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After your down payment, closing costs, and other additional fees, buying a home adds up. But there are some pretty great benefits to being a homeowner too. These tax deductions can potentially save you thousands of dollars when all is said and done. Let's take a closer look at seven of them and what they mean for you. 

#1 Mortgage Interest

Do you have a mortgage? Great. You will definitely want to take advantage of this one. Part of your monthly payment works to cover what you've borrowed, but another part of it is dedicated to paying off interest. 

As a single or married homeowner that is filing jointly, you can deduct interest that is paid on up to $750,000 of your balance. If you are married but choosing to file separately –  up to $375,000 each. 

Remember, if you purchased your home between October 14, 1987, and December 15, 2017, you can deduct interest paid on up to $1 million, and before October 14, 1987, all interest paid. 

#2 Home Equity Loan Interest 

What is a home equity loan? In essence, it is a second mortgage on your home. Taking out a home equity loan gives you the ability to borrow funds based on the equity you've built in your home as collateral.

If your home is worth $500,000, and you still owe $400,000, you have $100,000 of equity. 

Similar to mortgage interest, you can deduct interest from your home equity loan as well. 

#3 Property Taxes

Depending on where you live, property tax deductions can be very profitable. If you are single or married filing separately, you may deduct $5,000 each per year. If you are married and filing together, you may deduct up to $10,000 per year. 

#4 Discount Points 

Discount points are an optional aid you have at the time of closing to lower the interest rate on your loan. How does it work? One discount point equals 1% of the mortgage amount. 

If you chose to purchase these discount points at the time of closing, there is a good chance that the money you paid is tax deductible. 

#5 Mortgage Insurance (PMI)

Private mortgage insurance, or PMI, is a type of insurance that protects the lender if, for some reason, you stop paying on your loan. Depending on your annual income, it can be deducted on your itemized tax return. 

#6 Necessary Home Improvements

Unfortunately, fun renovations to your perfectly-functional kitchen won't apply, but if you need to make improvements to your home on a more serious scale, you may be able to deduct the amount from your taxes. 

Some examples are capital improvements, energy efficiency improvements {depending on where you live}, or medical improvements, like adding wheelchair-accessible features, etc. 

#7 Home Office Expenses

Do you run your business from home? You may be interested in deducting home office expenses. This one is dependent on a few specific factors. 

- Are you using the space exclusively to run your business?

- Are you using the space regularly?

- How large is your space in comparison to the rest of your home?

- Do you actually run the business? {Does not count if you are working from home for an employer}

As you can see, there is a pretty fine line here, but if it applies to you, it is definitely worth looking into. 

We hope this blog gave you a better understanding of some of the tax deductions you can take advantage of as a homeowner. Talk to a tax professional or an experienced real estate agent with further questions about tax deductions. 

Real estate agents at The Masiello Group are eager to let their experience work for you. 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

You can find more information on today's market and other real estate trends by reading our blog weekly at


Your renting days are over, and you feel ready to take on the journey of homeownership. But before you can commit to finding your dream home, there are a few things you might want to address. Having worked with first-time buyers like you for over 50 years, we have found these questions to be some of the most vital. 

Q: Am I ready to buy a home?

This may seem like an obvious one, but all the same important. Why? Because becoming a homeowner means taking on new responsibilities, and that shouldn't be taken lightly. Here are a few follow-up questions to help determine your readiness. 

- Am I ready to maintain a home?

- Do I have a steady income/stable employment?

- Do I have a positive history of paying bills?

- Have I saved for/am I prepared to make a down payment?

- Can I afford a mortgage, taxes, utilities, and insurance?

- Do I qualify for a mortgage? 

If you were able to answer these questions with confidence – great! You're ready to move on to our next FAQ. 

Q: How much do I need for a down payment?

The amount you put down is dependent on your lender but generally falls between 5-20%. In a perfect world, everyone would put down 20% because of benefits like these: lower monthly payments, better interest rates, and a competitive edge over other potential buyers. 

But if you can't put 20% down – or even close to that amount – don't panic. There are many programs available to assist you. 

Talk to your lender to come up with a plan that works for you. 

