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Archive for January, 2012

What home improvements actually increase the value of your home?

Spring isn’t far off, and lots of Union County residents are thinking about getting their homes ready to sell. Which home improvements actually pay off in terms of increased selling price?

You may have heard homeowners saying that they’ll recover the cost of a certain home improvement when they sell the house. The truth is, some home improvements are worth more than others.

Does the house have a pool? A fourth bedroom? Marble tile? Hardwood floors? A fireplace? These things typically add to the value for a buyer. Some of the amenities that might increase the sale price might be worth adding to your home in advance of selling it. If you can afford to update your home before you sell it, it will bring in a better price.

Remodeling Magazine and the National Association of Realtors produce a collaborative report on improving a home before sale every year. This report is called the Remodeling Cost vs. Value Report and it compares construction costs with resale values.

The 2011-2011 Remodeling Cost vs. Value Report indicates that, nationally, replacing the front door of a home results in a 102 percent profit over the cost of replacing the door, on average. In other words, one can expect to recoup $102 dollar for every $100 spent on a new door, on average nationally. Similarly, replacing a garage door results in an 84 percent recovery of cost. Replacing siding results in a national average of 80 percent recovery of cost.  (Source: http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2011/01/2011-cost-vs-value-help-clients-stretch-their-remo)

Adding a 16 by 20 foot deck using pressure treated joists and including a built in bench and planter with stairs and railings returns about 73 percent of cost nationally.(Source: http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2011/01/2011-cost-vs-value-help-clients-stretch-their-remo)

According to the 2010-2011Remodeling Cost vs. Value Report, remodeling a minor mid-range kitchen returns about 73 percent of its investment but a major remodeling recovers about 60 percent.(Source: http://www.inman.com/buyers-sellers/columnists/dianhymer/make-cost-effective-home-improvements)

This post is part of an eBook on selling your home that can be obtained for free by emailing TeamZuhl@gmail.com.

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What is a Short Sale?

What Is A Short Sale – A short sale is when a homeowner sells their home at a price that is below the mortgage on the home. For example, if homeowners owe $200,000 on their existing mortgage but the property’s market value is only $180,000, the sale would be a short sale. The sale can only occur if the lender approves the sale.

Why are there so many short sales now? The average homeowner stays in their home about seven years. Usually, seven years is enough time, especially in vibrant New Jersey, for homes to appreciate in value and usually, after seven years, the market value has increased. For example, a house purchased in 1995 for $250,000 may have sold in 2001 for $375,000, resulting in profit for the homeowner as well as a paid off mortgage. 2011 is a unique year in that housing prices aren’t as high as they were in 2005, and, in most markets, are actually lower. Therefore, a home purchased in 2005 for $250,000 may only be worth $180,000 now.  If the homeowner owes more than the home will sell for, the sale is a short sale.

Short sales are much more common in 2011 because home prices dropped quickly and left many homeowners owing more than the home was worth.

How is a short sale different from a foreclosure? A foreclosure results when the lender demands payment for outstanding debt and the homeowner can’t pay the debt. The lender then has the right to file for foreclosure, which deeds the home to the lender.

After a short sale, the seller’s credit report will show that the mortgage debt was settled for less than full, but the balance of the mortgage is $0. The seller’s FICO credit score is affected by about 50 points.  Late payments, on the other hand, affect your credit score by about 30 points per month. (Source: http://www.manausa.com/short-sale-versus-foreclosure/?awt_l=GyOyF&awt_m=KWxaQpk6kAtOaW)

Typically, sellers who sold short do not need to report this to future mortgage lenders. After a short sale, you may be eligible for a Fanny Mae loan on a primary residence or investment property after only two years.

After a foreclosure, the seller’s credit report will show that the home was sold in foreclosure and that the balance of the mortgage is whatever amount the sale did not net. It is also important to note that foreclosed properties usually sell for about 60% of current market value, according to a May, 2011 report. (Source: http://www.kcmblog.com/2011/10/04/short-sale-vs-foreclosure-a-short-sale-always-wins/)

After a foreclosure, the seller’s FICO credit score is lowered by at least 300 points and stays on his or her record for 10 years. (http://www.manausa.com/short-sale-versus-foreclosure/?awt_l=GyOyF&awt_m=KWxaQpk6kAtOaW)

In almost all instances, a short sale is a better option than a foreclosure.

