5 Home Improvement Projects That Will Get You Top Dollar

It’s a highly competitive market for home sellers right now. More homes to compete with means that the impression your homes makes - from the curb, and on the inside - matter now more than ever. You can increase your chances of selling faster - and at today’s top dollar - by investing in a select few home improvement projects that have been shown to make a big impact on buyers.

Bad news alert: it might cost you a little time, effort and cash.  The good news, though, is that the best projects for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract buyers, and to attract dollars from those buyers.

1. Painting:  Adding a fresh coat of paint to ceilings and walls is a tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have an easier time envisioning how they will infuse their own personalities into your home if they’re looking at a relatively blank slate.

Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.

Fresh exterior paint - even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims - is also a quick, inexpensive way to polish the look of your home from the curb.

2. Landscaping:  Everything you’ve heard about curb appeal is true. First impressions matter - especially if your house is one of eight or nine a buyer has seen in one day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the biggest impact - and be diligent about keeping your landscaping very well-manicured throughout the time your home is on the market.

Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want to take on. Think clean, simple and elegant for the biggest boost in value.

3. Cleaning and de-cluttering:  Start by removing all your family photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and counters. Buyers want to be able to envision their lives in the house, not yours. Personal items - and the visual clutter they create - have been shown time and time again to block buyers’ ability to create this vision.

Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail and other items.

And then clean - and keep cleaning obsessively, the entire time your place is on the market. Kitchens, bathrooms and bedrooms should look unlived in when they are shown.  And don't forget to clean less obvious places like windows, walls, doors and  and floors, to dust off shelves and furniture, and to polish appliances.

4. Plumbing repairs and water stain/damage repair: Paying a plumber to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely provoke disgust and exasperation on the part of the buyers you want and need to impress.  And they can be pretty cost effective to fix - ask your agent for a referral, if you need one.

5. Staging:  Staging your home can make a dramatic difference in the price for which your home sells. Good staging is equal parts:

(a)    removing your personal belongings and replacing it with more  artwork, decor and cleaner-looking furniture,

(b)    and tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light.

When done well, staging can convert your home from just another listing on a buyer’s list to the setting for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to a buyer), to  items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story of the life buyers can fantasize about living in your home.

Talk to your agent about staging - some agents have the skill to do this on their own, while others might have a professional stager they frequently work with.

In some cases, you might want to take on even larger projects. Before you go that route, talk with a local real estate agent; they are well-positioned to know what sort of updates and features will make the most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant difference in the price it commands, so take advantage of your agent’s expertise as you make decisions about whichproperty preparation investments to make (and which to forego).

Tara Nicholle-Nelson (Trulia)

New mortgage limits: Another hurdle for the housing market?

Prospective homebuyers and sellers could run into additional roadblocks in coming months as new mortgage regulations set to take effect this fall filter into the system. Although the new limits on conforming loans — mortgages eligible for government guarantees — won't officially roll out until Oct. 1, buyers and sellers alike could feel the pinch of even tighter credit availability much sooner as lenders start gearing up for lower loan caps.

"As these regulations are rolled out, every individual lender takes a different amount of time to implement and get the changes into the pipeline," says Mona Marimow, senior vice president at LendingTree.com. "Many lenders might start implementing and affecting their rates prior to the October 1 rollout."

To shore up a faltering housing market, Congress increased the maximum loan amount that government-sponsored enterprises Fannie Mae and Freddie Mac could guarantee, to a high of $729,750 in some markets. That made it easier for borrowers in pricier markets to get loans because lenders and investors were guaranteed to receive payment regardless of whether the homeowner defaulted.  

Now, as the government begins to gradually reduce its footprint in the housing market, limits on government-backed loans are scheduled to reset to prior levels — a high of $625,500 in some markets — which experts say could ultimately lead to higher mortgage rates and more downward pressure on home prices.

The brunt of the impact will fall on middle-of-the-market buyers and sellers in pricier housing markets, says Paul Bishop who heads up research at the National Association of Realtors. "The biggest change could potentially happen in higher-cost areas, because for a number of buyers in higher-cost areas [such as] New York, Washington, Los Angeles, a home that would require a mortgage above $625,000 is not an unusual purchase," Bishop says. "It's really going be a hit for those buyers in those areas right at the middle of the market, and what we've seen over the last several months is that the middle segment of the market have really been the weakest."

