|
|
Are there gov't programs
for rehab?
ANSWER: The U.S. Department of Housing and
Urban Development's Section 203 (K) rehabilitation loan
program is designed to facilitate major structural
rehabilitation of houses with one to four units that are
more than one year old. Condominiums are not eligible.
The 203(K) loan is usually done as a combination loan to
purchase a fixer-upper property "as is" and rehabilitate
it, or to refinance a temporary loan to buy the property
and do the rehabilitation. It can also be done as a
rehabilitation-only loan. Plans and specifications for
the proposed work must be submitted for architectural
review and cost estimation. Mortgage proceeds are
advanced periodically during the rehabilitation period
to finance the construction costs. For a list of
participating lenders, call HUD at (202) 708-1112. If
you are a veteran, loans from the U.S. Department of
Veterans Affairs also can be used to buy a home, build a
home, improve a home or to refinance an existing loan.
VA loans frequently offer lower interest rates than
ordinarily available with other kinds of loans. To
qualify for a loan, the first step is to apply for a
Certificate of Eligibility. Another program is the
Fedeal Housing Administration's Title 1 FHA loan
program.
Resources: * "Rehab a Home With HUD's 203(K)" brochure,
U.S. Department of Housing and Urban Development,
Washington, D.C.; brochure online.
How can I improve the value of my property?
ANSWER: The biggest
factor outside of a homeowners control is market
conditions. But other issues -- including the condition
of the property, specific home improvements and
neighborhood stability and safety -- can influence
property values. The greatest rise in home prices occurs
when the economy is strong and the number of home sales
is increasing. Though markets vary, that has occurred
several times in recent history -- including the early
1970s, late 1980s and late 1990s. Specific home
improvements can increase the value above the cost of
the improvements. According to Remodeling magazine,
which publishes an annual "Cost vs. Value" remodeling
report, a remodeled bathroom returns 81 percent to the
owner, a bathroom addition, 89 percent and a master
bedroom suite, 82 percent. Remember, quality pays.
Well-planned and well-executed remodeling jobs are a
good investment while bad work seldom enhances value or
livability. The safety and security of a neighborhood
can affect property values, too. If you live in a
high-crime area, an organized community watch program
not only will lower the crime rate but give home values
a boost, too.
How do building codes work?
ANSWER: Building codes
are established by local authorities to set out minimum
public-safety standards for building design,
construction, quality, use and occupancy, location and
maintenance. There are specialized codes for plumbing,
electrical and fire, which usually involve separate
inspections and inspectors. All buildings must be issued
a building permit and a certificate of occupancy before
it can be used. During construction, housing inspectors
must make checks at key points. Codes are usually
enforced by denying permits, occupancy certificates and
by imposing fines. Building codes also cover most
remodeling projects. If you are buying a house that has
been significantly remodeled, ask for proof of the
permits involved before you purchase to avoid future
liability for fines.
How do you increase the value of your property?
ANSWER: The biggest
factor that can affect property value -- market
conditions -- are outside of your control. But other
factors -- including the condition of the property,
certain home improvements and neighborhood stability and
safety -- are not. For example, specific home
improvements can increase your property value above the
cost of the improvements themselves, such as remodeling
a kitchen, adding a bathroom, finishing a basement or
upgrading landscaping. Just be sure that quality pays
with remodeling. A bad remodeling job will do little to
boost your property value. If you live in a high-crime
area, an organized community watch program not only will
lower the crime rate but can enhance property values,
too. It also helps to live in an area where other
homeowners are upgrading their homes, which can help
pull up your property value, too. The bottom line is to
measure the cost of any improvements you want to make
against the overall values in your neighborhood. If you
overimprove for the neighborhood, you may not
necessarily recover your costs or boost your property
value significantly.
How much will I spend on maintenance expenses?
ANSWER: Experts
generally agree that you can plan on annually spend 1
percent of the purchase price of your house on repairing
gutters, caulking windows, sealing your driveway and the
myriad other maintenance chores that come with the
privilege of homeownership. Newer homes will cost less
to maintain than older homes. It also depends on how
well the house has been maintained over the years.
Should I add on or buy a bigger home?
ANSWER: Consider these
questions before making a choice between adding on to an
existing home or moving up in the market to a bigger
house:
-
How much money is available, either from cash
reserves or through a home improvement loan, to
remodel the current house?