Q: What is the difference between pre-qualified and pre-approved?

Two key steps in the mortgage application process are pre-qualification and pre-approval. Although you've probably heard the words used interchangeably, there are some important differences to note. 

First up – pre-qualification. Pre-qualification is meant to estimate how much you can borrow based on what you told your lender. This can be done over the phone or even online and doesn't take into account credit reports/history – meaning it doesn't hold as much weight as the pre-approval. 

Pre-approval is the final say. It provides a set-in-stone answer about how much you can borrow and what your interest rate will be. Here, you'll be required to complete and submit the necessary paperwork and documentation to paint a clearer picture of your borrowing capability.

Do you have to be pre-qualified and approved to start looking? The short answer is no, but it will save you from looking at homes that might be out of reach. 

Q: What are the homeowner's tax benefits?

A huge benefit of buying over renting is the tax benefits. Many first-time buyers are eligible for the following… 

Mortgage Interest

Home Equity Loan Interest

Discount Points

Property Taxes

Necessary Home Improvements

Home Office Expenses

Private Mortgage Insurance 

Capital Gains

We will take a deeper look at these benefits in a future blog post, but don't forget to talk to a tax professional before buying a home to discover which of these apply to you. 

Q: Do I need to work with a real estate agent?

Choosing to work with an agent is a no-brainer for a number of reasons, but especially for buyers because it costs nothing to gain everything. The right real estate agent will take time to learn your unique situation and help match you with a home you love. 

They can get you pre-approved, set up tours, negotiate offers, lead communication with the sellers' agent, tie loose ends at closing, and of course, celebrate when you find the one. 

They are even there to ensure you don't miss any unturned stones in the process. Things you may not even think of, they know to look into – like choosing the best home inspector in your area or helping you read and understand the report. 

Agents will take on the less glamorous parts of the process, making your experience easier and more enjoyable. 

We hope these FAQs helped you gain a better understanding of what to think about before buying your first home. Agents at The Masiello Group are eager and excited to help you meet your real estate needs! Contact us today to start your home-buying journey.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

You can find more information on today's market and other real estate trends by reading our blog weekly at


So, your offer on your new home has been accepted and is now in escrow—congratulations! If you aren't already familiar with the home-buying process, you might be asking yourself, "What exactly IS escrow?" In this blog, we'll explain what it means for your offer to be in escrow and what you can expect during that process.   

What Is Escrow? 

Escrow is a third-party service that is part of every real estate transaction. Once a buyer and seller arrive at a purchase agreement, they bring in a third party, the escrow agent. The escrow agent collects a deposit from the buyer that is a small percentage of the agreed-upon purchase price. In return, the seller takes the property off the market. Until the purchase process is completed, the property and the deposit are "in escrow."

Escrow timelines can vary, but most last 30 days. And while every sale is different, this timeline should give you a good idea of what to expect.

Week 1: Inspections and Disclosures

Inspections and disclosures are an important part of any home-buying venture. A general certified home inspection is the baseline, but the mortgage lender may also require additional, more specific inspections, like a pest inspection or a flood inspection. Inspections are typically ordered and paid for by the buyer. At the same time, the seller will provide any disclosures to the buyer. Disclosures describe any material defects or past issues with the property. 

Week 2: Decisions

During this week, there are several items that need final decisions made. First up is loan approval. Even if you're already pre-approved for a loan, at this stage in the game, your lender will prepare a "good faith estimate" detailing the loan amount, monthly payments, interest rate, and closing costs. During this time, you'll also review the appraisal report and seller disclosures. With all of this information, all parties involved will be able to decide if any adjustments need to be made to the purchase price, if there will be any repair requests, and finally, if you still want to go through with the purchase of the home.     

Week 3: Contingency Releases

Week 3 is all about meeting deadlines. At this time, you'll be responsible for signing a release of contingencies. There are many different types of contingencies—for example, making a purchase contingent on certain repairs being made. These contingencies should contain a time frame or action to release them. If you haven't signed a release of contingencies by the agreed-upon deadline, the seller can cancel the contract.   

