Rob Dykstra\’s Blog

If you’re thinking about selling your home or property, a comparative market analysis or CMA is a great way to help you determine the actual value of your home for your home in the Grand Rapids area.
You could conduct your own comparative market analysis, but it’s best to seek the assistance of a trained real estate professional. As trained Real estate professionals we have access to up-to-date geographic-related information about:
- Active, pending and expired real estate listings
- Comparable home sales
- Market trends including the average number of days area homes remain on the market before they are sold
- An area’s recent highest, lowest and average home sales prices
When you enlist a real estate agent to provide you with a CMA, you are likely to get more complete information faster. An agent will also help you to analyze the information in a comparative market analysis. A CMA is in no way a price guarantee. There are many factors that go into pricing a home and some of them are very personal including a seller’s motivation. Some sellers are financially distressed, or are under pressure to relocate for employment purposes and are willing to drop the price of a home for a quick sale. Other sellers are willing to wait for the right buyer to purchase his or her home at a premium price.
The depth of comparative market analysis reports varies. Ask your real estate agent to explain what you can expect to learn from the CMA he or she provides.

At the very least, a standard CMA will include:

• Active listings or homes currently for sale. This will give you a snapshot of homes your potential buyers will be viewing and comparing to yours. A seller can list a home at any sales price, so be careful not to read too much into active listings. In the end, a home is worth what a buyer is willing to pay.Pending listings. A pending listing is a home under contract. This means the sale has not yet closed. Like sold listings, pending listings can help you determine what buyers are willing to pay for property comparable to yours. Because pending sales are still in the legal negotiation process, this information is often kept private.  

• Sold listings. Appraisers are strongly influenced by the price at which comparable homes have sold in the same geographic area as your home. An estimated market value will be largely based on sold listings.
  Withdrawn or canceled listings. Sellers sometimes withdraw their homes from the market and the reasons vary. A change in life circumstances, low offers, and repairs required for buyer financing are just a few. This information can, however, be very helpful in determining how high is too high.

• Expired listings. An expired listing is one that has been on the market beyond the length of a realtor contract. Sometimes these properties are overpriced. Sometimes they are not marketed aggressively. Occasionally a seller will change agents in the middle of the sales process.
  

It is very important to only compare properties that are similar to yours in a comparative market analysis. In some locations, this will be hard to do.  Important comparables include:
¢ Square footage
¢ Location
¢ Type and age of construction
¢ Amenities and upgrades
¢ Condition
Of all of these factors, you have the most influence over condition and amenities and upgrades. A thorough comparative market analysis or CMA will help you determine whether or not repairs and upgrades will significantly increase the value of your home. It’s best to seek a CMA before spending too much money on repairs and remodeling.       If you live or reside in the Grand Rapids / West Michigan area, please visit www.robdykstra.com for your FREE Market Analysis!

 The January 2010 Grand Rapids Magazine Readers Poll has ranked Keller Williams as the Best Real Estate Company in Grand Rapids!Thanks to all our hard working agents and staff that made this possible!   What a great company to be associated with!

Whether to move or improve is a harder question to answer than it was a few years ago, but a few cost-benefit calculations can help you make the right decision.

What do you do when your family outgrows your house, or when the quirks you once found charming about the place just aren’t liveable anymore? A few years ago, the answers were easy. With house values climbing an average of 50% from 2001 to 2005 and lenders handing out big checks to nearly anyone who asked, you could quickly unload a too-small house and use the profits to help pay for a larger one. Or you could borrow against that growing equity to fund a big home-improvement project, with the full expectation of making your investment back someday when you sold. Flash forward a few years, and the rules of real estate have changed. In this marketplace, with home equity shrinking and banks reluctant to lend, is it smarter to move or improve? Here’s some advice to help you decide.

Moving has gotten harder

With median housing prices down 25% since their peak in 2006, some 15 million homeowners-almost one in four-owe more on their mortgages than they could get from a buyer, according to Celia Chen, senior director of Moody’s Economy.com (http://www.economy.com). And even folks who bought before the big run-up and can afford to sell at today’s lower prices still face steep odds trying to unload their homes with the glut of inventory on the market (36% more lawns wear For Sale signs now than a few years ago). There was an uptick in units sold in early 2009, leading some economists to predict that the market has begun to rebound, but selling a house is likely going to remain difficult for a while.

Still, there can be an advantage to trading up now: If your house has curb appeal and a good kitchen-and you price it right-offers will come. You may not turn a big profit, but once you sell, you become a buyer in this buyer’s market. That means you’ll find what you’re looking for and pay less for it than a few years ago.

