Tips & Tools : home affordability calculator

A Green Home Is Within Your Reach

RE.com Tips & Tools — Wed, 02 May 2007 19:21:00 GMT

Even a few changes can help you save energy and protect the environment.

It isn’t easy being green, a famous frog once lamented, but when it comes to your home it’s getting easier and easier to go green.

You can go big or you can go small when you go green, but even small changes can help you reduce your carbon footprint – your personal impact on global warming based on the amount of carbon-based energy you use.

About 80 percent of consumers say they want a green home -- but less than 50 percent said they were willing to pay more money to get one, said Stephen Melman, director of economic surveys for the National Association of Home Builders, or NAHB.

The NAHB recently approved green-building guidelines that are adjustable for different parts of the country. The organization argues green homes don’t have to cost more than other homes, or look like an experiment in alternative living.

“When a house is green but looks like other houses in the neighborhood – and can be replicated by large-scale building companies – then we know green is mainstream,” NAHB President Kevin Pressly said in a release. “We’re seeing that happen right now.”

The more popular green building becomes, the more companies will manufacture green products, and the less they will cost, Melman said.

Here are some ways suggested by the NAHB to make your home more green:

Install energy-efficient windows that use technologies including low-emittance (low-E) glass coatings, gas filler between layers and composite framing materials.
Use recycled plastic lumber and wood composite materials instead of hardwood for decks, porches, trim and fencing.
Install more efficient heating and cooling systems that are properly sized based on your home’s square footage, and consider a tankless water heater. A geothermal heating and cooling system uses renewable energy to provide heating, cooling and even hot water at little monthly cost.
Increase the amount and quality (based on R-value) of insulation to reduce heating and cooling losses. (Heating and cooling represent at least half of the energy used by a home.) Some newer types of insulation can be healthier, with little or no emissions of volatile organic compounds (VOCs), and more efficient.
Don’t stop at the attic and walls when it comes to insulation. Foundations and crawl spaces can be insulated, too.
Install low-VOC carpets to improve indoor air quality. Other environmentally friendly flooring choices include linoleum, a natural product, and laminates that look like hardwood.
Buy more-efficient appliances. ENERGY STAR-rated appliances use an average of 30 percent less energy than standard models. Front-loading washers use 40 percent less water and 50 percent less energy than top-loading washers.
Install plumbing fixtures that use less water. Early low-flow toilets didn’t flush very well, and old low-flow showerheads didn’t provide much water pressure. New technology has solved those problems.

Find more tips on how easy it is going green at the NAHB’s Web site, www.nahb.org. You can read up on ENERGY STAR homes and appliances at the U.S. Environmental Protection Agency’s Web site, www.energystar.gov. The EPA offers additional green-building tips for homes at http://www.epa.gov/greenbuilding.

Remodel Your Home for Maximum Wow

RE.com Tips & Tools — Thu, 22 Feb 2007 20:23:00 GMT

Some home renovations increase the value of your home more than others. Here's how to get the biggest bang for your buck.

Americans spend billions of dollars a year remodeling their homes. But real estate agents caution that not all projects deliver the same resale payback. So which of the trendy ideas showcased in glossy decorating magazines are the most likely to create an envy-inspiring dream home? The following tips can help you sort through the hype and make the best remodeling choices.

Contact a real estate agent
If you’re thinking about selling your home, do your homework first. A real estate agent can tell you what home buyers in your community desire most. For instance, while gourmet kitchens may be highly coveted, a hot-tub room may not. As a rule of thumb, consider renovations that keep your home current with -- but not exceeding -- the features of competing properties.

Create a budget
Start by estimating your remodeling costs and the percentage you can expect to recoup on resale. In order to reap the greatest reward, it’s important not to go overboard on price. Home improvements that can go a long way in enhancing the appearance of your home (and generally recover most of their costs) include mid-range kitchen or bathroom renovations and exterior home improvements like new siding and landscaping. Durable hardwood flooring also continues to dominate home buyer wish lists and typically achieves full return at resale.

That doesn’t mean you shouldn’t indulge in your own dream home upgrades, especially if you plan to stay put for a while. If you crave a movie screening room or a customized hobby station, go for it! Just remember that your tastes may not align with those of potential home buyers.

