What is an ADU & Why You Should Care?

Great Information if you are looking for additional space to care for loved ones and/or  several other options.  Check out this article from the LifeEdited.com website.   Dawn

What is an ADU and Why You Should Care

ADU stands for Accessory Dwelling Unit and they might just be your next edited home. You might know ADUs by their other, quasi-affectionate names such as granny-flats, mother-in-law-apartments and so on. They are dwellings–either attached or detached from a main house–that exist on a lot with another house. Many ADUs are buit above garages such as the one pictured above.

ADUs have myriad benefits such as:

  • Creating a secondary rental income.
  • Increasing the occupancy of a given plot of land.
  • Creating more communal living, while still providing autonomy and privacy for both homes.
  • People who may have once needed a large home–e.g. parents whose children have moved out–can move into the ADU and rent out the main home.

ADUs are not lean-to’s; they are real homes that require building permits and some investment. A great resource is accessorydwellings.org, which goes into the ins-and-outs of ADU construction, financing, zoning for every state and other issues.

blu-homes

For those looking to install an ADU on their property, but who don’t want the headache of designing a custom home, there are many prefabricated options like the model above by Blu Homes.

What’s great about ADUs is that they provide a way of optimizing traditional the American home, whose lot size is often considerably larger than its home. We realize many people who want to live an edited life live in traditional American homes; moreover they neither want to move into a micro apartment in the city or a tiny house in the country. The ADU provides a great way of working with existing resources, while providing extra income, increasing the efficiency of a property and creating a more community-oriented lifestyle.

Do you have experiences living or building an ADU? Tell us about it.

Top picture by Pete Sloutos, courtesy of Peter Brachvogel, BC&J Architects

Posted in Add Ons, Additions, ADU, Buyers, Buying a Home, FHA & VA Loans, Home Security, Inspections, Investment Properties, Investors - Investment Income, Lenders & Loans, New Homes, Real Estate - Sellers & Buyers, REALTOR®, Remodel, Remodeling, Second Homes | Tagged , , , , , , , , , | Leave a comment

What Are Modular Homes vs Manufactured?

Modular Home
•••

When you are buying a home, you might hear the terms modular homes, manufactured homes and site built homes. It’s important to understand how they all differ, no matter whether you are purchasing an existing house or plan to build on land that is subject to restrictions. The differences can affect a home’s price and its resale value, and even dictate whether or not it can be built on your land.

What Are Site Built Homes?

  • They are constructed entirely at the building site.
  • Common construction materials are 2 by 4s and 4 by 6s precut wood used for framing and trusses.
  • They conform to all state, local or regional codes where the house is located.
  • Often called ‘stick-built’ houses, they make up the majority of all new homes constructed today and are the favored way to build a home.
  • A well-built, cared for site-built home generally increases in value over time, although its location plays a key role in value.

What Are Modular Homes?

You might find this hard to believe, but the photograph on this page is of a modular home. It looks just like a regular house built on top of a slab with 2x4s, doesn’t it? You cannot really tell the difference these days. Modular homes are typically very well built. Here are more facts about modular homes:

  • Modular homes are built in sections at a factory.
  • Modular homes are built to conform to all state, local or regional building codes at their destinations.
  • Sections are transported to the building site on truck beds, then joined together by local contractors.
  • Local building inspectors check to make sure a modular home’s structure meets requirements and that all finish work is done properly.
  • Modular homes are sometimes less expensive per square foot than site built houses.
  • A well-built modular home should have the same longevity as its site-built counterpart, increasing in value over time.
  • Read ​​more facts about modular homes
  • What Are Manufactured Homes?  Formerly referred to as mobile homes or trailers, but with many more style options than in the past.
  • Manufactured houses are built in a factory.  They conform to a Federal building code, called the HUD code, rather than to building codes at their destinations.
  •  Manufactured homes are built on a non-removable steel chassis.
  • Sections are transported to the building site on their own wheels.
  • Multi-part manufactured units are joined at their destination.
  • Segments are not always placed on a permanent foundation, making them more difficult to re-finance.
  • Building inspectors check the work done locally (electric hook up, etc.) but are not required to approve the structure.
  • Manufactured housing is generally less expensive than site built and modular homes.
  • Manufactured homes sometimes decrease in value over time.Read ​​more facts about manufactured homes

What Do the Differences Mean to You?

Restrictive Covenants and Deed Restrictions

  • Communities generally have no restrictions against traditional, site-built homes. Many housing developments do set minimum size requirements and stipulate you must build a house that conforms to published restricted covenants or be approved by an architectural review committee.
  • Most developments allow modular homes. Some do not, but, in those cases, the restrictions seem to have been imposed because of an ongoing confusion about the differences between modular homes and manufactured homes.
  • Restrictive covenants and deed restrictions often exclude manufactured homes.

Investigate the deed restrictions thoroughly before purchasing land for any type of new home. Further, obtain a copy of the Covenants, Conditions and Restrictions, also known as the CC&Rs for your new neighborhood. Study the plat map and know where your easement boundaries lie to make sure you do not place your modular home on top of any easements.

