Author Archives: Joanne Y. Cleaver

About Joanne Y. Cleaver

Joanne Cleaver is a strategic communication consultant, media trainer, media readiness coach, editor, writer, and real estate guru. Check her out on Google+!

3 Budget Busters and How to Sidestep Them

Interior designer Patricia Brown offers advice to help homeowners steer clear of three mistakes often made in remodeling projects.

Remodeling Mistakes to Avoid

Photo: shutterstock.com

Interior designer Patricia Brown has counseled hundreds of clients through renovation projects large and small. She even offers an online workshop that helps homeowners sidestep the biggest pitfalls in renovation. Here are Brown’s tips for avoiding three common budget busters.

Budget Buster 1: Contracting for a design-build package
Some contractors regularly work with a specific designer, wile others keep one or more designers on staff. But Brown says it’s best to hire these parties separately. She recommends shelling out $2,000 to $5,000 for a full-fledged design plan, one that you can shop around to several competing contractors.

The design plan should be detailed and comprehensive. ”If you hand [contractors] a plan with all the specifications—from the quality of cabinetry to lighting—when you get back qualified bids, you’ll see where there’s a difference for the same work,” says Brown. “If it’s over budget, you can see where you can save on materials. Either way, you are setting the parameters and choosing. Without that design first, you are vulnerable to the unexpected.”

Slideshow: 10 Renovation Steps You Don’t Want to Skip

Remodeling Mistakes to Avoid - Subway Tile Backsplash

Photo: dreambookdesign.com

Budget Buster 2: Choosing overrich materials
The next time you walk into your kitchen, what does your eye gravitate toward: the countertops or the backsplash? Brown would bet on the latter, since vertical surfaces tend to dominate the look of a room. She counsels clients to decide on the backsplash first, before choosing a counter material that is complementary.

High-impact, moderate-cost backsplashes include:

  • White subway tile punctuated with the occasional colored art tile
  • Glass tile for a modern look with low maintenance requirements
  • Wood or bamboo; either can be finished so as to ensure easy care

Budget Buster 3: Procrastinating your way into expensive change orders
For incidental costs and overruns, wise remodelers pad their project budgets with an extra ten percent of the total amount allotted. Don’t waste that cricital cushion on change orders!

Brown attests that last-minute changes are the enemy of clients’ purse strings. Even a seemingly simple swap (e.g., substituting a different light fixture) can touch off a cascade of delays and adjustments.

Another downside of change orders, Brown cautions, is that they pave the way for contractors to use “equivalent materials.” If you allow a contractor that wiggle room, you will have to perform on-the-spot quality checks. After choosing materials with a designer’s aid, it is of course preferable to stick with the original plan.


Walkable Locations Step Up Value

A house within walking distance to transportation and shopping holds more value to both buyers and sellers, according to a newly released study.

Alexandria, VA street

Alexandria, VA's restored riverfront along the Potomac has a 64.5 walk score. Photo: Zach Rudisin / Wikipedia

Common sense dictates that homes in walkable neighborhoods, with easy access to public transit, would pull higher values than houses in areas only accessible via car. How much higher? According to a recent study conducted by the American Public Transportation Association (APTA) and the National Association of Realtors—41.6% higher.

Looking at a constellation of neighborhood characteristics, including easy proximity to light rail, easy walking access to neighborhood business districts, and smaller blocks, the study revealed higher values in the neighborhoods reported in Boston, Chicago, Minneapolis-St. Paul, Phoenix and San Francisco.

Boston was the outlier; its ‘walkable’ neighborhoods delivered home values 129% greater than less convenient neighborhoods.  For the rest, the premium ranged from 30% in Chicago to 48% for Minneapolis-St. Paul.

Furthermore, brand-new housing in those walk-friendly neighborhoods won a price premium of 4.1% to 14.9%.

If you are considering buying, a house in a walkable neighborhood will cost more, but is likely to hold its value better. And, the study found that households in these neighborhoods had significantly lower monthly transportation costs.

If you are considering selling a house in a walkable neighborhood, be sure that marketing materials locate the house in relation to key destinations, including transit stations, business districts, and key bus stops. Also include the property’s Walk score, which adds independent validation of its convenient location.


5 Hidden Costs of Remodeling

Hidden Costs of Remodeling

Photo: landsourcecontainers.com

Labor. Materials. Pizza?

Some costs do not fit neatly into a renovation project’s line-item budget, but if you ignore hidden costs, you will be left wondering why your wallet has sprung a leak. Prepare for these often unanticipated expenses:

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How Stuck Is Your Market? Two Key Metrics to Track

Sale Pending Sign

Photo: npr.org

All real estate is local, but it’s national real estate statistics that dominate headlines. If you wish to identify emerging trends relevant to your market, ignore such perennially popular statistics as the number of houses selling. Instead, focus on two other key metrics:

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Quick Flip: Is Now the Moment to Buy, Improve, and Sell?

Flipping Houses

Photo: shutterstock.com

All of a sudden there are not enough houses for sale to meet homebuyers’ rising level of demand. Could you pull off a fast-and-dirty flip—buying low, fixing quick, and selling in a rebounding market?

Those who have already located the market’s sweet spot—buying low and selling within six months as prices continue to climb—are enjoying average profits of $37,375 on each property, according to RealtyTrac.

