If your home is in pretty good shape i.e. its decently updated and not in need of a total overhaul, you might think its ready to go on the market as is. But little things you wouldnt expect can end up being deal breakers. And, when youve got competition, you need your home to stand out for all the right reasons. Give your home a good look and address the little things now before they become big problems when buyers are balking.
Cords hanging from your mounted TV
This is one of those things that tends to fade into the background in a home we live in every day. But dont be surprised if new eyes go right to those dangling cords and wonder why you didnt take the next step and hide them in the wall. Anything that makes a potential buyer question whether you cut corners or were lazy elsewhere could spell bad news for your home sale.
An unkempt yard
So, you had your landscapers out to clean out your flower beds, trim the bushes, plant colorful new blooms and mulch everything. And then, the night before a showing, a storm blew a whole mess of leaves into your yard. Grab that rake and make it a family affair out on the lawn at dawn. You know what they say about first impressions. Buyers likely wont be forgiving of a messy lawn, and your house may stand out if they can see the effort made to clean it up when the neighbors yards are still 15-deep in leaves.
A dingy front door
Again with the first impressions. Your home may look great inside, but if the front door is chipped or faded, or the hardware is worn, your potential buyers may never get past it. This is an easy fix, and one that consistently rates high on the ROI scale.
While homebuyers in general may not mind if animals live in the home they are considering purchasing unless there are severe allergy issues, they dont want to see - and, especially, smell - evidence of them. You have probably gathered up and stowed away the overflowing box of toys and balls. But have you considered the smell? You might not notice it, but first-time visitors likely will.
You dont have to rehome your pets; Use these tips from petMD to make your home smell pet-free.
Even if you keep a pretty clean home, there may be areas that need attention, like ceiling fans or windowsills that are out of reach. You may not have a housekeeper on a regular basis, but doing a one-time, super deep clean before your home hits the market is a good way to make sure potential buyers dont nitpick and find a reason to question the homes condition.
Poor furniture arrangement
If youre rolling your eyes at the idea that the way you have your living room laid out could make a difference in whether or not your home sells, remember back to when you saw the home for the first time. Were you picturing your own furniture in the space? Thats what real buyers do, and if they cant picture how it will work because you have too much stuff in the space or its oddly configured - blocking a fireplace or doorway, for instance - youre keeping them from doing the thing that could make them buy the home.
"Square footage is important to homebuyers, so when youre selling a house its important to maximize the space to appear bigger and highlight each rooms dual functionality to enhance buyer appeal," said U.S. News World Report. "A home seller can do this by decluttering,lighting up the roomand especially by having your furniture strategically placed to show off the square footage. The layout will determine the visual size and flow of the room." You can learn more staging tips for arranging your furniture here.
Junk drawers and crammed cabinets
Buyers who are genuinely interested in your home are likely going to open everything and look everywhere. Its not snooping at least, we hope its not snooping - its an interest in how much storage there is in the home. You may be forgiven for one "junk drawer," but the neater and cleaner you can make everything else, the better. You want people to see the space, not your stuff.
The need to showcase the space, not the stuff, goes double for closets. "Whether its a hallway coat closet or a master suite walk-in, your homes closets will have a major big impact on prospective buyers," said Apartment Therapy. "Box up off-season appa>Cluttered countertops
Eliminating, or at least cutting down on, clutter in your home is key to getting it sale-ready, and this is especially important in kitchens and bathrooms. While people may be impressed by your professional mixer and juicer, theyre much more interested in knowing they have ample countertop space for their own stuff.
Has technology passed your home by? Its never too late to update it. Whether you just want to bring the homes function into this century for your personal use or are looking to put it on the market, incorporating some smart home items is, well, a smart strategy.
"The stock advice for homeowners putting a house on the market used to go like this: Give the exterior, or the front door, a fresh coat of paint; tame unruly shrubs; and swap out a few light fixtures. But todays homebuyers are expecting a little more," said Consumer Reports. According to Coldwell Bankers latest annualnbsp;smart-home survey, most potential homebuyers want smart-home tech preinstalled."
Specifically, "Seventy-seven percent wantnbsp;smart thermostats, 75 percent want smart smoke detectors, 66 percent want smart home security cameras, and 63 percent wantnbsp;smart locks, to name a few."
