february 2016 real estate update

7/25/2019 February 2016 Real Estate Update

1/19

Your REALTOR

Steven Aslanian

February 2016

May all your Summer dreams come true"

www.aslanian-team.com

Copyright 2016 Realty TimeAll Rights Reserved.

818-879-0800

Note: Simply click on the title of a story below to go directly to that page.

Pages with full header

February Real Estate Update

9 Little Things That Can Make or Break Your Home

Purchase

How Smart Can Appliances Be?

3 Key Pre-Offer Home Seller Actions

The Five Biggest Mortgage Mistakes You Can Make

Capital Gains: The Stepped Up Basis

Home Renovation Projects That Provide The Best Return

On Investment

There Are Tax Benefits With Home Ownership

Blank Template

Pages with footer only


9 Little Things That Can Make or Break Your Home

Purchase





Home Renovation Projects That Provide The Best

Return On Investment


Blank Template

Equal HousingOpportunity

Steven [email protected]://www.aslanian-team.com

RE/MAX Olson & Associates818-879-080030699 Russell Ranch Rd.Westlake Village, CA 91362


2/19

Your REALTOR

Steven Aslanian

February 2016



Copyright 2016 Realty TimAll Rights Reserved.

818-879-0800

Mortgage Rates Fall

In Freddie Mac's results of itsPrimary Mortgage Market Survey the30-year fixed-rate mortgage averaged3.79% for the week ending January 28,2016.

A year ago at this time, the 30-yearFRM averaged 3.66 percent.The Fed stood pat this week but kept

ts options open for a rate increase inMarch. This week's housing releasesconfirmed the momentum of home salesgoing into 2016. A hesitant Fed, sub 4%mortgage rates, and strong housing

Mortgage RatesSource: Realty Times

U.S. averages as of January 28, 2016:

30 yr. fixed: 3.79%15 yr. fixed: 3.07%5 yr. ARM: 2.90%

fundamentals should generate a threepercent increase in home sales this year.

Garages: Not Just ForCars Anymore

With larger, moreluxurious kitchens now theheart of many houses, and

irst-floor laundry and mud rooms thenew activity centers, it was only a matterof time before the garage also underwenta transformation.

Despite the fact that 82 percent ofhomes have garages, the space is oftenthe largest, most underutilized, most

abused, and most often ignored room inhe house," wrote Bill West in his book,

Your Garagenous Zone.Many people still struggle to findenough space amid the junk in theirgarage to park a car. But there's agrowing desire to create cleaner, moreorganized spaces that can contribute to ahome's "wow" factor, says West. It maynot raise the price in most markets, but ithelps win a beauty contest if the buyer isdeciding among a few homes.

Giving Your Kitchen ABoost When Selling

Most experts agree itis not always cost-efficient toremodel a kitchen inanticipation of selling. There are ways to make your kitchensparkle before you put your home on themarket. Repair leaky faucets and removestains from the kitchen counters andsink. Clean the interior of your oven anddishwasher, as someone is sure to openthem. Dirty appliances can convey animpression that will extend to the rest of

the house. "Before taking out walls or committinga lot of money, you have to ask, does itneed a facelift or major surgery," saidJason Feldman, director of style,innovation, and design for Home Depot. "There's no point in replacing cabinetsor making structural changes if all that'sneeded are a few cosmeticimprovements."

Can Home Staging ReaWin Over Buyers?

Home staging caninfluence buyers'perceptions of a home andeven motivate them to paymore, according to the NationalAssociation of REALTORS' Profile oHome Staging, a survey of more than2,300 REALTORSrepresenting buyeand sellers. Eighty-one percent of REALTORSwho represent buyers say that stagedhomes make it easier for their homebuyers to visualize a property as theirfuture home. Forty-six percent of buyeagents also reported that staging maktheir buyers more willing to tour a homthey viewed online, and 45% say that

buyers tend to view the value of thehome more positively if it is decoratedbuyers' tastes. Twenty-eight percent of agents saidtheir buyers are even more willing tooverlook other property faults if a homis staged, according to NAR's survey.Buyer agents also say that staging capotentially influence how much theirbuyers are willing to offer for a home.According to the survey, thirty-twopercent of buyer agents surveyed saythat staged homes increase the dollarvalue buyers are willing to offer for a

home by 1% to 5%; 16% said it couldincrease offers by 6% to 10%. However, not everyone chooses tostage a home in prepping it for sale.Forty-four percent of seller agents saythey only suggest that sellers declutteand fix property faults, and they do norecommend that their clients shouldprofessionally stage the home.





3/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800

9 Little Things That Can Make OrBreak Your Home Purchase

By Jaymi Naciri

When it comes to buying a home, we always think about thebig things: sales price, location, mortgage qualification. But it'soften the little things that rise up to make living in that home agreat joy or a huge letdown.

Your welcome to the neighborhood: There are neighborswho bring warm cookies to welcome you to the neighborhoodand then there are the Homeowners' Associations that welcomeyou with a stern warning to move your storage unit immediatelyeven though it's only been in your driveway for a few hours andyou haven't even arrived from your cross-country drive (truestory).

The friendliness of your neighbors: Beyond your initialmpression, is living in your neighborhood going to give you thekind of lifestyle you want? In many cases, you won't know untilafter you've moved in. Spending some time there and getting toknow your potential neighbors/asking questions before youpurchase may give you the info you need.

Where to put the dog bowl: Does it seem like a frivoloushing to be considering when buying a home? Only until youmove in and realize there's nowhere to put the food and waterbowls that won't end up spilled, kicked over, or constantly in theway.

Think about it in terms of a car purchase. You might notnotice the number/placement of drink holders in the new caryou're buying, but you're sure going to notice how lacking theyare when you're driving a carful of people around in the100-degree summer and there's nowhere to put your Big Gulps.When your pets are a part of your life, considering where theywill graze (and sleep and run) may help you make the bestdecision.

Closet space: Closet space isn't necessarily a small thing

for many of us, it's an absolute necessity!). But, it can also beone of those things that is easily overlooked when seduced by abig kitchen or a pool in the yard. If the closet space seems like itmay be a problem when you tour the house, it most likely will bea problem when you're living in the house.

Placement of the laundry: Is it a deal breaker if yourlaundry room is downstairs and the bedrooms are upstairs?

