Pittsburgh Real Estate Blog | Pittsburgh Homes R Us

In case you missed it, part of the Fannie Mae/Freddie Mac bailout included some measures that will affect buyers and homeowners.

• A $7,500 tax credit for first-time homebuyers - note that this is based on 10% of the sale price, up to a maximum credit of $7,500.  However, don’t get too excited - this money is more of a loan, in that it will have to be paid back over the course of 15 years. But at least it’s interest-free. This will apply to home purchases made between April 9, 2008 and July 1, 2009.
• A tax deduction for homeowners who don’t itemize deductions on their income tax returns - estimated deductions will be between $500 and $1,000.
• Higher limits on mortgages insured through Fannie Mae and Freddie Mac - up to $625,000 beginning January 1, 2009. The current temporary limit of $729,750 will stay in effect until the end of this year.
• Mortgage refinancing for distressed homeowners - allows homeowners facing foreclosure to apply for lower fixed-rate mortgages backed by the FHA. However, the original lenders would have to agree to potentially take a loss on their loans.

On the darker side of all this are provisions in the 600+ page bill that will require the fingerprinting of mortgage loan originators (broadly interpreted to include anyone who takes a mortgage loan application) and the requirement for payment systems nation-wide to report online transactions to the IRS. This includes eBay’s PayPal, Amazon.com, and Google Checkout, as well as the major credit card companies.

Some bloggers (you can Google the topics) are questioning these provisions, especially wondering what that last one is doing in a housing bill.

Based on some research I did, it does not appear that either of these provisions will be removed from the bill when it is finally signed by President Bush.

Bookmark It

Hide Sites

With the Pittsburgh housing market remaining competitive for sellers (at least for now), it would be a good idea to take a quick look at some relatively simple and cost-effective approaches to increasing the value and desirability of your home.

Here are some areas you should keep in mind:

1. Curb Appeal - obviously, it’s the first thing buyers see when they take that walk up to the front door. And since it doesn’t take much time for a first impression to register, this is an important area to focus on.

The condition of the landscaping, paint, soffit and fascia, siding, window frames, even the house number, can point to either neglect  or a home that has been well-maintained. Repair, paint or replace any broken screen doors.

2. Interior Colors - some say paint everything white. But that can be a turn-off as well. Soft colors, such as pale greens, can be attractive to a buyer’s eyes. Avoid dark colors - lighter colors can make a home look larger. Needless to say, stay away from the pink, orange and purple rooms. Bold colors are risky.

Wallpaper is not very popular either - although if it’s high quality and the pattern is tasteful, it could pass.

3. Upgrade the kitchen and bath - probably the two most important rooms in the home. If something looks dated, consider replacing it. Make sure both rooms are pristine for showings.

4. Hardwood floors - because it’s costly and time-consuming to refinish floors, try "screening." The process involves scraping off the old finish to prepare it for applying a new finish. Do a Google search or click here to download a pdf file for an explanation of the procedure.

5. Closets - cluttered closets give the appearance of messiness and neglect. They can also give the impression that a decent size closet is smaller than it is.

6. Window treatments - plenty of light and the view are most important when it comes to windows. For example, dark drapes will darken a room and should be replaced.

7. Pre-inspection - as a seller, a home pre-inspection will give you a head start on finding out what needs repair before the buyer finds it. If you can get most, if not all, of the problems repaired (at least the major ones) you’ll be better off.

Make sure you provide a list of recent repairs, along with receipts, to prospective buyers. Chances are you’ll get a higher price for your home or it will sell faster, or both. You’ll also avoid much of the sticky home inpsection negotiations - which can result in buyers walking away from the sale.

As a final suggestion: The web site for HGTV is a good place to start for getting ideas on how you can improve the image of your home.

Bookmark It

Hide Sites

I suppose that anyone who doesn’t yet know we’re living in the Information Age must be living in a cave.

Not that there’s anything wrong with that.

In any case, in the area of real estate, the impact of this information overload over the last few years has been significant.

For example, buyers and sellers can go on line and within a short amount of time can find out what’s for sale, what’s been sold, and where it’s all happening. This information is offered, no doubt, to help people crunch numbers when it comes to making an offer on a property or determining a selling price for a property they’re thinking of putting on the market.  All, presumably, without the assistance of a real estate agent.

Will the wonders of technology ever cease?

While some people see this as a boon for the consumer, there are certain things that one needs to be aware of. One of those things is the accuracy of the data that is available.

Zillow has become one of the popular web sites for property listings and valuations.  As I’ve mentioned elsewhere, the accuracy of their "Zestimates" can be a bit dicey.

Now Realtor.com, the number one web site for property listings, has thrown their hat into the ring with their "Find Home Values" feature.

For the edification of the readers of this blog, I decided to do a comparison of the two sites to see how close they come to reality.

Using one of my current listings, this is what I found:

First, some background.  My listing (MLS # 713690, for anyone who may be interested) is a 9 year-old, 3800 square-foot, 4/5-bedroom home in Plum Boro.  It’s in excellent condition and loaded with extra features and upgrades, such as an eat-in kitchen with an $8,000 Sub-Zero fridge, 1st floor laundry, a custom-designed lower level with an in-law suite, an elevator (!), outdoor sauna, pool, and 3-car garage, just to name a few of its many attributes.  The listing price is $235,000 - a major bargain, even if I do say so myself as the listing agent.

I began with Realtor.com. I typed in the address and - Voila!  Their estimated value of this home came up as $38,547.

Hmmm. Perhaps they left out a digit.

I also wonder if that’s the reason they haven’t been heavily advertising this new feature.

