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Focus on Curb Appeal for the Highest Return on Investment

The Remodeling Cost vs. Value Report for 2015 analyzed home improvement projects to see which would give homeowners the biggest return on their investments when it came time to sell. The top five investments that put the most cash into sellers' pockets were all visible from the curb.

Upgrade Your Front Door
Replacing an old front door with a new steel one was the most affordable renovation on the list, with an average cost of $1,230. But for the third year in a row, this simple upgrade brought buyers the greatest returns on their investments; the resale value of a steel door upgrade averaged $1,252, a return of 101.8 percent. An upgraded front door makes a home seem well-cared for, a good first impression that will stay with a buyer throughout the rest of their viewing.

Garage Door Replacements
Thanks to their large size, garage doors are the focal points of many homes. Replacing a dated, non-functioning door with a new, more decorative one will attract buyers. But sellers would be wise to stick to their budgets. A mid-range garage door replacement with an average cost of $1,595 recouped sellers 88.5 percent of their investment. A more upscale garage door, averaging $2,944 to install, only had an 82.5 percent return on investment. While both upgrades made it on the shortlist of top five renovations, sellers who didn't over-improve for their area likely saw the biggest gains.

New Trends in Siding
Fiber cement siding has been popular for years, and 2015 was no exception. Replace your old siding with fiber cement and you'll recoup 84.3 percent of its cost. But when it comes to cladding your home, siding is no longer the biggest earner. Manufactured stone veneer, with an average cost of $7,150, is cheaper to install than fiber cement, a job which costs on average $13,378. Yet stone veneer recoups 92.2 percent of its initial cost at resale time. Stone veneer is well-suited to both modern and traditional home facades, making it a trend with staying power.

Indoor Improvements that Attract Buyers
While it failed to break into the list of top five investments, a minor kitchen remodel will still attract buyers. An economical renovation with an average cost of $19,226 will recover 79.3 percent of its initial cost. Other cost-conscious renovations include replacing older windows with new windows (wood)-recouping 78.8 percent-and adding an attic bedroom-recouping 77.2 percent.

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    Introducing NVBR's 2015 Realtor of the Year, Barb Trousdale - A Note from Curtis Trousdale

    I am proud as a husband can be that on May 19th, 2015, my wife (and business partner), Barb Trousdale, was awarded “REALTOR of the Year” at the 2015 REALTORS of Distinction Awards Gala. The most revered award presented at this annual event, Barb was recognized for her exemplary contributions to our community, her professional career, and the Vermont Realtors association. Her nomination and selection is indicative to the respect that other members of the Northwestern Vermont Board of Realtors have for Barb. 

    Prior to receiving her award, a short video was played for all in attendance, and the folks on camera who were interviewed all repeated the same word when talking about Barb: integrity. Barb sincerely values integrity; she strives to maintain it in all areas of her life. Loyal to her family, friends, colleagues, clients, customers, and God, Barb also upholds the National Association of REALTORS Code of Ethics and Standards of Practice to a “T.”

    Up on stage, Barb looked lovely in her black and white dress (and the corsage I bought her) as she accepted her award. Her speech was unscripted, genuine and short; she credited her success not only on her desire to have integrity in all she does, but also due to the support from family, friends, and God’s immense grace.

    I’m so proud that Barb’s peers recognize her hard work and commitment, and I am honored to have witnessed this milestone in her career along with 25 members of our family, and more than half of our staff at Preferred Properties.

    If you are contemplating buying or selling a home, or know someone who is, you can be confident in your decision to call Barb.

    Please feel free to congratulate Barb if you have the opportunity!

    -Curtis Trousdale

    What Americans Want In a Home: The Housing Satisfaction Gap

    In a recent survey conducted by the Demand Institute, 10,000 households were asked if their current homes met their lists of must-haves. The survey found that many homeowners are going without some important features. Home buyers and renovators should take heed; these are the features that should be on every must-have list.

    Energy Efficient ?
    Spending on home electricity has climbed 56 percent since 2000, leading 71 percent of households to think energy efficiency is important. Yet only 35 percent are satisfied with their own home's energy efficiency. Homeowners are making simple improvements to save on energy, like changing bulbs to LEDs and sealing leaks around windows and doors.

    Move-In Ready?
    Since 2010, Americans have been spending more on home renovations-smart investments, since 67 percent of those surveyed felt a fully renovated home was important. Only 41 percent were satisfied with the repairs done on their own home; when asked which jobs they will be likely to tackle over the next five years, painting and replacing worn flooring topped the to-do list.

