Five Tips on How to Sell Your Home in a Competitive Market

What does it take to sell a home in a competitive market – a fresh coat of paint or a kitchen overhaul? Lowering the asking price or offering incentives?

What does it take to sell a home in a competitive market – a fresh coat of paint or a kitchen overhaul? Lowering the asking price or offering incentives? From cosmetic to strategic, smart sellers can take advantage of a few simple tips to get the most out of their properties. Here are five suggestions on how to help secure a “sold” sign:

Price Point is Paramount When getting ready to put a home on the market, determining the right listing price is the number one most important element in the home selling process. After you have carefully chosen an agent, the trust you have established will come into play immediately. Have those tough discussions with your agent about where to price your home. Make certain you understand how the agent has arrived at the price, including how previous sales and current homes on the market make an impact. If necessary, jump in the car with your agent and see some of the homes on the market in the area. This will provide first hand knowledge on homes that are available in your neighborhood.

Appeal to Your Audience Work with your agent to determine how to get your home to stand out. Providing incentives is a great way to draw in potential home buyers, and monetary bonuses don’t just have to come from negotiation of the listing price. Sellers can also choose to contribute to closing costs, or conduct pre-home inspections, which can comfort potential home buyers in knowing that the property is in top shape.

Leave a Great First Impression Everyone talks about curb appeal, but a first impression is truly lasting. Remember, your agent is your trusted advisor. They will know the necessary updates and upkeep you should make to get the home ready for showings. But some of this is fairly easy and the front door is particularly important. This is the area where a buyer will first step up to a home – and likely wait for a moment providing time to look around. Do this ahead of time, stand directly in the front door and look up and around at the home from all angles – cobwebs that have not been noticed in years could be the first thing greeting a potential home buyer, so it’s important for this area to give a great first impression.

Everything is in the Visual Don’t underestimate the power of visuals in marketing your home. The National Association of Realtors found that, more than 90 percent of home buyers begin their search online. Your agent may push hard for you to have the home prepared for vivid pictures and video of the property that can be posted on websites such as Coldwell Banker On Location

Hit the Right Note with all Five Senses When a buyer comes to look at a home they want the full experience. To help a home stand out, your agent may ask you to focus on appealing to all five senses. Small and inexpensive upgrades to the home such as getting the walls painted, de-cluttering and making minor improvements to the outdoor landscape. In terms of “touch,” remember that buyers aren’t just going to look – they’ll be turning on your faucets and opening closets, so make sure closets are clean and organized. When it comes to making a home smell good, many agents prefer the smell of baked goods rather than fresh flowers or air fresheners which can be overwhelming. All of this is being done to allow the buyer to properly visualize living in the home.

Buying A Foreclosed Home: How a Foreclosure Sale Works

Buying a foreclosed home can be a good way to score a deal while house hunting. These are houses whose owners were unable to pay the mortgage or sell the property. As a result, the lender assumed ownership and is now trying to sell it to recoup some of its costs.

Buying a foreclosed home

While foreclosures aren’t as common today as they were during the height of the housing crisis in 2008, they do still happen. Currently, according to RealtyTrac, 1 in 13,000 homes ends up in foreclosure. In states with the highest frequency, such as Maryland and New Jersey, that ratio shoots up to 1 in approximately every 550 homes. That’s a lot of foreclosed places.

While foreclosure is hardly a pretty story for the home’s previous owners, it can be a bargain bonanza for buyers. Since banks are often eager to unload these properties, they aim to break even with an asking price that’s typically the sum of the remaining mortgage note plus interest, lawyer fees, and penalties. On average, this ends up totaling about 15% below the home’s actual value—and if you want to buy a foreclosure, you’ll find they often sell for less than asking price.

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But buying a foreclosed home does come with risks, so buyers should proceed with caution to see if the gamble is worth it.

How to buy a foreclosed home

To find foreclosed homes, you can peruse listings of foreclosures on realtor.com®, which may also be marked as “bank owned” or “real estate owned (REO).” If you spot a home you like, contact the real estate agenton the listing as usual.

The biggest caveat when buying a foreclosed home is that it is typically sold as is, which means the bank is not going to fix any problems. And there may be plenty of them, considering that many foreclosures have been slowly crumbling into disrepair due to the previous owner’s financial strain. And unlike a normal home sale, in which disclosure requirements force owners to reveal a home’s every flaw, there’s no such legal stipulation in a foreclosure. What you see (or don’t) is truly what you get.

That’s why foreclosed homes risk costing buyers a ton of money to renovate that could negate their supposed savings. This is why Eric Workman of the Chicago-based residential rehab lender Renovo Financial suggests that buyers take extra precautions such as the following before making an offer:

• Research how long the foreclosure sat vacant, whether it endured freeze and thaw seasons unattended, or experienced anything that may have caused significant structural damage. Homes in a dire state of disrepair won’t be eligible for a conventional mortgage.
• Hire a home inspector to thoroughly check out the foreclosed home for major problems. Have the inspector give you an estimate of how much money it will take to make repairs.
• You can try to add financing and inspection contingencies to your offer. That way, if you do encounter problems with the home or attaining a mortgage for it, you can back out of the deal without losing your deposit. Just keep in mind that asking for contingencies does not mean the bank will accept them; they’re not the norm when you buy a foreclosure.
• Also hire a professional to conduct a title search, says Ben Niernberg, executive vice president at Northbrook, IL–based Proper Title. This may allow you to avoid all kinds of nightmare scenarios—sometimes the bank will clear the liens, but it isn’t required to do so. For instance, let’s say the IRS has a lien on the property for back taxes. That debt doesn’t follow the owner once he sells. Instead, the lien sticks with the property, making the new owner responsible for repayment.

If you find out the home has problems, you will want to carefully weigh whether it’s worth all the extra work. In some cases it will be; in others, it may be more prudent to walk.

