Technology is changing the way we do almost everything, and real estate transactions are no exception. In fact, a new crop of tech companies wants to revolutionize the way we buy and sell homes.

iBuyer startups like Opendoor, Offerpad, and Properly are rapidly expanding into new territories, and now established players, like Zillow, are starting to get in on the action. Also known as Direct Buyers, these companies use computer algorithms to provide sellers with a quick cash offer to buy their home.

While the actual market share of iBuyers remains small, their big advertising budgets have helped create a noticeable buzz in the industry. This has left many of our clients curious about them and how they work.

In this article, we explain their business model, weigh the pros and cons of working with an iBuyer, and share strategies you can use to protect yourself if you choose to explore this new option to buy or sell your home.

FIRST, HOW DOES THE iBUYER PROCESS WORK?

While each company operates a little differently, the basic premise is the same. A seller (or seller’s agent) completes a brief online form that asks questions about the size, features, and condition of the property. Some also request digital photos of the home.

The iBuyer will use this information to determine whether or not the home fits within their “buy box,” or set of criteria that matches their investment model. They are generally looking for houses they can easily value and “flip.” In most cases, their ideal property is a moderately priced, single-family home located in a neighborhood with many similar houses. The property shouldn’t require any major renovations before listing.¹ These qualities make it easier to assess value (lots of comparable sales data) and help to reduce risk and minimize carrying costs.

Once the iBuyer has used their algorithm to determine the amount they are willing to pay, they will email an offer to the seller, usually within a few days. The offer should also disclose the company’s service fee, which is typically between 7% and 12% of the purchase price.²

If the seller accepts, an in-person visit and inspection are scheduled. The iBuyer will ask for a reduction in price to cover any defects they find during the process. Once the sale closes, they will make the necessary updates and repairs and then resell the home on the open market.

WHAT ARE THE PROS AND CONS OF SELLING TO AN iBUYER?

Of course, the biggest benefit of selling your home to an iBuyer is convenience. For some homeowners, the stress and disruption of preparing and listing their home can feel overwhelming. And what busy family with kids and pets wouldn’t want to skip the hassle of keeping their house “show ready” for potential buyers? Additionally, many sellers like the predictability of a cash buyer and the flexibility to choose their closing date.

However, this added convenience does come at a cost. An iBuyer is an investor looking to make a profit. So their purchase offer is usually below true market value. When you tack on service fees of up to 12% and deductions for updates and repairs, studies show that sellers who work with iBuyers net a lower amount than those that list the traditional way.³

In fact, a MarketWatch investigation found that transactions involving iBuyers net the seller 11% less than if they would have sold their home with an agent on the open market.²

WHAT ARE THE PROS AND CONS OF BUYING FROM AN iBUYER?

Buying a home from an iBuyer is a lot like buying a home from any investor. The pros are that it’s usually clean, neutral, and moderately updated. You’ll often find fresh paint and modern finishes. And because it’s uninhabited (no one is living there), you don’t have to work around a seller’s schedule to see the home.

However, there are some pitfalls to avoid when working with iBuyers. Speed is of the essence, so sometimes the renovations are rushed and the quality can suffer. Also, their investment margins don’t leave much room for negotiating a price reduction or additional repairs. That leaves buyers —who have already invested hundreds of dollars in an inspection—little recourse if any issues are uncovered.⁴

That’s one of the reasons we always recommend viewing properties with an agent. During your visit, a real estate professional can point out any “red flags” at the home, provide background information about the neighborhood, and help you assess its true market value. That way, you don’t invest time and money in a high-risk or overpriced property. Safety is also a concern. Some companies allow buyers to access their homes via a smartphone app. While it may seem convenient, it provides an easy way for squatters and others to enter the home illegally.⁵

Luckily, since most iBuyers (and traditional sellers) pay a buyer agent’s commission, you can benefit from the guidance and expertise of a real estate professional … at no cost to you!

HOW CAN I PROTECT MYSELF IF I CHOOSE TO WORK WITH AN iBUYER?

While it may seem like the “quick and easy” way to go, working with an iBuyer can present some unique challenges. For example, they are notorious for presenting a strong initial purchase offer and then whittling it down with a long list of costly updates and repairs once they complete their inspection.² And unlike a traditional buyer who is incentivized to make a deal work, iBuyers can easily walk away if you don’t meet their demands.

Just like you wouldn’t go to court without a lawyer, you shouldn’t enter into a real estate transaction without an advocate to represent you. Having a professional agent on your side can be especially important when negotiating with an iBuyer. Remember, they employ sophisticated representatives and a team of lawyers who are focused on maximizing their profits, not yours. You need someone in your corner who has the skills and knowledge to ensure you get a fair deal and who understands the terms of their contracts, so you don’t encounter any unpleasant surprises along the way.

Overall, we think the emergence of new technology that helps to streamline the real estate process is exciting. And if we believe a client can benefit from working with an iBuyer, we present it as an option. But there is—inevitably—a cost to the convenience. After all, most iBuyers eventually list the properties they acquire on the open market, which is still the best place to find a buyer if you want to maximize the sales price of your home.

