, and new companies spun off by technologies developed locally.

Ann Arbor, Michigan, home to the main campus of the University of Michigan, is an excellent example of a campus-based economy that is much larger than its facility and student body. One out of three local jobs are in educational service, and an additional one out of ten are in technical, professional and scientific services. At $39,235, Ann Arbor’s average per capita income and its median family income of $102,615 are 20% to 30% higher than national averages.

WalletHub ranked Ann Arbor, the nation’s fifth-best college town and the best small city college town in 2020 based on academic, social, and economic opportunities for students. It also ranked Ann Arbor, the nation’s “most educated city in 2020,” outranking San Jose, California, and Washington, D.C. It also placed first in educational attainment and quality of education and attainment gap.

Read: 5 Reasons Why You Should Still Buy an Investment Property

college university student leaving librarycollege university student leaving library

Affordability is Under Fire

Popularity can have a downside, and Ann Arbor is experiencing the price of success in rising housing costs and decreasing affordability, especially in Washtenaw County as a whole.

As of February 2020, the average monthly rent in Ann Arbor was $1,580 for an 882-square-foot apartment, a 3% increase over 2019, higher than the national median for a comparable apartment ($1,468) and considerably higher than nearby Detroit ($1,069) or East Lansing ($1,294), home of Michigan State University. Half of Ann Arbor tenants spend 30% or more of their household income on rent. HUD defines cost-burdened families as those “who pay more than 30% of their income for housing” and “may have difficulty affording necessities such as food, clothing, transportation, and medical care.”

“Ann Arbor – and its central driver, the University of Michigan – is a magnet for highly educated households with upward mobility and significant disposable income. With some exceptions, Ypsilanti (City and Township) and their challenge of being overloaded by a disproportionate number of at-risk households and homes with negative equity – is where the most affordable options exist,” stated a 2015 Washtenaw County housing study.

“Ann Arbor will become more costly, and less affordable, especially to non-student renters in the short run and eventually, to aspiring buyers as well. The driver for higher costs is a combination of high livability and quality of life, great public schools, resulting in sustained demand by households with discretionary income, and resulting expectations of stable and continually rising property values,” the study concluded.

Read: Investing in a College Town Rental Property: Charlottesville, VA

The Ann Arbor Rental Market is Vast and Profitable

In many ways, Ann Arbor is a great rental market. The massive student body drives demand. About 70% of the University of Michigan’s 46,000 students live off-campus and the current cap rate for Washtenaw County apartment buildings is a respectable 7.6%. (The capitalization rate is the ratio of rentals’ net operating income to property value. Low cap rates imply lower risk, and higher CAP rates indicate higher risk.)

Living off-campus is so popular; the university maintains web pages listing rentals and providing advice and information for off-campus renters. This summer initiated a “virtual housing fair” to help students find rentals for the 2020-2021 school year.

group of young college students hanging out at homegroup of young college students hanging out at home

Homes.com lists 1,235 properties in Ann Arbor, with a median home value of $355,600, about 17% above the national median of $304,100 in July. Of the total homes in Ann Arbor listed on Homes.com, 60% are for sale, and 34% are rentals.

Read: What to Know Before You Rent to College Students

Though several new high-rise apartment buildings recently opened and more are under construction, single-family rentals still dominate the market. Homes.com lists more than 200 single family homes for rent in Ann Arbor. Smaller rental households are a result of the above-average presence of single-family rentals relative to apartments. The average household size for Ann Arbor rentals is 2.2 people, compared to 2.3 for Michigan and 2.5 for the nation as a whole.

COVID-19 and Ann Arbor, Michigan

COVID-19 delayed the University of Michigan’s plans for the fall semester but did not cancel fall apartment rentals. The university’s plans include both in-person and remote classes, a new academic calendar, and the elimination of breaks and changes centered around preventing the spread of the coronavirus.