Probably not, but it does make things more challenging. Ifyou're trying to decide between a couple of homes, this mayone of the little things that helps you finalize your decision. Commute time to and from work : Your daily commutesomething you've probably spent considerable time thinkingabout, especially if you're considering moving farther from wBut even if you're moving equidistance from your existing hothe commute could be very different. And it's not something want to discover AFTER you've moved. Doing a few test runbefore you make an offer can help. The schools aren't great: If you don't yet have kids, orthey're babies, or already grown, or you don't plan on kids, tquality of the schools may not seem like a big deal in relationother items on your must-have list. But, you never know howlong you might live there. A "starter" home that's supposed tbe a springboard to a large home in a few years may not enup springing you so quickly. And studies show that goodschools can help home values, so even if you're not packinglunches and preparing backpacks, being near people who amight be a good move. Positioning of the house: Everyone wants a house thalight and bright, but what you might not want is a sun that seright in your living room. If you're in a warm climate, you canplan on being hotter than you'd like to be in that room duringsummer and having higher electric bills. Really high ceilings: This is another feature people tenwant in their home... until they actually have them and realiz

It's cold in the winter since all the warm air gets sucked uIt's hot in the summer since conditioned air has a hard tim

doing its thing in such a vast space.You'll never be able to paint the room without renting

scaffoldingDitto for changing light bulbs





4/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800


By Stewart Wolpin

The Consumer Electronics Show (CES) is not an applianceshow - not yet, anyway. Whirlpool and Bosch had appliances atCES this past week in Las Vegas, but Haier showed mostly TVsn its exhibit space. Other white goods brands such as Sears,GE, Maytag and Electrolux did not show off any majorappliances.

Instead, it was mainstream Korean electronics brandsSamsung and LG who played "can you top this" where smartappliances - mostly refrigerators - were concerned.

First, Samsung announced its Family Hub Refrigeratoravailable this May), which is essentially a 21.5-inch verticalablet with a four-door refrigerator attached.

The Family Hub fridge is equipped with a 1920 by 1080pouchscreen with Wi-Fi, Bluetooth and speakers. Itspre-installed apps are family- and kitchen-centric, such as acombined schedule app that syncs everyone's Google or AppleCal calendars, as well as a food shopping app called Groceries

by MasterCard.Inside the Hub fridge are two fish-eye cameras which snap

a photo of the interior contents each time the doors closes.Photos can be viewed on the pending Samsung appliance appor shopping remotely. Interior cameras seem to be a growingsmart fridge trend.

LG countered with its Signature refrigerator, which has aview-through window that turns translucent or dark by simplyknocking on it. The door opens when you step on an "opendoor" holograph projected from the fridge onto the kitchen floor -and the fridge is smart enough to differentiate between you anda dog or cat who might happen to wander by. LG didn't provideiming for when the fridge will be available.

Not to be outdone, Whirlpool announced its Connected

French Door refrigerator, out this spring, along with a smartdishwasher and smart ranges in both gas and electric. All canbe monitored and controlled from Whirlpool's app, so you cancheck the refrigerator's contents via internal

Wi-Fi cameras, monitor and moderate the fridge's varying zotemperatures, or initiate speed ice-making for parties. Smart Appliance Ecosystems As a result of Smart Appliances dependence on humaninteraction, appliances can't perform much "If This Then Tha(IFTTT) automation, nor can they work together the washinmachine or dishwasher won't automatically eject its contentsonce the cleaning cycle is done, for instance, nor can arefrigerator order groceries by itself (at least, not yet). So jushow "smart" appliances can ultimately become is an openquestion. Despite these intelligence limitations, both Samsung andLG, along with Bosch, are attempting to build applianceecosystems. In mid-2014, Samsung bought smart-homeplatform SmartThings, and all the company's 2016 UHD TVswill double as SmartThings hubs and enable on-screenmonitoring and control.

Meanwhile, LG is developing an overarching smarthome/appliance platform, Smart ThinQ (confusinglypronounced "smart thin cue"). Smart ThinQ will allow LG'sappliances to communicate through an Amazon Echo-liketubular Bluetooth speaker hub equipped with a 3.5-inch coloscreen, Wi-Fi and ZigBee, Z-Wave, Nest and AllJoyncompatibility. There also will be small-button IR/motion sensthat can transmit limited information from normal appliancesthe Smart ThinQ app. Like Samsung, LG wants to make its controls availablethrough a TV; a Smart ThinQ app will be included in thecompany's webOS 3.0, which will first be available in thecompany's new Signature OLED TVs, due later this year. LG continues to promote HomeChat, a text-based,

man-to-machine form of communication. But LG'stop-of-the-line Signature appliances lack HomeChat, which mimply the feature's abandonment or absorption into SmartThinQ.





5/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800

Good Credit Is Just As Important3 Key Pre-Offer Home Seller Actions

By PJ Wade

Sellers who wait until they're faced with a buyer's offer topurchase before initiating three key actions, may be forcinghemselves to make too many decisions at once and tooquickly. Most of us are nervous about decision making. Manyack confidence in their ability. Yet, sellers will be faced withquickly making multiple financial, legal, and lifestyle decisions

when a buyer's offer is presented to them.There are 3 key positive actions sellers should begin

before offers arrive, so that they are prepared for decisionmaking and are less overwhelmed by the selling process:

#1. Start thinking that you're living in the buyer's newhome.Mentally move out. Let go of "mine." Cut the emotionalcord. Concentrate on making the property as attractive tobuyers as possible and practical. If you wait to start this "cut theemotional cord to home" thinking when your real estateprofessional presents you with an offer, you're doing yourself aremendous disservice. Making confident decisions is difficultwhen you're distracted by pride of ownership and personalhistory.

#2. Start thinking about what the buyer may ask you to

do.Anticipate buyer requests regarding financing, movingdates, and other factors that may cause inconvenience or costo you, the seller. For instance, if you had to wait many monthsor closing and the money from the sale, what problems couldhat cause you? Conversely, consider costs attached to movingn less than a month or at least sooner than convenient. Do youunderstand possible costs and considerations if buyers ask youo hold a second mortgage to enable them to pay the top dollaryou ask for? Ask your real estate professional to explain howseller-held mortgages work and what would have to be true foryou to sell that mortgage and realize cash.

#3. Start thinking beyond list price to achieve full offervalue.The value expressed in a buyer's offer to purchasenvolves 5 key elements - it's a financial package:

Purchase Price is not automatically the amount the sellereceives since other factors, like unpaid property taxes, caneduce the total. It's not the purchase price, but the net

proceeds of the salethat sellers should concentrate on. Realestate professionals can calculate, or at least estimate, theseller's net proceeds after costs related to the offer anddeduction of commission.

