Adding Value by Dennis O'Hagan

Real Estate HUMOR...

Questions To Ask Before Hiring A Property Manager...

Just Sayin...

A mile of highway will take you just one mile, but a mile of runway will take you anywhere...

Updating On A Budget...

Small home improvements can really add up when it comes time to sell.  Contact me to learn more tips and tricks to increase your home's value. 

Thinking About Remodeling???

Well, maybe it's time to move up instead... Give me a call, and we'll find a home that fits your family's needs.

Financial Sacrifice or Reward? You Choose...

And every one of them said the long term rewards were much greater than the short term sacrifice...

Thanksgiving Real Estate Humor...

The Myth Of The Required 20% Down Payment...

You may have been told that you should put down 20% to buy a home. This may give you more choices and let you avoid private mortgage insurance, but this large amount may not be prudent, or necessary, in all circumstances. Some experts advise keeping your mortgage down payment small — a strategy that sets you up so you'll be better assured of liquidity when life happens.

What's going to happen with the economy? No one can be sure, but it's pretty certain that the economy and home prices are closely linked. That's why buyers who make large down payments find themselves overexposed to economic downturns compared with buyers who made small down payments.  

Take this scenario: You make a 20% down payment on a home.  What if, instead, you opt for the Federal Housing Administration mortgage program, with a down payment of just 3.5%? In this situation, that's only $14,000 down.

Now, if the economy turns for the worse, home values will plummet — in some markets dropping as much as 20%. These buyers' homes are now worth $320,000 with no home equity yet available. The buyer who made the large down payment finds that the money is lost and can't be recouped until the housing market recovers. The buyer who put down only $14,000  transferred the risk to the bank. The smaller down payment translates to a smaller risk.

You may say that a large down payment helps you afford more house, but turn that around: Maybe you shouldn't use your last dollar. You don't save a ton of money each month by putting down a lot.

And yes, there's always the PMI issue: When you get a conventional mortgage with a down payment of less than 20%, you have to get private mortgage insurance. However, if you go the FHA route, the agency doesn't charge more to people with lower credit scores, while PMI does. However, you cannot cancel annual mortgage insurance premiums if you put down less than 10% on an FHA loan.

Ultimately, it's wise not to deplete your retirement savings account or emergency fund to buy a home. You might need money to make repairs after moving in or run into a financial hardship. You won't have a cushion to fall back on. 

Besides, if you take advantage of down payment assistance programs that provide grants or loans, you can buy a home with only 3% down. And research shows that Millennials tend to go with lower down payments than older generations did.

What this tells us is that the 20% down payment is no longer the standard: Down payment assistance programs are available. The 20% down payment myth is dispelling, opening the path to homeownership to younger generations. 

The bottom line? Don't make assumptions and get professional financial advice before choosing a mortgage and making a down payment decision.

Some Tips to Update Your Kitchen On A Budget...

After living in a home for a few years, you might start itching for a kitchen upgrade. However, it can be difficult to come up with a list of kitchen upgrades that you can complete on a budget. The average kitchen remodel costs nearly $20,000—a figure that is far beyond the reach of the average family on a budget. Instead of doing a full kitchen remodel, consider taking advantage of some of these affordable kitchen upgrades that will not break the bank.

1. Replace Outdated Light Fixtures

One of the most obvious signs of age in your kitchen is a dated light fixture. A brightly colored pendant light will give your kitchen a more modern look. These can be found online at surprisingly affordable prices. Taking some time to shop around is well worth your time. 

2. Install New Handles or Pulls for Cabinets and Drawers

Cabinet fixtures come in a wide range of colors and styles that include everything from traditional metal handles, such as copper or brushed nickel to trendy styles like handles that resemble tiny silverware. Replacing your cabinetry hardware is a quick, easy and affordable way to give your kitchen a face-lift. 

While some people love trendy designs, carefully weigh your options before settling on something unusual. You might like it now, but how will you feel about it a year from now? You will not want to spend money replacing the handles again if you get tired of them or if the trend goes out of style.