8 Mistakes to Avoid When Buying and Selling at the Same Time

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Plenty of people find themselves buying and selling a home simultaneously, but knowing that others have gone through the same stress does not make it one bit easier. After all, the stakes are so high: If your buyer backs out, you don’t have any cash to land your next home! Or if your own purchase falls through but your current home sells, you’re homeless!

It’s all like walking across the Grand Canyon on a tightrope: The tiniest thing goes wrong, and you fall.

Breathe in. Don’t panic.

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It turns out that most buying-and-selling mistakes are easily avoidable—or at least predictable. Follow these eight tips to enter escrow with eyes wide open.

1. Waiting too long to prep your home for selling

Every home needs a little work before selling. You might need to repaint some scratched walls, fix broken decking, or add grout in a rarely used bathroom. Don’t wait until the last minute to kick-start this process, otherwise you could wind up in a bind.

Take, for example, one of the clients of real estate associate Kenneth Er. He was trying to buy and sell simultaneously. Er advised him repeatedly to start prepping the home, “but he kept pushing it off and pushing it off, despite actively looking for a new home and submitting offers.”

Once the client went under contract to buy a home, suddenly he and Er found themselves rushing to list his existing home. When they finally finished prepping, it was already October—precisely when the market was slowing down and it became tougher to find a buyer.

“I advised him—and would advise anyone—to get the little projects out of the way,” Er says.

2. Skipping the backup plan

When you’re buying and selling simultaneously, the number of moving parts doubles. And if any of those parts gets jammed, it can throw off both transactions.

For example, Miami Realtor® Juan P. Rojas was recently involved in a three-way transaction where the sellers of property A wanted to buy property B—and the sellers of property B wanted to buy property C.

“We had to coordinate two closes and three different families moving in and out of properties,” he recalls.

It worked out, but Rojas cautions: “Assume that you won’t be able to buy and sell at exactly the same time.”

And with that assumption, you better have a plan in place in case everything goes wrong. Keep your emergency fund well-stocked. In a best-case scenario, you may simply need a hotel for a week, but you may also find yourself looking into short-term rentals. Have cash on hand—in addition to your down payment funds—to survive the setback.

3. Buying too big

“One of the biggest mistakes that we see that simultaneous buyers and sellers make is the same one that many first-time buyers make: They fail to get pre-approved on their new loan,” says Orange Country Realtor Jessica Althoff.

Pre-approval is essential, because it puts a stop to unrealistic dreaming by telling you exactly what size of house you can afford.

“Buyers assume that with a large down payment and increased income, they will automatically qualify for a larger home loan,” she says. “Many do, but not as large as they think or wish. They begin the search and are disappointed when they can’t upgrade as much as they thought they would be able to.”

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4. Working with too little cushion

You know what price your house should sell for. But what if the market softens? If you’re forced to take an offer that’s $20,000 less than expected, there goes the down payment on your new home.

“Give yourself a cushion on what you need to sell your existing home for,” Er says.

If you’re hoping to use the entire sale price as a down payment on another home, move forward with the assumption your home will sell for less than expected.

One of Er’s clients set a purchase budget of $2.2 million. In order to afford his new home, he needed to sell his home for about $1.3 million. Not only did he exceed his purchasing budget, Er says, “We’re unlikely to get $1.3 million for his current home, due to the softening market and the time of the year. He’s stressed out and scrambling.”

5. Failing to compromise

Don’t forget you’re not the only human in a stressful situation. That person selling your dream home? And the buyers under contract for your current place? They’re all probably stressed, too.

So keep that in mind when issues come up—for example, if the buyers need an extra week of escrow because there was an issue selling their home, or the sellers don’t think they need to fix a leaky pipe for you.

“One mistake is expecting so much from the people selling the home, but not being willing to give anything to the buyers of their own home,” Althoff says. “A little compromise goes a long way, especially when there are two escrows (or more) on the line.”

6. Using two different real estate agents

Expect this already messy process to get even messier if you’re juggling agents for your listing and for buying a new home. Simplify things by using the same agent for both transactions.

“I would always prefer to handle both sides of your sale and purchase,” says agent Michael Pacheco. “Having control and insight over both transactions allows me to make sure that we close both homes simultaneously.”

There are two instances when you should not use the same real estate agent. If you’re moving out of state, look for a reputable buyer’s agent in your new location. If you’re remaining in the same area, you may also meet and like an agent who works exclusively with buyers or sellers — not both. In that case, ask for a recommendation within your agent’s brokerage so you can, at a minimum, keep both transactions under the same roof.

7. Closing on a Friday…

While you should work with your agent to determine the best timing, you’d ideally want to finalize the sale of your current home first, and then close on your new one. Try to aim for closings within two or three days of the other—”and never on a Friday,” says Realtor Karen Choate.

That’s because bank transfers can take a few days to go through. In order to ensure there’s money in your account when the time comes, buffer a few days to transfer funds.

8. …or late in the afternoon

When you’re scheduling those closings, aim for the morning—especially on the sale of your current home.

“Banks usually stop wire transfers by 3 p.m. in the time zone where the property is located,” says Choate. Closing in the morning allows extra time for the money to hit your account.

The 4 Best Reasons to Buy a Home This Year

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Take the Plunge: The 4 Best Reasons to Buy a Home This Year

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The housing landscape of the past several years hasn’t exactly been friendly to buyers: the bidding wars, the eye-popping prices, the houses that sold before a “For Sale” sign even went up. It’s enough to make any of us put our search on hold until we have a fighting chance at landing a home—without draining our bank accounts.

If you’ve been sitting on the sidelines, we’ve got good news and we’ve got bad news: Things are finally slowing down. But they might not slow down fast enough for your liking.

Don’t despair, though—this year still stands to look better than last for aspiring home buyers.