Not only will a smart thermostat make your air conditioner function better and make your house more comfortable, it will save you money in the process. "With anbsp;smart thermostat, easily control the temperature in your home from a central control panel, with the sound of your voice, or using your mobile device," said Vivint. "Combined with a smart assistant that intuits and learns your preferences and behaviors, your thermostat can automatically adjust the temperature - saving you valuable time, energy, and money."
The Nest Thermostat is one of the most popular options on the market. It "currently costs 249 butnbsp;projects an average savingsnbsp;of around 173 per year," said UpNest. We also love the ecobee because it has multiple sensors. The latest version, the ecobee4 249, also has built-in Amazon Alexa.
Smart door locks
There are lots of smart door locks out there, which eliminate the need for a key and replace it with a keypad and code that are used for entry. But, we love this August Smart Lock, which takes smart home capabilities up a notch.
"This battery operated device sells for 199, and communicates with your smartphone via Bluetooth," said Nerds on Call. "When the Smart Lock identifies your Bluetooth signal approaching, it unlocks your door, and can lock it behind you if you choose that setting. It also allows you to set up virtual keys for guests, with the ability to grant access for only certain dates and times for each key. The activity log keeps track of when each unique user comes and goes. Perhaps the best part about this smart home upgrade is that it goes over your existing lock, meaning that you can have strong security and an intelligent lock. If you choose, you can pair the Smart Lock with the lsquo;August Connect for 79, which lets guests in and locks the door behind them. The Connect also grants real time status of locked or unlocked, and alerts you instantly when somebody comes or goes."
The August Smart Lock Pro is also a Consumer Reports fave. "We tested the previous-generationnbsp;August Smart Locknbsp;and found that it offers a wealth of smart features that potential homeowners will appreciate," they said.
The humble doorbell has come a long way in the past few years," said Business Insider. "Gone are the days when all a doorbell would do is alert you to the fact that someones at the door. These days, doorbells can connect to your Wi-Fi network to offer enhanced home security with built-in cameras and microphones. Of all the doorbells you can buy, thenbsp;Ring Video Doorbell 2nbsp;currently 199 is our top pick because it doesnt have to be hard wired and it has an excellent 1080p camera."
Smart smoke detectors
If youve ever dealt with a smoke detector going off in the middle of the night, this product should thrill you. But, of course, knowing your family is safe is obviously your No. 1 priority. And why not save a little money at the same time, right?
"Another smart technology product, the smart smoke detector, could not only save you money approximately 5 on yournbsp;insurance premiums, but could even save your life," said UpNest. "One 2014 CBS news report cites a figure of 2/3 of all home fire fatalities occurring in residences where the smoke detectors are missing or disabled -- which is something many of us have resorted to at one time or other out of sheer frustration when our typical lsquo;dumb detector insists on shrieking an alarm every time we try to fry up some bacon. A smart detector will allow you to keep on frying without fear of interruption. Two such products, thenbsp;Birdinbsp;and the Nest Protect, will not only monitor smoke but also carbon dioxide and general air quality. They can even send an alert to your smart phone or tablet if anything is amiss.nbsp;These products retail for 119 and 99 respectively."
Smart irrigation system
The SkyDrop: Smart Irrigation System Controller is a next-level automatic sprinkler system that allows you to control your irrigation from anywhere by using their app, and, "The best part is the irrigation will adjust itself based on your local weather," said Nerds on Call. "The SkyDrop can be programmed to adhere to local water restrictions in order to contribute to saving water. An amazing part about SkyDrop is that it can calculate how much water your lawn uses every day and adjust the amount of watering time to keep your lawn healthy. This device sells for 200 on Amazon, and connects to your existing irrigation system along with your WiFi network."
Keeping your home and family safe is a priority we all share. But beyond locking the doors and getting a home alarm, there are numerous steps we can take to protect who - and what - we love, and it doesnt have to break the bank.
1. Change your locks
Did you change your locks when you moved into your new home? Yeah. Neither did we. That means someone might already have the most important thing they need to get into your home: a key.
2. Upgrade your door security
While youre changing your locks, look for those that give you more secure options. If youre not sure how important this is, consider what Family handyman reports about FBI burglary statistics: "65 percent of break-ins occur by forcing in the front, back or garage service door."