    Upgraded Kitchens
    Of all the rooms in a home, the kitchen comes out on top, with 62 percent of households declaring it an important space in their homes. Yet only 38 percent of households are happy with their current kitchens. Top-of-the-line appliances seem to be on many must-have lists, with 49 percent of homeowners thinking about purchasing a smart appliance.

    Space and Privacy
    Whether it's space around a home to afford a little privacy from neighbors or space inside a home for more storage, homeowners want more room. Privacy was important for 63 percent of the surveyed households, but only 42 percent were satisfied with the distance between their house and the neighbors. And while 55 percent felt storage space was important, only 35 percent felt they had enough room in their closets. Over the next few years, large single-family homes in suburban communities are expected to grow in popularity to meet the demand for more privacy and space.

    Age-In-Place
    Over the next five years, the number of households helmed by someone over 65 is expected to grow exponentially. These aging buyers place a greater emphasis on single-story, low-maintenance homes with accessible features. But many households feel their homes won't be compatible with their aging bodies; 76 percent think aging-in-place is important, but only 53 percent are satisfied with their home's ability to meet their future accessibility needs.

    Good Investment
    Despite the recent housing crisis, 65 percent of households still think a home is a good long-term investment. However, only 47 percent are happy with their current home, a group largely made up of renters; 53 percent of renters hope to purchase a home one day.

    Spring Cleaning: An Organization Attack Plan for Your Home

    Assessing your things, organizing your space and an overall clean will make your home seem new again and help set the tone for an organized lifestyle. Here are four steps that will help you get your house cleaned and organized.

    1. Don't Set Yourself Up for Failure
    Sometimes the best spring cleaners can be overzealous and think they can attack the house in one day and be done with it. Biting off more than you can chew can lead to frustration, burnout and scrapping the project altogether. Dedicate a few hours each evening, or a few hours over the weekend for cleaning. By working through your home bit by bit, you will be more successful at an overall clean over the course of a few weeks.

    2. Clean One Area at a Time
    Don't try to clear out everything in a whirlwind. Start in one area, say the dresser, work through it, and then move on. If you get started pulling out items from everywhere and cleaning with no plan, you can actually make more of a mess than when you started! An overall assessment to make sure items are where they should be to get started is okay, but otherwise try to focus on one area at a time.

    3. Ask for Help
    If you have a friend or family member that is an organization guru or just owes you a favor, ask them to help you as sometimes it is good to have a fresh pair of eyes to review your things. There might be items that you are holding on to that someone can honestly tell you need to go. If you are lacking motivation, having a set time that you have a helper can keep you on task and make you follow through with cleaning.

    4. Have a Staging Area for Unwanted Items
    A major point of cleaning and organizing is to get rid of things you no longer need. Rather than just hiding these items in the back of your closet, make sure that you have a functional system in place to store these items while cleaning. Set up boxes and bags in a designated spot, so as you move through the home, you can toss in items that you will be getting rid of. This way you'll be ready to toss out or donate things at the end of your project rather than hold on to items you don't really need.

    Lower Mortgage Insurance May Bring More New Homebuyers

    The Federal Housing Administration announced in January that it would reduce its annual mortgage insurance premiums by half a percentage point-dropping it from 1.35 percent to 0.85 percent. FHA-backed loans are popular with new homebuyers, and offer downpayment options as low as 3.5 percent of the purchase price, but require mortgage insurance for the life of the loan. Lowering mortgage insurance premiums will not give free reign to irresponsible borrowers; rather, it will help responsible buyers purchase a home. Despite the reduction, FHA premiums will remain 50 percent higher than they were before the housing crisis.

    Lower Premiums Will Help New Homebuyers
    According to the National Association of Realtors, around 400,000 borrowers were unable to afford a mortgage due to high premiums. The FHA's recent actions will have a direct impact on home affordability for thousands of Americans. Home sales should see a slight uptick; HUD predicts that over the next three years, the reduction will generate around 250,000 new home purchases. And the reduced premiums will save over two million FHA homeowners approximately $900 every year, according to U.S. Department of Housing & Urban Development (HUD) estimates.

    Will There Be More Discounts?
    After the changes were announced, FHA purchase applications climbed 12.4 percent, according to the Mortgage Bankers Association. But buyers waiting for greater savings should start their house hunt now: According to Julian Castro, secretary of HUD, the FHA will not consider any further fee reductions. The FHA premium reduction applies to loans that closed after January 26, with mortgage terms longer than 15 years. Homeowners looking to take advantage of the FHA's lower premiums should contact an FHA-approved lender.

    6 Traits of Successful Home Sellers

    The goal for any home seller is to sell a property quickly at the best price for the market. Here are six characteristics that will help home sellers succeed.

