Staging Your Home to Sell In Any Market

Posted on January 31, 2014 by Jessica

You have likely heard the term, “staging” when discussing making your home ready to sell. If you’re not familiar with the term, staging is the process of organizing a home and the décor therein in order to create a sale as quickly as possible, for as much money as possible. This is done by highlighting the positive features of a home, while camouflaging those which are less so. It is also the art of making your home appealing to the widest range of buyers possible.

Is staging necessary to sell real estate in the Tri-Cities? Absolutely! In fact, review this study supplied by the Real Estate Staging Association (RESA) in 2012:

89 homes were listed, unstaged. These homes did not sell and were on the market for an average of 166 days.
These same homes were staged and received their first offer in an average of 32 days.

A separate RESA study reviewed 359 homes that were staged before they went on the market. On average, these homes received an offer 26 days after being on the market and 69 of those homes received multiple offers.

Staging works! If you are thinking about selling, consider the following first steps for staging your home:

Stage the whole home, not just certain rooms. Kitchens and master bedrooms “sell” homes, but there are many more rooms in your home. Laundry rooms, pantries, cabinets, bonus rooms, and even your refrigerator will benefit from special staging treatment. I recommend removing everything from the space, wiping down the surfaces, throwing away what you no longer need, storing what you don’t need for the next three months, and then putting back what you do in a nice and neat manner at a minimum.
Don’t ignore the closets and garage. If your idea of staging is clearing away clutter and putting it in a closet (or your garage), think again. Rent a storage facility and remove off-season clothing, recreation items, and anything else you aren’t going to use for the next 90 days, and then remove at least a third of what remains.
Home staging also includes touching up paint and cosmetic defects. Painting corners, wipe down the baseboards, make sure all the light bulbs are in working order, make sure all the drawers and cabinets open correctly, etc.
Home staging should not be thought of as a cover-up for deferred maintenance or structural problems. If there are issues you need to address, do that now. They’re just going to come up on the inspection anyway!
Staging also applies to the outside of your house. Pressure washing, pruning shrubs, making sure the paint is touched up outside, and make sure the containers are full of flowers.

Like most things in life, the final steps of staging are often best left to qualified professionals who can look at your home with a strategic eye. If you are looking to sell this year, take the first steps outlined above, but give us a call for personal guidance. Call Jennifer at (509) 947-5670 or Jessica at (509) 947-2230.

Tri-Cities Real Estate Market Update, December

Posted on January 21, 2014 by Jennifer

The end-of-2013 Tri-Cities real estate market information has just been released. Comparing December 2012 with December 2013 note that although median sales price decreased just a bit, the number of homes under contract and sold have seen significant gains.

2013q4update1

The numbers as a whole represent a year of modest growth. Below is the number of homes available on the market for both 2012 and 2013. As you can see, in April 2013, the number of homes available in the Tri-Cities began to decline. A smaller supply of homes with steady demand will cause home prices to increase, in this case modestly.

2013q4update2

The below graph represents median home prices in the Tri-Cities over 2012 and 2013. Note that the 2013 line is almost consistently over the 2012 line, representing a small increase over 2012.

2013q4update3

If you are interested in hearing more about our market, please give us a call: Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

Planning for Real Estate Tax Deductions

Posted on January 2, 2014 by Jessica

This time of year, people are thinking about their new year’s resolutions and beginning to get their taxes together for the April deadline. If you are renting or thinking about buying in the near future, there are many tax deductions that benefit homeowners that sometimes people don’t think about when weighing the benefits of renting versus owning:

Mortgage Interest Deduction – The interest homeowners pay to their lenders each year is deductible on mortgages up to $1 million. During the first several years of a loan, mortgage payments are interest-heavy which means the tax deductions for young mortgages can be substantial.

For example, for a median sales-priced home in the Tri-Cities ($212,300 as of October, 2013), the first 12 months of interest on a 4.6% loan can add up to $9,695. That interest can be immediately deducted from a taxpayer’s adjusted gross income, saving hundreds in tax liability for the first year alone.

Property Taxes – In states that have property taxes (including Washington State), those can also generally be deducted from the homeowners’ adjusted gross income. It is important to only include property taxes paid to the municipality – not to the lender as part of the escrow account.