Week 4: Final Details

Ideally, during the last week of the escrow timeline, all repairs will be completed, and any contingencies satisfied. (Timelines can always be adjusted, so don't panic if there's still a lot to do during week 2 or 3.) When everything is ready to go, you'll conduct a final walk-through to make sure that repairs have been made, check for items that will convey with the purchase (for example, kitchen appliances), and ensure that no damage has been done to the home in the meantime. After that, you can expect to sign a lot of documents and pay any costs related to the sale other than the purchase price. Your money that was held in escrow will be released and applied to the purchase of the home. The grant deed will be recorded at the assessor's office, and then—finally, get the keys to your new home!    

Whether your home-buying experience goes smoothly from start to finish or experiences some road bumps along the way, you'll want an experienced and knowledgeable real estate agent by your side. Agents at The Masiello Group can't wait to help you every step of the way.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at


House hunting is a fun and exciting process – but it also takes serious thought and consideration. There is a lot to think about, and adding kids to the mix forces you to see things from a different point of view. 

Whether you already have a family or are planning to start one in the future, there are a few additional considerations when searching for your perfect place. Here are a few questions to ask yourself to ensure you choose the right home for you and your loved ones. 

"What school district do we want to be in?"

Don't make the mistake of thinking you'll be able to talk your way into a school that's out of your district. It's a lot harder than one may think and will just be something else to worry about later down the road. 

Before you even begin your search, decide what school district you want to be in, and stick with homes in that area. 

Say you don't have a family yet but are hoping for one in the future. You might be wondering where to even start when choosing a school district. Here are a few things to look for.

- Upkeep of facilities

- Awards and recognition 

- Extracurricular activities offered

- Class size

- Rate of students attending higher education

- Community reputation

Most of these things can even be found through a simple Google search.  

"What is the crime rate in this area?"

As parents, we always want to do whatever we can to protect our kids. Taking an extra second to check on the crime rate in the area is well worth it – and we mean it when we say it only takes a second! 

Here are a few simple tools you can use to research the safety of your area. 

1) AreaVibes: Provides a liveability score of your zip code. 

2) CrimeReports: Provides up to date crime-reports in your area. 

3) NextDoor: Allows you to connect with your neighbors. 

4) Family WatchDog: Locates sexual offenders in your area. 

"What is there to do around here?"

When choosing an area to live, you want to be mindful of its proximity to amenities within the community. For example – do your kids play sports? How close is the ballfield or court? Is it a quick drive, or are you okay with traveling a bit to get there? 

How close is your grocery store of choice? 

If a spacious backyard isn't a big deal, will you want a park nearby for the kids to play outside? 

Figure out what activities are most important for your thriving family and how close you prefer them to be to your home.

"Does this floor plan make sense for us?"

What you need from a floor plan as a single person or couple differs greatly from what you may need from one as a family. If you have younger kids/babies, you may want a bedroom(s) near the master – or on the main floor to avoid going up and down the stairs. 

If the kids are a little older, you may want their rooms on the same floor so that they can be close to each other…{or not}! 

You know your family dynamic and what you need from a floor plan. Be picky about it, and don't compromise on what makes sense for you! 

"Are there any safety issues?" 

By "safety issues," we don't necessarily mean things that are addressed in the inspection. We're talking about things that are based again on your unique family dynamic. For example, families with small children want to look at the "baby proof-ability" of the home. {If there are large staircases or railings overlooking the lower level of the home, are you going to be able to fit a gate?} 

And remember – there are equal things to look for outside as there are inside! If a home is close to a body of water, like a pool, lake, creek, etc., is there a way to block children from getting out there on their own?

One last tip – Include your kids in the process! 

After you've taken the time to consider everything above, if there's a house that's checked all the boxes, bring your kids along for a tour! 

Making them feel included in the decision-making process goes a long way. They might even be able to point out something you've missed! Better yet – if they love the place just as much as you do, it'll be even more exciting when you make an offer! 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at


They say the best investments you'll ever make are in yourself and in your future – and what better way to do so than by investing in real estate?

As Franklin D. Roosevelt once said, "Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world."