Despite the pandemic, Ann Arbor is still one of the best college town markets in the nation. As in most markets, acquisition is a challenge. Property prices in Ann Arbor are rising, and the smaller, less expensive homes that make ideal single-family rentals are few and far between.  Otherwise, conditions are good for single-family rental owners and will improve as the nation returns to health.


Steve Cook is the editor of the Down Payment Report and provides public relations consulting services to leading companies and non-profits in residential real estate and housing finance. He has been vice president of public affairs for the National Association of Realtors, senior vice president of Edelman Worldwide and press secretary to two members of Congress.

Source: homes.com

Underground Compound of 4 Fallout Shelters in Montana Awaits Buyer To Burrow In

When spectacular mountain views are available, nearby homes almost always feature an abundance of windows to soak in the vistas.

However, this property in Montana heads in a completely opposite direction. These four homes have no windows at all—they’re completely underground.

The quartet of below-ground homes sit beneath 10.6 acres in Paradise Valley near Emigrant, MT, just north of Yellowstone National Park.

Listed for $1.75 million, the earth-sheltered homes were originally built as fallout shelters. They offer all the amenities a comfortable residence requires—albeit with curved walls.

Views of Montana
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Three of out of the four homes measure in at about 2,500 square feet, and each features multiple bedrooms, bathrooms, and living spaces.

The fourth home is significantly larger, with space to accommodate a crowd looking for a real escape.

“The largest one has several bunk rooms, so you could have more than a couple people in there,” says the listing agent, Theresa Lunn.

Each boasts a basement for food and supplies storage and to house all of the mechanicals.

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Watch: Live Outside the Box in This Cool Cubic Condo

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The earth keeps the houses at a constant 50 to 55 degrees and to increase the temperature as needed, each home is equipped with its own HVAC and ventilation system.

“It never feels musty in there with the air circulation system. It always smells fresh,” Lunn says.

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Each home comes with its own kitchen, complete with appliances.

“Once you’re in there, they’re comfortable. It’s just like you’re in a house,” Lunn explains. “You walk down hallways, but then you just you walk into a kitchen that you think is your mom’s kitchen—a great area, bedrooms, very nice bathrooms.”

One house features a pool table in the rec room.

The current owner is a builder and is willing to sweeten the deal for a buyer who might be interested in buying the land and the underground homes.

“He would put a very nice [above-ground] home for an extra $240,000 onto the list price. Underneath the house, it would have a discrete entrance into shelter No. 4,” Lunn explains. “The additional house has not been built. He is offering that as a buyer package, if someone wanted that.”

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The Paradise Valley area is known for its outdoor activities.

“It’s arguably one of the most beautiful places in the U.S., for sure. It’s a huge mecca for fly fishermen,” Lunn says, adding hunting, hiking, snowmobiling, four-wheeling, and horseback riding are also popular.

“It’s a great spot for vacation rentals,” Lunn says, adding that renting an underground home could offer a unique allure for guests. “If you bought this, you could live in it and still rent it out. It’s also a great retreat possibility.”

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Lunn says buyers have shown an interest in the property—ranging from those in search of a sustainable property, to folks who desire the ultimate in protection.

The agent says she doesn’t like to use the term “preppers,” because of the negative connotations attached to the term. But she acknowledges that that is basically what people do when they store supplies in underground bunkers.

“If our great-grandparents didn’t prep, none of us would be here,” she says. “It’s just being prepared.”

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The homes are currently attached to the electrical grid, but could be unhooked if a buyer decided to rely on the property’s own generators for power.

As in the case of most fallout shelters, the entrance to each home is through a thick door. Upon entry, the hallway takes a turn at a right angle.

“Any bunker worth its salt has to have those 90-degree turns, because nuclear and chemical material can’t go around [corners],” Lunn explains. “That’s really one of those tips of the trade for guys that are building bunkers.”

Lunn stresses these are regular homes where people would be very comfortable living or vacationing.