Applying for a Short Sale – In order to qualify for a short sale, the homeowner must first write a hardship letter explaining why he or she can no longer handle the debt. The lender will require specific details as to why the mortgage is now a hardship, and a smart homeowner will include all relevant reasons.

Some of the major reasons why hardship is usually granted are:

Lenders are also more likely to approve a short sale if the borrower has paid their mortgage on time consistently. Hardship letters should also be brief and to the point. The explanation for the hardship should be specific but not technical. Writing with feeling and emotion may help to persuade the lender to grant hardship. It is also a good idea to include copies of bank statements, tax returns, and any other documentation that may support your claim.

Short sales are unlikely to be approved for these reasons:

It’s not a bad idea to use a sample hardship letter to give you ideas. A good one can be found at http://www.usattorneylegalservices.com/mortgage-hardship-letter.html.

This post is part of an eBook on selling your home that can be obtained for free by emailing TeamZuhl@gmail.com.

The Red Cadillac

We had a fantastic time at dinner last night at The Red Cadillac in Union, NJ. 

Joe & Jamey Montes, along with Chef Ralph Pagano (Hell’s Kitchen and Iron Chef) have a fantastic menu – – featuring appetizers (Start Your Engines) like Muscle Car Mussels  and Cheese and Chorizo Dip Sticks and salads (Head Lites) like the Garage Salad and the Low Rider Salad. Entrees (Main Rides) are tasty and we had a fantastic time. Definitely check it out!

Is Your Home Infested With Termites?

Termites have lived on Earth for more than a quarter of a billion years and are a critical link in the Earth’s ecosystem, returning the nutrients in dead wood back to the soil.

Termites are silent destroyers of homes, leaving few signs of activity while steadily eating the wood and sheet rock in the floors, ceilings and walls of homes. Termites build the largest nest of any insect.

Protozoa that are capable of digesting wood live symbiotically in the intestine of termites, giving termites a uncontested niche in the food web of your home. Termites will feed on anything that contains cellulose including (but not limited to) paper, cardboard, styrofoam, wood and plastic materials.

Termites cause more damage to homes in the United States than tornadoes, hurricanes, wind, and hail storms combined but termite damage is not covered by homeowners insurance.

Wise homeowners can prevent termites by preventing the insects from accessing food and water.

  • First, eliminate excess moisture by repairing leaky faucets and pipes. Divert all running water from your foundation so that termites who find water won’t be near your home. Keep gutters and downspouts clean and remove excessive wood mulch.
  • Secondly, remove the termites’ food. Keep firewood and paper away from your foundation or crawl space. Get rid of tree stumps that are near your home. Keep an eye on your deck and wooden fence for any termite damage and treat it immediately.

The best time to control termites is before they swarm in the spring.

Here are five warning signs that your home is infested with termites:

1. A swarm of winged insects, often lasting 3-4 days, appearing near a window or door, usually in the springtime. When a colony has matured, the termites swarm, mate, and then locate a new breeding site and begin a new colony. Ants also swarm but have smaller waists than termites and have longer front wings than back wings.

2. Cracked or bubbling paint may be signs of termite droppings.  Inspect any stored boxes or paper items on the floor of the basement or garage for evidence of termite activity.

3. Wood that sounds hollow when tapped might be a sign that termites have destroyed the wood from the inside. Wood damaged by moisture or other insects won’t have hollow tubes or bits of dried mud which are common in termite damaged wood.

4. Pencil-thick  termite shelter tubes (mud tubes) attahed to foundations on the interior of your garage, basement or walls (if house is on a slab) or on the exterior foundation.  These tubes are built by termites for shelter as they travel from their underground shelter to your home to eat. You can break the tube open to see if it is an actively used tube.

