After the Building Inspection- Be Careful When Getting Repair Estimates

I recently spoke with a seller who just got a deposit on his home, and had to get a few repairs done to the premises for the buyers. So he set about getting  estimates for the work to be performed. Being the diligent seller that he was, he called a number of contractors, and of course, only a few called him back. I am not getting on contractors, everyone has to make a living. Some jobs just don't pay enough to warrant an estimate. I get that.  A call back would be nice just to say, "thanks, I'm not interested" but that's getting off point just a little bit.

So this seller called a number of contractors to see about getting a repair done to the chimney that needed to get re-pointed.  Getting a chimney re-pointed pretty much consists of fixing the broken mortar in between the bricks, and depending on how badly it needs repointing, even I can tell that it will need to be done. If I see that there is loose or missing  mortar when we list your home or when we go about finding you your new home, I will tell you up front that it should be looked at.

Well, a few contractors came out and give this seller their estimates, and the prices varied widely.One contractor came in at $500, and another came in at $900, and another came in at $1200. Figuring that three estimates was enough, and since no one else called him back, the seller went with the $500 estimate and got the job completed. What's not so funny is what happened next.

One of the other contractors that never initially called back, finally called to say that he was out to look at the house, and the repair would cost $1,100.. Smart guy that the seller was, he asked the contractor when he looked at the chimney, and the contractor replied that he had just come out that morning.
(By the way, the repair was already done  the previous week).

Could it be that the contractor that did the repair didn't do the job? Or was it that the contractor that just came out was scamming the seller? In this case, the seller asked the second contractor if he went up on the roof to look at the job, and the contractor replied "no, and that he eyeballed it from the yard".  That seller could have gotten scammed very easily, but he was savvy enough not to fall for the trap. (The timing just gave it away) As he told the contractor that the repair was done already, the contractor had little to say, except to just hang up.

Okay, so not all contractors are honest, and not all contractors are scam-artists. Just do your due diligence, and check the contractor out thoroughly to make sure that he is licensed through the State of Connecticut and  has a good reputation. Get those references!! They are important!

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Mechanic's Liens - Avoiding the seller nightmare!

Have you ever heardof a Mechanic's Lien?...If you haven't, let me enlighten you-  a Mechanic's Lien (sometimes called a Construction Lien) is a security interest taken in a property by contractors or other workers who have not been paid for their work. This type of lien can apply to anyone who has provided work, improvements, construction, materials  or goods to real property. To be technical, the minimum amount is $10.00, however paltry that may sound to you. A Mechanic's Lien against your property will preclude you from selling your home until the amount is satisfied, and it will have to be recorded in Town Hall as public notice, just as the lien was.

To reiterate, a Mechanics Lien  can be placed upon your property by ANYONE that performs work on your property and has a claim against you for non-payment . If you have sold your home before, you might recall that your attorney always asks you if anyone has performed work on the property in the last 90 days.  It may seem like an odd question, but your attorney asks you that for a reason. If you have had work done within the past 90 days, and have not paid for the work performed, there is a chance that a Mechanics Lien can be filed against your property. The reason for this seemingly innocent question is that any lien statement must be filed no later than 90 days after the supplies are delivered or the last day that work has been performed.

The work must be agreed to by the owner of the property and can occur on the building, in the structure itself,  or within the confines of the property owned. Besides the fact that the buyer will be unable to obtain Title Insurance for the bank, they may not be able to obtain the loan for your property because Title Insurance is required by the bank for a mortgage. This will cause an absolute mess at the closing table if that happens- if it doesn't ruin the sale altogether.

A few things that are VERY IMPORTANT to know:

• Check your contractor out thoroughly before hiring him/her. If your contractor has a history of non-payment, I would be wary. You can always ask if he has ever been involved in any type of Lawsuit. It's a basic question and the only people that would be offended by that are people that have. So do yourself a big favor, and ask. There are ways to find this out as well without asking, and you can always contact me to look up records if you wish- it only takes a few minutes, and is well worth the effort. 
• Also important to know: If your contractor does not pay the supplier for goods used in the work at your home, and the supplier is aware of your address for those materials, the supplier can even file against you. If there are sub-contractors involved, they can also file against you, if the contractor has not paid them.
• Make sure you have a contract for work to be performed with a stated cost, and get a receipt for your payment. 
• The contractor filing the lien has up to one year to file a foreclosure notice on your property to get paid. Contact an attorney and handle this NOW.
• If a Mechanics Lien is filed against your property, contact an attorney NOW. Even if you are not selling your property at this very minute, contact an attorney now.

If you have any legal questions about Mechanics Liens, contact your attorney. This article is not intended to give legal advice.

Should you fix up your home to get it sold, or sell it as-is?

Now that it comes time to sell your home, you realize that there are some things that you should have done over the years, but chose to do others for one reason or another.  You may have focused on the interior, and now your home is missing curb appeal, or you may have focused on the exterior, and the inside needs updating. So what do you do?