We took a deeper look at why someone might want to invest and nailed down five big reasons. With benefits like these, the opportunity is hard to ignore. 

#1. You will see a steady cash flow. 

Did someone say extra income? We sure did. People choose to invest in real estate for the same reason they start any other side hustle – to generate cash flow. Whether you purchase a residential home or commercial property, you can rent it out to tenants or businesses on a monthly basis. Monthly checks will start to roll in and can be used to pay down your mortgage. After that's all squared away, you'll start racking in extra income month by month. If you can stay patient while this happens, the reward is so worthwhile! 

#2. There are tons of tax benefits. 

By purchasing real estate and renting it out, you can become a landlord…which makes you a business owner! What's so great about that? The tax benefits, of course! Here are just a few expenses you'll be able to write off as business expenses. 

- Mortgage interest

- Property taxes

- Maintenance costs

- Homeowners insurance

- Property management fees

- HOA dues

Don't forget to talk to your tax advisor to find out what else you might be able to write off as a real estate investor. 

#3. Real estate appreciates in value. 

Real estate appreciates naturally at an annual average of 3-5%. This means that without doing anything to your home – aside from maintaining it, of course – it will increase in value. This is unlike a car or machine, where your investment depreciates (loses value) over time.

This is great news for you, as an investor, for two reasons.

- Easier to rent to tenants

- Easier to sell in the long run with earned profit

But, you don't have to let it appreciate on its own. You can also force a property to appreciate by adding value yourself. 

This can be done through big and small renovations like these…

- Replacing the garage door

- Finishing the basement

- Updating light fixtures

- Minor room remodels

- Adding curb appeal 

What you put in is what you'll get out. The choice is yours! 

#4. Investing in real estate can help diversify your portfolio. 

A successful investor is one with a diverse portfolio. So, let's talk about why this is beneficial and how you can accomplish this through real estate.

Starting with why this is beneficial, it's really pretty simple. A diverse portfolio is going to do two key things for you. It's going to reduce risk and improve long-term returns. 

Investors can choose to put their dollars in numerous assets like stocks, bonds, cash, collectibles, real estate, and more. This culmination is what qualifies as an investor's portfolio. 

When you spread your investment dollars across multiple assets – real estate, for example – you can balance risky investments with less risky ones. Think of it like the old "don't put your eggs in one basket" mentality.

Here's what Mark Henricks from Yahoo had to say about this investment in particular. 

"Real estate is an especially effective asset for diversification because it is not tightly correlated to the securities markets. When stocks and bonds are down, that is, real estate may be up and vice versa. In this way, diversification helps investors minimize losses due to broad market trends."

#5. There are many different ways to invest. 

One of the most appealing things about investing in real estate is that there is no single, dead-set, one way to do it. You have numerous options and the ability to decide what will work best for you. 

Here are just a few ideas…

- Multifamily homes

- Commercial properties

- Vacation homes

- Land

- Duplexes (house hacking)

- Home flipping

- Investment groups/trusts

As you can see, there is a great deal of opportunity in the investment space if you are willing to put in the work. We hope that after reading this blog, you have a better understanding of why people invest and what that could look like for you.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at


Selling Your Home? These Simple Upgrades Can Increase Your Home's Value

Thanks to the pandemic, our lives have changed in the last couple of years. How and where we work, shop, and live in our homes have been centers of significant change and re-evaluation. Whether you're considering selling your home or just looking to improve your quality of life, it's more important to know what upgrades have the best return on investment and adds value to your home.

For example, a dedicated home office and outdoor entertainment and living spaces are coveted by buyers in a house for sale. This blog post will look at trending home improvements that can add value to a house for sale in 2022.

An Overview of 2022 Home Renovation Trends

We used surveys from real estate agents, expert data from the National Association of Home Builders (NAHB), and other industry experts to determine what home buyers are looking for in a house for sale in 2022.

Researchers estimate that total spending on remodeling projects in the U.S. could reach $430 billion by the second half of 2022. Growth is expected to taper in the third quarter due to rising costs of materials, labor, construction, and interest rates. A 7% annual inflation rate, the highest since 1982, is making everything cost more, including putting in new floors or refreshing a dated kitchen or bathroom.

