The Importance of Real Estate Appraisals

An independent real estate appraisal is part of every home transaction, but there’s other times an appraisal may be just as valuable to you...(More)

Should You Pay Off Your Mortgage Early?

The question of whether you should pay off your mortgage is constantly debated. Ultimately, the best decision isn’t just based on the numbers; it also depends on your age, other investments, and even your emotions...(More)

Home Equity Credit: Is It Right for You?

Many families take advantage of the equity they’ve built in their home to finance new purchases through home equity lines of credit. While there can be advantages to this type of financing, there are also risks...(More)

Get Your Home Ready to Sell at Its Best

With the current state of the housing market, it’s more important than ever to do the right things to get your home ready to sell at the price you know it deserves...(More)

The Importance of Real Estate Appraisals

Real estate appraisers provide an unbiased, independent assessment of the value of a parcel of land and the buildings and features on it. They create an estimate of fair value based on current market conditions and the general condition of the property. However, real estate appraisers should not be confused with property inspectors. Appraisers do not assess the working condition of household systems; they focus more on square footage, the number of baths, rooms, and value-adding amenities such as pools.

A typical real estate appraisal will include a general home visit, which will include questions about any known problems with the home. The appraiser will also take a brief tour of the neighborhood to determine whether or not the home is typical for the area. The appraiser then studies information on recent home sales in the neighborhood. This information is used in a highly structured way to determine a fair value for the property.

The appraised property value is very important to homeowners for many reasons. Not only is it used to assess property taxes, it also has many other uses, including:

• Determining value for home mortgages
• Establishing value for home insurance
• Settling estates in case of death or divorce
• Settling insurance claims
• Establishing value for buyers or sellers of the property
• Establishing value for refinancing or home equity loans

Appraisers are state certified and licensed and they must go through a specific education process before they can qualify for licensing, while adhering to strict industry standards. Appraisers are one of the few individuals involved in a home transaction who do not benefit in any way from a home being valued either high or low – their fee is the same.

In every transaction where the value of a home is important, a professional real estate appraiser is the safeguard that ensures your home (or the home you are considering buying), is valued correctly and fairly.

Back To Top

The standard “rule” is that if you can make more money after taxes from investments than the effective interest rate on our mortgage, you shouldn’t pay down or pay off your mortgage.

According to a recent study by Michigan’s Ross School of Business, approximately 40% of those who are currently making extra payments on their mortgage are making unwise decisions. Many of these people are paying down their mortgages instead of investing their extra money in tax-deferred retirement accounts.

In fact, the study indicates that these households could gain as much as 17 cents on the dollar on average by putting their extra funds into tax-deferred accounts instead of additional mortgage payments – saving nearly $400 per household per year.

Of course, the degree of advantage a homeowner can gain from making investments other than paying down a mortgage depends on his or her tolerance for risk. The most secure investments may not pay a rate of return high enough to surpass the interest savings from paying off a mortgage.

As you get closer to retirement age, paying off your mortgage can be more desirable. When most or all of your household income comes from your investments, paying off your mortgage reduces the amount of capital you need to provide your monthly income. For example, if the monthly mortgage payment on a $175,000 mortgage is $1000.00; that adds up to a $12,000 annual expense. It would take capital of approximately $240,000 in order to generate the income to pay for the monthly payment. Finally, there can be emotional benefits from knowing you own your home free and clear. Eliminating a major debt is gratifying for many people and gives them a sense of economic freedom even if it isn’t the wisest move according to investment planners.

If you’re considering paying off your mortgage, you may want to consult your accountant or an investment or estate planner and see how the numbers work out for you. Everyone’s financial situation is unique and what works for the average homeowner may not be right for you.

Back To Top

A home equity line of credit is basically a form of revolving credit, using the equity in your home as collateral. Depending on the length of time you have lived in your home and local market conditions, you may qualify for a sizable amount of credit.

