The Importance of Pre-Sale Home Inspections in Order to Avoiding Surprises and Stress

Without a professional inspection, sellers cannot accurately gauge the condition of every aspect of their home. Identifying issues like termites early allows the seller to address them in a timely manner. If a seller skips the cost of an inspection and the buyer’s inspector uncovers major problems, the seller loses any advantage and faces repair decisions under the threat of the buyer backing out.

However, inspection reports can be overwhelming. The worst approach is to expect the seller to address everything in the report. This turns the process from simple repairs into a full-scale renovation, straining everyone’s nerves.

Differentiating Repairs from Renovations

Electrical Work: Fixing a couple of dead outlets is a repair; rewiring the entire house is a renovation. The tipping point is cost and time. If electrical repairs exceed 10% of the total house cost, it’s considered a renovation.

Realistic Expectations: Unlike DIY shows where massive projects are completed in 45 minutes, real-life repairs and renovations take time. Be upfront about project timelines to set realistic expectations.

Permits and Governmental Oversight: Once a project requires a permit, it moves beyond a simple repair to a renovation. It’s crucial to follow local regulations to avoid complications.

The Advantages of “AS IS” Deals

In my company’s listings, “AS IS” means the seller has the property professionally inspected before listing. This eliminates disputes about repairs and how they should be done, providing clarity and reducing stress.

Fully Informed Buyers: Prospective buyers are informed about the condition of the property. They can choose to conduct their own inspections or rely on the seller’s inspections and receipts. The seller’s terms for repairs are already set.

Simplicity and Transparency: The “AS IS” approach simplifies the transaction, focusing negotiations on price rather than repairs. It avoids the drawn-out process of differentiating between home repairs and renovations.

Calmer Transactions: This method eliminates the drama often associated with inspections and repair negotiations, leading to a smoother and more straightforward sale.

Pre-sale home inspections and the “AS IS” approach streamline the selling process, reducing stress and focusing negotiations on price. By addressing issues early and setting clear expectations, sellers and buyers can avoid the pitfalls of turning a simple home sale into an extensive renovation project.

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The Evolution of Home Offices in a Post-Pandemic World

Despite companies’ fervent requests for employees to return to the office, the work-from-home (WFH) trend that took hold during the COVID-19 pandemic shows no signs of disappearing. The Wall Street Journal notes, “Around a quarter of total American workdays happened off-site in 2023. While that is down from more than 60% during the pandemic lockdowns in 2020, many expect working from home to become a permanent practice as hybrid models take root.” With this shift, home offices are evolving to be more dynamic, personal, and suited to collaboration. Here are six ways home offices are changing.

1. Multifunctional Rooms

Gone are the days when home offices were confined to closets or cramped corners. Today, WFH setups are integrated throughout the entire home, making nearly every room multifunctional. Joseph DiNapoli, co-founding principal of Study Architects in San Francisco, emphasizes the need for flexibility: “A CEO’s home theater could double as a meeting space or room for video calls. A covered outdoor area could function as an al-fresco office.”

To make these multifunctional spaces work, infrastructure such as robust Wi-Fi, flattering lighting for video calls, noise-dampening features, and versatile furniture are essential.

2. Enhanced Delivery Security

With more work being done at home, the need for secure delivery solutions has increased. To protect against “porch pirates,” MB Sentinel offers the Box Gobbler, a stainless steel parcel safe with keypad access and conveyor rollers. This secure delivery box ensures that important packages remain safe until retrieved.

3. Focus on Wellness

The time saved from commuting is often redirected towards wellness activities. Home designers are incorporating features that promote health and well-being, such as home-wide air purification systems, sun-tracking skylights, Wi-Fi-enabled meditation gardens, and fitness equipment integrated into workspaces. Porcelain tile flooring, which offers antimicrobial properties and durability, is becoming a popular choice for wellness-oriented home designs.