3. Remove that extra key
The FBI also reports that 12 percent of break-ins are caused by thieves simply finding your hidden key. If you have one sitting under your welcome mat or in a planter, its time to remove it.
4. Use timers
"Put interior lights, TVs, and radios on timers so that you can create the illusion that someone is home when theyre not," said Bob Vila. "Modern digital light timers offer a key benefit over traditional models by having lights cycle on and off randomly."
Make sure to include motion detector lights in key spots around the exterior of your home. A light that pops on just as a burglar is approaching your back door may be enough to make him back away form your home. Home automation products make all of this easier than since you can control lights, TVs, and other items via Smartphone.
5. Get a dog
Seriously. Homes with dogs are less likely to be broken into, according to a study by The University of North Carolina, because they bark to create a ruckus and can also harm an intruder by biting.
6. Fake the alarm
If you cant swing the cost of an alarm, pretend you have one. "Thieves look for an easy mark; making your home look tough to crack will encourage them to move on," said HGTV. "You can easily put up security system decals - a clear deterrent - even if you dont have a system."
7. Install a camera
"Thanks to >8. Check doors and windows
You might think your home is more secure than it is. Maybe that backdoor is easy to open with a good push or the guest room window isnt shutting all the way. Eliminating easy access points by shutting doors and windows and locking everything up will cost you nothing, but if you need a backup for that easy-access slider door, a good old broomstick cut down to size will do the trick.
9. Call the police
In many areas, a police officer will visit your home to give you tips on how to make your home more secure, and it will cost you nothing.
10. Eliminate hiding spots
Having a pool can be one of the most enjoyable parts of homeownership, but building it can be an expensive undertaking. "If youre planning to install a pool, be prepared to open your wallet," said US News. "PK Data reports that the average cost of a residential in-ground swimming pool was 39,084 last year."
If you want a pool without the high price, there are ways to keep costs down:
1. Get multiple bids
Talking to only one company gives you no point of reference. Youll want to compare at least three bids from three different companies while youre deciding who is going to build your pool, even if the companies in the running are referrals. And, speaking of referrals, make sure you get them. Entrusting someone with that much money and responsibility without the recommendation of someone you trust - and without thoroughly checking them out - may not end well.
2. Think about the big picture
It might be that a larger upfront cost can lead to savings down the line. Consider this from Marc Sheridan of River Pools: "In the past, concrete, or gunite pools as theyre also called, were almost always more expensive or at least priced about the same initially as fiberglass pools. This year thoughhellip;Ive been witness to some of the lowest prices offered on concrete pool installations in over 10 years. For example, on large pools, Im finding that most concrete pools come in 5-10k less than a fiberglass pool."
The problem lies with using inexpensive surfaces that may not have lasting power. "Most consumers have no idea that theyll be shelling out an additional 8-12k minimum only a decade after install" of white plaster," he said. "When one compounds this number over the course of 20-30 years, the cost to the homeowner is even worse. This doesnt even account for the fact that most pool owners are now using salt chlorinators with their swimming pools, a technology of which I am a huge fan of but has been shown to be more abrasive on concrete pool surfaces than regular chlorine. This is also why I always recommend to my clients that decide to go with a concrete/gunite pool that they should go with a more permanent surface like PebbleTec. I always base decisions and recommendations on what is the best for the long-term, and not for the initial moment price. What good does it does to save a few thousand dollars upfront on a swimming pool purchase if these savings will cost you thousands and thousands more in the long run?"
3. Go with a simple design
A pool design with multiple curves, steps, shelves, and other add-ons will raise the cost. Keep it simple for the best chance of keeping the price down.
4. Limit the materials
Exotic tiles and finishes in the pool, and upscale materials used on the decking and patio, can add thousands of dollars to the overall cost.
5. Forgo the bells and whistles
A spa, a waterfall, a bubbler, and an Infinity edge... All are desirable pool features, and all will add to your bottom line.
"By some estimates, the actual construction of an in-ground pool is only about half of what you will eventually pay," said Pool Pricer.
6. Pay attention to size
The bigger the pool, the more expense youll have in piping, pumps, filters, chemicals, and energy used.
