Monday, January 31, 2011

Erin Attardi breaks through the Sacramento bubble...and visits San Diego. Ok so it was a working trip...

Well, as much as I love Sacramento, I was not bummed about leaving our foggy and cold weather last week in order to attend the California Association of Realtors winter conference and attend the C.A.R. Board of Directors meetings -- in sunny San Diego. In fact, it was about 80 degrees and sunny there all week.

Ironically, as beautiful as San Diego is, I had very little time to enjoy it. Most of our committee and board meetings were held in these stuffy, windowless rooms at the San Diego Manchester Hyatt, and they started early and went late. I did walk through the Gaslamp Quarter for a couple hours one afternoon...but that was about all the fresh air I got. Even my daily running regimen and half-marathon training was spent on the treadmill (mainly because it was dark by the time we were done for the day, and I didn't want to run in unfamiliar territory in the dark by myself).

So what did I do down there, you may ask? Well, in short -- as a current member of the C.A.R. Board of Directors, I attended meetings, meetings, and more meetings.

Did you know that the local, state and national associations of Realtors work to defend consumer private property rights? Lemme guess - your answer was no. Most people (heck, many Realtors for that matter) are not aware that we do this. We are constantly out trying to convince lawmakers that proposing pieces of legislation that do things like add more taxes to real estate transactions, require certain home retrofits at the point of sale, eliminate the mortgage interest tax deduction, and things of that nature are BAD ideas....while at the same time trying to convince lawmakers that proposing pieces of legislation that do things like prohibit advanced fee loan modification contracts, extend forgiveness of paying income tax on "phantom income" created by short sales, give additional rights to tenants of foreclosed homes, and things of that nature are GOOD ideas.

So without going into all of the boring details, we worked all week strategizing things like that. There were some interesting forums and roundtable discussions regarding issues involving short sales, foreclosure, appraisal fraud, etc. Very productive...

Friday, January 28, 2011

FHA 90-day Anti-Flipping Rule - the suspension has been extended!!!

Early this month I posted about the impending expiration of the 1-year suspension that was imposed on the "FHA 90-day Anti-Flipping Rule" and the potentially negative impact this would have on our local Sacramento real estate market.

Well, great news! The Federal Housing Administration has extended the suspension! It means that buyers seeking to finance a home with an FHA loan will still be able to finance a "flipped" property that has been owned by the current seller for less than 90 days. Before the initial suspension a year ago, the “Anti-Flipping”rule meant that a buyer using an FHA loan to finance the purchase can not finance a flipped home until the title to the home has been held by the current seller for 90 days or more.

As you can probably guess, a “Flipped” home is one that someone purchases with the intent to resell it within a short time period for a profit. Also, one thing that many people do not realize, is that the flipping rules for lending can also apply to transfers of title from placing the property in a living trust, adding a family member to title before listing it for sale, etc….not just investors looking to profit from flipping.

So...yay!

Monday, January 24, 2011

Do you have a Carbon Monoxide Detector in your home?


Do you have a Carbon Monoxide Detector in your home? Well, soon you will need at least one of them...

SB 183, passed last year, requires that carbon monoxide detectors be installed in existing single-family homes that currently use "fossil-fuel burning appliances, fireplace or have attached garage" by July 2011. ALL other homes will have to have carbon monoxide detectors installed by January 1st, 2013.

This new law requires the property owners “to install the devices in a manner consistent with building standards applicable to new construction for the relevant type of occupancy or with the manufacturer’s instructions, if it is technically feasible to do so” (California Health & Safety Code § 17926(b)).

The following language comes packaged with carbon monoxide detectors: For minimum security, an alarm should be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents.


Sunday, January 23, 2011

Ask Erin: How does MLS define "Days on the Market" for Sacramento homes?

So I was asked twice this week by two different buyer clients about "days on the market." They were both a little confused about how our local MLS tracks length of time on the market, and what exactly it means.

The primary MLS for Sacramento county (called Metrolist) uses two different abbreviations to define with how long a property has been on the market; DOM (Days on Market) and CDOM (Cumulative Days on Market). Up until a few years ago, Metrolist just used DOM...but that method just counted the days of that current listing, meaning that the agent could cancel or withdraw the listing, and the re-enter it as a new listing...this would reset the DOM to zero.

Generally speaking, home listings get more attention then they have a lower DOM - for example 2 days vs. 180 days. Also, potential buyers will think twice about making an offer close to the listing price the higher the DOM.