3. Repaint Your Cabinets

If just replacing the hardware is not enough, consider repainting the entire row of cabinets. For the cost of a can of paint and a few hours of your time, you could have your kitchen cabinetry looking as good as new. Brand-new cabinets can be a costly upgrade, but freshly painted cabinets are almost as good at a fraction of the cost. 

4. Remove Cabinet Doors

If repainting your kitchen cabinets does not appeal to you, consider removing the doors entirely. Open-faced cabinets can instantly give your kitchen a more modern look. The one drawback to this strategy is that you will need to keep the contents of your cabinets neat and tidy in order for it to work. For this reason, many designers use open-faced cabinets on the upper levels and traditional closed cabinets on the lower levels.

Using one or all four of these strategies can help give your kitchen a face-lift without breaking the bank or going over your budget on the project.

Three Things Every “For Sale By Owner” Wishes They Knew (That Agents Do!)...

Today, you can Google instructions to become a DIY-pro at just about anything. But selling a home is a complex process requiring knowledge that only experience – not the internet – can provide. 

Sellers who try to list their home as “For Sale By Owner” (or FSBO), can miss out on several benefits a professional agent brings to the table. Many previously FSBO sellers have eventually seen that working with an agent can save them time and stress.

When they understand the value an agent brings because of their experience and negotiation skills, many see that working with an agent ultimately delivers a better end result. 

Here are three areas of agent expertise sellers should consider when determining if working with an agent will deliver more value than going it alone.  

1. Marketing strategy and tools to cast a broad net

Finding the right buyer for a home goes beyond a “for sale” sign in the yard. The more buyers are interested in a property, the more competitive their offers are likely to be. Marketing resources an agent brings to the table are difficult for a FSBO to match. 

RE/MAX Agents have a system that helps us market a property more effectively than someone listing their home as a FSBO can on their own. We use a variety of tools, including Facebook ads and retargeting, to help get as much exposure as possible for a listing. 

Another tool we tap into is the RE/MAX referral network of 125,000 agents worldwide. This is especially important because it tends to attract international buyers. 

You have to think about who the buyer is, and if there are people in other countries who might potentially purchase the property. It goes back to having a proven marketing system. At RE/MAX, we have a global referral tool and access to social media advertising to help locate buyers all around the world.

2. Navigating real estate laws and regulations

Real estate is a complex process, and laws differ from state to state. Working with an agent who is familiar with the unique rules and regulations of their area can help sellers “avoid a lot of heartburn. 

Another downside of selling FSBO is when sellers run into pitfalls that could have been avoided with the advice of an experienced professional. “A FSBO seller once called me and said he was getting sued for not disclosing a material defect in the property. An agent could have advised him to file a seller’s disclosure for the home.”

3. Negotiation tactics and avoiding contract issues

While there are several rules that govern a real estate transaction, there’s also a lot of gray area. An agent’s negotiation skills can really benefit sellers. 

Yes, agents obtain a fee for helping clients sell their home, but they also help negotiate items clients don’t need to pay for. 

For example, many buyers are under the impression that sellers must repair any defects found in the inspection. Not true... An agent can help sellers negotiate repairs. We have the knowledge of what really needs to be completed and what can be countered or declined. 

Just as critical as the inspection is the fact that agents are also skilled at negotiating the final sale price. 

And, it is important  to understand the nuances of different offers. 

Whether the offer is cash, VA, FHA or a Conventional loan, an agent can help the seller understand the differences and what they should know before accepting an offer.” 

Ultimately, the role of an agent is to help protect buyers and sellers.

Once FSBO sellers see the knowledge and experience a Professional Real Estate Agent bring from working in real estate every day, they begin to see, ‘I do need someone like you on my side,’...

Realtors sell thousands of homes over their career. We know the market and often know what to expect in the transaction. We know the 150 things to do in order to get you to closing.