4. Video-Ready Workspaces

The rise of digital conferencing tools like Zoom and Teams has transformed the aesthetics of home offices. Bradley Nelson of Sotheby’s International Realty notes that workspace designs now incorporate “video-ready sightlines” that reflect the user’s identity while maintaining a professional appearance. This trend has also driven demand for high-quality digital meeting cameras, lighting, and microphones.

5. Homey Yet Functional Furnishings

As hybrid work becomes more permanent, people are seeking workspaces that blend the comforts of home with the functionality of traditional office furniture. Joseph DiNapoli’s company, for instance, is designing custom desks that look like dining tables but offer cable management and storage features. Companies like MillerKnoll are also producing office furniture that integrates better with home aesthetics.

6. Design Hacks for a Professional Look

Creating a professional yet warm home office can be achieved with design hacks like accent walls. Fusion™ thinBRIK from Acme, a glazed thin brick, can soften the look of a home office while providing a stylish backdrop for video calls.

A Worthwhile Investment

Investing in a well-designed home office can pay off, especially as many first impressions now happen via digital meetings. Consulting with an interior designer or architect can help create a professional yet inviting workspace. However, some challenges, like managing a barking dog during conference calls, may still require creative solutions.

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Five Steps to Prepare Your Finances for Buying a Home

Buying a home is one of the most complex and expensive transactions you’ll ever make. If you’re planning to take that leap in the next year or two, preparing your finances now can save you money and help you avoid unpleasant surprises. “Time is a gift,” says Avi Adler, a Realtor at Long & Foster Real Estate. Here are five steps to get you started.

1. Do a Financial Checkup

Before you start hunting for your dream home, take a comprehensive look at your financial situation. Assess your income, savings, expenses, and debt. Calculate the percentage of your gross income you save each month, how much goes to housing, your debt payments (credit cards, car loans, student loans, etc.), and your discretionary spending (like travel, entertainment, dining out, and streaming services).

Mortgage lenders consider various metrics when assessing your creditworthiness, but a key factor is your debt-to-income (DTI) ratio. Ideally, you should spend no more than 43% of your gross income on housing and other debt, with 35% being preferable. Optimally, your housing payments alone shouldn’t exceed 28% of your income.

If your DTI is high, consider adjusting your budget. “Look at your budget and figure out what your priority is. Are there expenses you can cut because buying a house is a bigger goal for you now?” suggests certified financial planner Sara Zuckerman, founder of Reset Financial Planning.

2. Check Your Credit Reports and Credit Scores

Lenders also consider your credit history and credit score. Start by checking your credit reports from each of the three major credit bureaus (Equifax, Experian, and TransUnion) through annualcreditreport.com. This allows you to understand your current credit health and check for any potential fraud or inaccuracies. If you find errors, dispute them immediately, as the investigation can take up to 30 days.

Next, order your credit score, particularly your FICO score, which is most commonly used by mortgage lenders. You can get a free FICO score based on your Equifax report, or for $29.95, get scores based on each credit bureau’s reports, including those specific for mortgage lending.

Typically, a FICO score of 720 or higher gets you the best mortgage rates, while a score below 620 makes securing a loan more difficult. If you’re buying with someone else, the lender may consider the lowest score between you.

Your credit score can change with your credit behavior. Improving your score can significantly lower your mortgage payments, saving you hundreds of dollars a month.

3. Reduce Credit Card Debt

A key way to improve your credit score is to reduce your credit card debt. Pay off any balances you’re carrying and ensure future charges are paid off in full and on time each month. Avoid making large purchases or using a significant portion of your credit limit before seeking a mortgage. Even if you pay your credit card bill monthly, it may not be reflected in the score lenders pull up.

Use your credit card sparingly in the months leading up to applying for a mortgage. “Because there are many variables that affect an individual consumer’s credit score, we can’t say a specific number of months,” says FICO’s Joe Zeibert. “The advice we can give is to do your best to get your utilization as low as possible leading up to the purchase of your home.”

