Home Improvements: What Gets You the Greatest Bang for the Buck?

Posted on Aug 29, 2018 in Buying or Selling, Moving

Clients and friends often ask me what home improvements are the smartest ones to make, both short-term when listing a home for sale, as well as generally over the long-term. The question is always – will I get this money back when I sell?
When listing a home for sale, my experience has convinced me that for most homes a relatively small investment in handyman fix-ups is some of the best money homeowners can spend. Though often minor and cosmetic, even the smallest of defects can embed in a buyer’s mind the idea that this home is not well cared-for. Eliminating this possibility is critical for a successful sale. Other listing priorities are a fresh coat of paint and the oft-mentioned de-cluttering.
As for longer term investments, my first advice is always if a home improvement will give you and your loved ones a better quality of life, then it’s a good investment. I also a look to Remodeling Magazine, which publishes a well-known Cost vs. Value Report annually. As compiled in the 2018 issue of this report (www.costvsvalue.com), the best recoupment for the Washington, DC metro area are, surprisingly, stone veneer (104.9% recoupment), garage door (102.0%) and front door (101.3%). The lowest recoupment cost projects are an upscale (as opposed to midrange) master suite addition (51.2%) and a backyard patio (54.9%). These figures no doubt vary by house and scale of project, and I am always happy to offer my insight and experience to neighbors and friends in Arlington and throughout the DC metro area.

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The New Tax Law: What Does it Mean for Residential Real Estate?

Posted on Jan 30, 2018 in Buying or Selling, Moving

In recent weeks, I have often been asked what the new tax law means for real estate. Friends and clients want to know if and when should they buy or sell, or more generally how the law affects them. Of course, I recommend that both homeowners and prospective buyers and sellers consult their accountant and/or financial adviser to determine the best course for their particular circumstances.
Here are the law’s main provisions affecting residential real estate:
▪ New homebuyers will now be able to deduct interest on the first $750,000 of mortgage debt on a newly-purchased home. This is down from the current cap of $1 million but higher than the $500,000 limit in the House bill. Current homeowners will not be
affected by the lower cap.
▪ Taxpayers will no longer be able to fully deduct state and local taxes. The law allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. The original House and Senate bills completely eliminated this deduction.
▪ Though not specific to real estate, the standard deduction is doubled from the old law. This significant provision may reduce the value of mortgage interest and property tax deductions as tax incentives for homeownership.
What do these new provisions mean to real estate in Arlington and the DC metro region? No one knows for sure but, here in the nation’s capital of public policy, there is no shortage of speculation. One notable relevant fact is that 19.5% of new residential loans in Arlington County were valued at $750,000 or greater in 2017.* Assuming this percentage continues in the new year, a significant number of new borrowers at this level will have less to deduct. Compared to the rest of the nation, the DC metro area has a relatively large number of borrowers who will be affected by this new limit on deductions. In addition, there has been speculation in the press about the law’s effects. A December 29, 2017 Washington Post article reported that “the steady increase in housing prices in…the Washington region…is expected to slow in the coming years.” The December 24, 2017 Wall Street Journal also reported that “the tax overhaul is expected to create winners and losers among housing markets across the U.S., dealing a blow to high-cost coastal regions but potentially fueling demand in places in the middle of the country.”
So should we panic and move to Peoria? I don’t think so. There will always be regular life reasons for buying and selling homes – family, work, life choices, etc. – and these changes mentioned above may well be at the margins. What’s more, there is a lot more to this new law than the real estate provisions, and the law’s overall effect on the nation’s and region’s economies remains unknown. It will surely be constantly assessed. As stated earlier, homeowners should consult with tax and financial professionals to determine what is best for them.
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8 Dating Rules that Apply to Real Estate

Posted on May 12, 2017 in Buying or Selling

Recently I came across an amusing yet informative article from the National Association of Realtors RealtorMag Tips:

 

Your clients are looking for a home to fall in love with, so here’s how to perfect your matchmaking skills and help them find the one.