“[They’re not] some kind of freaky, end-of-the-world, zombie-apocalypse whatever. There is a lot of need for this type of property.”

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  • For more photos and details, check out the full listing.
  • Homes for sale in Emigrant, MT
  • Learn more about Emigrant, MT

Source: realtor.com

What the Flip? A 1909 Family Home Is Fully Restored and Grabs Top Dollar

Flipping a house is a lot of work, and can yield a big profit. But not every project is guaranteed to be lucrative. So what’s the key to successfully making over a fixer-upper and selling it for a gain? Our new series “What the Flip?” presents before and after photos to identify the smart construction and design decisions that ultimately helped make a house desirable to buyers.

Oklahoma City is an alluring place for home buyers these days. Its cost of living is low, there are plenty of opportunities for work and play, and you get the pace of city life with the quiet of the country nearby.

With a median listing price of $225,000, Oklahoma City is certainly a place to score a sizable single-family home for a reasonable chunk of cash, but finding an age-old property with good bones is a challenge. So when our flippers stumbled upon this four-bedroom, three-bathroom home from the early 1900s—in one of the city’s most prestigious and historic neighborhoods—they jumped.

Sure, the home wasn’t exactly in great shape, but that’s where the flip comes in. This old home went from drab and dusty to absolutely fabulous. It was purchased in July 2018 for $325,000, and in September 2019 it was sold again, for $642,000. The sellers doubled their money in just over a year—a result that any flipper could hope for.

So what made this such a successful flip? We turned to our experts to uncover the winning design and home improvement moves.

Living room

The living room is often the first space buyers see when they enter the home, so bringing this room up to date was key. The original room felt dark, dirty, and cramped, so the sellers had a big project on their hands.

“Lighting is key to this room,” says Malissa Kelsch, real estate adviser with Red Rock Real Estate. “Removal of window coverings and additional can lights deliver a distinctive sensation of relaxation.”

“They resurfaced the walls, which was a great choice to make the walls feel like new construction,” adds architect and interior designer Alondra Alberti. “The light paint and blond floor stain showcase how large the space actually is.”

But one of the most impactful changes was simply the removal of the accordion doors leading to the kitchen.

“The living room seamlessly flows into the kitchen to make it a perfect home for entertaining,” adds real estate agent Sarah Bernard. “This is the open, bright look that buyers today are demanding in new construction, so to renovate with this in mind makes lots of sense.”

Office

Previously, the home office looks like a strange afterthought. The flip transformed it into a gorgeous, usable room.

“Home offices are one of the most sought-after spaces in our current climate of working and teaching kids remotely,” says Bernard. “The new floor, lighting, and open, sleek modern space with windows make this a strong selling point for busy buyers.”

“The hardwood floors throughout facilitate the visual flow between spaces, creating a more harmonious relationship between the office and the rest of the house,” says Alberti. “I also love the contrast of the black-matte stair raisers and wooden handrails. It provides a sophisticated rustic appeal that a lot of buyers look for in a home.”

Kitchen

“It looked like a sad little kitchen crying in the corner,” Alberti says of the pre-renovation space. But the flip made a huge difference in this all-important room.

“They have repositioned and expanded the kitchen, creating an open concept tied in by a beautiful, massive island that not only provides contrast but also bar seating,” Alberti explains. “They did a great job combining different materials and textures. … It’s a design risk that elevates the home.”

Kelsch says the new kitchen is definitely more appealing to potential buyers.

“Additional usable counter space, storage, and lighting make this a desirable kitchen and a ‘wow’ feature in the home,” she says.

Bathroom

The old bathroom in this home was like a walk back in time, but not in a good way.

“The wallpaper and the top-and-bottom built-in cabinets made the space feel enclosed and restricted,” says Alberti. “The old shower doors are always a must-go—they have had their run for far too long.”

The updated bathroom now feels warm and welcoming.

“The shower wall niche was a particularly nice touch because it provides practicality to the user,” adds Alberti. “Those kinds of details are never overlooked by buyers.”