    1. Realistic Expectations
    Real estate agents do not pluck listing prices out of thin air. Every price range they recommend to potential home sellers is the result of meticulous research: of the property, the neighborhood and the current real estate market. Most of the factors that affect a property's saleability-location, interest rates, the local job market-are outside the seller's control. Other things, such as the condition of the home and how it is presented, are within the seller's control. Highly effective home sellers address the things they can control and accept the things they cannot. You might not like what the market is saying, but it doesn’t lie.

    2. Flexibility
    A flexible home seller is open to suggestions. Listen to your agent and heed his or her advice regarding pricing the home for sale, marketing the property and making it show ready. Flexible sellers are prepared to lower the price if they are not getting any showings. Flexible sellers are prepared to stage and remodel the home if they are getting showings but no offers. Delaying a sale by being inflexible can cost you money in extra mortgage payments.

    3. Detachment
    Homes sell faster when the seller stops thinking about the property as his home and starts thinking about it as product to be packaged for sale. Sellers who find it hard to emotionally detach from the home often sabotage viewings or reject offers, because they are not ready to leave their home. Be honest with yourself. If you are not ready to sell, don't. If you are, then pack up your emotions and accept that it is time to move on.

    4. A Big Picture View
    Giving way on price is not the same as giving way on the deal. Effective sellers think about all aspects of the deal. A seller who wants to move quickly may be prepared to lower the price in return for faster closing. Requests for repairs, no matter how galling, should be carefully scrutinized. Would you really want to lose a buyer over a $200 repair bill?

    5. Availability
    Selling your home is a time-consuming business. You must be available to speak to your agent and make urgent decisions concerning the list price, marketing strategies and any offers that come in. Remember, you can't sell a property if would-be buyers can't see it. Make sure that buyers can view your home at all reasonable hours. No showings on weekends might suit your lifestyle, but it certainly won't suit your buyers.

    6. Learning
    You don't need a degree to sell your home, but you do need a clear understanding of the home selling process. Sellers who understand how home sales work have a clearer idea of the hurdles buyers must jump to purchase a home and can better pre-empt a buyer's needs. Figure out what escrow means and what happens between the contract and closing. Speak to your agent. Ask him or her to fill you in on the local market, the lending environment and the types of things that buyers are looking for in your neighborhood.

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      Inventory Drops and Home Prices Continue to Increase

      In December, the total housing inventory dropped 11.1 percent. There were 1.85 million existing homes on the market, which is a 4.4 month supply at the current sales pace; in November, there was a 5.1 month supply. With the strengthening economy and sub-4 percent interest rates, the demand for homes from buyers should be increasing, but a tight supply of homes available for sale could cool that demand.

      Supply shortage causes home prices to increase. And according to the National Association of Realtors' economists, home prices and rents are outpacing wages, making it difficult for buyers to save for a down payment. The national median existing-home price reached $208,500 in 2014, the highest it’s been since 2007, and a 5.8 percent increase from 2013. What's more, every region of the country saw home prices increase. In the Northeast, prices rose by 3.2 percent from a year earlier, while the Midwest reported a climb of 5.3 percent. Prices in the South increased 6.6 percent from December 2013, while in the West, prices were up 5.6 percent.

      Home Sale Numbers
      December closed out the year with 5.04 million sales, a 3.5 percent increase from December 2013. December was also the third month in a row where sales climbed above year-over-year levels. However, sales for all of 2014 were still 3.1 percent below 2013. Existing-home sales were up in the West in December; sales climbed 9.8 percent month-over-month and 2.8 percent year-over-year. The South also saw gains in their real estate market, with sales climbing 3.8 percent from November to December and 7.4 percent from a year earlier. Existing-home sales fell in the Northeast by 2.9 percent, but the news wasn't all bad as sales are still 3.1 percent higher than a year ago. In the Midwest, sales declined both month-over-month and year-over-year, falling 3.5 percent and 2.7 percent, respectively.

      First-time Buyers Decline
      The number of first-time buyers making purchases last year fell to the lowest level in almost three decades, according to a NAR survey. For all of 2014, first-time buyers accounted for 29 percent of the market, tying their percentage for 2013. In December, first-time buyers represented 29 percent of all buyers, down from 31 percent in November but up from 27 percent in December 2013. Economists with NAR are optimistic that first-time buyers will be better represented in the market in the coming year. The Federal Housing Administration recently reduced annual mortgage insurance premiums, which will make buying a home more affordable for new homebuyers.

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        A Note From Barb Trousdale

        Barb Trousdale, Broker, Owner, REALTOR

        Barb Trousdale
        Broker, Owner, REALTOR

        What a month! It’s been a great season for the skiers and snowmobilers among us, but I know many (including me) are looking forward to spring.