February 14, 2017 | By Mary McIntosh

So much of our lives are online nowadays. Our social lives happen in online communities as much or more than in friends’ basements or bars. We meet people with similar interests by joining Facebook groups or following someone’s story on Snapchat. YouTube is where we learn to do almost everything, from simple home maintenance tasks to cooking dinner for the family.

Home shopping, like dating in the 21st century, almost always starts online as well. They’re both about finding the right one—and just like a matchmaker, house hunters turn to you to help them wade through the pool of eligible homes and find the one of their dreams. Here are eight ways online dating and home shopping are exactly the same and what your role is as the matchmaker.

  1. Knowing their price range is like knowing who is in their league. You have to help your client be as realistic as possible here. In the dating world, it’s a waste of time always going after people who you know won’t give you a chance. In a home search, there’s no point in lusting after houses you’ll never be able to afford. Be a good wingman for your client and only introduce them to prospective properties they have a serious chance with.
  2. Be sure they’re ready to move on. Buying a home is a long-term commitment; is your client ready for something long-term? Help your client get prequalified — it’ll show they’re ready to move on from their current home or apartment. In other words, make sure they’re over their last real estate love. Ask them for a sign they’re not just pretending to be ready to move on.
  3. Don’t be superficial. Ever met a date who looked nothing like the online photo? Well, homes sometimes also look way better online than they do in person. Before agreeing to take them on a home tour, ask your client to name something not related to aesthetics that draws them to the home. Then you’ll know a deeper connection is possible.
  4. Don’t make decisions based on first impressions. After they meet in person, your client may think the house is as awesome as it appeared online. But encourage your client to take it slow before making a commitment. Keep them grounded by pushing them to do an inspection (or maybe more than one) to make sure the home isn’t hiding any dark secrets inside.
  5. Don’t second-guess your heart (or gut). Love at first sight is rare, but it happens. It’s possible your client will find the home of their dreams in the first property they see. If this is the case, don’t try and rationalize or talk them out of their decision. But do make sure they take the necessary precautions before jumping into this new real estate relationship.
  6. Ask if others see in the home what your client sees. Are you worried your client is being blinded by the twinkle in the windows and the sparkle in the backyard pool? But you think the home is just a pig wearing lipstick? Tell your client to bring their friends, parents, and others they trust to a second showing. They’ll see right through any facade and help your client avoid falling for the wrong house.
  7. Celebrate once they’ve sealed the deal. Once your client closes the transaction and walks down the aisle and into their new home, congratulate them and come to their housewarming party to show your support for their new status as a homeowner.
  8. Help them maintain a lifetime of happiness. Show your clients steps they can take to care for their home so they don’t fall on hard times. Give them resources to keep up with home maintenance and make sure they know never to ignore problems that may pop up. This will help your clients have an enduring home that comforts them and their families for years to come.
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Did You Know? – Dual Agency in Virginia

Posted on Feb 1, 2017 in Buying or Selling, Renting

Many consumers are not aware of Virginia law as it pertains to dual agency in real estate (in which a single agent represents both the buyer and seller). In general, a “dual agent” is largely prohibited from offering advice to either side.  In fact, in Maryland dual agency is illegal.  

 As published by the Northern Virginia Association of Realtors (NVAR), “The code of Virginia sets forth what services a dual agent cannot provide:

 1. The agent will be unable to advise either seller or buyer as to the terms, offers or counteroffers (except, however, that the dual agent may have already provided such advice to the seller prior to representing the buyer); 2. The agent cannot advise the buyer as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to repairs of the property (to make or request); 3. The agent cannot advise either party in any dispute that might later arise relating to the transaction; 4. The agent will be acting without knowledge of the client’s needs, client’s experience in the market, or client’s experience in handling real estate transactions unless he has gained that information from earlier contact with the client. Remember that either party may engage another licensee if additional representation is required.”

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