Closing Date, or the day ownership is transferred and theseller receives the money, can represent cost or value to

sellers. If the seller has to make two moves or has to pay twmortgages during the transition from one home to another,costs can add up and offer value goes down.

Inclusions and Exclusions represent costs and value.Appliances, light fixtures, and draperies are common sellerinclusions, but the cost of replacing them in the next homereduces profit.

Terms and Conditions are clauses in the offer which cove"what if" risks and the obligations of both parties. These claudetail what the buyer asks the seller to do for the purchaseprice. The degree of uncertainty attached to the conditions athe buyer's related ability to close effect the value of an offer

Intent and Sincerity are vital aspects of an offer althoughdifficult to quantify. For the seller, offer value lies in the certathat the buyer will close in spite of market shifts and otherproblems ahead. Weeks or months may pass from the time that you decidsell and the day your real estate professional receives an offto present to you. This key stage of selling your home is no t

to discover: what you didn't understand about selling

what you haven't considered thoroughly

which details comprise your ideal outcome. Discussing strategies and contingencies with your listingsalesperson ahead of offer presentation will help theprofessional negotiate a solid high-value Agreement with thebuyer. Mentally preparing yourself, and anyone else who hasay in what happens to the property, means no one will bepressured into snap decisions or miss opportunities under thtight timelines common with offers. Real estate professionalare trained to help sellers make decisions in their own bestinterest by providing necessary context and details, but thes

professionals cannot advise sellers exactly what to do, normake decisions for them. To gain full benefit from the knowledge and experience othe real estate professional who lists your real estate, let thefully prepare you for offer presentations in advance. When aoffer comes in (usually at a very inconvenient time), you'll feas confident and prepared as possible faced with thislife-changing opportunity. You will understand which decisioto make and how to evaluate the full offer.

Equal Housing

Opportunity


RE/MAX Olson & Associates818-879-080030699 Russell Ranch Rd.

Westlake Village, CA 91362


6/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800


By Blanche Evans

For most buyers, the mortgage is the largest monthlyexpense they will have. Yet most borrowers will do little to nopreparation, negotiation, or shopping to get the best deal. Andhey end up paying much more for their loans than they need to.Here are five of the biggest mistakes that can cost you real

money.1. Believing advertised rates are what you'll pay: Unlessyou have perfect or near-perfect credit, most advertised ratesare out of your league. To get boasting rights on a rate thatgood, you have to pay part of a point (1% of the loan amount) apoint, or more to get the best rates. Your lender will go overyour credit with a fine-tooth comb to find anything to raise theate. That includes qualifying you at the beginning of theransaction, and then running your credit again a day or twobefore you're supposed to close on the home and loan. Ifhere's been any change in your debt-to-income ratio, goodbyeow mortgage rate.

2. Not comparing lenders: Just like everyone knows two orhree real estate agents or more, everyone knows a loan officeror a mortgage broker. A loan officer works for a bank or savingsand loan and can only offer you loan packages that the bankhas put together. A mortgage broker prequalifies you just like aoan officer, and shops your deal around to various lenders.

Whether you talk to a loan officer or a mortgage broker,you're going to have to share personal financial information inorder to get a realistic rate.

Reputable brokers will show you what certain banks andcredit unions quoted and you can pick the loan you like best. Ifyou'd rather do your own shopping, consider talking to a localbank, a national bank, a credit union, and a savings and loan,but remember, unless you give them personal information andpermission to run your credit, it's just talk.

3. Not paying attention to terms: Advertised rates even forhose with perfect credit aren't what you will actually pay. Therue cost of the loan is the APR or annual percentage rate,which includes fees from the lender. Understanding loan termss harder than shopping for a new mattress. There are so manyways lenders can inch up the fees. A loan origination fee is alsocalled a processing fee. It pays the loan officer or mortgagebroker, so this fee can vary widely. You may pay one lendermore for an appraisal than another might charge you. One

lender may charge more for pulling your credit than anotherall in your good faith estimate, which you don't get until you'vapplied for the loan. All terms are negotiable, so don't be afrto ask what a particular fee is for. 4. Waiting for a better rate: It's great to have bragging

rights on a low rate, but you don't want to lose the home of ydreams over a quarter of a point in interest. There's a bigpicture here you could be missing. No matter what your interate is, you're going to pay thousands of dollars in interest ufront before you make any serious gain in equity. If you go athe way to the end of your loan's term, you'll pay so muchinterest that you could have bought the same home two or thtimes. Instead of focusing on the percentage rate, work on hquickly you can build equity. Down the road, if rates drop through the floor, you canrefinance, but even that's not an ideal solution. You'll pay loaorigination fees, title search fees, appraisal fees and so on -enough to equal the closing costs you paid the first time aro 5. Choosing the wrong type of loan: Many families wehurt post-9/11 when lenders opened the spigots and gave aloan to almost anyone who could sign the paperwork. Suckebought homes that were too expensive using balloon loans wlow teaser rates. The type of loan you choose should depenon current market conditions and how long you plan to stay your home, not how much home you want to buy. Current market conditions favor fixed rates, because rateare rising from all-time lows. Yes, they cost more than hybridloans or adjustable rate loans, but the base amount is fixed doesn't change. Only your taxes and hazard insurance will cyou more over the years. If you get an adjustable rate mortgage, you are at the meof market conditions. While there's a cap on how high yourinterest rate can go, it's still a risk. If you plan to stay in yourhome five years or more, get a fixed-rate mortgage. If you plto sell your home sooner, you're taking a risk. It takes mostborrowers five years just to earn back their original closingcosts in equity. Once you've narrowed your choice of lenderask them on the same day to give you a quote. If you wait evone day, rates may have changed, so you're no longercomparing apples to apples.





7/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800


By Benny L. Kass

If you are married, and file a joint income tax return, the taxaws allow you to exclude up to $500,000 on any gain you makeon the sale of your principal residence. There are some basicules (conditions) which must be met, the most important is that

you must have owned and lived in the house for two out of theast five years before the sale. This is referred to as theownership and use" test.

If you are single -- or widowed -- you can only exclude up to$250,000 of your profit. At first blush, this seems unfair --especially to a person who has lived in their principal house formany years and then the spouse dies. There are, however, twoax breaks available.

First, according to the IRS, "if you sell your home after yourspouse dies (within 2 years after your spouse dies), and youhave not remarried as of the sale date, you can count any time

when your spouse owned the home as time you owned it, andany time when the home was your spouse's residence as timewhen it was your residence." (IRS Publication 523, Selling YourHome). In other words, the surviving spouse can claim theup-to-$500,000 exclusion of gain if the house is sold within twoyears from the date of death, and it is not necessary to file aoint tax return.