        2015 is turning out to be a fantastic year for real estate; we’ve helped many Buyers and Sellers accomplish their goal of moving already and we’re only two months into the New Year!!

        We are gearing up to have a booth at the Annual Home & Garden Show, which is sponsored by the Home Builders and Remodelers Association and will be held on April 18th & 19th at the Champlain Valley Expo. Please make plans to attend and stop by to say “Hi.” You’ll want to see the “tiny home” we’ll be sponsoring; one of the newest rages in some parts of the country.

        Please contact us if we can assist in helping you determine market value of your current home or just want to see what’s currently available in your favorite town. We have an easy way of setting up a search that will automatically send you listings any time a new one comes on the market, and it involves little to no effort on our part.

        Until next month, stay warm and keep your eyes open for that first robin of the season; a sure sign that warmer temps are on the way!

         

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          A Loan with a Down Payment Option as Low as 3%

          In December, Fannie Mae and Freddie Mac launched Home Possible Advantage, a program that makes it possible for buyers to purchase a home with a smaller down payment. Through the program, low- and moderate-income buyers can qualify for loans with down payments as low as three percent. The program will open up the housing market to responsible buyers who do not have enough saved for a large down payment. Any risk of default is lessened by strong underwriting standards.

          The Specifics
          Home Possible Advantage mortgages are available as 15-, 20- and 30-year fixed-rate mortgages, with a maximum loan-to-value ratio of 97 percent. Mortgages can only be used to purchase single-unit properties. But the program isn't just for homebuyers; homeowners can also use the program to refinance their current mortgage, as long as that refinance is no-cash out.

          Who Qualifies?
          The Home Possible Advantage program is available to all buyers, not just first-timers. But there are several restrictions for buyers. First, you must live in the home you purchase; the program cannot be used to buy rental properties. Second, if you are a first-time buyer-a borrower who has not owned a residential property in the last three years-you will need to participate in a borrower education program, like Freddie Mac's CreditSmart. And lastly, if your Home Possible Advantage mortgage is underwritten manually by a lender, you must have a credit score of 660, or 680 for refinances. If you have a weaker credit score, you can use Freddie Mac's automated underwriting system, Loan Prospector. This system considers a loan based on multiple factors; a weak credit score won't necessarily disqualify you if you have a number of other positive factors.

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            The Tax Perks of Homeownership

            The Tax Perks of Homeownership

            Uncle Sam favors homeowners. Whether you own a starter home, a condo, a single-family residence or a cooperative apartment, you can enjoy tax breaks simply by being a homeowner-and the tax perks continue even when you sell your property.

            Your mortgage interest will seriously reduce your tax bill.
            Owning a home comes with serious tax breaks, and none bigger than the relief you get on your mortgage interest payment each month. For most homeowners, this is a huge deduction, since the bulk of the mortgage repayment goes toward interest in the early years of a loan. All that interest is deductible, unless your mortgage loan exceeds $1,000,000. However, the longer you live in your property, the less you'll get from this tax break. By the end of your mortgage term, you are paying more toward the loan's principal than the interest-and the principal is not deductible.

            The home equity mortgage tax break allows you to debt shift.
            The IRS lets you take out up to $100,000 additional mortgage debt against your home equity and deduct the interest from your income tax. Significantly, you can use the loan for any purpose-not just home improvements. This lets homeowners "debt-shift" to receive preferential tax treatment on their debts. Suppose, for example, you have a credit card balance of $15,000 at 14% interest. None of that interest is deductible. But if you own a house and take out a home equity loan for $15,000, you can pay off the credit card debt and all of the interest on your home equity loan is automatically deductible.

            You can deduct the mortgage origination fee.
            If you paid points to get a better interest rate on your home loan, you're in luck: the IRS lets you deduct the points in the year you paid them. Because origination fees of 1% or more are common, this can add up to quite a savings. What's more, discount points and loan origination fees are tax deductible to the buyer, even if the seller pays them at closing.

            Property taxes are tax deductible on your primary residence and vacation homes.
            Property taxes are fully deductible from income tax as an itemized expense on Schedule A. It does not matter if the property in question is a primary residence, vacation home or rental.

            Profits on a home sale are usually tax-free.
            Homeowners who have lived in their main residence for at least two of the five years before they sell do not pay tax on the first $250,000 of profit from a home sale. You have a profit if you sell the house for more than it cost. Profits in excess of $250,000 ($500,000 for married couples who file a joint return) are reported as a capital gain on Schedule D. As a bonus, you can add the cost of any improvements you make, such as a new roof or patio, to the original purchase price, reducing your taxable profit. On the downside, the tax man does not let you write off a loss if you sell your primary residence for less than what you paid.

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