What is a CMA (Comparable Market Analysis)?

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Before putting a home on the market or listing with a local real estate agent, home sellers obtain a comparative market analysis, also referred to in the industry as a CMA. Sellers use a CMA to figure out the value of their home and what to price their home for sale.

What is a Comparative Market Analysis?

Although reports can vary, from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the report depend on the agent’s business practice.

However, standard comparative market analysis reports contain the following data:

  • Active Listings

Active listings are homes currently for sale. These listings matter only to the extent that they are your competition for buyers. They are not indicative of market value because sellers can ask whatever they want for their home. It doesn’t mean any of the prices are realistic. The offered sales prices do not reflect market value until they sell, and in buyers market, for example, most sell for a lot less.

  • Pending Listings

Pending sale homes are formerly active listings that are under contract. They have not yet closed, so they are not yet a comparable sale. Unless the listing agent is willing to share information about the pending sale – and many are not – you will not know the actual sold price until the transaction closes. However, pending sales do indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you could face longer DOM (Day On Market).

  • Sold Listings

Homes that have closed within the past six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales (which will likely have closed by the time your home is sold). Look long and hard at the comparable sales because those are your market value.

  • Off-Market / Withdrawn / Canceled

These are properties that were taken off the market for a variety of reasons. Usually, the reason homes are removed from the market is because the prices were too high. The median prices of this group will almost always be higher than the median prices of comparable sales. However,listings cancel, also for the following reasons:

1. Seller’s remorse. The sellers decided they cannot part with their home and no longer want to sell.

2. Priced too high. Nobody made an offer or the only offers received were low-ball offers, which were rejected.

3. The DOM were too long. Agents sometimes withdraw listings so they can put them back as a new listing and fool buyers.

4. Repair requests. The homes were once under contract and after the home inspection, the buyer requested repairs which the seller refused.

5. Seller fired the agent. It’s not uncommon for unhappy sellers to fire an agent and hire a newagent.

  • Expired Listings

This group will reflect the highest median sales price because they did not sell and were probably unreasonably priced. Some of the expired listings could also show up as an active listing, listed by a new agent at a new price. Listings also expire because they were not aggressively marketed or because the home was in need of repairs.

Examining Comparable Sales

Comparable sales are those that most closely resemble your home. It is difficult to compare a tri-level home to a single-story home. Select the homes from this list that are mostly identical to your home in size, shape and condition, such as:

  • Similar Square Footage

Appraisers compare homes based on square footage. Larger square-foot homes are worth less per square foot than smaller square-foot homes. The variance among a group of median-priced homes ideally should not exceed more than 200 to 400 square feet, plus or minus.

  • Similar Age of Construction

Ideally, the age of the home – the year it was built – should be within a few years of other comparable sold homes. Mixed-age subdivisions are common. For example, in one area of Sacramento, a subdivision consists of homes built in the 1950s, and then they jump a couple decades to the 1970s. Although the homes are located next door to each other, the homes loaded with character from the 1950s sell for more than their newer Brady Bunch counterparts. If your home was built in 1980, say, and brand new homes up the street are selling for more, you cannot command the same price as a new home.

  • Similar Amenities, Upgrades, and Condition

Appraisers will deduct value from your home if other homes have upgrades and yours does not. A home with a swimming pool will have a different value than a home without a pool. A completely remodeled home is worth more than a fixer. Homes with one bath are worth less than homes with two or more baths. Deferred maintenance will count against you.

  • Location

Everybody knows that real estate is valued on “location, location, location,” but have you considered what that means? A home with a view of the city, for example, is worth more than a home facing a cement wall. Homes located on busy thoroughfares are worth considerably less than homes on quiet streets. Compare your home to those in similar locations. If your home sits across the street from a power plant, look for other homes with power plant exposure or those located along railroad tracks, among other undesirable locations.

For a FREE CMA of your property visit: www.ModernoRealtyHomeValue.com

Source: The Balance

 

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Fall home improvements for less than $500

home-improvements

Homeowners can add to the resale value of their home before selling their home.

As the seasons change the weather gets colder, more homeowners begin to turn their thoughts to the coming winter, and the preparations their homes might need to get through it comfortably.

Although there are a lot of expensive upgrades and improvements that owners could do on their homes this fall, there are also several others that can have just as big an impact on comfort, energy efficiency and how well the property will hold up through the coming months that will cost a lot less.

These fall home improvements all cost less than $500 and will still give homeowners and sellers a lot of bang for their buck.

1. Insulate the attic

The vast majority of homes today are under-insulated, leading to higher energy bills, colder interiors in the winter and hotter interiors in the summer.

