12 Tips for Hiring a Remodeling Contractor

1. Get at least three written estimates.
2. Get references and call to check on the work. If possible, go by and visit earlier jobs.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure that the contract states exactly what is to be done and how change orders will be handled.
5. Make as small a downpayment as possible so you won't lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7. Be sure that the contract states when the work will be completed and what recourse you have if it isn't. Also remember that in many instances you can cancel a contract within three business days of signing it.
8. Ask if the contractor's workers will do the entire job or whether subcontractors will do parts.
9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that materials used meet your specifications.
12. Don't make the final payment until you're satisfied with the work.

20 Low-Cost Ways to Spruce Up Your Condo

Make your unit more appealing for yourself and for potential buyers with these quick and easy tips:

1. Trim bushes so they don't block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your front door.
5. Edge the grass around walks and trees.
6. Keep your garden tools out of site.
7. Be sure kids put away their toys.
8. Upgrade your outside lighting.
9. Use warm, incandescent light bulbs for a homey feel.
10. Polish or replace your house numbers.
11. Put out potpourri or burn scented candles.
12. Buy new pillows for the sofa.
13. Buy a flowering plant and put in a window you pass by frequently.
14. Make a centerpiece for your table with fruit or artificial flowers.
15. Replace heavy curtains with sheer ones that let in more light.
16. Buy new towels.
17. Put a seasonal wreath on your door.

Understanding Capital Gains in Real Estate

When you sell a stock, you owe taxes on your gain-the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.

How to Calculate Gain

In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:

1. Take the purchase price of the condo: This is the sale price, not the amount of money you actually contributed at closing.
2. Add Adjustments:

• Cost of the purchase-including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
• Cost of sale-including inspections, attorney's fee, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements-including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

A Special Real Estate Exemption for Capital Gains

Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria.

1. You have lived in the home as your principal residence for two out of the last five years.
2. You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.

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10 Things a Professional Realtor Can Do for You

1. Obtain and qualify prospects, eliminating professional lookers and non-qualified prospects.
2. Diplomatically handle objections and overcome them.
3. Assist in helping both the Seller and the Buyer navigate through the complex world of financing.
4. Follow up with prospects without weakening your position.
5. Handle the sale of your buyer's house if they need to sell prior to purchasing.
6. Explain closing costs.
7. Know how to justify your asking price to the Buyer.
8. Relieve you of having to stay home to wait for Buyer's phone calls or for showings.
9. Provide strangers access to your property without jeopardizing you or your family.
10. Guide you through the closing process, including inspections, disclosures, obtaining flood hazard and hazardous materials information, assist in obtaining permits, assist the appraiser in valuing the property at the price where it sold, as well as a variety of other issues that may occur in any given transaction

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Get Your Condo Ready To Sell

In preparing your condo to sell, ask yourself over and over if your place looks like someone else's dream house. Homes in tip-top condition tend to be inviting to buyers; homes that are like new typically sell the fastest and procure the best price.

With that in mind, here are a few things to consider when getting ready to sell:

Exterior
Remember the 60-second rule: that's all the time you have to create a good first impression! Mow the lawn, rake leaves, trim trees and shrubs that keep light out of the house and remove dead plants. Pick up tools, garbage cans, hoses, toys, and building materials and store them neatly in a storage area. Clean all windows and mend torn screens. Put up a new light fixture. Dress up the front yard with some simple landscaping.

Clean, Clean, Clean
Step back for a moment and look at your condo as if you were seeing it for the first time. Every room should be spotlessly clean, dusted and uncluttered. Steam clean the carpets and wax the floors. Wash the walls, windows and light fixtures. Tighten loose stair railings and clean all woodwork. In the event that you feel a project of this magnitude is better left to a professional, ask your real estate agent to recommend a cleaning service.

Entryway
Use bright light bulbs in the foyer and throughout the house. Fill the house with a pleasant aroma, such as fresh flowers in the summer or cinnamon or candles in the winter.

Living Room
Replace the carpet if it's worn. Show off the hardwood floors if you have them - buyers prefer wood floors! It costs money, but you may find that you will more than recoup that cost when the home sells. Patch cracks and nail holes in the walls, and repaint walls in neutral colors, such as white or ivory. Nail down creaking boards and stair treads. Lubricate any sticking or squeaking doors. Open all curtains, and replace them if they are getting old. Add lamps and lighting if the house is dark. Set out fresh flowers.

Furniture
Rearrange or remove furniture to make your rooms look more spacious. Too much furniture and too many knick-knacks make rooms look cluttered and small. One or two decorative items per surface are plenty, so pack the rest away. Great way to start packing away those things you do not need day-to-day.

Kitchen and Baths
These rooms should sparkle! Clear off counters, and clean all appliances and fixtures. Scrub the floors and walls. Re-caulk tubs and showers. Clean these rooms thoroughly, and be sure they smell fresh. Never leave dishes in the sink, and run the dishwasher often!

Closets
Take those things to Goodwill that you'll have to discard anyway when you move. Organize shelves and straighten shoes. Be sure that sliding doors operate smoothly and knobs on drawers are secure.