Once this plan is established, a predetermined amount of credit is available to use when and how you please – to consolidate bills, purchase a car, make home improvements, or pay for education, and the interest rate you pay is usually substantially below typical credit cards. Best of all, depending on your specific situation, you may be able to deduct the interest costs; your accountant can provide you with more complete advice on that possibility.

If you are considering seeking a loan, a home equity plan may be worth considering – weigh the costs of a home equity line against the benefits. Remember, failure to repay your home equity loan could mean the loss of your home.

If you do decide to apply for a home equity line of credit, proceed carefully: Read the complete credit agreement to be sure you understand all the conditions and terms, especially the cost of establishing the plan and the annual percentage rate of interest. There are fees and closing costs associated with establishing a home equity line of credit beyond the interest rate. These typically include an application fee, a property appraisal fee, fees for attorneys, title search, mortgage preparation, and more.

It’s also important to remember that repaying a home equity plan is not necessarily like repaying a conventional loan, like a car loan or mortgage. Any minimum monthly payment may not necessarily cover the principal (the amount of money you borrowed) by the end of the plan’s term. If you borrow $10,000, you could still owe all or part of that amount when the plan ends. Be sure your payment plan covers both interest and principal to make sure this doesn’t happen to you.

Also, home equity lines of credit typically involve variable interest rates instead of fixed rates. That means your plan could wind up costing you more than you originally planned, if interest rates rise. Make sure you understand the interest rates for your plan, and if there are any limits (a margin) on how much the interest can go up.

If you decide to pursue a home equity line of credit, contact a variety of banks and saving institutions. Compare terms and interest rates. Consider the benefits and the costs. A home equity line of credit is a way to tap into the value of your home, but it is not for everyone.

Back To Top

Get Your Home Ready to Sell at Its Best

There are a record number of homes on the market today. To attract a buyer with a desirable offer, you need to make sure your home outshines the competition from the very first moment a home shopper sees your home.

Try to avoid big expenditures.

Sometimes people begin a flurry of renovations and improvements in order to get the best possible price for their home. However, renovations at this time can be a bad investment. While different neighborhoods have different standards, as a general rule you can’t recoup the full costs of bathroom or similar renovations. Sometimes even fresh painting can be a mistake if walls are in fairly good condition.

However, you can usually improve the way your home appears to potential home buyers without spending very much at all.

Make that first impression the best impression.

As soon as a home shopper steps onto your property, you want to make a positive impression; that means making sure your home’s curb appeal is on show. Well-manicured lawns, shrubs and flowerbeds will send a message that the inside of the home is also well-maintained.

The doorbell and front lights should work perfectly. Screens, windows, and doors should all be clean and in good repair. Put away outdoor toys, mowers and other distractions. Pets should not be seen, heard, or smelled when people tour your home.

Pack up, clean out, and brighten up.

Your goal is to make a potential buyer fall in love with your home. To do that, you need to pack up all those pictures and mementoes that make your home special to you. After all, you want home shoppers to feel like they are in a model house, not someone else’s much loved home.

Closets and cabinets should all be neat and orderly. In fact, it’s a good idea to remove one half to one third of your closets’ contents; this can make closet space in your home look even more generous. The same approach works for kitchen and bathroom counters as well – the fewer things in view, the better the impression. Don’t forget your basement, attic, and garage. It might seem like a daunting task, but you’ll have to pack up to move anyway, so do it early and help your home shine.

You want your home to look bright and open, so don’t remove any lamps. In fact, you may want to put in higher wattage bulbs or even borrow a few extra lamps to brighten any dark corners.

Call on professionals to help.

If all this sounds like too much, call on professionals to help. Carpet cleaning and housecleaning services can handle many of these tasks for you.

Finally, get a professional home inspection with a comprehensive report. Having your AmeriSpec® inspection report on hand will help to assure home shoppers that not only does your home look great; it’s well-maintained beyond the outward appearance as well.

Back To Top