9 Reasons To Choose A New Home Over A Resale

As the mortgage crisis continues to inundate the market with distressed properties, house hunters have no shortage of cheap, foreclosed homes to pick through. But despite all those deals in the market for previously owned homes, consumers shouldn’t overlook the potential benefits of buying a new home.

“New homes usually sell higher per square foot then resale homes,” says Jack McCabe of McCabe Research & Consulting in Deerfield Beach, Fla. “But their selling points, I think, are pretty strong.”

To help consumers understand the advantages of buying a new home, U.S. News spoke with a handful of experts and compiled a list of nine reasons to choose a new home over a resale.

1. Customization: Many homebuilders allow buyers to help design the property, which helps create a living space tailored to the consumer’s tastes. New-home buyers, for example, can often decide where their bathroom might go, choose their favorite flooring or pick the exterior paint color. Buyers moving into a subdivision can sometimes pick the lot they like best.

“There is a lot of flexibility for [new-home buyers] to kind of put their personal signature on the product,” says Patrick Costello, president of Forty West Builders, based in Ellicott City, Md. “Those kind of things you can’t do with a used house — it’s just not possible.”

2. Building envelope: Building codes have mandated higher energy-efficiency standards since they began to address the issue in the late 1970s, says Kevin Morrow, senior program manager for the National Association of Home Builders’ green-building programs. The most recent International Energy Conservation Code came out in 2009 and required about 17% more efficiency than three years earlier, he says.

“So using that as sort of a gauge to how newer homes should perform from an efficiency standpoint compared to older homes, it’s pretty clear that just as homes meet code, they are going to be more efficient,” Morrow says.

Newly constructed homes use energy more efficiently in two ways, Morrow says. First, they tend to have a tighter-sealed building envelope, or the enclosed part of a structure, that helps prevent conditioned air — cool air in the summer, warm air in the winter — from escaping. Features that create this envelope include higher-efficiency insulation, doors and windows.

“Gone are the days of the single-pane window,” Morrow says. “Now, I think you are starting to see triple- and quadruple-paned windows. These are windows that are designed to really minimize the transfer of heat either from warm to cold or vice versa, and they of course will help the building envelope.”

3. Green appliances: The more energy-efficient mechanics of the house also help reduce utility bills for new-home buyers, Morrow says. New homes often include green systems and appliances — such as high-efficiency stoves, refrigerators, washing machines, water heaters, furnaces or air conditioning units — that homes built years ago might not.

“The conditioning equipment is usually considered to be one of the larger energy-consumption devices, but certainly, those kitchen appliances matter,” Morrow says.

Owners of existing homes can always retrofit their property or buy higher-efficiency appliances, but doing so can be expensive.

4. Fewer repairs: The features of new homes should also hold up better than those of existing homes, which may have experienced years of wear and tear, says Evan Gilligan of Mandrin Homes, which has offices in Maryland and Delaware.

5. Less maintenance: At the same time, today’s new homes are engineered specifically to minimize maintenance requirements. For example, Costello says his company uses composite products for a home’s exterior trim instead of wood, which could rot or need repainting.

“You buy a used house, you don’t know what you are getting; you might have to do a lot of maintenance,” Costello says. “We are trying to look down the road and make things as easy as possible for [homeowners] so they can enjoy living there and not have to be saddled with maintenance.”

6. Warranty: In addition, builders often agree to take care of the necessary repair work in a new home for at least the first year.

 generally fully warrantied by the builder for a minimum of a year, and most of all the other components are warrantied for extended periods,” McCabe says.

So if your roof starts leaking or the heater breaks during the warranty period, your builder will pick up the tab for the repairs.

“When you buy a resale home, even if you have a home inspection done, it still does not turn up hidden defects that you don’t find out about a lot of times for two years,” McCabe says.

7. Fire safety: New homes often include fire-safety features that may not be in properties built years ago, Gilligan says.

“We use fire retardant in our carpeting and in our insulation,” he says.

In addition, all new homes are required to include hard-wired smoke detectors. These devices can provide better protection than battery-operated smoke detectors, which can fail if their battery runs out, Morrow says.

“Hard-wired [smoke detectors] run on the electricity of the house and then have a battery backup for if the house power goes out,” he says.

8. Concessions: Especially in today’s sluggish housing market, buyers could squeeze more concessions out of a homebuilding company than an individual seller. That’s because individual sellers often have an emotional attachment to their property that can blind them to its true value.

