Tag Archives: home value

Undertanding Your Home’s Equity

home equityThe dream of home ownership is about more than just a stable place to live, exempt from the whims and decisions of landlords. For many, home ownership is a piece of the wealth building picture, essential to a future retirement or financial independence. The idea is pretty basic: You purchase a home and pay it down while hoping the value of the home increases over time. Generally speaking, this is what happens over a long enough period of time. (Remember, real estate is meant to be a long term investment.) As you go, you build what’s called “equity.”

 Equity is defined as “the market value of a homeowner’s unencumbered interest in their real property—that is, the sum of the home’s fair market value and the outstanding balance of all liens on the property.” If you were to sell your home and pay off the balance of the mortgage (and any other debts, such as home equity credit lines or liens), the cash you would have leftover is your equity. Your “equity position” changes over time due to a variety of factors.

 As you’ve probably noted, the biggest variable in your home equity position is the home’s true market value. A variety of factors can influence your home’s value, including: Market demand for homes in your area, local amenities, schools, your home’s particular features, upgrades you’ve made, condition issues, and quite a bit more. So how can you tell your equity position?

 First, you need to know what you owe on your home. This is as simple as checking home equity 2your mortgage statement to see what your principle balance is on the loan. This number can differ slightly from your actual payoff amount due to closing dates, interest, and other issues determined during the sale, but generally speaking your principle balance is the number you need to know. If you have any other debt on the home, you need to add the value of this debt to the principle balance. This might include credit lines, liens, or second mortgages, for example.

 Next, you need to know the value of your home. While there are sites such as Zillow and Trulia out there which will tell you what your home’s value is, these “automated valuation models” are generally not very accurate when it comes to your home’s value, as they exclude many crucial factors. Often they come in quite a bit higher. They can, however, give you an idea of general changing trends in your market over time.  Learn more about market values and prices here.

Hiring an appraiser is one way to determine your home’s value from a more bank-like perspective. While an actual sale may be above the appraisal, this thorough, conservative option is a good way to go. The downside? You may have to pay up to $500 for the appraisal.

 Of course, We’re happy to help you get a handle on your home’s current value with a comparative market analysis (CMA). Just get in touch today: THE NICHOLAS TEAM, Barbara & Gregg, realestate@thenicholasteam.com  Office: 973-509-2222 ext. 1126

Remodeling Without Return: The Home Office

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  realestate@thenicholasteam.com

Preserve Your Home’s Value with these Cleaning Projects

Whether your home is two years old or a classic concrete block ranch from 1950, you can help your house hold its value and scream curb appeal with a few simple fair weather cleaning projects. Keeping a home in shape in a little like good dental hygiene… routine attention prevents major renovation!

With the sun shining, here are the top projects you should schedule before settling into vacation mode. Stay on top of these at least once a year and you’ll not only help your home shine, but you’ll fend off the threat of more costly repairs and replacements in the future:

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  1. Power wash. Blast off mold, oxidized stains, kicked up mud, and the grim insect life which can build up over the course of a year. This is good not only for your exterior walls, but also driveways, patios, and panel fencing (both sides, please!). If you don’t own a power washer, you can usually rent one affordably. Be careful with power washers, though, as they can also strip paint when dialed up and used improperly. If power washing isn’t your bag personally, hire someone with a track record to handle this wet-and-wild job.
  1. Gut the gutters. Freely flowing gutters prevent a host of problems. Dig out the muck and you’ll be certain that water isn’t backing up under your roof or running down to the foundation. While you’re working, check the downspouts for cracks and corrosion. Be sure to run water through the clean gutters to see if there are any holes you may have missed while inspecting the clean gutters.
  1. Wash the windows. This is an inside and outside approach, because if you want to maximize the light your house lets in, you need to get the panes from both directions. Start with the outside. While power washing can sometimes be harsh on window seals, using a hose with a green/garden safe cleaning fluid is a good way to start. Once you’ve take care of the outside, remove and wash any indoor window treatments (blinds, drapes) and do a thorough job with the glass. Some people like to use old newspaper as it makes an excellent eco-friendly alternative to rolls of paper towels.
  1. Shore-up sheds and garages. Start by discarding. A year or even a season can result in piles of unwanted objects or half-used containers of questionable chemicals. Be ruthless in what you keep. Once you’ve identified the must-keep items, haul them out and clean the interior of the shed or garage. Replace items mindfully.

Here are a few ideas to help make your yard unique and stand out this summer:

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We love to sell clean homes! If you think your house is at maximum curb appeal, why not find out how much it’s worth?  Get in touch with The Nicholas Team, Barbara and Gregg at the office  973-508-7363 or email us realestate@thenicholasteam.com

Be sure to visit our website for more infomration and to see what’s on the market in your neighborhood and “LIKE” us on Facebook for daily updates and tips for buying, selling and maintaining a home.

Why Overpricing Hurts Sellers In The End

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All sellers want their home to sell for the highest possible price. This is one reason it’s why it’s so easy for agents to “buy” listings. If you’re not familiar with the concept, “buying” a listing is when an agent (unscrupulously) tells a client their home is worth far more than the market value in order to win the listing.  

Sellers are susceptible to this tactic because they want to believe, however irrationally, that their home is for some reason or another worth more than comparable homes on the market. Sometimes, though, sellers believe high home pricing is either an acceptable risk or even a benefit. Here’s what they say, and why it’s a problem:

  1. “I can always come down in price later if I have to.”   Yes, it’s possible that someone will find the house irresistible and pay the inflated price, but the odds are the house will languish on the market until the price comes down. Buyers, though, will see this from a different perspective. They’ll be thinking: What’s wrong with the property? Maybe I can get this house for significantly below market value. Holding out for a high could end up leading to a desperation low.
  1. “I have to keep the price high for negotiating purposes.”  A house isn’t a used car. Don’t start far above what’s acceptable in order to pad out the negotiations. Buyers will have access to the same market data, and their agent will have a pretty good idea what the home’s true market value should be. The ruse will quickly come to pieces, so why not price right for a quick, fair sale?
  1. “This is the price I need to get for my house.”  If that’s true, sellers should also prepared to stay put when the house doesn’t sell. Despite dire and important reasons why lower offers can’t be accepted, the market is indifferent to the seller’s situation. There are other homes and other sellers unencumbered by the same reasons.
  1. “A house just like mine sold for this price… so why not mine?”   Sellers will assume houses are i  dentical when the final price tells sweet story. Odds are there are other outstanding reasons the home sold above market value, especially when it comes to interior renovations.

We’re happy to give you an accurate valuation for your home. Let’s talk : The Nicholas Team, Barbara and Gregg 973-509-2222 or email us to set up a meeting: realestate@TheNicholasTeam.com

Be sure to visit our website for more information or to see what homes in your neighborhood are listing and selling for in today’s market

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