Buying A Home

Is It Ever Smart to Build the Biggest or Smallest House in the Neighborhood?

When you are thinking about building a new house you may face a dilemma: Should I build the biggest home in the subdivision? Or, what about the smallest?...

Once you’ve decided how much space you need and can afford, if the house you are considering would be the smallest or the largest in a neighborhood, then you have to be mindful of the potential outcome when you are ready to sell it. If you intend to stay in the house many years, you may not be as concerned about this. However, you may need to move sooner than you previously thought so being prepared is important....

The biggest house. When you build the biggest house, assuming that size alone puts you at the top of pricing in the neighborhood, you will have less room to grow in appreciation versus a smaller home. Any improvements you make will provide less return. It is possible to over build, and out price the neighborhood....

The smallest house. If your household size dictates the need for a smaller house, it could work to your advantage in future valuation. You will have more room to appreciate underneath the price cap set by the larger homes. Additionally, any future improvements increase the value proportionately. One exception here would be if smaller means only two bedrooms or some other floor plan limitation that would give most buyers pause. One more factor to consider: In recent years, the trend has been toward smaller homes, as Gen X’ers and millennials drive the market....

The middle ground. Houses in the middle of the spectrum offer more versatility. The smallest house will appeal to a smaller slice of consumers, such as singles, young couples with no kids, or empty nesters. Larger houses appeal to other, rather limited segments of the market. By contrast the mid-sized home appeals to a broader group of buyers, garnering more demand and better appreciation. If your household needs can be met in the middle, your future resale prospects are probably brighter....

Outdoor Living, Ownership,

It’s Game Time: Building a Backyard Sports Court

Home sports courts provide great fun and exercise, but are they a wise investment? While the kids may overwhelmingly approve, a future buyer may not agree. Here’s a quick play-by-play of what’s involved, how much it will cost and the return on investment....

Types of courts. The most common types of courts are for basketball and tennis. Some courts double for both, with a basketball goal on the side and markings for both sports. Such courts can also be used for volleyball, badminton, shuffleboard and hockey....

Surfaces. A court’s foundation can be made of asphalt, concrete or compacted material such as fragmented concrete. A sports modular surface can be laid upon these foundations. Asphalt has less durability and will need repairs more often. Concrete will last many decades. Both of these surfaces require heavy equipment for installation and both create a barrier preventing rainwater from reaching the ground beneath, resulting in standing puddles. Removal would be difficult. Compacted material requires less in the way of equipment and is permeable....

A modular sports surface laid on top of concrete, asphalt or compacted material will absorb shock and minimize injuries, particularly when placed upon compacted material. It is portable should you decide to remove it from the base....

Space requirements. The space for a home court must be big enough for the court itself — plus adequate buffer between your property and the neighbors. Check your deed restrictions. You also don’t want to crowd the house, deck or patio. The land should be level....

Landscaping changes. Consider how the sports court will alter your landscaping and drainage. Will you have to remove trees to install the court? Not only will this add to your costs, but also consider the loss of shade to the area and the aesthetic value sacrificed....

How will a court alter the flow of drainage from rain and irrigation runoff? Check with your local government officials about rules and regulations concerning water runoff. Many local governments require a certain percentage of the land to be permeable....

Finally, the space must be accessible to installation crews with earth-moving equipment. If the area is fenced, this may require temporary removal of fence panels....

Seek approvals. Seek the proper permits from local authorities and your homeowners association, if you have one. A detailed design plan will likely be required along with permitting fees....

Cost. On the low end, a simple half basketball court starts at $7,000. On the upper end, a multi-use court big enough for tennis, will cost tens of thousands of dollars....

Pros and cons. A sports court would no doubt encourage your children to become active outdoors and be a drawing card for friends and neighbors. It also would be a great convenience for athletes in the family needing extra training time. But it’s also important to think about how the courts will affect your neighbors. Will they be bothered by the noise? Will the drainage or aesthetics of their property be compromised? And what about the age of your children? Will you use the courts after your kids are grown and gone? And finally, how would a sports court influence the resale value of your home? You would likely get less than a 50 percent return on your investment — and it might even hinder a sale. Similar to a pool, a home sports court would limit your home’s appeal to a narrow subset of buyers. If a buyer wanted it removed, the cost could be a deal killer....

