How Fast Does Equity Build During Homeownership?

Building equity in your home is like a savings account – the more you put toward it, the better. Your home’s equity grows with each mortgage payment you make and with time.

According to BankofAmerica.com, you can calculate your equity based on current appraised value less any mortgages tied to your home. If your home is appraised at $400,000 and you owe $120,000, then your equity is $280,000. But that doesn’t mean you have savings of $280K; it just means that you have a general idea of how much your home will yield should you sell it at that moment, less closing costs, of course.

Lenders consider equity differently. You can begin building equity the moment you purchase your home with your down-payment. ($400K – 20% = $320K) Your loan amount would be $320K and the equity in your home would be $80,000. You can increase your equity by paying your mortgage regularly and paying a little extra every month, which speeds up the amortization of your loan.

To approve a home improvement loan or to determine whether to eliminate private mortgage insurance, lenders take the appraised amount and divide it by your loan balance to get a percentage of how much equity you have.  Divide your current loan balance by your home’s appraised value, then multiply by 100. ($120K ÷ $400K = 35%) That means you own 65% of your home. 

These numbers are theoretical until you sell your home. Meanwhile, watch your savings grow on your monthly mortgage statement!


Staged Homes Sell Faster

In a survey released this year, the National Association of REALTORS found that 83% of buyers’ agents reported that staging helps homebuyers visualize themselves living in the home and influences them enough to make higher offers. Sellers’ agents agreed that staged homes sell faster and for more money.

These are just a few of the advantages to staging your home, but there are other benefits for home sellers. 

Staging gives you a deadline. Getting your home ready to is a lot of work, but online photos and agent showings should showcase your home at its best – decluttered, freshly painted and staged with fresh new furniture and accessories.

Staging gives you great ideas. You’ll learn a lot about making rooms flow, creating focal points, increase and improve lighting, and how to use color.

Staging helps you decide what to keep or discard. If your furnishings are hand-me-downs, out of date, or not your taste, why take it all to your next home? Staging can help you separate what you love so you’ll have far less to move.

Ask your Berkshire Hathaway HomeServices Select Agent more about staging, or even virtual staging options for your online photos.


Moving with your pet

As scary and exciting as moving day is for you and your family, it is just as scary and exciting for your pets. Here are some tips to make sure they stay safe and feel more comfortable.

  1. Keep your pets in a separate room from all of the action – The loud noises of all of the commotion may startle your animals, and the opening/closing of doors when loading up the moving van increase the risk that they might run out and get lost. Keep them safe and secure by putting them in a separate room with the door closed.
  • When driving to your new home, keep your pets near you in the car – Try keeping your pet in their carrying crate or pet car seat in the car near you. Maybe give them a blanket or toy they love to comfort them. Do not open the crate or unbuckle your pet until you have arrived at the house and found a place to keep them away from moving the boxes in. Put them with their toys, food, water, and bed for comfort.
  • Slowly adjust them to their new home – Just like us, pets take some time to get used to major changes. Slowly introduce them into each room of the home and let them explore safely, once the commotion of moving day is over.

After giving them time to adjust and explore, your pets will feel at home again. Give them time to figure things out, and make sure when letting them outside, they are secured, as they may not know where they are now. Pretty soon, everyone will be adjusted and can enjoy the new home together!


Are You Selling Your Home, Or Just Curious About Value?

All homeowners wonder at some point what their home is worth, but there’s a big difference between planning to sell and simply satisfying your curiosity. You can get a ballpark idea of what homes in the neighborhood are fetching by going online, or you could contact your Berkshire Hathaway HomeServices Select Realty professional for a comprehensive market analysis, a comparison between your home and other similar homes in your neighborhood. 

If you’re just curious, you can take your estimated sales price, subtract the customary closing costs in your area plus the closing costs on your new home (anywhere from about six to ten percent for both transactions). But then, what have you got? Without a plan of what you want to accomplish with your equity, your home’s worth doesn’t mean anything because it can change at any time. The economy, jobs, buyer preferences, and more can all make a difference.

If you’re really interested in selling your home, run some what-if scenarios. What are your goals? A bigger, nicer home? A home closer to work or family? Are there better programs for your children in a different school district? In short, you want to know how life will improve for each of your household members in a different home or location.  

Once you have the answers to these questions, you’ll be in a better position to sell your home with confidence. It’s not just about knowing how much your home is worth; it’s about providing quality of life to your household. 

Contact a Berkshire Hathaway HomeServices Select Realty sales professional to learn more about what your home is worth. www.bhhsselect.com


Portable Gardens for Curb Appeal

To make your home more attractive to homebuyers, you could plant fresh flowers or you could put plants in containers and take your garden with you when you sell your home!  

Containers can accent your home’s personality – like washtubs for a farmhouse look or colorful fired pottery for a bohemian vibe. They’re the perfect solution for styling a porch, entry or walkway.

Follow these easy tips to make sure your potted gardens thrive:

Pick the right container. A confined space means substituting what the plants would get if they were in the ground. You need to have enough space for plants to grow and proper drainage holes so your plants don’t become sodden.

Use fresh potting soil. Good potting soil doesn’t clump and allows roots to spread. It contains nutrients to give plants a good head start.

Group plants according to sun and water requirements. A mix of cascading plants, tall leafy plants and various flowers make a beautiful composition. You can even mix in edibles like vegetables and herbs, but make sure all the plants in one container require the same amount of sun and water.

Water frequently. Container gardens dry out quickly, especially smaller pots. Check that the container is draining properly and you don’t have to worry about overwatering. Water daily in warm weather.

Bigger is better. Larger containers hold more soil, allow plants to grow larger, offer more room for variety and require less frequent watering.