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“If your resolution is to buy a home in 2019, you’ll have some challenges to contend with, but also some opportunities,” says Danielle Hale, realtor.com‘s chief economist.

The devil’s in the details, though, and there are quite a few factors that could dictate whether this is your year to buy. Here are the four biggest reasons to take the plunge now. 

1. There will be more available homes—or at least, not fewer

Tight home inventory has sidelined would-be buyers for several years now. Even if you could afford a home, too few of them were hitting the market to keep up with demand. Or, when they did, there was a good chance they were snapped up before you could even call your real estate agent.

House hunting felt especially bleak last winter, when nationwide inventory hit its lowest level in recorded history. By the end of 2018, though, things finally started looking up, and in 2019, experts predict more opportunities—and less frustration—for buyers.

But there’s a catch: Not everyone will be able to afford those opportunities. That’s because the markets seeing the most increases in available homes tend to be more expensive, Hale says.

“For buyers, there is going to be more inventory. So that’s a bright spot,” she says. “The downside of that bright spot is it might not be in their price range.”

If you don’t have big bucks, though, all is not lost. The news is still good—just tempered. The supply of affordable homes for sale (under $300,000, which is about the median home price right now) might not be growing dramatically just yet, but it’s certainly not decreasing anymore.

2. Skyrocketing prices will slow their roll

While inventory went down, down, down over the past few years, home prices did the opposite. Will we still see staggering dollar amounts throughout 2019?

It’s another mixed bag here: Expect home prices to continue to rise (blah), but at a slower pace than they have been (yay). Hale predicts a 2.2% increase in home prices this year—compared with a nearly 5% increase last year.

That’s not nothin’. And if you can get in the market before those moderate increases, all the better.

“We do still anticipate rising home prices, particularly for below-median-priced homes, so buyers in that price range may have some incentive to buy sooner rather than later,” Hale says.

And there’s a silver lining to those climbing home prices, too—again, for some of you.

“As rising costs raise the bar to homeownership, some would-be buyers will be knocked out of the market, so that remaining buyers may have less competition to contend with than they saw in 2018,” Hale says.

3. Mortgage rates are lower than expected

There was a lot of discouraging talk at the end of 2018 about increasing rates—and there was good reason to be nervous. Rates on a 30-year fixed-rate mortgage, the most popular home loan, were approaching 5%—and expected to trend upward throughout 2019.

But that hasn’t happened.

In fact, rates have been falling—perplexing the pros but creating a prime opportunity for home shoppers. Rates did tick up slightly last week—for the first time in 2019—to 4.46%. But that’s still historically low.

“That’s definitely a huge opportunity for buyers because it drastically improves affordability,” Hale says. “And I think that if these low rates persist for a little while, then we’ll actually see stronger sales than we originally forecast.”

“Lower mortgage rates will get buyers off the sidelines,” adds Ali Wolf, director of economic research at Meyers Research. “Consumers should take advantage of the returned purchasing power, and in fact, we’re already seeing early 2019 data that suggest they are.”

But don’t get complacent, Hale warns: “I do think that the long-term direction of mortgage rates is going to be back up. We’ve still got a strong economy.”

4. Rents are rising—and won’t be falling anytime soon

Buying a home is a scary-expensive endeavor in the best of circumstances, and when prices are climbing, it can be downright soul-sucking.

But bear this in mind: Rents are rising, too. In fact, they very rarelydecline, Hale says. And while buying a home is generally going to cost you more in the short term than renting, you have to look at the bigger picture. Buying means you’re building equity—and not forking over your hard-earned dollars to a landlord.

“The challenge will be finding a home that fits needs, some wants, and still stays within the monthly budget,” Hale says.

If you can afford to buy now, you’ll thank yourself in the long run—and whenever your friends get their annual rent increases.

Open Shower Design: The Trend That Transforms a Bland Bathroom Into a Luxurious Loo

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Open showers are growing in popularity, but what exactly are they? This bathroom trend features a shower with a layout that’s free of doors or curtains. It’s a minimal and luxurious look, and that’s exactly why many people are drawn to it.

Read on for a full overview of open shower designs, including how much they cost and how to determine if this style of shower is right for your home.

What is an open shower?

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Photo by DeForest Architects

Open showers are designed to maximize bathroom space, and they often don’t include a tub, which provides more space for a large, luxury shower experience.

“This experience can include space to sit, dual shower heads, rain showers, and ample space for more than one person,” says Leigh Spicher, national director of design studios for Ashton Woods.

Advantages of an open shower

Now that you know what an open shower is, how do you know if it’s right for your home? For one, an open shower will make your bathroom feel, well, open.

“This spa-inspired design instantly creates the sense of more space by removing walls, using the same flooring throughout, and letting light flow more freely throughout the space,” says Eric Moore, an interior designer at Kohler.

But that isn’t the only advantage of an open shower. Moore says its design makes it ideal for aging in place.

“Walk-in showers with no doors allow people with reduced mobility to easily access the shower and safely move around within the space,” says Brad Roberson, president of Glass Doctor. “This simple difference can make the showering area noticeably safer for everybody—and you can even consider adding grab bars or benches inside the shower for maximum accessibility.”

An open shower design also eliminates the need for a shower curtain.

“The area is much easier to maintain over time and reduces the moldfactor in your home,” says Spicher.

In addition, Kelly Parks, broker and owner at Paris Gibson Realty in Great Falls, MT, says open showers are great for resale value if you decide to move in the future.

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Disadvantages of an open shower

The upsides of an open shower may make it seem like the ideal bathroom setup, but it also comes with a handful of shortcomings.

“Let’s face it: If it’s open, sometimes water gets where you don’t want,” says Spicher. “However, if it is designed properly, this challenge is minimized.”

Also, an open shower will mean you’re fully exposed in the bathroom. For some, this isn’t a problem. But others may be more comfortable in a more enclosed space.