EXPLORE YOUR OPTIONS Do you want to learn more about iBuyers and other options currently available in our area to buy or sell your home? We can help you determine the best path, given your unique circumstances. Contact us to schedule a free, no-obligation consultation!

Sources:

1. The Dallas Morning News –
   https://www.dallasnews.com/business/real-estate/2019/07/11/so-called-ibuyer-real-estate-firms-pitch-programs-to-buy-your-house-help-you-hunt-for-another/
2. MarketWatch –
   https://www.marketwatch.com/story/selling-your-home-to-an-ibuyer-could-cost-you-thousands-heres-why-2019-06-11
3. Forbes –
   https://www.forbes.com/sites/alyyale/2019/08/16/study-shows-ibuyers-cost-home-sellers-thousands-is-convenience-worth-the-price/#697ac0c42269
4. US News & World Report –
   https://realestate.usnews.com/real-estate/articles/what-to-expect-when-buying-a-home-from-an-ibuyer
5. Inman –
   https://www.inman.com/2019/09/11/police-arrest-couple-found-squatting-in-opendoor-home-with-their-kids/

 

Tax season. Just the words can send shivers down your spine. But if you’re a homeowner, there’s a silver lining: potential savings!

You’ve probably heard that you can deduct the interest you pay on your mortgage — but did you know there are many other ways homeowners can reduce their tax burden?

Before you start your return, read this post for common home-related tax deductions, eligibility requirements, and tips on how to maximize your savings.

Home-Related Tax Savings: The Basics

Before we get into the details, it’s important to define some important terms to set the stage.

Tax Deductions vs. Tax Credits

Most tax savings opportunities for homeowners come in the form of tax deductions. Deductions work by reducing your taxable income — essentially, the government allows you to subtract certain expenses from your total income before calculating how much you owe in taxes. This means a lower taxable income and, ultimately, a lower tax bill. For example, if you earn $50,000 and claim tax deductions worth $5,000, you will only pay taxes on $45,000.

Tax credits, on the other hand, directly reduce your tax bill, rather than your taxable income. That means that if you owe $10,000 in taxes and claim a tax credit worth $2,000, your tax bill will be reduced to $8,000.

Pro Tip: Meticulous record-keeping is crucial. Keep detailed records of all potentially eligible expenses. This will make tax time much smoother and ensure you don’t miss out on any deductions.

Itemized Deductions vs. Standard Deduction

To understand what deductions apply to your situation, it’s important to know the difference between itemized deductions and the standard deduction. The standard deduction is a fixed dollar amount that you can subtract from your adjusted gross income (AGI) regardless of your actual expenses. Itemized deductions, on the other hand, are specific expenses that you can deduct, such as mortgage interest, property taxes, and charitable contributions.

You’ll need to choose whether to itemize or take the standard deduction. Generally, you should itemize if your total itemized deductions exceed the standard deduction. Most home-related deductions are only applicable if you choose to itemize.

2025 Standard Deduction Amounts

• Single and Married Filing Separately: $15,000
• Head of Household: $22,500
• Married Filing Jointly: $30,000¹

Source: IRS

Key Home-Related Tax Deductions and Credits

If you do choose to itemize your taxes, common tax deductions and credits available to homeowners include:

Mortgage Interest Deduction

No one likes to pay mortgage interest, but the good news is that you can deduct interest used to buy or build your primary residence or a second home. However, there are certain limitations that you need to be aware of.²

Mortgage size: If you file your taxes single or married filing jointly, you can deduct interest paid on the first $750,000 of mortgage debt³ for your primary residence or second home. If you are married but choose to file separately, that limit drops to the first $375,000 (for each partner).

Requirements:

• The mortgage interest deduction only applies if your home is collateral for the loan (which is standard).
• To qualify as a primary home, your property must have sleeping, cooking, and toilet facilities.
• If you are deducting mortgage interest on a second home, you don’t need to use the home during the year; however, if you rent it out, you must spend at least 14 days or more than 10% of the days you rented it out (whichever is longer).

So, how do you calculate how much mortgage interest you’ve paid?

The amount of interest you pay each year will vary, even if your interest rate is fixed — that’s because mortgage amortization³ means that you pay more interest earlier in the mortgage’s term, and more principal closer to the end. Each year, your lender will send you (and the IRS) a copy of Form 1098, which shows how much you paid in interest.⁴

For example, let’s say you are a married homeowner filing jointly with a mortgage for $400,000. If your Form 1098 shows that you paid $25,000 in mortgage interest in 2025, you could deduct the full $25,000 from your 2025 household income.

Real Estate Taxes (Property Taxes)

You can deduct state and local real estate taxes (property taxes) you pay on your primary residence or second home. However, it’s crucial to understand what qualifies. Only property taxes imposed for “general public welfare” are deductible⁵—if your town imposes a special assessment for a project that directly improves your property value, like a sewer line, that is not deductible. Furthermore, fees for local services, such as trash collection or sewer maintenance, are not deductible, even though your town may list them on the same bill as your property taxes.

