5 Ways to Add Luxury to Your Regular Home

Real estate eye candy is everywhere. And if you love window shopping for homes online, there's a seemingly endless influx of massive mansions listed in the tens of millions of dollars. While their trillion square feet might not tempt you, and their manicured grounds seem like an eco-nightmare requiring a lifetime of landscaping, the luxury amenities and highly customized features do make the living seem easy, right?

Whether you're buying, prepping to sell or simply trying to live the good life in your current home, here are 5 inexpensive ways to add some luxury to your regular home:

1. Spa bathroom upgrades. I’m not saying you have to have a toilet like Whoopi Goldberg’s or anything. Her flusher has been featured on the View, Oprah and all over the web - one site even made up a song about it (the ditty is a bit blue, though, so I won’t link here. The curious can find it online.) But her toilet - yes, the toilet - runs around $7,000!! (No typo, folks.)

In all seriousness, though, spas tend to have a clean, bright look and feel and luxurious stress-busting features that just flush the tension right out of you (pardon the pun) - many of which can be installed in your own home for a fraction of what the dreadlocked one paid for her porcelain potty. For example, pedestal sinks instantly - and inexpensively - open up a bathroom, especially when replacing a dark vanity and wall-to-counter mirrors. I recently put a new pedestal sink in my bathroom for less than $600 - top of the line, including faucets and installation!

Similarly, you can get more of the spa look and experience at home, with a relatively modest investment - especially compared with the lifestyle upgrade for your buck - by installing granite counters (the tiny slab most bathrooms take can run a few hundred dollars), a basic bathtub with jets or river-rock shower floors for under a thousand dollars!

2. Custom, decorative paint treaments. Sponge painting? Très 1990. Murals in your kids’ rooms, entry hall inspirational mantras that greet your guests - paint is one of the least expensive “edits” you can make to your home, and homeowners are upleveling their home’s aesthetics with custom paint in lots of luxe-ey ways.

From harlequin diamonds to chair rails, crown moldings and wainscoating, decorative paint treatments are a simple, cheap and chic method for upping the luxury in your home life.

3. Built-in anything. Part of what makes uber-luxury homes, well, uber-luxurious is the fact that it seems like living life in them would be so neat and clean and easy. One way to get that feel in your very own home is to build in some of the necessities, optimizing the way you use your space and takes great advantage of otherwise unusable areas, generally creating what the feng shui set would deem free-flowing chi.

Consider building in:

• Storage systems. From shelved nooks to closet organizers to garage grids for sports equipment, storage systems eliminate clutter and make sure there’s a place for everything, and that everything has a place. If you can afford a custom cabinet installation or custom closets, they certainly offer the fancy moldings and modules that create luxury appeal. But many home improvement stores now offer much less expensive versions of these systems that look and work great.

• Desks and bookshelves. Like storage, but activity-specific, built-in office equipment maintains order and can turn a dead corner of a room into a highly useful workstation. To replicate this functionality on the cheap, find a corner or nook and put in an armoire-style workstation that closes and folds up when you’re not working. And built-in bookshelves are a time-tested selling point when your home is being sold, by the by, so, if you have an empty area from old-school built-ins which were removed, installing inexpensive shelving might be a great way to go.

• Wine storage. Dead space under the stairs can easily be transformed into a wine cellar or storage space. My own personal wine cellar is where I store my kid’s chocolate milk, my electrolyte water and a bottle or two fish sauce, but it’s a great feature to have at home, no matter what you’ll use it for!

• Recycling/compost/trash centers. Try as we might to minimize it, we all generate trash. Built-in centers with clearly marked waste receptacles make this dirty part of life less messy and more manageable.

4. Dedicated spaces for anything. There’s no need to go all Candy Spelling and dedicate multiple rooms to gift wrapping. But space is a luxury in and of itself, so dedicated space for your film-watching (a theater room), gardening materials, crafting supplies or even the kids’ homework is an extra-special, super-duper luxury, especially if it’s equipped with the right equipment for the activity to which the room, half-room or even corner or nook is dedicated.

5. Automation. Remember the Jetsons? The vision for this century was a fully automated, robotic home that did all the work of life for you, so your time would be free to shop at Mooning Dales or work for Mr. Spacely building sprockets. Most of that hasn’t happened, and that’s probably for the good. But injecting small touches of automation into your home can give it a decidedly high-end feel - for very, very little cash.

