HOW TO DECIDE IF YOU SHOULD REMODEL OR MOVE
After living in a home for several years, it can be easy to discover things you may not be crazy about. While some things can be a quick fix, there may be major changes that make you wonder if it is worth the investment. At this point, you’re probably asking yourself if you should remodel or just find a new home. As you have probably realized, this isn’t always an easy choice. There are many factors that go into this decision. Here are some things to consider when deciding what will work best for you.
1. Determine which is more cost-friendly
While both options will have costs, one will have more than the other depending on your situation. Some of the costs of selling include agent commissions, moving costs, minor repairs, the costs of a new home, and potential upsizing costs. The costs of remodeling can include permits, architectural plans, materials and labor, and any other additional costs incurred in the process.
2. Look into the current housing market
Depending on whether your local real estate market is hot, it might make more sense to just sell if houses are selling quickly around you. By talking to a real estate agent, you can find out what to expect in terms of days on market, average sales price, and other important factors when it comes to selling a home.
3. Decide if your roots are deep
Is your home more than just a home to you? If you and your family are actively involved in the community, remodeling may work best for you. On the flip side, if there are better schooling or job opportunities in a different neighborhood, or you already spend hours a day traveling to those locations, selling may be a better option.
4. Decide if a renovation can solve your problems
Take the time to decide if the problems with your home are fixable. Is it really the house, or do you dislike your neighborhood? Do you have to spend an hour driving one way to work? Do you need a lot more space? If your answer to questions like this make you realize renovations won’t solve your problems, consider that it may just be time to put your home on the market.
5. Consider the ROI on your remodel
Calculating your return on investment will help you determine two things – first, if a remodel will cost you less than selling your home. It will also help you determine if you will be able to make your money back on a remodel if you choose to sell in the future. Look into the Cost v. Value Report for the last year, which can guide you on the most and least cost-effective improvements.
If these considerations make you realize it is time to sell your home, give me a call today!
Home Buying Process
Buying a home might seem like a huge undertaking. It’s not something you do every day, so
you might not know what to expect. Most buyers don’t. Learning the home buying process can
take the mystery out of buying a new home and allow you to approach each step with
1. Identify your real estate agent and mortgage broker; these professionals will be your
guides though the process
2. Get a loan pre-approval; learn your budget and terms
3. Go house-hunting
4. Negotiate the price and terms
5. Enter the contract period and place a deposit
6. Perform home inspections
7. Receive the appraisal and obtain final loan approval
8. Review all information and remove contingencies if satisfied
9. Close on the new home
As you can see, buying a home is really a series of small decisions. As long as you continue to
find the information you receive acceptable, you will move through the process towards the
close. If not…then you will cancel and start over with another property. Buying a home is
exciting and understanding the process can help you avoid unnecessary stress.
The Difference between a Short Sale and a Foreclosure
Fortunately we are starting to see less distressed properties for sale in most markets across the board. Distressed properties are defined as homes whose owners cannot maintain them. Typically these properties suffer from neglect and are in poor condition.
Distressed homes statistics are different in every market. Our local market, Dallas, Fort Worth, has seen a slight decrease in the number of these homes available on the market. Often buyers are confused about the common terms used; short sale, foreclosure, distressed are all terms found in listings and can be confusing.
First of all, the term “distressed” is a catchall term for any property that is not being sold in a more traditional manner. It certainly includes both short sales and foreclosures, but can also be used to describe a severely damage property which might not be able to obtain conventional financing due to lack of livability.
A short sale is a home where the seller owes more than the home is worth and is asking their mortgage holder to accept less than they owe in the sale. The purchase price must have their lender approval.
A foreclosure is a home which was lost by the previous owner and is now being offered for sale by the bank that held the old mortgage note.
One of the most common real estate investment transactions is the 1031 Exchange. Simply
put, a 1031 Exchange (also called a “like-kind” exchange) is the swap of one investment asset
for another which defers capital gains taxes on profits.
A like-kind asset refers to selling one class of investment for a similar type of asset. For
example, an investor currently holds several multi-family properties, such as duplexes, and
wishes to sell them all in order to purchase a larger multi-family property, such as an
apartment complex. This would qualify as a like-kind exchange.
There are specific IRS rules which must be carefully adhered to in order to qualify for the
deferred capital gains tax. The sale must take place through an intermediary. Title companies
are one such option and when coupled with the use of a real estate agent, the easiest. The
new asset must also be identified within 45 days of the sale of the current asset and the sale
must conclude within 180 days. Finally, the asset must be held for over 1 year before it is
eligible for use in a 1031 exchange.
Serious investors use the 1031 exchange to buy and sell assets as new opportunities present
themselves, while shielding themselves from immediate capital gains liability.