When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.

“This year’s Remodeling Cost vs. Value Report shows the value of putting your home’s best façade forward, so to speak,” said National Association of REALTORS® President Moe Veissi. “Inexpensive exterior replacement projects are not only crucial to a home’s regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal.”

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.

The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project — upscale vinyl — rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.

The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.

Source: NAR

If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!

by Carla Hill

Energy efficient upgrades–like adding compact fluorescent light bulbs, energy efficient windows and boilers–can bring down utility costs, finds a new study by Deutsche Bank Americas Foundation and Living Cities.

Researchers examined about 19,000 affordable housing units in New York City that received energy efficiency retrofits. They found that the retrofits added up to 19 percent in savings on fuel bills and a 10 percent savings on electricity–or, in other words, a $240 on average fuel savings and $70 electrical savings per apartment each year.

“This study proves that the assumption that you can’t rely on savings when doing a retrofit isn’t true,” Jeffrey I. Brodsky, president of Related Management, the landlord of some of the apartments used in the study, told The New York Times. “It may not be perfect or exact, but you will see savings.”

Savings were also found when looking at 343 apartments that started an electrical savings program, which included more efficient windows, lighting upgrades, and Energy Star refrigerators. The retrofits helped shave overall electricity usage in the apartment units by more than 25 percent and helped contribute to an $808 in annual savings for each apartment.

While lenders don’t consider future savings from retrofits when underwriting a loan, some in the industry have called for a change in that, and a new bill in the Senate is even urging lenders to start taking into account a home’s energy costs in standard mortgage underwriting.

“The study informs what we hope will be a new set of lending practices that places real monetary value on energy efficiency improvements,” Sam Marks, the vice president of Deutsche Bank Americas Foundation, told The New York Times.

Source: “Study Clarifies the Energy Savings in Retrofitted Buildings,” The New York Times (Nov. 8, 2011)

Traditionally, the time from Thanksgiving to New Year’s Day can be some of the slowest time of the year for home buying due to the holidays and the often less-than-perfect weather. But that doesn’t mean sellers can’t sell during the winter months. In fact, with decreased inventories, sellers may have a better chance to standout and face a buyer pool with more urgency to settle down.

Experts offer some of the following tips for selling a home in the winter:

Stage it: Stagers can arrange furniture so that selling-points in a home don’t get overlooked, paint rooms inviting colors, and have the know-how to give a home a cozy winter feel. Display photos of the home that also show it in warmer summer months. And don’t forget to turn up the thermostat in the home so buyers are comfortable from the moment they step through the door.”If you have a vacant house in winter with the heat turned down to 50, chances are someone will make a very low offer,” Loren Keim, a real estate broker, told the Associated Press.

Price it right: “If it’s priced properly, it will sell any day of the year,” Katie Severance, a broker for RE/MAX in Upper Montclair, N.J., told the Associated Press.

Show the way: Keep sidewalks and driveways clear of snow, ice, and leaves–giving potential buyers a clear path to your listing’s front door.

Light it up: There’s less daylight in the winter months so it’s even more important to keep all the lights on as well as open blinds and drapes for natural light. Keep the home well-lit even when you’re not there so the home still looks inviting to passersby who drive by in the evenings after work.

Source: “Selling Your Home? Some Tips for the Off-season,” The Associated Press (Nov. 9, 2011)

More lenders are scrutinizing mortgage applications since the financial crisis fallout, which has triggered fears of borrowers who will default or walk-away from their mortgage or mortgage fraud.

Here are the triggers that may cause the most lender scrutiny of loan applications, according to a recent article at The New York Times:

Large deposits of money: Lenders are required to account for any cash gifts for down payments, such as from relatives. So if a borrower earns $5,000 a month and suddenly deposits an extra $10,000 beyond that, lenders may question where the money came from when applying for a loan.

The home’s new address: Buyers who are purchasing a primary home three hours from where they work may also draw increased scrutiny from lenders, according to The New York Times article. Borrowers may even need a letter from their employer stating that they work from home a few times a week. That’s because lenders may want to ensure the borrower plans to be an owner-occupant and not buying the property to rent or flip, which must be disclosed.

Signing up for new credit cards: Borrowers should avoid taking on extra debt when applying for a loan — so they may want to wait to buy all the new furniture. Extra debt can be a red flag to a lender and could even jeopardize closing on a new home if the debt pushes the borrower’s total debt levels beyond lender-accepted limits.

Source: “Mortgages: Triggers of Lender Scrutiny,” The New York Times (Nov. 3, 2011)

Buyers may be drawn to distressed properties. After all, “the No. 1 reason to buy a foreclosure is the potential for a good bargain,” says Daren Blomquist of RealtyTrac.com.

Indeed, discounts often can range from to 20 or 40 percent off on a short sale or foreclosure compared to a sales price of a nondistressed home.

But despite the big bargains, buyers need to tread carefully before jumping in. Blomquist provides some of the following tips in buying a foreclosure in a recent article at Business Insider.

- Beginners may want to focus on REOs. New buyers may want to avoid short sales, which often come with lengthy negotiations, or foreclosure auctions that often require all-cash payments. On the other hand, REOs, Blomquist says, can be similar to a traditional home sale in some ways and can offer some of the biggest bargains. “A bank isn’t emotionally attached to a REO; it’s just looking to recoup as much of its losses as possible,” Blomquist told Business Insider. “So the lender is often more willing to capitulate on price.”

-Don’t forget the inspection. Many distressed properties are sold “as is” and can come with a host of problems if buyers aren’t careful. Blomquist recommends getting a home inspector to inspect the home prior to any purchase. Buyers will then have a list of any potential problems with the home, along with estimates for costs of repair. Buyers can then use the list to possibly negotiate a lower price, Blomquist says.

