Carol Rock's Blog
The equity in your home plays a major role in how much profit you'll make off the sale, but it's not always simple to determine just how much of the home you own (even if you haven't refinanced). Here are a few tips to understand equity and how you can use it to your advantage.
What Is Home Equity?
The simplest definition is that home equity is the difference between the market value and your current loan amount. When calculating, you should also take into account related financing (e.g., home improvement loans, second mortgages, etc.). If you owe more on the home than you owe, you have negative home equity.
Of course, the number you generate is just an estimate. Just because your market value is listed at a certain price, doesn't mean that a buyer will offer that amount. Overall though, it's a good place to start. Once you have a baseline, it can give you a better idea of how your home sale will go and what you can afford once you move out.
The Bottom Line
Let's say you bought a home for $150,000 and you've paid off $50,000 total. If your home was recently assessed at $400,000, then your home equity is now $300,000, even though you only owe $100,000. The longer you've owned your home, the more you'll pay toward equity as opposed to interest.
But home sale profits aren't the same as home equity. You also have to deduct any expenses associated with selling the home, including staging, listing and real estate agent fees. This can take as much as 10% off the total sale price. Some lenders will charge a penalty fee for paying off the loan early, so you'll need to check your contract to understand your responsibilities.
Equity and the Home Sale
Experts recommend having at least 10% equity in a home if they're making a lateral move. So if you need to relocate for your job and you're planning to move into a similar home, then you'll need less than someone who's upgrading their lifestyle. If you want a bigger and more luxurious home, it helps to have at least 15% — and preferably more. The less equity you have, the more likely you'll end up with negative equity.
Equity can be confusing because you ultimately own the home while you're paying the mortgage payments. Your lender is simply using the value of the property as a type of collateral in case of default. You can think of equity as a form of leverage you can use to give you a little more confidence during the sale.
One of the perks of moving out of an apartment into a home is having your very own outdoor space. Depending on how close to the city you live, you may not get much of a yard with your home. If you’re looking for that perfect outdoor space to dwell in, read on for some tips on buying a house with a yard. If you check the yard out, you could save yourself from facing problems further down the road.
Are The Trees In Good Condition?
While mature trees in a yard are a sure fire way to have privacy and shade, the trees must be safe. You want any trees in your yard to be healthy. Otherwise, during a storm, you may have an issue with falling trees. If you have a lot of trees in your yard, it may be a good idea to hire an arborist who can tell you if the trees are safe. Tree removal can be costly, so you’ll need to plan for this expense if your yard has many trees.
How Safe The Outdoor Living Areas?
You should check out any outdoor living areas the yard has. If the home comes with a patio, or gazebo the soundness of the structures should be checked. Any cement should be free of cracks or crumble.
The Layout Of The Lot
There is more to a yard than the size of a property. You should keep in mind where the home is situated on the lot. Is the front yard more prominent than the backyard? Is the home on a slope? Is there a chance water will pool near the foundation of the house? All of these questions are important for the long-term health of the property.
How Much Yard Are You Willing To Care For?
You need to know how large of a yard you’re actually willing to care for. For many buyers, a small yard is just enough. Other buyers aim to care for a large lawn the many flowerbeds. The larger the yard, the more possibilities you have. If you are willing to take the extra time and incur the additional expense that a large yard will cost, it could be a good feature to look for. Yard size may also narrow down your home search considerably.
Buying a home with a yard can be a great decision, all you need is to understand your own preferences and ability to care for properties of different sizes.
We’ve learned to use voice controls in our cars for hands-free calling, but what about in our homes? Alexa, Google Assistant, Echo and Siri are for more than simply using your voice to switch on the lights or control the temperature. Here are more ways to control your home with the sound of your voice.
Vacuum or Mop
With a robotic mop or vacuum controlled by your device or remotely from your smartphone, you can wipe up spills or clean up the pet hair while you’re at work.
Appliances plugged into outlets use a surprising amount of power throughout the day. But if your device connects to a smart power strip, you can turn off individual outlets from a distance. That way, the slow cooker starts right on time but doesn’t waste power all day. Or set outlets on a timer so that your bedroom fan turns on just before bedtime, or the television automatically shuts off when it’s time for the kids to go to sleep.
Activate a Digital Butler
When you’re at home and can get to it, you’ll answer the door. But what if your 9-year-old lost their keys and can’t get in after school. Or you’re in the kitchen kneading bread when your mother-in-law pops over. You can see who’s there or open the door with your smart device and a smart lock on the door. Now, when the package arrives, you can arrange for internal delivery. Let your buddies in without missing the big play. It’s all under your command. You can even lock the door just in case you forgot before you went to bed. Call out and let your voice handle it.