According to a Remodeling magazine survey of real estate professionals, the average recoupment of 22 popular projects came in at about 60% nationally in 2021. That's down from 63.7% in 2020 and 66.1% in 2019. Some upgrades can add perceived and actual value to a house for sale if you're considering selling, making it stand out to buyers and offer a good return on your investment.

Home Improvement Projects That Add Value

The way we live in our homes has changed since the pandemic. Homebuyers are looking for specific features when touring a house for sale.

Buyers always appreciate space. However, over the past year, they want even more. The NAHB report What Home Buyers Really Want – 2021 Edition found that buyers wanted a median of 2022 square feet, about 8% more than they currently have. Specifically, 46% were looking for three bedrooms, 37% wanted two bathrooms, and 42% preferred a two-car garage. A 2020 survey of real estate agents found that 44% of buyers said the need for more space was their number one motivator. Another 31% cited the desire for more private outdoor space as a top motivation.

Here are some upgrades that will make your home stand out to buyers.

Major Upgrades

These can be pricey upgrades but make your home more appealing to buyers. If you're not ready to sell, these upgrades can improve your quality of life while adding to your home's resale value when it comes time to sell!

Build or Covert A Space into a Dedicated Home Office

The trend for remote work was growing before the pandemic. The need for home office space exploded as we were forced into working from home in the early days of the pandemic. Even as we slowly return to the office today, remote work is here to stay.

A 2021 survey by Home Light found that 60% of top agents cited a home office as a top priority. Today, buyers care about a home office more than whether a home is move-in ready. Some buyers are looking for multiple home offices.

Creating a new room or dedicating existing space for a home office is a good investment if your buyers telecommute. Home Light data from mid-2020 indicates that a home office adds over $10,000 in resale value. Today, that number might be even higher as the hybrid work model takes hold.

Options include converting a walk-in closet or building an accessory dwelling unit. The estimated value that an ADU adds has gone from $47,600 to $66,000 since pre-pandemic times.

Finish Your Basement or Attic

If you have an unfinished basement or attic, you have potential livable space future buyers can enjoy. Whether as a home office, a home theater, an extra bedroom, or an in-law apartment. according to HomeAdvisor, a finished basement between 400 and 1500 square feet has a potential ROI of 75%

Adding heated square footage bumps your house value to another level. Today, an unfinished basement adds $15,000 to $20,000 in value. A finished basement can add $40,000 to $50,000 to your asking price.

Open Your Floorplan

Buyers today love an open concept floorplan. People need a dedicated space to work, but they still want to entertain and enjoy time with family and friends. NAHB's survey found that 85% of buyers want an open floorplan between the kitchen and dining room. 79% prefer an open arrangement between the kitchen and family room.

While an open layout is great for adding natural light, you should speak with a contractor before knocking down any walls!

Exterior Upgrades

Simple exterior upgrades to your home's curb appeal can add significant value to your home. These affordable upgrades can grab a buyer's attention before opening the door!

Up Your Home's Curb Appeal

Curb appeal impresses buyers before they enter your home. Attractive landscaping implies you maintain your home. In fact, buyers will pay a 7% premium for a house with stunning curb appeal. The highest ROI for curb appeal is in the Northeast, where an investment of about $3600 for curb appeal upgrades can yield a $14,800 bump in resale value for a 309% ROI!

Basic lawn care like cutting the grass, fertilizing, and controlling weeds costs around $340 but offers a 539% ROI!

Update Your Garage Door

Is your garage door looking worse for wear? Is it a dated design compared to your neighbors? A new garage door is another inexpensive way to add value. According to Home Light, a new garage door costs around $1200 but can add an average of $2797 in resale value for a 133% ROI.

Add A Parking Spot

If you live in a city, or town where street parking is at a premium, consider adding a concrete parking pad. It costs around $1200 and is a considerable upgrade in the city. It's affordable and can add significant value and up your asking price!

