by Kathe Barge | Feb 10, 2023 | Market Trends, Mortgage, Property Value, Real Estate
Can you explain what is going on in Allegheny with property tax assessments?
It’s big news! For property tax appeals in 2023, the PA State Tax Equalization Board has set the common level ration at 63.6%. This is dramatically less than the 81.6% in effect for 2022. What this means is that for homeowners appealing their property taxes in 2023, the tax assessment should be set at 63.6% of the property’s 2022 value. This is great news for people buying their homes in 2022. Buyers have grown accustomed to having their property tax assessment appealed after they purchase their home, and these increased assessments can dramatically impact the monthly cost of owning their homes. This often impacts the sale-ability of a home as buyers often worry about that their monthly payments might increase to, but with new common level ratio, it is a big break for new home buyers.
For example, a home selling for $1million in 2022 should have a tax assessment of $636,000, which is an outstanding possibility. Likewise, a home selling in 2022 for $500,000 should have a tax assessment of $318,000.
Of course, buyers in previous years could consider appealing their tax assessment as well. For example, if a home was purchased in 2021 for $500,000, applying the current year percentages, it might have an assessment of $408,000. We did see dramatic appreciation in 2022, so that home might be worth $550,000 today, but applying the 2022 ratio of 63.6% to 2022 value could result in an assessment of $350,000 which would generate potential tax savings of approx. $1500. Any recent homeowners may want to consult their tax advisors as to whether it makes sense to appeal their tax assessment based on this new information.
The potential concern here is for the taxing bodies. The services we all depend upon require tax revenues to be funded. With the potential erosion of tax bases, this new common level ratio will be a victory for new homeowners, but we may all end up paying more in taxes due to the increased millage rates that may be required to compensate for declining tax bases.
by Kathe Barge | Dec 1, 2022 | Blog, Buyers, Buying Conditions, Contracts, Helpful Tips, Interest Rates, Market Trends, Mortgage, Property Value, Real Estate
We would like to buy a new home soon but interest rates seem very high – we see advertisements for internet lenders offering what seem to be below market rates. Is this too good to be true?
If you were simply refinancing an existing mortgage debt, you MAY be ok choosing an internet lender. You would just need to be very careful that, before you apply to refinance your loan, you receive from the lender a full disclosure of all the costs and not just the rates. Often times I see lenders have exorbitantly high fees connected with low rates. In a sense, you would be buying down your rate by paying high fees upfront. You would want to be sure to compare them on the same day to a couple of local lenders and understand what you are paying to get the quoted rates. The reason you must compare rates on a singular date is because rates go up and down continuously and a rate may seem lower simply because you called a particular lender on a date rates dropped.
Since you are buying a new home rather than refinancing, I do NOT recommend that you use an internet lender. They do not tend to be familiar with area norms and that can cause you more headaches than you can imagine. There is a long list of particularities to PA Agreements of Sale and the last thing you want to do is have your closing delayed (while your movers are standing at the curb) while you wait for your lender (who does not have a local presence that you can visit personally to address any issues) to sort things out. As they are not familiar with our Agreements and processes, internet lenders may also impose requirements on you that are not requirements generally imposed by local lenders that may disadvantage you later. Finally, internet lenders often do not understand that PA Agreements of Sale declare “time is of the essence” inside the contract – what that means to you is that if you miss your closing date because the lender isn’t ready to close, the seller does have the legal right to declare you in default, keep your hand money and sell the home to someone else.
When buying, why take a risk? Rely on your trusted Realtor to help you find a local lender who offers the most competitively priced loan products and delivers exceptional customer service. Realtors cannot accept referral fees from lenders, so you can be sure we are motivated only by knowing you will have an outstanding transaction. Feel free to reach out to me for help finding you the best local lender to meet your financing needs!
by Kathe Barge | Nov 4, 2022 | Buyers, Buying Conditions, Contracts, Helpful Tips, Interest Rates, Investment Properties, Listings, Market Trends, Mortgage, Property Value, Real Estate
Interest rates jumped up again. Is it time for us to just wait until spring and hope they start to come back down?
If you are a buyer, the real estate market offers you a great opportunity right now! Don’t be fooled by the higher interest rates – this is an awesome market for you to buy in! Why? Because all of the people who you would have been competing with are afraid of the interest rates and sitting by the sidelines. This allows you to have a competition – free opportunity to buy a home! Just six months ago, buyers would have been overjoyed to have an opportunity to buy a home without competition, to have had an opportunity to have had an offer accepted on the first home they offered on instead of their seventh, to have been able to purchase a home at asking price rather than asking price plus 10 percent! Do not miss this golden opportunity – there are some very nice homes available right now. You can refinance later with a convenient no cost refinance loan – get the house now! Once rates start to come back down, the buyers (who have all been sitting by the sidelines with you) will come racing back into the market, and bidding wars will be back. Make the smart move – buy now.
And as a side note, I do not feel we will see a “crash” in prices. Inventory remains at record lows and those homes that are selling continue to increase in their sales prices to new record highs, despite the increasing rates. This is not 2008 – I am not anticipating any “deals” to be had this spring – if anything the natural increase in the buyer pool we see every spring will boost prices because of the extreme lack of inventory. Feel free to reach out to me and we can strategize on how you can take the most advantage of the current real estate market while you still can!