Bernard agrees: “The new, beautiful bath lets in natural light for the tranquility that homeowners want in their bathrooms,” she says. “The updated shower and more functional and modern vanity feel clean and fresh compared to the original.”

Bedroom

From the gray wall-to-wall carpet to the heavy drapes, can we all just agree that the old bedroom was the stuff of nightmares?

“The new bedroom sheds pounds of darkness that were exhibited in the old carpeting and bulky cabinets,” says Bernard. “The white walls and wonderful new windows are inviting in a room that anyone can envision themselves waking up in. This is a luxury look that buyers in all price ranges desire.”

“This bedroom has had a complete turnaround. The new vaulted ceiling helps make the room feel more spacious, and removing the cabinetry opens up the room,” says Kelsch. “Bringing in as much natural light as possible by taking down dated old drapes and updating furnishings and fixtures will bring top dollar to this house.”

Source: realtor.com

Virtual Staging: The Hot Trend That Can Help Sell Your Home During the Coronavirus Crisis

In this age of social distancing, you might want to limit the number of strangers traipsing through your house. So chances are good you’ve said sayonara to the idea of having a staging company come in to artfully showcase your home for sale.

That means it’s time to get creative in order to prep your property for sale. And guess what? There’s an app for that.

Actually, there’s a wide variety of virtual staging software options available, allowing designers to digitally add gorgeous furnishings and accessories to photos of each room in your house, enhancing its overall appeal.

Some tech platforms can even do virtual renovations like digitally erasing a tired sofa or peeling wallpaper, and revamping rooms with new wall color and different flooring so you can show it off online to potential buyers.

Eager to find out more? Here’s how you can make virtual staging work for you.

Virtual staging is a practical solution during the pandemic

When Ed Gory, a Realtor®, was preparing to list a vacant two-bedroom ranch house in early March, staging companies couldn’t physically work in the house. Gory’s photographer suggested he contact roOomy, a company offering virtual staging services. Digital decor elements are layered into high-resolution photos of the home and rendered into a realistic final image to look like you’ve actually accomplished the transformation.

“I’d never considered virtual staging before, because the finished product I’d seen looked a little cartoonish, but the technology has come a long way,” says Gory, who works at Intero Real Estate in San Carlos, CA.

“Since buyers weren’t able to visit houses, virtual staging provided a means for us to show something more exciting than a picture of a blank room,” Gory says.

It worked so well, in fact, that the house was sold five days later.

This didn’t surprise Lindsay Dillon, roOomy’s vice president of strategic partnerships and marketing. That’s because virtual staging is experiencing a surge in popularity.

“Even before the coronavirus, we were seeing a shift in how the real estate community was approaching digital content,” Dillon says.

Click the arrows and slide from left to right to see a fully staged room from roOomy.

Your home can be styled any way you like

Home stagers usually pull decorative items and furniture from their warehouse to fit your rooms, limited to whatever inventory they have on hand at the time. They also generally just add basic elements—think sofas, dining and bedroom furniture, plus artwork—but they won’t usually change out light fixtures, for example. Virtual staging designers have no limits, because they’re working with a huge digital library of 3-D assets.

“We want to show the space in its best light based on your target buyer,” says Dillon. But “we don’t want to be deceptive, so we won’t add a wall or kitchen island that doesn’t exist.”

Virtual staging can make a vacant home more attractive

Virtual staging is especially useful for sellers who have already moved out, says Lyndsey Garza, owner/broker at Galveston Vacation Real Estate. An empty house is typically much more expensive to stage, and it can be harder to sell.

“For people that don’t have the imagination to see something as an office or a kids’ playroom, virtual staging gives them room to think outside the box,” Garza explains.

Click the arrows and slide from left to right to see a fully staged room from roOomy.

Virtual staging is cost-effective

Sellers can save significantly with virtual staging, because the costs of physically staging a home—removing existing furniture, hauling in a bunch of new things, and then staging the home—really add up.