Additionally, avoid opening new lines of credit, like store cards, for at least a year before seeking a mortgage, as new credit lines can suggest financial stress.

4. Budget for a Down Payment, Closing Costs, and Post-Purchase Expenses

To reduce your monthly mortgage payment, aim to make as large a down payment as possible. Keep your down payment funds in a high-yield savings account or a very short-term CD to earn a reasonable return before you start home shopping.

While 20% of a home’s purchase price is the traditional down payment standard, if your savings fall short, explore other funding sources like gifts from family or state-based home-buying assistance programs.

Also, budget for closing costs, which might range between 2% to 4% of the purchase price. Paying these out of pocket is less expensive than rolling them into the mortgage. Some homebuyer assistance programs may cover a significant portion of these costs.

Lastly, plan for post-purchase living expenses. “Think through not just the mortgage but the costs after,” says Zuckerman. This includes all your bills, home maintenance, and utilities.

5. Get a Lender’s Perspective

Since lenders determine how much home you can buy and your monthly payments, get preliminary assessments from a few lenders. Eventually, you’ll need a mortgage pre-approval letter, but wait until you’re ready to shop in earnest, as pre-approvals are typically valid for only 60 to 90 days.

Bottom Line

Taking time to prepare your finances now can make your home-buying experience smoother and more affordable. Start with a financial checkup, monitor and improve your credit, reduce debt, budget for upfront and ongoing costs, and seek advice from lenders. These steps will help you make informed decisions and set you on the path to homeownership.

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Harnessing Energy Improvement Tax Incentives to Save Money and Increase Home Efficiency

If there’s an upside to inflation, it might be the energy improvement tax incentives introduced by the Inflation Reduction Act of 2022. These tax credits offer homeowners substantial savings for making specified home energy efficiency improvements.

Why Consider Energy Improvement Tax Credits?

High utility bills can be a significant burden for homeowners trying to maintain and improve their properties. Fortunately, the new energy efficiency tax credits can help offset these costs, providing financial relief and encouraging energy-saving practices.

“There have been a number of tax incentives for energy in the past decades, and they’ve been very helpful,” says Evan Liddiard, CPA, director of federal taxation, federal policy, and industry relations with the National Association of REALTORS® in Washington, D.C. “But these new ones leave them in the dust because there are more incentives and more money on the table. Earlier laws had lifetime limits. Once a taxpayer had credits up to that limit, they couldn’t claim more. But these new rules have no lifetime limits in some of the categories. However, there are some year-to-year limits.”

Two Types of Tax Credits

The tax credits are divided into two types: the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit, explains Courtney Klosterman, home insights expert at Hippo Home Insurance Group.

Energy Efficient Home Improvement Credit

This tax credit is available to homeowners making qualified energy-efficient improvements to their homes, such as:

– ENERGY STAR’s most efficient products can earn owners credits up to $600 per year.
– Homeowners can claim up to 30% of what they spend, each year up to 2032.
– These must have thermal efficiency ratings of at least 75%, qualifying for up to a $2,000 credit per year.

Homeowners can also request home energy audits from professional auditors for tax credits of up to $150 per year. These audits can identify areas of energy loss and potential home health and safety issues, potentially saving homeowners up to 30% on their energy bills by making recommended improvements, according to the U.S. Department of Energy.

Residential Clean Energy Credit

This credit supports homeowners investing in renewable energy solutions, including:

– **Solar, wind, geothermal, and fuel cells**
– **Battery storage technology**

“This credit intentionally covers improvements that aren’t common yet,” says Liddiard. “Congress took the time to really look forward to what could be widely available in the next decade.”

Homeowners can claim 30% of the cost of these improvements until 2032, after which the reimbursement drops to 26% in 2033 and 22% in 2034. If all upgrades are done in one year, unused credits can be carried forward to future years, a flexibility not available with the Energy Efficient Home Improvement Credit.

