Top 10 Value-Boosting Projects (#3)

Number 3 on the list of top Value Boosting projects is…

The Finished Basement.  Oooohhhh.  Aaaaahhhh.

The finished basement is a way WAY bigger project than the previous 2.

The cost new front door and the new garage door both end up at around $1,200 each.  The average full basement remodel costs $64,000.

We are in the big leagues now.

Remember: This list is all about Cost vs. Value.  Projects are ranked in terms of ROI (return on investment); not the sheer number of dollars it will add to your home.

Now…For your inspiration, we have…

The cozy basement Family Room

The Basement Home Theater

Don Johnson once sneezed on this couch in scene from Miami Vice (no proof.  I’m just saying…)

The Basement Game Room

The Wine Cellar

The Basement Gym

The Basement Bar

The Basement Play Room

I married into a Finnish family, so the Basement Sauna cannot be ignored.

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Top 10 Value-Boosting Projects (#2)

Ok Friends.  I thought it would be fun to have a theme for the next week: Remodeling.  Studies have been done, numbers have been crunched  (see Cost vs. Value Report).  You don’t just have to guess what the best projects are to add value to your home.  Let’s go through the top ten, one by one, starting… on the previous post.

Keep this in mind: these are the top ten value-boosting projects in Richmond, VA.  In different regions of the country, different projects might do a better job increasing your home’s value.

Last post, we learned (at least I did) that replacing your entry door is far and away the #1 project that gives you the most money back for money spent.

Coming in at #2…

Garage Door Replacement.

I was kind of surprised.

#1 cost v value project is a New Entry Door.  #2 is New Garage Doors.  Here’s the lesson to takeaway: curb appeal matters.

 Consider this: a door will always be a focal point of any building.  The first thing your brain does when you see a building is think, how do I get inside?

A door provides a welcome contrast with the rest of the house; I’ve never seen a brick house with a brick door, or a wood siding house with a wood siding door.  A door has the opportunity to stand out to add character and depth to a house’s style.

 

 

I thought for the rest of us who don’t have 3 or 4 car garages on our million dollar houses, maybe these photos would be more helpful sources of inspiration…

 

 

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Top Project to Increase Your Home’s Value

If you are thinking of selling your house in the coming months, now is the time to start doing all you can do to increase the value and marketability of your home.  You don’t just have to guess at which projects are the best at recouping your money: Remodeling Magazine contacted 150,000 appraisers, Realtors, and brokers to find out which projects get the best results.  They look at dozens of projects for your home and tell you the cost vs. value results.  You can find the full Cost vs. Value Report on their website here.

 

You might be surprised to learn that the number 1 upgrade is not granite counter tops and stainless steel appliances…

 

 

It’s a new Entry Door.

 

 

 

 

 

 

 

 

 

Across the country, replacing a front door was the one project that consistently recouped the highest percentage of money.

A stunning entry door can add a ton of character to a house and shape first impressions.  Here’s the thing to keep in mind if you’re going to install a new front door: choose the right one for your house.  Not every door goes with every house.

And for my fellow thrifters, you can consider whether or not a nice new paint job for your composite or aluminum door, or stripping and refinishing for your wooden door would give it the new life it needs at a fraction of the cost of replacement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

 

Inspiration For Your Home: Before & After

Don’t think your house is much to look at on the outside? You need to view your home the way Silvio Berlusconi views women: every one- regardless of its outward appearance- has potential. Check out what can happen with some hard work and inspiration.

Farmhouse: Before

After

 

Cottage: Before

After

 

Ranch: Before

After

 

Split-Level: Before

After

 

You might have noticed that all the “after” photos above are computer images, and you’re wondering if it can be done in real life as well.  Here’s a couple real life before and afters.

 

Michigan Ranch: Before

After

 

Bungalow: Before

After

I love Before & Afters because there’s something inherently good about taking something old, or broken, and giving it new life by investing your hard work and creativity into it.  What could be better than that?

Want to transform the way your house looks?  Have an architect or builder do a consult.  Of course, that type of consult costs money.  Not that committed yet?  Start sketching some pictures of your house on graph paper and brainstorm with your friends.

Keep this in mind: the great idea you have drawn out on paper might not always be feasible from a construction standpoint.  Before you get too committed to an idea, talk with a builder.

All of these photos are from thisoldhouse.com, where I often go for inspiration.

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

The Cynic (Your Real Estate Tidbit for the Day)

I am not one of those people who is inherently trusting.  I have always hated taking my car into the shop for any sort of repair because I’m convinced that the mechanic is not just trying to fix my car; he’s trying to rip me off.  He’s going to fix something that doesn’t need to get fixed, or say the thing that took him a half hour to repair actually took him 4 hours.