7. Do your own maintenance
Pools get dirty and have to be cleaned and maintained regularly. The monthly cost averages 130 to 378, according to HomeAdvisor, with pool cleaners charging 75 to 100 per hour or more. But, much of this cost can be eliminated if you choose to maintain the pool yourself.
"Maintaining your pool yourself will take less than two hours as long as you do it regularly. Routine maintenance not only keeps your pool clean for use, but it also allows you to spot problems early on - before they become big, costly repairs," they said.
8. Build a self-sustaining pond instead
The swimming pond is a growing trend that brings a natural look to the yard and limits the amount of maintenance that needs to be done. "One of the great benefits of a swimming pond is that it is chemical free. When managed properly, natural swimming pools have crystal-clear water and require no chemicals to maintain because they are self-cleaning mini-ecosystems," said Good Housekeeping.
9. Wait on the pool heater
"Adding a heater after having owned the swimming pool a season or more can be a great idea because pool owners can get a true gauge on just how much they need a heater, as well as what type of heater will suite them best," said Sheridan. This is especially useful in warmer climates where homeowners may not even need a heater in the summer.
10. Carefully choose the location
A pool that is located under trees may benefit from shade and therefore not need as much heating, however, it might end up with more leaves and debris, increasing the need for cleaning. The distance from the house is also a factor. "Well-planned pools are generally located close to the house, reducing costs associated with energy and water," said Contractors.com.
The starter home. It was so cute and quaint and sweet when you bought it, right? But, that was before kids and dogs and overnight quests and holiday dinners that require mathematician-level logistics to finding everyone a seat in a dining room that bursts at six people.
Lets face it: Its probably time to move up. Lack of space is the No. 1 reason people start looking for a larger home. Families expand, life>But running out of room not the only reason to consider moving up.
Youve got the equity
You may have had to scrimp and save for the down payment on your first home, but, if your home has appreciated, you may be in a completely different financial position this time around. If youre the type who envisions paying off your home and being free and clear, moving up may not be on your mind. But, for the rest of us, having equity in our current home means greater buying power to buy something bigger or get into a neighborhood we covet.
Youre at each others throats
Feeling cramped and living in clutter and hating that you dont have a space of your own or even a minute to yourself? That can create stress and leave you feeling anxious and overwhelmed. And, it goes against the general principle of homeownership since your home is supposed to be your sanctuary Having some extra room to spread out and yard for the kids and dogs to play in can make a real difference in the way your family functions.
Ask yourself if "your quality of life is suffering," said Unpakt. "This category can include many things: your ever-growing pack of dogs or cats who are driving you crazy. Your cascading piles of fabrics that you use for quilting, but just cant keep organized in your current space. The lack of a guest room means that when family visits, youre stuck on the couch. Whatever it might be, if your quality of life has taken a nosedive because your house is too small, well, the answer is pretty clear."
The neighborhood is changingand not for the better
One of the reasons you may want to start looking at a new house is because your neighborhood is starting to evolve. Maybe there are new restaurants and bars that have attracted a different crowd or plans for a huge mixed-use project that, while great for the economic potential in the area, could mean more traffic than you want in your quiet little town. Even something like a change in the flight patterns from the local airport can get you thinking about that next home.
Remodeling is price prohibitive
A good real estate agent should be able to give you an idea of what necessary or wanted renovations would cost to your existing home. It could be that the amount of work you would need to do on your home to get it where you want it - or get it into tip-top shape for a sale - is beyond what you want to spend. In that case, it might make better financial sense to make small improvements, put it up for sale, and put your money into a new home that better suits your needs.
You dont want to over-improve for the neighborhood
The other important factor to consider when deciding whether to move or improve your home is how the redone home would sit in your neighborhood. You dont want to run the risk of doing a bunch of expensive renovations only to have the home sit on the market because its overdone and considered overpriced.
"Weighing against renovation is the risk youll over-improve your home comparedwith others on the block," said Bankrate. "When you are in a neighborhood that has starter homes and smaller homes, adding a large addition or doing an extensive renovation may not yield the return one would expect."