Focus on what’s hot:

1. Contemporary kitchens
There’s no other room that has the potential to dazzle potential buyers more than the kitchen. It’s not surprising. After all, no matter how beautifully you decorate your living room, dining room or bedroom, savvy buyers will realize that when you move out these rooms will be nothing more than empty boxes. The kitchen, however, is most likely to remain looking pretty much the same. You’re not going to be taking the built-in cabinets, sinks and countertops with you. And, in most cases, the kitchen appliances are also going to be thrown into the deal.

Prospective buyers who see a gleaming new kitchen are bound to be impressed. So if your kitchen is looking a little tired, consider upgrading it with new flooring and appliances or refacing the cabinets with new doors and drawers. While stainless steel appliances remain big sellers, it’s popular to conceal new counter-depth appliances behind homey wood paneling. Design experts recommend light, blond or honey-colored woods that create warmth and will outlast some of today’s fickle trends.

Slab countertops without seams or grout lines, in granite, concrete, marble or soapstone continue to be hot -- a top choice over tile or laminate. Quartz countertops are also becoming increasingly popular and, available in a wide range of colors, can easily complement any style from homey to ultra-modern.

To move your kitchen further up-market, choose gourmet, commercial-style stoves and hoods or exaggerated sinks with professional taps and hoses. Stylish appliance options include pull-out refrigerator drawers, oven warming drawers to keep prepared food hot and wine fridges, often hidden below customized islands, eating stations or coffee bars. Current kitchen trends favor sleek, artistic lines, computerized modern appliances in retro styles and colors and Italian cooking accessories like espresso machines.

2. Beautiful bathrooms
After kitchens, the next rooms most likely to create the “wow” factor are bathrooms. Sprucing up your main bathroom, or adding a second or master bath, is bound to add sure-fire appeal. Installing quality light fixtures and updated sink basins and toilets can make a dramatic difference. For added pizzazz, install elegant mirrors and glass shower enclosures with the latest rain showerheads. His and her vanities with personal drawers for beauty and grooming products are also popular.

Create the illusion of a personal spa by installing a soaking tub or trendy new infinity tub that provides water overflow channels. Two person steam showers, heated floors, towel bars and mood lighting are also in vogue, as are low-voltage accent lights, mirrored cabinets and pedestal sinks

3. Finishing touches
You can refresh the rest of your home for added appeal with trendy, low-cost decorating tricks. Add crown molding, cornice and window trim, booster baseboards (at least double the height of the old classic), plantation style window shutters and upgraded door handles. Recessed lighting or new fixtures in streamlined contemporary styles make a big difference in any room, as can enlarging existing windows to draw in more natural light. For extra luxury, add a fireplace or a customized designer walk-in closet large enough for a celebrity-size wardrobe.

The end result will be a home you can enjoy and one potential future buyers are bound to admire.

How to see your home through a buyer's eyes

RE.com Tips & Tools — Fri, 19 Jan 2007 22:41:00 GMT

Eagle-eyed buyers will see the flaws, so beat them to the punch and send your home to the top of their list.

Your eyes and a buyer’s eyes are not the same. You’re probably looking at your home through rose-colored glasses. A buyer’s eyes, meanwhile, are zeroing in on flaws big and small.

But you can learn to see your home through a buyer’s eyes. In a way, you probably already have the basic skills. Have you ever visited someone’s home and wondered why on earth they painted their kitchen purple or why they’ve never replaced the disco-era green shag carpeting? Do you notice that the toilet rocks and the tub faucet drips, or the bare spots in the lawn? If so, you’ve looked at the home through a buyer’s eyes.

The truth is, it doesn’t take things as obvious as avocado-colored appliances or a sagging roof to turn off buyers – although either will certainly do the trick. To look at your home through a buyer’s eyes, try to think less like a decorator and more like an architect.

Why? Well, decorators tend to think about filling up a space, while architects think about creating a space. As a seller, you want to show off a space where buyers can imagine creating a home. That’s why one of the first pieces of advice real estate professionals usually give sellers is to “clear the clutter.”

“It can be a touchy subject,” says Kathy Opolski, a RealEstate.com agent in Salt Lake City. “People are often proud of their home and how they live in it. They take it as a criticism of them.”

Indeed, she says, “their house looks perfect in their eyes. It’s comfortable to them.”