Same with doctors, contractors, Girl Scouts (just because they’re 9 years old, have delicious cookies, and enjoy camping doesn’t mean they’re not out to scam you.  I mean seriously- they’ve got to be putting something in those cookies.  COME ON PEOPLE… think about it!!!)- basically, anyone who’s got any service to provide or item to sell.

Ok.  Obviously, it is not a healthy way to view the world.

But if you’re like me, here’s something that’s good to know…

RESPA (the Real Estate Settlement and Procedures Act) protects you from a lot of shady happenings that used to be common in the Real Estate Industry.

Here’s an example:

Many buyers come to me without knowing who they want to use for a mortgage lender.  I have 3 specific ones that I recommend to them.  Do I do it because I have some sort of arrangement with those specific lenders?  No.  Under section 8 of RESPA, it is totally prohibited for me to recommend a lender (or a closing attorney, title company, contractor, or any other “vendor”) and then get paid for that referral.

They are serious, too.  A Real Estate agent who is in violation could face up to a year in prison and/or a $10,000 fine.

And for good reason.  It wasn’t that long ago that these types of referral payments were commonplace.  The bottom line was that a Realtor could recommend a certain lender/contractor/attorney to you not because they were a good lender/contractor/attorney, but because he would get paid for the referral.

So, out of all the lenders out there, why do I recommend the ones that I do to my clients?  Because I have worked with a lot of them and I’ve found the ones who are the best.  My clients are spared the time and headache of trying to weed out the bad ones from the good ones, and I get a smooth transaction with no alarms and no surprises.
 

It’s a crazy market- be safe out there.

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Historical Home Detectives

A young couple with a thing for old houses buys a historical home in Massachusetts.  It is listed with the National Register of Historic Places as being built circa 1687, and they didn’t have any reason to believe otherwise.  When they get ready to add an addition onto the home, however, some contractors and historical architects question the date of the original construction.

The story is found on This Old House.  I’m basically just giving you the book report on the article.  Click on the photo at right to read the full story.

 

Detective Work

You’re probably wondering, How do they know?  Here are some of the clues that helped them figure out that their 1687 historical house was probably made in the mid-1700’s:

Framing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The center beam had a rounded edge on bottom, which was a technique not largely utilized until the mid-1700’s

 

Staircase.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The vase shape of the newel posts was a style which was not common until the 1700’s.

 

Will the real original materials please stand up?

The main problem with determining the date of a very old home is the fact that a lot of what you see could be an addition or renovation.  This house had an addition built on the back that was done in the 1800’s.  The thing that’s 200 years old might have been added to the house after it had already been standing for 100 years.  Wow.  That has got to be the definition of historic.

This attic door found in the house was confirmed to be constructed in the 1600’s and part of the original house.  But… the door could have been decades old when it was hung in the new house.  Norm Abram (the guy is awesome- watch the New Yankee Workshop on PBS) explains:

“It was harder to build things then, so people reused parts such as doors and windows. You can’t just assume that a house is as old as the oldest piece of it,”

 

 

 

In the end, the age of the house was determined to be circa 1720 rather than 1687.

Next time you’re walking around Richmond and you see a historic plaque somewhere, it’s possible that there might be more to the true story than is known.

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Behind the Curtain of Real Estate (Pay No Attention.)

People everywhere* are always asking me**, “Jay, what does a Realtor’s daily life look like?  Do you just drive people around and look at houses all day long?”

I’ve always felt like there’s a sort of “pay no attention to the man behind the curtain” element to Real Estate.  You are purchasing one item (a house) from another person, and yet there are dozens of people involved and literally hundreds of pieces of paper to sign.  What is going on and what are all these people doing behind the scenes?  Do Real Estate agents really need to even be a part of the process?

Kristen and I lived in Indonesia for a while, and at the airport in Jakarta, there are these unofficial “baggage guys” in the airport parking lot.  They want to carry your baggage to your car and get paid a couple of bucks for their effort.  This one time, I was walking back to my car with one rolling suitcase- not really struggling with the bags, right- and this “baggage guy” almost wrestles the suitcase away from me so he can roll it the final 50 feet to the car.  Then he wants to get paid for it!

Is that the Real Estate profession in a nutshell?  Someone who gets tries to get paid for their involvement in a transaction even though their services were totally unneeded?

No.  Please please believe me- No.  Good Lord, No.  I’ve said it and I’ll say it again- No.