“People usually think that their home is worth more money than it is,” McCabe says.

At the same time, builders often have greater financial wherewithal to absorb a loss on a sale than individuals.

“I’ll put it to you this way: A $30,000 hit [spread] over 30 lots hurts a lot less than a $30,000 hit on one existing house,” says Christopher Rachuba of Rachuba Home Builders, based in Eldersburg, Md. “So I think [buyers] may get more bargaining [power] that way.”

9. Financing: New-home buyers can take advantage of mortgage-financing perks available through their builder.

“New-home builders — in many cases, the larger ones — have their own mortgage companies, or they will offer paying points or closing costs and buy down certain rates for you,” McCabe says. “The seller of a resale home is generally not going to do that for the buyer.”

Don’t Let Interest Rates Fool You

Albert Einstein has referred to interest as the eighth wonder of the world, the greates invention of the human race, and the most powerful force in the universe.

Why is this so? Interest has three major functions in finance. It is the surcharge placed on the repayment of borrowed money or goods; it is the return which is derived from investments; and interest also refers to a person’s right or claim to a corporation, such as that of a creditor or owner.

In economics, interest is referred to as rent on money. Rent, or economic rent, is further defined as a payment to a factor of production (land, labor, and capital goods).

Like any other form of rental, interest rates constantly change to reflect market conditions. Interest rate is the percentage by which balances grow, and the initial balance is referred to as the principal. Interest rates have remarkable effects on finance and economics, thus, they are the most watched market indicators.

History suggests that the Sumerian civilization is the first to have developed a structural credit system based on grain and silver, the two main commodities. Before the advent of coins, Sumerians practiced a credit system where loans were made in the form of metals based on their weights.

Loans of grain and silver made trading possible. Silver was used by towns, and the country economies used grain.

As proof to this historical claim, archaeologists have uncovered metal pieces believed to be used in trade in Troy, Minoan, and Mycenaean civilizations. They have also found similar items in Babylonia, Assyria, Egypt, and Persia.

Today, credit has changed into an entirely new system. Banks, individuals, and other financing institutions have developed their own system of collecting interest for the repayment of borrowed money, or debt.
This practice; however, is considered usury by religious orders such as the Jewish and Christian. In Islam, a special type of banking is practiced, which is consistent with Islamic laws, such that the collection and repayment of interest is prohibited. There are Islamic banks which cater to this specific banking system.

Interest accumulates in two ways: by growing linearly with time (simple interest), and by growing exponentially over time (compound interest). Simple interest, the method by which interest accumulate linearly with time, is seldom practiced because the interest earned by the money previously is assumed to have remained in the account.

When this happens, the amount of money which is subject to interest increases because the previous interest remained with the capital money.

With compound interest, outstanding balances, which may include the principal and other add-on amounts, balance grow exponentially through time. This means that periodically, the total balance grows by percentages of the total of the principal and the interest paid in previous periods.

In this mode of interest, the rate of compounding influences the whole amount of interest which is paid over the duration of the loan. The growth function in compound interest is an exponential function with regards to time.

Today, there are two general types of interest rates for debt instruments. Debt instruments are also called income streams, which pertains to the stream of income for the person who lends money.

There are a number of debt instruments such as business-based, collateral-based, consumer-based, contingency-based, government-based, and insurance-based instruments. These interest rates are fixed-rate and variable rate.

Fixed-rate instruments, the more common between the two, have fixed value throughout the instrument’s duration. This interest rate is usually used in bonds.

Variable-rate instruments are typically attached to an index which floats according to the economic conditions such as prime rate (interest rate given by lenders to customers who are considered trustworthy) and CPI or consumer price index (statistical measure of the average of prices of a set of economic goods and services bought by wage earners in urban areas).

Staging The Home

The term “staging a home” describes the process of rearranging and decorating a home’s interior in an effort to downplay deficiencies and accent strengths. In its simplest form, staging involves adding specialty accessories like towels, candles, throw rugs, bedding, pillows, dishes, napkins, and stemware. Staging at its most extensive level involves rearranging or replacing furniture, or even adding specialty furniture pieces to create a feeling of comfort and livability.