To start looking at their home through a buyer’s eyes, Opolski often suggests sellers think back to homes they liked and didn’t like and what created those impressions. Since most people who are selling their homes also are in the market to buy, these images often are fresh in their minds.

If you were turned off seeing signs of deferred maintenance like a cracked window, think about what a buyer might think about something similar you’ve learned to live with in your own home. If you left feeling a home was crowded or out of date, think about how someone with tastes different than yours might feel about certain rooms in your own home.

If you still can’t think of your Star Wars collection as clutter, maybe you could trust your real estate agent to look at your home through a buyer’s eyes and make some decisions for you. He or she is trying to help you get top dollar, and generally knows what helps a home sell in your area.

“Or,” Opolski says, “a staging person might be the way to go.” Home stagers are trained to highlight a home’s strengths and minimize its weaknesses – or at least what a majority of buyers would see as strengths and weaknesses. They are becoming increasingly popular as sellers seek a competitive edge in a slowing market.

So toss those rose-colored glasses. They clashed with the appliances anyway.

How to sell a home in an up-and-coming neighborhood

RE.com Tips & Tools — Tue, 16 Jan 2007 15:22:00 GMT

Know your market and price appropriately to make the sale.

The phrase “up-and-coming neighborhood” can be code for a risky or dangerous neighborhood. These areas are often close to a city’s downtown, and that usually brings with it a certain amount of crime. But these risks also usually mean home prices in up-and-coming neighborhoods are comparatively low, and that attracts young, hip buyers looking for a good deal in a funky area.

Keep your potential buyer in mind

When you’re selling a home in an up-and-coming neighborhood, it helps to keep that buyer in mind. They’re gambling that the neighborhood will continue gentrifying, and are attracted to its diversity and proximity to amenities. They’re thinking about the possibilities for your home, and how its relatively low price leaves them money for renovations.

In short, buyers in up-and-coming neighborhoods are focused on possibility, and your home needs to take advantage of that. Removing personal and outdated items leaves the canvas clean for buyers to see their own belongings in the space. Removing heavy, old-fashioned furniture can modernize an older home; you might even want to buy some inexpensive hip, modern furniture to stage the living room or master bedroom.

Many buyers looking in up-and-coming neighborhoods are single people or young couples who don’t have children yet, so a child-friendly environment probably isn’t important to them. A second bedroom made into an office with a pull-out couch or a futon might be more appealing than one with a crib and toys. If you have young, single neighbors, you might ask them what they would like to see in a home.

Focus on the right market, and the right price

Make sure you hire a real estate agent who understands your neighborhood and the type of buyers attracted to its up-and-coming status. Ask her to consider advertising in venues seen by the target audience -- your city’s alternative weekly, artist collectives or Web sites for young professionals, for example.

Finally, don’t overprice your home. Base the selling price on comparable sales in your area, not what you think prices will be in a year or two. A fairly priced home will attract more potential buyers and sell more quickly. This is especially true in an up-and-coming neighborhood, where value is the key to attracting new homeowners.

How much home can you afford?

RE.com Tips & Tools — Fri, 12 Jan 2007 16:41:00 GMT

Shopping for a home but not sure how much you can spend? Here's how to figure out your price range.

If you’re like many first-time homebuyers, chances are you’ve been spending your weekends driving around visiting open houses and new model homes. This is a great way to get a feel for what you want. The problem is that what you want isn’t always what you should get.

Before you start touring homes for sale, it’s important to start off with a budget so you know how much you can afford to spend. Knowing what mortgage payment you can handle will also help you narrow the field so you don’t waste precious time touring homes that are out of your reach.

Where to begin

The key factor in figuring how much home you can afford is your debt-to-income ratio. This is the figure lenders use to determine how much mortgage debt you can handle, and thus the maximum loan amount you will be offered. The ratio is based on how much personal debt you are carrying in relation to how much you earn, and it’s expressed as a percentage.

The ideal ratio

Mortgage lenders generally use a ratio of 36 percent as the guideline for how high your debt-to-income ratio should be. A ratio above 36 percent is seen as risky, and the lender will likely either deny the loan or charge a higher interest rate. Another good guideline is that no more than 28 percent of your gross monthly income goes to housing expenses.