Are Prefab Modular Homes the Same as Shipping Containers?

Shipping containers can also be called a modular home but they are generally very different from your typical modular home.

A conventional modular home looks very much like a traditional stick-built home. It is hard to tell the difference. Whereas a shipping container home, constructed from an actual shipping container and not a replica, looks like a shipping container home, made from corrugated metal.

A single pod modular home built from a shipping container can be used as a cabin, getaway or tiny home. For more space, consider joining together two shipping containers.

At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.

Posted in Buyers, Buying a Home, Inspections, Manufactured Homes, Mobile Homes, Modular Homes, New Homes, Real Estate - Sellers & Buyers, REALTOR®, Remodel, Remodeling, Second Homes | Tagged , , , , , , , , , | Leave a comment

Homebuying Mistakes by Generation

Make sure you check out these “Observations”.  They may help save you time and money!  DawnHomebuying Mistakes by Generation

Posted in Buyers, Buying a Home, FHA & VA Loans, Investors - Investment Income, Lenders & Loans, NAR-National Association of REALTORS®, New Homes, Personal Opinions, Real Estate - Sellers & Buyers, REALTOR®, Second Homes, Seniors and Senior Services | Tagged , , , , , , , , , , , , , , , | Leave a comment

Want a Vacation Home? Check the Tax Laws First

Interesting issues to delve into before buying a home.  Smart tax planning up front will save many headaches down the road. – Dawn

The Tax Cuts and Jobs Act of 2017 is changing how buyers pay for that oceanfront condominium or ski chalet

Want a Vacation Home? Check the Tax Laws First
ILLUSTRATION: CHRIS GASH

Thinking about buying that oceanfront condominium or ski chalet? If you are shopping for a vacation home, bear in mind that the new tax laws may have an impact on how you choose to pay for that property.

The Tax Cuts and Jobs Act of 2017, passed by Congress in December and effective on Jan. 1, made some significant changes that may affect owners or purchasers of luxury homes.

The new rules limit deductions of mortgage interest and property taxes. They also limit the deductibility of interest on home-equity loans, home-equity lines of credit (Helocs) and second mortgages—loans that some homeowners use to tap the equity on their primary residences to pay for vacation homes.

While the new tax provisions don’t entirely eliminate the deduction of interest on Helocs, they limit it to situations where the proceeds are used to buy, build or substantially improve the home that secures the loan. So if vacation-home buyers use Helocs on their primary residences to purchase vacation homes, they can’t deduct the interest on the Helocs, according to the Internal Revenue Service.

Andy Weiser, a real-estate broker with Better Homes and Gardens Real Estate Florida 1st, in Fort Lauderdale, Fla., says that in the past, many of his clients from the New York area would take out a Heloc on their primary residences to pay cash for an oceanfront condominium.

Things have changed. “Heloc purchases have pretty much dried up since the beginning of the year,” says Mr. Weiser, whose clients typically purchase units that range from $600,000 to $1.2 million.

Of course, mortgage-interest rates—even those on a Heloc—remain historically low, so many homeowners, particularly affluent ones, may feel comfortable using a Heloc for a vacation-home purchase even if the interest is not deductible. For some, that may even be preferable to liquidating a portfolio to finance the purchase.

If you’re planning to purchase a vacation home, there are various ways to finance your purchase. Here are some things to consider.

• Pay cash. If you have the funds available, paying cash is a quick and easy way to finance a vacation home. It also gives buyers a competitive edge in many cases because there’s no mortgage contingency and, hence, no added risk to the seller that the deal will fall through. And, if you later decide to renovate your new vacation home and want to use a Heloc to pay for those costs, your interest would be deductible as long as the Heloc is secured by the vacation home, and total mortgage indebtedness on the vacation and primary homes doesn’t exceed $750,000, according to Edward N. Cooper, director-in-charge of tax services at Berkowitz Pollack Brant Advisors and Accountants.

• Mortgage the vacation home. According to Rick Bechtel, executive vice president and head of U.S. mortgage banking at TD Bank in Cherry Hill, N.J., many vacation-home buyers are applying for first mortgages to finance their purchases. At TD, there is no interest-rate difference between a mortgage on a primary or vacation home, as long as the vacation home isn’t rented out. But the underwriting guidelines—the down payment required, loan-to-value ratio and credit score—are tougher for vacation homes, Mr. Bechtel said.

For example, while TD requires a down payment of at least 10% on a jumbo loan securing a primary residence, a borrower needs a minimum of 15% for a vacation home.


• Consult experts in vacation-home financing.
 Before making your purchase, consult with a financial adviser and mortgage lender with expertise in financing vacation homes. Vacation-home buyers are in many cases high-net-worth individuals with complex financial situations, so they should check with an accountant or other financial adviser to ensure that they are structuring the deal the best way.

