Dual Agency –

January 16, 2019

Consumers are confused when it comes to dual agency arrangements in real estate, according to a new report from the Consumer Federation of America that reflects results from a consumer survey and a mystery shopper survey of real estate agents.

Two-thirds of consumers surveyed believe that real estate agents are always or almost always required to represent the interests of the home buyer or seller they’re working with. However, they’re confused when agents can also work with the other party.

“Today, many home buyers and sellers do not know whether their agent is representing their interests, those of the other party, or those of neither,” says Stephen Brobeck, a CFA senior fellow and author of the report. “Given the huge expenditure of a home purchase and the conflict of financial interests between seller and buyer, it is important that consumers know who their real estate agent is actually representing.”

A road sign with arrows pointing in opposite directions.

Charliedoug – Morguefile

States have laws requiring real estate interests and relationships to be disclosed to clients. But the CFA report suggests the laws may not be sufficient. The report says that the laws typically define agent roles as “agent,” “subagent,” “transactional agent,” “designated agent,” and “dual agent”—words consumers say they do not understand.

Also, the CFA notes that these disclosures could be diminished by the fact that they are only required to be given orally and may not be required early on during the home purchase. The CFA also notes that some agents are failing to make these disclosures or mention dual agency issues.

The failure of these disclosures can harm consumers, the report says. For example, home buyers who think subagents are working for them often have disclosed information about their finances and house price ceilings that the subagents are then legally required to share with sellers.

The CFA report calls for reforms including the prohibition of dual agency. Eight states currently ban the practice. Also, the report calls for clearer written and verbal communications from the real estate professional to the consumer about whether the agent will function as a fiduciary agent, subagent, or transaction agent or facilitator and what exactly that will mean to them.

“These reforms would benefit both consumers and real estate agents,” Brobeck says. “More informed home buyers and sellers will make better decisions. … And agents will not face the risks and ethical dilemmas of dual agency and undisclosed subagency.”

Read the CFA’s full report.

You are here Home News and Commentary Daily News 3 Home Repairs That Can Save a Sale

Sellers whose homes aren’t in tip-top shape may need to spend extra money or put in a little elbow grease to get their properties in market-ready condition. But what are the most important repair or maintenance tasks that support a higher asking price? “Smaller and less expensive updates in combination with good staging will have a great return,” Susanna Haynie, GRI, a sales associate with Colorado Real Estate Group in Colorado Springs, told HouseLogic. The National Association of REALTORS®’ consumer-facing news service highlighted some of the most important items to address before putting a home up for sale.

1. Fix flooring flaws. “Scratched-up wood flooring, ratty, outdated carpeting, and tired linoleum make your home feel sad,” the HouseLogic article notes. “Buyers might take one step inside and scratch the property from their list.” Most buyers don’t want the hassle of replacing carpet and may not accept a credit to cover the cost after the sale, Haynie says. When refinishing hardwood floors, for example, homeowners can expect to spend an average of $3,000 but recoup 100 percent of that cost at resale, according to NAR’s 2017 Remodeling Impact Report.

2. Repair water stains. The home’s plumbing issues may have long been resolved, but leftover water stains will mislead buyers into thinking the problems still exist. First, double-check that the problem truly is fixed, and then make any needed repairs to the walls or floors. Water-stained ceilings can cost about $670, on average, to fix. Drywall costs about $1.50 per square foot to repair.

3. Touch up the grout. Yellow or cracked grout can be a turnoff to buyers. New grout can make old floors look revived. “The best return-on-investment projects before selling a home involve making a home look like new,” Shelton Wilder, a sales associate at Berkshire Hathaway HomeServices in Los Angeles, told HouseLogic. Bathroom re-grouting costs an average of $1 to $2 per square foot, increasing to $10 for more complex jobs.

How do you pay down your credit card dept?

(TNS)—Like the holiday pounds, credit card debt doesn’t just melt away—especially after the latest binge.
The cold reality is credit card debt hit a record $1.02 trillion in November, according to figures released by the Federal Reserve. And Americans racked up on average $1,054 in debt to treat others—and, frankly, themselves—during the holiday season, according to MagnifyMoney.
About half of consumers surveyed admit it will take more than three months to pay off holiday spending, according to MagnifyMoney. Some may need five months or longer.
Now what? What can you do to juggle all those credit card bills and avoid drowning in a debt trap? Sure, many people aren’t scared yet, as the jobs market is strong. Bankers say most consumers are continuing to pay their bills.
But what happens when the furnace dies? Or you lose your smartphone? What should you do if, maybe, your 2018 goal is to pay off all those credit card bills?
First, imagine what you could do if you had no credit card bills.
Lauren Zangardi Haynes, a fee-only financial adviser who has a blog called WordsonWealth.com, says some of her younger clients are motivated to cut down expenses to pay down debt once they think about their dreams.
“It’s like, ‘Oh, wait a second, I need to get some things in order,’” says Zangardi Haynes, who is a member of the National Association of Personal Financial Advisors.
Two strategies exist: The avalanche, or the snowball approach.
Typically, if you want to save the most in interest charges, you’d take a strategy to pay the monthly minimum required on each credit card to avoid fees—and then apply as much money as possible toward the credit card that charges the highest interest rate. Once that card is paid off, you add more money to the next highest-rate card, and then the next, until you pay off all your cards.
Haynes, who lives outside Richmond, Va., calls that approach the avalanche, as the payoff can be huge and fairly swift.
But the snowball approach can be a little more fun, she says. Again, you’d make your minimum monthly payment on each card, but then aim to put most of your money toward the credit card with the smallest balance.
Why? You’d pay off the first credit card more quickly and then move to the next card with a small balance to pay that one off, too.
It’s kind of like a good hit in a snowball fight.
“You get a psychological win that can sometimes be motivating for people,” she says.