The answer will depend greatly upon a number of variables including your available funds, estimated time frame of completion of any work to be performed and whether or not that work can be completed while the home is on the market, the likelyhood of the return on your investment, the current real estate market climate and the number of competing homes in your price range. Your agent should be able to guide you as to what would make the most sense in your situation.

If fixing up your home seems to be the best choice: Make a list of everything that needs attention, whether it is defective, broken or worn out. Don't be afraid to ask your agent for assistance on this. It is important that buyers do not spot problems or issues before you do. If a buyer sees a number of minor issues, they may think that there are more issues that have gone undetected, and pass on your house.

Here are a few improvements to make before selling your home:

Remove and replace dated light fixtures and make sure EVERY light in the home is working properly, and that there are no dim areas.
Remove excess furniture, clutter and personal effects. (see staging articles )
Paint walls that need it, and if any room color is dark, paint it a neutral color.
Make sure that your heating and cooling systems are operating properly.
Note any plumbing issues and repair (including leaky faucets)
Replace worn or outdated carpeting. (If there is hardwood underneath your carpet  in good condition, just remove the carpet)
Replace broken windows, rotted wood, and make sure all doors and locks are working properly.

Weigh the cost of individual proposed improvements against the home's estimated market value after the repairs or upgrades are completed. See my prior post on Return on Investment for Home Repairs.  Improvements should not be warranted if the cost of that improvement outweighs the return. Before you decide to change the carpet, or re-roof your home, look at this prior post regarding return on investment percentages. You may also want to view a few homes that your  home will be competing with- if most of these homes have amenities or upgrades that yours does not, take that into consideration as well. If the kitchens are upgraded, you may want to consider an improvement, just don't overdo it. If you will be replacing appliances, there is no need to go top-of-the-line. Mid-range is fine. Remember, those appliances would be brand new, and that's a bonus within itself.

Selling your home in as-is condition: If you are considering  selling  as-is route, just make sure you have carefully thought out the following: Is it that cumbersome, or costly to do any repairs whatsoever?
Have you priced it correctly for the repairs, improvement that it needs?

Fixer-uppers have some appeal to  a general market, it just depends on the scope of repairs, or improvements that are needed. Minor cosmetics won't scare a number of buyers away who are willing to do some work by themselves, however when the minor repairs or cosmetics get to be too much to handle, they, too will pass. Limiting your market if you don't absolutely have to is not the best idea.  Remember, if an upgrade or repair costs $3,000 for example, you can expect the buyer to want to reduce the price by about $4,500 , just for the inconvenience of doing the work themselves. It's not a rule of thumb, it just seems to be a pattern that I have seen. When you price your home, and your agent creates marketing materials for the home,  you may want to note that you have reduced the price accordingly to offset the work needed, and hopefully that will head off any lowball offers.

Truly, you need expert guidance in any circumstance, and the advice that I would give you  is going to be different than the advice that I may give your neighbor. You have twoo different houses, and two different sets of circumstances regarding yoru proposed sale. When you are ready to make a move, and need a professional, call me. I'll be right to the point, and guide you in the best direction possible.

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Return on Investment for Home Remodeling and/or Renovations in CT

You may have heard that when you remodel a kitchen or bath you get all (or most) of that money back when you sell. Really that depends on how much money you spend on the kitchen or bath, when you sell your home, and how marketable the remodeling is (colors, current  trends (but not fads), aesthetics, and functionality.  Overspending for your area is not ever a good idea, so if you have a question as to whether your proposed remodeling project  would be worth the money or if you are better off moving to a new location, call me. I'll give you an honest assessment- no charge.
If you are considering buying a home that needs a renovation, your agent should also help you with the cost vs. value of the proposed renovation, and whether or not that particular home makes good fiscal sense for you considering the amount of remodeling that you want to do. I  will always do that for a client, I assume that most agents will.

A few respected sources put out reports on the average ROI (return on investment) for all types of renovation and remodeling jobs.  Realtor magazine is a good source for national averages, but if you want something a bit more specific for our state, Remodeling magazine gets into bigger detail, and its geographically relevant.

I'll include a few ROI's on more upscale improvements below for your convenience -  These figures are from 2009-2010, and  very relevant

90.7%     Siding Replacement
84.9%     Siding Replacement
78.8%     Window Replacement (vinyl)
70.2%     Window Replacement (wood)
62.8%     Major Kitchen Remodel
59.2%     Roofing Replacement
56.7%     Bathroom Addition
49.8%     Master Suite Addition

Also, according to Remodeling Magazine, a mid-range remodel would net on average the following ROI

117.8%    Entry Door Replacement (steel)
 86.0%     Vinyl Siding Replacement
 84.1%     Wood Deck Addition
 83.6%     Attic Bedroom
 82.3%     Vinyl Window Replacement
 81.5%     Minor Kitchen Remodel
 72.9%     Major Kitchen Remodel
 69.5%     Two-Story Addition    
 68.6%     Bathroom Remodel
 67.4%     Roofing Replacement    
 64.0%     Basement Remodel 
 63.4%     Master Suite Addition
 62.3%     Family Room Addition
 61.1%     Garage Addition
 58.3%     Bathroom Addition    
 47.8%     Home Office Remodel