Let's assume for this discussion that the couple purchasedheir home many years ago for $50,000, and when the husbanddied, it was worth $750,000. Let's further assume no capitalmprovements which would have increased the tax basis. In ourexample, if within two years from death, the spouse sells for$750,000, the gain is $700,000. The spouse can exclude$500,000 of the gain. But $200,000 of gain still has to beaccounted for.

Then we go to the second tax break: called "Stepped UpBasis".

Basically, the value of the house on the date of deathbecomes the basis of the person who inherits from thedeceased. In effect, the basis is "stepped up".

Let's go back to our example. The basis of the survivingspouse in the house is $25,000 (half of the purchase price).When one spouse died, the survivor inherited his/her basis aof the date of death, which was $375,000 (half of $750,000)Thus, for tax purposes, the surviving spouse's basis is now$400,000 (the original $25,000 basis plus the inherited basis$375,000).

If we continue to do the math, when the house is sold for$750,000, the capital gain -- i.e., profit -- is only $350,000($750,000 - 400,000). If the house is sold within two years frthe day the spouse died, the surviving spouse can exclude athe gain and pay no tax.

However, if the house is sold after the two years, the gain$100,000 more than the $250,000 ceiling authorized byCongress, and the survivor will have to pay capital gains taxthe $100,000. Clearly, while the IRS will get some money, thstepped-up basis does reduce the pain.

Since the gain is over $250,000, it is important to includecapital improvements which the owners made to the house othe many years. Any such improvements are additions to baand thus would reduce the profit. Hopefully, in this situation,can be reduced sufficiently so that the gain falls under the$250,000 cap.

Before you consider selling, you must review your specifi

situation with your tax advisors. Clearly you don't want to maany mistakes with your valuable equity.





8/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800

Home Renovation Projects That ProvideThe Best Return On Investment

By Jaymi Naciri

It's not hard to daydream about shiny new countertops andancy new appliances and one of those spa baths with a dozensprayers and a chic soaker tub, but when it comes to homeenovations, the sleek and sexy often take a back seat to the

basic and boring."Basic maintenance, such as the roof and exterior painting,

are frequently more important than an awesome kitchen," saidHGTV.

That's the takeaway (again) from the latest Cost vs. ValueReport from Remodeling Magazine, which tracks average costsand return on investment (ROI) for popular remodeling projects.The top 2016 renovation in terms of money recouped: fiberglassattic insulation, which came in at well over 100% ROI.

"For the first time, a fiberglass insulation attic upgrade wasncluded among the list of 30 home renovation projectsevaluated and proved to add the greatest value to the home at117% of the cost of the project, according to Hanley Wood,publisher of Remodeling Magazine," said KCEN TV.

Sound like a snoozer? Only if saving money - and energy -puts you to sleep.

"This is great news for homeowners, who know thatnsulation improves the comfort and energy efficiency of theirhome, but may not know that it adds value as well," said CurtRich, President and CEO of the North American InsulationManufacturers Association on KCEN. They estimated that thisproject would cost "an average of $1,268 nationwide. Realestate pros, meanwhile, estimated the project would increase ahome's retail value by an average of $1,482. That's a $116.90eturn for every $100 invested."

Key Trends in the 2016 Cost vs. Value ReportManufactured stone veneer was new to the project list last

year and came in at No. 2. It finished in the same position onhe 2016 report, with an ROI of 92.9%. Next were:

Midscale garage door replacement (91.5% ROI)Steel entry door replacement (91.1% ROI and falling from

ast year's top spot)Upscale garage door replacement (90.1% ROI)

Notice what they have in common? These four projects aall exterior, which highlights the importance of curb appeal. Ifact, "12 of the 15 highest-scoring projects" in this year's repwere for "work done on the exterior of the home." Reflection of the Real Estate Market Remodeling projects follow the logic of the real estatemarket overall. Remodeling notes that, "Gains in the new-homarket are helping lift the value of remodeling projects evencosts rise." With more money and equity can come morecomplex undertakings, so some "bigger and more expensiveprojects" also saw gains this year," they said. A minor kitchen remodel that costs $20,122 comes in at83.1% ROI, up from 79.3% last year. A family room additiona cost, on average, of $86,615 will bring a return of 67.9%, ufrom last year's return of 64.1%. But, overall, returns on thesmore expensive and more extensive projects were limited. Band large, upscale projects are still not providing the kind ofreturn that would compel many homeowners to renovate if thhave their eye solely on the bottom line. Among the fiveprojects with the worst returns were:

Midrange bathroom addition (56.2% ROI)Upscale bathroom addition (56.7% ROI)Upscale master suite (57.2% ROI)Upscale bathroom remodel (57.5% ROI)

Not surprisingly, the projects that are easier to accomplisand make the lowest impact on a bank balance continue todominate the list. "As a general rule, the simpler and lower-cthe project, the bigger its cost-value ratio. Four of the fiveprojects that cost less than $5,000 for a pro to do were rankein the top five for cost recouped, and the remaining one wascheapest project in the $5,000-to-$25,000 price range," theysaid. "No project costing more than $25,000 ranked better than15th. This is in part because the simpler projects tend to reqless time and skill by a professional remodeler. It stands toreason that it's far easier to replace a steel entry door than itto design, source, and build a two-story addition."





9/19

Your REALTOR

Steven Aslanian

February 2016




818-879-0800


By Benny L. Kass

Homeownership has always been the "great Americandream". To foster and encourage this dream, Congress hasconsistently enacted tax legislation which favors homeowners.

ndeed, much has been written that our tax laws discriminateagainst renters, by giving unfair and unequal tax benefits tohose who own homes.

Every four years, some candidate for high political officeries to focus our attention on equalizing the tax laws, andepealing the homeowner benefits, but these arguments have

consistently fallen on deaf ears. And this coming election year isno different.

For those of us who own homes, here is a list of thetemized tax deductions available to the average homeowner.Every year, you are permitted to deduct the following expenses:

Taxes. Real property taxes, both state and local, can bededucted. However, it should be noted that real estate taxes areonly deductible in the year they are actually paid to the

government. Thus, if in year 2015, your lender held in escrowmoneys for taxes due in 2016, you cannot take a deduction forhese taxes when you file your 2015 tax return.

Mortgage lenders are required to send an annual statemento borrowers by the end of January of each year, reflecting theamount of mortgage interest and real estate taxes thehomeowner paid during the previous year.

