When you finally find your dream home, the worst thing that can happen is the deal falling through at the last minute. It’s more common than you might think, and the reasons are often surprisingly small. Fortunately, a little attention to detail and thorough planning can save you from the heartbreak of a buy gone bad. Here are some pitfalls for buyers:
- Last-minute shopping sprees. Until your home loan has been funded, big purchases are flat out dangerous to closing the deal. Your credit matters and so does your bank balance. Every time they take a hit (say for new furniture, appliances, or even a big pickup truck for moving day), you risk skewing your financial picture in a foul direction. Lay off the buying until you’re in the clear.
Last winter, we had a buyer who bought three rooms of new furniture two weeks before closing- Bob’s Store was running a sale with 18 months interest free new credit… this purchase delayed the closing by two weeks and required her to put the new furniture she bought for a house she didn’t own yet and had delivered into storage…good thing she had interested free payments!
- Not drilling down deep on seller disclosures. Nobody likes surprises, so ask all the questions you have about condition issues in the home or on the lot. Sellers must disclose, so you’re well within your rights to ask after anything which seems unreasonably unexplained. Finding out late can sour the deal or stick you with costly repairs post-closing. Ask your agent to perform an OPRA Request on the property-its a written request done at town hall asking for a history of permits pulled for any rehab or renovations done to a home. This will also give you reassurance that any work was done correctly, inspected and approved.
- Failing to clarify which “fixtures” are included with the house. Fixture can be one of those words open to interpretation. Get clarity on what is an appliance, what is a part of the home, and what remains the seller’s personal property. An early understanding of what’s excluded will prevent sour feelings later on. If you fall in love with the house based the purple chandelier in the dining room because it reminds you of the one Grandma used to have- make sure its staying. Seller can be asked to replace lighting fixtures but they aren’t always replaced with exact replicas.
- Not securing a preliminary title report ASAP. Great surprises lurk in the title search, so you’ll want to know in advance if there’s anything which might complicate the deal. You never know when someone might have an interest in the property (like an ex-husband), and you can’t be 100% sure about the property boundaries until you’ve defined them, can you? A misplaced fence or disputed driveway can foul things up in a hurry.
- Insurance surprises. Is the home in a flood plain? Will your rates be through the roof for hurricane or earthquake risks? It’s worth investigating early on in the process. You may still decide to buy the home, but you’ll at least be able to budget accordingly. Again, your agent should be able to do a little research to find out about flood plains, but your best bet may be to ask your insurance agent for the most accurate information.
I like to help buyers navigate the home buying process smoothly, armed with all of the knowledge they need in order to find the right home at the right price. Let me guide you to a smooth closing this year!
Barbara & Gregg , THE NICHOLAS TEAM of RE/MAX VILLAGE SQUARE 973-509-2222 ext.1126 RealEstate@TheNicholasTeam.com
Many home remodeling projects do wonders for the value of the home. Certain upgrades and renovations pay dividends when it comes time to sell, and you often can recoup the money you’ve invested in the upgrade.
There are exceptions, however. And one stands head and shoulders above the rest (or should I say below) when it comes to return on investment:
The home office.
Surprised? It may seem like a home office would be a boon for your home at sale time, especially considering the number of people who telecommute and work online. But the fact of the matter is, a home office seldom recoups more than 45% of the money invested in the remodel.
Why? A couple of main factors.
First, even people who work at home often don’t work at home. When was the last time you walked into a coffee shop and didn’t see a laptop open? Many people still find space outside the home to work.
Second, a full-on home office renovation often takes up a bedroom which new owners might want to be able to convert back into a bedroom. If you’ve spent the time and money having built-in furniture added, media wiring, and other “office like” details installed, it represents a cost to restore or lost-usage for the new owners.
Of course, if you need a home office and want to have the home office of your dreams, it might be worth it to you to put the return on investment aside. But don’t undertake the project thinking it will pay off down the line.
Curious which home remodeling projects pay off at the sale? Let’s talk about what you’re considering: THE NICHOLAS TEAM, Barbara P. Hughes and Gregg Nicholas RE?MAX Village Square REALTORS email@example.com
Not all renovations are created equal. If you’re adding a luxurious new bathroom or a “man cave” for your own purposes, you’re probably not too concerned about your return when the house goes on the market. You’re spending the money for your pleasure and quality of life, not the return.
But many homeowners see their home as a financial investment vehicle and understand that it’s quite likely the day will come in 5 to 7 years when they are ready to trade up or move to a new market. With this eye, every renovation is a calculated decision. In this situation, you want to select projects which are likely to provide a good return.
Any renovation which improves the value of your home in the eyes of buyers without breaking your renovation budget is an excellent choice. So how do you know which ones buyers want to see?
According to a National Association of Home Builder’s 2013 report of 4,000 prospective buyers, the following seven features were on buyers’ most wanted list:
- Separate laundry room (93% preference)
- Exterior lighting (90% preference)
- Energy Star-qualified windows (89% preference)
- Garage storage space (86% preference)
- Eat-in kitchen (85% preference)
- Walk-in kitchen pantry (85% preference)
- Wireless home security system (50% preference)
You can read the estimated costs and reasoning behind these features in the original Kiplinger article here:
(Keep in mind that the costs may have risen, as the original article ran in 2014.)
The past few months, something we’ve noticed Millenial buyers look for and often ask about is FIOS connectivity as well as strong cell service for the many mobildevices we now all rely on day to day…something you can’t always gaurantee personally, but its good to know the answers and the availability of these “must-haves”.
Are you planning to sell your home after a renovation? I’d be happy to help you. Let’s talk: Barbara & Gregg, THE NICHOLAS TEAM firstname.lastname@example.org 973-509-2222 ext. 1126