But engineering such a feat truly takes as much luck as skill. Here are three factors to help you filter house-flipping fantasy from fiction:

Can you buy with cash? Real estate investors are reportedly locked in tight with agents and lenders. Because they buy in bulk and pay with cash, those investors get the best deals. If you can’t write a check for the full amount on the spot, don’t expect your offer to compete with an investor’s.

Will your local market be strong in six months? If you buy the house, fix it up, and then discover you can’t sell it, you’ll have a flop, not a flip. Since market blips rarely become major housing trends, cut through the confusion by focusing on jobs. Strong and growing employment numbers are likely to sustain a steady real estate market.

Are you sure you can make only the improvements that will support a profit? If your project budgets are usually overrun by expensive but beautiful details and add-ons, think long and hard before you tackle a project driven by cold, hard return. If the house you target is a bargain, first identify structural and systemic problems. (One big project like roof replacement might drain your potential profit.) Once the basics are sound, you’ll have to apply a will of steel to choose market-pleasing materials and fixtures that will yield the greatest appeal, even if that means forgoing the crown molding.

For more on real estate, consider:

Suddenly, a Seller’s Market?
 5 Market Trends to Cash In On This Year
Beyond Stainless: What Buyers Want This Spring


Remodeling for Resale: 3 Tarnished Trends to Avoid

Remodeling Trends to Avoid

Photo: gawker.com

At times it’s necessary to walk a fine line when remodeling. On the one hand, you want to give your house distinct appeal, but on the other hand, you should avoid making your residence so idiosyncratic (or so plain-vanilla) that it won’t appeal to potential buyers. Here are three strategies to help you stay ahead of the market:

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Beyond Stainless: What Buyers Want This Spring

What Home Buyers Want

Photo: shutterstock.com

House hunters today aren’t necessarily fixated on luxury finishes like stainless steel. They are practical and focused on function, willing to pay more for a house whose features align with their buying priorities—especially if the seller can spare them the average $4,550 that 53% of buyers spend on improvements within three months of closing.

This list of wants and must-haves, compiled by the National Association of Realtors in its 2013 Profile of Buyers’ Home Feature Preferences, shows you what to promote if you are selling a house this spring. In other words, give buyers what they want, namely:

  • New appliances are worth a $1,840 bump in the offer, buyers claim
  • A separate laundry room is coveted by 47%
  • Fireplaces are top-of-list for 57%
  • 41% of recent buyers bought houses with basements
  • In-law suites
  • The number one amenity is central air

The one thing buyers can’t get enough of is storage space. As part of your home staging routine, emphasize all closets and ancillary storage areas.

For more on real estate, consider:

Suddenly, a Seller’s Market?
Market Trends to Cash In On This Year
5 Savvy Upgrades That Add Home Value


5 Savvy Upgrades That Add Home Value

Add Home Value

Photo: homeremodelingportland.org

Will your project pay off? For a trustworthy estimate, consult Remodeling magazine’s annual Cost vs. Value report to find comprehensive data you can use to gauge whether a given upgrade is likely to add home value.

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Measure Twice, Borrow Once: Home Equity Loan Success

Home values are bouncing back—is the trend strong enough to support your bid for a home equity loan?

Home Equity Loan Success

Photo: shutterstock.com

According to the S&P Case Shiller index, sale prices are up 8.1% for the 20 metro areas the company tracks (for the 12 months ended in January). That means it may be an advantageous time to pursue a home equity line of credit for that bigger-scale project you’ve been eyeing.

Appraisers rely on recent sales to put a value on your house, so after about a year of steady-to-increasing values, chances are that an optimistic valuation will be accepted by lenders.

Still, homeowners and lenders alike are operating with caution, says Brad Blackwell, executive vice president and portfolio business manager for Wells Fargo Home Mortgage. As in the past, two questions are of key importance today: how much can you borrow, and how should you spend your equity?

The prevailing rule of thumb is that an individual’s total home debt—original mortgage plus home equity line—should not exceed 85% of the property’s value. For a house worth $200,000 with an outstanding first mortgage of $100,000, the cap for the home equity loan will likely be $60,000.

Blackwell cautions, “don’t take out more than you can afford.” You will be paying off the equity loan with earnings, so consider current and expected financial obligations before accepting the maximum amount offered. Plot the financial parameters of the project first, then adjust its scope accordingly.

Now more than ever, traditional wisdom applies: Keep your home improvements in sync with neighborhood norms. “If you over-improve,” Blackwell says, “you won’t necessarily get it back. Typically the money you spend on home improvement will not give you a dollar-for-dollar increase. Different projects will provide different values, with kitchen and bathroom renovations and energy efficiency returning the greatest value.”

See the latest Cost vs. Value report, compiled by Remodeling magazine, for estimates on the return for various types of remodeling projects.

If you limit the amount you borrow and reign in the scope of your remodeling work, you’ll find the sweet spot where investment intersects with higher value.

For more on financing, consider:

Footing the Bills
HELOC? HEL, Yes!
FHA Financing for Renovations? Yes, But…


Suddenly, a Seller’s Market?

Seller's Market

Illustration: activerain.com

That choking sound you hear is the echo of real estate deals not getting done, because suddenly, buyers can’t find houses they want. In markets where buyers are clamoring for properties, this spring may give sellers the rare opportunity to cut agents’ commissions, and in so doing, save a bigger slice of hard-won equity.

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