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Top 10 Budget-Friendly Home Repairs and Improvements to Boost Value and Prepare Your Sacramento Home for Sale
As a note -- as you work through the to-do list to prepare your home for sale, maintain a running record of what you have done to add to your property disclosures. Also, it is worth mentioning that while these cosmetic improvements go a long way to help your home visually appeal to buyers, I strongly recommend performing some pre-listing inspections as well for the sake of disclosure -- I wrote a separate post about that. I welcome your call (916-342-1372) if you have any questions and to see if we are a fit to work together. I also have a full slate of professionals who can assist in tackling a lot of pre-listing to-do's.
(1) Deep Cleaning: Let's start with the basics. A sparkling clean home is just flat out more appealing to home buyers. At the most basic level, roll up your sleeves and thoroughly clean the house. Consider hiring a professional cleaning service to tackle those hard-to-reach spots and ensure your home is spotless for showings.
(2) Declutter and Depersonalize: A seller client I recently met with said she was going to try to make her home look like an "AirBnb" unit - stylishly minimalist. This is the perfect way to think about it. Decluttering is really key and costs little to nothing just to pack and put things away (something you will need to do anyway eventually) -- or you might even make a few bucks if you have a garage sale. Less is more. Remove excess furniture and personal items, or rearrange furniture if necessary -- creating a clean, open space that allows buyers to envision their own belongings in the home.
(3) Refresh Interior Paint: A fresh coat of paint can work wonders in transforming the look and feel of your home. It is usually not necessary to paint the entire interior of a home. Typically I would suggest focusing on high-traffic areas and possibly neutralizing loud colors -- painting rooms entirely white is actually the trend at the moment and will create a crisp, clean look. If you think just a simple touch-up may work well, test a small area first and let it dry before you invest a lot of time with touch-up. Oftentimes touch-up will be more work than just repainting an entire wall and may look muddled or worse than before.
(4) Enhance Curb Appeal: First impressions matter. Spend some effort to improve your home's curb appeal. A fresh coat of paint on the exterior of the front door or on the front window trim goes a long way to brighten things up. Planting colorful flowers, trimming overgrown bushes, and adding a fresh layer of mulch to your garden beds can significantly enhance your home's exterior.
(5) Touch-Up Exterior Landscape: In addition to curb appeal, invest in small landscaping projects like trimming trees, mowing the lawn, and filling in any bare spots with grass seed. A well-maintained yard adds value.
(6) Update Plugs and Switches: Replace your dingy almond colored light switches and plugs with new white ones. The before and after appearance will really shock you (pun intended).
(7) Replace Fixtures: Replacing outdated light fixtures, faucets, or doorknobs and hinges can give your home a more modern and cohesive look. You'd be surprised how much of a difference this can make.
(8) Minor Kitchen Updates: While a kitchen remodel can be costly, there are budget-friendly ways to refresh this crucial selling point. Consider painting or restaining cabinets, updating cabinet door and drawer hardware, or adding a backsplash for a more contemporary look.
(9) Repair Leaks and Drips: Fix any leaky faucets or running toilets. Do not forget to look at your exterior hose bibs and sprinkler heads as well. These minor plumbing issues may seem insignificant but can signal to buyers that there are larger maintenance problems lurking. Plumbing leaks can also be the cause of future damage, so best to knock those out as soon as you can anyway.
(10) Enhance Lighting: Nice ambient lighting can make your home feel more spacious and inviting. Replace burnt out bulbs with new ones. Replace old bulbs with brighter, energy-efficient ones, and consider adding inexpensive floor or table lamps in darker areas. Note -- ensure all of the bulbs in each room emit the same color temperature. "Soft White" tends to be warm and yellowish. However "Daylight" tends to has a more bluish tone. If you combine different colors in the same room, the lighting will be distracting to look at.
Preparing your Sacramento home for sale on a budget is entirely possible, and these 10 cost-effective strategic improvements are a great place to start. With a little time and effort, you can significantly increase your home's appeal to potential buyers and potentially raise its value. Ideally, sellers should strive to present a well-maintained, clean and inviting space.
Tuesday, August 22, 2023
So you have a low interest rate on your home and want to sell -- is your mortgage loan "assumable" by another buyer?