Before you try advising clients or taking on the staging process, gain knowledge about basic staging techniques and outcomes by visiting newly developed neighborhoods with model homes. Invest the time to see how new homes are being shown. Notice how the most appealing homes present master baths. Take a close look at desirable kitchens to see what is and isn’t on the countertops. Note how towels, dishes, and glassware are displayed. Most of all, study how furniture is arranged in various shaped rooms to create an open, warm, comfortable environment.

If you are really challenged by staging and design, turn to the professionals for help. In most real estate markets you’ll find people who specialize in staging homes for sale. Many interior decorators offer hourly consultation. Others offer full-service staging, by working up a design plan, bringing in the furniture and accessories, handling the installation, and dismantling it all after the sale – for a fee.

Then be ready to convince the sellers that it’s in their best interest to invest in the home’s interior look. Remind them that well-staged homes attract not only buyer prospects but also Agents who want to show homes that show well.  I will do this service for sellers. In many cases, the investment pays off in two ways: A faster sale and a higher price.

Removing clutter
Realtors cite a truism about buyers: Buyers have to move the seller’s stuff out before they can move in.

Literally, the sellers have to move their stuff out. But figuratively, the buyers have to mentally remove the seller’s belongings when they assess how well the home that they’re viewing will accommodate their own possessions and activities.

Some seller’s homes are so full of garage sale and flea market finds that the buyers honestly can’t see the home through the clutter. They can’t “move in” because they can’t see anywhere for their own things to go.

If you’re working with sellers of this type, take these steps:

• Advise them to remove excessive accessories and knick-knacks. Whether they get rid of them altogether or pack them up in preparation for their anticipated move, get them out of sight. The results can do wonders for a home’s interior appearance.
• Dismantle what I call the “shrine wall.” A wall of pictures of children, grandchildren, nieces, nephews, friends, acquaintances, and snapshots of every experience the owners remember fondly adds clutter with little to no buyer appeal.
• Follow the design rule “When in doubt, take it out.” Advise sellers to keep clutter, wall décor, and placement of figurines and mementos to a bare minimum.
Simplifying traffic flow
“When in doubt, take it out” applies to furniture as well. Rooms that feel cramped and hard to move through usually suffer from too much furniture. To make a diagnosis and recommendations, put the home through these steps:

• Walk through the home to see where you feel the flow gets held up. Where do transition areas from room-to-room or from one part of a room to another feel restricted?
• Make recommendations to improve traffic flow. The sellers can’t move walls (without great expense) but they can move furniture that restricts movement.
• Evaluate the size and number of pieces of furniture in each room. Assess:

1. Are there too many pieces of furniture?
2. Are furnishings too large and beefy for the room?
3. Does the furniture arrangement work in terms of space and flow?
• Be on the lookout for small, decorative pieces of furniture. These are often the biggest culprits when it comes to restricting walkways and creating a crowded feeling

Most people have too much furniture in too small a space. Be ready to recommend that the sellers remove furniture to create bigger open spaces to make the home appear larger and more comfortable. Also be ready for your furniture-removal recommendation to meet owner resistance. Sellers will counter that by removing furniture there won’t be any place for people to sit. Stick to your story: Tell them a home with too little furniture almost always shows better than a home with too much.

Toning it down
Themed bedrooms with matching wallpaper, wallpaper borders, sheets, pillows, comforters and wall hangings – are very popular for children today. The problem is that buyers walk in and can’t see an alternate use for the room. Or if they can, they see considerable expense and effort to get from where the room is to where they’d like it to be in terms of decoration and usability. As a result they’ll offer a lower price, if they make an offer at all, in order to cover the costs they anticipate incurring in order to replace the theme with a more neutral design.

Be on the lookout for the following red flags:

• Loud or outlandish paint colors or wall coverings
• Immediately visible and highly personalized themes. For example, a vibrant pink bedroom with lots of stuffed animals might be off-putting empty nesters or a family that has only boys.

Explain to the sellers that many buyers are design-challenged and have little sense of how to redecorate or what kinds of costs are involved to repaint or re-paper. Tell them that a more neutral design will attract more buyer interest and command a higher price.

Here are the top 5 mistakes people make when people list their homes.

Mistake No. 1: Get Emotionally Involved

Mistake No.2: Not Hiring An Agent

Mistake No.3: Assuming You Must Hire An Agent

Mistake No. 4: Set an Unrealistic Price

Mistake No. 5: Expecting to Get Your Asking Price

Selling Your Home Can Be A Breeze With A Real Estate Agent

If you are thinking of selling your house, you should look into the matter of hiring a real estate agent. You will gain many benefits from hiring such a professional especially in the buyer’s market borne of the recession.

