If you’re trying to sell your home, it’s likely your real estate agent has suggested hosting a broker’s open house. But, what is that, exactly? Long story short, it’s an open house not for home buyers, but for their agents so they can determine whether your home is right for any of their clients.
Here’s how to decide how to make the most of this marketing opportunity.
How a broker’s open house is different
The biggest difference between a broker’s open house and a standard open house is who ends up on the invite list. While standard open houses are quite flexible about who can stop by—and might include anyone from potential buyers to curious neighbors—the guest list for a broker’s open house is strictly limited to other real estate agents and industry professionals.
Time is another differing factor. Usually, standard open houses are hosted on Sunday afternoons, because the vast majority of potential buyers have weekends free for house hunting. On the other hand, because a broker’s open house caters to agents—whose weekend schedules are often packed with home showings for clients—it is often held midweek, when agents are more likely to be available.
What happens at a broker’s open house?
At its core, this is another tool that real estate agents use to help market a home. In addition to internet marketing systems like the multiple listing service, it’s a method of debuting your listing to industry professionals in your community.
Once your agent schedules a broker’s open, he will advertise it to his network of industry contacts. Usually a free lunch is also offered as an incentive to show up. On the day of the event, the other agents will be given a chance to tour your home, enjoy the free lunch while catching up with colleagues, and offer your agent their opinions on the property.
Typically, broker’s open houses are held within the first few days of a home being put on the market in order to capitalize on the initial burst of interest that often accompanies new listings. But if there is ever a dramatic adjustment to how your home is being marketed—such as a significant drop in price—your agent may suggest hosting another broker’s open house in order to spread the news.
The benefits of a broker’s open house for sellers
If you’re the type who doesn’t relish the idea of opening your home to crowds of looky-loos who’ll tramp through your rooms and open every closet and medicine cabinet, then a professionally targeted broker’s open may be appealing.
If all goes according to plan, the agents who tour the house will go through their mental Rolodex to see if your property would be a good fit for any of their clients. If so, they’ll likely bring those clients back for a private showing in the near future, especially if the broker’s open was well-attended.
“It creates a sense of urgency“, says Stephen Marchese of Re/Max Central in Blue Bell, PA. “And, a higher perceived value of the house.”
However, even if an offer doesn’t come directly from the broker’s open, it can offer a valuable critique of how your home looks in comparison with other properties currently on the market in your area. Since Realtors regularly have the chance to view a variety of homes, they have the ability to give your agent feedback on how your home is being perceived by others—and how to better attract buyers.
T is for Turkey. T is for Turducken. T is for “Thank God this election season is over, now can we all please stop talking about politics for just one damn weekend?” Whatever your “T,” it’s now T minus three days until Thanksgiving, the glorious holiday when many Americans will spend the entire day sweating in the kitchen—and quite possibly several additional days prior to that, stressfully prepping. As for the big day itself, that oversized fowl will take three to five hours to cook, depending on its girth, and then there are side dishes to prepare and pies to bake. So many side dishes and pies!
After a brief reprieve to actually peck at the food, you’re back in the most important room in your home to clean up a monumental mess.
Even apart from Flightless Bird Consumption Day, Americans are spending more waking hours in the kitchen—cooking, eating, and socializing—than ever before. That’s why the kitchen has become the most obsessed-about and downright valuable room in real estate. But we want details! So we decided to tap our ever-hungry data team to dive into the statistics and apply some cool, hard numbers to this hot obsession.
What we discovered: some fascinating facts about the way we cook and eat today, how that shapes the features we want in our home kitchens, and how they drive the prices that we’re willing to pay. Let’s head to the SousVide machines!
Kitchen confidential No. 1: A trophy kitchen sells your home better than anything else
Once a small, functional space tucked away at the back of the house, the American kitchen has emerged as the showpiece of the home. Top-of-the-line-appliances, rich cabinets, and shining stone countertops have become status symbols. And catnip for home buyers.
“It’s almost not worth calling it a kitchen anymore—it’s a living room that you can cook in,” says Christopher Peacock, a high-end cabinetry designer in Norwalk, CT.
In real estate, the data proves that the kitchen has become the most important room in home buying and selling. Of all homes listed for sale on realtor.com®, 69% of them tout the kitchen as a selling point in their descriptions, compared to 49% that mention the bedrooms and 21% that mention the living room.
Homes that include a “killer kitchen” or “luxury kitchen,” as described by the sellers, sell 8% faster than similar-sized homes in the same ZIP code. And that’s why they’ve become a key part of renovation plans, home decor upgrades, and listings descriptions. Vive la cuisine!
Kitchen confidential No. 2: Small homes no longer mean small kitchens
You can turn out a holiday meal from a cramped galley kitchen, but would you want to? Across the United States, the size of home kitchens varies by region. And you might be surprised to find out which regions of the country love their kitchens the most.
Homes in the Mid-Atlantic region—New York and Pennsylvania—have the largest kitchens (at an average of 170 square feet); while the wide-open West North Central region—the Dakotas, Minnesota, and Iowa—have the smallest kitchens (153 square feet), according to a report from the American Kitchen and Bathroom Association.
While larger homes tend to have larger kitchens, the scale of the increased kitchen size is not proportional to the overall home, the report notes.
“We see extra space in the Mid Atlantic, where people are more affluent, and prime land is relatively inexpensive. In the Southwest, where families are bigger and need a bigger kitchen. And, of course, everything is bigger in Texas,” says Javier Vivas, realtor.com’s economic researcher.
High-end kitchen mania is not universal, however. In America’s heartland, people appear to be less enthusiastic about investing in a luxury kitchen. Affordability, efficient layout, and outdoor features are more appealing to these folks. More of them are maximizing the utility of a small kitchen with clever organizers, like racks that can be attached to a drawer. A rolling island, which can be used both as a prep area and dining surface, is becoming a popular way to save sanity on Thanksgiving Day, says Heidi Féliz-Grimm with Martha O’Hara Interiors in Minneapolis.
Kitchen confidential No. 3: Some features add big value, some don’t
If you want to keep your home from looking dated, you need to up the ante in the kitchen. At the same time, kitchen renovations really can cost you—so home owners need to be wise about putting their money where their mutton is (or where it could be, judiciously broiled and served with rosemary and garlic-infused fingerlings. Delicious!)
As we can see from our listings, some features are better at adding value than others. Custom cabinets that pull the kitchen together, a center island that holds everything you need, and a capacious pantry to stock with your favorite essentials are among the most frequently mentioned features.
At the opposite end of the spectrum, you should probably stay away from over-the-stove microwaves, maple cabinets, and 4 x 4 tile floors—those are so yesterday.
Kitchen confidential No. 4: The chef’s kitchen is growing in popularity
If budget is not a concern, having a professional chef’s kitchen is the ultimate dream. Currently, 4.7% of homes on the market describe their kitchen as a “chef’s kitchen” or “gourmet kitchen,” up from 3.3% three years ago. Homes with this feature carry a median price tag of $589,900.