Prospective borrowers could face higher mortgage interest rates for loans that exceed the new caps — also called jumbo loans — which would increase the overall cost of owning a home. That, in turn, would likely discourage the house hunters the economy desperately needs to jump-start the housing market.

It's a concern for homebuyers thinking about whether they want to move forward in an economic environment where there's one more type of uncertainty in the decision making process," Bishop adds.

House hunters might also be drawn to less-expensive properties as a result of the change, which could exacerbate existing weakness in the middle-priced segment of the market. "When you consider the new jumbo rate plus you have to put a greater amount down, it's going to have implications for consumers who are probably going to decide to take a home with a lesser value," Marimow says.

But buyers aren't the only ones who will feel the ripple effects of a drop in conforming loan limits. Sellers, too, are likely to feel the impact, especially if their asking price is above the new limits. "If home sellers want to make their sale attractive to potential buyers, then there may be some downward pressure, such that it's more likely that the buyer walking in the door would be able to get a conforming loan at the new level," Bishop says. That means that if normally a house might sell for $750,000, for example, the seller might find it in their best interest to push down the price to accommodate buyers seeking mortgages under the new limits.

That's not good news for the housing market or the U.S. economy, neither of which can afford fresh obstacles to recovery. "At this point, the timing in reduction of any loan limits is probably not good in any real way, simply because the housing market is struggling," Bishop says. "In terms of the big picture, it's still fragile, but we would like to see that move forward because history shows the rest of the economy really doesn't recover in any meaningful or robust way unless the housing market is also on stable footing."

Nevertheless, consumers can start preparing for the shift now, ahead of the Oct. 1 transition. "The good news is that there is information being shared about this now," Marimow says. "This is the right time to be talking about it because once the changes do take effect, the people who are affected will already not have other options."

The best thing consumers can do now is evaluate their needs and do their research, especially in an environment as frenetic as this one. "Consumers should look for a closing guarantee and lenders that are going to be able to lock in your rate as quickly as possible, because your rate could float even over the time [it takes] to close your loan," Marimow says. "You truly need to shop around as much as you can to make sure you're comparing and contrasting to know you're getting the best one."

Meg Handley of U.S. News & World Report

Real Estate sales slip a little in June.

After stumbling in April and May, existing-home sales continued to slip in June compared to the month before, according to the latest monthly report from the National Association of Realtors.

Completed sales of existing single-family homes, townhomes, condominiums and co-ops dipped 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June from 4.81 million in May, the report said. Sales fell 8.8 percent compared to June 2010, the scheduled closing deadline for a federal homebuyer tax credit program.

Lawrence Yun, NAR's chief economist, said in a statement that there was "an unusual spike" in contract cancellations last month.

"The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was canceled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year," Yun said.

The national median price for existing homes rose 0.8 percent year-over-year last month, to $184,300. Distressed properties, typically sold at a discount, made up 30 percent of sales in June, down from 31 percent in May and from 32 percent in June 2010, the report said.

Total unsold inventory increased 3.3 percent to 3.77 million -- a 9.5-month supply at the current sales pace, the report said. That's a slight jump from a 9.1-month supply in May.

According to a separate NAR survey, cash buyers accounted for 29 percent of purchases in June, down from 30 percent in May and up from 24 percent in June 2010, the report said.

First-time buyers made up 31 percent of sales, down from 36 percent in May and from 43 percent in June 2010. Investors made up 19 percent of sales, up from 13 percent in June 2010. Repeat buyers saw a seasonal bump in market share to 50 percent from 45 percent in May.

Sales in the Northeast declined the most both year-over-year (17 percent) and month-to-month (5.2 percent), to an annual pace of 730,000 in June. The region's median price rose 3.1 percent compared to June 2010, to $261,000.

In the Midwest, sales rose 1 percent month-to-month, but fell 14 percent year-over-year to an annual rate of 1.04 million. The region saw the biggest drop in median price year-over-year (5.3 percent), to $147,700.