So a few years ago Metrolist added the CDOM. CDOM counts the total days on the market - so if the property is re-listed by the same agent, another agent, etc. within 30 days of the cancellation or withdrawal of a previous listing, the CDOM continues counting days. CDOM tracks the property's parcel number, so even if the seller of a house lists the property with another Sacramento real estate firm, the CDOM still tracks the cumulative days. So, you may see a listing that has a current DOM of 2, but a CDOM of 182. Does that make sense?

In order for the CDOM to go back to zero, a property has to be off the market for 30 consecutive days.

Friday, January 21, 2011

Thursday, January 20, 2011

Attended the Annual City of Sacramento "State of the City" Address


If you follow me on Facebook, you will already know that earlier today I was lucky enough to attend Sacramento's "State of the City Address" with some of the leadership of the Sacramento Association of Realtors. The Sacramento Convention Center was packed, and in addition to the Realtors at my table, we were joined by City Council members Kevin McCarty and Darrel Fong.

Mayor Kevin Johnson outlined his goals for the City of Sacramento - they center around improving education, creating a "greener" and more energy efficient Sacramento, and continuing the revitalization of the Downtown Sacramento area. I do love his enthusiasm! I was hoping he'd talk about the local economy and the Sacramento real estate market a little, but he didn't really touch on it. Here's to a great 2011...

Wednesday, January 19, 2011

How much air do you think can flow through this HVAC filter?


I spent this afternoon at a home inspection at a Natomas property I have in contract. As a part of the home inspector's test the central heat and air conditioning system, he popped open the air return grill...and discovered this. Kinda gross!! It would seem to me that this air filter has not been changed in at least a few years? It's a really good idea to change these every couple of months. A dirty filter will slow down the flow of air and ultimately make your HVAC unit work harder (and use more energy) to heat or cool the house. AND they are inexpensive. You can pick up a filter for a few dollars at your local Sacramento hardware store.

Tuesday, January 18, 2011

Upcoming Greater Sacramento Races - 5k, 10k, Half Marathons, Marathons, and more!


While most of my life seems to revolve purely around Sacramento real estate, short sale negotiation, home inspections, touring property, participating in Sacramento Association of Realtors activities, etc., I do have some hobbies outside of work.

If you follow me on Facebook or Twitter, you will already know that for the last month or so I have been training for a half marathon (approximately 13.1 miles). In fact, this last Saturday, after working a little, I ran 8 miles in 1:34:08...which is exactly 25 seconds faster than my 8 mile run the Saturday before. YAY for improvement! This coming weekend I will run 9 miles for the first time...we'll see just if I can move on Sunday.

I am planning to run the Shamrock'n Half Marathon on March 13th. My goal at this point is really just to finish it without stopping. I ran the Run to Feed the Hungry on Thanksgiving Day, which was a 10k...my first race.

So as I am getting more and more in to my newly found love of running, I have been researching other organized races to participate in. There are A LOT of them! Here are the upcoming races in the greater Sacramento area through the end of April that look like fun;

Davis Stampede - February 6th, 2011; 5k, 10k, and Half Marathon in Davis, CA
Super Bowl Sunday Run II - February 6th, 2011; 10k, which can also be run as a 2-person relay in Sacramento
8th Annual Valentine Run - February 12th, 2011; 1.8mi or 4mi walk/run in the Arden area of Sacramento
Lucky 7 Run - March 5th, 2011; 7mi or 7k in Davis
Shamrock'n Half Marathon - March 13th, 2011; Half Marathon that starts and ends at Raley Field in West Sacramento
Nutrition Fuels Fitness - March 27th, 2011; 5k and 10k in Elk Grove
River City Marathon - March 27th, 2011; Marathon and Half Marathon along the American River Parkway
8th Annual Run Rocklin - April 3rd, 2011; 5k and 12k run in Rocklin
SacTown 10 Miler - April 3rd, 2011; 10mi that starts and ends at the California State Capitol
Sacramento Zoo Zoom - April 10th, 2011; 5k and 10k runs in Land Park around the Sacramento Zoo
Capitol City Classic - April 17th, 2011; 5k and 10k runs in Downtown Sacramento
American River Parkway Run - April 30th, 2011; Half Marathon and 5k along the American River Parkway

Friday, January 14, 2011

Unique Decor in this Natomas home for sale...