While there’s still no standard definition of what a “chef’s kitchen” includes, we were able to calculate which features are most frequently associated with one. The idea is becoming more and more specific and tangible to homeowners and would-be buyers alike.
The No. 1 principle: Think big, and bigger. That means an oversized fridge (it’s even better to have a separate fridge and freezer); dual commercial-quality ovens to separate the main dish and the sides, a six-burner stovetop (or two!) so your pans don’t crowd each other, and a butler’s pantry that serves as a catering station.
Those are the most touted gourmet features, but we also couldn’t help drooling over indulgences like a walk-in refrigerator, blast chiller (it cools beverages and food within minutes), and a wood-fired pizza oven.
Kitchen confidential No. 5: The nation is split—between open kitchens and formal dining rooms
For years, HGTV has been telling us to knock down walls and open up the kitchen, so that families can spend more time together, whether they’re cooking or eating.
“I can’t even remember the last time somebody asked me to put a wall in their kitchen,” says Féliz-Grimm.
But the formal dining room still has a hold on some parts of the country. For each state, we counted the number of homes in our listings that mention explicitly whether they have an open kitchen or a formal dining room. Here we present you with the United States of America—divided by kitchen layout:
In New England, where many of the country’s oldest homes tend to be smaller, opening up the kitchen and creating a feeling of space is the focus of many home renovation projects. In the Southwest, where balmy weather dominates most of the year, an open floor plan increases natural light and the connection to the outdoors.
This does not apply in the South, where the formal dining room has been a tradition for centuries. People are far more likely there to enjoy their turkey with all the family in a separate dining room, often lit up with chandeliers and adorned with plush drapery.
When you buy a home, you will be showered with offers to buy insurance—and not just one type, but many types. Such awesome deals! So which ones do you really need?
There are a few that are downright essential, and others are nice but not necessary. Furthermore, others are total rip-offs to avoid at all costs.
To help you differentiate among them all, here’s a rundown of the types of insurance you’ll likely encounter on your home-buying journey and a reality check on whether you need them.
Do you need it? Absolutely!
Normally, this isn’t even a question because it’s almost always mandatory when you’re getting a mortgage. But if you’re paying all-cash, you have the option of skipping on title insurance. You shouldn’t.
Title insurance “ensures both the lender and the owner’s financial interests in the home are protected against loss due to title defects, liens, or other matters,” says Liane Jamason, a Realtor® and owner of the Jamason Realty Group at Smith & Associates Real Estate in Tampa, FL.
It’s especially important to get title insurance in transactions like short sales and foreclosures, which often carry the high risk of some kind of tax lien being attached to the property. Title insurance is going to safeguard against your needing to pay for liens, and will ensure the title is clear so no one down the road could claim they own the property and file a lawsuit.
If for some reason you’re dead set against getting title insurance, Jamason suggests you should at least get a lawyer to “thoroughly check the property’s history to ensure there could be no future claims to title.”
Do you need it? You bet
Like title insurance, this is another one that’s not required if you own the house outright (you’ll need to have it with a mortgage), but this is necessary. Homeowners insurance covers you for a variety of things like fires and storms. You’ll want it even if you aren’t legally required to have it.
Eric Kossian, agency principal of InsurePro, a Washington state insurance agency, cites an example of a wealthy homeowner who had paid off his house and “figured since he had never had an insurance claim he would save himself the $700 a year in premium.” Then some kids near his home started a fire, which got out of control and burned down several houses—including his. It cost the homeowner about $450,000 in damages. Consider this a cautionary tale.
Extra moving insurance
Do you need it? Yes, if you’re smart.
Bare-bones, federally mandated moving coverage offers just 60 cents per pound of an item, and is known as “released value protection.” So if something breaks and that’s your only coverage, you won’t get back the full cost of the item, just what’s calculated under the coverage limits.
There’s also “full-value protection,” which can be purchased from the moving company, but you need to specify which items are worth more than $100 per pound. The moving company can opt to repair the item back to its original state, or give you the fair market value of the item—not necessarily what you paid for it. Plus, full-value protection excludes items over $5,000. Opt for this instead of released value protection. (Rates vary by moving company—it’ll be more than released value, but it’s worth it.)
If you’re moving some really valuable stuff, you can purchase extra insurance from a third-party insurance provider. This typically costs $100 per $10,000 of coverage.
Do you need it? It depends on where you live and how lucky you feel.
Flood insurance is a tricky one. Requirement for flood insurance can be mandatory for homes in flood-prone areas. Otherwise, it’s optional. The biggest problem with flood insurance is you don’t know you need it until it’s too late. Last year, flash floods in Texas and Oklahoma washed homes away. In 2012, Hurricane Sandy hit the Northeast and left thousands in low- or moderate-risk flood zones with water-damaged homes.
Torrential rain and freak storms can happen anywhere.
“If you are not in a designated flooding area, it is still a wise idea to get flood insurance, and typically it is very affordable if you are not in a low-lying area,” Jamason says.
So this one’s sort of a toss-up. If you have it, you may never need it. But it’s worse to really need it, and then not have it. A similar argument can be made for earthquake insurance.
Private mortgage insurance
Do you need it? Hopefully no.
For most loans, private mortgage insurance is mandatory if you don’t have a 20% down payment. But if you can put down at least that amount, it’s well worth doing to avoid PMI. The reason: Mortgage insurance benefits only the lender—it does nothing for you, so get rid of it as quickly and cheaply as possible. Some options to avoid PMI include piggyback loans, lender-paid PMI, and single-payment PMI.
Mortgage protection life insurance
Do you need it? Not really.
In case you die while you’re still paying off a mortgage (bummer, we know), this insurance is supposed to make sure your family is financially covered when it comes to paying your mortgage. But it’s basically pointless.
“I would say as a general rule that mortgage life insurance or mortgage protection insurance is unnecessary,” says David Reiss, a law professor specializing in real estate at Brooklyn Law School. Reiss says consumers “are generally better served by a cheap term insurance policy from a well-rated insurance company,” and “you will generally get more protection per premium dollar with a term life insurance policy.”
Do you need it? Usually not.
Umbrella insurance is basically insurance for your insurance. It vastly expands the amount of damages your insurance will cover. But it’s not necessarily worth it.
“One common rule of thumb is that an umbrella insurance policy should equal the net worth of the insured,” Reiss says. So for the average middle-class American homeowner, Reiss notes that an umbrella policy is generally “less relevant,” probably because your regular insurance covers enough. For the rich, or those who are “reasonably expecting” a rise in income, Reiss says it can be a good idea and worth researching further.
Luxury builders have favored the Mediterranean and Tuscan style of homes in recent years, and it’s no wonder: The median list price of that style of home is $749,900.