“Here, a 1,200-square-foot home could cost $2,500, but it’s about a third that price to do virtual staging,” says Gory. “Plus, you have a lot more control over the style, artwork, and even the plants you put out, so you could really dress up a house and give it a great online first impression.”

Garza notes that to minimally stage a four-bedroom, three-bath, 2,500-square-foot home in Galveston or the Houston area for three months, sellers fork over $3,500. A simple virtual staging would cost about $500.

“Very few sellers want to put any more money into their home, and virtual staging saves them money with less traffic through the home,” she says.

You can save valuable time when listing your home

Because virtual staging is done on a computer, it saves a lot of time, Gory says. Usually real estate agents meet with a live stager to assess the house, wait for an estimate, and then wait again for movers to bring over rented furniture—and finally, the photographer takes listing photos.

“That process could easily take a week from start to finish, and it took a lot quicker to stage virtually, because I did everything from my computer,” Gory says.

And consider this: If you’re in the middle of sprucing up your place, you don’t have to wait until your renovations are complete before posting listing photos—virtual staging allows buyers to visualize how great the house will look when you’re done.

Click the arrows and slide from left to right to see a fully staged room from roOomy.

Be transparent about what’s real and what isn’t

The last thing you want is a buyer who feels tricked into going to see a house that looks nothing like the photographs, says Garza.

“The downfall with virtual staging is that sometimes it can appear misleading: Even though the perspectives and measurements are theoretically correct, it’s fictitious—it’s an idea of what the space could be versus the actual space,” she says, adding that it’s important to clearly note on the online property listing that the images have been virtually staged.

Consider a true virtual staging platform

There’s a reason virtual staging hasn’t taken off in the past—it’s tricky to get right. Make sure you have confidence in the technology being used by the company you choose.

“Because we’re able to transform a 2-D image into a 3-D space with our patented technology and add real 3-D furniture to that space, we’re ensuring that what you’re seeing in scale is accurate,” says Dillon. “You’re not trying to fit a king-sized bed in a room that has no business to have one by using photo-editing tools.”

And be sure to carefully vet the companies you and your agent are thinking of hiring.

“Some of them look way too spiffed up and don’t fit the property, and sometimes it looks like you’re playing a video game,” Garza says. “I like to show clients samples, because I want sellers to be happy with what’s online. Then, chances are buyers are going to be happy with it, too.”

Source: realtor.com

How This 1920s California Bohemian Sold Over Asking—and Helped Set a Record

It doesn’t matter how perfect your home is—if your listing photos don’t stand out, potential buyers won’t come by to take a look. In our series “Lessons From Listing Photos,” we dissect the smart updates sellers have made to their homes, and how their listing pictures highlight the home’s best assets.

In 2020, nothing is for certain—and in many places, that includes the real estate market. That’s not true for Berkeley, though. This Northern California city, located on the east side of the San Francisco Bay, is experiencing an upswing in an already booming real estate market. In fact, October 2020 racked up the most single-family home sales for the city in nearly two decades.

High demand is likely to have been part of the reason the former owners of this two-bedroom, one-bathroom bungalow in Berkeley were able to sell their home for $161,000 over the listing price of $1,189,000. They purchased their home in April 2014 for $1,020,000 and sold it in November, for $1.35 million. But, looking at the before and after photos, we also chalk this successful sale up to smart home staging.

If you’re getting ready to put your home on the market, there are plenty of lessons to learn from this particular sale. From clever design decisions to the little details that made all the difference, here are the moves that made this cozy home appealing to buyers.

Living room

This living room may feel completely different in the before and after photos, but if you look closely, you’ll notice there weren’t any major changes. Instead, the owners made a few smart cosmetic updates and did a great job of staging the room.

“The ‘before’ of this room felt small, dark, and choppy, due to the use of multiple paint colors breaking up the visual flow of the space,” explains designer Gabrielle Aker, of Aker Interiors. “The fresh coat of white paint instantly brightens the room.”