5. Discarded wings from swarmers.

The only way to confirm a termite infestation is to hire a professional. Remember, there is no subsutition for a professional termite inspection performed by a qualified licensed wood destroying insect inspector! The chemicals that can kill termites are controlled by law and cannot be purchased or applied by unlicensed homeowners. Professionals are licensed by the Department of Agriculture. Many are also members of the National Pest Management Association. Professional companies may offer references and warrantees.

Special thanks to today’s guest blogger, Glenn Zuhl!

How Much is Your Home Worth?

If you’re like me, your home is your largest investment, and I try to keep aware of how much that investment is worth. There are, essentially, six primary factors that determine the value of a home:

1. Location – Because of factors out of your control, some towns and neighborhoods are more desirable to buyers than others.

2. Size – Bigger houses sell for more money than smaller houses.

3. Housing market – How does the supply of homes on the market compare with the number of ready, willing, and able buyers?  Throughout most of the country, we’re looking at a strong buyers’ market – there are many more buyers than there are sellers, and, therefore, prices are driven down by the principles of supply and demand.

4.   Amenities – Does the house have a pool? A fourth bedroom? Marble tile? Hardwood floors? A fireplace? These things typically add to the value for a buyer. Some of the amenities that might increase the sale price might be worth adding to your home in advance of selling it. If you can afford to update your home before you sell it, it will bring in a better price.

5. Condition – A home that has been well cared for is more attractive to buyers. It is nearly always beneficial to the seller to do routine updates and maintenance on the home before attempting to sell it. Chipped paint, rusty or worn appliances, stained carpet and the like are all going to make your home’s value and selling price decrease.

6. Marketing – The wider your home is marketed, the more potential buyers

Unfortunately, the value of your home is NOT affected by:will be aware of it, increasing demand.  The average home buyer searches for 12 weeks and sees, on the average, 15 homes before making a purchase. (Source: http://www.realtor.org/library/library/fg006)1. How much you paid for it.2. The value of the home you’re moving to.

3. How much money you’ve invested in the home.

An appraiser can be hired to prepare an appraisal which can give you a pretty good idea of fair market value. A REALTOR ® can provide you with a free (free in cost and free in obligation) Comparative Market Analysis which will compare properties similar to yours that have been listed and sold recently.

You can also do a similar process by yourself relatively easily.  Recent home sales are part of many towns’ local newspapers. Search for homes like yours in size, style, location and conditions and see what other similar homes have recently sold for. You may be able to ask a little more if your home is newly remodeled or upgraded, and you may have to ask a little less if your home is outdated.

This post is part of an eBook on selling your home that can be obtained for free by emailing TeamZuhl@gmail.com.

The Electric Company Choice

All consumers of electricity in NJ are able to comparison shop when they choose their electric power company. Customers can select a company based upon price, environmental impact, name recognition, or any other criteria they choose. If no selection is made, then a company is assigned to the customer.

Right now, Union County’s electricity is provided by JCP&L or PSE&G. These companies distribute the power to you, and they own the power lines, pipes, and equipment. You can choose who supplies the power.

How do you choose? If you want to comparison shop by price, your energy bill shows you how much you’re currently paying for electricity. There are many companies in NJ that will offer electricity to you – a simple Google search can yield dozens of names and their cost for electricity. This website provides a list of companies available through PSE&G and  a list of companies available through JCP&L can be found here. The State of NJ requires that all electricity providers be licensed by the NJ Board of Public Utilities and must meet strict reliability standards to protect customers.

To help you choose a company, you can compare what’s included in the price, the length of the agreement, if the price changes throughout the agreement, if there is a penalty for early cancellation, and are there any restrictions to usage.

Your distributor will remain the same if you switch companies, and they are who you would call in an emergency. Even if you switch companies, your bill will look the same – but hopefully be for less money!

You can switch companies at any time. Slamming, or switching a customer’s electric company without consent, is illegal and anyone who feels they may have been a victim should call 1-800-624-0241.

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