There’s also a limit: the 2017 Tax Cuts and Jobs Act imposed a $10,000 cap on the total amount of state and local taxes (SALT)⁶ you can deduct. This includes state and local income tax (or sales tax) as well as property taxes.

Finally, be aware that the amount you deduct must match the amount actually paid to the tax authority.⁷ This might differ from what you put into escrow if you pay property taxes through your mortgage lender. Typically, the amount your lender paid to your tax authority is listed on Form 1098.

Home Equity Loan Interest

You can deduct the interest paid on home equity loans or home equity lines of credit, but with a significant caveat. Since 2017, that interest is only deductible if the loan proceeds are used to buy, build, or substantially improve³ your primary residence or second home, and the loan is secured by the home.

If you use the home equity loan for other purposes, such as a vacation, debt consolidation, or purchasing a car, the interest is generally not deductible. If you use part of the loan or line of credit for eligible purchases, and part for non-eligible purchases, only interest incurred on the portion used for eligible spending is deductible.

Loan interest is also not deductible if the funds are used for home improvement projects or repairs that do not “substantially improve” your home. Smaller projects, like repainting or new cabinets, likely do not qualify. However, projects like building an addition, a full kitchen remodel, or installing a new roof should qualify as substantial improvements.⁸

It’s also important to note that home equity loan and HELOC interest rate deductions are subject to the same upper limits³ as mortgages (and are added together with your mortgage for calculation purposes). For example, if you have a $500,000 mortgage and a $300,000 home equity line of credit—which together exceed the $750,000 limit for a married couple—you would only be able to deduct interest paid on the first $750,000 of those combined loans.

Home Improvement Expenses

You can’t usually deduct home improvement expenses directly.⁹ However, the money you spend on capital improvements (improvements that increase your home’s value) can help reduce your tax bill later. These expenses are added to your home’s “cost basis,”¹⁰ which reduces your capital gains tax when you eventually sell the house. Think of it this way: by keeping records of your home improvements, you’re essentially increasing the “price” you’re considered to have paid for your home, thus lowering your profit when you sell.

It’s important to note that not all projects qualify as capital improvement. Basic repairs and updates likely won’t qualify, while major additions and landscaping likely will (the considerations are the same as those used to determine whether home equity loan interest is deductible).

Beyond capital improvement, there are a few specific categories of home improvement that are deductible, including work on home offices (which is subject to specific limitations) and certain modifications for medical/accessibility reasons.¹¹

Energy-Efficient and Clean Energy Tax Credits

Certain energy-efficient home improvements can qualify you for valuable tax credits. Unlike deductions, which reduce your taxable income, tax credits directly reduce your tax bill, making them even more beneficial.

For qualifying energy efficiency expenses in the 2024 tax year¹², homeowners can claim up to 30% of qualified expenses on their federal tax return, with a maximum credit of $3,200.¹³ However, some qualifying expenses, like new exterior doors and windows, come with their own maximum credit limits, so it’s essential to check the specific rules.

Another option is the Residential Clean Energy Tax Credit, which offers a 30% credit for the cost of installing renewable energy systems, such as solar panels, on your primary residence or a second home that you use part-time and don’t rent out.¹³ Many states also offer their own tax deductions, rebates, or credits related to energy efficiency and clean energy, so be sure to investigate what’s available in your state.

Selling Your Home and Taxes

When you sell your home, the difference between the selling price and what you originally paid for it (plus any major improvements) is called your capital gain. Think of it as your profit from the sale. Let’s walk through a simple example:

Imagine you bought your home for $200,000. Over the years, you invested in some significant upgrades, like a kitchen remodel ($30,000), a new roof ($15,000), and landscaping ($5,000). These are called “capital improvements,” and they increase your home’s “cost basis”—essentially, what the IRS considers you to have invested in the property. In this case, your adjusted cost basis would be $250,000 ($200,000 original price + $50,000 improvements).

Now, let’s say you sell your home for $350,000. Your capital gain would be $100,000 ($350,000 selling price – $250,000 adjusted cost basis).

Capital Gains Exclusion

The good news is that the IRS allows you to exclude a significant portion of your capital gain from taxation!¹⁴ If you’re single, you can exclude up to $250,000, and if you’re married filing jointly, you can exclude up to $500,000. To qualify for this exclusion, you need to have owned and used the home as your primary residence for at least two out of the five years before the sale. This is a key factor to consider when deciding how long you plan to live in a home.

Essentially, this exclusion means that, in many cases, homeowners won’t owe any capital gains tax when they sell their primary residence. It’s a valuable tax benefit that can significantly impact your finances. Keep good records of your purchase price and any capital improvements you make to ensure you can accurately calculate your capital gain and take full advantage of the exclusion when you sell.

Record-Keeping Tips for Homeowners

Organized records are essential for taking advantage of tax deductions and credits. Keep all relevant documents, such as mortgage statements, property tax bills, and receipts for home improvements, readily accessible.¹⁵ It’s wise to keep both physical and digital copies (scan and save everything!). Store physical copies securely, perhaps in a safe deposit box. Keep all home-related records for as long as you own the home, plus at least three years after you file your tax returns for the year of the sale.

