Is it Worth the Cost?

A stressful part of putting your home on the market is trying to figure out what to fix and upgrade to get the very best price. An experienced agent will recommend projects to consider and ones to avoid. After all, just because you put money into a renovation project doesn’t mean you will recoup the money in a sale.

You may also want to consult Remodeling Magazine’s annual Cost vs. Value Report for a breakdown of typical returns on renovation projects large and small. The 24th annual edition published earlier this year contains input from some of the country’s top remodeling professionals and ranked 35 remodeling projects for highest returns.

In many cases, smaller-scale renovation projects recoup more of their initial cost than larger, pricier ones, according to the report. For example, a minor $20,000 kitchen upgrade returns 72.8% of renovation costs, but a more expensive $58,000 kitchen remodel only retains 68.7% of its value on resale.

Surprisingly, the report noted that exterior upgrades recoup more of their costs than interior renovations -- a trend that’s been building for the past five years. What’s the hottest exterior upgrade according to this year’s report? Replacing the front door with a steel entry door, which typically returns more than 100% of its cost.

The report also lists garage doors as a wise investment, returning up to 83% of their original cost when the home sells. Other prudent outdoor renovations include siding and window replacement, returning 80% and 72.4 %, respectively.

Interior improvements retaining the most value include attic renovations and basement remodels, recouping 72.2% and 70%.

“Just like an addition to the home, an unfinished space—such as the attic or basement—will instantly add value and livability to your home, as it increases the square footage and changes the way your family lives in it,” said Will Tomlinson, owner of North Carolina-based greyHouse Inc. Renovation and Remodeling. “You will be transforming a space that likely gets very little use into a fully functional area for your family to enjoy.”

The report also notes that non-essential features have less resale value. Sunroom additions recoup only 48.6% of renovation costs; home office remodels, 45.8%; and backup power generators, 48.5%.

Of course, homeowners’ needs and budgets dictate their choice of home-improvement projects. Still, it helps to know projects’ cost vs. return ratio when making the final decisions.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

Selling an Ugly Home

Let’s say that you inherited an old house in a distant location and want to put it on the market. You may not have the time, resources or energy to make it perfect and just want a quick sale.

Or, maybe you had renters at your property who did substantial damage and you don’t have the money to make necessary renovations.

Fear not. Just because the house needs work doesn’t mean you can’t sell it. Many homebuyers today are shopping for deals and want to see the potential in your home. In that case, leave brochures for new cabinets in the kitchen, color palates around the bedrooms and even create computerized images of what updates could look like.

In addition, secure bids from licensed contractors on necessary fixes and provide them to your potential buyers. People may overestimate the cost of a new roof, shower stall or drywall repair and fresh paint. Estimates will bring the home into clearer perspective.

Work with your real estate agent to make the home as presentable as possible for the least amount of money. Make a room or two inviting so you have the photos that will attract buyers to what you can call “a fixer upper.”

Of course, nothing is going to attract people more than a low price. Obviously, you will need to discount the sales price to gain an advantage over comparables in better condition.

A down-and-out house doesn’t mean you’re stuck. With small repairs, research and practical pricing, you can turn that “Ugly Betty” into a sale.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

September's Tri-State Real Estate Market Report

"Real Estate is like the weather report. It doesn't matter if Seattle has rain in the forecast if you live in Philadelphia.

The Local Real Estate Market is what you should focus on and not the National Averages."

When you watch the news and they give you the "National Real Estate Stats" don't let that bother you. Even the Case-Schiller Index doesn't include the best data. If you put garbage in, you get garbage out. ALL REAL ESTATE MARKETS ARE LOCALIZED!

Year over year, for Chester County, the number of settled units compared to 2010 are only down by 155 homes! That represents less than a 4.5% decline! The average sales price year to date is $362,000 and this time last year it was $369,000. When the media is saying that homes are off 5%, 10% and, I've even heard, 20% compared to 2010, keep in mind that this $7,000 difference is only a 1.9% decrease. So really what "Doom & Gloom" are we facing?

I strongly urge you to take a look at the reports straight from TrendMLS (the area's Multiple Listing Service) and determine your own opinion of what the market is truly like. The numbers speak for themselves!

Please click on your County below for the detailed PDF of your market area. Please keep in mind that some of the numbers before June are skewed because of the Federal Tax Credit offered in the first 6 months of 2010.

Interest rates are starting to climb a little. A 30 year fixed rate is about 4.125% and a 15 year fixed rate is around 3.125%. There is a possibility of getting a lower rate with points too. Great time to buy and sell!

Chester County

Delaware County

New Castle County

Tri-State Area Year-To-Date Market Snapshot

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

Researching the Perfect Neighborhood

There’s an episode of the hit TV series “How I Met Your Mother” where the characters of Marshall and Lily decide to buy a home in a neighborhood they are unfamiliar with, only to learn later that it sits downwind from a sewer plant. The message is obvious: A buyer must do his or her due diligence on prospective neighborhoods to make the best real estate decisions.

For starters, investigate the local school district as good schools boost your property value. Research the closest parks and community centers and consider how busy streets impact the neighborhood.

Profiling the perfect neighborhood also involves meeting prospective neighbors. Walk through the area and say hello to people, and ask them for their impressions of the neighborhood. While you’re at it look around. Are there lots of kids on the block? Do people walk or jog through the neighborhood at night? A neighborhood can speak volumes by itself.

Don’t forget to map out stores and restaurants in the area. You may be used to a five-minute drive to the local grocery store, only to find out that your new home is 25 minutes away from the nearest place to buy milk. Of course, find out if your potential new home is part of a neighborhood association bearing regular fees, and if your community has lawn or construction restrictions.

A good agent can furnish you with a wealth of local information, and will take you on a tour of the closest commerce centers, restaurants and shops.
With a little groundwork you can help ensure that your dream house is surrounded by a dream neighborhood.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

The Importance of Assets

Mortgage lenders dissect the entire credit history of a potential client with strict attention to income, credit, collateral and assets. Of the four, assets are perhaps the least discussed yet may be the most important in securing credit and buying a home.

Simply put, assets include the amount of money needed for the down payment, in addition to closing costs, pre-paid costs such as insurance and taxes, escrow fees and funds that would be available in case of an emergency.

“Assets may be the truest reflection of a borrower’s fiscal strength,” Dean Hartman, regional vice president for Benchmark Lending, Melville, N.Y., in his post on the KCM (Keeping Current Matters) blog site. “Their ability to save and properly budget could be a significant indicator to their future paying habits.”

Common assets considered in a mortgage loan application include stocks, bonds, mutual funds, 401K and retirement accounts, life insurance, cars, boats, antiques, jewelry and other real estate.

The source of the assets is also important. Anyone who has attempted to secure a loan recently knows that restrictions have tightened, and when borrowers are paying off credit cards to get their ratios in line, lenders want to know where the money came from.

“For instance, we can obviously see a direct deposit from your employer or a transfer from one account to the next,” says Justin Miller, a mortgage broker for FEMBi Mortgage, Fort Lauderdale, Fla. “If we cannot determine this, we will need a letter of explanation and show proof of where it came from. My suggestion is to not make any cash deposits or take any monies from someone personally unless it is going to be a gift from a relative.”

Large and recent savings deposits raise underwriter concerns as they can indicate loans that have yet to appear on borrowers’ credit reports. Borrowing from relatives to boost savings and creditworthiness also doesn’t help. If funds aren’t reflected on income statements and tax returns, they can’t be used to qualify for mortgages.

Indeed, make sure your assets are in order with proper documentation. Your preparation can speed you on the road to homeownership.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com