Determining Whether or Not a Move is YOUR Best Move
No matter the economic climate or the state of the housing market, as a people – we are often nomadic by nature. We seek change. We strike out in search of new horizons. Once we find what we’re looking for, we settle down and make a home for ourselves. This has been our way since the dawn of man. When you think of it – nothing has really changed in all that time.
In recent years, Highlight Homes’ representatives have heard the following question echoed repeatedly, “Should I sell my current house and move into a new house in order to take advantage of record low house prices? I can get a lot more house for the money than I could a few years ago!” If you share this same sentiment, we pose the following questions and answers to help YOU find your way.
- How long have you been in your current house? If you’ve been in your home less than 10 years, the sad truth is you probably have NEGATIVE equity in your home – thanks to the sharp decline in the real estate market over the past 3 years.
- What do you believe your current home is worth? The Atlanta Housing Market enjoyed a virtual BOOM during 2001 to 2007. Due to the current economic state and the banking crisis, pundits predict that the majority of house values reflect prices that were seen as far back as the beginning of the millennium. Chances are that your home is not worth what you may believe it to be – and possibly less than what you paid for it. If you’re still serious about selling, a phone call to your lender might be the next best step. They can help guide you to figure out how much you still owe on your home and give you a ballpark figure on your home’s value with a “drive-by” appraisal.
- How many homes are for sale in your neighborhood? http://www.Trulia.com is a terrific online resource which allows you to type in your address to learn what homes in your general area are selling for and how much competition you might have out there. The answer to finding the best price to sell your home for is “virtually” right at your fingertips. Write down some of the addresses near you and hop in the car to take a look – you may actually find some For Sale by Owner properties during this field trip, as well.
- Are you aware of any foreclosures in your neighborhood? Foreclosures are the #1 factor in loss to property values in any given neighborhood. Bank and Mortgage Company-owned homes tend to go at bargain basement prices because the lender just wants the home off of their books. Therefore, even if you are fortunate to find a buyer who is willing to pay your asking price, an appraiser will likely be unable to get anywhere near it and will – more likely – come in closer to the foreclosure price. The question is can you really AFFORD to sell?
- What is the current condition of your home? Is it in good repair? Is it up-to-date? In order to compete in Atlanta’s competitive housing market – your home has to be at its best to attract potential buyers. Maintenance issues that need to be addressed or dated decor may serve to turn buyers away.
- What is the reason you are considering a move? Is this a WANT or a NEED? People move for all kinds of reasons. Goals such as better school system, better neighborhood, heightened sense of status, and to be closer to family & friends may feel like needs, but may actually fall under the “want” category. However, intentions such as the need for more space to accommodate a growing or blended family, relocation or job transfer, the inability to afford the house note due to job loss, divorce, and adult children leaving the nest are all “needs”.
- How stable is your/your spouse’s current employment? Having a stable job and solid job history will make a difference in your mortgage rates. If you are self-employed – you will probably have to provide more documentation than someone who is employed by someone else. If you are considering a move to a home with a larger mortgage payment, ask yourself if you can still make the payments if you or your spouse loses their job.
- Is your credit up to snuff? This is one of the #1 category Mortgage Lenders and Banks examine when you apply for a mortgage. It is vital that you pay all of your bills on time and keep close tabs on your credit. Lenders are far stricter than in years past – it currently takes about a 700+ credit rating just to qualify for a conventional loan for a new mortgage or to refinance your current home. These standards continue to change on an almost daily basis. Keep in mind that your lender will be looking at the “4 C’s” to determine if you qualify for a mortgage in today’s market: Capacity (the ability to repay), Cash, Credit & Collateral.
- What is your debt to income ratio? The debt to income ratio is a percentage used by lenders to determine if you can afford a home. Depending on the loan you are applying for – FHA, VA, Conventional, Jumbo, ARM (just to name a few) – these percentages can fall into different ranges based on your mortgage payment. Lenders will first look at the “front-end” – your mortgage payment divided by your income (ex. A $1500 house payment divided by a $5000 monthly income = 30%) – to fall no higher than a range of 31-49%. They then look at the “back-end” – all of your bills including house payment, utilities, car payments, credit cards divided by your monthly income (ex. $1500 house payment + $450 utilities + $800 car payments + $400 credit cards divided by $5000 monthly income = 63% ratio). In other words, add in groceries and a few other standard “life expenses” and you may virtually be maxed out month after month just to afford this house.