(And they're also gadget-ally delicious!)

I personally just put a couple of these automated trash cans- $60 each! - into my own kitchen. They’re hands free, so eliminate the germiness and clunkiness of opening a lid with your hands or feet, and they were the hit of a recent dinner party! (Okay, it was the food, then the trash cans that guests admired. But still.) Many hands-free or automatic household items are available at very low prices, like automatic soap pumps, paper towel dispensers and robotic vacuum cleaners.

And if you want a built-in recycling center with a techie feel, here’s one that should really float your boat - $100 bucks for in-home, eco-chic luxe!

 

5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)

 On today’s market, every savvy seller wants to know what turns buyers off, so they can get their homes sold as quickly as possible, for as much as possible.  But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller.

Lest you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios.  Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial.  That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further.

For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have!

Here’s a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves:

1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you! 

Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there.  Sellers: avoid being at home while your home is being shown.  Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.

2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested.  As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.

Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract.  It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are.  Buyers:  Get pre-approved.  Seriously.  And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.

3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of.  And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off.  Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.

Sellers:  Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving. Buyers:  Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too.  Don’t be amazed if you make an offer far below asking, and don’t get a response.

4. Renegotiating mid-stream. Sellers plan their finances, moves and  - to some extent – their lives around the purchase price a buyer agrees to pay for their home.  If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair.  But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul.  And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.

Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home. Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.

5. Misleading or setting the seller up.  Remember when we talked about buyer turn-offs?  Being misled by listing photos or very fluffy property descriptions was high on the list.  The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price?  #LAME  Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors?  Lame squared.

Sellers:  If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists.  Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called
 

 

5 Mortgage and Foreclosure Myths

 

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up.  The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth:  If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

The 5 New Rules of Real Estate

We’re about to enter the peak season for real estate shopping: spring. But, before you jump in with both feet, you should know a lot has changed since the last time you may have bought or sold a house. It’s like dating — all of those old rules you used to know have changed over the past few years. It’s important that your approach to home ownership reflects the realities of the current market, and not those of the housing boom. Here are a few of the new real estate rules to help guide you this spring:

1. Then: Don’t buy now, home values have further to fall

Now: It’s a fool’s errand trying to time the bottom. Economists don’t even agree on when the bottom will occur, so the average person probably won’t be able to time it perfectly.  While it’s true that home values have further to fall in many areas this year,  interest rates will likely rise, offsetting any savings that may come from lower home values.

2. Then: It’s better to buy than to rent

Now: It’s a buyer’s market across most of the U.S. But the time frame for how long you need to live in your home varies greatly across markets. A good rule of thumb is, if you are going to live in your home at least 5-7 years, then buying makes sense in most places. Home values will likely stay flat for several years after we reach bottom at the end of this year, but if you’re planning to live in your home long term, you can ride out the years where appreciation remains flat and come out ahead in the end.

3. Then: You should spend 1/3 of your monthly gross income on your mortgage

Now: During the bubble, many people listened to the advice that they should “stretch” to buy a house. Now, many want to avoid being “house poor.”  The standard rule of thumb was to spend no more than 30 percent of your pretax monthly income on your mortgage.  Now, many financial experts recommend spending no more than 25 percent.  But really, only you can truly figure out what you can, or want to afford based on your various goals (college and retirement savings), lifestyle (kids, travel, special interests)  income and debts. So take the time to do your own math.

4. Then: When it comes to re-sale value think: Location, Location, Location

Now: The suburbs are often thought of as the more desirable place to live, compared to the city (better schools, lower crime). So one would think homes in the suburbs would have weathered the housing downturn better than homes in the city. However, according to analysis from Zillow, in most major metros (with some exceptions) home values closer to city center held up better than those in the ‘burbs.

5. Then: Only refinance if rates are dropping

Now: Everyone jumped at the chance to refinance when rates fell below 4 percent. Now that rates are higher it may seem like the opportunity to save money on your mortgage is over.  Not necessarily.  While rates may have inched higher, they are still at overall historic lows and the general consensus is rates will continue to trend up. So, if you haven’t refinanced yet, even though rates are a bit higher, start shopping for mortgage quotes today. You haven’t missed the boat yet.

  

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