Well sure enough, a few days ago while I was out showing property to some Natomas buyer clients, I came across this 'unique' home decor. I can appreciate the whole DIY (do-it-yourself) paint job, but this was pretty horrendous. The entire bathroom was painted in camouflage - the vanity, the drawers, the light switch cover, all of the trim mouldings, the door, etc. In fact, the entire house had unique decor...there was a full wall mural of a 'Monopoly' game board in the loft area, a hot-air balloon themed room, a jungle-themed bathroom with textured bamboo wallpaper, etc.

This particular property was a bank repo...it's been on the market for about 2 months. I encourage any bank foreclosure asset manager to slap a fresh coat of white paint over this stuff. Neutral is good when selling a home...overall the layout of the house wasn't too bad, location was good, curb appeal was good, but UGH - it is so hard to see past this sort of stuff when looking for a home!

Wednesday, January 12, 2011

Erin's Sacramento Short Sale Experiment, Part VII

Yes, it is time for my seventh installment of Erin's Sacramento Short Sale Experiment! I am sure ya'll are just on the edge of your seats to find out just what has transpired in the world of short sales in our Sacramento metro area since the last time? I am anxious to see if 2011 continues to bring a high volume of active short sale listings, and more importantly, more closed short sales. For those of you not following along at home, or perhaps if you are reading this for the first time, my short sale experiment is tracking a few different Sacramento zip codes to see what how the short sale activity increases or decreases over time as compared with traditional resale listings (where there is a seller with equity in a "normal transaction") and to bank-owned resale transactions. My hypothesis at the start of this experiment: the number of short sales will grow over time, as will their dominance in our greater Sacramento marketplace (overall percentage of listings). I have continued to list more short sale properties, and thus far I think my hypothesis has been proven to be true. Starting in this installment, just for kicks and for the sake of comparison, I am going to track the numbers of active Foreclosure / REO listings. Let's see how this new data compares to the "control data" for the experiment and also to last installment...

95624 is the section of Elk Grove closest to Hwy 99. As of right this second according to MLS, there are a total of 354 active listings there. 231/354 listings are short sales. The median price in that zip code in December 2010 was $244,000 according to Trendgraphix. The result vs. the control data? Control data was 68.6% of all active listings in 95624 were short sales, vs. 71.9% last installment, vs. 65.3% this month. DECREASE over the control data, and a decrease over last installment. Number of 2010 closed short sales - 312. YTD closed in 2011 - 9....Active Foreclosure / REO listings - 60.

95610 is a section of Citrus Heights. As of right this second according to MLS, there are a total of 232 active listings there. 126/232 listings are short sales. The median price in that zip code in December 2010 was $164,000 according to Trendgraphix. The result vs. the control data? Control data was 60.3% of all active listings in 95610 were short sales, vs. 64.0% last installment, vs. 54.3% this month. DECREASE over the control data, and a decrease over last installment. Number of 2010 closed short sales - 109. YTD closed in 2011 - 1....Active Foreclosure / REO listings - 57.

95826 is a section of Rosemont and College Greens. As of right this second according to MLS, there are a total of 143 active listings there. 73/143 listings are short sales. The median price in that zip code in December 2010 was also $161,000 according to Trendgraphix. The result vs. the control data? Control data was 62.2% of all active listings in 95826 were short sales, vs. 51.5% last installment, vs. 51.0% this month = DECREASE over the control data. Number of 2010 closed short sales - 57. YTD closed in 2011 - 1....Active Foreclosure / REO listings - 36.

95864 is a section of Sierra Oaks, Arden Park, and Arden Manor. As of right this second according to MLS, there are a total of 134 active listings there. 57/134 listings are short sales. The median price in that zip code in December 2010 was $248,000 according to Trendgraphix. The result vs. the control data? Control data was 17.0% of all active listings in 95864 were short sales, vs. 29.7% last installment, vs. 42.5% this month. BIG INCREASE over the control data and last month. Number of 2010 closed short sales - 37. YTD closed in 2011 - 0....Active Foreclosure / REO listings - 12.

95818 is a section of Midtown, Land Park, and Curtis Park. As of right this second according to MLS, there are a total of 87 active listings there. 24/87 listings are short sales. The median price in that zip code in December 2010 was $307,000 according to Trendgraphix. The result vs. the control data? Control data was 16.0% of all active listings in 95818 were short sales, vs. 16.9% last installment, vs. 27.6% this month. INCREASE over the control data, and increase over the last installment. Number of 2010 closed short sales - 23. YTD closed in 2011 - 0....Active Foreclosure / REO listings - 6.