“Some people prefer the privacy of enclosed showers, especially when more than one person may be using the bathroom at a time,” says James McDonald, senior designer at OBMI International, an architectural firm in Coral Gables, FL.

Dan DiClerico, a home expert at Home Advisor, says the biggest downside to this design trend is that it usually increases the cost of a bathroom renovation.

“The average cost of a full bathroom remodel is just under $10,000, but a reno with an open shower is going to be closer to the higher end of the scale, around $20,000,” DiClerico says.

Why is the price tag higher for a bathroom with an open shower? DiClerico says the overall quality of the work needs to be extremely high to make sure every inch of the room is watertight.

“For example, the slope of the floor must be just right or you’ll end up with standing water in one corner of the room,” he says.

Budget-friendly alternatives to an open shower

If you’re leaning toward building an open shower but don’t want to spend all of your budget on it, there are some other options that won’t break the bank.

DiClerico notes that you can save money on materials.

“By choosing inexpensive ceramic tile and a single shower head, you might be able to have an open shower installed for as little as $2,000,” he says.

However, he warns against cutting corners on labor.

“If your contractor doesn’t know what he or she is doing, you’ll end up spending many thousands more on repairs from water damage,” he cautions.

What’s on the Horizon in the 2019 Housing Market

Chief Economist Danielle Hale Shares What’s on the Horizon in the 2019 Housing Market

It’s going to be a tougher road ahead for home buyers and sellers in 2019, according to the realtor.com® 2019 National Housing Forecast. Although inventory is expected to grow, so too are home prices. And with mortgage rates expected to hit 5.5 percent by the end of 2019, monthly mortgage payments will rise 8 percent, putting home ownership more out of reach especially for younger Gen-Z, millennial, and other first-time home buyers. Upscale homes in high-growth markets, however, will provide more opportunities for buyers.

Whether you are a potential buyer looking to make a purchase in 2019, a home owner considering putting your house on the market, or a real estate professional, realtor.com® Chief Economist Danielle Hale parses through the forecast data and breaks down what the road ahead may mean for you.

What are the major takeaways looking into 2019?

What’s most surprising is the challenges both buyers and sellers are likely to experience. In 2018, it was all about buyers dealing with competition, but it’s sellers that are going to have to contend with that in 2019. On the other hand, buyers are going to have more homes to choose from with the inventory increase, but need to be prepared for rising prices and mortgage rates. A monthly mortgage payment will be about 8 percent higher next year while incomes are growing at about 3 percent on average. They’ll have to reconcile what they want, what they need, and what they can afford.

With the expected increase in prices and mortgage rates, how can a first-time home buyer be successful in 2019?

Enlisting partners will be crucial. First-time home buyers generally don’t have the benefit of equity and, as a result, tend to put down a lower down payment and take out significant loans. When prices rise, that’s a challenge. The most important factor for a first-time home buyer is to conduct research and determine his or her budget. If you are a first-time home buyer, utilize tools such as price alerts on realtor.com® so that you’ll be notified when a property in your price range and neighborhood hits the market.

Working with an agent to identify realistic needs versus wants and setting up a very targeted framework to hone your search will be most effective. As a first-time homebuyer, this is likely your first major investment and approaching it realistically will set you up for better success. Additionally, talk with a lender to get pre-approved now. Consider getting pre-approved at a hypothetical higher mortgage rate. This way, you will already know how higher rates will impact your home search and can adjust accordingly. All of these steps will position you well and show that you’re a serious buyer. To guide you through the first-time home buying process, check out our interactive resource page.

Given the inventory increase, what can sellers expect?

Sellers will need to consider the competition. It’s still a very good market for sellers, but if they’ve had their expectations set by listening to their neighbors’ stories of how quickly their homes sold in 2018 or 2017, they’ll need to adjust their expectations because it’s not going to be the same market in 2019. They likely won’t be able to put up a listing and get multiple offers at or above their asking price; they’re going to have to be mindful of other listings in their area. If you’re a seller, to navigate the process, you’ll want to hire an agent who is a local expert. Using the Find a Realtor tool on realtor.com®, your agent can stay on top of local market dynamics and offer advice on things like repairs you should make versus those you should leave for your buyers and how to stage your home. Keep in mind that the majority of buyers are starting their home search online and listing photos on websites is often the first chance you have to make a first impression. Making sure your home is looking its best will spur online views that turn into visits and finding a buyer faster.

How will 2019’s housing market impact millennials and other generations?

Given that first-time home buyers tend to be millennials, it’s going to be a challenging year for many in this generation. However, it’s traditionally been millennials that cite rising rents as a reason to get into the home market. If they buy with a fixed-rate mortgage which most home buyers use, then they’re locking in their monthly payment, keeping it the same over time. Even if it’s more expensive today, as rents continue to rise, eventually their home payment likely will be less expensive than it would be to rent. This is a good way to keep housing costs fixed and protect from some of those inflationary increases. In addition to rising rents pushing millennials to buy homes, as the largest segment of millennials turn 30 in 2020, many are getting married and creating families, and those are key drivers prompting renters to become homeowners.

Baby boomers will be a demographic to watch. Although inventories are increasing, prices are still rising in most markets, so boomers hoping to sell will likely still face a favorable housing market. Especially when considering their long tenure, boomer home sellers are likely to walk away with a good profit. Generally expressing a desire to stay put and be tied to the local community, however, many boomers are not listing homes for sale, and this has contributed to lower inventories in the past. As they age, however, we expect more boomers to be interested in downsizing, freeing up the larger homes they currently occupy.

For those millennials that have already gotten into the market, this could be a year to trade up, which could create some more affordable inventory for those first-time home buyers. Millenials are really poised to make an impact on the housing market both at the first-time home buyer side and also at the repeat or trade up buyer side.