And even in homes that do have adequate insulation, it’s important to remember that older insulation does break down over time, and it may become displaced by rodents, pests or workman, all of which can reduce its efficiency.

Insulation often tops the list of things homebuyers like to see because it means they’ll have lower utility bills, while staying more comfortable year round.

Adding the insulation before the cold weather sets in, when homebuyers have it in mind and are questioning the utility bills, gives it a chance to shine during the home inspection, while at the same time allowing the seller to recoup a whopping 116.9% of the costs at time of resale, which is an extremely attractive selling point.

Project timeline estimate: DIY homeowners can tackle this project over a weekend. Hiring a pro to handle the job can get it done in less than one day.

Cost: The average cost of insulating an attic is around $400.

Money saving tips: Invest in batts that don’t use fiberglass, and have them installed DIY to save on labor costs. Purchase the highest R-value insulation available to allow the new homebuyers to save more on their energy bills going forward and to get the best ROI.

2. Put in storm windows

Once the warmer days are over, cool air starts seeping in around your existing windows and doors. This is due to an air gap that is present in many homes, which can account for a loss of as much as 40% of the energy used to heat the home.

Putting up storm windows before a home is being shown will eliminate drafts and make it more comfortable for buyers walking through.

Best of all, according to Energy.gov, installing them will save the homeowners 12% – 33% of their energy costs, while installing any new windows can help recoup as much as 73% of the cost at time of resale, which means that this simple project can help them save, while making a better impression on buyers at the same time.

Project timeline estimate: It takes just a few hours to put up storm windows all around the home, seal them in and insulate them.

Cost: The cost of installing storm windows is around $275.

Money saving tips: Install storm windows in the draftiest rooms to make them feel more comfortable for buyers walking through.

3. Seal an asphalt driveway

Tiny cracks that appear in the driveway over time both detract from the house’s curb appeal and can lead to big holes and bigger expenses if left alone over the winter.

The cooler fall days are the perfect time of year to seal an asphalt driveway because the lower temperatures both mean that the asphalt will cure more quickly and that the VOCs and scent it gives off will be lower and less likely to put off homebuyers.

Having the seller seal up these cracks now means that there won’t be major pot holes showing up in the spring after the freeze-thaw cycles are complete, and it means that the driveway will look fresh, attractive and likely to increase curb appeal for the whole property.

Sealing the driveway protects it, which in turn helps it maintain its value; failing to seal the driveway means that the property could lose value over the winter when the damage is done.

Project timeline estimate: It takes about three to four hours to seal a driveway, and another one to two days for curing.

Cost: The cost to seal a driveway is around $200.

Money saving tips: Tackling this job DIY will get the biggest ROI and save money in the process.

4. Hydroseed the lawn

The cool nights and warmer days of fall make it the perfect time of year to seed a lawn. Grass seeds grow and take root better in cooler weather, so sowing new seed at this time of year will create a richer, fuller lawn in the spring.

Hydroseeding is one of the least expensive ways to seed a lawn, nourishing it for the coming winter months. It can be done DIY by the seller as well, as a way to cut costs

Improving the landscaping and lawn of a property can have an impact of as much as 20 percent of the value of the home, making this a smart fall decision. The landscaping is also one of the first things a buyer sees, which makes it an important part of the home’s curb appeal.

Project timeline estimate: Hydroseeding takes a few hours to a full day depending on the size of the lawn.

Cost: The average cost to hydroseed a lawn is $0.50 – $1 a sqft.

Money saving tips: Seed the lawn DIY to save the most. Fertilize at the same time to add additional nourishment and ensure that the grass grows properly.

5. Install an electric fireplace

As the weather turns cooler more people begin spending time indoor, which can lead some people to begin thinking about cozy, warm spaces, such as rooms with built-in fireplaces.

Electric fireplaces are clean, energy efficient additions to any home that will add instant visual appeal and warmth at the same time, something that both the buyer and the seller can appreciate.

They range from plug-in units to built-in features so it’s easy to find one that fits the room’s decor, and the seller’s budget, easily.

And according to realtor.com, adding any working fireplace, including electric and nicely kept mantel to a home can add as much as $12,000 to the home’s value, which makes it attractive to current homeowners and new buyers alike.

Project timeline estimate: Plug-in electric fireplaces can be installed in just minutes, particularly if there is an existing firebox. Otherwise, they can be built into a wall or alcove in one to three days.

Cost: The average cost to install an electric fireplace is around $300.

Money saving tips: Opt for a plug-in unit to save the most on building or installation fees. Use an existing fireplace to convert.

As chilly weather sets in, it’s important to leave an impression of a warm, cozy home that’s welcoming to everyone that enters.