Conclusion

Homeownership offers numerous opportunities to save on taxes. From mortgage interest and property taxes to energy-efficient upgrades and capital gains exclusions, understanding these deductions and credits can significantly reduce your tax burden. Remember, this information is for general guidance only. Consulting with a qualified tax professional is invaluable for personalized advice.

Call to Action: Have questions about real estate or need a referral to a trusted tax advisor? Contact us today!

Note: This information is accurate as of February 2025 and is intended for general guidance only. Tax regulations are subject to change.

Sources:

1. IRS – https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025
2. Nerdwallet – https://www.nerdwallet.com/article/taxes/mortgage-interest-rate-deduction
3. IRS – https://www.irs.gov/forms-pubs/about-publication-936
4. IRS – https://www.irs.gov/forms-pubs/about-form-1098
5. IRS – https://www.irs.gov/faqs/itemized-deductions-standard-deduction/real-estate-taxes-mortgage-interest-points-other-property-expenses/real-estate-taxes-mortgage-interest-points-other-property-expenses-5#:~:text=The%20total%20deduction%20allowed%20for,taxes%20or%20sales%20taxes)%20is
6. IRS – https://www.irs.gov/taxtopics/tc503#:~:text=Overall%20limit,your%20other%20itemized%20deductions%20also.
7. TurboTax – https://turbotax.intuit.com/tax-tips/home-ownership/claiming-property-taxes-on-your-tax-return/L6cSL1QoB
8. Bankrate – https://www.bankrate.com/home-equity/home-equity-loan-tax-changes/#how-to-claim
9. USNews – https://realestate.usnews.com/real-estate/articles/are-home-improvements-tax-deductible
10. IRS – https://www.irs.gov/publications/p523
11. NOLO – https://www.nolo.com/legal-encyclopedia/what-home-improvements-tax-deductible.html
12. USNews – https://money.usnews.com/money/personal-finance/articles/how-consumers-can-save-with-the-new-climate-tax-breaks
13. IRS – https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
14. Bankrate – https://www.bankrate.com/real-estate/capital-gains-tax-on-real-estate/#avoiding-during-home-sale
15. NOLO – https://www.nolo.com/legal-encyclopedia/tax-reasons-keep-good-records-home-improvements.html

 

Ask any homeowner about what they would like to change about their home, and most will say, “How much time do you have?

Home improvements (cue Tim Allen) or home remodeling projects can stem from a variety of motivations, like preparing your home to put on the market, adding space for a growing family, addressing outdated features or aesthetics, or fixing structural/functional issues with the home.

However, when it comes to home remodeling projects, too many people assume their project will proportionally increase the value of their home. Few consider the complete scope of return on investment (ROI), considering not only potential impact on resale value but also the total costs of time, labor, and materials. Some renovations may provide more “quality of life” ROI by improving comfort and aesthetics without significantly impacting resale value, while others can deliver notable financial returns.

Whether you’re looking to upgrade your living space, increase the equity of your home, or try to make some quick changes to improve your resale price, here are four remodeling projects with the highest ROI and some tips on how to get them done.

Before diving into specific projects, it’s important to understand how the data supporting these ROI estimates was gathered. This article references findings from the 2024 Cost vs. Value Report conducted by Zonda Media, a reputable research firm in the real estate and construction industries. The report’s ROI figures are based on national averages for both the cost of materials and labor, which means that regional differences may lead to variations in actual returns.

1. Garage Door Replacement

• Job Cost: $4,513
• Resale Value: $8,751
• ROI: 193.9%

Replacing an old garage door is one of the simplest ways to dramatically boost your home’s curb appeal—and it happens to deliver the highest ROI of any remodeling project. The impact is largely due to the prominent visual space a garage door occupies on a home’s exterior. A sleek, modern garage door can make your entire facade look fresher and more attractive to buyers.

Garage doors with the highest ROI include insulated steel doors with modern paneling, custom carriage-style doors, and those featuring windows or decorative hardware. These options not only enhance the home’s exterior aesthetics but also improve functionality and energy efficiency.

2. Steel Entry Door Replacement

• Job Cost: $2,355
• Resale Value: $4,430
• ROI: 188.1%

Upgrading to a steel entry door is a simple yet impactful change that can drastically improve both the look and energy efficiency of your home. Steel doors cost less than wood ones, giving you a cost effective way to make a big impact on the curb appeal of a home, without sacrificing performance, life span, or durability.

Why It Works:

• Cost-Effective Curb Appeal: Steel doors are less expensive than wood but provide a similar aesthetic boost. This makes them a budget-friendly way to enhance a home’s exterior.
• Energy Efficiency: Many steel doors come with insulating cores, which can help keep your home comfortable year-round and lower energy bills.
• Increased Security: Steel doors are harder to break into, providing an added layer of safety that appeals to security-conscious buyers.

3. Manufactured Stone Veneer

• Job Cost: $11,287
• Resale Value: $17,291
• ROI: 153.2%

Manufactured stone veneer (MSV) is a high-ROI project because it delivers a striking visual upgrade at a relatively moderate cost. MSV is an artificial cladding material designed to mimic the look of natural stone, making it a cost-effective way to add texture and sophistication to your home’s exterior.