However, the public’s love with this style of home may be waning. For the past four years, the list price of Mediterranean homes has stalled. On the other hand, more modern home styles are seeing quicker appreciation, surging 37 percent since 2012, according to an analysis by realtor.com®.
“Modern homes are built to be more energy-efficient, and modern-looking,” says Tim Cannan, president of PreservationDirectory.com. “It’s easier to heat and cool them, and they’re cheaper to repair as opposed to Mediterranean or Spanish style – those red clay roofs could wind up costing much more. So it’s really the size and scope that determines what people can afford.”
So you know the prices, but which home style is the most popular in the U.S.?
The ranch home is the most popular real estate style in 29 of the 50 states, according to realtor.com®’s analysis. Ranch homes tend to be able to be built quickly and inexpensively compared to some other styles. Its popularity soared in suburbia with the rise of the automobile culture in the 1960s, realtor.com® reports.
Realtor.com® describes the second most popular architecture style in the U.S. as more “traditional,” which encompasses several classic designs defined by simple rooflines and symmetrical windows.
A closer look reveals quite a few regional architecture differences. For example, in the Northeast, colonial homes – known for their rectangular or box-shaped styles – remain popular. Victorians, on the other hand, are popular in the East Coast and into the Midwest. These homes have intricate moldings and ornate shapes carved into beams, along with pitched roofs, textured shingles, and long front porches.
You’ll find plenty of Cape Cod homes in New England, and rustic cabins nestled in the Appalachian, Rocky, and Sierra Nevada mountain ranges.
Differences arise by a state level too. For example, realtor.com® notes that in Illinois, Georgian home styles are popular while in California the Spanish style rules.
Friday, November 25, 2015 – Saturday, January 7, 2017
The Mission Inn Hotel & Spa - Southern California’s historic AAA-Four Diamond hotel will kick off the holiday season on November 25, 2016 with Festival of Lights a free, six-week-long holiday extravaganza featuring one of the nation's largest holiday light collections of its kind. Now in its 24th year, Festival of Lights is an annual gift to the community from property owners Duane and Kelly Roberts, who saved the historic hotel from destruction in 1992.
The beloved Southern California tradition recently named “Best Public Lights Display in the Nation” by USA Today creates a magical, Disneyland-like experience in the heart of Riverside and attracts more than 250,000 visitors from all over the world each year, commencing with the famous “Switch-On” Ceremony, a spectacular event in which the castle-like hotel is instantly illuminated with nearly 4.5 million holiday lights followed by a full fireworks display.
Highlights of Festival of Lights include more than 400 animated figures including angels, elves and Dickens carolers; appearances by Santa Claus; the world’s largest man-made mistletoe measuring 12’ x 8’; horse-drawn carriage rides; elf tuck-ins; freshly fallen snow; elaborately decorated Christmas trees in the lobby and throughout the hotel; and delectable holiday confections at the famous Casey’s Cupcakes, among other festive offerings.
New this year, The Mission Inn Hotel & Spa will be offering a gingerbread theme throughout the hotel. This includes the "Gingerbread Dreams Suite" room package, gingerbread spa treatment at Kelly's Spa, three gingerbread villages located in the lobby, gingerbread turn-down service, gingerbread martini & dessert available in all four of the hotel's restaurants. Casey’s Cupcakes also feature delectable holiday confections to include Glamorous Gingerbread cupcakes.
Those wishing to stay at the historic hotel during Festival of Lights can select from a variety of special room packages. Whether it’s a family tradition, romantic getaway or gathering with friends, The Mission Inn Hotel & Spa makes every stay during Festival of Lights unforgettable.
The Mission Inn Hotel & Spa: www.festivaloflightsca.com
The City of Riverside: www.riversideca.gov/fol/
Featured Event Weight -6
Main Street Riverside between University & Mission Inn Avenues
Riverside, CA 92501
Mortgage rates took their biggest leap in two months on Friday, thanks to a sell-off in the U.S. bond market. Mortgage rates loosely follow the yield on the 10-year Treasury. It was only an eighth of a percentage point move, but enough to send stocks of the nation's homebuilders, as well as anything else that touches housing, tumbling.
The numbers on the tickers are dramatic, but the impact of higher mortgage rates on the nation's neighborhoods will take different forms.
First and foremost, rising rates scare a whole host of housing players: buyers, sellers, builders and homeowners. The average contract interest rate on the popular 30-year fixed mortgage is still historically very low, around 3.5 percent. The historical average for that rate is just more than 8 percent, and it has been as high as 18 percent. Still, a move higher is scary.
"When it comes to rates and financial markets in general, things can always go either way, but I will say that the past two days are the scariest we've seen since before Brexit," wrote Matthew Graham, chief operating officer of Mortgage News Daily on Friday. "This is the kind of move that should be treated as a serious threat to low, stable mortgage rates until proven otherwise."
Higher mortgage rates make homebuying more expensive. No question. The move now could make some buyers want to get into a contract quickly before their costs rise. That, however, has always been a very short-term stimulus. Higher rates could also scare some sellers into lowering prices slightly, to sell before they lose potential buyers. For homeowners, this could be one more reason to jump on a mortgage refinance. Even with rates sitting at near-record lows for months, there are still hundreds of thousands of borrowers who have yet to take advantage and reduce their monthly payments.
But even if the Federal Reserve raises its funds rate this month, mortgage rates may not move much higher. After the central bank made its first increase last December, mortgage rates moved up briefly, but then fell again.
"The easiest way to say it is that 'longer-term' rates (stuff like 10-year Treasury yields and mortgage rates) do indeed tend to move with Fed rate hike expectations, not the Fed rate hike itself," explained Graham. "Let December be your guide. The Fed hiked and rates fell. Now, why was that? Because rates had just spent the past 10 months rising in anticipation of an impending Fed rate hike."
So let's say rates rise a little bit in anticipation. There is only a small chance they would move a full percentage point higher. For that matter, mortgage rates have only gone up by half a percentage point 14 times since 1971, according to an analysis by John Burns Real Estate Consulting. Burns is predicting rates could stay below 4 percent at least through 2018. Still, a mortgage rate increase will have different outcomes for different segments of housing.
"Historically, they have hammered builder stocks, hurt new home sales bad, hurt existing home sales a little, and had very little impact on home prices unless there was a recession too," noted John Burns. "My conclusion is that investors are right to punish the stocks, but often punish them too hard."
Even if rates make another small move higher, there are bigger things weighing on housing right now than mortgage rates. For one, tight supply. The severe lack of homes for sale is pushing home prices higher and hurting affordability far more than a slightly higher interest rate. Homebuilders need to ramp up production, but they are fighting higher costs for land and labor, as well as a far more restrictive landscape in terms of construction regulation.
CORRECTION: This story was corrected after John Burns earlier misspoke. Mortgage rates have gone up by half a percentage point 14 times since 1971.