Pay attention to the interest rates on your credit cards.
Don’t just toss any notices or mail from your credit card issuer. You might discover that you’re looking at a rate increase on your card. Read your monthly statements. Under the law, your card issuer in many cases must provide you with a written 45-day notice of an increase in a rate or other significant changes. A “significant change” would include an increase in the minimum payment and other changes, including the late payment fee.
What happens if you receive a 45-day notice of a rate increase? You might consider whether you can afford to pay off that balance and close the account before the rate hike becomes effective, according to Sandra Barker, a senior policy analyst for the Federal Deposit Insurance Corp.
Or if paying off that balance in full isn’t an option, you could look into transferring the balance to a lower-rate credit card.
Watch out: You do not always get an advance notice of a rate hike. You’re not getting a 45-day heads-up if rates edge higher after a Fed rate hike.
Most credit cards do not have fixed rates, so interest rates would go up quickly on your variable-rate cards after a Fed rate hike. Rate increases because of Fed rate hikes apply to outstanding balances, too, not just future balances.
The Fed has raised rates five times since late 2015—and some expect two or three more Fed rate hikes in 2018. The next bump up in interest rates is expected to take place as soon as the Federal Reserve policy meeting March 21.
And here’s another good tip: You’re not going to get a 45-day notice when an limited introductory rate expires, either. So you need to figure out when that 0 percent rate for 12 months goes up to 15 percent or 20 percent when the deal ends, according to Matt Schutz, senior industry analyst for CreditCards.com.
And you won’t get a 45-day notice when your active duty in the military ends, Schulz said. Federal law caps credit card interest rates for active-duty service members at 6 percent.
Pay your bills on time.
If you don’t pay credit card bills on time, you’d risk getting slapped with far higher penalty rates for some time, too. Penalty rates can be charged on existing balances if you’re 60 days late or more with a payment.
Remember, credit card issuers are required to re-evaluate your payment history and take steps to restore the original lower rate after six months of on-time payments—if your card issuer raised rates because of a 60-day late payment.

Shop around for a better rate.
“In a perfect world, the best way to avoid paying interest on a credit card is to pay the entire balance off every month,” says Barker at the FDIC. “However, we don’t live in a perfect world, so for those who do carry a balance, balance transfers can save money, assuming the person is diligent about keeping track of when the zero- or low-interest rate period ends.”
But she warns that consumers should be cautious about opening up a number of new credit cards just for the low or no interest rate. Each time a lender looks at the potential cardholder’s credit in order to open a new account, the person’s credit score can be affected. Other lenders may be wary when they see lots of credit applications on a report, as well.

Schulz says several card issuers are still offering limited 0 percent deals, including Citi Diamond Preferred, Bank Americard MasterCard, and Slate from Chase.
No-interest offers can run from 15 months to 21 months, depending on the card. Remember, though, once the intro expires, you’d look at variable rates that could climb to the 14 percent to 24 percent range. Also pay attention to any balance transfer fees that might be charged.
Get a real number.
Add up how much you’re carrying in credit card debt. Total up all the required minimum payments for each month. Just like with a diet, you want to get on the scale and know where you stand.

©2018 Detroit Free Press
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Can you afford that fixer upper?

6 Simple Steps to Assess the Real Cost of a Fixer-Upper House

By: G. M. Filisko

Published: August 24, 2010

This will help you figure out how much to offer for a fixer-upper.

Trying to decide whether to buy a fixer-upper house?

Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

#1 Decide What You Can DIY

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.

Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

#2 Price the Cost of Renovations Before You Make an Offer

Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

If you’re doing the work yourself, price the supplies.

Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

#3 Check Permit Costs

Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.

Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

Factor the time and aggravation of permits into your plans.

#4 Double-Check Pricing on Structural Work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don’t purchase a home that needs major structural work unless:

  • You’re getting it at a steep discount
  • You’re sure you’ve uncovered the extent of the problem
  • You know the problem can be fixed
  • You have a binding written estimate for the repairs

#5 Check the Cost of Financing

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan, get yourself pre-approved for both loans before you make an offer.

Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation.

The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans.

A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

#6 Calculate Your Fair Purchase Offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

#7 Include Inspection Contingencies

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

  • Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.
  • Radon, mold, lead-based paint
  • Septic and well
  • Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

Cost vs. Value

Cost vs. Value: The Home Improvement Projects With the Highest ROI in 2018

Posted on Jan 17 2018 – 4:35pm by Jameson Doris

cost vs. valueA strong housing market isn’t necessarily all good news for sellers. As evidenced by Remodeling magazine’s newly-released Cost vs. Value Report for 2018, average return on investment (ROI) for home improvement projects dipped across the board, with “upscale” projects taking the biggest hit.

The report, which measures the average cost of 21 popular remodeling projects and their average resale value one year later, found that garage door replacement has the highest ROI at 98.3 percent (up from 85 percent year-over-year). Backyard patio jobs garner the lowest ROI, at 47.6 percent (down from 54.9 percent year-over-year).

The reason for the sweeping decrease in ROI isn’t immediately obvious, but Remodeling magazine’s editor-in-chief (and manager of the report) Craig Webb notes that it’s likely related to the strength of the housing market currently.

“It’s not clear if…nationwide affordability concerns are leading (real estate) pros to question the value of renovations that would make a house even more expensive at resale,” says Webb.

However, a silver lining from the report relates to when the data was compiled. Remodeling magazine put all the cost information together before the country was struck with several natural disasters, including massive forest fires and several hurricanes. Since then, building supplies and the price of skilled labor has increased, but that’s expected to change over the course of 2018. As a result, expect to see the ROI of most of these projects level out by the end of the year.

Despite these events, some longtime trends continued through the new year. Remodeling is still far more cost-effective than replacement, but, according to real estate pros, replacing is still the way to go. This year, there’s a 20-point difference in ROI: 76.1 percent for replacement jobs, versus 56 percent for remodeling.

Nationally, when it comes to renovation ROI, curb appeal still wins out. Here are the top five projects with the greatest ROI in the report’s “midrange” cost category:

Manufactured Stone Veneer (97.1% ROI)

  • Average Cost: $8,221
  • Average Resale Value: $7,986

Entry Door Replacement (Steel) (91.3% ROI)

  • Average Cost: $1,471
  • Average Resale Value: $1,344

Deck Addition (Wood) (82.8% ROI)

  • Average Cost: $10,950
  • Average Resale Value: $9,065

Minor Kitchen Remodel (81.1% ROI)

  • Average Cost: $21,198
  • Average Resale Value: $17,193

Siding Replacement (76.7% ROI)

  • Average Cost: $15,072
  • Average Resale Value: $11,554

The top five projects with the greatest ROI in the report’s “upscale” cost category are:

Garage Door Replacement (98.3% ROI)

  • Average Cost: $3,470
  • Average Resale Value: $3,411

Window Replacement (Vinyl) (74.3% ROI)

  • Average Cost: $15,955
  • Average Resale Value: $11,855

Window Replacement (Wood) (69.5% ROI)

  • Average Cost: $19,391
  • Average Resale Value: $13,468

Grand Entrance (Fiberglass) (67.6% ROI)

  • Average Cost: $8,591
  • Average Resale Value: $5,809

Bathroom Remodel (56.2% ROI)

  • Average Cost: $61,662
  • Average Resale Value: $34,633

Nationally—and on the complete other end of the spectrum—here are the five projects with the lowest ROI in the “midrange” cost category:

Backyard Patio (47.6% ROI)

  • Average Cost: $54,130
  • Average Resale Value: $25,769

Master Suite Addition (56.6% ROI)

  • Average Cost: $123,420
  • Average Resale Value: $69,807

Major Kitchen Remodel (59% ROI)

  • Average Cost: $63,829
  • Average Resale Value: $37,637

Bathroom Addition (59.9% ROI)

  • Average Cost: $44,717
  • Average Resale Value: $26,769

Deck Addition (Composite) (63.6% ROI)

  • Average Cost: $17,668
  • Average Resale Value: $11,239

The five projects with the lowest ROI in the “upscale” cost category are:

Master Suite Addition (48.3% ROI)

  • Average Cost: $256,229
  • Average Resale Value: $123,797

Major Kitchen Remodel (53.5% ROI)

  • Average Cost: $125,721
  • Average Resale Value: $67,212

Bathroom Addition (54.6% ROI)

  • Average Cost: $83,869
  • Average Resale Value: $45,752

Bathroom Remodel (56.2% ROI)

  • Average Cost: $61,662
  • Average Resale Value: $34,633

Grand Entrance (Fiberglass) (67.6% ROI)

  • Average Cost: $8,591
  • Average Resale Value: $5,809

The 2018 Cost vs. Value Report compares, across 149 markets, the average cost of 21 popular remodeling projects with their average value at resale one year later.