 

Except, maybe… yes.  Sometimes yes.

 

First the YES: there are still Real Estate agents out there who essentially think they should get paid for just putting a hand on your “baggage.”  If they are on the listing side, all they do is stick a For Sale sign in your yard and they’ve done their job.  If they’re working with a Buyer, they open up a few houses to show you and then you don’t see them until the settlement date, when the house closes and they get paid.

The good news is that those types of agents are a lot harder to find these days.  A lot has changed in Real Estate, even since the early 2000’s.

Now the No: Let me pull back the curtain and show you what actually goes on behind the scenes.  This is a snapshot of what I do when I work with a Buyer client:

First, we discuss what you want- #beds and baths, sq footage, price range, neighborhood, etc.  Then I set up your own personal website to help you organize all the Richmond area houses that match your criteria.

My fancy Realtor software helps me create a waaay better search than Zillow

Limit your search to one specific neighborhood if you want to

Next, I help you navigate through financing.  There are a lot of different types of loans and a lot of lenders out there.  I try to stay informed about all of them and help you secure the right type of loan to meet your goals and stay on budget.  For first time buyers, this step can be especially daunting.  I make it my job to help you figure it out.

Next we do the drive around and look at houses thing.  Like I said, some Buyer’s Agents think this is their entire job.  This is actually probably the smallest part of my job.

When you find the house that you want to buy, I do a CMA (Comparative Market Analysis).  I search through public tax records, do a search for everything that has sold in that neighborhood in the past year, everything that is on the market now or pending, and create a report which will give us a detailed understanding of what the best reasonable (even a reeeaaally good Realtor can’t help you get a $300k home for $200k) price is for that home.

Then we write a contract.  If you know what you’re doing, there are dozens of contingencies, clauses, and subtle (you might read shady there, but don’t… just subtle) ways to create as much leverage as you can while writing a contract.  I help write the contract and negotiate price.

Now we need a closing attorney.  A good one can save you from some serious liabilities when buying a house.  I have found the ones who I think are the best in Richmond and I connect you with them.

By Closing date, there's a lot of paperwork to keep track of

There’s usually anywhere from 30-90 days that it takes from the time you write a contract until the day you can actually close on a house.  During that time period, I am like the head coach of the closing team we have assembled- the Mortgage Lender, the Title Company, the Closing Attorney, the Home Inspector, the Sellers and their Agent, Contractors… I am in constant communication with all of them to make sure they are doing what they need to be doing.  This is arguably the most important part of my job.  All these different people involved in one transaction with one exact closing date… I make sure that everyone on the team is giving their 100% so we make it to the closing table with no surprises.

That, friends, is a peek at what goes on- or should go on- behind the scenes of a Real Estate transaction.

Have any Real Estate question you’re curious about?  Send them my way!

 

 

*My Mom and Grandma

**It happened once

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

On Becoming a Green Homeowner: Energy Efficient Mortgages

UPDATE: Congratulations, Maureen!  You were chosen as the winner of the $25 Tastebuds Giveaway! (chosen by random.org)  Have a great time there, and if you order the pork tacos, think of me!

 

Here’s something that I hope will not be true 5 years from now:

A home with granite counter tops and stainless steel appliances will almost always sell for more money than one with really good insulation and a tankless hot water heater.  The market shows us where out priorities are- and for the most part, our priority is granite counters rather than lowering energy consumption.  I hope that some day in the not-so-distant future, we will re-order those priorities.

 

 


Want to be burdened with an unfortunate sense of responsibility?
 When you buy a home, you are voting for what will be a priority in tomorrow’s real estate market.  Willing to pay more for the home with granite counters and cherry cabinets instead of the one with the tankless hot water heater and green building materials?  You just cast your vote in a market that listens to consumers very well- as all markets do.

A lot of us find ourselves in this position; we’d like to make our home more energy efficient, but it is beyond our budget.  2 things: First, when I owned a home in Philadelphia, I had a $450 heating bill one January- and I kept the thermostat at 60.  I’m sure most people can relate.  The point being, rising energy prices mean investing in energy efficient upgrades for you home can actually make a lot of sense financially.

Second, creating a green home might be easier than you think…

Green Mortgages

If you are looking at buying a home and have environmental responsibility in mind (or if you’re just tired of spending more than you need to on utilities), a Green Mortgage might make it possible.

There are 2 basic types of Green Mortgages:

An Energy Efficient Mortgage can be used to finance the construction of a new house that meets green building standards.

An Energy Improvement Mortgage can be used to make energy efficiency improvements on an old house- replacing old windows, installing insulation, energy efficient heating/cooling systems and/or appliances.