To analyse your trade-up options, check local listings to ballpark the price you could realistically get for your home and what you’d have to pay for the next place. Then contact a bank to see if, based on those figures and your financial situation, you’re likely to qualify for the new mortgage. Or do your research online: Investigate home values at online real estate sites and how much of a mortgage you’d qualify for at bankrate.com (http://www.bankrate.com).

Improving has gotten easier

The economic slump has actually made renovating the home you already own a bit easier. The construction-industry slowdown has lowered the cost of some building materials: Plywood is down 46%, for example, framing lumber is down 42%, and drywall is down 25%, according to Bernard Markstein, senior economist for the National Association of Home Builders (http://www.nahb.org). Many contractors are also charging less for labor, to compete for the smaller pool of available jobs. What’s more, you won’t have to wait months for a contractor to show up-chances are he’ll be able to start in a matter of days.

Of course, you’ll still need to come up with cash to pay for the project. And the news is good there, too: As a general rule, improving costs less than trading up. Figure somewhere between $100 and $200 per square foot for new construction or a major remodel, depending on the scope of the project and labor costs in your area. A two-story addition with a family room, bedroom, and bathroom costs an average of $156,309, according to Remodeling magazine’s 2009-10 Cost vs. Value Report. (http://www.remodeling.hw.net/2008/costvsvalue/national.aspx)

 Now more than ever, though, you need to make sure that you invest your money wisely. In other words, will your $75,000 kitchen remodel increase your home value by $75,000-or by anything close?

To assess what’s right for your particular house, let your neighborhood be your guide. If there’s any chance that you’ll move within the next 10 years (and in this economy, who can be sure?) keep your improvements in line with those of other houses on your block, or you risk losing the money when you sell.

The most important considerations haven’t changed

Your house isn’t just your largest investment; of course, it’s also the place where your family lives. Financial considerations aside, the question of whether to move or improve should be decided by the things you cannot change about your current home: the school district, the amount of traffic on your street, the size and layout of your yard, your commute, the ease of access to markets and malls, and your neighborhood quality of life. If you love the spot, improving makes sense. But if a different location would be an improvement in its own right, then trading up could be the way to go.

To help explain the new Home Buyer™s Tax Credit that recently passed, I™ve summed up the important points right here.

Extended & Expanded!  

The original version of the Home Buyer™s Tax Credit was not only extended to last into next year, it was also modified. Now, existing home owners can benefit from this as well!  In addition to first-timer home buyers getting an $8,000 tax credit, existing homeowners can qualify for a $6,500 credit.

Who Qualifies?

Home buyers (both first-time and existing home owners) who purchase a primary residence of the following type: single family home, condo, townhouse, or co-op. Existing homeowners can now qualify for their tax credit if they have lived in their current homes for five out of the last eight years (consecutively).

Income Limit:  

To benefit from the new tax credit, single buyers™ income can not exceed $145,000 and a family (combined) income must be under $245,000 per year to qualify.

Price Range:

The home being purchased can not exceed a price of $800,000.

New Timeline:

The purchase agreement or contract must be signed by April 30, 2010; but as long as a closing agreement is reached by June 30^th the tax credit will be extended to that date.

Important Dates to Know:

• January 1, 2009 – November 6, 2009:If you were a first-time home buyer and you purchased a home within this time period, then you are eligible for the original First-Time Home Buyer Tax Credit.
• November 7, 2009 – April 30, 2010:If you purchase a home within this time period and you meet the qualifications of either a first time home buyer or an existing home owner, you are eligible for the new Home Buyer Tax Credit.  As long as the purchase agreement is signed by April 30, 2010, you are eligible for the FULL amount of the Tax Credit ($8,000) for first-time home buyers, and $6,500 for existing home owners. If a contract is signed by this date, you can still qualify for the tax credit as long as it closes by:
• June 30, 2010:All closing agreements must be reached and signed by this date to access the full amount of the Tax Credit. You can still benefit from the tax credit after this date, but you will no longer be eligible for the full amount.
• July 1, 2010 - December 31, 2010 uring this period, the amount of the Tax Credit you can qualify for will decrease by $2,000 per quarter until the end of 2010.

Does it have to be repaid?

No. This is not a loan. You (the buyer) do not need to repay the tax credit, if you occupy the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

For more information, go to: www.federalhousingtaxcredit.com

Sources: National Association of Realtors, the Grand Rapids Association of Realtors, and Mlive.com.

The legislation to extend the first time home owner tax credit has passed.   The $8,000 home buyer tax credit was extended to May 1, 2010, for first-time buyers.  