Ready to house hunt? It’s a jungle out there: Prepare for a flurry of paperwork, stampedes of buyers competing for the same digs, and other challenges before you get your hands on those house keys. We won’t lie: The process can be complex and stressful—which is why having a pro by your side can make all the difference.
You might have heard of buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent? True to their name, buyer’s agents assist home buyers every step of the way; they can also save you tons of time and money on the road to homeownership.
Read on to learn how a buyer’s agent can help, and how to find the right one for you.
Benefits of using buyer’s agents
“A buyer’s agent will guide you through the home-buying transaction and be at your disposal for any questions or concerns,” says Shane Wilcox, a Realtor® with Partners Trust. Here are some of the things a buyer’s agent can do:
- Find the right property. After determining what clients are looking for and what they can afford, the agent will schedule appointments to tour homes that fit the bill. The agent can also explain the ins and outs of various properties and neighborhoods to help buyers decide which home is right for them by explaining the pros and cons of various options.
- Negotiate the offer. The buyer’s agent will advise clients on an appropriate price to offer and present it to the seller’s agent. “Then they will negotiate on your behalf and write up the contracts for you,” says Matt Laricy, a Realtor with Americorp Real Estate in Chicago. This is where the agent’s experience in negotiating deals can save you money and help you avoid pitfalls like a fixer-upper that’s more trouble than it’s worth.
- Recommend other professionals. A buyer’s agent should also be able to refer you to reliable mortgage brokers, real estate attorneys, home inspectors, movers, and more. This can also help expedite each step of the process and move you to a successful sale all the faster.
- Help overcome setbacks. If the home inspector’s report or appraisal brings new issues to light, a buyer’s agent can advise you on how to proceed, and then act as a buffer between you and the sellers or their agent. If negotiations become heated or hostile, it’s extremely helpful to have an experienced professional keeping calm and offering productive solutions.
Buyer’s vs. listing agent: What’s the difference?
Buyer’s agents are legally bound to help buyers, whereas listing agents—the agent representing the home listing—have a fiduciary duty to the home seller. “That’s why it’s in your best interest as a buyer to get an agent who is there to represent you,” explains Alex Cortez, a Realtor with Wailea Village Properties LLC in Kihei, HI. “Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently fight for your interests and rights.”
Let’s say, for instance, you walked up to the listing agent at an open house and gushed about how you love the home and want to buy it, but you will need to move soon because you’re expecting your second child and need to decorate the nursery pronto, or the lease on your rental is up in a couple of months. A seller’s agent could then use this information against you by informing the seller that your clock is ticking, so they shouldn’t budge too much on their asking price—or at all.
Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this info private from sellers (and their agents) so it can’t be used against you.
How to find a buyer’s agent
A good buyer’s agent can ease your way to homeownership—and a bad one can result in a bumpy ride. As such, don’t just take the first buyer’s agent you meet (which is what two-thirds of home buyers do), or blindly accept the recommendation from a friend (over half do this). Instead, it’s best to interview at least three agents and ask them a few questions, including the following:
- What neighborhoods do you specialize in? Real estate requires local expertise, so you should find an agent who’s extremely familiar with the areas you’re interested in.
- What’s your schedule and availability? Part-time agents who are committed can do a fine job, but if the house of your dreams pops up or you encounter last-minute closing snafus, you want an agent who will be readily reachable.
- How long have you been a real estate agent? You ideally want someone with a couple of years of experience, and a proven track record of selling homes.
To find real estate agents in your area, head to realtor.com/realestateagents, where you can also read online reviews provided by past clients and learn more.
The agent/buyer contract
Once you agree to work with an agent, you will have to sign a contract called an Exclusive Buyer Agency Agreement outlining the agent’s services and compensation (more on that next). This contract also means that this agent will be your sole representative and that you won’t work with other buyer’s agents.
How much do buyer’s agents cost?
Home buyers need to worry about the expense of hiring a buyer’s agent. Why? Because the seller pays the commission for both the seller’s agent and the buyer’s agent. Typically the commission equals about 6% of the home’s sales price, which is split evenly between both agents (on a $200,000 home, that would be $6,000 apiece).
The holidays are here so let’s gather around to cheer! Join us for the annual Holiday Lighting Celebration on Sunday, December 4, 2016 at 4 p.m. at the Historic Civic Center Front Lawn (Map).
Enjoy an evening of holiday cheer at this family-friendly event featuring a plethora of activities!
- Live Entertainment by Arts Alive
- Crafts at Santa’s Workshop
- Take a photo with Santa
- Play with Real Snow
- Tasty goodies and warm refreshments will be available for all to enjoy!
Start the Season of Giving!
The Corona Fire Department will be collecting new unwrapped toys for the Spark of Love toy drive! Guests at the celebration will have the opportunity to participate in “Light up a Life” with Corona Regional Medical Center Hospice Auxiliary and purchase a luminary bag to remember loved ones lost.
The Celebration would not be possible without the generous sponsorship of: Thomas Miller Mortuary; Vulcan Materials Company; and Lifetouch Photography, as well as our supporting organizations, the Corona Partners for Parks and Recreation, the Corona-Norco United Way and Arts Alive Cultural Arts Council.
Hope to see you and your family at the Holiday Lighting Celebration! The event is free and parking is located at Corona City Hall (Map). For more information on this event, please contact the Library and Recreation Services Department at 951-736-2241.
Buying a house can involve big and scary terms, and “escrow” ranks near the top. So what is escrow, anyway?
The good news is that escrow is not as ominous as it sounds. In the home-buying process, escrow is a financial tool that allows you to set aside important items such as the buyer’s earnest money check and purchase agreement document in an impartial holding area, where it will stay until all of the details are worked out between a buyer and a seller, says Andy Prasky, a real estate professional with Re/Max Advantage Plus in Twin Cities.
The escrow officer is a third party—perhaps someone from the closing company, an attorney, or a title company agent (customs vary by state). How much does escrow cost? That varies too—as well as whether the buyer or seller (or both) pays—with the fee for this service typically totaling about 1% to 2% of the cost of the home.
How escrow works
The third party is there to make sure everything during the closing proceeds smoothly, including the transfers of money and documents. Escrow protects all the relevant parties by ensuring that no funds and property change hands until all conditions in the agreement have been met.
Along the way, proper documentation is filed with the escrow officer as each step toward closing is completed. Contingencies that might be part of the process could includehome inspection, repairs, and other tasks that need to be accomplished by the buyer or seller. And every time one of those steps is completed, the buyer or seller signs off with a contingency release form; then the transaction moves on to the next step (and one step closer to closing).
Once all conditions are met and the deal is finalized, the money due to the sellers is transferred to them. Meanwhile an escrow officer clears (or records) the title, which means the buyer officially owns the home.
