Laurie Sawyer

Why Renovation Pays...

If you are planning to sell your home, have you wondered what you should do to best get it sold? And for the best price?

First, you need to be sure to hire a Realtor then you want to think about what normal wear and tear has happened to your home while you have lived there.

NATIONAL ASSOCIATION OF REALTORS® statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners' investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling's 2008-2009 Cost vs. Value Report.

Have you been thinking about redoing the bathroom because there are some tiles are coming loose and the facet is the original from when the house was built? What about the kitchen? Well there are several things you do on your home and this is why renovation pays; you can recoup a good percentage of the price and it will help you get the best price for your home.

So why wouldn't you want to do a few little things around the house?

Why Renovation Pays

Why are renovations holding their value better than home prices today? "When housing slows down, people stay put and renovate their house to make it more livable," says Paul Zuch, president of Capital Improvements, a designing, building, and remodeling company in Dallas. And by renovating before they sell, home owners get to enjoy the new space themselves, not just make the home more appealing to buyers. "It just makes sense," says Zuch.

Why Renovation Pays?

1. It makes the home buyer's lives easier:

"Home owners who remodel their home are providing a service to future buyers," says Eileen Nelis, a broker at Savvy and Co. in Charlotte, N.C. "When buyers purchase, they don't want to do all that painting and remodeling, and they don't want that price tag. They may be willing to make improvements down the line, but when they purchase, they want to open the door and have everything complete. It reduces their stress." It makes the appeal of your home even better for the home buyer which shows why renovation pays.

Another reason Why Renovation Pays?

2. Reduces your,The Sellers, stress:

Making home improvements can also reduce sellers' stress by heading off that time-honored negotiating technique-pecking away at the sales price by pointing out imperfections found in a home inspection. "If sellers have done some improvements and dressed up their property, the improvements will help sell it," says Bernard Fallon, broker at Fallon Associates Realty in Rochester, N.Y. "If sellers don't want to improve their property, buyers will tick off the repairs and try to take them off the price."

That doesn't mean that every home owner should do every renovation, even in a more stable real estate market. Take Tulsa, Okla., where median home prices actually edged up slightly more than 2 percent in 2008, according to NAR. REALTORS® in Tulsa reported that, of the 30 remodeling projects surveyed, only 16 netted home owners at least 80 percent of the cost.

Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects.

So what are the best projects to tackle right away? As you can see on the chart, the best bets are:1. Upscale (fiber cement) Siding, or 2. Adding a deck to the yard, which have an 86.7% or 81.8% return respectively. Even if you don't want to do those projects, none of the projects have less than a 50% return, which shows even more why renovation pays.

Despite the value, the weak economy is likely to slow seller spending on remodeling, at least in the short term, predicts the most recent Leading Indicator of Remodeling Activity computed by the Joint Center for Housing Studies at Harvard University.

Yet, despite declines in overall remodeling dollars spent and a still shaky housing market, "people's homes are still one of their best, most solid investments," notes Zuch. "Even though the markets have gone through some adjustments, it's still smart to invest in your home."

Incredible news about the $8000 tax credit!

Since my last blog on this subject, there has been incredible news about the $8000 tax credit and this is for all states! Lawmakers in the Senate have agreed to extend the existing $8000 tax credit until mid 2010.

What date does that mean for mid 2010? This means you would need to be under contract for your new home by April 30, 2010 and close before July 1.

There is another great added perk to this Tax Credit and that is people who have been in their existing home for a consecutive five-year period in the past eight years, you folks could be eligible for a $6500 tax credit! The government is trying to help everyone whether you are buying your first home (remember the definition for first time home buyers according to the IRS is as long as you have not owned a home in the past 3 years) or if you have been in your current home for five years consecutively. It is an amazing time for people to be a homeowner.

Since it was getting close to the end of the time period, I have seen lots of communication from the National Association of Realtors (NAR) asking Realtors to contact their lawmakers to try to get this to be extended. Realtors have all gone to bat for first time homebuyers in the country. It is very exciting that it did actually come through.

Home buyers now have a little extra time to find that perfect house or to fix their credit or to do some cleaning in their current house before listing it so that home buyers can come and take a look. It really is amazing how fast time flies by. November came so quick for the previous end of the program and before you know it, spring will get here as well. Don't wait!

Do you know what to do from here?

In order to buy or sell a home in RI, call or email Laurie Sawyer at 401-996-0843 or email at mypickettfence@yahoo.com

If you need to be prequalified for a mortgage, email John Dionne at Shamrock Financial at John.Dionne@shamrockfinancial.com

Using the $8000 Tax Credit in RI!

I am going to give you some information on using the $8000 Tax Credit in RI. I know there is some confusion about things that have been heard about this tax credit and I was even confused when I first heard about it.

The biggest confusion for me was I heard about this $8000 Tax Credit and I thought it was only a tax deduction that you get for buying say a hybrid car. It's totally different! Basically, it could put you in a totally different tax bracket, because it reduces the amount of tax you owe to the IRS. If you were to do your taxes without it and you owe $8000, with this $8000 Tax Credit, you would owe nothing!

Also, some people have heard about using the $8000 Tax Credit as a downpayment for your home but unfortunately for us here in RI, there are only a few states that are eligible for that and we are not one of them.

Did you know that time is running out to be eligible for the $8000 Tax Credit? You need to be closed on a house by November 30th! Not the end of the 2009, as in December 31st, that is too late!

Are you wondering if you are eligible for the $8000 Tax Credit? Well you do need to jump over a few but easy hurdles ... You need to be a First time home buyer and even if you are a nonresident alien (as defined by the IRS) using an FHA loan you could qualify. There are also some income limitations.

The definition of a "First time home buyer" in qualifying for the $8000 Tax Credit is different than many people would have thought! You could be considered a "First time home buyer" even if you have owned a home before! That's right, you could qualify and could receive the $8000 Tax Credit if the last time you purchased a house was over 3 years ago. There is a small catch to that... if you are married than that goes for both spouses. (For Example, It is 2009 and you last bought a home as a single person in 2002 and now you got married last year and your spouse bought her last house in 2007, you would not qualify for the $8000 Tax Credit)

The income limitations I mentioned before? You need to make less than $75,000 a year to get the full $8000 Tax Credit if you are a single person and if you are legally married and filing a joint return, the combined income needs to be less than $150,000.

So what about actually getting this $8000 Tax Credit from the government, how do you do that? Well, all home buyers wanting to apply for this credit need to complete the IRS Form 5405 to determine the tax credit amount and then claim this on Line 69 of their 1040 income tax return. No other forms are required as long as you are qualified as stated above.

So I'm sure you are also wondering if you can buy even that cozy cottage that you have been pining over recently and still quality for the $8000 Tax Credit ... Absolutely! Any home that you will use as a principal residence qualifies you for the $8000 Tax Credit. This includes single family homes, condos and even houseboats! DON'T wait - Time is running out!

So what is your next step, you ask?

1. Contact me at mypickettfence@yahoo.com so we can start looking for your new home.

2. Contact my associate John Dionne at Shamrock Financial at John.Dionne@shamrockfinancial.com to find out how the $8000 Tax Credit can work for you!