In addition a tax credit of   $6,500  was added  for repeat buyers if they’ve lived in their home for five of the past eight years. Home prices are capped at $800,000.

In the clip below, The Today Show lists Grand Rapids as one of the top 10 best real estate markets in America.  the reasons for such a  prestigious placement was that median home price for the area is $85,000; due to a 25 percent drop in pricing in the last few years but an overall positive trend in local purchasing activity recently– up 12 percent last month alone! The show also mentioned Grand Rapids as a city of Innovation and discussed the recent Art Prize competition.  In fact, Michigan received triple mentions as Lansing & Saginaw were included as well.http://today.msnbc.msn.com/id/26184891/vp/33191501#33191501

The National Association of Realtors (NAR) has released it™s new numbers for the Pending Home Sales Index. The full report and statistics can be found on www.grar.com, but here are some highlights:

• Pending Home Sales rose for six straight months this year, which has not happened since the Index began in 2001.
• While the Index is down slightly this month by 2 percent, it still remains over 8 percent higher than this time last year.
• Around 2 million first time home buyers are expected to take advantage of the $8,000 tax credit this year.
• To qualify for the tax credit, the sale must be completed by November 30, 2009.
• According to the NAR, “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year. However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010.”

Chances are if you’re considering selling your home, you’re probably looking at new ones. You might have taken a couple of perspective drives through potential neighborhoods, or casually perused the local listings. Whether you’re doing either one of these common property-search techniques, what catches or loses your interest in a prospective home first?It’s that first image of the property which creates the strongest impression. Realtors know this! That is why most listings provide a snapshot of the home in question. When you are driving through the neighborhood it is that original impression of the exterior and landscaping that you drive away with.Put quite simply, one of the best things the Dykstra Realty Group can do to help sell your home-and quickly-is to re-evaluate and improve its curb appeal.One of the most common problems I have seen in West Michigan in homes up for sale is that many either overlook the importance of their home’s curb appeal, or they fail to be objective when it comes to appraising the state of it.   You must look at it like what it truly is: a propterty, not a home, which you are trying to sell for the highest dollar.The following are some of the simple tips I share with my clients to help them put the best face on their property that they can.

1. Pretend it’s not yours. Ignore the fact you’ve lived there for years. You’ve seen every nook and cranny so many times that you now overlook them. Drive up to your property and stop your car where a prospective buyer might. Take a look around, and think to yourself, “Would I buy this property in this state?”
2. Start at the beginning. Where would a potential buyer walk up to your property? Leave your car and take a look around. is the walkway clean and clear, free of un-even cement slabs, dead plants, or debris? Is the driveway or the sidewalk green with mold and canvased with unwelcome weeds? Power-wash it, and follow-up with a good weed killer. Also, remembering that most people who work for a living are likely to check out your house after work (translation: in the evening), make sure to check out whether your walkways are well-lit. A great quick fix for after-or-near-dusk curb appeal is to update your lighting. A couple of solar-paneled lanterns will easily light the way.
3. The grass is always greener. The landscaping is important! If your home is obscured by over-grown trees and bushes, the lawn is full of patchy brown areas, or it appears the main thring growing in your gardens are weeds; then you have a problem. Believe it or not, investing a small amount to remanicure your lawn and hem in the greenery will serve to give your home a clean, well-kept appearance.
4. Bringing out the best (and hiding the worst). It’s time to think like you’re going shopping for new clothes. You must decide what are the the best features on the body of your house and what the “problem areas” are. BE OBJECTIVE. Then it’s time to flatter the property by enhancing and highlighting the good qualities and quietly hide the not-so-good.

Here are a few of those “problem areas” I check for:

• Dirty, warped siding or peeling paint. Again, here’s where a pressure washer could do wonders! Or perhaps a new coat of paint.
• Dirty or broken windows, shudders, or screens. Clean and/or repair these. The state of the windows will lend a home either a secure or insecure air.
• Unattractive (be honest here) entrance way. Nothing a new door, a new wood-stain or paint job, or even just new handle hardware can’t usually fix! and it’s never a bad idea to consider some sort of potted plant.
• Stow unnecessary tools and clutter away from sight. A messy outside might let people think the state of the property inside is similar.

Remember, buyers tend to have a hard time looking past these “fix-its” to the real value of the home. A simple fix could really pay off.Here are some links for more tips and ideas:

• Better Homes & Gardens http://www.bhg.com/home-improvement/exteriors/curb-appeal/ways-to-add-curb-appeal/
• About.com http://homebuying.about.com/cs/sellerarticles/a/curb_appeal.htm