Will we continue to see spring buying season start earlier this year as we have in the past two years or does the 2019 market look more traditional?

In the last two years, in addition to seeing spring buying season start earlier, we also saw fall buyers persist longer into the holiday season. We haven’t seen much of that this year so that could be a sign that buyers will wait to start buying in the spring season but only time will tell. This is something to keep an eye out for moving into the spring.

What impact will the new tax bill have on the housing market?

Homeowners experienced a lot of benefits under the old tax regime that many will no longer be able to take advantage of. There are a lot of moving pieces to the tax reform plan, one of which was to limit the deductibility of mortgage interest on mortgages priced between $750,000 to $1 million. Previously, you could deduct interest on mortgages up to $1 million; now you can only deduct interest on mortgages up to $750,000.

But that’s not the biggest reason that homeowner incentives are affected by the tax plan. The biggest reason homeowner incentives are affected is that the standard deduction was almost doubled. This increase means that the majority of taxpayers are going to be standard deduction tax payers, so tax incentives won’t be a factor in their decision making because they take the same standard deduction regardless of whether they own or rent.

As far as how it affects people’s decision making in the housing market, we really haven’t seen the bulk of that. Most people have enjoyed the benefit of more take home pay this year because withholding has been adjusted, but until they’ve done their 2018 taxes, they won’t know all the ins and outs of how the tax plan is going to affect them. Come spring when people are sitting down and doing their taxes, that’s when we’re going to see a bit of a reassessment and people recognize whether they will or won’t itemize under the new regime.

Homeowners Spent a Record Amount on Remodeling—but on What, Exactly?

Feverpitched/iStock

With the Great Recession now finally in the rearview mirror, many homeowners—and their bank accounts—are suddenly a bit more flush. And that’s good news for their homes sorely in need of more than a fresh coat of paint. Some new flooring, maybe? How about brand-new kitchen countertops? And while you’re at it, maybe an entire HVAC overhaul?

Homeowners spent $361 billion—more than ever before—on home improvements, maintenance, and repairs in 2016, according to a recent report from the Joint Center for Housing Studies of Harvard University. That’s a nearly 13.5% jump from the previous peak, in 2007, just before the housing market crashed.

The report looked at U.S. Census data on the 25 largest U.S. metros. Most of the data in the report was from 2015, except for the 2016 statistic on overall spending.

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“Homeowners just feel like they have more equity built in their home … so they can invest in their homes in bigger ways than they could in the past,” says Abbe Will, one of the contributors to the report.

That’s because less unemployment, higher salaries, and rising home values are leading many homeowners to pimp out their homes, or at least fix them up a bit before putting them on the market. Renovations are also popular among new homeowners who want to customize their new pads.

“A lot of remodeling tends to happen around the time of the sale,” Will says.

So instead of only paying for things that need to be done, like replacing a leaky roof or repairing a cracked foundation, they’re creating outdoor oases and splurging on new granite countertops.

Millennials “really put a lot of value on personalizing something so it is an expression of themselves,” says Brad Hunter, chief economist at HomeAdvisor, a website that connects consumers and contractors. “They may not have the money to do it all at once, but they can do it over the years and they can also do it themselves.”

Over the past few years, investors also spent a pretty penny fixing up residences they bought in the downturn to get them ready to rent out to tenants.

What are homeowners spending money on?

Kitchen and bath remodels still top the list of most popular home improvements.Feverpitched/iStock

Spending may be back, but many homeowners still aren’t throwing money around with quite the abandon they did before the recession. In 2015, discretionary spending made up just a third of all home improvements—compared to more than 40% in 2007.

The most common work done wasn’t exactly glamorous—necessary improvements such as replacing systems that keep a home humming along, like plumbing, electrical, and HVAC, took the lead, according to the report. This was followed by necessary upkeep on home exteriors, like roofing, siding, windows, and doors; interiors, like carpeting, flooring, and insulation; and improvements to lots and yards, such as fixing fences.

Meanwhile, the most popular discretionary home improvements were bath remodels followed by kitchen remodels. Next up were outdoor living additions, like porches, decks, patios, terraces, garages, and carports, and then room additions.

“We’re seeing a lot more [demand for things like] painted cabinets, a tuxedo finish, which is light on the bottom dark on the top, quartz countertops versus granite,” says Joanne Theunissen, vice president of the custom home building and remodeling firm Howling Hammer Builders in Mount Pleasant, MI. “We still see a lot of [people wanting] stainless appliances.”

Baby boomers are leading the charge, with those 55 and up making up about 52% of the home improvement spending in 2015. That’s because many of them want to stay in their homes as long as possible, and they’re willing to spend some serious moolah to do that.

Another area of growth is more energy-efficient and smart home renovations, remodels, and improvements. This can be anything from water-, power-, and cash-saving appliances to home technologies like the Amazon Echo.

“Home automation is the emerging market that’s really starting to take off,” Will says. “As the technology has improved, the price has come down.”

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Who’s spending the most—and least—on home improvements?

It shouldn’t come as a surprise that those under 35 spent the least on improvements—likely because they don’t have the higher incomes and equity built up in their homes, if, in fact, they own one at all.

For example, homeowners younger than 35 spent an average $8,702 on their individuals projects in 2015. Those in the 35–44 age range spent $10,294, while the 45–54 age range plunked down $10,553. Homeowners in the 55–64 age range spent an average of $11,207, and those 65 and up spent $9,058.

Those in their mid-30s to mid-50s spent the most, because they’re the most likely to have families. No one ever said kids come cheap!

In the coming years, minorities are expected to spend more as well, according to the report. Their spending rose from 12% of the market share in 1995 to 19% in 2015. And that’s expected to grow by 40% to $60 billion by 2025.

White homeowners are still expected to pay for the lion’s share of improvements, making up about two-thirds of the spending through 2025, according to the report. However, Hispanics are predicted to be about 18% of those seeking home improvements, followed by about 10% of Asians and 7% of blacks.