Everyone else has moved on
So, your kids were young and bicycles and basketball nets lined the street when you first fell in love with your home. At the time, it was everything you were looking for. But now, so many of those families have moved on, and the lively street you loved has turned rather sleepy. If youre still holding on to the memories of what your neighborhood once was, maybe its time to find one that better meets your life>Youve crunched the numbers
Presumably, a move-up home is going to be more expensive. Beyond the equity you can use to make the purchase doable, you have to consider the monthly expenses, too. "Its not just the sticker price on the house; its thelong-term costs associated with it," said Realtor.com. "When you go up in square footage, you get higher property taxes, higher utilities, and more maintenance." And acquiring more rooms means shelling out for more furniture, too.
Color experts such as The Pantone Color Institute, provide a number of services to companies all over the world to help them learn more about color and how to use it in their businesses. One of the most famous examples of color trending is Pantones Color of the Year, which "provides strategic direction for the world of trend and design."
To remain >The idea is to stimulate change and perhaps get comfortable with a color you might not normally try in your home. In other words, the Color of the Year is a stimulus to spend money. You might not buy the purple couch, but youll be tempted to go bolder on something. Youll try a new set of towels for the bath or buy a set of glasses in some bold shade to set off the dinner table.
There are other colors of the year that are getting plenty of notice.
Sherwin Williams put its 2018 money on "Oceanside," a bold, sexy teal blue thats not just for the coasts. You dont have to live on the water to appreciate its mysterious depths.
Another aggressive choice is Pittsburgh Paints "Black Flame," a smokey hue that connotes drama and sophistication. Its a good excuse to wean homeowners away from the neutral and safe light greys and whites of the past few years.
Too strong? Then try Pratt Lamberts soothing blue "Heron," or Behrs blue-tinged green "In the Moment." These are still a far cry from white, beige or grey.
The only paint company not to go in the direction of blues, greens or greys is Benjamin Moore. Its Color of the Year is a spicy hot red called "Caliente."
Does the color of the year mean you should run out and buy a purple couch or paint your babys room black? No, the color is an inspiration for the year, and may be completely different from the color of the year from the year before and the year to follow. Its only this years inspiration to give you ideas to think about, sort of like runway fashion introduces new silhouettes.
Most products for the home are designed to have a longer use than a year. But, you may see the color and be tempted to try it in a small way or in a more muted tone. A fresh new color looks modern and takes you away from colors that may date your home, like ashes of roses from the 50s, avocado green from the 70s, or Tuscan gold from the 90s.
If theres one takeaway from the colors of the year, its that they give you permission to go bolder. You can still stick to the safety of white, grey or beige, but you might use an eye-catching color on an accent wall or in a throw pillow or in a piece of art. And if you want it in a mixer or crockpot, you can have it.
Think of color as an expression of your personality and the mood you wish to convey -- both great places to start when designing and decorating your home.
Question: I understand that our State government has plans to expand our rapid transit railway system and many of us are concerned that they will take our houses in order to complete the project. What is the law on this? Do they have the absolute right to do this? Joseph.
Answer: Joseph. You are referring to a concept called "eminent domain" -- also known as "condemnation". The short answer: if the taking of the property is for a "public use" -- such as road or a rail transit -- the government has the absolute right to take your house or even your business.
The Fifth Amendment to our Constitution reads, in part: "nor shall private property be taken for public use, without just compensation". And the Fourteenth Amendment applies that same concept to all States. That means that while you have very little chance to fight the taking, you can challenge the amount the government initially offers you. You have the right to a full jury trial to have the court determine what is "just compensation".
Although the process may differ from state to state, typically once the government makes a determination that it needs certain property for its "public use", it may actually hold hearings where the pros and cons are discussed. In fact, often you -- the effective homeowner -- may not even be aware of the facts until you get a formal notice of the taking. In many states, the government does what is known as a "quick take" -- they immediately record the title to the property in the name of the government.
What is a public use? A 2005 Supreme Court opinion muddied the waters somewhat when it ruled that the City of New London, Connecticut, could condemn private property and give it to a private developer to be used a part of a comprehensive redevelopment plan. According to the Court, "the governmental taking of property from one private owner to give to another in furtherance of economic development constitutes a permissible public use under the Fifth Amendment." Kelo v City of New London.
As a result, many States have reacted to the high courts decision by enacting legislation that prohibits a state from taking property and giving it to another private land owner, even for example in the case of job creation.