Just in case you have been living under a rock, even celebrities and millionaires selling their homes have had to significantly lower their homes’ selling prices in an effort to sell these properties as fast as possible and yet nobody seems to be taking the bait. With the right real estate agent, however, you can have greater success where your moderately-priced house is concerned.

Home Assessment

Your real estate agent will start by providing advice on how you can sell the house in a quick manner and even on your own terms. Your house will be inspected from floor to ceiling and then changes will be recommended to make it more salable. You need not worry about spending plenty of money on the recommended home improvements. For the most part, these steps will only focus on minor things like a fresh coat of paint on one part of the house, cleaning up the yard of weeds and junk, fixing up small defects in the plumbing and even removing years of clutter.

Once you have made these minor improvements, your real estate agent can then make an assessment of the house’s value. Factors to consider include comparisons with the property in the neighborhood, current market prices and the value of the home in and of itself, to name a few. From the initial valuation, you and your agent can then discuss the market list price of the property. Keep in mind that keeping to a reasonable and affordable list price is essential in making a fast sale.

Marketing Your Home

Next stop is marketing your home, which is a key responsibility of the real estate agent. Methods applied in said activity include advertisements in the classified ads, posters and, most important, the MSL. Essentially, it is a listing where brokers and agents as well as sellers and buyers share information about available properties for sale. The success of the MSL is proven, too – approximately 80 percent of all home transactions were made with the network as a common factor. You can even secure a better price for your home with said network.

Negotiating the Deal

And of course, your real estate agent will help in deal negotiations for the transaction to push through. The aspects for negotiations will include total price of the house, down payments and final payments, transaction fees and penalties. Basically, your agent should protect your interests first so much so that he can turn down offers that he believes are to your detriment. You still make the final decision but it is a good idea to listen to what the expert in the matter has to say about it.

Before placing your signature on any contract, you are well advised to read it down to the last fine prints. You want to be protected in all aspects so you might also consider talking to an accountant and lawyer for more advice. These professionals are worth their fees if only to ensure that the kinks in the contract are ironed out.

What Is Needed For Home Staging?

Precisely it is a proven system to prepare your home for sale in such a way it looks most appealing to the prospective buyer. In this process, Coldwell Banker’s Sandy Johnson will magnify the advantages your home already has and would reduce the negatives to the best extent possible.

Why do Home Staging?

A good question. Well – let’s face it – the US housing market is not what it was for decades. Gone are those days when home sellers were having the final say. Selling a home was easy just by listing it and setting the asking price. Virtually the home seller selected the buyer, among the many contenders for pricey locations, and put forth conditions of sale.

Now thanks to the tidal wave of foreclosure properties flooding the real estate market, it has become a buyers’ market, where as many as 11 housing properties are made available with same qualifications, while searching online for a home. So home sellers have to change their strategies accordingly to impress upon the buyers.

Know the competition existing:

For example in Virginia Beach, VA, according to latest reports there are 4,300 properties listed for sale in MLS along with 1,287 properties listed for distressed sale under foreclosure. The inventory of unsold properties is mounting and your property will be lying one among them – if you do not use your prudence to make it heads above the other attractive properties, to pull the attention of the searcher like a piece of iron to magnet, to your property.

Home Staging will make the difference?

In a competitive market – consumer goods or real estate – the packaging does the trick. In a supermarket you have gone for shopping – which attracts your attention first – the beautifully displayed items or the sack-packs lying on the floor? Likewise your house put in the market for sale is a commodity that should attract those entering the store – the online list of properties for sale.

What is needed for Home Staging?

Nothing more than the realistic approach to the situation. Yes – your house is comfortable for you and you love it for the reason that you hard-earned it, but the buyer can’t necessarily see this. You think your house needs no Home Staging and why should you spend extra money when you are selling. If this is your line of thinking – sorry – you are missing a lot.

Forget for a while you are the owner of the house and step into the shoes of the buyer you want to buy your home. From the front door to the backyard – if you view with a critical eye, you are sure to find many “ifs” and “buts” to deter the buyer from appreciating the house.