Interest & Property Taxes on Second Homes – In many cases (depending on tax brackets and other IRS rules), the above two deductions can also apply to second properties. There are parameters to me met (such as the homeowner must stay at the home at least 14 days per year and it is not considered a rental property).

Home Equity Line of Credit Interest Tax Deduction – In the event a loan was secured against a home’s equity and the funds were used on “capital improvements” to a home, this interest may also be tax deductible.

Points for obtaining a loan – Points are usually a certain percentage of the loan and are either paid up front or over the duration of the loan. However, points are usually tax deductible over the duration of the loan period or in the year paid depending on if the loan is on a purchase or a refinance.

These deductions are presented as generalities only and you should confirm all eligibility with your tax professional. There are additional tax deductions that may benefit you if thinking about a purchase. If you have questions, Jennifer Cowgill can be reached at (509) 947-5670 or jennifer@referredrealestate.com or Jessica Johnson at (509) 947-2230 or jessica@referredrealestate.com.

* Above figures are based on 2012 tax table supplied by the IRS

Source:

Finding a Diamond in the Rough – A Guide for Home Buyers

Posted on December 17, 2013 by Jessica

The Tri-Cities real estate market is healthy with houses selling at a steady pace. The National Association of REALTORS® predicts that prices should rise about 6% next year nationally with interest rates rising to 5.8%. Those stats may have potential homebuyers who had planned on moving next year scratching their heads and wondering if the time is right to make a move now. But what if they can’t find exactly what they are looking for?

There are buyers in the market right now who are still looking for a “deal” despite the health of the market. And other buyers who are out looking but just aren’t finding that house that feels “just right.” Should they be looking at homes that have been on the market for six months, nine months, a year or more with the hopes of getting a deal and doing an extensive renovation? Or if scores of other buyers have bypassed these homes, should you stay away too?

Home improvement shows have made the idea of purchasing something unappealing and retrofitting to the buyer’s unique tastes seems appealing – even easy! As you determine if a home that has languished on the market is really a diamond in the rough awaiting polishing, consider why the home may still be on the market. Unless these problems are solved that caused the home to be on the market so long are fixed, you could run into the same problem when it is time to sell unless you make the required changes.

Homes that are on the market for a long time usually have a common list of challenges:

Overpriced property. This is the easiest obstacle to overcome in terms of fixing the problem – if the seller is willing. Even the ugliest property will sell if it is priced right. The key is to widen the buyer pool as much as possible by lowering the price to what the pool of buyers – or at least one of them – will pay. Sellers may steadfastly hold to their price, but the bottom line is if the home has been on the market for months, generally the price needs to be reduced to meet the market.

As a potential buyer, before purchasing a property, it is important for the buyer’s agent to do a comparative market analysis (CMA) so the buyer will have an estimate of market value before purchasing to make sure they are making a sound investment.

Floorplan/Flow is awkward. Is the master bedroom two floors away from the other bedrooms? Is there only one bathroom for the whole house? Is the kitchen small in proportion to the rest of the house? Are the rooms small with little closet space? Floorplan/flow challenges such as these may be easy to overcome with a remodel. It is important to do your due diligence first and determine a remodel is possible – and within your budget. Also, features such as multiple flights of stairs will keep certain buyer pools from considering the property (such as seniors or perhaps parents of young children) and may not be easily remedied by a remodel. Furthermore, there may be zoning restrictions if altering the outside of the home is required and should be investigated before finalizing the purchase.

Location location location. Are there power lines nearby? Is the home located beneath the flight path to the airport? Is the home located on or nearby a very busy street? These types of challenges are not ones that can be altered. Therefore, if the home is located near something that others might find disturbing or a nuisance, this should be reflected in the price of the property to attract the largest buyer pool – both now and down the road when it comes time to sell.

Dated, but easily updated. If the home is in a good location and everything else looks favorable, but the rust-colored linoleum and pink sink and tub in the bathroom is giving you pause, then this may indeed be the diamond in the rough you have been looking for! If the rest of the “bones” of the house are desirable such as general house layout, roof, supports, etc and the updates are mostly cosmetic or involve moving just a few non-supporting walls, then you may have found your home.