Indoor Living, Ownership,

Creating a Great Room for Kids to Share

When siblings share a bedroom, every little bit of space counts. So what can a frazzled parent do? We’ve got you covered with this handy list of tips to ease sibling rivalry and create a harmonious space that your kids will love....

Meeting of the minds. If your children are old enough to participate in the design process, invite them to a family meeting to discuss options for the shared space. Ask them for their likes and dislikes and identify common ground. Make sure each child feels like he or she has had input....

Divide the space. If privacy is an issue, create a temporary room divider, such as a curtain hanging from the ceiling, to divvy up the space. Younger children may like a bed tent or a draped canopy. A bookshelf can be a great space divider as well while also providing needed extra storage. (Make sure it’s secured for safety.)...

Coordinate styles. Matching bed linens are not a requirement, but it’s best to use colors from the same color palette. Elements that continue across the space, like a bunting or artwork, help to unify the space and harmonize elements that don’t go together on their own....

Types of beds. Depending on the ages of your children, choose among bunk beds, trundle beds, and twin beds. Also consider the best way to arrange the beds: side-by-side, foot-to-foot, or at a 90-degree angle. Some parents place beds on casters for easy movement around the room....

Nooks and crannies. Utilize corners, alcoves, and the wall space underneath windows to place furniture and storage. Will one nightstand with a drawer for each occupant suffice? Can an extra dresser be placed in a closet? Consider floating shelves on walls, hooks, and under-bed storage solutions....

Investment, Money,

How to Develop Your Own Land

If you own raw undeveloped acreage, the land may be your route to financial security. Subdividing residential lots or owning commercial buildings can put you on the path to prosperity. Land development, however, is a complex venture. Take a look....

Details count. You may already own the land, but to develop it you will need to convince other people that you have a reasonable plan and chance of success. Do a feasibility study describing what you propose to do with the land, the supply and demand for your offering, and why you think you can be successful. Among the people you will need to persuade:...

Potential investors, if outside financing is needed. This includes bankers if you are borrowing money.
Lawyers, who will help form a legal entity under which you will operate the development, help you with construction contracts, steer you through the maze of governmental authorities that have a say-so on your land use.
Engineers and architects, who will design and blueprint every aspect of the construction.
Utility commissioners, who must approve plans for water, gas, electric and wastewater lines.
Builders and construction companies that will survey, grade and pave the land, and construct the buildings.
Real estate brokers, who will bring you buyers.
Marketing people to tell the world about your new development.
Environmental analysts, if the state in which you are doing business has concerns about how your development will affect the environment.
Traffic engineers, if the size of your development will lead to increased traffic.
Considerable financial resources are required to navigate all of these aspects of the development process, since you will be spending considerable amounts of money long before the lots begin to sell in your residential development or the business spaces lease in your shopping center.

One fundamental rule of real estate investing: Don’t accept a negative cash flow situation. In the case of owning raw land, if it is not producing income in some way, it is a drain, even if it ultimately appreciates in value. Developing the land will generate cash flow and leverage the increase in value, because you’ve made the land more useful and valuable....

Home Improvements, Ownership,

Keeping Your House Dry In All the Right Places

Throughout your house, key construction materials — things like flashing and weather stripping — work to keep rain and moisture from coming inside. As a homeowner, it’s your job to keep those materials well maintained to protect the integrity of your home. Here’s what you need to know....

Roof. The roof has plywood decking, or more likely now, a thermal board that serves as both a temperature buffer and moisture barrier. If plywood is used, then a tarpaper-type of covering is attached upon which the final shingles are installed....

Flashing. Used in places where the lines of the roof diverge, a galvanized steel trim keeps rain out....

Walls. Around the frame walls of the house, a wrap known as an envelope is installed that serves as both a moisture barrier and thermal buffer. This material is essential for keeping moisture from penetrating the walls due to humidity and temperature differences. If masonry is the outside cover, then weep holes will be placed at the bottom every few feet to allow any moisture that forms in the walls to drain out....

Weather stripping. Your windows should be tight and well caulked around the window frame. The movable part of the window, called the sash, will have rubber stripping around it to keep air and water outside. Doors also have weather stripping at the bottom edge and around the door frame for the same purpose....