Danny Davis, owner and broker of San Diego Brokerage in Encinitas, CA, agrees that color was a key factor in the living room.

“In my decades of experience in real estate, no one has ever told me that they were looking for a dark and gloomy home. Everyone wants light and bright,” he says. “Incorporating stylish, minimalist furniture and light paint and stain colors often make a smaller space feel larger and more livable.”

Real estate agent Natasha Wood of Balaj Realty Group says making the floors more visible also made a big impact.

“Hardwood flooring can increase a home’s value by up to 5%, so showing that off is key,” she explains.

Kitchen

“Choosing the right professional photographer and staging company is very important when selling your home,” says Davis.

He explains that each listing must attract a buyer in the first few photos, or they’ll just keep scrolling. In the case of this kitchen, he says the listing photos showed exactly what buyers want to see.

“This kitchen, where families tend to spend most of their time, is so much more inviting in the ‘after’ photo,” he says.

“That warm wood island makes such a difference in this space,” adds Susan Covell Sands, owner of Susan Covell Designs. “The floor-to-ceiling white tile, new textured stone floor—all of it looks much cozier and workable than the ‘before’ photo, with its gray walls and old, orange-toned wood floors.

Nook

Before the overhaul, this nook just off of the kitchen was a strange bit of wasted space, a real shame in a small home.

“What a difference it makes to give a space a specific function,” says Covell Sands. “Showing the shelves with a laptop, lamp, and stool gives the potential buyer the understanding that this space could be more than just extra storage shelves.”

Davis explained that thanks to COVID-19, most of us are now doing many things at home that we used to do elsewhere, from working, to exercising, to school.

“It’s more important than ever to showcase an area where people can have a private space to work and take Zoom calls away from the rest of the family, pets, and mess that a home must accommodate in today’s lifestyle,” he says.

“Creating a useful space that has a dedicated function, especially in a small home, will invite buyers to imagine themselves in that space, instead of wondering what to do with it.”

Dining room

Even in the before image, this unique dining room was a showstopper, but after a few tweaks, it’s a home buyer’s heaven.

According to Davis, staging was a huge factor in this room.

“As for staging, it’s imperative that you stay away from bulky furniture in small areas and finish off a room with accents like window shades,” he explains, which is exactly what happened in this space.

Kendall Severson, co-owner of Interior Design Partnership, LLC, agreed.

“I love this transformation!” she says. “The ‘before’ picture makes the space feel heavy and small. They toned down the color and focused on white and natural elements. … They really hit the nail on the head when it came to scale and proportion in this space.”

Wood noticed that the stairs are also visible from this room.

“The updated stairway follows the natural movement throughout the home and creates a cohesive feel,” she says.

Bedroom

Having an extra bedroom that doubles as both a guest room and an office may sound like a great way to utilize a space, but our experts say that often sends buyers running.

“Defining a space with a specific purpose definitely helps a buyer envision themselves and their belongings in a home. That’s why staging is so valuable to home sellers,” says Davis.

He explains that the previous owners, once again, pulled off a major win in this room.

“Oftentimes, multipurpose rooms—such as a guest room/office—only point out to the buyer that the home doesn’t have room for both purposes, and that can have a negative effect on buyer perception,” he says.

Staging this room as a cozy bedroom makes the whole house feel more inviting and livable, he argues.

Source: realtor.com

Rent-to-Own Real Estate: The Benefits and Risks for Home Buyers

Rent-to-own real estate may sound like a dream come true. Under the best circumstances, everyone benefits: Sellers collect rent and have a purchase commitment from the buyers, and the buyers can move in right away.

In addition, credit score problems or other financial issues that could hamper a buyer’s ability to get a mortgage matter much less in a rent-to-own agreement than when you’re buying a house right out.