Mortgage Interest. Interest on mortgage loans on a firstor second home is fully deductible, subject to the followingimitations: acquisition loans up to $1 million, and home equityoans up to $100,000. If you are married, but file separately,hese limits are split in half.

You must understand the concept of an acquisition loan. Toqualify for such a loan, you must buy, construct or substantially

mprove your home. If you refinance for more than theoutstanding indebtedness, the excess amount does not qualifyas an acquisition loan unless you use all of the excess tomprove your home. However, any other excess may qualify asa home equity loan.

Let us look at this example: Several years ago, youpurchased your house for $150,000 and obtained a mortgagthe amount of $100,000. Last year, your mortgage

indebtedness had been reduced to $95,000, but your housewas worth $300,000. Because rates were low last year, you refinanced and weable to get a new mortgage of $175,000. Your acquisitionindebtedness is $95,000. The additional $80,000 that you toout of your equity does not qualify as acquisition indebtednebut since it is under $100,000, it qualifies as if it was a homeequity loan. Several years ago, the Internal Revenue Service ruled thone does not have to take out a separate home equity loan tqualify for this aspect of the tax deduction. However, if you hborrowed $200,000, you would only be able to deduct intereon $195,000 of your loan -- the $95,000 acquisitionindebtedness, plus the $100,000 home equity. The remainin

interest is treated as personal interest, and is not deductible Points. When you obtain a mortgage loan, some lendwill allow you to pay one or more points to get that loan. Themore points you pay, the lower your mortgage interest rateshould be. Whether referred to as "loan origination fees,""premium charges," or "discounts," these are still points. Eacpoint is one percent of the amount borrowed; if you obtain aloan of $170,000, each point will cost you $1,700. The IRS has also ruled that even if points are paid bysellers, they are still deductible by the homebuyer. Points pato a lender when you refinance your current mortgage are nfully deductible in the year they are paid; you have to allocatthe amount over the life of the loan. For example, you paid$1700 in points for a 30 year loan. Each year you are permitto deduct only $56.66 ($1700 divided by 30); however, whenyou pay off this new loan, any remaining portion of the pointyou have not deducted are then deductible in full. Needless to say, if you have any questions about these tbenefits, discuss them with your financial and legal advisors





10/19

Your REALTOR

Steven Aslanian

February 2016



Copyright 2016 Realty TimAll Rights Reserved.

818-879-0800





11/19


Mortgage Rates Fall

In Freddie Mac's results of itsPrimary Mortgage Market Survey the30-year fixed-rate mortgage averaged3.79% for the week ending January 28,2016.

A year ago at this time, the 30-yearFRM averaged 3.66 percent.

The Fed stood pat this week but keptts options open for a rate increase inMarch. This week's housing releasesconfirmed the momentum of home salesgoing into 2016. A hesitant Fed, sub 4%mortgage rates, and strong housing

Mortgage RatesSource: Realty Times

U.S. averages as of January 28, 2016:

30 yr. fixed: 3.79%15 yr. fixed: 3.07%

5 yr. ARM: 2.90%

fundamentals should generate a threepercent increase in home sales this year.

Garages: Not Just ForCars Anymore

With larger, moreluxurious kitchens now theheart of many houses, and

irst-floor laundry and mud rooms thenew activity centers, it was only a matterof time before the garage also underwenta transformation.

Despite the fact that 82 percent ofhomes have garages, the space is oftenthe largest, most underutilized, most

abused, and most often ignored room inhe house," wrote Bill West in his book,

Your Garagenous Zone.Many people still struggle to find

enough space amid the junk in their

garage to park a car. But there's agrowing desire to create cleaner, moreorganized spaces that can contribute to ahome's "wow" factor, says West. It maynot raise the price in most markets, but ithelps win a beauty contest if the buyer isdeciding among a few homes.

Giving Your Kitchen ABoost When Selling

Most experts agree itis not always cost-efficient toremodel a kitchen inanticipation of selling. There are ways to make your kitchensparkle before you put your home on themarket. Repair leaky faucets and removestains from the kitchen counters andsink. Clean the interior of your oven anddishwasher, as someone is sure to openthem. Dirty appliances can convey animpression that will extend to the rest ofthe house. "Before taking out walls or committinga lot of money, you have to ask, does it

need a facelift or major surgery," saidJason Feldman, director of style,innovation, and design for Home Depot. "There's no point in replacing cabinetsor making structural changes if all that'sneeded are a few cosmeticimprovements."

Can Home Staging ReaWin Over Buyers?

Home staging caninfluence buyers'perceptions of a home andeven motivate them to paymore, according to the NationalAssociation of REALTORS' Profile oHome Staging, a survey of more than

2,300 REALTORSrepresenting buyeand sellers. Eighty-one percent of REALTORSwho represent buyers say that stagedhomes make it easier for their homebuyers to visualize a property as theirfuture home. Forty-six percent of buyeagents also reported that staging maktheir buyers more willing to tour a homthey viewed online, and 45% say thatbuyers tend to view the value of thehome more positively if it is decoratedbuyers' tastes. Twenty-eight percent of agents sai

their buyers are even more willing tooverlook other property faults if a homis staged, according to NAR's survey.Buyer agents also say that staging capotentially influence how much theirbuyers are willing to offer for a home.According to the survey, thirty-twopercent of buyer agents surveyed saythat staged homes increase the dollarvalue buyers are willing to offer for ahome by 1% to 5%; 16% said it couldincrease offers by 6% to 10%. However, not everyone chooses tostage a home in prepping it for sale.

Forty-four percent of seller agents saythey only suggest that sellers declutteand fix property faults, and they do norecommend that their clients shouldprofessionally stage the home.




February 2016 Real Estate Update

Copyright 2016 Realty Times. All Rights Reserved.


12/19

9 Little Things That Can Make OrBreak Your Home Purchase

By Jaymi Naciri

When it comes to buying a home, we always think about thebig things: sales price, location, mortgage qualification. But it'soften the little things that rise up to make living in that home agreat joy or a huge letdown.

Your welcome to the neighborhood: There are neighborswho bring warm cookies to welcome you to the neighborhoodand then there are the Homeowners' Associations that welcomeyou with a stern warning to move your storage unit immediately

even though it's only been in your driveway for a few hours andyou haven't even arrived from your cross-country drive (truestory).

The friendliness of your neighbors: Beyond your initialmpression, is living in your neighborhood going to give you thekind of lifestyle you want? In many cases, you won't know untilafter you've moved in. Spending some time there and getting toknow your potential neighbors/asking questions before youpurchase may give you the info you need.