A home’s value is set by the market. Value is always determined by what a buyer is willing to pay for your home. Many factors come into play in setting that value. Market value reflects quantitative factors such as: # bedrooms, # bathrooms, # garages, placement of garages (attached or integral), lot configuration (large and functional back yard? Cliff lot?), location of the home generally, age of roof, age of mechanicals. Market value also reflects more qualitative items: how updated is your home, and is it all new, or just refreshed? What is the floorplan (open concept?) What are your wall colors? There is always a range that value will land in, which we call the range of reasonable. There is no ONE price at which a home will sell. If there are many buyers seeking a home like yours, it will sell at the top of the range of reasonable. If there are not, it will take longer to sell and may sell a bit lower in the range. What the market does not consider in setting a value of a home is what you need from the home. In 2008, many homeowners had used their homes as ATMs and withdrawn large sums of money for educations, vacations and cars. When the market softened, there was not enough equity for them to be able to sell their homes and not be in a short sale situation. This fact, that a homeowner over-extended themselves on mortgages, is not the least bit relevant to market value. The market is also not going to consider what you plan to do next. If you plan to move to Los Angeles to be closer to family and are finding that the Pittsburgh market is not going to yield you enough to be able to buy in L.A., you will need to turn to other investments to make up any difference.
We are in a very robust market – your home is far more likely to garner more now – whatever that may be – than it could have in the past. Forecasters are also suggesting that values will soften by year end. My crystal ball is out for service, but what I can tell you is that every hot market eventually softens. Waiting out the market so that you can get a price that the market is unprepared to deliver at this time may have you waiting many, many years, and during that time you may need to invest even more in your home in order to deliver to the market what it needs in order to deliver an acceptable sale to you.
by Kathe Barge | Sep 13, 2022 | Blog, For Sale By Owner, Helpful Tips, Home Improvements, Home Staging, Listings, Market Trends, Marketing, Property Updates, Property Value, Real Estate, Sellers, Selling Conditions
Do we really have to have our home professionally deep cleaned before putting it on the market?
The short answer is yes, but here is why! When we live in our homes, we don’t see the dirt and the grime build up. Even if you have your home cleaned every week, it is impossible for a weekly cleaning to keep up with the little things. And when you want to sell your home, to achieve top dollar, it is important that your home sparkles at the highest possible level. We are no longer in a market where buyers are happy to get any house. We have moved back to a more traditional market and that means that sellers must take the time and incur the expense of a deep cleaning to make sure your home is squeaky clean and showing its very best.
Deep cleans are expensive and when done properly take many days of work. It is unlikely that your weekly housekeeper (if you have one) is going to have the time to clean at this level. Should you choose to take on the task yourself, you will soon see why deep cleans are costly and time consuming. So what is involved? In every room of your home, every surface must be thoroughly cleaned. Light switches and plugs should have all grime completely removed and restored to new, all vent covers (heating, ceiling fans, appliances) must be removed and washed (some may need to be repainted), all lighting fixtures must be carefully cleaned (including removing any glass bowls to clean inside) and should sparkle, all cabinets and drawers should be cleaned inside and out, windows should be washed inside and out including screens and tracks, carpets should be steam cleaned, shower grout needs to be cleaned, mineral build-up should be removed from shower/bath glass and all plumbing fixtures (try CLR and a scrub brush, or Stanley Steamer if the deposits wont budge), fireplaces need to be swept out and scrubbed down (if you burn wood in them, call a chimney sweep for a professional cleaning). All wood work needs to be washed down or repainted as needed to look fresh. Any smudging on walls needs to be cleaned or painted away.
Outside your home be sure that all doors are clean and fresh, that your porch/deck is clean (power wash if needed), that all lighting fixtures sparkle and that all patios and walkways are freshly power washed.
You may of course find it helpful to employ additional service providers, such as a power washer, carpet cleaner and window washer to get the job done right! It’s a big task cleaning up after years of enjoying a home, but it will absolutely pay dividends when you go to sell.
by Kathe Barge | Sep 8, 2022 | Buyers, Buying Conditions, Helpful Tips, Listings, Market Trends, Property Value, Real Estate, Sellers, Selling Conditions
We see recent projections forecast a housing downturn. What do you think?
You are correct – Goldman Sachs recently released a paper forecasting that the US housing market will see a downturn. Their reports predicts that new home sales will drop 22%, existing home sales will drop 17% and the housing GDP will drop 8.9% this year and that the decline will continue in 2023. This downturn is attributed to rising interest rates that were implemented to combat inflation. They have also noted that pandemic trends for second homes are fading. That said, the report does not anticipate a downturn in prices – just demand – and suggests given other economic factors at play that the market will remain flat for most regions.