How escrow protects buyers and sellers
Escrow may seem like a pain, but here’s how it can work in your favor. Let’s say, for example, the buyer had a home inspection contingency and discovered that the roof needed repairs. The seller agrees to fix the roof. However, during the buyer’s final walk-through, she finds that the roof hasn’t been repaired as expected. In this case, the sellers won’t see a dime of the buyer’s money until they fix that roof. Talk about a nice safeguard for the buyer!
Sellers benefit from escrow, too: Let’s say the buyers get cold feet at the last minute and bail on the deal. This may be disappointing to the seller, but at the very least, buyers have typically ponied up a sizable chunk of change for their earnest money deposit. This money, often totaling 1% to 2% of the purchase price of a home, has been held in escrow. When buyers back out with no legitimate reason, they forfeit that money to the seller—a decent consolation for the sale’s failure.
Escrow, in other words, is the equivalent of bumpers on cars, keeping everyone safe as they move forward in a real estate transaction. Odds are, no one’s trying to swindle anyone. But isn’t it nice to know that if something does go wrong, escrow is there to cushion the blow?
So you think you’re finally ready to make the jump from renter to homeowner? Awesome! In this exciting but admittedly scary time, you might be inclined to turn to friends and family for advice—especially if they own homes.
But beware, dear home buyer of the future: Those close to you might not be the experts you think they are. You could be heeding bad (albeit well-intentioned) advice without even knowing it.
So we’re here to bust the most common misconceptions about home buying so you can do this thing the right way. Because this is what we do.
Myth No. 1: The first step is looking for a house
Perhaps you just want to get a feel for the area. You know, have something in mind before you sit down with a Realtor®. I mean, you’re not really looking yet, right?
Stop right there. Even if you think you’re just browsing, you run the risk of setting your heart on something, only to have it broken.
“A buyer might be viewing homes that are in a higher or lower price range than what they are qualified for,” says Connie Antoniou, a broker associate in Barrington, IL.
Browsing is always fun, but when it comes to serious home-buying work, you need to make sure your credit is in top-notch shape before you get started for real. Also, don’t forget to get pre-approved for a mortgage before you embark on your home-buying journey. This will determine what your budget is.
Myth No. 2: A 30-year mortgage is the best option
If you think that the longer you agree to invest in your home, the cheaper the mortgage payments will be, think again.
Most people opt for 30-year fixed-rate mortgages and for valid reason: Monthly payments for a 30-year fixed-rate mortgage are lower than its 15-year counterpart.
But consider this: You could end up paying more during the life of the loan if you pick the 30-year option instead of the 15-year mortgage. That’s because essentially, with a 30-year loan, you’re borrowing the same amount of money for twice as long—at a higher interest rate.
“If you have $1,000, would you rather put that toward your monthly payment for your house or is there a better place for your money?” asks Samantha DeBianchi, Realtor and founder of DeBianchi Realty in Florida. “If you’re more focused on paying down the house versus the interest, a 15-year option is great.”
No, we’re not saying the 30-year option is a bad one. But keep an open mind toward other loan plans, including an adjustable-rate mortgage. If you aren’t set on staying in your home for the long haul, this could be an ideal mortgage for you.
Myth No. 3: Your down payment must be 20%
Sure, a 20% down payment is ideal if you want to avoid that pesky private mortgage insurance otherwise known as PMI. But many lenders will be glad to offer up home loans with 10% or 5% down—as long as you’re willing to foot the monthly bill for PMI. Or you can skip the conventional loan and head to the Federal Housing Administration for a government-backed loan with only 3.5% down, if you qualify.
In fact, there are thousands of options for down payment assistance. And while many programs are geared toward low-income home buyers, you don’t have to be destitute. There are lots of different ways you can qualify for help on the local or federal level.
Myth No. 4: The only up-front cost is a down payment
As if! For one thing, the seller might determine you’re responsible for closing costs, which can be anywhere from 3% to 6% of the purchase price—and those costs can change drastically depending on your state. And don’t forget the slew of fees, taxes, and other costs for inspections, credit reports, insurance, among others.
Myth No. 5: You can’t buy with bad credit
If you’re looking to get a conventional loan, having bad credit might give you a full stop. But FHA loans require only a 3.5% down payment and borrowers with low credit scores—even under 600—can qualify. Keep in mind, though, that FHA loans may look great at first, but they definitely aren’t for everyone.
Myth No. 6: You don’t need a home inspection
You might be tempted to believe this tall tale, especially if your housing market is hot and you’re worried your dream home could be sold in a split second to someone else whowaives the home inspection.
But beware: Sellers are banking on your skipping this crucial step. It means you’ll get the home as is, including any and all problems that come with it. And sometimes those problems aren’t exactly visible.
“Just spend the money for a really thorough inspection, because in the long run it can save you a lot of money and time,” DeBianchi says.
Myth No. 7: The asking price is set in stone
Much like buying a car, the offer you make on a house does not need to be the asking price. If you have stellar credit, pre-approval, and a down payment ready to go, sellers might be more willing to negotiate than to wait for another, possibly less awesome, buyer to come around.
Plus, if your home inspection (you know—the one you got because you’re smart) turns up issues, you can use those to your advantage in your negotiations.
Myth No. 8: You don’t need an agent
You might think you can do this home-buying thing solo. After all, isn’t that what the internet is for?
This is where we tell you to resist the urge to DIY your first home purchase and call a Realtor instead. They’re pros who bring expertise to the table—everything from negotiating chops to turbocharged searching power (yes, they have tools to see stuff you can’t). Trust us: They know more than you do.
Myth No. 9: Schools don’t matter if you don’t have kids
We get it: You love the house, it’s in your price range, and you want to move fast. But there’s more to it than that.
The neighborhood you choose matters—both now and later when you might consider selling. Even if you don’t have children, good schools are a sign of a good neighborhood. Also, check out the area’s walkability, your commute to work, and any other features that would make the hood a good fit for your lifestyle—now and a decade from now.
Whether you’re buying or selling a home, one question that’s always front and center is the price: How much is a home worth? That’s a tricky question to answer, but probably the best starting point is to know a home’s fair market value, or FMV.
A home’s fair market value is the price it would sell for in a perfectly logical world—one where both buyer and seller are acting of their own free will (in other words, they aren’t desperate to strike a deal), are reasonably aware of a home’s good and bad points, and could just as easily choose a different house that suits their needs better.
In such a world, market forces reign. Buyers and sellers negotiate up or down from their various positions and agree on a home’s price. Deal done. All is good!
Fair market value vs. market value
A home’s fair market value is similar to a home’s market value—what it would fetch on the open market—but is used in specialized circumstances where the concept of fairness is important to evoke so that the home’s price carries more weight.
“FMV is typically brought into the real estate conversation whenever a sales price is being scrutinized,” says Robert Pellegrini, a real estate lawyer in Boston. Here are some circumstances where you’ll likely hear about a home’s fair market value:
- Property tax assessments.
- Home insurance claims—if a house suffers damage from a fire, flood, or other disaster, the insurer will look to FMV to determine compensation.