Either way, though, buying a home is still a major financial commitment. While rent-to-own real estate contracts may not be traditional, they’re not necessarily always less complicated than negotiating on a purchase price and getting a loan.

You may not need to come up with a big down payment or have the best credit score to enter into a rent-to-own agreement, but still, this type of contract isn’t always easy to manage.

The key to a smooth transaction is ensuring that you understand the entire process. Here’s what you need to know about rent-to-own homes, as well as the risks involved for buyers.

Why choose a rent-to-own agreement?

Ordinarily, sellers don’t like being landlords. They prefer to get their money in one lump sum and avoid dealing with tenants.

Rent-to-own homes are more common when there is a downturn in the real estate market and numerous homes on the market are vacant. Under a rent-to-own plan, the seller can lock in a price before the market drops further.

But it can be a great choice for tenants, too. While leasing can be a great option, you might be tired of looking for homes to rent. In fact, maybe you’re finally ready to buy that forever home.

However, the high recent purchase price on homes in your area may seem daunting, and you might know that you can’t afford a hefty down payment. This is when a rent-to-own contract might work for you.

Terms of rent-to-own real estate

Always read your contract closely and be sure you can handle the terms. The rent-to-own real estate contract should include the home price, the cost of rent, and the deadline that establishes when you should exercise your option to buy.

It should specify what portion of the rent payment is credited toward the home purchase—or if you need to write two checks each month, for the rent and for the home payment—and under what circumstances the contract can be voided.

You should make certain that there is no language allowing the landlord to evict you for a minor infraction after you have made a substantial financial investment.

It’s worth the expense to have an experienced real estate attorney look at your lease-option contract to make sure you are protected.

When the agreed-upon lease option expires, the tenants will get the chance to buy the house.

Most of the money the tenants have invested in the house is going towards the purchase price, so if they are able to qualify for a home loan, they can be in a good place to buy the house.

If, however, they aren’t able to swing a home loan, and can’t afford the house, they could be out more money than they would be if they had simply been renting during the period.

Renting to own may at first seem like a lease agreement with a pot of gold at the end.

However, if you’re not careful, the deal could go south, and you could end up in big financial trouble. Don’t let your excitement over becoming a homeowner keep you from doing your homework.

Rent-to-own home fees

There are extra fees when it comes to rent-to-own properties, including an option fee and maintenance fees.

The option fee is likely to cost between 1% and 5% of the purchase price. Tenants also can expect their rent to total slightly more than the market rate during the lease.

Usually, all or part of the option fee will be set aside as a down payment. While the home is being rented, the landlord retains ownership but often requires the tenant to assume responsibility for maintenance.

Remember that maintenance on a house can be expensive, so consider carefully what state the house is in before agreeing to a rent-to-own property.

Know the risks of rent-to-own real estate

Buyers can get plenty of benefits out of rent-to-own agreements—but not without some big potential roadblocks.

In many cases, buyers are counting on being able to rebuild their damaged credit rating while living in the rent-to-own home and paying above-market rent.

To benefit, they must be able to get their finances in order and qualify for a home loan before their lease option expires.

Should the market drop significantly, the buyers/renters may end up owing a lot more on a house than it’s worth. It will also be harder to move out should their lifestyle change.

Leasing with an option to buy can be a good financial tool if you know what you’re doing. You could make plans for buying a house without needing to qualify for a home loan or ponying up a hefty down payment.

Make sure that before you go the rent-to-own real estate route, you talk to a lender or mortgage broker to make sure that you will be able to qualify for a loan.

Updated from an earlier version by Emmet Pierce

Source: realtor.com

6 Modest Front-Yard Updates Home Sellers Should Never Forget

Home sellers know that a tidy, tasteful home will catch any buyer’s eye. That’s why many people put effort into fixing up—and even staging—the interior of their home before putting it on the market and hosting open houses.

But did you know that an unkempt exterior could deter potential buyers from even setting foot in the door? That’s right. A shoddy-looking front yard could undermine all that hard work you put into beautifying the inside of your home, and that could jeopardize your chances of selling.