What does this mean for home sellers? It means a return to traditional marketing. In other words, home sellers need to anticipate that they will need to take the time to condition their homes for market, stage their homes, and present their homes in an appealing way for buyers. Gone are the days, at least for now, when buyers are so desperate that they are going to buy homes in any condition just to get a home. Sellers also need to anticipate that it may take longer to find a buyer for their home — typically in Pittsburgh most homes would take between 120 and 150 days to sell in traditional market. Home sellers need to adjust their expectations and not anticipate that their home will likely be sold in one week. It will also be very important to price your home correctly and not take giant stabs at the market just to see if it might stick. It probably won’t stick. Appraisers are starting to doubt valuations on homes and we are starting to see some appraisal failures. For you sellers out there, it will be very important for you to pay greater attention to whom you choose as your listing agent. Marketing techniques and agent experience will become all the more important in generating a successful sale of your home. Take the time to do your research and choose an agent with great experience in all kinds of markets.
Buyers – I seriously doubt that this is going to become a buying a free-for-all like we saw back in 2009. There is no anticipation that there is going to be a downturn in pricing in Pittsburgh. But the good news is you may be able to buy a home with less competition and you may even be able to get a small discount. You still need to plan on being well qualified when you go in with your offer. And again, choosing a buyers agent with significant experience who can help you to understand market trends and where you should be offering will be critical to a successful home purchase.
by Kathe Barge | Aug 26, 2022 | Buyers, Buying Conditions, Contracts, For Sale By Owner, Helpful Tips, Home Improvements, Inspections, Listings, Property Updates, Property Value, Real Estate, Sellers, Sellers-Contracts
We find the inspection process confusing – do we have to fix everything in the inspection report before we close on our home or just the repairs the buyer requested?
The home inspection report is the document from which your buyer works to make their repair requests of you. Some buyers will ask for everything and others will ask for only those items that they think are important. They may let some things go, for example, if they are planning on renovating an area and anticipate fixing those items as a part of the renovation.
Once you and your buyer agree on a list of repairs, these are memorialized on an addendum. It is that addendum, called a Change in Terms Addendum (“CTA”), from which you work when completing your repairs. You need not refer to the inspection again unless the CTA references it. You do, however, need to make sure that you do everything on the CTA exactly as specified, so be sure to read it carefully and provide a copy to your contractor(s). For example, if the CTA says that you will have GFCI outlets installed by a licensed electrician then you need to make sure you hire a licensed electrician, and not your favorite handyman, to make the repair! If the CTA says you must paint to match existing then you need to take a sample of the existing paint to the paint store and color match it – don’t rely on old paint in cans – paint fades with age and it won’t match. Be very careful to be sure you are complying with the terms of the CTA – if you do not, or if your contractor does not, your closing may be delayed or postponed until the work is done as specified. Along those lines, be sure to review your contactor’s work when complete and make sure that he actually did what you agreed to do on the CTA. If not, request that he return before it becomes a walk-through issue.
And of course, be sure to get paid receipts from all contractors, or if they have not been paid, notify the closing company so that they can be paid at closing. All repairs must be paid for before ownership changes hands so be sure to stay on top of your bills, and provide receipts to the buyers agent.
by Kathe Barge | Aug 8, 2022 | Buyers, Buying Conditions, Design, Downsizing, Helpful Tips, Home Improvements, Home Staging, Inspections, Market Trends, Property Updates, Property Value, Real Estate, Sellers, Selling Conditions
We aren’t ready to move but want to update our home – what are the best choices for paint colors and flooring changes, assuming we may want to move in the next few years?
New paint colors must harmonize with the rest of your home, unless you plan to repaint the entire interior of your home, so any suggestions need to be taken in the context of what else is going on inside your home. My best suggestion for a currently fairly timeless paint color is Benjamin Moore’s Edgecomb Gray. This color blends with virtually every shade of white that might be on your trim and nearly every color flooring that might be in your home. It is really more of a greige than a gray and, like a chameleon, changes color a bit depending on what is in the space and what kind of light is filtering in through the windows. However, if your home is a palette if golds, for example, this color might not be the right choice! Trending now is white on white (with trim and walls painted the same or nearly the same shade of white), but this is a design style that is best incorporated throughout the entire home, and not just a singular room. If you have wallpaper in your space, then it’s a very good investment to have it removed (do not paint over it, no matter what the painter tells you) and painted in a color that coordinates with your design aesthetic. Wallpaper overall remains a difficult sell.
As to flooring, real wood floors remain the best investment you can make. They are timeless and easy to refinish if they become worn or if the buyer prefers a different color. I highly recommend choosing a medium tone brown, not too yellow, red or dark and preferably in ¾” thickness. If engineered wood floors are what your budget requires, choose one that the manufacturer indicates can be refinished at least once, and keep a few extra pieces on hand in case you damage any through normal wear and tear. Bamboo is another great option and there are on-line suppliers that offer a variety of shades in ¾” planks – it is very resilient, environmentally friendly and installed can look like hardwood. I do not recommend that you choose the latest trend, “LVL” (luxury vinyl flooring), for anything beyond the basement level of your home. These are plastic floors, and if your home will likely sell for over $500,000, these floors will not be appreciated on the main or upper levels. Finally, carpet in a neutral tone plush (no berber, no mixed colors) is acceptable as long as they are clean and stain free. If you stain them during the remaining time in your home, you would need to replace them again before you sell your home.