Window Costs: Expectation vs. Reality – From HomeAdvisor Newsletter

Aside from building an addition or completely remodeling your kitchen, replacing your windows is one of the most expensive home improvement projects you can tackle. However, understanding the cost-factors involved will help you get the most out of your budget.

Speaking of budget, many homeowners have unrealistic expectations about how much they should spend. Much of this can be partially attributed to exposure to ads touting low-priced deals as low at $189 per window. While it is possible to find a good deal, you should remember the maxim, “You get what you pay for.” Of course, that’s not to say you should go out and drop $3,000 per window either.

How much can you expect to pay? If the window frame is intact, most window experts say that in most instances you can expect to spend about $300 – $700 per window, including tear out, disposal and installation (for most standard window sizes). If you’re going with custom windows, that figure can quickly jump above $1000 per window. If you need to replace the window and frame you can expect to spend up to twice as much per window. According to HomeAdvisor’s Cost Guide, homeowners spent $5,209 on average to replace their windows.

So, what makes some windows more expensive than others and are they worth it?

As is the case with most products, higher quality equals higher price. The most expensive windows will likely be wood or fiberglass and feature triple glazed, argon or krypton gas filling and low-E coatings. And while it might be tempting to go with the least expensive windows possible, there are a few reasons you might not want to. For one, cheap windows generally don’t last as long as higher quality windows. In general, windows are built to last between 20 and 30 years. However, many homeowners have found themselves replacing inexpensive windows as soon as ten years after install. Second, inexpensive windows typically don’t look as good. When you consider how visible windows are and how much they affect the look of your home it’s wise to spend more to ensure you select windows that complement your home. Third, inexpensive windows won’t be as soundproof and energy-efficient. If you live near a busy street or in an environment prone to excessive heat or cold, it’d be worth it to invest in nicer windows with low U-factors (two or three).

That being said, just because you don’t want to go with the cheapest option doesn’t mean you should automatically go with the most expensive option, especially since the ROI will be incremental. Unless you have the budget to spare or like the aesthetics afforded by more expensive windows, save yourself the cash and go with mid-grade windows.

As for whether or not it’s worth it to get new windows…the answer depends on your situation. Does your home have old, drafty, single-pane windows that barely open or have rotted frames? Do you plan on staying in your home for the next ten years? Are you tired of dealing with condensation or high utility bills? If so, then yes, it’s probably worth it. For one, inoperable windows pose a safety hazard, especially if there’s a fire. Second, old, inefficient windows affect your utility bills, indoor air quality, and home value.  However, if you’re making the decision solely on energy savings, replacing windows that are otherwise functional doesn’t make much sense as the energy savings won’t be enough to justify the investment, even if you are upgrading from old, single-pane windows.

If you are ready to move forward with your window project, HomeAdvisor recommends getting quotes from at least three contractors. Our ProFinder tool will help you find a screened and rated pro in your area.

 

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4 steps to buy again after foreclosure

Homeowners facing foreclosure seem to be desperate to buy again.

Frequently, I receive letters from someone who hasn’t yet lost their home to foreclosure but anticipates they soon will, and wants to be able to get back into the market, quick-like.

Many claim their haste is because they don’t want to miss out on today’s bargain housing prices or interest rates. Yet neither seems poised to rise significantly any time soon.

In the same breath, many of these folks say they’re ready to pay top dollar for their next home, and pay an additional premium if they are forced to rely on lease-to-own, seller financing, or a hard-money mortgage.

Others claim they don’t want to miss out on the opportunity to build equity in a home instead of paying rent, or cite the tax advantages of homeownership as the piece they particularly want to retain.

My advice is almost always this: Slow down! Most legitimate loan programs now impose a three-year-plus waiting period after a borrower loses a home to foreclosure, even if they would otherwise qualify for a mortgage based on their credit score, income and assets.

Here are my four suggestions for how you can wisely use that waiting period to recover from a foreclosure — these steps also do double duty in terms of setting you up for success and sustainability the next time you buy a home.

1. Feel the pain.

Many folks who write to me are still in the early stages of grief at the loss of their home: anger and denial. They are angry at the bank, and in denial about the loss of their home and its advantages, from status to tax write-offs.

What I know is that getting through this grief is an essential first step to truly moving forward. Inherent in grief is an acknowledgement that something is dead and over. The acceptance of that finality is what allows you to move forward and learn the lessons that such experiences can teach.