- Refinancing a home loan—the bank will typically use a home’s fair market value as a measure of how much the home is worth to determine refinancing terms.
- Estate sales—if the homeowner has died and a relative wants to purchase the property, the court will look at FMV to determine a price.
- If the government wants to “buy out” a homeowner to use that land to, say, build a highway or school, the owner is typically entitled to be compensated at fair market value.
- Short sale—this is when a home is worth less than the owners owe on their mortgage. In this case, the owners must persuade the lender to let them sell the home for some amount that is less than the balance of the home loan they still owe. “When a bank does allow this, the bank wants to make sure that the short-selling purchase price is at least FMV for the property,” says Pellegrini. Because, of course, no one likes a total loss!
How is fair market value determined?
“Let’s be clear about one thing: There is no exact mathematical formula that calculates fair market value,” says mortgage lender Michael Sema, CEO of Get a Rate. “Information is key, and the best way to obtain a home’s true FMV is … by hiring a professional licensed appraiser.”
To determine fair market value, a licensed appraiser gathers and measures the qualities of a home, such as its size, condition, neighborhood, and other factors. This information is used by lenders, attorneys, insurance companies, and other agencies to help determine a fair price.
All that said, no one ever proclaimed that life (or the housing market) is fair—which is why homes may often sell for an amount far different from this figure.
If, say, a family is desperate to buy a certain home because it’s in a coveted school district and their twins are entering kindergarten that fall, they might be willing to pay substantially over a home’s fair market value. Or if a home seller has fallen ill and has to sell quickly to cover medical bills, he or she might be willing to settle for less than a home’s FMV.
But in an ideal world, fair market value is the benchmark, and probably the closest number to what a home is truly worth.
At its heart, fair market value helps prevent home sellers and buyers from being taken advantage of, and is a good thing for both parties. And it’s worth knowing the term in case you feel like someone’s stance on a home’s price is off base. Just point out, “I think that’s pretty far above/below this home’s fair market value.” Who knows? If you’re right, this argument could persuade the seller or buyer to budge.
Building Your Rain Garden
After planning you rain garden, the next step is to build, plant, and maintain it. Use string, rope, a garden hose, or builder’s chalk to mark out the edges of the planned garden. Double check that there aren’t any utilities in the way, and that you aren’t disturbing existing desirable vegetation. The roots of many trees extend as far out as the edge of the canopy.
Decide where you want the inflow and overflow to be. Mark those locations with stakes. The inflow is where water will enter the rain garden, and the overflow is where excess water will drain off. You can have more than one inflow, or no specific inflow.
A small, shallow rain garden can be excavated by hand, but if your rain garden needs to be larger or deeper, consider renting a mini-excavator. If using a mini-excavator, be careful not to drive it into the garden itself, as it can easily compact the soil, dramatically reducing drainage rate.
You will need to dig beyond the ponding depth to provide room for adding soil. The recommended soil depth is 12-24 inches. If your soil is poorer quality, such as a clay heavy soil, consider going with a soil depth of 24 inches, to allow more room for plant roots and water storage. You should dig a hole that is as deep as the soil depth plus the planned ponding depth plus 6 inches for overflow. The extra space for overflow might not be needed if you intend to create a berm, a raised line of soil. A berm is recommended for rain gardens on steeper slopes. However, sandy soil is ill-suited for a berm.
You’ll need to either import new soil or alter your current soil. Consider importing new soil if your soil is poor. You can alter soil by mixing in compost, to help your plants establish themselves. You’ll need to know how many cubic yards you want, since many soil companies measure deliveries in cubic yards. If adding compost, mix 2 parts soil for 1 part compost.
- First, convert the soil depth to feet. Divide the soil depth by 12 to get the number of feet.
- Then, multiple the soil depth (in feet) by the area of the rain garden (in square feet).
- Your answer will be the number of cubic feet you need. There are 27 cubic feet to 1 cubic yard, so divide the number of cubic feet by 27.
- Your answer will be the number of cubic yards you need.
- If composting, divide your number by 3 to get the number of cubic yards of compost.
Don’t add sand to clay-heavy soils in an attempt to improve soil quality, since this can create a concrete-like texture.
Your rain garden will need to be as level as possible overall, so that water doesn’t pool and spill over one side. If digging on a fairly flat surface (less than 5% slope), dig soil to the depth you decided on earlier. If digging on a steeper slope (5% or greater), then more care will need to be taken. The easiest way to dig out a steeper slope is to dig the downhill side to the desired depth, then create a flat bottom.
To create the overflow containment area, either construct a berm or dig down from the surface.
A berm should cover three of the rain garden’s edges – the downhill edge and the two sides perpendicular to the slope. A berm should be at least 6 inches tall and at least 12 inches wide along the downhill edge of the rain garden, tapering down from 6 inches to level with the ground uphill on the sides. Remove any vegetation under where the berm will go. Carefully compact the berm’s soil. If the overflow extends through the berm, line it with rocks to prevent erosion.
If choosing to dig down, start out 12 inches from the edge of the rain garden and construct a slope 6 inches down into the rain garden proper.
Install the inflow after excavating, but before adding in the soil. The inflow (or inflows) can consist of spout extensions, pipes, swales, runnels, or other features. Line the swale and the exit point of pipes and spout extensions with rock to slow down water entering the rain garden.
Carefully fill the rain garden with soil, gently walking over the soil every 6 inches to lightly tamp it down. Fill the soil until it is at the desired soil depth, checking that you’ve left room for the ponding depth and the overflow. Once done, check that the bottom of your rain garden is level.
Use washed/sediment-free round rocks (such as cobble or river rocks) that are a minimum of 2 inches in diameter to line the inflow and overflow. If the overflow passes through a berm, be careful to provide extra protection and extend the rock-lined overflow at least 4 feet past the berm to help prevent erosion. Consider edging the rain garden with the same rocks, to help prevent encroachment from the lawn and to nicely tie-in the overflow and inflow.
Planting Your Rain Garden
Rain gardens can be split into three zones for plants.
- Zone 1 is at the center and bottom. Plants in Zone 1 should be able to thrive in standing water for at least a few days at a time.
- Zone 2 is on the side slopes (of the overflow area and/or the berm). Plants in Zone 2 should be able to tolerate occasional standing water or water-logged soil.
- Zone 3 is on the perimeter of the rain garden, including the opposite slope of the berm. Plants in Zone 3 should be those that prefer drier conditions.
A successful rain garden planted with native species will attract beneficial insects and birds, further brightening your garden. The National Wildlife Federation has guidelines for developing wildlife habitats, and several states have lists of plants native to them. Your local plant nursery should also know what grows best in the area, when and how to best plant each species, and how best to care for specific plants.
