Home Sellers: Top 5 Home Improvement Projects Based on Cost and Return on Investment

RISMEDIA, November 10, 2009—HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey.

HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes.

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI)

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase).

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999.

For more information, visit www.homegain.com

Expanded Version of Tax Credit Will Allow More Homebuyers to Qualify

RISMEDIA, November 9, 2009—President Obama recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:

Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:

-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).

-The credit applies even if you have co-signers on your mortgage loan

Don't Let An Over-priced Home Be a Humbling Lesson

Perhaps the greatest influence in getting your home sold is entering the market with a home that's priced correctly.

Over-priced homes won't get favorable attention; they lose out to the ones that are reasonably priced.

All sellers are looking for the highest price for their home. That's why some sellers want to start at the highest point, maybe even asking a higher price than what they really believe they can get -- the continued readjustment of price can be a humbling ride down to finding the reasonable price to sell the home.

Still dropping the price sounds like an okay strategy, some sellers think.

Here's the problem, especially in today's current market conditions where numerous sellers are competing for fewer buyers -- adjusting price down may come too late and cost the seller less in gain than if the home were priced correctly from the start.

The majority of buyers use buyers' agents to assist them with purchasing a property. Buyers' agents will help the buyers find a home that's right for them. If their buyers are interested in a particular home and it is priced too high (based on comparable properties sold) then the buyers' agents will find their clients similar more reasonably priced homes to view in the same area.

As a seller's property that's over-priced continues to sit on the market the listing loses its newness. There are typically fewer new listings than existing listings. Agents pay a great deal of attention to what's new on the market. Homes that are priced correctly generate attention, activity and a sale; over-priced homes, on the other hand, sit for long periods, are passed over, and ultimately result in a price reduction.

If a seller has an over-priced home on the market and then chooses to drop the price it sometimes goes overlooked. Because it's not a new listing it'll need a little more attention to get agents and buyers to notice that this same home is now being offered for less.

Flyers, emails, ads, etc. have the challenge of enticing buyers and agents who wouldn't give it a look at the higher price -- to come see it now. Not an impossible battle, but again, the listing is no longer new and may be less appealing even with the price reduction.

Obviously, the longer an over-priced home sits on the market, typically the more financial stress the seller begins to feel. If the seller has purchased a new home or must move to another state, suddenly the desperate seller syndrome sets in and low-ball offers may have to be accepted due to financial circumstances.

Pricing a home correctly initially is vital -- otherwise the "we-can-always-drop-our-price" strategy could become a costly and humbling lesson in the end.

Home Buyer's Tax Credit Changes Possible

The first major change to the $8,000 home buyer's tax credit began moving through Congress the last week of September, giving hope to real estate and building groups pushing for extension of the entire program before it expires November 30, 2009.

House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the "Service Members Home Ownership Act of 2009", with a floor vote expected soon.

The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.[click her for the rest of the article]

Positive Signs: Home Prices on an Upswing in Second Quarter 2009

RISMEDIA, August 26, 2009-Data through June 2009, released by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index improved in the second quarter of 2009. The S&P/Case-Shiller U.S. National Home Price Index- which covers all nine U.S. census divisions- recorded a 14.9% decline in the 2nd quarter of 2009 versus the 2nd quarter of 2008. While still a substantial negative annual rate of return, this is an improvement over the record decline of 19.1% reported in the 1st quarter of the year. The 10-City and 20-City Composites recorded annual declines of 15.1% and 15.4%, respectively. These are also improvements from their recent respective record losses of -19.4% and -19.1%.

“For the second month in a row, we’re seeing some positive signs,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The U.S. National Composite rose in the 2nd quarter compared to the 1st quarter of 2009. This is the first time we have seen a positive quarter-over-quarter print in three years. Both the 10-City and 20-City Composites posted monthly increases, as did most of the cities. As seen in both seasonally adjusted and unadjusted data, there are hints of an upward turn from a bottom. However, some of the hardest hit cities, especially in the Sun Belt, show continued weakness.”

Read more: http://rismedia.com/2009-08-25/positive-signs-home-prices-on-an-upswing-in-second-quarter-2009/#ixzz0PHoqnnHC

Signs of Change: Existing Home Sales Rise 3.6% in June

RISMEDIA, July 24, 2009-Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®.

Existing-home sales-including single-family, townhomes, condominiums and co-ops-increased 3.6% to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2% lower than the 4.90 million-unit level in June 2008.

Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”

Read more: http://rismedia.com/2009-07-23/signs-of-change-existing-home-sales-rise-36-in-june/#ixzz0MD5pTTMN

Get Your $8,000 Tax Credit NOW!

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