95819 is a section of East Sacramento. As of right this second according to MLS, there are a total of 78 active listings there. 18/78 listings are short sales. The median price in that zip code in December 2010 was $391,000 according to Trendgraphix. The result vs. the control data? Control data was 19.7% of all active listings in 95819 were short sales, vs. 21.1% last month, vs. 23.1 this month. INCREASE over the control data, and over the last installment. Number of 2010 closed short sales - 15. YTD closed in 2011 - 0....Active Foreclosure / REO listings - 6.

So in summary - of the six Sacramento area zip codes I am tracking for my experiment, 3 of them experienced a decrease in the number of active short sale listings from last installment, while 3 experienced an increase over the control data...interesting. It appears that areas with higher median sales prices are starting to show an increase in short sale activity, while the areas with the lower median prices are showing a decrease in short sale activity. AND while I have not specifically been tracking this data, it appears that there are an increasing number of Foreclosure / REO listings on the market. Since I just started tracking that statistic for this little project, we will have to see how those numbers compare in the future. My phone definitely keeps ringing and I continue to receive emails - I am fielding lots of inquiries from homeowners looking for more information and insight from my short sale experience...buyers too are really curious about the short sale process since they are encountering so many short sale listings in our marketplace. Also (you will be aware of this if you follow me on Twitter or Facebook), I closed many of my own short sale listings since the last installment of Erin's Sacramento Short Sale Experiment...until next time!

Erin's Sacramento Short Sale Experiment, Part I
Erin's Sacramento Short Sale Experiment, Part II
Erin's Sacramento Short Sale Experiment, Part III
Erin's Sacramento Short Sale Experiment, Part IV
Erin's Sacramento Short Sale Experiment, Part V
Erin's Sacramento Short Sale Experiment, Part VI

Tuesday, January 11, 2011

A GREAT way to start 2011!


If you follow me on Facebook or Twitter, you will know that today I attended the Officers & Directors Installation Luncheon at the Sacramento Association of Realtors. Our new President for 2011, Doug Covill (a Realtor with Coldwell Banker) was sworn in, along with the President-Elect, the Secretary-Treasurer, and the members of the Board of Directors...I was actually elected to serve on the SAR Board of Directors for a 2-year term starting this year (2011-2012). Pretty neat. I am very excited to serve the members of the association at this level.

Along with the installation, there was an awards ceremony to recognize outstanding association members for their contributions in 2010. I was honored to be one of about a dozen association members to be recognized! I received an award for "Oustanding Service in Association Activities." As I mentioned in my final blog post of 2010, last year I helped raise over $26,000 for charitable causes through different "Masters Club" and "Young Professionals Council" Sacramento Association of Realtors fundraisers.

This was a nice way to start 2011!

Monday, January 10, 2011

Changes coming to HAFA short sale guidelines as of February 1, 2011...

Welp, looks like the folks that run the HAFA short sale program (Home Affordable Foreclosure Alternatives) have issued some new and revised guidelines that going into effect as of February 1, 2011. Some highlights to these changes are;

  • The subject property must either be owner occupied, OR it can be vacant for up to 12 months preceding the date of the HAFA Short Sale Agreement if the sellers can provide documentation that the property was their primary residence prior to moving out. Uhh, this is fantastic! There was a lot of confusion before about sellers occupying the home, vs. not occupying the home. Many loan servicers (aka, short sale lenders) argued that the home absolutely had to be currently occupied by the seller. Often times, homeowners in default will move out of the home prior to listing it as a short sale...mainly so that they can move on their own terms (keep the kids in the same school district, remain near public transportation) are not evicted or asked to leave at a later time...or sometimes they are relocating due to a job transfer, to be near a sick relative, or whatever. Under these new rules, as long as a seller can prove they did live in the house during the previous 12 months, they will still qualify for a HAFA short sale (where they may have been rejected before). Proof could be a copy of a utility bill, for example. Unfortunately, investment property still does not qualify for a HAFA short sale - though it will potentially qualify for a non-HAFA short sale.
  • Loan servicers will no longer be restricted as much when paying off second mortgage holders. Loan servicers used to be restricted through the HAFA short sale program to paying second-lien holders no more than 3 percent of outstanding loan balance. It has been increased to 6 percent (with an overall limit of $6,000) in exchange for releasing those "subordinate" liens. When there is a second mortgage, the second generally gets a small payoff to release their lien to allow a transferable title to the new buyer. With any luck this will help to satisfy the second mortgage holders - especially where larger loan amounts are concerned.
  • Loan servicers will have 30 days to send a borrower a HAFA short sale agreement that includes the list price or the acceptable net proceeds amount from a sale. Futhermore, once a purchase contract has been accepted by the seller and submitted to the loan servicer for final approval, the loan servicers then have 30 days to approve or reject the transaction. There were no timeframes imposed on the loan servicers before, so this is a good (ok, great!) thing.
  • Loan servicers may not deduct third party vendor expenses from commissions paid to real estate brokers, nor may they charge sellers. In addition, agents negotiating HAFA short sales may not charge the seller or other parties to the transaction a third party negotiating fee. This is great! Occasionally loan servicers will retain third parties to process paperwork in connection with short sales, and charge an additional fee that is either deducted from the agent commissions or paid by the seller - so now that is not allowed. Also, some short sale listing agents (NOT ME, by the way) hire separate negotiators and pass that cost along to the seller...they are no longer allowed to do that in connection with a HAFA short sale. Good stuff.
So, these changes seem to have good intentions...we shall see how efficiently the loan servicers implement them. Keep in mind that these rules are effective February 1, 2011. The HAFA short sale program does not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA).