This is exactly where Sandy Johnson can do  the magic. She knows – by experience and expertise gained through staging a number of houses, how to make your home look pleasing to the buyers on all aspects. And ultimately you are going to reap the harvest of profits – many times more than the cost of Home Staging – in making your home sell in faster and at the price you ask for.

The Tax Benefits of Buying a Home

There are many tax benefits to buying a home. They are definitely worth keeping in mind if you are a renter considering buying a home for the first time. Such benefits include mortgage interest deductions, property tax deductions, a capital gains tax exclusion, and preferential tax treatment.

In short, tax laws in the United States favor home owners. For instance, if your mortgage balance is smaller than the value of your home, you can fully deduct the mortgage interest applying to your home loan on your tax return. When you make a mortgage payment, interest is often the biggest component. For example, if your monthly payment is $1,200 then you might find that $1,162 is going toward interest while only the remainder of the monthly payment is touching the principal balance. It follows that being able to tax-deduct twelve months of interest is a huge benefit!

As a first time home owner you can also benefit from property tax deductions. Property taxes on your first home are fully deductible for income tax purposes. Also, property tax increases are limited to the lesser of the inflation rate or 2 percent per annum after assessing the value of the home when it’s sold.

Home owners can also benefit from a capital gain exclusion. If you have lived in your home for at least two of the past five years then you may exclude profit of up to $500,000 (for couples) or $250,000 (for individuals) from capital gains tax. This exclusion can be used on your taxes every other year or every 24 months. This means you could foreseeable sell your home every two years and make a profit, tax free.

Home owners also receive other kinds of preferential tax treatment when they own a home. Even if you sell your home and receive more profit than the allowable exclusion for capital gains tax purposes, such profit will be considered a capital asset (providing you have been in possession of your home for more than one year). Capital assets receive preferential treatment by the IRS for tax purposes.

In addition to the many tax benefits of home ownership you will build equity when you own a home. The more payments you make, and the more you reduce the outstanding balance of your mortgage, the more equity you will build. Your credit score will also improve due to making monthly payments on time.

So… if you are a renter thinking about buying a home, definitely take the various tax benefits into account, as well as the general benefits of home ownership!

Pricing Your Home Correctly

If you are contemplating selling your West Monroe real estate, you should speak with a West Monroe Realtor about pricing the home right, as well as other marketing strategies. The biggest mistake any seller can make is pricing their home too high in today’s real estate market.

West Monroe/Monroe sellers are competing with other comparable properties in their neighborhoods, as well as short pay, foreclosure and bank owned REO properties. Savvy buyers are looking for well priced homes. Only smart and motivated West Monroe sellers are able to compete in this marketplace by pricing their homes at or slightly below market.

Factors to Consider When Determining the Right Listing Price

Here are some factors to take into consideration to help you price your West Monroe real estate:

1. Recent comparable sales in the area.
2. Special features and amenities of your home.
3. Your motivation for selling.
4. Market conditions. Buyer’s market or seller’s market?

Your West Monroe Realtor will prepare a comparative market analysis for you which contains information about the active listings, pending sales and closed sales in your neighborhood. She will recommend a suggested list and sales price that you can expect to get for your home and also recommendations on how to make your home more attractive to a large pool of buyers.

Only Motivated Sellers are Selling Their Homes

If you are not motivated to sell your home, this is not the right market to test the waters. For those sellers that are realistic and have a true need to sell, if you price your home at fair market price and are willing to offer concessions and other incentives to buyers such as seller financing, paying homeowner dues, or contributing to the buyer’s closing costs.

Marketing the Home

While price is important in selling your home, you also need a good marketing campaign to expose your home to qualified buyers. It is recommended that you list your property with an experienced West Monroe Realtor who will place the listing in the MLS, and advertise it in several different Internet websites to reach a large pool of buyers both locally, nationally and internationally. Trying to sell your home on your own is difficult today because there is a large inventory of homes on the market in the West Monroe, and you are competing with distressed properties, bank owned and REO properties.

The right price, a good marketing campaign and an experienced West Monroe Realtor will enable you to get top dollar for your West Monroe/Monroe home, and help you sell your home quicker.

Sandy Johnson – West Monroe/Monroe Realtor – has been serving buyers and sellers in the West Monroe areas for over 10 years. Her knowledge of the real estate market in Monroe and West Monroe have helped him achieve an excellent reputation throughout the Coldwell Banker network. (318)362-0007