Choose plants with a mixture of different textures, heights, and bloom times for visual interest. Include some evergreens in the mix to have year-round color. Plant according to each plant’s size at maturity, so that plants don’t overcrowd each other. If there are underground utilities nearby your rain garden, choose plants whose roots won’t threaten pipes.
Consider grouping plants by type and sticking plastic labels into the ground with the name of the plant. This will help you identify your plants when weeding, especially when they’re still young.
Maintaining Your Rain Garden
Water immediately after planting and continue to water as needed. Most plants will have instructions saying how often they need to be watered. Once plants have established themselves, you should only need to water during droughts or dry seasons if you’ve chosen native plants.
Maintain access to the bottom of the rain garden so you can still weed even after plants are mature. A few flat rocks can serve as stepping stones without compacting the soil. Weeding will be needed for at least the first two years. Weed by hand, removing only those plants you’re certain are weeds. Make sure you remove the weed’s roots. Even after plants have established themselves occasional weeding may still be needed.
Mulch the garden, especially when plants are still establishing themselves. Mulching helps retain soil moisture, control weeds, replenish soil nutrients, and prevent erosion.
Avoid using fertilizers, pesticides, or herbicides as these things can pollute your rainwater run off and damage other systems downstream. Natural compost is okay to use.
And last but certainly not least – enjoy! Get the whole family involved with planning your rain garden, discussing the different benefits and needs of different options. Think about how you might use the space. Do you want to add a bench for reading? Maybe a path of stepping stones for quiet reflection? Rain gardens can be a wonderful addition to any home, adding not only value at resale, but also significant value to your quality of life.
For some, the idea of a kitchen renovation is thrilling. They can't wait to get in there and rip out countertops, replace or paint cabinets, and choose shiny new finishes. Others just had a small anxiety attack upon reading the words "kitchen" and "renovation" together.
The idea of redoing a kitchen, especially if it involves demolition and you don't know what surprises await behind the walls, can be scary. And whether you're approaching a renovation with enthusiasm or something more closely resembling abject terror, you still want to make sure you get the value out. Those countertops might be gorgeous, but you'll probably love them even more if they bring in good ROI.
Mosaik Design reports that the national average of an 83% ROI, and the best way to achieve the max is to "focus on kitchen upgrades that are energy-efficient, reasonably priced, and low-maintenance." That's especially important if you're looking to sell your home sometime soon.
"If you have a dated kitchen…and a buyer walks into that kitchen, they're going to think that in order to redo that kitchen, they're going to have to spend $40,000 or $50,000," said US News. In reality, "the average cost of a minor kitchen remodel -- new cabinet doors, appliances, countertops, sink, faucet, paint and hardware" -- is $20,122 nationwide, according to the most recent Cost vs. Value report. "Savvy shoppers can do it for less than the buyer assumes."
Even if you have no plans of selling soon, or ever, choosing the kitchen upgrades that can have the biggest impact on the look and function of your space while providing the best return on your investment is key. Put your money in the following areas to give you the best shot at both.
"Replace basic black appliances with stainless steel," said Forbes. That goes for white appliances as well. Stainless will instantly update the look of the space, and if your old appliances were, well, old, they probably weren't functioning great anyway, nor were they energy efficient. "To keep this upgrade within your budget, try to find a deeply discounted appliance at an outlet or local "scratch-and-dent" store — where almost-perfect pieces come with perfectly approachable price tags."
"Cabinets make up a big chunk of the total cost for kitchen upgrades, sometimes one-third of your total budget," said Mosaik Design. But you can easily update your space by painting them. As long as your doors and drawers are in decent condition, a few coats of paint will make a huge difference. Choose white for a fresh look that will also make your space look larger. Doors not looking so hot? Refacing can save you tons of money over the cost of brand-new cabinets.
You'd be surprised how impactful new hardware can be in making your cabinets look fresh and new, especially if they represent a fancy new trend, like the return of brass, which has never looked better.
"One of our favorite tips for updating a kitchen is to swap out standard hardware," Marika Meyer of Marika Meyer Interiors LLC told Money magazine. "Hardware can change the feel of the space, making an out-of-date kitchen feel more modern, or noncustom cabinetry feel like an upgrade."
Investing in new countertops can be pricey, and if you're getting ready to sell, you might not want to make the investment in high-end materials. "Make your decisions with thriftiness in mind: choose one of the more affordable granite countertops (such as Napoli, Baltic Brown, or St. Cecilia)," said Forbes. "Leave higher-end stone and more ornate beveling for your next home.
Add a backsplash
If your backsplash is icky, ugly, or barely warrants a mention, it's time to get it together. With the right materials and a good effort, you can make the backsplash a focal point, which can help emphasize the positive and downplay other features in the space that may need attention.
"Add a splash of color with a new backsplash," said HGTV. "New tile is attractive." And if you want to do it yourself, "Home improvement stores teach classes on this."
Not sure what to choose? Subway tile is both classic and trendy, which makes it safe, and thanks to about 10,000 kitchen renovations on TV, it's also one of the most sought-after options.
The only thing worse than a dark and dreary kitchen is dark and dreary kitchen with ugly light fixtures. Swap out the chandelier in your eat-in kitchen for something more fresh, and concentrate on the area over your island or breakfast bar by adding a few trendy pendant lights.
"Jeffrey Osborne of Hark and Osborne Interior Design recommends sourcing ‘stylish yet affordable' pendant lights (he likes Schoolhouse Electric & Supply Co. Lighting) to hang above an island or countertop," said Money. Add undercabinet lighting to give the kitchen a higher-end look — or simply change out the bulbs in existing fixtures to cast the kitchen in a better light (you might be surprised at the results!)."
For bolstered efficiency and enhanced convenience, it's worth it to equip your home with the newest technology. There are practical smart home devices that will help you save on utility costs, ensure the safety of your home and assist in home maintenance. There are also more personalized gadgets that will help you monitor health, ensure your pet’s safety, and also provide multifaceted assistance in home management. Tailor your home with the right technology for you and your family. Here is a list of the best smart home gadgets you should invest in:
The Nest Thermostat pays for itself with its energy efficiency programs, which yield significant savings on utility costs. The device learns the temperatures you like and will program itself in about a week with an automatic heating and cooling schedule. It also automatically turns itself down when no one is home, which saves energy. You can remotely control your Nest system from your phone, tablet or laptop. Nest will guide you toward the best temperature schedule that will save you both energy and money.
Philips Hue bulbs help you control your house's lighting via your smartphone. You can create light schedules for home automation so lights turn on when you arrive home or turn off once you’ve left. Doing this will help you reduce energy usage and also provide you with a means of remote theft deterrent. The away-from-home controls let you adjust your lights remotely. This is handy if you have forgotten to switch your lights off or if you need them on during a non-scheduled time. The Philips Hue kit is compatible with Apple HomeKit technology, which can be voice-accessed on the iPhone 6s Plus through Siri or manually through the app.
