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6 of the Worst Fixes When Selling Your House

by David Tyler Mills

“Desperate times call for desperate measures” may not be the best philosophy to abide by when selling your home.  Being a seller can be frustrating, especially if you’re doing it without a realtor, so naturally sellers blame the house’s presentation (or the lack thereof.)  Dana Dratch wrote an interesting article about six of the worst home fixes for your money; in addition, she included project averages and return ratios from Remodeling Magazine.  Before you make a hasty decision to plunge into a huge project to sell your home, consider the cost and return on the following:

Home Office Remodeling

Average Cost: $28,888

Expected Return: 45.8%

What’s the Deal?

The decrease in demand for home offices can be credited to technology.  With laptops, smartphones, and tablets, people can rarely be found sitting at their home office, especially if they can work at their favorite restaurant or amongst nature.  If you’re home has an office, you can get the most value if it can be easily converted into a bedroom or a den for the next buyer.

Backup Power Generator

Average Cost: $14,718

Expected Return: 48.5%

What’s the Deal?

Nothing screams “prepare for the worst” more than a backup power generator, particularly to a non-local.  If your house is in an area that is prone to power failure, then try to find the most inexpensive model.  Buying an inexpensive model or finding an inexpensive installation could cut costs significantly.

Sunroom Addition

Average Cost: $75,224

Expected Return: 48.6%

What’s the Deal?

We all want more; we just don’t want to pay for it.  The connotation of “addition” scares the buyer’s wallet even though you’re giving that buyer that additional square footage.  Additionally, the amount of money required in adding on a sunroom and the huge slump in housing prices causes your return to be dismal. However, adding a sunroom can be beneficial if another common area is needed.  Make sure that the sunroom fits the context of the entire house.

Upscale Master-suite Addition

Average Cost: $232,062

Expected Return: 52.7%

What’s the Deal?

You might as well throw a dart in the dark (and an expensive dart that is) in hopes to not losing it in the process.  The uncertainty of not knowing what kind of taste your buyer has in terms of design and layout makes upscale master-suites a risky investment.  To make matters worse, buyers could probably find a newer house with the same features and a better floor plan than your renovation for a better price.

Bathroom Addition

Average Cost: $21,695 to $40,000 for upscale

Expected Return: 53%

What’s the Deal?

Telling a buyer you spent $20,000 to $40,000 on a bathroom addition can be compared to flushing money down the toilet.  If you feel your house needs an extra bathroom, try utilizing your existing space to save money.  Reconfiguring your existing bathroom offers an inexpensive and effective alternative.

Upscale Garage Addition

Average Cost: $90,053

Expected Return: 53.6%

What’s the Deal?

The thought of having the top-of-the-line, detached garage that’s immune to clutter and confinement seems foolproof initially.  Unfortunately, only a small target audience is seeking an upscale garage.  With just a little over half of your return to expect back, you might want to save that money or invested it elsewhere in your home.  Garages rarely sell houses.      

It's Real Estate Investing Season!

by David Tyler Mills

With the economy still fighting to recover, investors are struggling to find profitable opportunities for their money.  Even in the midst of foreclosures, would you believe that investing into real estate is a valuable option?  That’s ok.  Roll your eyes, but let’s take a moment to consider the facts. 

Foreclosures are prominent.  People are simply not making enough money to pay for their homes.  They are being forced to move.  Immediately buying a new home is out of the question.  Moving out of town comes with high costs, both financially and emotionally, especially if the owner has a job and a family. 

The only financially viable option for most victims of foreclosure is renting.  As an investor, an important factor comes into mind.  What counties have the most foreclosed homes?  According to www.RealtyTrac.com, Benton County contains the most foreclosed homes in Arkansas with Washington County coming in at third.  McNaughton Real Estate’s website, www.allNWAhomes.com, has accounted for over 1,000 foreclosed homes in Washington County, Benton County, and Madison County.

The availability of foreclosures are evident, but what about the demand?  Having multiple, massive corporations such as Tyson, JB Hunt, and Wal-Mart stationed in Northwest Arkansas creates a significant inflow of rentals.  In addition, Arkansas’s flagship university, the University of Arkansas, in Fayetteville continues to pull renters throughout the world with this year being a record-breaking enrollment count for the university.

If the demand isn’t enough incentive to invest, then consider the quick return a rental property can provide.  With historically low interest rates, hovering around 4%, and low prices, NOW is the time to buy.  The increase in demand has also provided a healthy increase in rental prices. 

Inevitably, real estate investors gain a sense of pride in owning something tangible like land and/or a house compared to owning a small sliver of a corporation that stocks give.  These investors also have greater control in managing the value of their assets with the option to enhance, add-on, and renovate their property.  In addition, many real estate investors feel compassionate about offering an affordable home for families in need of shelter during this economic dip.