Plumbing. Plumbing should have tight joints, and a wrap of insulation where it runs through outside walls. If you ever have a water leak in your home, plumbing or the roof will be the most likely culprits....

What can you do? There are steps you can take to keep your home dry in the right places. When buying a home, even a new one, have the home professionally inspected. This will provide an overall review of construction quality, including roofing and plumbing. Once you are in the home, periodically check around window sills after hard rains. When driving nails into a wall, be mindful of whether plumbing is inside. Be sure to winterize outside faucets with good insulation wrap when the cold season begins....

Buying, Finding a Home,

Historical Homes: Buying a Piece of History

While ownership of historic homes can be appealing, it’s definitely not for everyone. Historic homes have their own set of challenges and responsibilities. Here’s a look at the joys and frustrations of owning a piece of history....

What qualifies as historic? Historic homes are recognized by an agency or organization such as the U.S. Department of the Interior, the National Register of Historic Places or other state and local historical societies. Typically a home is designated because it is associated with a famous person or historical event, or the architecture is noteworthy and needs to be preserved....

Before purchasing, find out from the governing agency if renovations and use of the property are restricted. Repairs and replacements are typically permitted but owners may not be permitted to renovate in such a way that significantly changes the interior plan or the outer appearance....

The benefits of owning an historic home. The old saying is true: They don’t make them like they used to. The architecture, the attention to detail and the solid craftsmanship of historic homes have a lasting value. Sometimes, historic homeowners will receive tax abatements as an incentive to keep the historic property in good condition. Additionally, historic homes are typically in mature neighborhoods, with large shade trees and peaceful environments. There’s a restful atmosphere in historic home districts....

Costs of ownership. As idyllic sounding as it might be to live in a piece of history, significant costs are associated with aging homes. Structural issues are one potential problem. Before purchasing, find an inspector that specializes in old homes who can do structural engineering analysis. You may have to weigh whether the home is worth the cost of repairs. In aging homes, you also must look out for health and safety issues, such as the existence of lead-based paint, lead plumbing and asbestos. Removing and replacement costs are significant....

Check the utility bills. Older homes were built before the age of energy efficiency. Ask for one year’s worth of utility bills to see how the house fares in terms of costs....

The sewage goes where? It’s possible that the original sewage system for the home was a cesspool or septic tank out in the yard. If the house is not in an area where it can be connected to city sewage, then you’ll need to make sure the sewage system is up to date and will pass health department inspection....

Money, Retirement,

Reverse Mortgages: What Are They and How Do They Work?

You may have heard the term “reverse mortgage,” but have you ever investigated how they work? Here’s a tutorial to help you understand if a reverse mortgage is right for you....

What is a reverse mortgage? A reverse mortgage, also known as a Home Equity Conversion Mortgage, is a tool typically used by an older adult to tap into the equity in the home to supplement retirement. In financial terms, a reverse mortgage converts the illiquid asset of equity in the home into the liquid asset of cash available for use. The money is not paid back until the home is sold or the last person named on the mortgage dies....

How does it work? First, you must meet certain qualifications: You must be 62 or older, own the home and live in it as your primary residence. The home must be no larger than a four-family residence, the home must be in good condition, and you must have substantial equity in it. Qualifying homeowners may apply for an amount up to the amount of equity in the home. For example: A homeowner with $300,000 in equity in a home valued at $350,000, could qualify for a reverse mortgage of up to $300,000. However, you must continue to live in the home. Expect several thousand dollars in lending fees to be subtracted from your equity. Homeowners may take the money in several ways: as a lump sum, as a monthly annuity for the time that you live in the house (called a tenure annuity), as an annuity for a set period of time (term annuity), or as a line of credit to be used at your discretion. Or you can chose a combination of these options. You do not make payments on the amount borrowed. The loan is paid back from the proceeds when the house is sold or when the last person on the mortgage dies and it is sold. If the house is worth more upon sale than the amount of the mortgage, then the heirs receive the additional amount. Reverse mortgages are guaranteed by the Federal Housing Administration or FHA. You are borrowing from a private lender, and FHA guarantees that the lender will make the payments owed to you. FHA also covers the difference if the amount owed to the lender exceeds the value of the home....