What the CMA Can’t Tell You

The comparison market analysis, otherwise known as a CMA, is an analytics tool real estate professionals use to help sellers learn what homes similar to theirs in size, age, and features have sold for, and buyers learn how close to asking price homes have sold for so they have a better idea how much to offer.

A CMA can provide quantifiable commodity details – such as age, square footage, lot size, and location, and number of bedrooms, living areas, and baths. But it can’t tell you the subjective details that make one house more attractive than another similar home, such as how well it’s been updated, landscaped, or maintained.

And that’s where your Berkshire Hathaway HomeServices sales professional can be invaluable. With their market knowledge, neighborhood expertise, and connections, they can provide the house-by-house intelligence you need to make a better-informed decision.

For homes that are listed for sale, your Berkshire Hathaway HomeServices sales professional can show you inside the ones most similar to your home or the home you’re most interested in buying. Homes that have already sold could still have virtual tours and photos that you can peruse.

Your Berkshire Hathaway HomeServices sales professional can also provide you with a detailed market report including graphs and pie charts compiled by the multiple listing service. You’ll learn the current macro and micro market conditions that explain why prices are trending up or down.

The market is constantly changing, and the more you know, the easier it is to reach your buying and selling goals. Contact a Berkshire Hathaway HomeServices Select Realty sales professional to learn more about what your home could be worth in the current market.


EMERGENCY PLANS FOR YOUR FAMILY

Do you know what to do when a disaster strikes? Do your children? By creating and practicing an emergency safety plan, you can protect your family when natural disasters happen.

Fires. The National Fire Protection Association advises you to have at least two ways to escape the home in case of fire. Practice fire drills with your children at least twice a year.

Tornadoes. Tornadoes are fast and destructive. The Red Cross recommends the safest shelter for the family as interior rooms, closets, hallways or a storm shelter/basement.

Hurricanes. The Insurance Information Institute suggests learning where the nearest public shelters and evacuation routes are before hurricane season begins.

Earthquakes. Ready.gov says to practice drop, cover and hold-on drills, like getting under a sturdy desk or table, against an interior wall, or in the jamb of a door on a load-bearing wall.

Before disaster strikes, review your homeowner’s insurance and make sure you’re covered for flooding and wind damage. Document your belongings. Keep valuables, important files, priceless photographs in a safety deposit box.  Prepare an emergency kit with food, water, first aid and blankets.

You may lose some material objects, but you’ll keep what matters most – your family.


STAGED HOMES SELL FASTER

In a survey released this year, the National Association of REALTORS found that 83% of buyers’ agents reported that staging helps homebuyers visualize themselves living in the home and influences them enough to make higher offers. Sellers’ agents agreed that staged homes sell faster and for more money.

These are just a few of the advantages to staging your home, but there are other benefits for home sellers. 

Staging gives you a deadline. Getting your home ready to is a lot of work, but online photos and agent showings should showcase your home at its best – decluttered, freshly painted and staged with fresh new furniture and accessories.

Staging gives you great ideas. You’ll learn a lot about making rooms flow, creating focal points, increase and improve lighting, and how to use color.

Staging helps you decide what to keep or discard. If your furnishings are hand-me-downs, out of date, or not your taste, why take it all to your next home? Staging can help you separate what you love so you’ll have far less to move.

Ask your Berkshire Hathaway HomeServices Select Realty sales professional if staging is part of their service or to recommend a good stager.


HOW TO CHOOSE NEW KITCHEN CABINETS

Cabinets set the style for any kitchen, and with advances in functionality as well as beauty, your new cabinets should transform your food prep workspace.

All kitchens have trouble spots that can be fixed with the right design. Hire a certified kitchen designer, who’s adept at space planning, traffic control and up to date on the newest products.

The most popular cabinet doors today are flat fronted with hidden hardware for a modern esthetic. Look for “quiet closing” cabinets that close softly to prevent slamming. Storage that pulls down, rotates or lifts up can save your back and the need for a stepladder. Drawers that pull out under countertops are easier to use than shelves because you can see everything that’s stored. Cabinets that reach the ceiling can accommodate items you don’t use daily, like holiday dinnerware.

Many new kitchen cabinets come in various wood grains and stains, factory-painted wood, and porcelain or laminate fronts. Island cabinets often feature a contrasting color to the wall cabinets. 

Be open to new products that can save you valuable time, such as built-in drink stations, refrigerated drawers and large trough sinks. Visit kitchen showrooms with your designer for more inspiration.


Be Ready for Unexpected Expenses

unexpected homeowner expenses

Congratulations, new homeowner! You’ve overcome the biggest hurdle – buying your first home – and now it’s time to switch your attention to maintaining and protecting your investment. Your electrical, water, gas and A/C systems may be working fine for now, but sooner or later, you can expect a major repair or replacement expense. All you need to do is be prepared.

Plan ahead. The International Association of Certified Home Inspectors offers a handy reference called The Standard Estimated Life Expectancy Chart for Homes. Compare the chart to your inspection report and you’ll be able to gauge how much life is left in your appliances and systems. If you know that your A/C unit is 10 years old and the life expectancy is seven to 15 years, you have the heads up to prepare for a major repair or replacement soon.

Review your homeowner’s insurance. How much is your deductible? That’s the amount you’re responsible for when you use your insurance for an expense like a hail-damaged roof. The higher the deductible, the more money you should set aside, just in case.

Build reserves. Many repairs or replacement costs won’t be covered by hazard insurance, so reserves are your rainy day fund. This money you’ve saved or set aside should be quickly and easily accessible through a savings account or a short-term certificate of deposit.

Set aside an emergency-only credit card. Keep one credit card at zero or a low balance so you’ll have a back-up source for payments.