The report doesn’t take into account recent changes to immigration policies that could affect the industry.

The future of remodeling is bright, but slower

Despite the surge in home renovations (new bathrooms! new kitchens! new patios!), remodeling spending is expected to grow by just 2% annually through 2025, according to the report. That’s a little lower than the 2.5% each year that homeowners paid from 1995 to 2015.

Blame the anticipated slowdown on rising home prices and mortgage interest rates and not enough properties on the market to meet demand. That means fewer millennials will become homeowners. And if they don’t own homes, they can’t remodel them.

However, when they do buy, their homes are likely to be cheaper and need more work. That’s expected to help drive the market in the future.

“A lot of remodeling tends to happen around the time of the sale,” says Harvard’s Will.

The Home Improvement Projects DIYers Regret the Most—You’ll Never Guess No. 1

Binge-watching HGTV home improvement shows can make it look so easy—even enjoyable—to do anything from retiling a bathroom to repainting the living room. Heck, it even seems like it might make financial sense to forgo the pricy professionals altogether. What could go wrong?

Those famous last words have led nearly two-thirds of do-it-yourselfers to regret not calling an expert on at least one home improvement project, according to a recent survey from ImproveNet. The online home services marketplace surveyed 2,000 Americans in November who had attempted at least one DIY renovation project.

The average DIY enthusiast attempted eight projects, according to the survey. And about a third of them had to later hire a professional to redo the job—which can cost more than if they’d hired a professional from the start.

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“People should educate themselves about what they’re getting into and what the common pitfalls are,” says Andy Kerns, creative director at Digital Third Coast, which teamed up with ImproveNet to do the survey. “It’s natural for people to expect things to go smoothly, especially if they’re not experienced contractors. [But] rather than just jumping in, people should find out what’s happened when things didn’t go well for others.”

Folks with no experience can start with a simple, low-stakes project, and go from there, says Joanne Theunissen, the remodeling chair of the National Association of Home Builders.

“We have seen people take on a lot more than they could deal with,” says Theunissen, also the co-owner of Howling Hammer Builders, a Mount Pleasant, MI–based remodeler and custom builder. “Be cautious. If it looks easy on TV, understand it’s not [in real life].”

Which projects did folks regret doing themselves the most?

If you don’t have experience installing floor tiles, you may want to start slow, rather than in the master bath: That was ranked the most regretted home improvement project by survey participants.

“It’s so difficult, and there are so many steps to getting it right,” says Theunissen. “If you think you want to try, buy an old table and see if you can put ceramic tile on the top, getting it level and grouted correctly. And if doesn’t work, throw it away. You’re not out much.”

The rest of the top 10 most regretted DIY home improvement projects were replacing a ceiling; refinishing hardwood floors; installing carpets; finishing basements; installing hardwood floors; refinishing cabinetry; installing sprinklers; installing showers and baths; and painting home interiors.

Why were these DIY projects so regrettable?

The majority of DIYers, 55%, said their projects took longer to complete than they expected. The ones that ran over more than anticipated the most were repairing home foundations, installing outdoor patios and walkways, and painting the exteriors of their homes.

Meanwhile, about 50% of do-it-yourselfers said their improvements were physically more difficult than anticipated, particularly when it came to installing roofs, landscaping, or installing patios and walkways. And 48% said their endeavors were technically harder than they had counted on, and 17% said they cost more than they had assumed.

Some projects even caused harm to their homes—and themselves. About 8% said their places were damaged as a result of the undertakings, mostly with repairing foundations, replacing ceilings, and installing roofs. And 6% were injured in the process. So be careful with installing fireplaces and windows and repairing foundations!

“A lot of people do very nice work, but you have to be really aware of what your skills are,” says Theunissen.

So what was the top reason folks were disappointed in the fruits of their blood, sweat, and now tears? About 55% of respondents said the finished project simply didn’t look as good as they had hoped. These folks were the most dissatisfied with their interior paint jobs, floor tile installations, and hardwood floor installations.

There Goes the Neighborhood: Watch Out for These 7 Red Flags When Buying a Home

Finally, you’ve done it: You’ve scoured the market for available homes—and then some—and found one you can’t stop thinking about. It’s time to make an offer!

But before you put your money on the line, take a peek around the neighborhood. We won’t use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can’t change the neighborhood. And if your hood is on the decline, you just might have a helluva time offloading your home when it’s time;

A bad neighborhood isn’t always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we’ve identified seven red flags that should give you pause before you sign on the dotted line.

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Red flag No.1: Too many houses are on the market

There’s nothing wrong with two or three listed houses on the same street. But if you see an army of “For Sale” signs, consider looking elsewhere.

“This points to illiquidity in the market and pricing pressure, which is a risk for buyers,” says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.

Of course, the hue of this particular red flag depends on the reason for those “For Sale” signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there’s a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.

Red flag No.2: The schools are enrolling fewer students

Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there’s no physical room to grow.

“Shrinking class sizes are a red flag,” Bernstein says.

There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it’s certainly something to consider.

Red flag No.3: The area leans industrial

A nearby strip of cute boutique stores might be a nice selling point, but reconsider the purchase if the closest commercial influences lean toward the industrial.

“Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise,” says Ralph DiBugnara, the vice president at Residential Home Funding.

Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.

Red flag No.4: There are lots of empty storefronts

Don’t just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?

“Empty storefronts can tell you a lot,” Bernstein says. “They point to less disposable income of residents than clearly there once was.”

Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don’t have money for dinner out, they probably don’t have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.

Red flag No. 5: The Stepford style is in full force

You might love the homogenous, well-groomed suburban look (and there’s nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?

If all the neighborhood’s homes (and landscaping) look suspiciously similar, “explore how restrictive the homeowners association is,” says Susanna Haynie, a Realtor in Colorado Springs, Co. “It could be an issue.”