Outdoor Living Upgrades

We've embraced the physical and mental benefits of being outdoors in the past few years. Today, outdoor living ranks third on the list of homebuyers' priorities, behind only a home office and excellent schools. Here are a couple of outdoor upgrades that can add resale value.

Add a Patio or Deck

A deck or patio is the centerpiece of an outdoor living space. It's a place to eat dinner, entertain, have a drink, or work outdoors on a beautiful day. A deck can add over $7000 in resale value. You can build a deck for around $4380 to $10,000, so you'll likely break even or see a positive ROI for this upgrade.

Put in a Fire Feature

54% of agents surveyed by Home Light said that 54% of their buyers cited having a fire feature, like a fire pit or outdoor fireplace, as a top priority. It's a great place to spend time with family and friends. An outdoor fireplace adds an average of $5700 in value.

Cook Al Fresco

Once reserved for luxury homes, today, everybody wants an outdoor kitchen! Along with a built-in grill, outdoor kitchens can include cabinetry, a bar, sink, and standard kitchen appliances. They can even include an outdoor flatscreen. The value of outdoor kitchens has increased since the pandemic. Pre-pandemic, an outdoor kitchen added $6100. An outdoor kitchen adds about $9800 in value in today's market.

Adding Value in a House For Sale

These are just a few upgrades and projects that can add significant value to a house for sale. If you're considering selling your home, simple improvements can add interest to buyers and drive up your asking price.

As you look around your home and consider which upgrades are worth the investment, first consider your quality of life. If you're planning on selling in the future large projects like adding square footage can enhance your current enjoyment of your home, but when you decide to sell, they can add resale value.

If you're planning on putting your house for sale, look at any upgrades from a potential buyer's perspective. Does your home lack the modern features and amenities that a remote professional needs to balance family, work, and relaxation? Maybe it's time to add a dedicated home office or outdoor kitchen. If you're not sure, speak with a local Realtor®. They can tell you what buyers in your area value most.


Winning a Bidding War and Buying A Home

Before the pandemic, the population growth of many cities in the U.S. with over 1 million people was stagnant or declining. As the pandemic peaked, smaller communities began to experience a growth surge as people, newly working from home, realized that they could live anywhere and chose to relocate away from cities.

As urban populations disperse, smaller metropolitan areas, suburban counties, and rural areas have experienced unprecedented demand for housing. This has caused many markets to heat up and become hyper-competitive. 

In a market where supply is low, and demand is high, it's not uncommon to find yourself in a bidding war as multiple offers push prices higher and higher. Add low mortgage rates to the mix, and you may find yourself edged out of the running several times when trying to buy a home!

While no single strategy can guarantee that you'll win a bidding war, there are several steps you can take to make your offer stronger when buying a home and put you in the best position to compete and prevail!

Prepare For War!

When you're competing in a hot housing market like we're experiencing today, most agents agree that it's best to push aside your emotions, regardless of how difficult that might be. After all, much of the home buying process relies on making an emotional connection with a home. However, to succeed in a bidding war, you need to begin your home search with a fully stocked arsenal!

That means, having your finances in order, thoroughly researching potential target neighborhoods, and building a team of trusted experienced professionals well before you need to move a deal along. This team should include everyone from your banker, to your broker, lawyer, and engineer, as well as a contractor.

Getting your finances in order means deciding the maximum comfortable number you're willing to pay for a home, which doesn't necessarily mean what the bank will approve you for.

Along with all of this, you also need to bring a willingness to compromise to the bargaining table. Right now, it's a strong seller's market. Sellers have the option of asking for the world, and more often than not, they're getting whatever they ask for!

Here are some tips for coming out ahead when buying a home in a bidding war.

• Get A Pre-approval Letter

This is one of the first and most important steps of the entire process! A mortgage pre-approval letter shows a seller that you've done your homework, and you're not only a serious buyer, you're also a qualified one. This is an especially effective tactic should you enter a bidding war.

It's important to understand that a pre-approval letter is different than a mortgage prequalification. To get a preapproval letter, your lender evaluates every financial detail, including your credit score and report, then decides whether they will loan you the money to buy a house, and the amount they will loan. Pre-approval is based on documentation which includes W-2 tax forms and bank statements.