I suggest that you and your neighbors immediately retain experienced local counsel so that you will be prepared in case that condemnation notice comes your way. There should be a lot of advanced preparation, such as getting your own appraiser, so that you will be able to challenge -- if necessary -- the dollar amount that the government will initially offer you as compensation.
Question: I read your informative articles and I have a question concerning condominium organization. First we have an association in "title" only, since it is run by one lady who collects the fees. Problem one: shes too tired to collect the fees from the owners that have abandoned their units. Problem two: how do we collect the fees from bank owned units. I am trying to organize the other owners, and plan to schedule a meeting with them. Hopefully we can move forward. Jilma.
Answer: Dear Jilma. I doubt that this will be any consolation to you, but you are not alone. Many, many community associations have the same problems. There is a lot of apathy since many owners bought into the community so that others could cut the grass and shovel the snow.
And where there is apathy, someone -- such as your lady -- sees an opportunity to be called "madame president", and basically takes over the association. Unfortunately, it is an ego trip on the part of many board presidents.
I do want to make it clear that the great majority of associations are run by boards of directors who take their positions seriously and are working without pay for the good of the entire community.
What should you do? There is a provision in your legal documents that allows for board members to be recalled. There are requirements, such as giving the board member adequate notice and an opportunity to defend him or herself before the community votes on the issue.
I would contact the Community Association Institute caionline.org and find an attorney in your area that practices and understands community association law. Your group should retain a lawyer to guide you through the process.
To answer your questions, there are two ways to collect -- whether it is from bank owned units, current or abandoned owners: you either file a lawsuit against the delinquent owner or you foreclose on the unit.
You need a lawyer to represent your interests. Your condo unit is your investment; dont lose it.
Question: If I rent a house from owners whose house is paid off, are they required to have and keep homeowners insurance on their property? Antonia.
Answer: Dear Antonia. Thats a great question, and I dont really know the answer. However, I do not believe that your landlord is required to have any insurance. But regardless of whether one is legally required to have homeowners insurance coverage, it is -- in my opinion a foolish decision if you do not have the protection that such an insurance policy can give you.
You should get what is known as "renters insurance". This will not insure the physical structure of the building or the apartment in which you live but will cover loss of your personal property because of such catastrophes as fire, theft or vandalism.
You should ask your landlord if he has sufficient insurance coverage should there be problems in the building. If not, you should first contact your insurance agent and discuss your options. You might be wise to move out unless the appropriate coverage is available.
A fortune teller asked me to gaze into her crystal ball. "I see wear and tear in your condominiums future. I see a new roof will be needed. I see cracking paint and asphalt in need of repair. I see gasp no money to pay for these things"
It doesnt take a fortune teller to predict that common elements are going to wear out and it doesnt take a crystal ball to predict that HOAs are going to need money and a plan to fix them. So why do so many HOAs fail to properly plan for these predictable events and expenses?
The truth is that too many HOA boards are busy putting out this years financial fires and havent the time to think about next year and beyond. Remember, "its hard to drain the swamp when youre up to your behind in alligators". In other words, its easy to lose track of long term goals
when you get sidetracked by more immediate demands. Putting out fires is what HOAs do, right? The poorly run ones seem to do just that.
HOAs are no different than any other business. Those that are successful engage in long range planning. Those that fail to plan fend off disaster after disaster and board members come and go through a revolving door. No real magic here. To know where you are going, you have to have a destination in mind. In spite of bumper sticker wisdom, those that wander really are lost.
So back to the HOA scenario. When a homeowner association doesnt have the funds to handle a major repairs, they defer those repairs until the funds are available. Of course, money doesnt grow on trees and without a plan to collect more money, band-aiding and deferring become the default reality and slippery slope.
How do you steer your HOA back up to high and stable ground? The first step is to review your reserve study. "Whats a reserve study?" you say. A reserve study identifies all common element components that have useful lives between 2 and 30 years like the roof, fences, decks, paint, paving, etc. The average condominium has 15-30 components. The average high rise condo can easily have 100. And HOAs that own golf courses and marinas can have many more. Regardless, a reserve study is customized to the HOA in question.
SIDEBAR: "But our condominium is small", you say meaning, "why is a reserve study even necessary in our case?" Its basic math: The more people you have to share the cost, the less the cost per person. Smaller HOAs have a greater need for reserve planning because the cost per person is greater.
