What Factors Determine Your Home's Resale Value? Let's Take a Look

There are several factors that will help you determine the value of your home when you want to sell it. Location, condition, layout, upgrades, and events relating to your home are all important when selling your home.

It's All About Location

Anyone in real estate will tell you location, location, location is the first thing to consider when buying real estate. If your home is on a busy street, it’s going to be harder to sell unless someone is looking for that exact location.

If a buyer is looking to have a business inside the home, then having more exposure could be important. However, for a family, the most sought after location is in a cul-de-sac or dead-end street where traffic is kept to a minimum.

Your Home's Condition Is Important

The home you are selling must be in excellent condition to ensure you get top dollar. Buyers are primarily looking for a home that is in move-in condition. If it needs painting, new flooring, a new roof, or new plumbing, it isn’t as desirable as a home that doesn’t need any work. Newer homes typically are in better condition than older homes, unless they have been well-maintained.

Your Home's Layout

Is your floorplan functional? Most buyers prefer homes with open floorplans and ample kitchens, living areas, and bathrooms. Closets are also important as everyone needs storage space. The number of bedrooms a home has can also be important. Two bedrooms aren’t as popular or functional as three or four bedrooms. It’s also nice to have a flex room that can be a study, exercise room, or a formal dining room if need be. If a smaller home is well-designed, it can be easier to resale than a larger home.

Upgrades And Renovations

If you have an older home, but have upgraded the kitchen and bathrooms, then your home will be easier to sell. Updated appliances can also be a big plus when selling a home.

Natural Disasters And Other Events

If your home has been flooded, been through a fire, or damaged from wind or a storm, then that may cause the value to be less. If a buyer happens to talk to a neighbor who tells them a negative story, that may spook a buyer and cause them to look elsewhere.

Buying a Second Home? Assessing Your Finances to Ensure You Can Afford a Second Mortgage

The decision to buy a second home may be made for a number of reasons. For example, you may have a destination where you and your family love to spend free time in, and you may be ready to settle into your own space in this location. You may considering the tax benefits associated with a second home, and you may even have plans to live in the home as your primary residence after you retire.

While there may be numerous benefits associated with the purchase of your second home, you may be concerned about how affordable it will be for you to manage the additional expense of a second mortgage payment.

Consider All Of The New Expenses Related To The Purchase

A second mortgage payment may be a rather major expense to take on, but it is not the only expense related to buying the new property. In order to ensure that the mortgage payment is affordable, you need to ensure that all aspects of secondary home ownership are affordable for you.

For example, consider HOA dues, repairs and maintenance expenses, property taxes, insurance and cleaning or lawn care service since you will not be available to handle these chores on a regular basis. If you can comfortably take on all of these expenses, you may make your purchase with confidence.

Increase Your Emergency Savings Account Balance

While your current budget may easily accommodate the new mortgage payment and the related expenses, the unfortunate truth is that your income or expenses may not remain static in the future. You may suffer from unemployment or a serious illness that reduces your income. You may have extra expenses due to a car accident or severe damage to a home.

These are just a few of the many things that can happen, and it is important that you have an adequate cash reserve in your emergency savings account that allows you to pay for all of your expenses for at least several months. Because your expenses will increase substantially with your new mortgage payment, you may need to increase your emergency savings account balance.

While it can seem intimidating to take on a new mortgage payment and other related household expenses for a second home, you may be able to more comfortably take on this additional expense when you follow these tips. You may also speak with a mortgage professional to get a quote for your new mortgage payment and interest rate.

What's Ahead For Mortgage Rates This Week - March 2, 2015

Last week provided several housing-related reports including New Home Sales, Pending Home Sales and Existing Home Sales reports. Case-Shiller and FHFA also released data on home prices. The details:

Sales of Pre-Owned Homes Hit Nine-Month Low

According to the National Association of Realtors® (NAR), Sales of pre-owned homes dropped to a seasonally-adjusted annual reading 4.82 million sales in January as compared to an estimated reading of 4.95 million sales and December's reading of 5.07 million existing homes sold. This was a month-to-month decline of 4.90 percent, and represented the lowest reading for existing home sales in nine months.

Lawrence Yun, chief economist for the NAR, said that a short supply of available homes coupled with rising prices contributed to the drop in sales. While mortgage rates remain near historical lows, higher home prices and short supply are negatively impacting affordability; this puts home buyers who rely on mortgages in competition with cash buyers.

More encouraging news arrived with the Commerce Department's new home sales report; new home sales reached 481,000 sales on a seasonally-adjusted annual basis in January. Analysts had expected new home sales of 467,000 new homes based on December's reading of 482,000 new homes sold in December.

Pending Home Sales Highest Since August 2013

The National Association of Realtors® reported that pending home sales rose by 1.70 percent in January as compared to December's reading of -3.70 percent. Pending sales were up 8.40 percent year-over-year. Job growth, a little more leniency in mortgage credit standards and slower inflation were seen as factors that contributed to higher pending sales. Pending sales represent under sales contracts that have not closed.

Case-Shiller, FHFA Post Home Price Data

The Case Shiller 20-City Composite reported that home prices rose by 0.10 percent month-to-month and 4.50 percent year-over-year according to its index report for December. San Francisco, California had the highest year-over-year price gain at 9.30 percent, while Chicago, Illinois had the lowest year-over-year home price appreciation rate at 1.30 percent as of December.

FHFA reported that home prices for properties connected with Fannie Mae and Freddie Mac loans rose by 5.40 percent on a year-over-year basis as compared to November' year-over-year reading of a 5.20 percent increase in home prices.

Mortgage Rates Rise

Freddie Mac reported that average mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by four basis points to 3.80 percent; the average rate for a 15-year fixed rate mortgage increased by two basis points to 3.07 percent and the rate for a 5/1 adjustable rate mortgage was also two basis points higher at 2.99 percent. Discount points for all loan types were unchanged at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

What's Ahead?

This week's scheduled economic news includes consumer spending, construction spending and the Labor Department's non-farm payroll and national unemployment reports. Weekly jobless claims and Freddie Mac's PMMS report on mortgage rates will be released as usual on Thursday.