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WHAT ROOM SHOULD YOU RENOVATE FIRST?

After you buy your home, it’s easy to get excited about renovating rooms and putting your unique spin on the design of your home. You can imagine the results of renovating your home with a gorgeous new kitchen, the perfect family room, and the beautiful bathroom just waiting for a bubble bath. But then comes the question: where to start?

There’s an easy trick you can use to decide which room to renovate first. Simply choose the renovation that will get you the most return on investment (aka the most bang for your buck).

Renovations are often expensive, and although they add value to your home, you won’t necessarily make all of that money back when you sell the home.

For example, if you spend $20,000 on a backyard reno, you may only make back $15,000 of that when you sell. As a result, your return on investment or ROI is $15,000 or 75%.

Typically, kitchen renovations will score the most ROI because a beautiful kitchen will sell a home. Bathrooms come in second. By focusing on the ROI of your renovations, you’ll make smart money choices that will help your house sell for more. You’ll instantly boost the value of your home when you do the biggest ROI renos first.

But if your home already has a decent kitchen and/or bathrooms, you can look at the commonly used areas: living room, family room, and bedrooms. And if you live in a place where the backyard doubles as another room, consider the backyard as well.

But hey, if there’s a room you just can’t wait to get started on, go with that one first!

Your real estate agent should be able to help you get an idea of which room renovation will up the value of your home the most. As always, I’m happy to give you my opinion on which reno will be best for you—whether you just moved in or you’re getting ready to sell.

Just contact me whenever you’re ready to choose which room to renovate first.

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NON-FINANCIAL BENEFITS OF HOMEOWNERSHIP

We talk a lot about the financial benefits of homeownership because there are just so many of them. But owning a home has way more benefits than just financial.

  1. You can have pets! Gone are the days of paying ridiculous pet rent or sneaking your dog out the door when the landlord comes to visit. When you own your house, you make the rules. And if you want to have the most pet-friendly property around, you can!
  2. You have the freedom to express your own style. There’s nothing worse than coming up with the perfect design for a room, only to remember that you’re renting and your landlord won’t let you do anything with the bare white walls, lest your deposit disappear. Owning your own house means you can paint, wallpaper, replace fixtures, and renovate as much as you want. Only your own ideas are the limit.
  3. You’ll have more privacy and security. Not that it isn’t great getting woken up by your upstairs neighbor at 4 am because they just have to move the furniture, but… it could be better, right? There’s something about knowing you’re safe and secure in your home and have privacy that makes it so much easier to sleep at night.
  4. You’ll feel settled in the community. When you buy a home, you become a part of the neighborhood fabric. You’ll get to know your neighbors, attend neighborhood events, and start to build those relationships that can really make life enjoyable. And, it’s always nice to know you can pop over to someone’s house for a cup of sugar.

I could go on and on about the benefits of becoming a homeowner, but you get the picture. Basically, owning a home has the potential to improve so many facets of your life—from your finances to your home life to your creativity to your relationships.

If you’re ready to start feeling the benefits of owning a home, just contact me anytime

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NET WORTH: CAN RENTERS BUILD JUST AS MUCH AS HOMEOWNERS?

When it comes to building your wealth, there are few investments as good as real estate. When you buy a house, you boost your net worth considerably. In fact, in 2016, the average homeowner had a median net worth of $231,400. Renters on the other hand had a net worth of only $5,200, according to the Federal Reserve.

That’s a HUGE difference in net worth—we’re talking hundreds of thousands of dollars. And I don’t know about you, but I would much rather have a bigger net worth.

But can renters build just as much net worth as homeowners? The short answer is yes, in some cases. The long answer is a bit more complicated.

First, to build wealth as a renter, you have to find a place to rent that’s WAY cheaper than owning a house would be. If you can’t find super cheap rent, you won’t be able to build as much wealth as a homeowner.

You then have to put all the money you would have spent on a home into the stock market, which is often volatile and requires long periods of time to get consistent returns.

So, if you want to be a lifetime renter, then go ahead. But make sure you’re investing the money you would have spent on a home in smart stocks.

No spending extra on vacations or Starbs. You have to be ruthless with your spending to make up for not owning real estate.

But of course, even if you do go this route, you’re still paying housing costs that go straight to your landlord—which is money that could be going into building wealth.

And wouldn’t it make more sense to put that money somewhere you can actually use it? Like, say. A house? I’ve said it before and I’ll say it again: real estate is truly one of the best investments out there. You’re going to have to pay for housing regardless, right? Might as well turn it into a wealth-building machine.

If you’re ready to build your wealth with real estate, just contact me and I’ll get you started!

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WHAT YOU NEED TO KNOW ABOUT APPRAISAL GAPS

When you’re buying or selling a home, hearing the words “appraisal gap” can make you shudder. An appraisal gap can make the difference between a successful sale or the deal falling through completely. But how does an appraisal gap happen and what can you do to avoid it as a buyer or seller?

When you put your home on the market, you list it at a certain price. Let’s say you put it on the market for $350,000. Then, when a buyer wants to purchase the home, they’ll make an offer—let’s say they offer $360,000. If they’re financing, their lender will order an appraisal of the home during the closing period.

An appraiser will come look at the home and determine its fair market value. An appraisal gap occurs when the home’s appraised value is lower than the buyer’s offer.

In this example, let’s say that the home’s appraised value is $340,000, $10,000 less than the buyer’s offer. Lenders don’t really like this. Why? Well, if you were to default on your mortgage and be unable to pay the bank back, they wouldn’t be able to recoup their investment. Because of this, banks typically won’t give you more money than what the home is worth. Often, this gap causes the offer to fall through.

But there are some things you can do in this situation as a buyer. First, you can write an appraisal gap guarantee clause into the purchase contract that says you’ll pay a predetermined amount above the appraised value. You also have the option to pay the gap in cash. In our case, you’d have to pony up $10,000 to give to the seller. You could also renegotiate with the seller on price and try to get the purchase price closer to the appraised value. And as a last resort, you can walk away if you have an appraisal contingency in the contract.

You’ll obviously want to avoid this as a seller, too. It’s good to keep in mind that only buyers with financing will have this issue with the bank, which means that cash transactions can go more smoothly.

Appraisal gaps can be bad news, but if you’re educated and prepare for them, they aren’t anything to be afraid of.

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Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.