In the South, the median price remained virtually flat year-over-year, at $159,100. Sales rose slightly month-to-month (0.5 percent), but fell 5.6 percent compared to June 2010, to an annual rate of 1.86 million.

The West saw the biggest year-over-year jump in price (9.5 percent), to $240,400. Sales declined 1.7 percent month-to-month and 2.6 percent year-over-year in the region, to 1.14 million.

Nationwide, sales in every price range except for homes under $100,000 declined year-over-year in June. All regions except the Northeast saw increases in that price range with the West seeing a whopping 61.2 percent rise.

In the Northeast, sales in all price ranges except homes above $1 million fell by double digits. Sales of homes above $1 million in that region remained virtually flat.

In the Midwest and South, sales of such high-end homes rose 3.6 percent and 4.2 percent, respectively.

Out of 18 metro areas tracked by NAR, sales rose year-over-year in five: Miami-Ft. Lauderdale, Fla. (24.5 percent); Phoenix (22.5 percent); Atlanta (7.7 percent); Dallas-Fort Worth, Texas (3.1 percent); and San Antonio (1.6 percent).

The rest saw sales drop year-over-year in June. Six metros saw sales fall by 10 percent or more: Philadelphia (-29.6 percent); New York-Northern New Jersey-Long Island (-17.7 percent); Cincinnati (-16.5 percent); Boston (-12.8 percent); Washington, D.C. (-10.7 percent); and Baltimore (-10.2 percent).

Prices fell in 12 out of 18 metro areas. St. Louis saw the biggest drop, down 14.9 percent to $137,400; followed by Atlanta, down 14.7 percent to $104,100.

Prices rose in six metros: Cincinnati (up 5.6 percent, to $137,300); Washington, D.C. (3.8 percent, to $359,200); San Antonio (3.6 percent, to $148,700); New Orleans (2.3 percent, to $166,000); Houston (1.6 percent, to $162,200); and Dallas-Fort Worth (0.4 percent, to $156,000).

A separate report released today by the California Association of REALTORS® found that pending home sales in the state rose year-over-year in June for the second straight month.

Pending home sales -- based on home purchase contracts signed but not yet closed -- rose 4.4 percent compared to June 2010, according to CAR's Pending Home Sales Index (PHSI). The index was 119, up 1.9 percent from May.

The share of distressed homes sold in the state remained flat both month-to-month and year-over-year in June, at 47 percent. REOs (bank-owned properties) accounted for 27 percent of sales, up slightly from 25 percent in June 2010, while short sales accounted for 19 percent, down from 21 percent in June of last year.

5 Mortgage and Foreclosure Myths

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up.  The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will c

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth:  If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure.  Contact the state agency listed below if you need this sort of help:

• Alabama: http://www.hardesthitalabama.com/
• Arizona: https://www.savemyhomeaz.gov/
• California: https://www.keepyourhomecalifornia.org/
• Florida: https://www.flhardesthithelp.org/
• Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
• Illinois:http://www.ihda.org/
• Indiana: http://www.877gethope.org/
• Kentucky: http://www.kyhousing.org/
• Michigan: http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners+-+contact+your+mortgage+servicer+for+assistance
• Mississippi: http://www.mshomecorp.com/firstpage.htm
• Nevada: http://www.nahac.org/
• New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
• North Carolina: http://www.ncforeclosureprevention.gov/
• Ohio: http://www.savethedream.ohio.gov/
• Oregon: http://www.oregonhomeownerhelp.org/
• Rhode Island: http://www.hhfri.org/
• South Carolina: http://www.scmortgagehelp.com/
• Tennessee: http://www.thda.org/
• Washington D.C.: http://www.dchfa.org/

Courtesy of Tara-Nicolle Nelson

5 Keys to Escaping a House Fire

You're sound asleep when you hear the wail of your home's smoke alarm. A fire has started somewhere in your home, smoke begins to fill the rooms, and you have only minutes -- maybe seconds -- to get everyone out safely.

It's a scenario that none of us ever want to think about. But it happens with surprising regularity. The U.S. Fire Administration reports that once every minute there's a fire in an American home that's severe enough to report to the fire department.