Thursday, January 6, 2011

Previously approved short sale in Garden of the Gods - back on the market...


So, although I have had this short sale approved two separate times, for reasons outside of my control this adorable Garden of the Gods home has not closed escrow...so it's back on the market. Lovingly maintained 3 bedroom, 1 bath Garden of the Gods home on Morpheus Lane! You will love the wood flooring, dual pane windows, remodeled bathroom with dual sinks, spacious kitchen, ample storage space, 2-car attached garage, composition roof. Central heating & air unit was new in 2008! Offered at $229,000 (contact me for details regarding the previous short sale approvals), subject to lender approval of short sale. For more photos and detail, visit http://www.4320morpheuslane.com/.

Wednesday, January 5, 2011

Unique Stuff in Other People's Homes...


So, if you follow me on Twitter or Facebook, you will know that several days per week, I tour the newest home listings that come on the market in different Sacramento neighborhoods.

Why do I do this? Well, it makes me a more effective Realtor. I find that I am better able to service the needs of my buyer and seller clients if I am familiar with the listing inventory in the areas that I work in. If I see something that one of my buyer clients may like, I immediately make arrangements to show the home to them. Or if I am listing a property, actually having first hand knowledge of the recent comparable home sales in the neighborhood helps me to guide sellers with regard to proper pricing. Of course, when I list a home, I open it up to other agents to tour it as well....it's good exposure.

In addition to making me a more effective Realtor, there are a couple other reasons I enjoy touring.

The first reason is - touring is a good opportunity to network and briefly socialize with other agents. The listing agent is usually present during these "broker open houses" and often times other (good, productive) agents are touring the homes at the same time. The Sacramento real estate community is really a small world...so, when I know an agent on the other end of one of my transactions, it makes for a much smoother process as there is a spirit of cooperation, and that ultimately makes for a less stressful process for my buyer or seller client.

The second reason is - sometimes the homes on tour are a little...unique. Or they have unique features. Or unique furnishings. Or unique decor. At least once every week I am pleasantly entertained (or completely disgusted?) by something found in homes on tour. What were these people thinking when they did that!? I occasionally tweet these photos, but until now have not put them on my blog...well since it seems that I run across these things so frequently, I thought I would start a regular blog feature to "showcase" the oddities that people do to or with their homes...Of course the property itself will remain unidentified. Let's start with a favorite of mine. Yes, this is a rug in a really gorgeous Sierra Oaks home, and yes it's real.

Tuesday, January 4, 2011

Sacramento Dine Downtown Restaurant Week is January 7 - 16, 2011!

I am SO excited!...The Downtown Sacramento Partnership is doing its annual Dine Downtown "Restaurant Week." From January 7 - 16, 2011, local chefs at the participating restaurants will create special three-course dinner menus for only $30 per person. It's a great opportunity to check out restaurants that you though perhaps you couldn't afford, or just get out of the box a little and try something new. Just ask for the "Dine Downtown Menu" at the participating restaurants.

