Best (2)

Best home features to draw the highest sale price.

photo credit: Jeremy Levine Design via photopin cc

photo credit: Jeremy Levine Design via photopin cc

Investing money in a rental property or a flip can yield great dividends.  However, not all improvements are equal.  It is important to put your money in the right places in order to have the greatest impact on the home's value.  Here are the top features you can add to a home that will likely draw the highest price.

New Deck

The addition of a deck is one of the best improvements that can be made to a home.  In fact, Remodeling Magazine published a report that stated over 85% of the money spent on a deck will likely be recovered when the home is sold.  This compares favorably to 78% of the money spent on remodeling a bathroom.

Decks add another usable area for families to entertain or relax.  It is wise to plan out the deck properly in order to maximize space, function and appearance.

Sunroom

One of the hottest trends over the past few years has been the addition of sunrooms.  These areas allow homeowners to feel close to the outdoors while staying comfortable inside.  Skylights and tile floors are common in sunrooms.  Owners can choose to have the room heated or not, depending on climate and budget.

A sunroom will add to the total square footage of the home but at a cheaper price than adding other types of rooms such as bathrooms or bedrooms. The best place to put a sunroom is just off a major area like a living room or kitchen.

Office

More companies are offering employees the option to telecommute and freelancers are growing in numbers every year.  For this reason it is quite common for people to need a specific work area in their home.  Having an office in the home makes it easier for people to get their jobs done and the area can be a deduction on taxes.  Popular features are multiple electrical outlets, internet line outlet, open space and storage cabinets.

Light and Space

Tight, dimly lit spots are a real turn off for potential buyers.  If there are areas in a home that do not have access to sunlight then it is a good idea to add electrical lighting.  Recessed lights, adjustable lights and modern light switches add a contemporary feel.

Besides adding light you can opt to add more space.  This can be accomplished by removing walls that block off areas from each other.  Many homes now have a wide open spot comprised of the kitchen, living room and dining room.  This allows a number of people to socialize with each other without the need for everyone fitting in to one small room.

This is not to suggest that all the above features need to be added to a home in order to increase its value.  These are simply some of the best ways to recover costs and attract buyers to a home.


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I have read several news and Blog pieces about 2012 being the bottom of the market and how the best time to purchase a home is now. In good conscious I cannot sit idly by without voicing my opinion.

The news and columnists have based their analysis on the low number of inventory currently on the market for sale and the fact that it is 22% less than this time last year. They further site a 30% increase in property searches on Realtor.com which is one of the top search websites where consumers make purchase decisions. The reporters further substantiate their point by stating that interest rates are the lowest they have been since the great depression. Well folks, I am here to let you in on a few things. I am a distressed property real estate broker and live in the numbers and happenings on the ground. Last year alone I personally closed $17 Million in real estate. More than three quarters of my sales were short sales and bank owned property sales. My job revolves around tracking properties that have defaulted on their mortgage payments and listing the property for sale before it ends up in foreclosure. When properties do end up going to foreclosure the banks also contacts me to sell the properties back into the marketplace as a bank owned property. This is also known as a REO (Real Estate Owned) property.

In dealing with the lenders on a daily basis I have the ability to see how many mortgages are current or behind in any part of California. The numbers are staggering! One in three properties in San Diego County is currently underwater (owe more than what the property is worth).
Many of you may have heard of the “Mortgage Debt Relief Act of 2007” which is set to expire at the end of 2012. This means that anyone wanting to do a short sale has until the end of this year to get it done to avoid the enormous tax and deficiency implications. As homeowners scramble to do short sales, the banks are absolutely inundated with files. Banks have increased their loss mitigation departments to handle the amount of short sale requests as the deadline draws near.

So to shed further light on the subject of a “recovery,” I would have to say that the reason there is a 22% decrease in inventory on the market for sale is due to the “Robo-signing” debacle which simply held up the foreclosure process for a few months. Furthermore, the lenders have started issuing three month extensions to foreclosure sale dates rather than the standard 30 day extensions. The numbers are artificially adjusted to modify the supply and demand ratio. Also, the news columnists have stated that the average nationwide sales price has started increasing and the market is recovering. This is not quite correct because the number of higher end distressed sales has dramatically increased. In other words, if 100 homes sell at $200K and 900 homes sell at $500K, the average home price may have increased.  However, what they are not saying is that the home that is currently selling at $500K was purchased in 2005 for $900K.  See how they are messing with the numbers. Just because the average nationwide sales price has increased, does not mean we are recovering.

So I would maybe agree that the lower end has reached the bottom whereas the middle and higher end have room to fall.  Far be it from me to state that 2012 is the “Big Housing Recovery.” New young families or recent college graduates will also add to the lower end recovery as they will need to purchase in this range.

The number of Baby Boomers now wanting to downsize will further hamper the prices of the middle and higher end as they add to the supply. There are currently 30 million Americans in this segment of the market.

The FED made an error in judgment a month ago when they stated interest rates would remain low through the end of 2014, which took away the immediate driving force to purchase now. If interest rates would remain low for an extended period of time, why would anyone be in a hurry to purchase when they know how much shadow inventory the lenders are sitting on?

As the world has become a global economy, few have shed light on the fact that China has begun their housing crisis with more than half the cities reporting huge decreases in home prices. This may have an influence on our economy further down the road as this may affect the cost of consumer goods locally.

Gas prices are at an all-time high and could further contribute to inflation and gyrations in the consumer price index.

Unemployment is still stubbornly above 8% and steam rises from the printing presses at the Fed.

I don’t know folks. Recovery 2012?  I am not so sure. And over the years I have learned that in the long run it pays to be honest rather than bending a situation for personal gain. There is a reason I am renting right now. Though the rents are higher, cash will soon be back on the thrown to be crowned King. Don’t be in any hurry to purchase unless you find a great deal.

This is my honest humble opinion.

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