Red flag No.6: There’s no parking

Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse’s car? If the streets have bumper-to-bumper traffic, think twice about buying in the neighborhood—especially if the home lacks a garage or carport.

“I’m always on the lookout for a lack of parking,” DiBugnara say. “It’s best to visit at night or on weekends to really, truly tell what will be available to you once you live there.”

Unless you commute primarily by foot or bike—or you’re OK spending your weekends circling the block—the neighborhood may not be a good fit for you.

Red flag No.7: Surrounding homes aren’t well-maintained

A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.

Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept as more expensive ones. It’s about pride. Neighbors with no pride in their home’s appearance and upkeep decrease property values for everyone.

Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights.

“If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage,” DiBugnara says. Fixing these major problems “could be a major expense, hassle, or detriment to your value later on.”

A Seller’s Guide to Navigating the Home Inspection

Passing the inspection advances you to the next level: closing the deal on your house.

Getting beyond the home inspection is sort of like advancing to the next level in a video game.

When you get past this step, you get to advance to a fresh, exciting place — your new home, to be exact.

In Every Inspection, There Are Stakes for Buyers and Sellers

Once the buyer has made, and you’ve accepted, the offer, your home will get the once-over from the buyer’s home inspector. The inspection is usually a contingency of the offer, meaning the buyer can back out based on serious problems discovered. The lender also expects an inspection to make sure it’s making a good investment. Makes sense, right?

During the home inspection, an inspector will examine the property for flaws. Based on the inspector’s report the buyer will then give you a list of repair requests.

Your agent will work with you to negotiate those requests. Don’t want to be responsible for a repair? (Maybe it’s best if the buyer has the fix made by their own contractor anyway.) Your agent may be able to negotiate a price credit with the buyer instead.

By the way, inspections aren’t necessarily a big, scary deal. Your agent will help advise you about repairs you need to make before the inspection. In fact, she may have made those recommendations to you even before you put the home on the market. And if you’ve been maintaining your home all along (and you have, right?), your punch list may be minimal.

In addition, back when you put the home on the market, you were required to disclose to buyers the home’s “material defects” — anything you know about the home that can either have a significant impact on the market value of the property or impair the safety of the house for occupants. Material defects tend to be big underlying problems, like foundation cracks, roof leaks, basement flooding, or termite infestation.

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What a Home Inspection Covers Depends on the Home

Every home is different, so which items are checked during your property’s inspection may vary. But home inspectors typically look at the following areas during a basic inspection:

• Plumbing systems
• Electrical systems
• Kitchen appliances
• Heating, ventilating, and air conditioning (HVAC) equipment
• Doors and windows
• Attic insulation
• Foundation and basement
• Exterior (e.g., siding, paint, outdoor light fixtures)
• Grounds

Depending on the sales contract, the purchase may also be contingent on a roof inspection, radon inspection, or termite inspection.

What a home inspection won’t cover is the unseen. Your inspector isn’t going to rip open walls or mountaineer on the roof. (Though that would be kind of exciting to watch.)

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So What Do You Need to Fix?

A home inspection report is by no means a to-do list of things that you must address. Many home repairs, including cosmetic issues and normal wear and tear, are negotiable.

There are, however, three occasionally overlapping types of repairs that sellers are typically required to deal with after a home inspection:

1. Structural defects. This is any physical damage to the load-bearing elements of a home; these issues include a crack in the foundation, roof framing damage, and decaying floor boards.
2. Safety issues. Homes for sale have to meet certain safety standards. Depending on where you live, safety issues that you, the seller, may have to address could include mold problems, wildlife infestation, or exposed electrical wiring.
3. Building code violations. Building code violations — such as the absence of smoke detectors, use of non-flame retardant roofing material, and use of lead paint after 1978 — must be addressed by the seller.

Again, addressing these might take the form of a credit on the pirce, which in the case of structural issues could be sizeable.

Use This Checklist to Prepare for a Home Inspection

So, are you ready for the inspection? If you take these steps (with your agent’s assistance) you will be:

• Assemble your paperwork. Transparency is key. Ideally, you’ll have summaries or invoices of renovations, maintenance, and repairs you’ve done on your home that you can provide to the home buyer. Create a file that collects this documentation and share it with the buyer.
• Make sure your home is squeaky clean. Your home should be pristine when the inspector arrives — a good first impression will set a positive tone. Take time to declutter and deep clean the whole house. A deep clean (stuff like cleaning the range hood and upholstery and sanitizing garbage cans), averages between $200 and $400, according to Angie’s List, depending on the size and condition of your home.
• Remove any obstacles that may block Does the Inspector Have a View?Make sure to rake up leaves and brush from the home’s foundation so the inspector can get a good view of the grounds, grading, and exterior. the inspector’s access . Take measures to ensure the inspector has complete access to all facets of the property, including electrical panels, attic space, and fireplaces. This may require temporarily moving clothing and other items that impede access.
• Leave the utilities on. For the home inspector to test items such as the stove, dishwasher, furnace, and air conditioning system, the utilities must be connected regardless of whether the house is vacant; otherwise, the inspector may need to reschedule, which can potentially push back closing.
• Fix minor problems ahead of time. Many cosmetic issues — say, a broken light fixture or a scratch on the wall — are minor and easy to fix, but they can make buyers more concerned about how well you’ve maintained other areas of the home. It’s best to take care of small problems yourself before the buyer’s inspection.