If you are not afraid to expend a little elbow grease and have a renovation budget to get the home of your dreams, you may be richly rewarded! If you have been eyeing a listing that has been on the market awhile or would like to learn about potential diamonds in the rough in our area, give us a call! Jennifer Cowgill can be reached at (509) 947-5670 or Jessica Johnson at (509) 947-2230.

Snow Bird Alert! Buying Property in Another State

Posted on December 5, 2013 by Jennifer

If you are like many of us in the Tri-Cities, the onset of cold weather has us thinking about gloves and hats, whether we are equipped to handle a snowstorm, and how to escape to places warmer when the cold weather really starts to chill us to the bone.

While many simply visit an online travel site to determine where they will go to get warm, others may see this escape as a way to actually put money back in their pockets. Investing in a second property out-of-state may be a great way to invest in something that not only may bring a return in wealth, but is also something you may enjoy year-in and year-out.

Below are six popular snowbird destinations with their corresponding second quarter, 2013 median home prices. For reference, a 30 year mortgage with 20% down payment and interest at 5% on a US median-priced home of $203,033 would require a monthly payment of about $871.

Remember, property appreciates at different rates in different areas of the country, so if you are thinking about a specific area, we can help you look at the historic rate of return so you can plan your investing.

If you think buying a second property out-of-state is something you are interested in exploring, please call us! We belong to a large network of real estate agents all over the country and can help you find just the right agent to help with this journey. Give us a call – Jennifer Cowgill at (509) 947-5670 or Jessica Johnson at (509) 947-2230.

Tri-Cities Real Estate Market Update, October

Posted on November 18, 2013 by Jessica

The September and October Tri-Cities real estate market information is hot off the presses! This has been another two months of modest growth over the previous year.

The below chart shows the data comparing September of 2012 and September of 2013.

sepmarketcomp01

The October data is also newly-available:

octmarketcomp01

According to the National Association of REALTORS®, the Kennewick-Richland-Pasco metro area is seeing a upward trend in new home construction with 1,661 current building permits through June 2013. This is 36.7% above the long-term average of 1,215 permits.

Did you know that the Tri-Cities is only behind Seattle and Portland for the number of building permits in Washington and Oregon? In August, 2013, Seattle issued 6300 permits, Portland issued 3970 permits and Kennewick-Richland-Pasco issued 1000 permits. New construction is strong in our area.

If you are interested in hearing more about our market, please give us a call: Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

Sources

Real Estate Investing: The Power of Leverage

Posted on November 5, 2013 by Jessica

One question we get a lot is “how do I begin investing in real estate? Whether someone is considering a second home, a property to improve and sell, or a property to rent and hold, investors starting out need to understand the power of leverage.

Leverage is the term used when one may not have the cash on hand to buy something outright, so they borrow someone else’s money (usually a bank’s) to finance their investment. Certainly the loan is paid back with interest, but the asset purchased appreciates at the full amount of the investment regardless of what was borrowed.

Let us give you an example. Let’s say a new real estate investor wants to purchase a second home in our area at $200,000. He has 20% to put down, or $40,000. He borrows $160,000 from the bank at 4.5% interest for a 30 year fixed rate loan and he plans to rent out the home for $1,200 per month.

His principle and interest payment is $810 per month. Of course, this does not include property taxes or insurance, which can be estimated at another $233 per month. Additionally, it is smart to estimate repairs at least 1% of the home value – in this case $2,000 per year.

At first glance, it doesn’t appear that the math works in this property owner’s favor as he is looking at a net loss in this case of $10 per month! And that is assuming that the property does not remain vacant, need major repairs, and he handles the rental himself instead of involving a property management company.

Here is where the value of appreciation and cost of living come into play. Unless our investor refinances, his payments for the next 30 years will be $810 per month. However, during that time a number of other forces are at work. Rents rise each year. At an approximate 5% increase per year in rent, that $1,200 in income today will equate to $1,540 in five years. We can assume that property taxes and insurance might rise at that same rate, leaving our investor in a slightly better position monthly than his $9 net loss of five years previous.

Estimated Monthly Revenue and Expenses

Let’s take a closer look at the 10 year figures listed above. At a modest 5% appreciation, the property purchased today would be worth $329,402 in 10 years. If our investor decided to sell and walk away from the $453 in net profits per month, he could be looking at gross proceeds of $201,259 (as his loan at this point has been reduced to $128,143). This doesn’t take into account closing costs, but isn’t it amazing how $40,000 can turn into over $200,000 in a relatively short amount of time?

