Category: Decor & Design

The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:

• 70% of respondents want more outdoor living space
• 69% of respondents want a home office (48% wanted multiple offices)
• 46% of respondents want a multi-function room/flexible space
• 42% of respondents want an au pair/in-law suite
• 39% of respondents want an exercise room/yoga space

If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:

1. A possible desire to relocate
2. The difference in the cost of a renovation versus a purchase
3. Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)

In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.

Home Equity Is Skyrocketing

The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph below uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years:Odeta Kushi, Deputy Chief Economist at First American, quantifies the amount of equity homeowners gained recently:

“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”

As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.

If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.

Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.

First Step: Determine the Amount of Equity in Your Home

If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:

1. The current mortgage balance on your home
2. The current value of your home

You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact a local real estate professional who will be able to present to you, at no charge, a professional equity assessment report.

Bottom Line

If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home.

Shawna O’Brien
F.C. Tucker Geist Fishers
shawna.obrien@talktotucker.com
317-506-0039

Selling Your Home? Here Are Some Affordable Staging Ideas

“Staging” is all about making a home look as appealing as possible and highlighting its best features. Through the careful placement of furniture, decorative items and other efforts, you can have your home looking picture perfect in no time — and that’s essential if you’re prepping to sell.

Is Staging Really Worth It?

Absolutely. When you’re still living in a home, staging can help “erase” your presence so that buyers can better see themselves in the space. If you’ve already emptied out a home, staging can help buyers envision what it’s like to live there — and show off big spaces and dramatic touches so that buyers can better see the property’s potential. That can translate into more money for you. According to the National Association of REALTORS®, staged homes can bring in bids up to 5% higher than homes that aren’t staged.

Depending on the size of your property, professional staging can cost between $1,000 and $5,000, so a lot of homeowners look for ways to handle the job themselves. Fortunately, there are plenty of no-cost and low-cost steps you can take to stage your place before it goes on the market.

If staging has a cardinal rule, it would be “Decrease and Declutter.” Less really is more in this situation. Anything that you can define as clutter needs to be picked up and thrown out or put away — but that’s just part of what needs to happen.

Unless you embraced a minimalist philosophy and style years ago, the odds are good that there’s far too much stuff in your space. Everything from the tchotchkes on your mantle to the art on your walls has your personality and stamp on them, and that makes it harder for buyers to envision the place as their own. With that in mind:

• Pull down all of the family photos. You want buyers to see their family in the house, not yours.

• Pack away almost all knickknacks. A good rule of thumb is to have no more than one or two “objects of interest” in a given room.

• Clear off the countertops. The breadmaker, blender, and other things you normally keep out may be useful, but they detract from your kitchen’s beauty.

• Get rid of memorabilia and personal keepsakes. You want buyers to see your home, not showcase your personality or interests.

• Eliminate extra furniture. Too many end tables, footstools and plant stands can make a home feel crowded and uncomfortable to buyers.

• Invest in a few baskets for easy pick-up. If you’re still living in your home, it’s difficult not to have a little clutter. Baskets can be used to quickly gather up television and game remotes, kids’ toys and more when prospective buyers are coming.

The goal is to make your home as relentlessly neutral as possible. The more it resembles a nice, cozy hotel that’s just waiting on its next occupants to arrive, the better.

Half-Empty Your Storage Spaces

When you’re in the process of decluttering, don’t simply shove everything into the closets and storage spaces around your home. Trust us: Interested buyers are going to look inside every nook and cranny — and they don’t want your stored items falling out on their heads when they do.

Since buyers want to be able to see how much storage they’re going to have in a home, a half-empty closet or cupboard is ideal. That helps visually reinforce the idea that there’s plenty of storage space available. With that in mind:

• Organize your closets. Coordinate all your hanging clothes and line up the shoes.

• Clear out the kitchen cupboards. Get rid of all the extra cups and seldom-used plates or pans.

• Clean the pantries. Throw out any expired food items and donate a lot of the rest. Leave just enough in your pantry to make cooking practical.

• Scale-back the linen closet. Stack blankets, sheets and towels neatly and put anything you aren’t likely to use soon, including seasonal items, in storage.

Don’t forget to cull through any other storage areas in your house, like cubby holes, the spot beneath the kitchen sink and the bathroom cabinets. The more spacious your home seems to buyers, the better.

Focus on the Buyer’s First View

What’s the first thing potential buyers see when they enter your home? If their choices are walking through a claustrophobic foyer that’s lined with coats and shoes or a cluttered side-entrance through a dirty garage, you’ve got some work to do.

• Paint foyers and mudrooms a bright, neutral color to make them seem more open and inviting.

• Eliminate utility items like coat racks, shoe benches, umbrella stands and keyholders, or any other type of clutter.

• Consider adding a mirror on one wall to make the foyer or entrance seem larger.

Make sure that you carefully clean and declutter any area that your potential buyers will be walking through, including the attached garage. As always, you want buyers to feel like there’s plenty of room in a space for their needs.

If you do the work yourself, your biggest expenses might be a storage unit for your extra belongings and seasonal clothing or the paint you use on your walls. You may also want to spring for professional landscaping or a few flower pots to make the front of your home look especially welcoming. It might also be helpful to hire a professional cleaning crew to make your home sparkle once you’ve done all of the decluttering and sorting.

Shawna O’Brien
shawna.obrien@talktotucker.com
F.C. Tucker Geist Fishers
The Tumbarello Group