It’s a Good Idea to Do Your Own Inspection Before the Inspection

Some sellers choose to hire their own home inspector to check the property before their house is even listed. This is called a “pre-listing inspection,” and it has several advantages:

• It can give you time to fix deal breakers. Granted, a pre-inspection costs money — a basic inspection is about $315, with condos and homes under 1,000 sq ft. costing as little as $200 and homes over 2,000 sq ft. running $400 or more, according to HomeAdvisor.com. That said, it can enable you to address major issues that could cause a buyer to pull out of their offer. Big problems may include mold, water damage, or foundation cracks.
• It can mean fewer surprises — and help you market your home. Knowing what needs to be fixed in your home in advance will enable you to be upfront with buyers about any big pre-existing issues, which can give buyers peace of mind. You can also make it known to prospective buyers that consideration for those items has already been factored into the sales price.
• It can speed up the negotiation process. Having a pre-listing inspection can help reduce, or even eliminate the time-consuming process of having back-and-forth negotiations.

If you discover any material defects to the property in a pre-listing inspection, you are legally required to disclose them to buyers — even if you fix them. Also there’s no guarantee that the buyer’s own inspection won’t reveal things yours didn’t find. The choice to do a pre-listing inspection is yours, but it never hurts to get a head start on repairs.

Be Aware of These Tried-and-True Tactics for Negotiating Repairs

When it comes to repairs, your agent will haggle with the buyer’s agent for you — though it’s ultimately your decision as to how you want to respond to the buyer’s home repair requests.

Here are four time-tested negotiating techniques that your agent may deploy to protect your best interests — without reducing the sales price:

1. Agree to make reasonable repairs. Unless your house is flawless — and the reality is that no one’s is — be prepared to receive repair requests from the buyer. You don’t have to offer to fix everything that buyer asks of you, but you should take responsibility for major issues.
2. Offer a closing cost credit. Don’t want to deal with the hassle of making or ordering home repairs yourself? Ask your agent to offer the buyer a credit at closing for the estimated costs. This can also help you avoid complaints from the buyer over the quality of the workmanship, since you won’t be the one overseeing the repairs.
3. Barter. One way to smooth things over with a buyer and keep the deal moving forward is to offer something of value that’s unrelated to the requested repairs. For example, if you know the buyer loves the new couch or bedroom set you bought, you could offer to leave it behind in exchange for making fewer repairs.
4. Leverage the market. You may have more negotiating power depending on where you live. In a hot seller’s market, for instance, you might be in the position to offer the buyer fewer repairs, especially if you have another buyer eager to make an offer.

Home inspection may sound like a burdensome process, especially when you’re so close to your goal. But when you cross it off your list, you’re readier than ever to jump to the next level — and into your life’s newest phase.

What to Do ASAP as a New Homeowner (“Future You” Will Thank You)

If you’re serious about developing good habits, you need this worksheet.

It’s finally yours. Your very own home. You can paint the walls whatever you like. Heck, even knock out a wall! There’s no landlord to fight you.

But if you’re serious about developing good homeowner habits (so your home makes you richer, not poorer), you’ll use this worksheet the minute you close on your home — if not before. Easier to do now than suffer some head-slapping regrets later.

If that doesn’t do it for you, here’s a *cheater* version done in the form of 22 tips. You only need scroll:

Security & Safety

These are the very first things you should do after buying a house (for obvious reasons):

1. Change locks. Spares could be floating around anywhere.

2. Hide an extra key in a lockbox. Thieves look under flower pots.

3. Reset the key codes for garage doors, gates, etc. The former owners might’ve trusted half the neighborhood.

4. Test fire and carbon monoxide detectors. Who knows when the last time was. Definitely install them if there are none.

5. Check the temperature on your water heater, especially if you have young ones, so it won’t accidentally scald. Manufacturers tend to set them high. (but the best temperature setting for hot water is 120 degrees).

6. Make sure motion lights and other security lights have working bulbs.

7. Put a fire extinguisher in the kitchen and each additional floor.

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Maintenance Planning

Start your master maintenance plan (and good home-keeping habits) by setting reminders in your calendar to do these basic maintenance tasks:

8. Clean out the dryer hose and vent yearly. Clogged ones burn down houses. And you don’t know the last time the previous homeowner did it.

9. Change your HVAC filters at least once a season. You’ll save on heating and cooling — and your unit will last longer. (While you’re at it, go ahead and stock up on them, too.)

10. Schedule HVAC maintenance for spring and fall.

11. Clean your fridge coils at least once a year. It’ll run better and last longer. (Don’t see any coils? Lucky you! Newer fridges often have coils insulated, so there’s no need for annual cleaning.)

12. Drain your water heater once a year.

13. Clean your gutters at least twice a year.

14. And if all items on your inspection report were not addressed, make a plan to fix them — before they become bigger and more expensive repairs.

Emergency Preparedness

You really really don’t want to be figuring any of this out in a real emergency. Do it now. You’ll sleep better and be less likely to ruin your home.

15. Locate the main water shut-off valve. Because busted pipes happen to almost every homeowner at least once. And water damage is value-busting and pricey to fix.

16. Find the circuit box, and label all circuit breakers.

17. Find the gas shut-off valve, too, if you have gas.

18. Test the sump pump if you have one. Especially before the rainy season starts.

19. List emergency contacts. You already know 911. These are the other numbers you often need in an emergency. You should have them posted where they’re easy to see. In fact, here’s a worksheet you can fill out and post.

• Your utility companies
• Your insurance agent
• Plumber
• Electrician

20. Assemble an emergency supply kit. Some key items are:

• Flashlights and batteries
• Non-perishable food and water
• Blankets and warm clothing
• A radio, TV, or cell phone with backup batteries

Home & Mortgage Documents

In case there’s a dispute with your mortgage lender or a neighbor over property lines, or if you’re a bit forgetful about due dates.

21. Store copies (the originals should be in a fireproof safe or safety deposit box) of important home documents so they’re readily available. Go paper, cloud, or better, yet, both.

• Lender contact information
• Property survey
• Inspection report
• Final closing documents
• Insurance documents

22. Set mortgage and other bills to auto-pay so you’re never late.