-Don’t expect appreciation right away. You’ll also likely want to caution buyers who believe that because they’re buying at a big discount they expect to see appreciation right away. Educate your buyers about the market. “It’s important to not make the mistake of counting on any major price appreciation in the near term,” Blomquist advises buyers in the article at Business Insider. “We’re still in a depressed market, and we’re probably not going to see home prices appreciate much for quite some time.”

Source: “Here Are Five Things You Should Always do if You’re Buying a Foreclosed House,” Business Insider (Oct. 31, 2011)

A new study lends more support to the idea that where you live can affect your health. In an experiment that started in the 1990s, the federal government offered thousands of low-income women living in public housing in Los Angeles, Baltimore, Chicago, New York, and Boston an opportunity to move to a more affluent neighborhood and see if it improved their health.

Now more than a decade since the experiment began, researchers have found that the relocated women had lower rates of obesity as well as lower rates of extreme obesity. For example, 16 percent of the women who were relocated had diabetes compared to 20 percent who remained in public housing. About 14 percent of the women who were relocated were extremely obese compared to nearly 18 percent who stayed in public housing.

“This study proves that concentrated poverty is not only bad policy, it’s bad for your health,” said Shaun Donovan, secretary of the Department of Housing and Urban Development. HUD arranged for the study, which appeared this week in the New England Journal of Medicine.

“This is one of the first studies to show that where you live — the circumstances of your neighborhood, the social characteristics of the people around you — all these things may play a role in your own health,” Dr. Harlan Krumholz, a cardiologist at the Yale School of Medicine, who was not involved in the study, told the Los Angeles Times. “Your health is not just what happens to you, but is influenced by all of those around you and the environment. … Some environments are toxic to health.”

Source: “Study Finds Poor Health in Poorer Neighborhoods,” Pittsburgh Post-Gazette (Oct. 20, 2011) and “Poor Neighborhoods May Contribute to Poor Health,” Los Angeles Times (Oct. 20, 2011)

While open houses benefit real estate agents in terms of advertising, training new agents, and finding buyers for other properties, sellers reap fewer benefits. They have to tidy the house and leave it for the afternoon, and the likelihood of the home actually selling as a result of the open house is small.

Experts say agents should consider the security risks posed by an open house. Thieves could tag team and steal valuables if only one agent is on duty, and children could break or take things. Moreover, someone could slip or fall if snow or ice is present; and agents must acknowledge the risks open houses pose to their personal safety.

Some experts believe virtual tours offer a safer and more efficient alternative, especially since the National Association of REALTORS® says 74 percent of buyers look for homes via the Internet. Virtual tours stay open 24/7 and give buyers a good view of the interior, exterior, and the surrounding neighborhood. They also minimize the risk of theft or injury, and they can be shared with others via e-mail.

Source: “Open Houses: Weighing Risks Versus Rewards,” NorthJersey.com (10/02/11)

Home sellers probably won’t be too happy, but housing experts in an article at CNNMoney say that underpricing a home by 10 percent may help it sell faster. And while sellers may lose out on thousands from the sale, they likely will avoid months of carrying costs from the home lingering on the market to offset that loss.

The high inventory of foreclosures on the market is making it difficult for sellers to compete against these ultra-low prices. Therefore, “listing your home for less than comparable ones in your neighborhood is the best way of unloading it as quickly as possible,” according to the article.

You could even attract a bidding war, says Steve Murray, editor of the Real Trends newsletter.

Furthermore, it may take the property a lot less time to sell. For example, a home underpriced by 10 percent in Somerdale, N.J., may sell in a few days rather than in the average four months, says Denise Riordan, a Sotheby’s International real estate professional.

Source: “Sell Your House Faster in a Tough Market,” CNNMoney (June 27, 2011

Bankrate.com recently featured a range of tips for first-time sellers to help them stay competitive in today’s real estate market. Here are some things you may want to discuss with your sellers:

Pricing a home competitively from the beginning is important. “Your largest number of showings will occur in the first two to three weeks,” says Mark Ramsey, broker with the Ramsey Group/Keller Williams Realty in Charlotte, N.C. “The (multiple listing service) systems and the Internet tend to drive the majority of showings.” That’s why real estate experts stress that it’s important sellers get a competitive, realistic price from the start.

Consider sweetening the deal. Sellers may be able to lure more buyers by offering some extra incentives, whether that’s leaving that top-of-the-line gas clothes dryer or other items that would be difficult to move, like the two wall-mounted, flat-screen TVs. The perks may add a little extra to attract buyers and become extra selling points too.

Make sure the home is show-ready and in move-in condition. In smaller homes, for example, clutter can mean the difference between cozy and cramped, experts say. Be sure the sellers keep homes clean and clear of clutter, particularly kitchen and bathroom countertops that tend to accumulate personal items that can hamper showing the home’s features.

However, make sure sellers don’t go to the other extreme and clear away too much.

“Don’t neutralize it so that it’s sterile,” says Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., adding that small mementos and photos help make a house feel like a home.

Real estate experts also stress the importance of sellers’ getting a home in move-in condition–such as fixing all repairs and replacements–before it is even listed.

“From a presentation standpoint, you want them to feel it’s turnkey — ready to go,” says Mark Ramsey, broker with the Ramsey Group/Keller Williams Realty in Charlotte, N.C. “Because your competition is doing that. In this market, it’s not just a price war but a beauty contest at the same time.”

Source: “7 Tips for the First-time Home Seller,” Bankrate.com (June 2011)