Posted in Buyers, Buying a Home, Income Tax, Investment Properties, Investors - Investment Income, IRS, Lenders & Loans, New Homes, Property Taxes, Real Estate - Sellers & Buyers, REALTOR®, Second Homes, Tax Basis, Tax Reform | Tagged , , , , , , , , , , | Leave a comment

What People Would Sacrifice to Buy a Home

What would you sacrifice? – Dawn

DAILY REAL ESTATE NEWS | THURSDAY, MAY 24, 2018

Home buyers are willing to make extreme sacrifices and even give up some basic rights to get a chance at homeownership or help with their down payment, a new survey shows. In exchange for a 10 percent down payment, would-be buyers said they’d forgo their dream car, vacations, and even their right to vote.

Twenty-two percent of 1,000 buyers recently surveyed said they’d be willing to give up the right to vote in exchange for a 10 percent down payment they would not need to pay back, according to Unison Home Ownership Investors and Atomik Research’s The Value of Owning a Home survey. Millennials (26 percent) are more likely than Gen X (20 percent) and baby boomers (7 percent) to be willing to give up their right to vote. Men are more likely than women to give up their driver’s license—14 percent versus 9 percent, respectively.

Forty-four percent said they’d be willing to give up their dream car, and 38 percent would give up vacationing for the next five years.

Homeownership status may even affect relationships, the survey found. Fifty-eight percent of respondents said they’d be more likely to date or marry someone who already owned a home at the time their relationship began, according to the survey. Homeowners may be more attractive to aspiring buyers. Millennials (58 percent), Gen X (59 percent), and baby boomers (56 percent) admit preference toward engaging in a relationship with a current homeowner.

To overcome the down payment barrier, more consumers are showing openness toward crowdfunding. Twenty-six percent of respondents surveyed said they’d consider crowdfunding a down payment, and 29 percent would use an equity investment or homeownership investment. Read more about buyers using crowdfunding to secure a home.

Source: “The Value of Owning a Home,” Unison Home Ownership Investors (May 24, 2018) [Log-in required.]

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3 Pros, 3 Cons of Buying New Construction

In my career, when helping my clients through a new home purchase, I would suggest they have an independent property inspector make the final walk through with us prior to signing off acceptance of the final build-out. Many seller reps were not pleased but would allow it.  Peace of mind goes a long way to making sure your buyers are protected in new homes too so having a professional inspection is definitely worth it.  This is a great article giving you several examples. – Dawn
DAILY REAL ESTATE NEWS | TUESDAY, MAY 22, 2018

Many house hunters are under the mistaken impression that new construction is flawless, a perception that may be challenging to wrestle with if your seller’s home is surrounded by brand-new development. In reality, there can be just as many inspection issues with new builds as there are with resale properties. If you’re working with clients who are interested in purchasing new, it’s important to manage their expectations and let them know that no home—no matter what age—is perfect. On the other hand, new homes do have some advantages because they’re not worn. Here are three pros and three cons of new construction.

Pros

  1. Less wear and tear. Buyers of new construction can expect fewer imperfections in the product, says Terrylynn Fisher, CRS, GRI, a professional stager and associate broker with Dudum Real Estate Group in Walnut Creek, Calif. Scratched floors and cracks in walls, for example, are more commonplace in resale homes than new ones. Finishes and design flourishes in new homes may also be brighter and more colorful because they are untouched.
  2. Built-in technology. While many homeowners have been slow to adopt smart-home technology, developers are jumping on the bandwagon more quickly and incorporating smart features into their projects, says Sce Pike, founder and CEO of Portland, Ore.-based software company IOTAS. Smart door locks and thermostats are among the most popular products developers request, but some are eyeing more comprehensive packages that include smart humidity sensors and the ability to control access to a home remotely, Pike adds.
  3. It’s a blank canvas. Buyers may feel more like they are designing a home specifically for them when starting from scratch with a brand-new home, which can be a big psychological motivator in a purchase decision, Fisher says. Though resale buyers, too, have the opportunity to make a home their own, they may not feel complete ownership of its style because they’re either adding to, morphing, or covering up the previous owner’s sense of style, says Christine Rae, founder of the Certified Staging Professionals International Business Training Academy.

Cons

  1. Flaws due to building shortcuts. Builders may take shortcuts in the construction process to cut costs, and that can result in blemishes in the home. Fisher says one of her buyers recently bought a new home and discovered about six aesthetic problems that were caused during construction, including an unsightly gap at the top of a shower that made the framing behind the wall visible. “It was like a bad flip that appeared beautiful on the outside,” she says. “You’re going to have a more substantial house in an older home because it’s had owners that have cared for it.”
  2. Style over functionality. Builders are hyperfocused on open floor plans, as it’s a top priority for today’s buyers. But that often requires sacrificing storage space, Rae says. To achieve a truly open space, builders often have to decrease the size of closets and other areas of the home designed for storage. That can be problematic for meeting the needs of buyers who envision purchasing a long-term residence.
  3. Incomplete curb appeal. Many builders put all of their effort—and investment—into the front of the house so it looks good to potential buyers driving by. But they’ll sometimes leave the backyard unattended to, Fisher says. Many new-home buyers may have to assume all the costs of backyard landscaping, including planting grass or laying sod, as well as planting trees and other shrubbery. This can be a huge expense, too.

—Graham Wood, REALTOR® Magazine

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Visual Impact of an Interest Rate Increase

Interest rate impack

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