Where to put the dog bowl: Does it seem like a frivoloushing to be considering when buying a home? Only until youmove in and realize there's nowhere to put the food and waterbowls that won't end up spilled, kicked over, or constantly in theway.

Think about it in terms of a car purchase. You might notnotice the number/placement of drink holders in the new caryou're buying, but you're sure going to notice how lacking theyare when you're driving a carful of people around in the100-degree summer and there's nowhere to put your Big Gulps.When your pets are a part of your life, considering where theywill graze (and sleep and run) may help you make the bestdecision.

Closet space: Closet space isn't necessarily a small thingfor many of us, it's an absolute necessity!). But, it can also be

one of those things that is easily overlooked when seduced by abig kitchen or a pool in the yard. If the closet space seems like itmay be a problem when you tour the house, it most likely will bea problem when you're living in the house.

Placement of the laundry: Is it a deal breaker if yourlaundry room is downstairs and the bedrooms are upstairs?Probably not, but it does make things more challenging. Ifyou're trying to decide between a couple of homes, this mayone of the little things that helps you finalize your decision. Commute time to and from work : Your daily commutesomething you've probably spent considerable time thinkingabout, especially if you're considering moving farther from w

But even if you're moving equidistance from your existing hothe commute could be very different. And it's not something want to discover AFTER you've moved. Doing a few test runbefore you make an offer can help. The schools aren't great: If you don't yet have kids, orthey're babies, or already grown, or you don't plan on kids, tquality of the schools may not seem like a big deal in relationother items on your must-have list. But, you never know howlong you might live there. A "starter" home that's supposed tbe a springboard to a large home in a few years may not enup springing you so quickly. And studies show that goodschools can help home values, so even if you're not packinglunches and preparing backpacks, being near people who amight be a good move.

Positioning of the house: Everyone wants a house thalight and bright, but what you might not want is a sun that seright in your living room. If you're in a warm climate, you canplan on being hotter than you'd like to be in that room duringsummer and having higher electric bills. Really high ceilings: This is another feature people tenwant in their home... until they actually have them and realiz

It's cold in the winter since all the warm air gets sucked uIt's hot in the summer since conditioned air has a hard tim

doing its thing in such a vast space.You'll never be able to paint the room without renting

scaffoldingDitto for changing light bulbs







13/19


By Stewart Wolpin

The Consumer Electronics Show (CES) is not an applianceshow - not yet, anyway. Whirlpool and Bosch had appliances atCES this past week in Las Vegas, but Haier showed mostly TVsn its exhibit space. Other white goods brands such as Sears,GE, Maytag and Electrolux did not show off any majorappliances.

Instead, it was mainstream Korean electronics brandsSamsung and LG who played "can you top this" where smartappliances - mostly refrigerators - were concerned.

First, Samsung announced its Family Hub Refrigerator

available this May), which is essentially a 21.5-inch verticalablet with a four-door refrigerator attached.The Family Hub fridge is equipped with a 1920 by 1080p

ouchscreen with Wi-Fi, Bluetooth and speakers. Itspre-installed apps are family- and kitchen-centric, such as acombined schedule app that syncs everyone's Google or AppleCal calendars, as well as a food shopping app called Groceriesby MasterCard.

Inside the Hub fridge are two fish-eye cameras which snapa photo of the interior contents each time the doors closes.Photos can be viewed on the pending Samsung appliance appor shopping remotely. Interior cameras seem to be a growingsmart fridge trend.

LG countered with its Signature refrigerator, which has a

view-through window that turns translucent or dark by simplyknocking on it. The door opens when you step on an "opendoor" holograph projected from the fridge onto the kitchen floor -and the fridge is smart enough to differentiate between you anda dog or cat who might happen to wander by. LG didn't provideiming for when the fridge will be available.

Not to be outdone, Whirlpool announced its ConnectedFrench Door refrigerator, out this spring, along with a smartdishwasher and smart ranges in both gas and electric. All canbe monitored and controlled from Whirlpool's app, so you cancheck the refrigerator's contents via internal

Wi-Fi cameras, monitor and moderate the fridge's varying zotemperatures, or initiate speed ice-making for parties. Smart Appliance Ecosystems As a result of Smart Appliances dependence on humaninteraction, appliances can't perform much "If This Then Tha(IFTTT) automation, nor can they work together the washinmachine or dishwasher won't automatically eject its contentsonce the cleaning cycle is done, for instance, nor can arefrigerator order groceries by itself (at least, not yet). So jushow "smart" appliances can ultimately become is an open

question. Despite these intelligence limitations, both Samsung andLG, along with Bosch, are attempting to build applianceecosystems. In mid-2014, Samsung bought smart-homeplatform SmartThings, and all the company's 2016 UHD TVswill double as SmartThings hubs and enable on-screenmonitoring and control. Meanwhile, LG is developing an overarching smarthome/appliance platform, Smart ThinQ (confusinglypronounced "smart thin cue"). Smart ThinQ will allow LG'sappliances to communicate through an Amazon Echo-liketubular Bluetooth speaker hub equipped with a 3.5-inch coloscreen, Wi-Fi and ZigBee, Z-Wave, Nest and AllJoyncompatibility. There also will be small-button IR/motion sens

that can transmit limited information from normal appliancesthe Smart ThinQ app. Like Samsung, LG wants to make its controls availablethrough a TV; a Smart ThinQ app will be included in thecompany's webOS 3.0, which will first be available in thecompany's new Signature OLED TVs, due later this year. LG continues to promote HomeChat, a text-based,man-to-machine form of communication. But LG'stop-of-the-line Signature appliances lack HomeChat, which mimply the feature's abandonment or absorption into SmartThinQ.


Steven Aslanian818-879-0800

[email protected]://www.aslanian-team.com





14/19


By PJ Wade

Sellers who wait until they're faced with a buyer's offer topurchase before initiating three key actions, may be forcinghemselves to make too many decisions at once and tooquickly. Most of us are nervous about decision making. Manyack confidence in their ability. Yet, sellers will be faced withquickly making multiple financial, legal, and lifestyle decisionswhen a buyer's offer is presented to them.

There are 3 key positive actions sellers should beginbefore offers arrive, so that they are prepared for decisionmaking and are less overwhelmed by the selling process:

#1. Start thinking that you're living in the buyer's newhome.Mentally move out. Let go of "mine." Cut the emotional

cord. Concentrate on making the property as attractive tobuyers as possible and practical. If you wait to start this "cut theemotional cord to home" thinking when your real estateprofessional presents you with an offer, you're doing yourself aremendous disservice. Making confident decisions is difficultwhen you're distracted by pride of ownership and personalhistory.