-
How much additional space is required? Would the
foundation support a second floor or does the lot
have room to expand on the ground level?
-
What do local zoning and building ordinances permit?
-
How much equity already exists in the property?
-
Are there affordable properties for sale that would
satisfy housing needs?
-
Ultimately, the decision should be based on
individual needs, the extent of work involved and
what will add the most value.
What are some guidelines
to follow when trying to find a contractor?
ANSWER: While hiring
contractors recommended by friends is usually a safe
route, never hire a construction professional without
first checking him or her out. If your state has a
licensing board for contractors, call to find out if
there are any outstanding complaints against that
license holder. Also, call your local Better Business
Bureau to see if there are any complaints on file.
If you are satisfied with the answers you find there,
interview the contractor candidates. Ask what kind of
worker's compensation insurance they carry and get
policy and insurance company phone numbers so you can
verify the information. If they are not covered, you
could be liable for any work-related injury incurred
during the project. Also be sure that the contractor has
an umbrella general liability policy. If they pass the
insurance hurdle, next check some of their references. A
good contractor will be happy to provide as many as you
want. Finally, don't let yourself be rushed into making
a decision no matter how competitive the market may
seem. Also, never pay a deposit to a contractor at the
first meeting. You may end up losing your money.
What are the pros and cons of adding on or buying
new?
ANSWER: Before making a
choice between adding on to an existing home or buying a
larger one, consider these questions:
-
How much money is available,
either from cash reserves or through a home
improvement loan, to remodel your current house?
-
How much additional space is
required?
-
Would the foundation support a
second floor or does the lot have room to expand on
the ground level?
-
What do local zoning and
building ordinances permit?
-
How much equity already exists
in the property?
-
Are there affordable
properties for sale that would satisfy your changing
housing needs?
-
Ultimately, the decision
should be based on individual needs, the extent of
work involved and what will add the most value. For
more information, check out "The Do-able Renewable
Home," a booklet published by the American
Association of Retired Persons, available online at
homemods.org.
What kind of return is
there on remodeling jobs?
ANSWER: Remodeling
magazine produces an annual "Cost vs. Value Report''
that answers just that question. The most important
point to remember is that remodeling a home not only
improves its livability for you but its curb appeal with
a potential buyer down the road.
Most recently, the highest remodeling paybacks have come
from updating kitchens and baths, home-office additions
and extra amenities in older homes. While home offices
are a relatively new remodeling trend, for example, you
could expect to recoup 58 percent of the cost of adding
a home office, according to the survey.
What repairs should the seller make?
ANSWER: If you want to
get top dollar for your property, you probably need to
make all minor repairs and selected major repairs before
going on the market. Nearly all purchase contracts
include an inspection clause, a buyer contingency that
allows a buyer to back out if numerous defects are found
or negotiate their repair. The trick is not to overspend
on pre-sale repairs, especially if there are few houses
on the market but many buyers willing to buy at almost
any price. On the other hand, making such repairs may be
the only way to sell your house in a down market.
Where can I get a list of architects?
ANSWER: If you need an
architect, contact a local chapter of the American
Institute of Architects or the national organization
itself at 1735 New York Avenue, N.W., Washington, DC
20006-5292; (800) AIA-3837; aia.org. Also contact
friends or colleagues who have recently worked with an
architect for referrals. Take the time to interview
several before choosing an architect.
Will a neighbor problem reduce the value of my
property?
ANSWER: While it may
not reduce the actual value, a cluttered landscape next
door can detract from the positive aspects of your home.
Review your local laws, which should be on file at the
public library, county law library or City Hall. A
typical "junk vehicle" ordinance, for example, requires
any disabled car to either be enclosed or placed behind
a fence. And most cities prohibit parking any vehicle on
a city street too long. It also may be worthwhile to
check into local zoning ordinances. An operator of a
home-based business usually is required to obtain a
variance or permanent zoning change in residential
areas. In addition, if a neighbor's repair work produces
loud noises, he may be breaking local noise-control
ordinances, which are enforced by the police department.
Before bringing in the authorities, you may want to make
a copy of the pertinent ordinance and give it to your
neighbor to give them a chance to correct the problem.
Resources:
* "Neighbor Law: Fences, Trees, Boundaries and Noise,"
Cora Jordan, Nolo Press, Berkeley, Calif.; 2001.
Purchase online.
BACK TO TOP
|