So… now what? Unless their reasons for a move are reflected as a NEED rather than a WANT, more and more people are making the decision to STAY rather than GO. However, there is no reason for homeowners to feel STUCK – all is not lost. There are many affordable ways to gain that “change” you seek by freshening your existing home to make it seem like new again. Highlight Homes and our newest division – Highlight Home Restoration – can help!
At Highlight Home Restorations, we don’t just renovate rooms – we create living spaces where you and your family can make memories together for years to come! There are fairly simple ways to add space, augment charm, and increase the enjoyment of your home for both you and your family, while adding value for future buyers. Here’s our list of the Top Six Renovations That Will Add Value to Your Current Home:
- Heart of the Home – Kitchen Renovations are the #1 change that will add value and increase appeal to future buyers when it DOES come time to sell. In the meantime, you and your family can enjoy a possible new layout (which can often make the room seem larger), new countertops and cabinets, new energy efficient appliances and new up-to-date fixtures.
- Pamper Me – The #2 renovation would have to be the Master Bath. More and more homebuyers are looking for a master retreat where they can let go of their cares & woes. Wouldn’t you like to have that, as well? It’s amazing the difference a jetted tub, his & hers vanities with solid surface tops, an enclosed water closet and tile flooring will make to a bathroom.
- From Top to Bottom – If you have a bonus room or a basement that you’ve never finished, this is the time to do it! Not only will it vastly increase the living space for members of your family, but it will also increase your home’s value! When finishing, think in terms of rooms your family will enjoy most: Gameroom/Playroom, Media Room/Home Theater, Additional Guest Bedroom with Bathroom, Kitchenette/Bar. The possibilities are endless!
- Divide and Conquer – A growing trend we are witnessing is the use of an attached garage as a storage area and workroom. More and more people are electing to ADD space by building a detached garage with a bonus room above. This move allows you to place your storage items in the detached garage, use the space above as an in-law suite or office, and park your vehicles in your attached garage as originally intended. This is also a great idea if you’ve always had a carport in place of an enclosed garage!
- Go Outside and Play – A recent trend that continues to gain momentum is the addition of outdoor living spaces to existing homes. A deck with a pergola or a bricked patio with small enclosure offers the ideal space to get away from it all – right in your own backyard! A fire pit or small pond will add to your enjoyment all the more.
- Mix Work with Pleasure – As the landscape of the world changes in relation to the economy, job market and the traditional skyscraper office building, more and more people are making the choice to telecommute. Highlight Homes has witnessed a virtual explosion in the number of requests for home offices in the last two years, as folks begin to see the value in skipping rush hour to sit behind a desk in the comfort of their own home (slippers are optional!)
We are also very proud of our distinction as a Green Builder here at Highlight Homes. There are ways you can bring a little eco-friendly change to your current home while saving yourself money in the long run. They will likely serve as additional benefits to potential buyers when you do decide to sell. The Top Four Energy Efficient Upgrades to Existing Homes include:
- Replacement of doors and windows with insulated products to aid with thermal transfer and help drive down energy costs.
- Replace HVAC with a more energy efficient model – units with 15 SEER (seasonal energy efficiency ratio) or greater will equate to higher efficiency and lower energy bills.
- Replace your water heater with a new tankless water heater. You will never run out of hot water, AND you’ll help save the planet AND money in the process!
- Add insulation to your attic to help avoid heat/air conditioning loss. Enjoy a warmer home in the winter and cooler home in the summer!
While the housing market struggles to right itself, it might be wise to just stay put and weather the storm. The repair to appraisal standards will be slow and steady – many pundits predict home values will rise between +0.5-2.5% year over year for the next 7 to 10 years. In the event that you choose to stay in your home and heed our advice with regard to home improvements, Highlight Homes and Highlight Home Restoration welcome the opportunity to become your “Home Transformation Partners.” To request an estimate and schedule a personalized consultation with one of our skilled supervisors, we invite you to call us at 678-873-9234 or e-mail us at info@highlighthomesga.com. To learn more about Highlight Homes, please visit us online at www.highlighthomesga.com!
Credits: “Should I Stay or Should I Go?” The Clash, Combat Rock (1981)