#2. Start thinking about what the buyer may ask you todo.Anticipate buyer requests regarding financing, movingdates, and other factors that may cause inconvenience or costo you, the seller. For instance, if you had to wait many monthsor closing and the money from the sale, what problems couldhat cause you? Conversely, consider costs attached to movingn less than a month or at least sooner than convenient. Do you

understand possible costs and considerations if buyers ask youo hold a second mortgage to enable them to pay the top dollaryou ask for? Ask your real estate professional to explain howseller-held mortgages work and what would have to be true foryou to sell that mortgage and realize cash.

#3. Start thinking beyond list price to achieve full offervalue.The value expressed in a buyer's offer to purchasenvolves 5 key elements - it's a financial package:

Purchase Price is not automatically the amount the sellereceives since other factors, like unpaid property taxes, caneduce the total. It's not the purchase price, but the net

proceeds of the salethat sellers should concentrate on. Realestate professionals can calculate, or at least estimate, theseller's net proceeds after costs related to the offer and

deduction of commission. Closing Date, or the day ownership is transferred and theseller receives the money, can represent cost or value to

sellers. If the seller has to make two moves or has to pay twmortgages during the transition from one home to another,costs can add up and offer value goes down.

Inclusions and Exclusions represent costs and value.Appliances, light fixtures, and draperies are common sellerinclusions, but the cost of replacing them in the next homereduces profit.

Terms and Conditions are clauses in the offer which cove"what if" risks and the obligations of both parties. These claudetail what the buyer asks the seller to do for the purchaseprice. The degree of uncertainty attached to the conditions athe buyer's related ability to close effect the value of an offer

Intent and Sincerity are vital aspects of an offer althoughdifficult to quantify. For the seller, offer value lies in the certathat the buyer will close in spite of market shifts and otherproblems ahead. Weeks or months may pass from the time that you decidsell and the day your real estate professional receives an offto present to you. This key stage of selling your home is no tto discover:

what you didn't understand about selling

what you haven't considered thoroughly

which details comprise your ideal outcome. Discussing strategies and contingencies with your listing

salesperson ahead of offer presentation will help theprofessional negotiate a solid high-value Agreement with thebuyer. Mentally preparing yourself, and anyone else who hasay in what happens to the property, means no one will bepressured into snap decisions or miss opportunities under thtight timelines common with offers. Real estate professionalare trained to help sellers make decisions in their own bestinterest by providing necessary context and details, but thesprofessionals cannot advise sellers exactly what to do, normake decisions for them. To gain full benefit from the knowledge and experience othe real estate professional who lists your real estate, let thefully prepare you for offer presentations in advance. When aoffer comes in (usually at a very inconvenient time), you'll fe

as confident and prepared as possible faced with thislife-changing opportunity. You will understand which decisioto make and how to evaluate the full offer.







15/19

The Five Biggest MortgageMistakes You Can Make

By Blanche Evans

For most buyers, the mortgage is the largest monthlyexpense they will have. Yet most borrowers will do little to nopreparation, negotiation, or shopping to get the best deal. Andhey end up paying much more for their loans than they need to.Here are five of the biggest mistakes that can cost you realmoney.

1. Believing advertised rates are what you'll pay: Unlessyou have perfect or near-perfect credit, most advertised ratesare out of your league. To get boasting rights on a rate thatgood, you have to pay part of a point (1% of the loan amount) apoint, or more to get the best rates. Your lender will go overyour credit with a fine-tooth comb to find anything to raise theate. That includes qualifying you at the beginning of theransaction, and then running your credit again a day or twobefore you're supposed to close on the home and loan. Ifhere's been any change in your debt-to-income ratio, goodbyeow mortgage rate.

2. Not comparing lenders: Just like everyone knows two orhree real estate agents or more, everyone knows a loan officeror a mortgage broker. A loan officer works for a bank or savingsand loan and can only offer you loan packages that the bankhas put together. A mortgage broker prequalifies you just like aoan officer, and shops your deal around to various lenders.

Whether you talk to a loan officer or a mortgage broker,you're going to have to share personal financial information in

order to get a realistic rate.Reputable brokers will show you what certain banks and

credit unions quoted and you can pick the loan you like best. Ifyou'd rather do your own shopping, consider talking to a localbank, a national bank, a credit union, and a savings and loan,but remember, unless you give them personal information andpermission to run your credit, it's just talk.

3. Not paying attention to terms: Advertised rates even forhose with perfect credit aren't what you will actually pay. Therue cost of the loan is the APR or annual percentage rate,which includes fees from the lender. Understanding loan termss harder than shopping for a new mattress. There are so manyways lenders can inch up the fees. A loan origination fee is alsocalled a processing fee. It pays the loan officer or mortgage

broker, so this fee can vary widely. You may pay one lendermore for an appraisal than another might charge you. One

lender may charge more for pulling your credit than anotherall in your good faith estimate, which you don't get until you'vapplied for the loan. All terms are negotiable, so don't be afrto ask what a particular fee is for. 4. Waiting for a better rate: It's great to have braggingrights on a low rate, but you don't want to lose the home of ydreams over a quarter of a point in interest. There's a bigpicture here you could be missing. No matter what your interate is, you're going to pay thousands of dollars in interest ufront before you make any serious gain in equity. If you go athe way to the end of your loan's term, you'll pay so muchinterest that you could have bought the same home two or thtimes. Instead of focusing on the percentage rate, work on hquickly you can build equity. Down the road, if rates drop through the floor, you canrefinance, but even that's not an ideal solution. You'll pay loaorigination fees, title search fees, appraisal fees and so on -enough to equal the closing costs you paid the first time aro 5. Choosing the wrong type of loan: Many families wehurt post-9/11 when lenders opened the spigots and gave aloan to almost anyone who could sign the paperwork. Suckebought homes that were too expensive using balloon loans wlow teaser rates. The type of loan you choose should depenon current market conditions and how long you plan to stay your home, not how much home you want to buy.

Current market conditions favor fixed rates, because rateare rising from all-time lows. Yes, they cost more than hybridloans or adjustable rate loans, but the base amount is fixed doesn't change. Only your taxes and hazard insurance will cyou more over the years. If you get an adjustable rate mortgage, you are at the meof market conditions. While there's a cap on how high yourinterest rate can go, it's still a risk. If you plan to stay in yourhome five years or more, get a fixed-rate mortgage. If you plto sell your home sooner, you're taking a risk. It takes mostborrowers five years just to earn back their original closingcosts in equity. Once you've narrowed your choice of lenderask them on the same day to give you a quote. If you wait evone day, rates may have changed, so you're no longer

comparing apples to apples.