As long as you’re stuck in the emotional protestations of how unfair it was that you lost your home, or spinning in a place of outrage about the Wall Street bailouts, you’re probably not making emotional progress to the point where you can begin to learn from your experience.

2. Metabolize the loss.

Henry Cloud, bestselling author of “Necessary Endings: The Employees, Businesses, and Relationships That All of Us Have to Give Up in Order to Move Forward” (Harper Business, 2011), recommends that we treat our painful past experiences as our bodies do food, metabolizing them by taking away the lessons we can distill from them that will fuel our future decisions, and leaving behind the pain and other toxic wastes from the experience.

Individuals and couples should take time out to acknowledge what has happened, and distill and discuss mistakes that were made and insights you’ve gained so that you can avoid repeating them in the future. It’s a meaningful method for progressing past grief and repositioning yourself to make smarter decisions about your money and your mortgage for the rest of your life.

3. Avoid rebound home purchases.

There’s a whole lot of what I call tuition — the price we pay to learn life lessons — involved in the loss a home to foreclosure. If rush in too quickly to the next home purchase, chances are good we’ll miss the lesson and get nothing for the tuition. This is evident in the gymnastics many foreclosed homeowners are considering going through in order to buy a home at all costs. These may mirror their willingness a few years ago to take on an unsustainable mortgage, which is what got some portion of them into foreclosure in the first place.

Trying to replace our losses on the rebound, be it after a breakup or after a foreclosure, is how people end up repeating their mistakes. Making new, unsustainable mortgage commitments and chronically overspending or over borrowing is no different from your friend who keeps repeating the same old dysfunctional relationship patterns, year after year.

4. Heal your finances.

My advice to foreclosed homeowners is to devote some real time to working on their finances, without worrying about buying another home. Get your debt paid down or off. Change your spending habits and your overall relationship with money. Get your taxes current and paid. Save some money. Create the habit of paying every bill on time every time. Eliminate unnecessary monthly expenses. Work the programs in “365 Days to Organized Finances or Financial Recovery,” or some similar book, or both. Focus for awhile on your career development.

By Tara-Nicholle Nelson, Tuesday, November 29, 2011.

Inman News™

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com

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3 myths of conventional real estate wisdom

Whether you’ve rented your whole life or own a portfolio of properties, you’ve undoubtedly heard the real estate saying, “Location, location, location,” which simply means that a home‘s value is highly dependent upon, well, its location!

The timeless truth of this saying is beyond dispute, even in tough times like these for the housing market. The recessionary fates and foreclosure rates of an individual housing market are highly dependent upon the economic and employment prospects of that market, and even the desirability of an individual neighborhood or lot.

However, there are some other age-old pieces of real estate wisdom that haven’t stood the test of time as well as the location adage. Here are three pieces of conventional real estate wisdom that are due for a refresh.

1. Paying off your mortgage is bad. At the top of the market, many an infomercial pusher espoused borrowing against your home to buy more homes, creating an empire. While that worked for some, for awhile, you can see how that turned out.

But even now, traditional and conservative financial advisers still say that paying off your mortgage is not the best use of cash, as your mortgage interest is tax deductible, and the better use of the funds is to invest them for growth.

For folks who can and are inclined to pay their homes off, though, this rule is off-target. Paying off your home is less about making the most assertive financial move possible, and more about creating security, fixing a low set of living expenses, and hedging against economic and job market uncertainty.

The best practice in today’s economy is to make money moves that create maximum sustainability and minimum stress; if that means paying your mortgage off, then do it.

2. Don’t upgrade your house beyond the level of neighboring homes. Real estate insiders have long observed that buyers are hesitant to pay a premium to buy the best house on an otherwise modest block. And I’ve seen this in full effect, especially when the so-called best house is a three-story castle that has been expanded all the way to the fences, complete with turrets, spotlights and cherub statuary, on a street of one-story ranchers.

Customizing a home with bizarre features, beyond all reason, does make it harder to sell later. But adding features and upgrades that make your life in your home mirror your dream life, or create the comfort and lifestyle your family craves? If you can afford it without draining your home of equity or going into consumer debt, go for it, especially if you plan to be in the property over the long term.

It’s your home, not just another financial asset, and one of the major advantages of ownership is your ability to create a comfortable, personalized habitat for your life.

Don’t necessarily expect to get back your investment in upgrades dollar for dollar, and do avoid making bizarre customizations (hot tub in the living room, anyone?) unless you’re OK with reversing them when you do list the place for sale, but don’t hold back on creating a custom home experience for your family and your lifestyle because you heard it’s a bad investment.