Why It Works:

• Strong Visual Impact: Stone veneers add depth and elegance, creating an upscale appearance that can significantly boost curb appeal.
• Durability and Low Maintenance: Unlike natural stone, MSV is lightweight, easier to install, and resistant to wear and tear.
• Perceived Value: Even though it’s a faux material, MSV adds an air of luxury and craftsmanship that can make your home more appealing to buyers.

Pro Tip: Use manufactured stone veneer to accentuate specific areas, such as around the entryway or along the lower portion of the facade, for maximum visual impact without overspending.

4. Minor Kitchen Remodel (Midrange)

Job Cost: $27,492

• Resale Value: $26,406
• ROI: 96.1%

According to Homelight’s “Top Agent Insights End of Year 2024 Report”, “88% of agents say that upgraded kitchens and appliances are one of the best selling points for homes”–a significant increase from the previous year. https://homelightblog.wpengine.com/wp-content/uploads/2024/12/homelight-top-agent-insights-end-of-year-2024-report.pdf

The trick to ROI with a kitchen remodel is the budget, and how you decide to balance what to upgrade, the quality of materials, and how much to work within the existing layout. For example, you can make a big impact with less expense if you keep your current cabinet boxes but upgrade the doors and hardware. However, if you strike that balance, you can recoup much of your investment. If you’re looking to sell, an updated kitchen will appeal to buyers, which can also help your home stand out and sell faster.

Why It Works:

• High Buyer Interest: Kitchens are a focal point for most buyers, so even modest improvements can make a significant impact.
• Affordable Upgrades: By focusing on midrange materials—such as quartz countertops, midrange appliances, and refaced cabinets—you can keep costs manageable while still delivering a fresh look.
• By keeping the existing layout and avoiding costly structural changes, you can modernize your kitchen while keeping costs down.

Key Takeaways for Homeowners

7 out of the 10 best ROI projects all have to do with improvements to the exterior of your home, which makes one thing very clear: Boosting the curb appeal of your home in a cost-effective manner will give you the best ROI if you’re thinking about selling this year.

If you look at the current housing market, you can start to see why that is. In the post-pandemic frenzy, buyers had to accept whatever they could find. However, housing inventory has increased over the last couple of years, giving buyers more options. Additionally, due to high-interest rates and affordability issues, the current market favors older, move-up home buyers who are sitting on equity, and these buyers can afford to be pickier about the home they buy.

You can see these trends play out in the “Top Agent Insights End of Year 2024 Report” conducted by HomeLight:

 

Given these trends, it’s no wonder that the remodeling projects with the best ROI are those that make the home stand out from other homes in the area and leave a strong impression with potential buyers.

Conversely, the projects with the lowest ROI involve major remodels or upscale materials. Anytime you alter the footprint of a home—such as by moving walls or adding square footage—you’ll incur higher costs and lower returns. Unless you’re a general contractor or a skilled DIYer, these high-end renovations typically aren’t worth it from a purely financial perspective. The one caveat is if you’re in a market where high-end appliances and materials are the rule not the exception.

How to Get Started on a Remodeling Project

Starting a remodeling project can feel overwhelming. Here’s how to set yourself up for success:

1. Outline Your Project Goals
   Before you dive into the nitty-gritty of remodeling, take a step back and clarify what you hope to achieve.Are you remodeling to improve aesthetics? To improve functionality or comfort for your family? To prepare your home for the market or boost your resale value? Is it an essential repair? After you decide on why you’re doing it, you can take a step back and decide what is worth the cost to you.
2. Get inspired: Take time to gather ideas and give shape to your vision. Whether you’re updating a single room or tackling a whole-house remodel, these resources can inspire you:
   • Houzz – A go-to platform for home remodeling ideas, complete with photos, product links, and even local contractor recommendations.
   • Pinterest – Create mood boards for different rooms by pinning your favorite designs and layouts. You can also add ‘-pinterest’ to Google searches to find more targeted boards and collections of remodeling ideas on Pinterest.
   • This Old House – Packed with articles, videos, and guides on home renovation projects, from DIY fixes to large-scale remodels.
   • YouTube Channels: Follow popular home renovation YouTubers who share real-life projects, product reviews, and practical tips.
   • Visit Local Showrooms: You can visit the showrooms or warehouses from local manufactures for ideas on fixtures, cabinetry, and counter tops.
   • Open Houses – Stop by open houses in your area to get a feel for what’s popular and what other homeowners have done.
   • Local Remodeling / Contractor Websites: Many will post galleries and before/after images of their renovations, and these galleries can be a goldmine for practical remodeling ideas!
3. Prioritize your wants vs. needs: Once you’ve gathered ideas, it’s time to separate the essentials from the extras.
   • Must-Haves: These are the non-negotiable items—structural fixes, code-compliance upgrades, or critical repairs.
   • Nice-to-Haves: These are aesthetic choices or features that you’d like to include if your budget allows.A prioritized list will help you make tough decisions if costs start to climb or timelines get tight.
4. Create a scope and timeline: Clearly defining what’s included (and excluded) in your remodel is critical for staying on schedule and within budget.
   • What’s Included: Are you only updating finishes and fixtures, or are you changing the layout and moving walls?
   • Project Phases: If you’re remodeling multiple areas, consider breaking the project into phases to manage timelines more effectively.
   • Expected Timelines: Be realistic about how long the project will take, especially if you’re working around major life events or seasonal weather.
5. Set a realistic budget: Start by researching the typical costs for your specific type of remodeling project in your area. Resources like Remodeling Magazine’s Cost vs. Value Report, HomeAdvisor, and NAHB provide national and regional averages for popular renovations like kitchens, bathrooms, and additions.
6. Include a Contingency Fund: Even with thorough planning, unexpected costs seem to always arise. Many experts recommend setting aside 15% – 30% of your total budget for contingencies.
7. Research contractors & Get Multiple Quotes: If you’re hiring contractors, request at least three detailed quotes to compare prices and scope of work. Make sure to clarify what’s included in each quote to avoid misunderstandings. And use your checklist below for some tips on hiring a contractor!