16/19


By Benny L. Kass

If you are married, and file a joint income tax return, the taxaws allow you to exclude up to $500,000 on any gain you makeon the sale of your principal residence. There are some basicules (conditions) which must be met, the most important is that

you must have owned and lived in the house for two out of theast five years before the sale. This is referred to as theownership and use" test.

If you are single -- or widowed -- you can only exclude up to$250,000 of your profit. At first blush, this seems unfair --

especially to a person who has lived in their principal house formany years and then the spouse dies. There are, however, twoax breaks available.

First, according to the IRS, "if you sell your home after yourspouse dies (within 2 years after your spouse dies), and youhave not remarried as of the sale date, you can count any timewhen your spouse owned the home as time you owned it, andany time when the home was your spouse's residence as timewhen it was your residence." (IRS Publication 523, Selling YourHome). In other words, the surviving spouse can claim theup-to-$500,000 exclusion of gain if the house is sold within twoyears from the date of death, and it is not necessary to file aoint tax return.

Let's assume for this discussion that the couple purchasedheir home many years ago for $50,000, and when the husbanddied, it was worth $750,000. Let's further assume no capitalmprovements which would have increased the tax basis. In ourexample, if within two years from death, the spouse sells for$750,000, the gain is $700,000. The spouse can exclude$500,000 of the gain. But $200,000 of gain still has to beaccounted for.

Then we go to the second tax break: called "Stepped UpBasis".

Basically, the value of the house on the date of deathbecomes the basis of the person who inherits from thedeceased. In effect, the basis is "stepped up".

Let's go back to our example. The basis of the survivingspouse in the house is $25,000 (half of the purchase price).When one spouse died, the survivor inherited his/her basis aof the date of death, which was $375,000 (half of $750,000)Thus, for tax purposes, the surviving spouse's basis is now$400,000 (the original $25,000 basis plus the inherited basis

$375,000). If we continue to do the math, when the house is sold for$750,000, the capital gain -- i.e., profit -- is only $350,000($750,000 - 400,000). If the house is sold within two years frthe day the spouse died, the surviving spouse can exclude athe gain and pay no tax.

However, if the house is sold after the two years, the gain$100,000 more than the $250,000 ceiling authorized byCongress, and the survivor will have to pay capital gains taxthe $100,000. Clearly, while the IRS will get some money, thstepped-up basis does reduce the pain.

Since the gain is over $250,000, it is important to include

capital improvements which the owners made to the house othe many years. Any such improvements are additions to baand thus would reduce the profit. Hopefully, in this situation,can be reduced sufficiently so that the gain falls under the$250,000 cap.

Before you consider selling, you must review your specifisituation with your tax advisors. Clearly you don't want to maany mistakes with your valuable equity.


Steven Aslanian818-879-0800

[email protected]://www.aslanian-team.com





17/19

Home Renovation Projects That ProvideThe Best Return On Investment

By Jaymi Naciri

It's not hard to daydream about shiny new countertops andancy new appliances and one of those spa baths with a dozensprayers and a chic soaker tub, but when it comes to homeenovations, the sleek and sexy often take a back seat to the

basic and boring."Basic maintenance, such as the roof and exterior painting,

are frequently more important than an awesome kitchen," saidHGTV.

That's the takeaway (again) from the latest Cost vs. ValueReport from Remodeling Magazine, which tracks average costsand return on investment (ROI) for popular remodeling projects.The top 2016 renovation in terms of money recouped: fiberglassattic insulation, which came in at well over 100% ROI.

"For the first time, a fiberglass insulation attic upgrade wasncluded among the list of 30 home renovation projectsevaluated and proved to add the greatest value to the home at117% of the cost of the project, according to Hanley Wood,publisher of Remodeling Magazine," said KCEN TV.

Sound like a snoozer? Only if saving money - and energy -puts you to sleep.

"This is great news for homeowners, who know thatnsulation improves the comfort and energy efficiency of their

home, but may not know that it adds value as well," said CurtRich, President and CEO of the North American InsulationManufacturers Association on KCEN. They estimated that thisproject would cost "an average of $1,268 nationwide. Realestate pros, meanwhile, estimated the project would increase ahome's retail value by an average of $1,482. That's a $116.90eturn for every $100 invested."

Key Trends in the 2016 Cost vs. Value ReportManufactured stone veneer was new to the project list last

year and came in at No. 2. It finished in the same position onhe 2016 report, with an ROI of 92.9%. Next were:

Midscale garage door replacement (91.5% ROI)Steel entry door replacement (91.1% ROI and falling from

ast year's top spot)

Upscale garage door replacement (90.1% ROI)

Notice what they have in common? These four projects aall exterior, which highlights the importance of curb appeal. Ifact, "12 of the 15 highest-scoring projects" in this year's repwere for "work done on the exterior of the home." Reflection of the Real Estate Market Remodeling projects follow the logic of the real estatemarket overall. Remodeling notes that, "Gains in the new-homarket are helping lift the value of remodeling projects even

costs rise." With more money and equity can come morecomplex undertakings, so some "bigger and more expensiveprojects" also saw gains this year," they said. A minor kitchen remodel that costs $20,122 comes in at83.1% ROI, up from 79.3% last year. A family room additiona cost, on average, of $86,615 will bring a return of 67.9%, ufrom last year's return of 64.1%. But, overall, returns on thesmore expensive and more extensive projects were limited. Band large, upscale projects are still not providing the kind ofreturn that would compel many homeowners to renovate if thhave their eye solely on the bottom line. Among the fiveprojects with the worst returns were:

Midrange bathroom addition (56.2% ROI)Upscale bathroom addition (56.7% ROI)

Upscale master suite (57.2% ROI)Upscale bathroom remodel (57.5% ROI)

Not surprisingly, the projects that are easier to accomplisand make the lowest impact on a bank balance continue todominate the list. "As a general rule, the simpler and lower-cthe project, the bigger its cost-value ratio. Four of the fiveprojects that cost less than $5,000 for a pro to do were rankein the top five for cost recouped, and the remaining one wascheapest project in the $5,000-to-$25,000 price range," theysaid. "No project costing more than $25,000 ranked better than15th. This is in part because the simpler projects tend to reqless time and skill by a professional remodeler. It stands toreason that it's far easier to replace a steel entry door than it

to design, source, and build a two-story addition."







18/19


19/19





february 2016 real estate update

Documents