The short answer to the question is MAYBE. Some mortgage loans are what we refer to as "ASSUMABLE" and under certain conditions the loan and its interest rate and terms can be transferred to a new purchaser. An assumable mortgage allows a homebuyer to take over the seller's home loan, and best of all, the new buyer may keep the original mortgage interest rate. Having an assumable mortgage can be a great selling point when marketing a home for sale! With current interest rates in the 6-7% range (depending on qualifications, loan type, terms, etc), and a lower interest rate environment in the years prior, the ability to offer a low mortgage interest rate to the next owner can really set your home listing apart from others.
The longer answer to this question is more nuanced and way more complicated.
First and foremost, not all loans are assumable. To determine if a home buyer can assume your loan, we need to know what kind of loan you have since usually it is only government-backed loans that are assumable. By government backed loans -- this refers to if your loan is insured by FHA, VA, or USDA. If you are not sure what type of loan you have, refer to the NOTE or CLOSING DISCLOSURE documents from when you purchased or last refinanced your home. Both will describe the loan type and if the loan is assumable. Page 4 of the loan's Closing Disclosure has a checkbox section at the very top that specifically states if your loan is assumable or not. Conventional loans and Jumbo loans that are backed by Fannie Mae and Freddie Mac typically are not assumable. If you are unsure what sort of loan you have, you can call me (or your agent if you are already working with someone) and I can help you figure it out.
If your loan is not assumable, then NO. You will not be able to transfer your loan to another buyer. Game over. Do not pass GO. Do not collect $200. Clearly, you may still sell your home, though the buyer will have to get their own loan at today's market rates. And there are plenty of Sacramento home buyers doing just that.
Second, if you determine that you do have a FHA, VA, USDA, or some other loan type that is assumable, the next step is to determine what your interest rate and your unpaid principle loan balance is. Your interest rate will be on your Note or your Closing Disclosure if you were able to track that down. You might also find this information on your most recent mortgage statement.
Third, once you determine you have an assumable loan, you know your interest rate and unpaid principle balance is -- next, you and your agent need to contact your loan servicing company. Do this proactively! Most loan servicers have a special document package they will SNAIL MAIL to you. Do this BEFORE your home goes on the market. It could take days or weeks to arrive. Again, need help navigating this? Contact me.
So you have an assumable loan, you know the balance and interest rate, and you have your package from your loan servicer...ok, now you can list your home for sale and market it to have an assumable loan. Which is awesome! But I do want to stress to you that new home buyers must still qualify and be underwritten by the loan servicer (buyers are not free to work with a lender of their choosing on an assumption), there are some drawbacks to this scenario. Listing agents must carefully vet buyer offers who seek to complete a loan assumption. The loan assumption will not work for everyone, and here are a few examples...
Example #1: You purchased your home for $400,000 in 2015, and your current unpaid principle balance on your loan is $355,000. Your home is worth $580,000 today. In order for a buyer to be able to assume your $355,000 loan, they will need to have approximately $225,000 in cash as a downpayment. That would equate to nearly 40% down, and most buyers will not be able to do that.
Example #2: You purchased your home for $500,000 in 2018, and your current unpaid principle balance on your VA loan is $475,000. Your home is worth $625,000 today. You are elated to find a buyer with 20% down who can easily assume the $475,000 loan...however this buyer is not a veteran. As a VA loan seller, you may choose to allow a non-veteran assume your VA loan, however unfortunately then you lose your VA loan eligibility in the future -- until that loan is paid in full. Once paid in full, your VA eligibility is restored...though it may not be restored in a timeframe that works for you to use a VA loan on a future home purchase.
Example #3: You purchased your home for $600,000 in 2020, and your current unpaid principle balance on your loan is $560,000. Your home is worth $700,000 today. You are elated to find a buyer with 20% down who can easily assume the $560,000 mortgage...however, your loan servicer takes 4 months to manually underwrite the new buyer's loan. The buyer must snail mail their financial documents to the lender. Every few weeks the lender asks for new documentation and the process drags out. That replacement home you were hoping to purchase is no longer available. The buyer gets frustrated, or finds another property, and walks away. Some loan servicers take A LONG TIME to process and underwrite loan assumptions because they do not have a dedicated team working on them.