Checklist for Hiring a Contractor

Finding the right contractor is crucial for a successful remodeling project. Here’s a quick checklist to help you hire the right professional:

• Get recommendations from friends, family, neighbors, and your real estate agent. Word of mouth is one of the most reliable ways to find a trusted contractor. Ask people you trust about their experiences and if they would hire the contractor again. After you have a recommendation, you can also search for reviews online.
• Check credentials, licensing, and insurance. Verify that the contractor is licensed to work in your state. Most states have an online database for checking contractor licenses. You can also look for contractors certified by reputable organizations, such as the National Association of the Remodeling Industry (NARI).
• Review past projects and ask for client references. Ask to see a portfolio of previous projects similar to yours. Pay attention to the quality of work and whether their style aligns with your vision.
• Request detailed bids from multiple contractors. Ask for written estimates that break down costs into categories such as labor, materials, permits, and any additional fees. Compare bids carefully to ensure all contractors are quoting on the same scope of work.
• Ensure the contract includes a clear scope of work, timeline, and payment terms.
• Check references – A reputable contractor should have no issue providing references. Contact past clients and ask about their experience.
• Avoid red flags
  • Unusually Low Bids: If a bid is significantly lower than others, it could indicate corner-cutting or hidden costs.
  • Pressure to Pay Upfront: A small deposit is normal, but never pay the full amount before work begins.
  • Lack of Written Contract: Never agree to verbal agreements only.
  • Poor Communication: If a contractor is difficult to reach or dismissive during the bidding process, this may continue during the project.

Conclusion

Whether you’re updating your home to sell or simply want to enjoy a more modern space, focusing on high-ROI projects is a smart strategy. From replacing your garage door to enhancing your home’s exterior with stone veneer, these upgrades can boost both your home’s value and appeal.

Curious about what features are popular in your neighborhood? Thinking of moving and wondering what remodeling projects, if any, you should do before listing? Want recommendations on contractors? I’m happy to help!

 

 

(AND WAYS TO MOVE PAST THEM)

Dreaming of a new home but feeling priced out? You’re not alone! According to a recent survey by Backdate, 78% of aspiring Home Buyers cite affordability issues as their primary deterrent.

According to data from the U.S. Census Bureau, home prices have risen around 32% since the pandemic. Elevated mortgage rates have caused monthly payments to balloon.²

Despite the challenges, homeownership remains a top goal for many Americans. Fortunately, there are ways to turn your dreams of homeownership into reality! In this guide, we’ll explore five common roadblocks to affordable homeownership and actionable solutions to help you overcome them. Let’s break down those barriers so you can finally get the home of your dreams!

ROADBLOCK #1: I Don’t Have Enough Saved for the Down Payment

Many prospective buyers believe they need a 20% down payment to buy a home. But most conventional loans need just 3-5%. And, for buyers who qualify, there are several programs and mortgage options that can make a home acquisition more accessible.

Down Payment Assistance Programs

DPAs offer grants, loans, and other financial assistance to help with your down payment and closing costs. Many programs are specifically designed for first-time buyers, but there are also options for repeat home buyers. These programs can significantly reduce the upfront costs of buying a home. We can help you find down payment assistance programs. Contact us to find out if you can qualify!

0% Down Government-Backed Mortgages
If you qualify for certain government-backed mortgages, you do not need a down payment. Some programs allow buyers to secure a loan without upfront costs. These loans are offered by the Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA). They are not available to all buyers. But, they do offer various benefits. These benefits include competitive rates and no down payment necessity.

• VA loans are available to U.S. military members, including veterans and surviving spouses. They do not need a down payment, though the buyer must pay a fee at closing.
• USDA loans are available for moderate and low-income buyers in certain rural areas. They do not need a down payment.

Family Gifts

Twenty-five percent of first-time buyers in 2024 reported receiving down payment gifts. They got these gifts or loans from family members or friends. In fact, an increasing number of Baby Boomers are choosing to give all or part of their heirs’ inheritance early. They prefer to do this before they pass away. Some financial advisors even recommend this as part of their client’s estate plan. Be sure to follow the proper procedures. It’s important to document these types of gifts.