When does a reverse mortgage make sense? A reverse mortgage makes the most sense when you are well past the age threshold of 62 and have substantial equity or own your home outright and need to tap into that equity to supplement a fixed income. It doesn’t make as much sense if you don’t have a large amount of home equity, are in your early 60s, have enough retirement income, or if you desire to pass the home onto your heirs....

What are the downsides? The fees associated with a reverse mortgage can be high and the interest rate is higher than traditional mortgages. You must maintain the condition of the home and if you fall behind on your existing mortgage, homeowner’s association dues, homeowners insurance or taxes, you would be at risk of defaulting on the loan. For these reasons, alternatives, such as refinancing an existing mortgage, downsizing or borrowing privately, should be considered....

A reverse mortgage can be confusing, even to some financial experts. But for the right homeowner, in the right circumstances, it may be a good choice. Consult with your financial adviser and tax adviser before making a commitment....

Selling, Staging Your Home,

Squeaky Clean Tips for a Successful Open House

It’s time to showcase your home with an open house. Your to-do list may be long, but the most basic of all is to clean it until it shines. Nothing is more fundamental to selling your house than to have it sparkling clean. Here are the basics....

Consider hiring a professional. You may want to DIY it, but nothing beats having people who clean for a living come in and transform your home. To hire a maid service is not that expensive, especially considering the potential payoff from selling your home. They will not overlook things. They know the techniques and they use professional grade cleansers to do the job. Call three different services and get quotes. Make sure they are bonded and insured before you hire them, and read online reviews of their work....

The stove, oven and kitchen sink. Whether you decide to clean it yourself or hire someone, let’s cover the basics. A stove and oven with caked on, burned on foods is simply gross. Make sure you or the service take care of this focal point in the kitchen. The sink should be scrubbed, stain free and use a deodorizer for the garbage disposer to eliminate smells....

Bathrooms. Toilets should be cleaned till they shine and smell sanitized. Clean the floor around the base and behind the toilets. Use lime remover on all faucets and hardware. Mirrors spot free. You know a clean bathroom when you see one so see that yours sparkle....

Dust. Go over every shelf, picture frame, bed frame, and every baseboard. Give your house the white glove treatment. Also, be sure to change the air conditioning intake filter and sweep/wipe the grate free of dust....

Floors. A professional maid service will vacuum and mop, but you should also have a carpet cleaning company professionally steam clean the carpets, treat stains and pet odors and clean stained grout lines in tile. Speaking of pets, wash their bedding and scrub well any area that is their designated sleeping/housing/feeding area to remove pet odors. You don’t smell it any longer, but most assuredly your buyers will. During an open house, remove their bedding and bowls to the garage and even have Fido or Fluffy temporarily off premises, staying with friends or relatives....

Don’t forget the outside. Drive up appeal is crucial so have the landscape mowed and trimmed, clutter cleaned up and no trash cans in sight. If necessary on open house day have extra cars parked elsewhere temporarily. Have your windows sparkling clean. Again, it’s worth it to hire a professional who can make them crystal clear. When you are showing the house you want to have curtains and blinds open on the windows for maximum light, so it defeats that purpose if the window glass is grimy....

Declutter inside and out. Have both front and back yards clear of any clutter such as old yard tools, defunct barbeque grills, stacked bricks or landscape timbers and whatever else may be lying around the yard. Clean out the garage and stack what you keep as neatly as possible. Inside, declutter with ruthless intensity. If you haven’t used it in a year or there’s no legitimate reason to keep it…no matter what “it” is…then sell it, give it or toss it away. Besides helping your home sell, decluttering brings a liberating feeling that’s hard to beat. Plus a cluttered home gives the illusion that it’s smaller than it really is, especially cluttered closets....

After all these steps, walk through your house with your listing real estate agent pretending to be a buyer. See what they will see, think as they would think. You’ll spot things that you’ve grown accustomed to that a buyer will notice right off. Make sure your home looks just like the photos listed on the MLS. With close attention to detail, and a spirited effort to make your house shine, you’ll have accomplished the most important step toward showcasing your house....

Buying, Buying a Home,

Real Estate 101: What Does a Title Company Do?

One of the biggest players in any real estate transaction is the title company. The title company serves multiple roles, all of them crucial to the closing process. Primarily, title companies exist to protect the parties involved, particularly the buyers and their mortgage companies. Here is what you need to know....