Participating Restaurants include;
3 Fires Lounge at the Residence Inn at Capitol Park
4th Street Grille
58 Degrees and Holding
Biba Restaurant
Brew It Up!
The Broiler Steakhouse
Cafeteria 15L
Capitol Garage
Chops Steak, Seafood & Bar
Dawson’s at the Hyatt
deVere’s Irish Pub
Esquire Grill
Fat City Bar & Café
The Firehouse Restaurant
Frank Fat’s
Grange Restaurant at The Citizen
Il Fornaio
Kupros Bistro
Mikuni

The Melting Pot
Morgan’s at the Sheraton
Mulvaneys B&L
Paragary’s Bar and Oven
Pilothouse
Spataro
Rio City Café
River City Brewing Company
Ten 22
Tower Bridge Bistro at the Embassy Suites

Monday, January 3, 2011

The FHA Anti-Flipping Rule Suspension is about to be lifted...what does this mean to buyers and sellers?

Early last year I wrote a blog post about HUD's one-year suspension of the FHA "Anti-Flipping" Rule that began on February 1, 2010. Well, in just a little under a month from now, that suspension is supposed to be lifted...what does this mean? It means that buyers seeking to finance a home with an FHA loan may have issues purchasing property that has been owned by the current seller for less than 90 days.

As you can probably guess, a "Flipped" home is one that someone purchases with the intent to resell it within a short time period for a profit. Also, one thing that many people do not realize, is that the flipping rules for lending can also apply to transfers of title from placing the property in a living trust, adding a family member to title before listing it for sale, etc....not just investors looking to profit from flipping.

The "Anti-Flipping"rule had been that a buyer using an FHA loan can not purchase a flipped home until the title to the home has been held by the current seller for 90 days or more. A couple years ago, HUD excluded bank owned properties from this rule, as there is a change of title from the foreclosed owner to the bank. Often times however, investors who are flipping property do some improvements to the property and list it within days or weeks of taking title to the property....before the Anti-Flipping rule was suspended, it was not uncommon when searching MLS for properties to show a buyer to see an agent-only remark stating something like, "Sorry, no FHA loans until 2/15/2010 due to anti-flipping rule." In fact, in 2008 I wrote a blog post about the anti-flipping rule when one of my buyer clients expressed interest in purchasing a flipped home.

So for nearly the last 11 months, buyers (and sellers of properties meeting the "Flipped" definition) have enjoyed the ability to use FHA financing on properties that meet the definition of a flip...I have not heard anything to support the continuation of this suspension of the "Anti-Flipping" rule. We shall see what happens when this suspension ends on January 31, 2011. If you are an FHA buyer looking for a Sacramento property and are looking at flipped homes, you may want to accelerate your home search.

Sunday, January 2, 2011

Sacramento Remodeling Costs vs Actual Home Value - What is your ROI?


When I speak with prospective sellers about the value of their home as we get ready to list it, I always review the recent comparable sales from the neighborhood to assist to determine the listing price. Often, sellers will tell me things like, "Well I saw that house when it was for sale, and even though it's the same floorplan, we have new wood floors. We spent $9,000 on the floors so our house is worth $9,000 more than the house that sold." Or " We put in a $65,000 swimming pool, so our house is worth $65,000 more than the house across the street." Nope, sorry, that is just not how it works. You can not just simply add the cost of the improvement project to the perceived value of the house...generally, and depending on the project, you will only recoup a percentage of the cost of the improvements to the actual "appraisable" value of the house. An appraisal is what a mortgage lender will use to determine the value of the house in order to lend money to a buyer who will purchase your home.

Certain home improvements will yield a stronger "return on investment" than others. The actual cost of the remodeling versus the actual increase in value of the home are two different figures. Obviously if you are a homeowner, your enjoyment of the upgrades you make to your home is really important, but you will never get dollar-for-dollar increase in your home's value.

Remodeling Magazine does a study every year regarding the home improvements that will give you the best return on the money you spend for the upgrades. Because trends are different regionally, they have separated different geographic areas in their report -- so here is the data for Sacramento specifically.

So what are the top 5 Sacramento home upgrade projects that give you the best return on investment (ROI)?

  1. Replacing your front Steel Entry Door; the average cost to do this is $1,464, and the average actual value of this upgrade is $1,641 (112.1% ROI).
  2. Replacing your Garage Door; the average cost to do this is $1,514, and the average actual value of this upgrade is $1,461 (96.4% ROI).
  3. Wood Deck addition; the average cost to do this is $13,827, and the average actual value of this upgrade is $11,956 (86.5% ROI).
  4. Minor kitchen remodel; the average cost to do this is $23,603, and the average actual value of this upgrade is $19,854 (84.1% ROI).
  5. Window replacement; the average cost to do this is $14,431, and the average actual value of this upgrade is $12,016 (83.3% ROI).
You can read the full report here.