3. The bigger the agent’s car/diamond/hair, the more successful she must be. The real estate industry is a-changing. More than 90 percent of homebuyers start their house hunt on the Internet. And that makes it much harder to tell at a glance who has the stuff to be successful at the endeavor of helping you buy or sell a home.

An agent who drives a Toyota and lacks Kardashian-style bling might even be more likely to have the technology skills it takes to market and sell your home in the Web-centric home marketplace, and to communicate with you via email, text and Facebook message — pick your poison — than the flashiest agent in town. Also, the agents who can hang in there and persevere on tough or small deals on today’s market are often the ones who have manageable expenses of their own.

When picking an agent, disregard your agent’s car, shoes and accoutrements (except maybe their tech tools: laptops, tablets and phones are important tools for them to have and use, prolifically).

So what does matter? Her track record of helping buyers or sellers similarly situated to you (e.g., her list-to-sale-price ratio or history of success at getting bank approval on short sales, if you’re selling a home, or her ability to close deals on bank-owned properties, if you’re buying).

Check prospective agents out by getting referrals from people you know that rave about their agent, checking online real estate forums to see if the agent is participating in online conversations about homes in your area, and asking for references from recent clients who can vouch for the agent’s skills.

By Tara-Nicholle Nelson, Wednesday, October 5, 2011.

Inman News™

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

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Top 10 Mortgage Mistakes

Finding the best mortgage can be complicated, but it doesn’t have to be. Avoid these top 10 mortgage mistakes and you’ll be well on your way to home sweet home.

  1. Don’t start looking for homes before you are pre-approved. When you find a property you’d like to make an offer on, you’ll have a much better chance of having your offer accepted if you’re pre-approved and prepared with a letter from your lender.
  2. Avoid verbal agreements and ask for everything in writing. Even if you verbally come to an agreement with the buyer or seller, always make sure the agreement is part of your contract or in some form of writing. Be sure that both parties have signed the written agreement.
  3. Don’t just look for the lowest rate. You’ll want to consider the APR, origination fees and discount points from all potential lenders. Not all fees are broken out or outright disclosed – don’t hesitate to ask for a full breakdown of the numbers. Do your research by asking friends and family for recommendations, look for customer reviews online and meet with a few different lenders before you make your choice.
  4. Good Faith Estimate. Shortly after submitting your loan application, you should receive a written statement of the estimated fees associated with the transaction (called a Good Faith Estimate). This statement is a close estimate of loan costs and fees for closing. The law requires that your lender provide you with your GFE within three days of application acceptance.
  5. When you lock in at the rate you agreed upon, get it in writing. Obtain a written document detailing your interest rate, the length of your rate lock and any details like discount points, etc. Make sure you and your lender have seen and signed this document.
  6. Know what you REALLY afford. You know what you can and can’t afford on a monthly basis. Setting a price limit and calculated budget help you determine exactly where your money goes, how you can cut costs and what you can truly afford to pay for a home. It’s not just a mortgage payment, you’ll want to include property taxes, insurance, potential homeowners dues and utilities. Don’t go borrowing what a lender is willing to lend you – stick a healthy, affordable price.
  7. Always insist on professional inspections. Even if you’re buying a new home with a warranty, it’s still a good idea to have a 3rd party inspect your home. An independent inspector can help put together a report that may help you with negotiating. You’ll certainly know more about what you’re purchasing and getting yourself into before signing on the dotted line.
  8. Shop around for homeowners insurance. You could save a few hundred dollars when you shop around for homeowners insurance. If you haven’t already, you can combine policies and often receive discounts for multiple policies.
  9. Read all of your documents before you sign. There are times when you’ll receive closing paperwork in advance. If you have time, it’s in your best interest to read ahead before closing day. Most closing appointments don’t allow enough time to read every page of every document, so try to read ahead. Don’t be afraid to speak up if you have a question about any paperwork you’re signing (that’s what they’re there for).
  10. Be prepared for delays. With so many people and so much paperwork involved with closing on a home, the chances of having a delay are relatively high. Be prepared by giving yourself an additional week on your current lease and utilities or be sure to have other arrangements should your closing day fall through or get delayed. You’ll be less stressed and pushed for time in the long run.

from AHS “Inside and Out”

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Renter’s Insurance

Take a look around you. Everything you see has value, and you could be vulnerable if you don’t have insurance.  Many renters think that their possessions are covered by their landlord’s policy. But your landlord’s policy typically only covers the structure and any liabilities the owner would face. Your possessions are not covered under this type of policy.