Upgrading and improving a home to include these features, doesn’t need to break the bank either; to find out more about what things cost, be sure to visit the cost guide.

Source: Yuka Kato, Fixr.com

Link: http://www.modernorealty.com/2016/10/26/fall-home-improvements-for-less-than-500/

 

 

 

Homeowners Insurance vs Home Warranty

Home Insurance vs. Home Warranty

What is the difference between homeowners insurance and home warrant coverage?

Insurance and home warranty companies say it’s one of the most common questions they receive.

Simply stated, homeowner’s insurance protects homeowners by covering the cost of rebuilding or repairing structural damage caused by a fire, storm, or other natural disaster or calamity. If there is a mortgage, the lender will require that the homebuyer obtain adequate “hazard insurance” to protect the bank’s financial interest in the home. Most homebuyers also opt to purchase protection that covers damage to, or theft of, a home’s contents or the homeowner’s personal property, liability coverage in case a third party is injured while on the property, and so-called “riders” that cover damage from specific catastrophic events, such as earthquake and wildfire, or specific valuables, such as art, jewelry or collectibles. Homeowner and hazard insurance premiums often are paid along with the homebuyer’s monthly mortgage payment.

home warranty, on the other hand, is a service contract designed to protect homeowners’ budgets from having to bear the entire cost of repairing or replacing major components of home systems and appliances that break down over time due to age and normal wear and tear. A home warranty plan is not a replacement or substitute for standard homeowner’s or hazard insurance. However, many homeowners consider a home warranty contract to be an important complement to homeowner’s insurance coverage.

While a homeowner may never suffer a catastrophic weather or other calamity during the time they own their home, the systems and appliances covered under a home warranty contract are quite likely to require repairs, or need to be replaced – particularly as a house ages.

Home warranty coverage can help home buyers ease the worries that come with thinking about how they will pay for repairs or replacement of systems and appliances in a home they have purchased. Home sellers, on the other hand, often purchase a one- or two-year home warranty contract [or] plan on behalf of their buyers. In doing so, they also enjoy the knowledge that a covered system or appliance breakdown is the responsibility of the homeowner once a home sale is completed.

Major home systems and appliances that may be covered by a home warranty contract include:

  • Furnace, central heating and air conditioning systems
  • Ductwork
  • Electrical and plumbing systems
  • Water heater
  • Clothes washer and dryer
  • Refrigerator
  • Range, oven, cooktop, built-in microwave
  • Instant hot/cold water dispenser
  • Dishwasher
  • Garbage disposal

Optional home warranty coverage can include a guest unit, swimming pool, spa and related equipment (including salt water pools and equipment), well or septic system pump, additional refrigerators, ceiling fans, doorbells and electric garage door openers, and telephone wiring.

It also may be helpful to think of the difference between homeowner’s insurance and a home warranty this way: Let’s say lightning strikes your home and damages your rooftop air conditioning unit and surrounding roofing materials. Because the damage was caused by a natural event beyond your control, your homeowner’s insurance would cover the cost of repairing or replacing the unit and roofing. However, if your air conditioning unit simply conked out the first day of summer and had to be repaired or replaced, your home warranty contract could help cover this breakdown.

It is important, of course, that everyone understands what events are included in their insurance policy, what coverages are required by their lender, and any dollar limitations to property coverage. An insurance agent is best equipped to provide important information about homeowner’s insurance, while REALTORS®, home sellers and home buyers should contact a reputable home warranty representative to learn more about coverage options.

Source: C.A.R.

Link: Homeowners Insurance vs Home Warranty

 

 

 

 

 

 

 

 

 

 

Benefits of a Home Warranty when Buying or Selling a home.

Benefits of a home warranty

A Home Warranty Plan provides many excellent benefits for all parties in a real estate transaction!

What’s in it for you as a Home Seller?

  • Budget Protection – against the high cost for repair or replacement of home systems and appliances that fail due to normal wear and use during the listing period.
  • Greater Return on Investment – your home may sell faster and at a higher price!
  • Immediate Protection – coverage takes effect the day the application is received by Old Republic Home Protection.
  • Sell with Confidence – Seller’s Coverage seamlessly converts to the Buyer’s Plan at closing.

What’s in it for you as a Home Buyer?

  • Budget Protection – against the high cost for repair or replacement of home systems and appliances that fail due to normal wear and use.
  • One Full Year of Coverage!
  • Access to Qualified Service Providers – we have a network of independent service providers you can rely on!
  • Peace of Mind – knowing help is just a phone call away.

Source: Old Republic Home Protection

http://www.modernorealty.com/2015/12/01/benefits-of-a-home-warranty/