An average of 2,600 people die every year in house fires in the U.S. -- that's one person every three hours -- and an average of 13,000 people are injured.

Smoke alarms
Obviously, one of the most important things you can do to protect yourself is to install smoke alarms. They're inexpensive and easy to install, and no home should be without an adequate number of them.

You should have one outside the door of each room where people sleep, and a minimum of one detector centrally located on each floor of the house. Once installed, be sure the batteries are changed once a year -- pick a specific day of the year, and mark it on the calendar!

Plan your escape
Another critically important thing for you and your family is to plan an escape route. This is something for the entire family to be involved with, since it's the best way to ensure that everyone gets out safely. Here are some tips for devising your escape plan:

 Leave immediately: Your home's contents can be replaced -- you can't. If you're alerted to a fire in your home, get out immediately. Don't stop to gather any belongings. Don't even stop to call 9-1-1 -- you can do that with a cell phone from outside, or from a neighbor's house.

You can't always depend on the door: You won't always be able to use the room's main door to escape during a fire, so take that into consideration when doing your escape planning. Look at two different ways to escape from any room.

If a room has two doors, practice your escape from each of them, in case one is blocked. If there's only one door, your next means of escape will be a window, so understand how to escape from each of the room's windows -- directly onto the ground, onto an adjacent roof or deck, or with the aid of an escape ladder.

In the event of a fire, if the door to the room you're in is closed, feel it before opening it. Use the back of your hand, and touch the top of the door or the doorknob to see if it's hot. If it feels cool, open it slowly and check for smoke. If heat and smoke come in, close the door immediately and use an alternate exit.

Know the route: Whatever exit you use from the room, know where that exit will lead you. No matter how well you know your house, during the heat, smoke, and chaos of a fire it's easy to become confused and disoriented -- especially at night. Everyone in the family needs to know and practice the escape route from each room all the way to the exterior of the house.

Plan on a meeting spot: Decide on a specific, easily recognized meeting spot outside the house where everyone can gather. It might be the end of the driveway, in front of a neighbor's, or some other location. Be sure that everyone in your family knows the spot, and that they immediately assemble there.

This is the fastest way to know that everyone's out safely, and to prevent unnecessary injuries from going back into the home to look for someone who's already out.

Escape ladders
A window is the normal escape route to use if the door to a room is blocked by fire. But if you live in a multistory house, using the window on an upper floor is obviously dangerous without a ladder. So for every upstairs sleeping room, you should have an escape ladder ready in the event of an emergency, and each family member needs to know how to deploy and use it.

The simplest type of ladder is one that hooks over the window sill. Open the window, hook the ladder in place, toss the rungs out of the window, and climb down. Ladders of this type typically cost in the $30 to $50 range.

There's a couple of disadvantages to this type of ladder, however. Because no one expects to use it, it gets stored away, and has to be found during the chaos of the fire. Also, many of these are single-use ladders, so there's no opportunity to practice with them.

In my opinion, a much better alternative is a permanently installed escape ladder, such as Werner's new Built-In Fire Escape Ladder ($99 for a two-story model, $139 for three-story). This type of ladder is installed in a can in the wall, directly under the escape window, so it's unobtrusive but always in place when you need it.

The Warner escape ladder is very easy to install, and comes with a clear and well-illustrated instruction booklet. It's basically a matter of cutting hole in the drywall between two studs -- the can is designed for mounting between studs on 16-inch centers -- and bolting the can in place. The escape ladder folds up and stores in the can, and a wood door, which can be painted or wallpapered to match the room, covers the can.

One distinct advantage to the Werner ladder, in addition to always being where you can find it, is that it's reusable. This allows each family member the opportunity to practice opening, deploying and climbing down the ladder. The can also can be used as a step to help you get out of the window, and there's a built-in assist strap, which gives you something to hang onto when you first start the climb.

Where to find what you need
Escape ladders, both permanent and single-use, are available at many home centers, hardware stores and online retailers such as Amazon. Smoke detectors and batteries are available from any home center, hardware store, department store and other retailers, as well as online.



Paul Bianchina/Inman News