Why Do You Need Insurance?

You may think your possessions aren’t valuable enough to insure, but add up the cost of replacing everything you have. It is a significant amount of money. If you do not have enough savings to cover these expenses all at once, you need renter’s insurance. Many policies also provide personal liability coverage, protecting you in the event that someone is injured at your home.

Isn’t It Expensive?

Renter’s insurance can cost as little as $15.00 a month. It all depends on how much coverage you want and where you live. Considering that you have no control over circumstances like fire, water damage, or burglary, this is a wise investment and gives you peace of mind.

Where Do I Get Renter’s Insurance?

Almost all insurance agents that sell homeowner’s insurance also sell renter’s insurance. Call several for quotes and choose the one that seems the most comprehensive and affordable for you. If you are interested in buying renter’s insurance online, search for renter’s insurance and you will find many companies willing to give you quotes by email. One company specializes in renter’s insurance with a low deductible and the ability to purchase your policy online. Go to renterscoverage. com for more information. 

from Puliz Records Management September 2011 Newsletter “Bits and Pieces”

 

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Buying trumps renting in most U.S. metros

Home prices were down nearly 34 percent at the end of March from their pre-recession peak in 2006, according to the latest Standard & Poor’s/Case-Shiller National Home Price Index. Still, more than 80 percent of adults say that buying a home is the best investment a person can make.

Two recent nationwide studies — one by the Pew Research Center and another by real estate website Trulia — revealed that not only do consumers prefer to buy than rent, but buying is more affordable than renting in 78 percent of the nation’s cities.

The Pew Research Center surveyed 2,142 adults between March 15 and March 29, 2011. The survey sample included 57 percent of respondents who own a home and 30 percent who are renters. The remainder has other arrangements, such as living with family members.

The study found that 37 percent “strongly agreed” and 44 percent “somewhat agree” that homeownership is the best investment a person can make. When this same question was asked two decades ago in a CBS News/New York Times survey, 49 percent” strongly agreed” and 35 percent “somewhat agreed,” the Pew study revealed.

Other key findings:

  • Homeowners are not blind to what has happened to home prices, nor are they expecting a speedy recovery. About half (47 percent) say their home is worth less now than before the recession began, and 31 percent say its value has stayed the same. Just 17 percent say their home is worth more.
  • Of those who say their home has lost value, 86 percent say they expect it to take at least three years for values to recover to pre-recession levels; 42 percent say it will take at least six years; and 10 percent say it will take more than 10 years.
  • Most renters are drawn to the allure of homeownership, even in the face of the five-year decline in prices. Asked if they rent out of choice or because they cannot afford to buy a home, just 24 percent of renters say they rent out of choice. And, when renters are asked if they would like to continue to rent or if they would prefer one day to buy a home, 81 percent say they would like to buy.
  • Homeowners who were hardest hit by the burst housing bubble are also among the least optimistic about their short-term financial prospects. Among those who say their home is worth a lot less now than it was before the recession, 31 percent expect their household financial situation to get worse over the next year. This compares with only 21 percent of those who say the value of their home increased or stayed the same over the course of the recession.

According to Trulia’s Rent vs. Buy Index, it’s cheaper to buy a home rather than rent in 78 percent of America‘s largest cities, but Seattle is not one of them.

Folks who would like to buy in some neighborhoods in Seattle, Boston, San Francisco, Portland, Los Angeles and Oakland, Calif., face a bigger challenge when it comes to deciding between renting and buying a home. The cost of homeownership in these coastal cities continues to be more expensive than renting. However, it may make more financial sense to buy “depending on the situation,” the Trulia survey suggested.

While the cost of renting in downtown Seattle rose significantly in the past quarter, the cost of buying in most in-city neighborhoods gave renting a financial edge.

The index compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse in the 50 largest U.S. cities. Since last quarter, buying a home has become more affordable than renting in nearly four out of five major cities.

Calculations for the total cost of homeownership include mortgage principal and interest, property taxes, insurance, closing costs, association dues, and private mortgage insurance. Also included are tax advantages from mortgage interest, property tax and closing-cost deductions.

Calculations for total rental cost include rent and renters insurance.

So, in most areas of the country, homeownership is not only desirable but also a prudent financial move to make. There are also the intangibles that cannot be quantified, including the memories of raising a family in your own home. Perhaps that’s part of the definition of “best investment a person can make.”

By Tom Kelly, Wednesday, June 1, 2011.

Inman News™

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