“You only get one chance to make a first impression, and it happens when a potential buyer sees the exterior of your home,” says Kate Rumson, interior designer. “We all tend to form opinions in the first few seconds of seeing a home for the first time—make those seconds count!”

Don’t let your home’s exterior fall to the wayside. Whether your front yard is in need of a few tweaks or a full face-lift, the following tips will help boost your home’s curb appeal and make sure everything matches.

1. Replace your garage door

Garage doors tend to be large, so they’re a major architectural element of your home. Replacing one can be costly, but this one upgrade could help sell your house faster.

According to Remodeling magazine’s annual Cost vs. Value report, garage door replacement has consistently topped the list of remodeling projects that give you the biggest return on investment. In fact, this year’s report found that by replacing your garage door, you could recoup 94.5% of the cost when you sell your home.

“Old or damaged garage doors will make a house feel dated and not cared for. If your garage doors are in poor condition, replace them,” says Rumson. “Don’t let potential buyers think that the damaged garage doors represent the rest of your home’s condition.”

As for the cost, garage door replacement can range from $600 to $2,750, according to HomeAdvisor.

2. Do a front door audit

The first thing potential buyers see as they walk up to your home is your front door. The door can give house hunters a hint of your design sense and what decor delights await them on the other side.

Ted Roberts, chief style and design expert at Schlage, says to consider the color and materials of both the inside and outside of your door. He says the hardware on a door is also important to the overall aesthetic and that door hardware should be updated to create a unified statement throughout your property.

“Updating your front door can do wonders for your security and style. If your door hardware is showing signs of age, this fall could be the perfect time to upgrade to a new handle set and an electronic lock that adds smart, keyless convenience,” says Roberts.

3. Complement your colors

Choosing the right colors for the inside of your home takes careful thought and consideration. But no matter what paint you choose, make sure the palette transitions smoothly from exterior to interior.

“Interior and exterior colors don’t have to match, but they need to complement one another,” says Rumson. For example, a traditional forest-green exterior trim looks great when paired with navy blue, tan, or blush interiors.

“Make sure that the colors of your exterior accurately represent what buyers should expect to see on the inside,” Rumson adds.

4. Consider new window frames

Photo by Spivey Architects, Inc.

Installing new window frames will create the appearance of brand-new windows, and is a quick and inexpensive way to make your home look newer and more attractive to buyers, says Rumson.

Consider updating your outdated window frames with new, stylish black window frames.

“Black window frames will boost your home’s curb appeal, make your home more unique, and create a great contrast with the rest of your interiors,” says Roberts. “Because black windows make such a statement, they don’t always need shades, blinds, or curtains, offering an opportunity for you to sidestep what can be an occasionally costly investment.”

5. Refresh your landscape

The American Society of Landscape Architects recommends that homeowners invest 10% of a home’s value in landscaping. A well-manicured front yard can be eye candy to potential buyers.

Professional landscaping can be pricey, but we’re not suggesting a full foliage overhaul. Simply take a few hours on a weekend to freshen up your existing landscaping with plants and fresh mulch.

Over 75% of top real estate agents nationwide say that well-landscaped homes are worth anywhere from 1% to 10% more than homes without landscaping, according to research at HomeLight.

6. Install outdoor lighting

Photo by Solid Renovations

“Outdoor lighting is important for safety, but it can also significantly improve the curb appeal of a home,” says Rumson.

There are a variety of outdoor lighting options, from decorative lighting (like sconces by your front door) to landscape lighting (to illuminate the pathway to your porch).

“It’s an easy update,” says Rumson. “You will find many beautiful options and styles at your local home improvement store.”

Light up your home’s exterior walkway with a set of 10 solar-powered, black LED outdoor lights ($79.97, Home Depot) or a lantern sconce ($59.97, Home Depot).

Source: realtor.com