Retrofitting your home to be a smart home can increase its value, so be sure your agent knows all the things your home can do.
There are many reasons people choose to rent. There are fewer responsibilities, it doesn't take saving up a large down payment, maintenance is likely taken care of and there are no real estate taxes and no homeowners' insurance to pay. That doesn't mean, however, you shouldn't carry insurance. If you rent a home, apartment or condo, there are five fundamental reasons you should carry renters' insurance.
You Are Not Covered By Your Landlord's Insurance
Some tenants make the mistake of thinking in case of a hurricane, flood, storm or even theft, they will be covered by their landlord's insurance. While it is true your landlord probably carries insurance, it likely only covers the structure and their property and losses, not yours.
It Protects Your Personal Property
Renters often feel like they have fewer personal possessions than homeowners. This may be true in that renters often don't need to buy major appliances, lawn care equipment, and other items. When tenants begin to take inventory, however, many are surprised at how expensive it would be to replace what they do own. Replacing furniture, beds and bedding, kitchenware, clothing, and electronics will likely run into the thousands of dollars or more. Renters insurance can help you get a fresh start following a covered calamity.
Renters Insurance Covers You Against Liability Claims
Renters may not be aware that they can be held liable should a friend, family member or even a delivery person should get injured while on or in their rented space. This can be financially devastating, especially when we are having more products delivered to our homes than ever, including food. Renters insurance can cover you against financial claims against you, including settlements and legal fees.
It May Cover Your Possessions When Traveling
An unexpected benefit of renters insurance is, depending on the specifics of the policy, your personal property can be covered while traveling. This may include in your car, while in your luggage or a hotel room. When one considers the expensive electronics many of us travel with these days, this can be an extremely valuable feature.
Renters Insurance is Generally Inexpensive
The cost of a renters' insurance policy may be as little as 10% of that of a traditional homeowners' insurance policy. Renters insurance can be so inexpensive and provide so much peace of mind it should absolutely be considered by those choosing to rent.
Renting instead of buying does not necessarily relieve you of all the responsibilities of homeownership. You are still responsible for your personal possessions and can be held liable in case of an on-site injury.
If you list your home and fail to stir up interest in it, there is no reason to panic. In fact, there are many quick, easy ways to ensure your house consistently garners homebuyers' attention.
Now, let's take a look at three tips to help you showcase your home to dozens of prospective buyers.
1. Bolster Your House's Curb Appeal
How your home looks to potential buyers can have a significant impact on the house selling journey. If your residence appears drab and cluttered, buyers may be reluctant to set up a home showing. However, if you enhance your residence's curb appeal, you could make your home an attractive choice to buyers.
To upgrade your house's curb appeal, it is essential to mow the lawn, trim the hedges and perform other lawn care tasks. Don't forget to repair or replace any damaged home siding too. Because if you make your home's exterior appealing to buyers, you may find that many buyers want to check out your house as soon as possible.
2. Eliminate Clutter
Clutter is a problem that home sellers must eliminate. Otherwise, excess items scattered throughout a home may make a residence appear small.
For those who want to cut down on clutter, it may be beneficial to rent a storage unit. You can rent a storage unit close to home that enables you to keep various belongings safe until your residence sells.
If you are ready to get rid of assorted items, you can host a yard sale or list these items online. You also may want to donate unwanted items to a local charity or give them to family members or friends.
3. Employ a Real Estate Agent
When it comes to generating interest in a home, it often helps to hire a real estate agent. This housing market professional knows how to promote a residence to buyers, and ultimately, ensure a seller can reap the benefits of a quick, profitable property selling experience.
Initially, a real estate agent will walk through your home and perform an in-depth analysis. He or she next will work with you to craft a house selling strategy and showcase your residence to buyers. Finally, if you receive an offer to purchase your home, a real estate agent will help you assess this proposal and determine how to proceed.
Let's not forget about the assistance a real estate agent provides after you accept an offer to purchase, either. At this point, a real estate agent will guide you through the closing stages of the home selling journey. And if you have any concerns or questions along the way, a real estate agent is happy to address them.
If you find that buyers are hesitant to view your house, you may want to revamp your property selling strategy. Thanks to the aforementioned tips, you can revise your house selling plan and take the necessary steps to get buyers interested in your residence.