• Make an All Cash Offer, or A Larger Downpayment

Sometimes the highest bid does not win. Sometimes money talks when bidding on a house. Paying cash is often much more appealing to a seller because it virtually eliminates the possibility that financing will fall through before closing. Cash deals also typically close faster. Offering a substantial down payment or making a cash offer often go right to the front of the line in a bidding war. 

Can't pay cash? Your earnest money deposit can show a seller that you are a serious buyer. The typical earnest money deposit is 1 to 2% of the purchase price, but this varies by location. A higher earnest money deposit can catch a seller's attention and signal that you're serious, especially in a hot housing market.

• Include an Escalation Clause in Your Offer

Including an escalation clause can work to strengthen your offer. if other offers come in that match or beat your initial bid, an escalation clause states that you are willing to incrementally increase your offer up to a fixed limit 

For example, say the asking price is $200,000. Your REALTOR® would prepare your office to state:

My initial bid is $200,000 with an escalation of $2000 over any and all competing offers with a cap at $210,000. However, if another bidder offers more than $210,000 you'd be out of the running.

• Limit Contingencies

Contingencies allow buyers to walk away from a deal without losing their earnest money if certain conditions are not met. In a bidding war, you want to carefully choose them. 

Try to submit a clean offer without too many contingencies. To be competitive today, you need to do your homework. Know you can obtain financing so you can eliminate a credit review contingency. Understand what to look for when walking through the home before submitting an offer to forego the inspection. Agree to pay a certain amount over the list price, and know you can afford that over the appraised value.

• Be Flexible on the Closing Date

This can be an effective tactic in a couple of ways. For example, let's say you get outbid by a few thousand dollars, but you're willing to give the seller more time to move out. That flexibility can often make you the frontrunner in a bidding war. 

Extra closing time might be attractive to a seller who might otherwise have to spend more on moving or storage. Especially if they're crunched for time to find another home in a tight market. Sometimes you can win the bidding war by extending the closing date. For example, if the sellers are in a crunch, offer to rent the home back to them cheaply, for a fixed period. If the home is already vacant, you can sometimes win by offering to close quicker, reducing the seller's expenses of carrying two mortgages. 

Even If You Lose the Battle, You Still Could Win The Bidding War!

One final thing to keep in mind...

Just because another buyer was chosen over you doesn't necessarily mean you've lost the war. When buying a home, transactions can often fall through for any number of reasons. If you make a well-thought-out offer, a strong enough bid, and are ready to act quickly, you might be next on the seller's list!

If you're serious about winning a bidding war, work with a seasoned real estate professional with experience in this type of market. A real estate agent or REALTOR® will have the skills to help you prevail in a bidding war. They will also have extensive market knowledge, which is critical for determining the fair market value of any home you're interested in. 


When starting your home search and looking for an agent, the first question a real estate professional will usually ask is "Have you been pre-approved?"

What is a mortgage pre-approval?

A mortgage pre-approval from a lender means they have verified and pre-approved the borrower to borrow a specific loan amount and possibly a specific mortgage type. It is the initial process of qualifying for a mortgage loan. The borrower has submitted the required financial information. This process usually requires pay stubs, bank statements, w-2's, social security number and an inquiry on the borrower's credit.

Why is pre-approval Important when home shopping?

  • It can help you find a reputable and experienced REALTOR®. Many seasoned agents only want to work with buyers who have already been mortgage pre-approved before shopping for a home.
  • Getting pre-approved by a lender at the start of your home shopping process will save you, and your agent, valuable time. Knowing how much you can afford helps narrow down your home search. You can avoid disappointment by shopping too far above your price range. This also helps you avoid settling on a home that may be under your budget that you're not 100% in love with. Your REALTOR® can now find the perfect dream home within your price range.
  • Home sellers will take you more seriously. Having a mortgage pre-approval letter from your lender can give you an advantage when making an offer, especially if there happens to be multiple bids on a property. A seller may be more apt to accept the offer with the pre-approval backing it over an offer from a buyer without. The seller knows that your offer is less likely to fall through, and fewer issues to arise, knowing your lender has already gone through a screening process.
  • It can help in negotiating a price if the seller is eager to sell.
  • A pre-approval helps speed up the process when you are ready to purchase and your offer is accepted. You have already done part of the leg-work and there will be fewer hurdles to jump through.
  • It holds more value than being pre-qualified. Receiving a pre-qualification from a lender only shows that you meet certain criteria to apply for a home loan. This usually only requires a few basic questions. It is not a great indicator of your ability to actually purchase or receive funding.