For everything that has a pro, there is always a con.  Many investors find it difficult to make time to search for quality tenants, have access to a network of contractors for maintenance, and be available for major and minor emergencies.  Fortunately, McNaughton Real Estate can alleviate the stress with their expertise in property management.  With McNaughton Real Estate you can expect:

  • A Property Management Team with 25+ years of experience whose primary focus is to protect your investment.
  • A vast network of local contractors, which can help you find the most cost-effective bid.
  • A quality tenant due to helpful insights with our credit and background checks.
  • Inspections to ensure security in your investment.
  • A 24/7 maintenance request line.
  • Abundant leads with our strong presence on the Internet and with our 35 years worth of referrals.  

We want to help maintain your focus on building your portfolio.  Allow us to protect what is yours and to advise you on any new opportunities that hit the market.  A professional Certified Investor Agent Specialist will be here to help you every step of the way. 

Joe Adams Amazing Kickoff Return

by David Tyler Mills

If you were watching the Razorback game this weekend, then you saw one of the best kickoff returns ever!  Arkansas senior wide receiver, Joe Adams, returns a punt for an amazing touchdown run in the Tennessee @ Arkansas matchup on November 12, 2011 to put the Razorbacks up 14-0.  Witness for yourself!

Foreclosure Fears Foster True Grief

by David Tyler Mills

Reports of foreclosures by the millions have been in the news so much over the past few years that to some, it might seem like the new normal. 

But as real estate professionals who are in the trenches with financially stressed homeowners every day, it never for a second feels like “business-as-usual.”

The prospect of losing one’s home is right up there among the major sources of grief, and often, it goes hand in hand with other tragic setbacks such as the loss of a job, a divorce, death of a loved one, mounting medical bills, or skyrocketing mortgage payments.

Unfortunately, the first stage of grief is denial, and that’s even more the case when the threat of foreclosure is looming. No one wants to talk about or admit financial troubles—even when millions of others have found themselves in a similar spot.  It’s completely understandable, but for homeowners who are behind on mortgage payments, decisive action is often the most critical step toward ensuring the best possible solution.

As real estate professionals who have sought out the Certified Distressed Property Expert (CDPE) designation, we help homeowners to deal with every aspect of the grief and uncertainty that accompanies a mortgage which is no longer manageable. In the process, we help them to get on a path of financial solvency.

If you or someone you care about would like to change the course of a life that’s facing foreclosure, we get it, and we can help.

Contact us today!

Use our Moving Truck for Free

by David Tyler Mills

Even when the buying or selling process is complete, McNaughton Real Estate isn't ready to let go just yet.  Up to this point we know you've invested a lot of time and money, so we want to make sure that you leave us completely satisfied.  Instead of wasting your time and money finding something to move all your belongings, use our moving truck for FREE! 

Too good to be true?  Hear it from Don yourself…

 

Our moving truck is also available for non-profit organizations such as

  • Churches
  • Schools
  • Fund raising events

 

 

 

 

 

 

 

 

The First Step

by David Tyler Mills

No matter if you're trying to break a habit or going skydiving, the first step is the hardest.  That first step becomes even more difficult if the final result is long term, such as buying a home.  Here at McNaughton Real Estate, we make that first step as easy and stress-free as possible.

What's the first step?  Getting Pre-approved!

Tell 'em, Don...

Northwest Arkansas is not Landlocked

by David Tyler Mills

There’s no doubt that moving from one state to another causes hesitation, especially if it’s a move from a whole different region of the country.  Though I can’t possible see why you would want to visit anywhere else in the world once you’ve settled in Arkansas, you won’t ever have to worry about being too far from anywhere.  With the Northwest Arkansas Regional Airport, or more commonly known as XNA, Northwest Arkansas is freed from being landlocked. 

Here’s a little bit about the airport as posted on their website…

“Opened for commercial passenger business on November 1, 1998, the geographic terrain where the airport is located provides tremendous facilities for regional and larger jet aircraft to operate. One of only two Airport Authorities in the state of Arkansas, the Board of Directors' sole purpose is to build, operate and maintain the facility. The airport's staff strives to keep pace with the growing demands of NW Arkansas' thriving economy and passenger traffic. This is done by initiatives to provide increased passenger destinations and expanded customer service - what the citizens and visitors to NW Arkansas have come to expect and deserve. NW Arkansas' dynamic economy, coupled with our air carrier partners' response to demand, combined to make the Northwest Arkansas Regional Airport the most eXciting New Airport in the country.”