How does it work?

If you are considering buying a home that needs energy efficiency upgrades, tell your mortgage lender that you want to learn more about an energy improvement mortgage.

An energy rater will come to the house to make suggestions for how to get the most bang for your energy efficiency buck.  Then the cost of making those upgrades is added to the purchase price of the house, BUT, you don’t have to qualify for the additional cost of the upgrades.

Want to learn more?  Here are a couple helpful sites:

This one has more info on Green Mortgages

This one has some insight into the rise of Green Houses in the Real Estate market

This one has some ideas of Green Upgrades for your house

 

And of course, helping people buy homes is my job.  Have a question about Green Mortgages or other things Real Estate?  Get in touch with me.

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Compass Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

 

Solutions: Buying a Home with a Minimal Down Payment (Part 2)

If you’re a Virginia resident who wants to buy a home but you don’t have money saved up for a down payment and closing costs, there is a good possibility that you’re not out of the game yet.  The VHDA (Virginia Housing Development Authority) exists “to help put quality housing within the reach of every Virginian.”

The VHDA finances the FHA Plus Loan.  The FHA Plus is designed for home buyers who don’t have sufficient savings for a down payment and closing costs.  You do have to have some savings: 1% of the sales price of the home.  So if you’re looking to buy a $200,000 home, you’ll need to pony up $2,000.  That’s a lot less than the 20% conventional down payment.

Here are a few of the basics, straight from the VHDA website:

Program Details

  • Borrower(s) must have cash available equal to a minimum of 1% of the sales price.
  • The 30-year fixed interest rate for the first and second (both VHDA-financed) mortgage is slightly higher than our standard fixed rate programs.
  • FHA’s standard qualifying guidelines apply (Minimum 620 credit score).
  • Borrowers must complete a VHDA-approved Homeownership Education class.
2 Facts You Might Not Know

1.Part of my job as a Buyer’s Agent is to help home buyers navigate through the confusion of figuring out financing solutions to buying a home.  Have a question about the FHA Plus loan or financing in general?  Give me a call or send me an email.
2. If you’re a Buyer, it doesn’t cost you a thing to hire me as your Buyer’s Agent.  The Seller pays the commission for both the Seller’s Agent and the Buyer’s Agent when a house is sold.  (Yes, Real Estate is sort of confusing that way… but if you’re a buyer, that’s great news for you!)

 
 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.
Contact: jaymcgee.kw@gmail.com

Solutions: Buying a Home with a Minimal Down Payment (Part 1)

It’s time to indulge your inner nerd and talk numbers.  Why?  Because knowing how to play the numbers can easily put a couple hundred bucks back in your pocket every month.

These days, many people are finding that their monthly payments can be several hundred dollars less per month when buying as compared to renting.  The reason- the huge drop in sale prices over the last few years, coupled with record-low interest rates.

Click on the chart below to enter your own Buying V Renting scenario.  The scenario I entered would be typical for a lot of renters in the Richmond area.  I though the results were fascinating.  On your third year of home ownership vs renting, you save over $2,000.  On the fifth year, $5,100.  On the tenth year, $9,200, and so on.

Buying V Renting graph from New York Times

Why Interest is Interesting
People who make payments on their 30 year fixed mortgage will notice something… and it might just keep you up at night with agitation and disbelief: the bulk of your monthly mortgage payment is actually just interest.  Some of your payment is going towards paying down the principal on your home and building your equity.  But most of it is interest.  Yikes.

I’ll use my own home mortgage as an example: I bought a house in 2007 when prevailing interest rates were at 6.8%.  A $200,000 mortgage at a 6.8% interest rate would give you a monthly payment of around $1,512.  Today, with interest rates around 4.5%, that same $200,000 mortgage will cost around $1,221.  Not to mention the fact that $200,000 can buy you a lot more house today than it did in ’07.

$200,000 at 6.8% = $1,512 monthly payment
$200,000 at 4.5% = $1,221 monthly payment
(all amounts are only estimates)

That means that the house you are renting for $1,300 per month, you might be able to own for lower monthly mortgage payments. Adios, landlord.  Adios, pet deposit.

So what can you do if already know that it makes more financial sense for you to buy rather than rent… but you don’t have enough savings for a down payment?

If you are a Virginia Resident, there might be a solution for you…

 

Stop by again tomorrow to learn more about the FHA Plus loan

Okay.  Tell that nerd to scram and watch some ridiculous real life Real Estate listings

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.
Contact: jaymcgee.kw@gmail.com


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