A title company issues title insurance

When a buyer purchases a property, ownership title transfers from the seller to the buyer via a document known as a deed. The name of the new owner of the real estate is recorded into official government documents at the county Register of Deeds where the property is located. But sometimes things happen in the history of a property that “encumber” ownership. Unpaid property taxes are an example. In this instance, the taxing authority places a tax lien — a claim on — the property, which stops the sale and title transfer until the taxes are paid. Similarly, contractors who worked on the property and were never paid can have so-called “mechanic’s liens.” The title company searches official records for any liens, access restrictions, and encroachments that need to be remedied before the property can close and the title can transfer. After the title company is satisfied the title is clear and marketable, it issues a title insurance policy that protects the interested parties against defects on the title found after the closing....

Title insurance protects two parties to the transaction

Two parties in a real estate transaction receive protection from a title insurance policy. First, the buyer is protected from spending a substantial amount of money on a property that has legal entanglements. The other protected party is the mortgage lender. Title policies cover either or both parties. Unlike other typical policies, title insurance protects the insured from an event that occurred before the policy was issued....

A title company manages escrowed funds

In some states, the earnest money (or down payment) paid by the buyer is held by the title company until it is applied at closing or returned to the buyer under certain provisions of the sales contract dissolving. In other states, an attorney will have the responsibility of holding the earnest money in a trust account. At closing, the title company or attorney handles the dispersing of money to each party. Typically a closing officer working for the title company or the attorney brings all the legal documents to the closing, explains them to the buying and selling parties, and gets all the proper signatures and notaries. Depending on the state, either the buyer’s real estate agent or the seller’s agent may have a title company they use regularly, but you are not bound by the recommendation....

Related – What Does it Mean to Have Clear Title?...

Home Improvements,

Checklist: Spring To-Dos for Homeowners

That winter chill is retreating, and the prospect of warm Spring weather is no longer a distant dream. Get your house and yard ready with these 10 maintenance musts....

1. Schedule a Spring air conditioning check

Be proactive. Spring is a great time to hire a professional to inspect the air handler, clean the condenser coils, inspect the evaporator coil and check the refrigerant level....

2. Inspect the roof

Once the ice and snow have melted, check the roof for damage. Look for cracked shingles and loose flashing, especially behind chimneys and in valleys. If the gutters filled with ice, the weight may have pulled them loose from fascia board mounts, so inspect and secure them as needed. Hire a pro if this is beyond your skill level or you’re afraid of heights....

3. Look for attic leaks

Inspect the underside of the roof decking in the attic for signs of water seepage. Ice can penetrate damaged shingles, and cause a leak in the attic upon melting. Call a roofer if you find damage....

4. Inspect for animal intruders

Squirrels, raccoons, rats, and possums may have invaded your attic to escape the winter chill. Look for nests, often made in the insulation. Call a licensed wildlife removal professional if you find evidence of animal trespassers....

5. Relocate firewood

If you have firewood in the yard, move the pile several yards from the house. A woodpile attracts termites, carpenter ants, skunks and possums when the weather warms up so keep it as far away from the house as possible....

6. Clean the windows

Remove the dirt and grime of winter from windows with a good cleaning, allowing that gorgeous spring sunshine to fill your rooms....

7. Ward off an Spring insect invasion

Remove any standing water around the property to limit the spread of mosquitoes. Call a pest control professional to inspect for wood-destroying insects such as carpenter ants and termites that can damage your home. This is not a do-it-yourself job....

8. Nourish your landscape for Spring

Depending on your climate, apply fertilizer and weed-control treatment in March or April. Consult local garden stores for timing and best products. After the last frost, add colorful annuals with a layer of mulch to rejuvenate your flower beds....

9. Get ready for outdoor relaxation

It’s time to fire up the grill. Wipe down the hood, knobs and handles with a mix of vinegar and water. Stock up on propane or charcoal. Scrub the grill grates to get them ready for the first cookout. Check gas burners to make sure no creatures have made nests inside over the winter....

10. Start up the lawn equipment

Soon the lawn will need mowing and edging. Fill the gas tanks and oil reservoirs of your mower and trimmer. Make sure the mower blade is sharp and the weed eater has plenty of the proper-size line. Start each and give them their first workout of the season. Start the leaf blower and clear off the drive and walkways....

Related – Removing Wild Animals from Your Home...

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