No matter if you decide to move to Fayetteville, Springdale, Bentonville, Rogers, or any other cities in Northwest Arkansas, XNA is centrally located.  You’re never too far from home! 

 

 

What to Expect from the Revised HARP

by David Tyler Mills

Revisions to the Home Affordable Refinance Program (HARP) announced last month, are by no means a game changer. HARP 2.0, as the media has started to refer to it, has some merit, but its scope is very limited and it will have little or no impact on foreclosures or the estimated 6.4 million homeowners nationwide who are behind on their mortgage payments. The new HARP essentially expands the net of underwater borrowers who were eligible to refinance under the original version.

HARP was created in 2009 to enable borrowers whose loans were backed by Fannie Mae, Freddie Mac or the FHA; who were current on their mortgage; and who owed up to 125 percent of the current value of their homes to refinance.

Under the new plan, borrowers can refinance no matter how far underwater they are. Banks will only have to verify that they have made their last six payments, haven't missed more than one payment over the past year, and have a job or another source of regular income.

While the new HARP won't help homeowners who are behind on their payments and at risk for foreclosure, it will be a welcome relief for homeowners who have been caught in the Catch-22 of not being able to refinance because they owe more on their mortgage than their home is worth, but at the same time, don't qualify for a short sale or a loan mod because they are current on their payments and still have income and assets.

*Information collected from CDPE's "The Distressed Property Report" for November 2011

Need Money for Improvements for a Fixer-upper? There's a Loan for That.

by David Tyler Mills

We meet a lot of customers who desire a fixer-upper but don’t have the cash to repair, replace, or improve their dream home.  Most of these customers are aware of an FHA loan, which only covers the price of the home, but what they may not know is the other types of FHA loans.  One of these types of FHA loans allows you to borrow money that you can use towards improvements.

Introducing the FHA 203K!  This loan allows you to borrow up to $35,000 for repairs, replacements, upgrades, remodeling, and enhancing.  Below is a list of eligible and ineligible improvements as well as a bid/proposal requirement checklist:

Streamlined 203K “Eligible” Improvements

Below are the types of improvements that are allowed in the streamlined 203K program.

  • Repair/replacement of roofs, gutters, and downspouts
  • Repair/replacement/upgrades of existing HVAC systems
  • Repair/replacement/upgrades of plumbing and electrical systems
  • Repair/replacement of existing flooring
  • Minor remodeling, such as kitchens and bathrooms, which does not involve structural repairs
  • Weatherization: including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including freestanding ranges, refrigerators, washers/dryers, dishwashers, and microwave ovens.
  • Accessibility improvements for persons with disabilities
  • Painting, both exterior and interior
  • Repair/replace/add exterior decks, patios, and porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement
  • Lead-based paint stabilization or abatement of lead-based paint hazards

Steamlined 203K “Ineligible” Improvements

Below are the types of improvements that are not allowed in the Streamlined 203K program.

  • Major rehabilitation or major remodeling such as the relocation of a load-bearing wall.
  • New construction (including room additions)
  • Repair of structure damage
  • Repairs requiring detailed drawings of architectural exhibits
  • Landscaping or similar site amenity improvements
  • Any repair or improvement requiring a work schedule longer than six months
  • Rehabilitation activities that require more than two payments per specialized contractor
  • Required repairs arising from the appraisal that do not appear on the list of eligible repairs
  • Walkways or driveways

Bid/Proposal Requirement Checklist

  • Must reflect date of bid/proposal
  • Must reflect borrowers name
  • Must reflect property address
  • Break out specific costs for materials, labor, permits, etc.  (Lender needs to understand what the reflected items are)
  • No “structural items” reflected
  • Indicate the estimated completion date (must be within 6 months)
  • Licensed Contractor must sign and date
  • Borrower must sign and date
  • Copy of Contractors license, references, and any other state licensing requirements
  • Copy of permit(s) for any work that requires a permit (if you are not sure, ask your contractor)
  • Homeowner/Contractor Agreement to be completed for each bid/proposal and must be signed and dated by the licensed Contractor and the Borrower (copy included in package.)
  • Total sum of bid/proposals and closing costs cannot exceed $35,000

*PLEASE NOTE…ALL REMODELING WORK MUST BE COMPLETED BY A LICENSED CONTRACTOR.  BORROWERS MAY NOT PERFORM REMODELING WORK!!!

*The only work that can be performed by the borrower is painting or installations of some appliances.  Please check with our office to determine if your project can qualify for SELF-HELP.

Displaying blog entries 1-9 of 9

Contact Information

Photo of Don McNaughton Real Estate
Don McNaughton
McNaughton Real Estate
4299 W. Persimmon
Fayetteville AR 72704
479-442-9099
Fax: 479-442-0948
       

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