In the modern housing and real estate market, homeowners face an uphill battle in recovering the appraisal value of their home prior to the financial market collapse. Even homeowners with outstanding credit, perfect payment history, or even homeowner's with no existing lien on their property at all still suffered during the financial crisis, as they saw their home's perceived value drop somewhat to drastically in the past twenty-four months. Couple these factors with an already stagnant real estate market to begin with, and most homeowners looking to sell faced massive losses financially or a lengthy waiting game to find any interested buyer. During this lull in the market, many proactive homeowners have taken steps in the interim to enhance their home's value, regardless of the market conditions at hand. Below are twelve ways homeowners can protect, or even enhance, their home property value in the declining market. The home value protection tips range from short-term mini-improvements to long-term investments of time and money in order to protect property value. Depending on your specific homeownership situation, one or more of these suggestions could save you thousands of dollars preventing decline in your home's value.
In reality, selling your home now may mean losing a large chunk of money. If possible, wait out the situation for six to twelve months and reassess. More than likely, market conditions will improve or, at the worst, potentially remain stagnant. Experts are pointing towards optimism over the next twelve months, so homeowners should protect their home value by not giving it away at bargain prices. In the meanwhile, take any of the remaining tips to heart in order to protect, or potentially, increase your home's value in the interim.
In a declining market, where properties are available by the hundreds below appraisal value, prospective buyers will immediately judge a potential home by the exterior. Quite frankly, it's the first thing any buyer will see, and in reality, is the representation of their potential home to the rest of the neighborhood. Vain, quite possibly, but according to many real estate agents, the cheapest and quickest method to retain home value is through regular lawn and landscaping maintenance coupled with ensuring the exterior of a home is in excellent cosmetic condition. Considering the difference between following this suggestion and not may mean even having a prospective buyer enter your home to look further, this step is imperative.
Homeowners, although they may have heard of it, rarely consider the true financial benefits of home staging during the sale process. In a last second effort to protect home value, homeowners should consider the one-time investment in a professional home-staging expert. Though statistics abound, the average property with home staging sells a full forty percent faster than those without- yes, on average. The figures regarding length of time on market are intriguing, but how does the home staging tactic stand up to retaining value, or dollars and cents. Well, according to one HGTV expert, up to $5,000 or more per $100,000 dollars of potential home value in final sale figures. Not bad, considering the average home staging professional doing a massive overall on a larger home will cost about $6,000 and significantly less for less intensive renovations or smaller properties.
New regulations in the appraisal process have been implemented, which when taken in combination with the downtrend market, left many homeowners shocked at how low their home value actually shrunk. Know the real value of your home by getting an appraisal, from multiple entities. Every state and municipality has a process where appraisal value can be contested, if desired. Additionally, continually stay abreast of appraisal values of other neighborhood properties, as well as potential fluctuations in your own property as well. Even if the numbers do not come out to where you want them, a homeowner will still have a clear and accurate picture of their home's value, as well as how to proceed in increasing their home's value in the future.
Depending on your location, some home improvements that may reap homeowners in Florida thousands, such as an in ground pool, will be an utter disaster in an area such as Alaska. A hyperbolic example, admittedly, but the point needs to be made that not all home improvements will provide a return on investment. Furthermore, some home improvements may actually prove tax beneficial, not to mention money saving in the end, such as implementing solar panels or some other forms of renewable energy system.
Stay abreast of all tax developments and changes in your local and state government. Changes can drastically alter the amount of money homeowner's may owe in property taxes. Additionally, seek financial advice on how to file federal returns that include itemized accounts of paying state and local property taxes.
According to the Wall Street Journal, an assessment of decline in property value from across the nation has exposed some staggering results. Below is a brief list of the five cities with the largest property value decline by percentage.
Las Vegas, Nevada
24.5% drop from September 2006 high
22% decline in property value
24% dive from values in late 2006
Los Angeles, California
22% drop from October 2006 high
San Diego, California
24% below previous property value peak
Many homeowners will understandably want to take tackling declining home values through hands on approach. It's one of the few factors they can seemingly control about their home's value these days. Beware; however, as some improvements are much more beneficial than others at return on investment are. Wood deck additions often bring back ninety percent of the cost of investment across the country, according to Remodel Online, while a remodeled kitchen typically only sustains a seventy-five percent return on investment. Have an honest, and perhaps professional, assessment of your home, consider the costs versus benefits, and only then, begin renovations and other major home improvement projects.
Although not ideal, some homeowners may face the situation of losing control of their finances versus staying in their home. Although not the most desirable situation, if the financial figures work out, renting a home for a period, while deriving revenue from the rental arrangement to keep the home long term, is an effective means of protecting your ownership of a valuable home. Additionally, second or investment homes should immediately be used as rental properties given the sluggish real estate sales market.
With so many homes in foreclosure and other stages of default, many neighborhoods are seeing abandoned properties spring up, as well as cheaply bought homes being filled by buyers looking for a deal, but bringing down the overall property value in the area. By banding together, neighborhoods can actually maintain their own home's value, as well as protect others in the area from intrusion by banks, speculators, and others that may not take the time or interest in maintaining a property.
Ever quick to serve the needs of the consumer, businesses around the country are now offering programs that protect the value of one's primary residence through guaranteeing the sale value of a home at market value. If a property value declines by ten percent in the next two years, these companies will pay homeowners the difference. Terms and conditions vary in each arrangement, and typical costs for enrolling for this form of equity protection coverage range from one to three percent of the home's value, which can be paid over time.
Not only are most of these green home improvements tax deductible to some extent, but also, homeowners can leverage the utilities savings into a final asking price for a home in the future. This is not to mention the utilities savings the homeowner will enjoy in the interim period prior to selling. Solar panel installation is one of the most popular, but an unlimited number of other options abound in today's eco-friendly business market.
Shopping around the mortgage market may surprise some homeowners. Again, refinancing is simply not a viable option for everyone, nor is it the financially smartest thing to do, pending the terms of the refinancing agreement. However, lower rates offered by banks may give some homeowners room to capitalize on the downtrend real estate market in a major way.
Every home ownership arrangement is different and present unique circumstances, both geographically, physically, and financially. Depending on your specific home and financial situation, one or more of the aforementioned methods may help you and your families protect home value in a declining market. In most cases, individual homeowners are not equipped with the immediate knowledge on the best means of protecting their home's value, and potentially, their financial nest egg. Consulting real estate professionals, real estate attorneys and others is the best method for a homeowner to confidently take steps to protect their individual home value.