After the component list is determined, a current repair or replacement cost must be determined for each as well as the remaining useful life. With this information and the current inflation factor, a funding plan can be made to instruct the board how much money to collect and set aside each year to meet future financial needs.
While there is no state or federal requirement, the reserve study should be performed by a professional since evaluating condition of components and establishing useful lives and current pricing takes special training that few boards have. The professionals carrying the highest credential in the industry, the PRA Professional Reserve Analyst, belong to the Association of Professional Reserve Analysts. A list of members and contact information can be found at www.apra-usa.com.
Rather than crystal ball your future, get a proper reserve study done and follow the funding and schedule recommendations. Leave the crystal balling to Lady Luck.
Last year various Canadian governments took measures to slow down the booming housing market, imposing new taxes and strict mortgage qualification requirements. The governments feared that homeowners were sinking too far into debt and that runaway house prices in Vancouver and Toronto were unsustainable.
Some people who are struggling to get into the market say they hope theres a "housing crash" that will bring prices down to an affordable level. But a recent report by the British Columbia Real Estate Association BCREA says we should be careful what we wish for.
"The desire of some well-meaning British Columbians for government to drive down the price of homes through demand-side policy may sound practical at first blush. However, when you consider the broad and deep economic toll that a negative shock to home prices would exact on both homeowners and renters, it quickly becomes apparent that such an approach is at best, a mugs game."
The association estimates how much a shock of 10, 20 and 35 per cent on home prices would impact the economy.
"Nearly 70 per cent of British Columbian households own their home. A >The Canadian Real Estate Association CREA commissioned Altus Group to determine the impact of resale housing transactions on the economy. It says between the period of 2014 to 2016, 61,600 was spent in an average transaction on items other than the actual house and land.
This includes renovations, conducted both before the sale to make it more marketable and afterwards as homeowners tailored the property to their needs; new appliances and furnishings. It also includes fees to real estate agents, lawyers, appraisers, home inspectors and appraisers.
The ancillary spending added up to more than 31 billion per year across Canada.
CREA says that during the same period, 220,065 jobs are estimated to have been generated each year. "Canada-wide, the finance, insurance, real estate, construction and professional services sectors benefited the most from MLS system home sales," says CREA.
"If home prices fell 35 per cent, a level some activists are championing, the B.C. economy would collapse into recession," says BCREA. "The average homeowner would have lost 245,000 in equity, housing starts would fall by half, 64,000 jobs would be forfeited -- sending the unemployment rate to 7.5 per cent with 4.4 billion in forgone retail sales and a colossal 8 billion loss to GDP in the first year."
Not everyone agrees that a housing shock would have such a dramatic impact on the economy.
Laura Cooper, an economist with RBC Economists, wrote in 2017 that "tallying up the contributions of everything from the building of new homes to the costs of maintaining and running a home, housing->But she says not all that activity would be vulnerable to a downturn in sales, estimating that "close to 15 per cent of the economy has a degree of exposure to a drop in home sales, but only five per cent has a strong >Based on historic declines in housing, Cooper says the impacts on the economy "tend to be limited and occur over different stages of the housing cycle. This implies a one-time blow to the economy resulting from a sales slump is unlikely."
She says rising home prices make homeowners feel wealthier, contributing to all types of consumer spending. "Vehicle purchases, eating out at restaurants, spending on recreation, cultural events and financial services all have a tendency to slow somewhat against a backdrop of declining home sales, but tends to occur over a period of six to nine months following the beginning signs of a housing downturn," she says.
Cooper says although renovation activity is susceptible to a housing downturn, historically "the drop in the value of home renovations tends to be less pronounced than that of home sales, declining by about one-third of the sales drop."
But she adds, "There is always the risk that households pull back more on spending now than in past downturns given elevated levels of household debt and prospective increases in interest rates." She adds, "A broad 30 per cent drop in home resales, and attendant spillovers to building activity, house prices and consumer confidence could translate into a hit on the economy of one per cent to two per cent, with a drop in ownership transfer costs and new home construction accounting for two-thirds of the decline."
Twice a year, in June and December, the California Association of REALTORS CAR >