I should mention that the home next to my listing is valued at $245,000 - so there’s obviously a glitch somewhere. However, for a consumer who is not looking carefully they could miss this.

On to Zillow.  Their estimate is $411,500.

For comparison and fairness, I checked another 10-year old, 4-bedroom in the same area, which is listed for $243,000 - a fair price in my opinion.  This home is identified on both web sites as a 3-bedroom home with a value of around $208,500 on Zillow and $203,000 on Realtor.

I don’t believe that either of these sites has provided information to allow a consumer to make an accurate and informed decision about the value of these properties.

Zillow does have a disclaimer about their estimates, stating that they can be affected by the amount of information that is available about a property. They also state that in Pittsburgh their valuations average about 80% of the actual sale price of homes that have Zestimates (not all properties have this).

Based on that average, my listing in Plum Boro should have a market value of about $329,000.  While that might be the case in a much stronger market than what we have today, that would still be stretching it. And an accuracy rating of 80% is not very good.

All of this is to say: Caveat Emptor - Let the Buyer (and Seller) beware.

While real estate information on the Web can be of value to consumers, there’s just so much of it out there that there’s really no substitute for a real estate agent who can accurately interpret it.

Bookmark It

Hide Sites

Tip #1 - If you’re concerned about environmental issues that may affect you as a homeowner or home buyer, you can get an environmental report for any address in the Pittsburgh area - or for anywhere in the U.S.

Go to http://www.prudential.com/realestate and type in any address. Then click on Environmental Profile and it will tell you if there are any environmental concerns associated with the property - at no charge. A detailed report will cost you $99, but if no concerns are reported you probably don’t need to purchase the report.

The U.S. Environmental Protection Agency also offers information on environmental hazards. Their EnviroMapper lets you search by zip code, city or county. You can find it at http://www.epa.gov/enviro/emef/.

If Sellers are aware of any environmental issues affecting their property, they are required to disclose this in the Sellers Disclosure. However, if they don’t know about it, they can’t be held accountable. In that case the Buyer is responsible for using their own due diligence in uncovering the information.

Tip #2 - Ready to leave city life behind? The US Department of Agriculture, Rural Development division, offers home loans for low-income buyers in rural areas.  These loans are referred to as Section 502 loans. The program provides funds for repair and renovation of homes as well as funds for the purchase of a home or land on which to build a home.

You can find more information about this program by going to http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1

These loans are intended for what the USDA refers to as "modest" residences. So, they probably won’t lend you money to purchase or build that mansion you’ve been dreaming about.  Still, it could be a useful resource if you’re income-eligible and the property is located in one of their approved areas.
 

Tip #3 - So, you’re out on the road and you’re hungry and you remember someone telling you about this great restaurant.  You remember the name and the area but don’t have an address or phone number.

Or, your agent told you about a home for sale and you have a street address but you’re not sure how to get there.

If you have your cell phone with you, you can find just about anything you’re looking for in a matter of minutes by using Google Mobile.

You can search for businesses, get maps, even get the latest score of the Pirate game. Their web site at  http://www.google.com/mobile/ will give you all the info you need to learn how to use this pretty slick service.

Keep in mind that the availability of some of the Google services may be dependent on the type of phone and/or the phone service you have.

Bookmark It

Hide Sites

Sometimes, the issue of what property is included in a real estate sale can be a source of disagreement and contention between a Buyer and Seller. When a Buyer looks at information in the MLS, he/she should not assume that the items stated there to be included in the sale will necessarily be there after closing. The agreement of sale is the only document that can be used to determine the terms of the sale.

In Pennsylvania, the Standard Agreement for the Sale of Real Estate contains the following section (paragraph 4), to which both Buyer and Seller need to pay close attention:

4. FIXTURES & PERSONAL PROPERTY (9-05)
(A) INCLUDED in this sale are all existing items permanently installed in the Property, free of liens, including plumbing; heating; lighting fixtures (including chandeliers and ceiling fans); water treatment systems; pool and spa equipment; garage door openers and transmitters; television antennas; unpotted shrubbery, plantings and trees; any remaining heating and cooking fuels stored on the Property at the time of settlement; sump pumps; storage sheds; mailboxes; wall to wall carpeting; existing window screens, storm windows and screen/storm doors; window covering hardware, shades and blinds; awnings; built-in air conditioners; built-in appliances; and the range/oven unless otherwise stated. Also included:

(C) EXCLUDED fixtures and items:

Fixtures are defined as any article that was once personal property but has been attached to the land or a building in such a way that the law interpets it to be a part of the real estate.

There is a legal test as to what constitutes a fixture (real property). The guidelines are: Intent, Method of annexation, Adaptation to real estate, and Agreement. Let’s briefly look at these.

Intent - refers to the intention of the person who installed the item. Was the intention to have the item be permanent or to be removed at some future time?

Method - refers to the permanence of the method of attachment.

Adaptation - refers to the character of the item. Is it being used as real or personal property?

Agreement - refers to agreement between the Buyer and Seller as to whether or not an item is real or personal property.

So, for example, let’s say the Seller has an expensive chandelier hanging in the dining room that he does not want included in the sale. The chandelier can easily be regarded as a fixture. During the time of the listing, the Seller should tag the fixture with a note that the chandelier is not part of the sale and indicate that in the sales agreement.

In order to avoid legal haggling over what may be considered real estate versus personal property, both Buyer and Seller should make sure that paragraph 4 of the sales agreement (or an addendum to the agreement) explicitly states which items will remain with the property and which items the Seller will take.

Bookmark It

Hide Sites