Doing the math

First, figure out how much total debt you (and your spouse, if applicable) can carry with a 36 percent ratio. To do this, multiply your monthly gross income (your total income before taxes and other expenses such as health care) by .36. For example, if your gross income is $6,500:

$6,500 (Gross monthly income)
x .36 (Debt-to-income ratio)
= $2,340 (Total allowable monthly debt payments)

Next, add up all your family’s fixed monthly debt expenses, such as car payments, your minimum credit card payments, student loans and any other regular debt payments. (Include monthly child support, but not bills such as groceries or utilities.)

Minimum monthly credit card payments*: _________
+ Monthly car loan payments: _________________
+ Other monthly debt payments: ________________
= Total monthly debt payments: ________________

*Your minimum credit card payment is not your total balance every month. It is your required minimum payment -- usually between two and three percent of the outstanding balance.

To continue with the above example, let’s assume your total monthly debt payments come to $750. You would then subtract $750 from your total allowable monthly debt payments to calculate your maximum monthly mortgage payment:

$2,340 (Total allowable monthly debt payments)
- $750 (Total monthly debt payments other than mortgage)
= $1,590 (Maximum mortgage payment)

In this example, the most you could afford for a home would be $1,590 per month. And keep in mind that this number includes private mortgage insurance, homeowner’s insurance and property taxes. To determine the price of home you can afford based on this amount, use our home affordability calculator.

Exceptions to the 36 percent rule

In regions with higher home prices, it may be hard to stay within the 36 percent guideline. There are lenders that allow a debt-to-income ratio as high as 45 percent. In addition, some mortgage programs, such as Federal Housing Authority mortgages and Veterans Administration mortgages, allow a ratio higher than 36 percent. But keep in mind that a higher ratio may increase your interest rate, so you may be better off in the long run with a less expensive home. It’s also important to try to pay down as much debt as possible before you begin looking for a mortgage, as that can help lower your debt-to-income ratio.

Buying a Home With a Pool

RE.com Tips & Tools — Thu, 11 Jan 2007 18:41:00 GMT

Wiling away the hot summer days in your new pool is a lovely fantasy, but taking care of one can be time-consuming.; test the waters before diving in

If you’re thinking of buying a house with a pool, you are a rare breed. Many house hunters shy from homes with pools because of the maintenance and the potential for costly repairs if the pool hasn’t been properly maintained. Consider your resale value before you make an offer on a home with a pool.

However, pools can be great fun for a family. So if you can handle the maintenance, follow these tips to make sure your new pool is ready for fun.

Make sure to get a thorough inspection, preferably by a pool specialist. Some of the most important things the inspector should look for are:

Leaks. You can’t enjoy your pool if it won’t hold water. Leaks can come from various sources within your pool, including tears in vinyl-lined pools, cracks or loose tiles in and around cement or granite pools, the filtration system, underwater lights, the heater and the skimmer. Some leaks are relatively inexpensive to repair. However, other leaks can undermine the structure of the pool and erode the soil around it, which could be a very costly repair.
Functional equipment. Pool equipment and plumbing can be very expensive to replace. The inspector will check them to make sure they’re working properly and have been adequately maintained. Some inspectors may charge extra for anything other than a visual inspection, but the cost might save you money in the long run.
Safety. To prevent accidental drownings, many communities have enacted strict codes regulating pool safety. Some include the requirement of multiple barriers (such as fences) to prevent children from wandering into pool areas unsupervised. Your pool inspector can offer more detailed information on requirements in your community, as well as additional safety measures you can take for your family and neighbors.

In addition to an inspection, here are a few more questions to ask and things to look for:

Ask who installed the pool and who has been looking after it. Your REALTOR® should know whether the pool company is reputable.
Imagine what the backyard will look like in summer, or ask to see photos. Make sure it gets adequate amounts of sun and shade, and check for overhanging trees that will drop leaves in the pool.
Ask for a written assurance from the owners that all pool equipment works.
If there are signs of repair, ask what happened.
The water should be crystal clear. If it isn’t, ask why.
Review the operating costs. For an average 12-by-24-foot pool, the pump shouldn’t cost much more than $40 a month to run. The heating costs shouldn’t exceed $100 a month. And the chemicals should be approximately $400 a season. If costs are higher, it could be an indication that the equipment will need to be replaced soon.