Additionally, savvy investors need to realize there is another perk of owning multiple properties -interest deduction on taxes. The mortgage interest paid on your home loans is tax deductible depending on how your investments are set up. In the example above, $7,147 is paid in interest on the first year alone which could result in big tax savings!

If you are interested in learning more about how to leverage your next home purchase or real estate investments, please contact us: Jennifer at (509) 947-5670 or Jessica at (509) 947-2230.

Tri-Cities Real Estate Market Update

Posted on October 16, 2013 by Jennifer

The August numbers have been released from the MLS and we have seen modest growth. Median Home Sale prices have increased over 7% over August 2012 numbers. The number of homes under contract also increased slightly by .84%. Our inventory has seen an adjustment as well, with a 5.1% decline.

The below chart shows the data comparing August of 2012 and August of 2013.

2013 Q3 Market Update 1

One reason the real estate market is showing moderate growth is due to our steady employment. The below graph shows the unemployment rate for the Tri-Cities Metropolitan Area which includes Kennewick, Richland, and Pasco. As you can see, year over year, our employment rate has been steady. We do see a slight spike in the winter as part of our economy is agriculturally based.

2013 Q3 Market Update 2

If you are interested in hearing more about our market and how it impacts your property, please give us a call: Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

Rediscover Mediterranean Villas – October 19th

Posted on October 11, 2013 by Jessica

Join us on October 19th between 1:00 to 5:00 pm for a first ever public viewing as we showcase two new luxurious home plans at the beautiful Mediterranean Villas. These gorgeous homes feature double master bedrooms and private guest suites, each presented with the careful attention to quality and detail that builder Devoted Builders has become known for.

Bring a friend who is ready to move! Refer a friend who buys and we’ll reward both of you with a weekend getaway package! Five beautifully customized, move-in ready homes are now available.

Exclusively presented by your Referred Real Estate agents Jennifer Cowgill, (509) 947-5670, and Jessica Johnson, (509) 947-2230.

Call for directions or simply attend with us on October 19th at 6013 Vincenzo Drive, Pasco, WA 99301.

Jennifer and Jessica’s Local Favorites: Windy River Meats!

Posted on September 6, 2013 by Jennifer

Windy River Meats isn’t your average start up business. Born in Kennewick, owner, Korey Lancaster is the 4th generation in his family to enter into the meat processing business. In the early 1960’s Korey’s grandfather, Bob Schutz, opened a custom meat cutting and butchering facility in Pasco, following in the footsteps of his parents who were butchers.

Bob’s Custom Meats grew to include locker beef sales, custom smokehouses, and sausage manufacturing. In 1982, Bob’s son Byran bought the business and continues to run the custom side of the business in his location off of Burden Blvd – the best place in town for custom butchering and wild game processing.

Korey learned to cut meat in this facility and it was through Bryan’s mentoring that Korey and his wife Staci were able to open up their own retail location in the lot to the North of Bryan’s Butcher Block.

Windy River Meats opened in March of this year, offering the freshest of local meats, cheeses, beer and wines. All fresh meats are butchered in-house. Korey uses family recipes, and some of his own, to make his fresh and smoked sausages from scratch. Their mouth-watering, thick cut homemade bacon is a huge seller, as is their homemade Jerky and Snack Sticks. They have just started to phase in local grass-fed beef and have Montana grass-fed buffalo in the back. Their motto is “if you don’t see, just ask and we will cut it fresh!” They are also happy to try and order items in they are not stocked. There is a monthly fresh seafood pre-order list via email and Facebook in which they bring in the freshest of fish, shellfish and more. The holidays will bring pre-ordered Smoked Turkeys, Peach Brandy, Apricot, and Honey Hams and Seasoned and/or Smoked Rib Roasts. Windy River Meats strives to bring quality and value back to your table. Stop by and check them out today!

Address: 4903 Robert Wayne Drive, Pasco, WA 99301
Facebook: Windy River Meats
Website: www.windyrivermeats.com
Email: windyrivermeats@hotmail.com
Phone: 509-545-8485