The Withings Aura is a high-tech alarm clock disguised as a sleek, modern lamp. It offers a personalized, gradual wake-up experience that will help you feel refreshed and energized. The light on the Aura provides a simulated sunrise, at your designated alarm time, for a gradual wake up. At night, the light provides optimized colors that promote the secretion of sleep hormones while its attached speaker projects soft ambient sounds that will enhance your sleep.
The Amazon Echo is a hands free speaker that you control with your voice. It can play music, provide information, news, sports scores, weather and more. You can connect the Echo to your music libraries from Prime Music, Pandora, Spotify, iHeartRadio, and TuneIn—the music will fill the room through the devices’ 360 degree omni-directional audio. Even while music is playing, the Echo can detect your voice for instruction. You can connect the Echo to your other smart home devices like the WeMo, Philips Hue, Nest, Wink, Samsung SmartThings, Insteon and ecobee.
Keep track of your furry friend, while you’re out of the house, with Petcube. The cube contains a wide-angle lens video camera that provides HD live video so you can monitor your pet’s activity from your smartphone, tablet or computer. There is also two-way audio, which allows you to listen-in on your little friend and also chat with them through your smartphone. A built-in laser toy lets you interact with your pet so they get in some play time during the middle of your workday.
Belkin WeMo Switch
The WeMo Switch lets you remotely control the power source to your electronic devices. The switch uses your Wi-Fi network for wireless control of your plugged-in devices, like your television, stereo, heaters, fans, kitchen appliances and more. Through the WeMo app you can turn the device on or off and set schedules for them. The WeMo Switch helps you conserve energy and ensure that your home is safe from any electrical mishaps.
The old saying, "Location, location, location" is more like a mantra when it comes to real estate. Buy in the wrong one and you could be setting yourself up for financial ruin. Or at least an unhappy experience. Right?
In some cases, yes. But also, maybe not so much. Let's get into it.
The argument for buying in the best location you can afford
You can change your home, adding, updating, and renovating down to the last square foot. What you can't change is where it's located. Add in an inherent desire to build equity when you buy a home, and it's not surprising that real estate experts often recommend buying not only in the best location you can afford, but, if given a choice, buying the worst house in the best neighborhood instead of the other way around.
"A home is an investment - and the best investments have the most room for improvement," said Realtor.com. "Ideally, you'll be adding to the home during your ownership, building equity in hopes of a payoff when you (eventually) sell. Brendon DeSimone, author of "Next Generation Real Estate," told them. "You can add value on your own. If you're choosing between an awesome house in a crappy location or an awful house in a great location, I would choose the latter."
Multiple recent studies bolstered the idea of buying in the best location you can, but identified new factors for determining location-worthiness. Namely, you need to buy a home with a Starbucks nearby. Or a Target nearby. Ideally, both.
"Among homeowners who sold in 2015, those near a Target saw an average 27 percent increase in home price since they purchased their home, which equates to an average price gain of $65,569," said the Washington Post.
As for Starbucks, "Between 1997 and 2014, homes within walking distance, or one-quarter mile, of a Starbucks appreciated 96 percent," said Forbes. "Compared to the national average for the same time period, 65 percent, it seems having a barista close by is a smart real estate move."
Buying the house, not the neighborhood
Yes, buying in a neighborhood that seems to offer some cushion when it comes to values makes sense. But what if you fall in love with a house that's not in your preferred neighborhood? What if it's not in anyone's preferred neighborhood?
The opportunity to buy a more affordable home can tempt people to take a chance on an iffy location. But how iffy is too iffy? The potential for losing money on a home that may not ever appreciate because of the neighborhood is only the beginning. Buying into an area that has higher crime can be dangerous to more than your finances.
Not sure what you're getting yourself into? Here are a few ways to investigate the neighborhood:
- Look at sales data - Beyond the safety issues, you want to know what you're in for in terms of your investment. Just because a home in a questionable area is priced low doesn't mean it's a good value.
- Check crime records - You'll obviously want to pay attention to murder and violent crime rates, but also property crimes including break-ins, home robberies, and car thefts.
- Check the sexual predator registry - That's a given for any move.
- Talk to neighbors and area business owners - Sometimes, the people that live and work there can provide the most telling information.
- Consider the type of businesses in the neighborhood. Remind yourself about the Starbucks and Target value conversation. Those aren't around? What's in their place?
The quality of the businesses in the area can be one of the main determining factors when considering a neighborhood. A story from attn: asked the question, "Do Certain Businesses Attract Crime?" Their findings: "The prospect of a new liquor store or marijuana dispensary can spark safety concerns in some neighborhoods. But while the idea that particular businesses are crime magnets holds up in some cases, it's not always true, and people's concerns can be based on real evidence or flawed perception."
However, they note that businesses like liquor stores, nightclubs, and pawn shops can be linked to higher crime trends. A careful examination of police reports can either put your mind at ease - or send you in another direction.
Perhaps toward a neighborhood with a strip club. Yes, the establishment once thought to be a neighborhood killer has actually been found to have little or no effect on home values. "A new study found that proximity to strip clubs doesn't put downward pressure on home prices, said Inman. In addition, "The research undercuts legal arguments that municipalities have used to justify placing zoning restrictions on strip clubs."
The new study was conducted in Seattle between 2010 and 2014, analyzing more than 300,000 home sales. "The basis for the study was as follows: The relationship between the City of Seattle and local strip clubs is tumultuous, at best. For more than 20 years, the city limited the number of strip clubs in operation using various forms of bans, ordinances and zoning regulations... to prevent a decline in property values due to possible negative externalities, or ‘secondary effects' generated by the presence of strip clubs in local neighborhoods."
The upshot: "The study found no empirical evidence that strip clubs drive down home prices, as property values in Seattle neighborhoods near the opening or closing of an establishment did not change in value per the study's findings."
Buying in a transitional neighborhood
Transitional is code for "might be on its way up" which also translates to "'might be a great investment." Many buyers seek out these changing neighborhoods when their ideal neighborhood is out of reach and/or to get more for their money and be on the "ground floor" as the area appreciates.
So how do you know if your neighborhood is transitioning? If they're building a Whole Foods, a Trader Joes, or a café on the corner, that a good sign. Forbes offered a few more tips:
- It's Accessible, with "proximity to public transportation."
- "Hot hoods border it - A neighborhood that's adjacent to a much-desired one is much more likely to gentrify than one that's surrounded by less prime areas."
- Days on market are dropping - Your real estate agent will be able to pull data and show you trends.
- "It Has an Art Scene. A large population of artists tends to mean galleries and restaurants will soon follow suit - which, in turn, attracts more residents and businesses."
- "It Has Historic Architecture - Historically significant styles, in particular, are a good indicator that an area is ready for a renaissance."
- Renovations are being made - "One of the most obvious signs of a turnaround neighborhood is homes that are in the process of renovation. Drive around and see if you spot construction trucks and dumpsters—then you know there's activity in the air."