Utility Room
Dust and wash the washer, dryer and water heater.

Light and Bright
Do everything you can to brighten the interior. Replace wallpaper with white or off-white paint, and repaint shabby or dark walls. Open the blinds, and replace broken windows and window seals. Always maintain a comfortable temperature inside the house, even if you are away for an extended period of time. Keep the heat on in the winter, and the air conditioning on in the summer!

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10 Biggest Selling Myths Uncovered

Selling a house can be a bit like having a baby -- everyone gives you advice that may or may not be true for you. Here are ten myths uncovered:

1. Myth: You should always price your home high and gradually lower it if it doesn't sell.
Truth: Pricing too high can be as bad as pricing too low.

You may think by listing high you can always accept a lower offer, but if you do, you'll miss the buyers looking in the price range where your home should be. Offers may not even come in, because interested buyers are scared off by the price and won't bother to look. By the time the listing price is corrected, you will have lost a large group of potential buyers. Your real estate agent will offer you a comparable market analysis. This is a document that compares your home to other similar homes in your area, with the goal of helping you to accurately assess your home's true market value.

2. Myth: Minor repairs can wait until later. There are more important things to be done.
Truth: Minor repairs make your house more marketable, allowing you to maximize your return (or minimize loss) on the sale.

By and large, buyers are looking for an inviting home in move-in condition. Buyers who are willing to tackle the repairs after moving in automatically subtract the cost of needed fix-ups from the price they offer. You save nothing by putting off these items, and you may likely slow the sale of your home.

3. Myth: Once potential buyers see the inside of your home, curb appeal won't matter.
Truth: Buyers probably won't make it to the inside of the home if the outside of your home does not appeal to them. Most people judge a house by its "cover."

Many buyers drive by a home before deciding whether or not to look inside. Your home's exterior will have less than a minute to make a good first impression. Spruce up the lawn, trim shrubs and trees, and weed the garden. Clear the walkways and driveways of leaves and other debris. Repair gutters and eaves, touch up the exterior paint and repair or resurface cracked driveways and sidewalks. Place potted flowers out front, hang a wreath on the door and put out a pleasing welcome mat for added curb appeal.

4. Myth: Once potential buyers fall in love with the exterior look of your condo you put interior improvements on the back burner.
Truth: Buyers have no qualms about walking right out the front door within 60 seconds if the house doesn't look like it could be theirs.

Remember that most buyers are looking for an inviting home in move-in condition. Spending a few thousand dollars for the right work on your home before you sell it, usually translates into a higher selling price and shorter marketing time. Your real estate agent will consult with you about the repairs and replacements that will benefit you most.

5. Myth: Your home must be every homebuyer's dream home.
Truth: If you get carried away with repairs and replacements to your home, you may end up over-improving the house and not getting back all the money you put into it.

At some point, improvements that you make to your home can exceed what is customary for comparable homes in your area. If your improvements push your home's value higher than 20% above average neighboring home values, don't expect to recoup the entire amount of improvements. Your real estate agent can advise you as to the scope of projects you might consider in preparing your house for sale.

6. Myth: Buyers are never swayed by sellers that offer creative financing options.
Truth: By offering flexibility in financing options, you may lure more prospective buyers.

You might consider offering seller financing, paying some of the buyer's closing costs, including a one-year home warranty, or other buyer incentives. Your real estate agent, who has professional knowledge of local market activity, can help you decide what incentives, if any, to offer.

7. Myth: You are better off selling your home on your own, thus saving the commission you would have paid to a real estate agent.
Truth: Statistically, many sellers who attempt to sell their homes on their own cannot complete the sale without the service of a professional real estate agent. Over 80% end up using an agent, so stop stressing, a have a professional do the job for you!

Sellers who sell their home without a real estate agent often net less from the sale than sellers who use one. You visit a doctor when you're sick and take your car to a mechanic when it needs repairs. It makes sense to contact a real estate professional when you are preparing to sell your biggest asset!

8. Myth: Good sellers should be available to guide prospective buyers through the home, giving the whole process a more personal touch.
Truth: Prospective buyers will feel more like the house could be theirs if the current owners are not there.

The presence of homeowners during a viewing can make buyers feel like they are intruding. They need to be able to visualize your house as their home, which can be difficult to do when they are acutely aware that it is still your home. Your real estate agent will be happy to look out for your home during open houses or showings.

9. Myth: Successful sellers insist that the terms of the sale happen their way or no way.
Truth: If you approach the sale of your home as the buyer's adversary, you risk losing a perfectly solid buyer for no good reason.

Both you and the buyer have the same goal: for you to sell your home and for the buyer to buy it. Work with your real estate agent to approach negotiations positively and with a win-win frame of mind.

10. Myth: When you receive an offer, you should make the buyer wait. This gives you a better negotiating position.
Truth: You should reply immediately to an offer! Your first offer more often than not may be your best offer!

When a buyer makes an offer, that buyer is, at that moment in time, ready to buy your home. Moods can change, and you don't want to lose the sale because you stalled in replying.

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All reports reprinted from REALTOR Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS. Copyright 2003. All rights reserved. www.REALTOR.org/realtormag