I get a lot of phone calls from Santa Clarita homeowners who want to sell now to 6 months from now, wondering how they can increase their home’s without breaking the bank. Here is what we see in the Santa Clarita Valley and some items that pay off in big ways for “smaller” coin.
- Treat your home as if it’s entering a beauty pageant, full time – This step can be easy and is going to depend on the type of property owner you are. If you are already snipping, dabbing and manicuring constantly, you are way ahead of the game. However, If this isn’t you, it’s time to either hire someone to keep up the exterior curb appeal or learn to do it yourself. I will say this was not me. I despised doing any of those update items, but I have learned to love doing it.
- Keep maintenance low – When home buyers are looking at real estate to purchase they are always concerned about maintenance. If there are larger than life lawns or supermassive oak tree’s that are going to need to be trimmed, they always mention it and want to get what it’d cost. Pool Covers are additions that may curtail maintenance. Large leafy tree’s looming over the home filling the roof crevices and gutters will cause home buyer dismay. Covering drains with grills to prevent clogs also will add value and show the buyer you are paying attention to those things they also care about.
- Efficiency is the new Black – LED, whole house fans, additional (aftermarket) insulation. These items will add value to your home for pennies on the dollar and your return will be more than costs related to adding them. LED lighting, these last thousands of hours, even if you weren’t moving, they would be a positive addition. Moving to the addition of a whole house fan, these save tons of money in the “water conserving” areas. Whole house fans are big in desert communities where water may be scarce. Opening up a lower level window then activating the system will pull the cool outside air through the home into the attic only to be expelled into the outside spaces.
- Expansion equates to a larger return – Square footage increases add value to homes. This one should be approached by consulting your real estate agent. Example, a dynamic market within Encino CA dictated an additional bedroom and bathroom could be added to a 2+1 home for about 60k. That was if the addition were to be done right and tastefully. For 60k, the home would sell around 200k profit. The location of your home may not provide that same high return, but you don’t know if you don’t ask. If your home was discounted because it doesn’t have something your neighbor’s homes do have, you may be doing the right thing by adding it.
- Smarter homes sell faster and for more – Nest thermostats, Ring doorbells and camera systems, Simplisafe security and others add a lot of value to the home you own. They are also items that will make your life more conformable and which don’t have to be added all at once. Example, we live in the Valencia summit and have no desire to sell our home. I added additional Ring Devices slowly, they are not cheap, but they do last and have a lifetime warranty if I pay for the storage, which I do. Now, we have a bunch. Next item will be the addition of the nest thermostats.
How to pay for these items?
Refinance of home pulling money from equity
I’m very conservative when it comes to pulling money out of a home for repair/update/upgrade purposes. If you are the type of person who can “promise” themselves the whole amount will be taken from the proceeds of the “refinance” loan, then good for you. If you may be tempted to go and buy a high-performance automobile with the money that your home contained in equity, that’s going to cause you problems.
Second loan 2nd trust deed
These were big before the last fall of the real estate cycle. Most everyone had a second and or third on their home. The interest rate will be a bit higher, in most cases. You will find entire businesses that talk “real estate investing” which are the pivot points within the second loan or 2nd trust deed lending world. Make sure you are dealing with legit, real brick and mortar lending offices where their representatives are licensed and where you are able to verify.
HELOC – Home Equity Line of Credit
This is typically handled via your current mortgage company. There are various ways for them to do this. A recording takes place legally defining the money which was lent. Then the mortgage company usually gives you checks and that’s how to access the money. In some cases, the checks versus receipts will be double-checked due to the specific regulations in place when wanting to use a HELOC.
In the banks best interest
In all of these cases, remember that the banks won’t loan you money that you don’t have. Meaning, related to borrowing against your equity, they want great odds of you being able to pay it back and if you refuse, they want to be able to take your home and sell it to compensate for their losses – breaking even or to make a profit.
Veterans of the Military
Have we got a deal for you 🙂 – I watch the commercials where some on late night and later night TV are talking about a Veteran being able to borrow against 100% of their equity. That is vastly different from a normal borrower. A normal, nonveteran, advance on equity requires greater than 20% equity.
I’m Connor MacIvor your local Santa Clarita real estate agent. Please reach out to menw he