If you are accepted for a mortgage pre-approval:

  1. Keep your finances operating as-usual.
  2. Don't open any new lines of credit.
  3. Don't fall behind on current payments.
  4. Your pre-approval is usually valid for 60-90 days

How to become pre-approved

Requirements for Mortgage Pre-Approval

  1. Proof of Assets
  2. Good Credit
  3. Proof of Income
  4. Employment Verification
  5. Any other two types of documentation: usually a driver's license or Social Security number

According to Investopedia, Consulting with a lender before the homebuying process can save a lot of heartache later. Gather paperwork before the pre-approval appointment, and definitely before you go house hunting.

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Buying Land

Know that you want to buy a new home, but haven't found a property that meets your needs? Consider buying land and building your own home. When you purchase land, you control the size and location of your home's lot. Here are some things to keep in mind if you're buying land this year. 

  1. It's Essential to Scout Out and Research Surrounding Land Plots
    Our real estate agents know that clients purchasing land may find plots in a variety of environments. The plots might be surrounded by land that has already been developed or is currently under construction. If so, you'll want to know if these plots will be used for residential homes or commercial businesses. Or, you may find the land plot surrounded by seemingly undeveloped land. Do your research to understand who owns the land. Are there any zoning restrictions? Are there farms nearby? Is there any history of criminal activity on the surrounding land plots? Check that you're comfortable with the neighboring land's current and potential usage. Investigate any restrictions that apply to your plot. It's not uncommon for local laws and ordinances to provide guidance on dwelling sizes or how many buildings may be placed on a piece of land. Don't assume that ordinances or restrictions can be appealed. Even if an ordinance is repealed, this is a lengthy process that may take years. 
  1. Financing Looks Different
    It's harder to finance the purchase of land than it is to take out a mortgage. When you use a mortgage to buy a home, the home acts as collateral for the lender if you default on the loan, permitting the lender to offer attractive lending terms. With land loans, the terms aren't nearly as favorable. Undeveloped land isn't as in demand as land with a home, so it's riskier for the bank to finance. You'll pay a higher interest rate, and you'll likely only be able to borrow a portion of the value of the land. It's not uncommon for lenders to require a downpayment of 50 percent for a land loan. You'll need accessible liquid savings to cover the difference. Some affordable land loans are available through the USDA for individuals purchasing land in qualified rural areas. 
  1. See What Utilities and Access Rights the Land Has
    A gorgeous plot of land is of little use if you can't access it. Confirm that the plot comes with access rights or an easement. Any easements concerning the land's access should be in writing. Depending on the location of the plot, you may need to add a private road to safely access your new residence. Make sure you consider this expense, as the cost of clearing and paving land quickly adds up. If the land isn't currently outfitted with utilities (like water, electricity, and internet), all of these items will need to be added. Check with your local utility companies that it's possible to run service to the land plot, and inquire about the cost. Some companies may run service to the land for free, while others will charge for their services. 
  1. A Land Survey is a Necessity
    You should hire a land surveyor to determine the exact boundaries of the land. Not only will this give you a better understanding of the plot's limits, but you can confirm that neighbors aren't intentionally or accidentally using the land. 

Ready to start searching for land for your home? Contact us today to get started!


VA Loan Changes 2021

Each year, changes are made to the existing legislature that provides additional advantages to many men and women. Prospective homeowners will be pleased to know that in 2020, Congress passed a new bill which changes the benefits that the men and women enlisted in our armed forces receive in 2021. It's known as the Johnny Isakson and David P. Roe, M.D., Veterans Health Care, and Benefits Improvement Act of 2020.

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