Existing Home Equity

You have more equity in your home than you realize. This is due to record-high real estate gains over the past few years. If you already own a home, this equity is can be significant. This equity can go toward a down payment on a new property. Wondering how much equity you have in your current home? Reach out for a free home value assessment.

ROADBLOCK #2: I Can’t Afford the Monthly Payment

Worried about those monthly mortgage payments? High interest rates and rising costs can make mortgage payments feel daunting. But there are strategies to reduce your monthly burden.

Explore Different Mortgage Terms

The traditional thirty year fixed-rate mortgage isn’t the only loan out there. Options like adjustable-rate mortgages (ARMs) or hybrid mortgages can offer lower starting rates. Some buyers choose these options if they plan to sell the home before the first rate term ends. Others opt to refinance down the road. A lower mortgage rate can significantly lower your monthly payment. But, it’s important to understand the risks involved so you can weigh the pros and cons before deciding.

Consider Discount Points

Buying discount points is a process also known as a permanent rate buy-down. It is another great way to limit your monthly costs. Essentially, this strategy involves prepaying a fee to lower your interest rate across the life of your loan. If a seller is especially motivated, they could be willing to pay discount points. This can help the buyer close the deal on a home. In some cases, we can help you negotiate these types of seller concessions.

Ask About Seller Financing or Assumable Mortgage

Here are two less common options you might not have considered:

• Seller Financing – The seller acts as the bank, offering you potentially better terms than a traditional mortgage.
• Assumable Mortgage – You take over the seller’s existing mortgage. Especially if it has a lower interest rate than what’s now offered by lenders.

Be aware that these options might not be possible for you. This depends on the seller, the home, and the type of mortgage. However, they are worth exploring. We can help.

Co-Buy with Family or Friends

A growing number of home buyers are returning to multi-generational living or are even buying a home with friends. This arrangement lets you cut costs significantly while sharing both the time and financial responsibilities of homeownership. We can help you search for homes that are well suited for your group.

Buy a Home with Income Potential

You can generate extra income to offset your mortgage payments. Consider purchasing a duplex or renting out a room. You might also rent an accessory dwelling unit, like a garage apartment, or even list your property on Airbnb. We work with investors and can help you find a property to meet your goals.

ROADBLOCK #3: I Can’t Qualify for a Mortgage

Qualifying for a mortgage can be a stressful process, especially if you have previously faced financial challenges. But you might be pleasantly surprised—there’s a lot you can do to improve your chances of success.

Boost Your Credit Score

Your credit score is foundational when it comes to getting a mortgage. A higher score typically means a lower interest rate and more options. Take steps to improve your credit by paying bills on time, reducing debt, and checking your credit report for errors. Even a small improvement in your score can make a big difference. Pro tip: Avoid opening or closing credit cards. Do not take out other loans, like car or personal loans, if you plan to start home shopping soon.

Lower Your Debt-to-Income Ratio

Lenders want to see that you can comfortably handle your debts. They assess this by calculating your debt-to-income ratio. This ratio is your total monthly loan payments. It includes mortgage, car loans, student loans, and credit cards. These payments are divided by your gross monthly salary. Paying down other types of debt is important. Reducing your car loan will leave more space in your budget for a monthly mortgage payment.

Apply for an FHA Loan

FHA loans are designed for buyers with less access to savings, as well as those with lower credit scores. Down payments on FHA mortgages can be as low as 3.5% with a credit score of 580 or above, or 10% with a credit score of 500 or above. Generally, the buyer’s debt-to-income ratio must be below 43%, with no more than 31% of income going to mortgage payments. These loans do come with some additional requirements, such as mortgage insurance (including an upfront premium of 1.75% at closing), a pre-purchase inspection, and borrowing limits that vary based on geographic area.

Consider Getting a Co-Signer

Having a co-signer with a stronger credit history or more income can strengthen your application. Still, you must make sure that they understand the risks and responsibilities involved.

ROADBLOCK #4: I Can’t Find a Home in My Price Range

Feeling frustrated by the lack of affordable homes on the market? Unfortunately, this is a common problem. But with a little flexibility and guidance, it’s possible to find a great property to fit most budgets.

Expand Your Home Search

You may need to search outside your target area. In many markets, home prices vary drastically within the span of miles. Being open to exploring alternative neighborhoods or those farther from town can uncover surprising possibilities. As local market experts, we can help you discover hidden gems and up-and-coming neighborhoods. Reach out for a complimentary consultation.

Revisit Your Must-Haves

Take a close look at your “must-have” list. Are there any features you can compromise on to expand your options and find a more affordable property? For example, do you really need two bathrooms? Or would you settle for a single bathroom with space to add a second one in the future?

These types of compromises can sometimes shave tens of thousands off your purchase price. We’re happy to offer our thoughts on the features that you’re likely to find within your budget.

Consider Fixer-Uppers

Looking to cut purchase costs? Don’t shy away from homes that need a little TLC. Fixer-uppers usually come with a lower price tag, and you can personalize the renovations to your taste. Just be sure to factor in the cost of repairs and renovations when determining your budget. Also, be realistic about your own home repair skills! If you’re interested in exploring fixer-upper opportunities, we can help you spot properties with potential. We can also connect you with reliable contractors.