Planning for Maximum Benefits

Proper planning is essential for maximizing these credits. DR Richardson, cofounder of Elephant Energy, advises homeowners to strategically plan their energy efficiency projects. “You want to install the heat pump one year and the heat pump water heater the next year to maximize those credits.”

When claiming the Energy Efficient Home Improvement Credit for improvements made during 2023, homeowners need to file Form 5695, Residential Energy Credits Part II, with their tax returns. The credit must be claimed for the tax year in which the installation was made, not the year of purchase.

Avoid Common Mistakes

Avoid installing equipment that isn’t efficient enough to qualify for the tax credits. Working with a knowledgeable contractor can ensure you select qualifying products. “The federal government doesn’t make it perfectly clear to the average consumer which products are sufficiently efficient,” Richardson warns. “So, you want to work with a contractor. Most buyers are not buying from the store, and the average salesperson would not necessarily know.”

Newer Homes Can Benefit Too

Liddiard shares his personal experience with energy efficiency improvements in his 11-year-old home. “It’s remarkable how much improvement has gone into furnaces in just 10 years,” he observes. “Your home does not have to be 40 years old for you to reap significant benefits and tax credits from energy-efficient home improvements you undertake.”

Homeowners looking to save money and enhance their home’s energy efficiency should consider taking advantage of these new tax incentives. By making strategic improvements and leveraging available credits, you can reduce energy costs and increase the overall value and comfort of your home.

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Essential Spring Home Maintenance Tips Every Homeowner Should Know

As winter gradually gives way to spring, seasoned homeowners know that now is the critical time to prepare their homes for the upcoming warmer months. Being proactive about home maintenance can prevent minor issues from turning into costly repairs. Here are four essential steps that savvy homeowners take each spring to keep their homes in top condition:

#1 Patch Up the Bare Spots in the Lawn

The end of winter often leaves lawns looking a little worse for wear. Addressing bare spots in your lawn is more than just an aesthetic measure—it’s a practical one. Filling in these spots helps prevent mud and water from being tracked into your house, especially as the snow melts and spring rains arrive. This is a simple yet effective way to maintain the cleanliness of your home and the health of your lawn. For tips on getting your lawn ready for spring, consider reading guides like “5 Ways to Prepare Your Lawn for Spring.”

#2 Inspect the Roof and Siding (Using Binoculars!)

Your home’s roof and siding are its first line of defense against the elements, and they take a significant beating during the cold winter months. With the arrival of slightly warmer temperatures in March, it’s the perfect time to check for any signs of damage. Using binoculars to inspect your roof is a safe and time-efficient method. Look for loose or curling shingles, damaged gutters, peeling paint, or cracks in the foundation. Identifying these issues early can save you a lot of money and hassle later on, so schedule repairs as soon as possible to prevent further damage.

#3 Put Up Window Screens

Window screens are essential for enjoying fresh air without inviting insects into your home. If you stored your screens for the winter, now is the time to put them back up. Check each screen for holes, frame damage, or looseness. Repairing these issues now ensures you can open your windows to let in the clean, refreshing breezes of spring without any unwelcome guests.

#4 Replace Batteries in Smoke Detectors

Smoke detectors are a critical safety feature in any home, and ensuring they function correctly is crucial. Batteries in smoke detectors should be replaced once a year, making spring an excellent time for this task. While you’re at it, test your smoke detector to ensure it’s working correctly. Remember, pressing the test button only checks the alarm sound, not the detector’s ability to sense smoke. For a more thorough test, light a match, blow it out, and hold the stream of smoke near the detector. If it goes off, it’s working correctly.

Taking these proactive steps in early spring can make a significant difference in maintaining the safety, functionality, and appearance of your home throughout the year. Start these tasks now to ensure your home remains a safe, clean, and pleasant place to live as the seasons change.

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