ROADBLOCK #5: I’m Overwhelmed by the Process

Buying a home can feel like navigating a maze. Between searching for properties, securing financing, negotiating contracts, and handling paperwork, the process can quickly become overwhelming. But you don’t have to do it alone! We can simplify every step, helping you stay organized, informed, and confident in your decisions.

Find the Right Home Faster

The sheer number of listings on the market can be daunting. Homes that meet your criteria may not always be easy to find. Our team can:

• Save your time by narrowing down homes that fit your budget, needs, and lifestyle.
• Get access to off-market and pre-listing properties that aren’t widely advertised.
• Provide insights into local market trends to help you make a competitive offer.

Navigate Financing & Paperwork with Ease

Real estate transactions involve complex contracts, legal documents, and lender requirements. One misstep could delay your purchase and might even cost you your dream home.

We will:

• Help you find down payment assistance or grants that you may not be aware of.
• Explain mortgage options and connect you with reputable lenders.
• Make sure all purchase documents are accurate, and deadlines are met.

Score the Best Deal

Many buyers worry about overpaying for a home or getting stuck with costly repairs, but we know how to:

• Use expert negotiation tactics to secure the best possible price.
• Find hidden costs so you aren’t caught off guard at closing.
• Negotiate repairs or seller concessions to save you money.

Streamline Inspections & Closing

The home inspection and closing process can bring last-minute surprises. We avoid these by:

• Helping you interpret inspection reports and advising on necessary repairs.
• Coordinating with lenders, appraisers, and title companies to keep everything on track.
• Preparing you for closing day so you know exactly what to expect.

Benefit From Ongoing Support

Our relationship doesn’t end once you get the keys. We always go the extra mile to:

• Recommend trusted contractors for renovations and repairs.
• Help you make strategic upgrades through complimentary real estate consultations.
• Provide market updates in case you want to refinance or sell later.

The bottom line? You don’t have to navigate this process alone. When you work with us, you’ll have a trusted partner to handle the complexities. We will answer your questions and make sure everything goes smoothly from start to finish.

LET’S TURN ROADBLOCKS INTO STEPPING- STONES TOWARD YOUR DREAM HOME!

Buying a home may come with challenges, but none of them are impossible to overcome. With the right strategies, resources, and expert guidance, you can navigate these obstacles with ease.

You could be worried about saving for a down payment. Qualifying for a mortgage or finding the right home in your price range can also be concerns. There are solutions available to help you move ahead. The key is to stay informed. Explore all your options. Work with professionals who can guide you every step of the way.

Our team is here to help you find the right home. We will secure the best financing. We will also negotiate the best deal for you. You can do this without the stress and uncertainty of doing it all yourself. Let’s turn your homeownership dreams into reality. Contact us today to get started!

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice about your individual needs.

SOURCES:

1. Bankrate –
   https://www.bankrate.com/mortgages/home-affordability-report/#unaffordability
2. Nerdwallet –
   https://www.nerdwallet.com/article/mortgages/2025-home-buyer-report
3. Bankrate –
   https://www.bankrate.com/mortgages/first-time-homebuyer-grants/#types
4. Down Payment Resource –
   https://downpaymentresource.com/
5. Bankrate –
   https://www.bankrate.com/mortgages/types-of-mortgages/#government-backed
6. Bankrate –
   https://www.bankrate.com/mortgages/understanding-va-loans/
7. Bankrate –
   https://www.bankrate.com/mortgages/what-is-a-usda-loan/
8. National Association of Realtors –
   https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
9. Business Insider –
   https://www.businessinsider.com/boomers-not-waiting-pass-inheritance-wealth-transfer-millennials-need-it-2024-7
10. Experian –
    https://www.experian.com/blogs/ask-experian/down-payment-gift-rules/
11. Bankrate –
    https://www.bankrate.com/home-equity/homeowner-equity-data-and-statistics/
12. Nerdwallet –
    https://www.nerdwallet.com/article/mortgages/adjustable-rate-mortgage-arm
13. Lending Tree –
    https://www.lendingtree.com/home/mortgage/what-is-a-hybrid-mortgage/
14. Investopedia –
    https://www.investopedia.com/terms/d/discountpoints.asp
15. Lending Tree –
    https://www.lendingtree.com/home/mortgage/what-to-know-about-owner-financing/
16. National Association of Realtors –
    https://www.nar.realtor/blogs/economists-outlook/home-for-the-holidays-the-rise-of-multi-generational-home-buying
17. Consumer Financial Protection Bureau –
    https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/
18. Nerdwallet –
    https://www.nerdwallet.com/article/mortgages/debt-income-ratio-mortgage
19. Bankrate –
    https://www.bankrate.com/mortgages/what-is-an-fha-loan/#requirements
20. Bankrate –
    https://www.bankrate.com/real-estate/low-inventory-housing-shortage/
21. Realtor –
    https://www.realtor.com/advice/buy/priced-out-of-dream-neighborhood-cheaper-alternative/