6 Real Estate Tips for Choosing Your Dream Home

The term “dream home” means a lot of different things to a wide variety of people.
To some, it means a cozy cabin on an acre or two of lake-front property near a small town. To others, it means an average-sized two-story dwelling in a friendly suburb. And then there are people who want the $1.3 million New York City apartment with views of the Empire State Building.
Regardless of what type of person you are or what type of home suits your fancy the most, there are a lot of important decisions that go into picking out your dream home. In this article, we’ll give you 6 real estate tips to consider when trying to select the home your heart craves most of all. And they are:
Square Footage
If you time-travel back to 30 years in the past, homes were usually around 1,645 square feet in size. Today, that number has gone up to 2,195. But since the housing bubble burst, that number is starting to shrink as people eliminate superfluous rooms like “exercise rooms, offices, studies, and media rooms”. Really, it all comes down to how much — or little — house do you want and/or need.
Floorplan
Do you like your home with rooms that are intimate and traditional, or do you prefer an open floor plan that will help facilitate parties, family get-togethers, and other forms of entertainment? Neither is better than the other; it just all comes down to need and personal preference.
Home Grade
This section could also be labeled “cost,” because the grade of home you want affects the price. Obviously, a home with granite countertops, authentic stone floors, and mahogany wood paneling is going to cost much more than a home with laminate counters, ceramic flooring, and pine paneling. If you want a green home (i.e. one with “zero-voc paint, bamboo floors, and recycled counters”), that will also affect price. Decide what you want and make sure it fits your budget.
Landscaping
Sure, a big, beautiful, well-maintained lawn sounds good in theory, but are you willing to perform the necessary upkeep? Opting for a condo or townhouse decreases your lawn maintenance, but it could also hinder your entertaining, especially if you’re a fan of cook-outs and flag football. Determine if you’re willing to put the time into a lawn; if you don’t want one, nix houses with large yards from your search.

Neighborhood
Picking a neighborhood can be hard. If you have children (or plan on having some in the future), your choice will probably determine what public school they attend. Other things that can influence your choice are your daily commute to work, whether or not you want to be in a historic part of town, what kind of demographics interest you the most, or how close you want to be to your city’s dining and entertainment venues. Figure out where you are in life — and where you’re headed — and plan accordingly.
Surrounding Area
This one relates back to the previous section. What kind of dining, shopping, and entertainment options do you need to be near your dream home? (For example, I know I personally have to live within 15 minutes of a Wal-Mart in order to get by.) Be sure to scope out what’s available to you in the town/city that interests you. That way, you won’t be disappointed down the road when you discover your dream home is nowhere near your favorite chain restaurant.

Are you ready to sell?

If you're like most home sellers, your house is worth a lot less than it was five years ago, maybe even less than what you paid for it.

So it isn't worth sinking more money into it before you put it on the market, right?

Sorry, but no, according to real estate agents. Sprucing up a home before you sell is still the best way to attract buyers and get a sale in this slowly recovering housing market.

"Buyers are picky," said Kim Guild, an agent with Keller Williams Realty, Edina. "There's not a lot of great inventory, but buyers still want it to look a certain way. A house needs to show like a model."

Today's buyers have higher expectations, but they aren't as set on a single neighborhood as they used to be, according to Laura Tiffany, an agent with Coldwell Banker Burnet's Minneapolis Lakes office. "They're more value-driven. They're willing to look in a broader area, which gives them more choices. The main thing I'm telling my clients is that homes need to be in pristine condition."

That doesn't mean you need to invest in major remodeling projects. Simple repairs, minor cosmetic enhancements, decluttering and staging are enough, in most cases, to make a home appealing to current buyers.

"Eliminate objections," said John Everett, an agent with Edina Realty. "You're competing with other houses, and the competition is all staged, neutralized and looking good. It doesn't cost a lot to declutter. Fresh paint doesn't cost a fortune."

A move-in-ready house is important to today's buyers because most don't have cash to pay for updates, Guild said. "They can finance the house but not the improvements. Lenders aren't approving those like they used to. You can't get those [home equity] lines of credit."

Plus, many of today's buyers aren't prepared -- or willing -- to tackle even minor home improvements themselves, according to Everett. "If they're both working, they don't have time." And most came of age in an era when home repairs and painting were increasingly outsourced.

"Buyers don't have a clue," Everett said. "They didn't do these things growing up and they didn't see their parents doing them. Today, when you point out a workbench in the basement, usually the wife laughs hysterically and says something like, 'My husband wouldn't know which end of the screwdriver to use.'"

So, if you're a home seller, what's worth spending money on and what's not? We asked agents to weigh in:

Professional photography. "The first showing is now online," Guild said. "You're not making the first impression when the buyer comes in the door, but on the Internet." Amateurish snapshots reduce the likelihood that a prospective buyer will be impressed enough to make an appointment. But high-quality shots by a pro who understands angles and lighting can pique buyers' interest.

Staging. Hiring a professional to present your home in its best light is almost always a worthwhile investment, Guild said. "I'm a huge proponent of staging." A well-staged home evokes positive emotion in potential buyers, often resulting in a faster sale and a higher sale price, she said.

Depending on the size of your home, a full-house staging can cost $2,500 to $3,000 -- even more if furniture, rather than just accessories, are involved. If that's beyond your budget, consider hiring a professional stager for a preliminary consultation and then follow his or her advice to complete the staging yourself.

Repairs. If it's broken, fix it. Today's buyers don't want to inherit your deferred-maintenance chores. "Almost all houses need some love," Everett said. "Spend the money, hire a handyman." Mechanics should be in good working order, Tiffany said. "Furnace certified. Windows and gutters clean -- anything that makes the house present itself as well cared for, and a good value."

Painting. A coat of fresh paint is a must for most homes, at least in rooms that see the most wear and tear. "You want everything to look fresh, new and clean," Tiffany said. Neutral colors are still recommended. While an unusual color scheme might be dramatic, it makes it more difficult for buyers to visualize themselves and their belongings in your home. Tiffany also tells her clients to paint basement floors, as part of cleaning and decluttering. "Basements can be scary, and clean, fresh paint on a cement floor really helps," she said.

Kitchens and baths. Concentrate your home-improvement efforts and dollars in these two spaces, Guild advised. "Kitchens and baths deliver the most bang for the buck." New lighting, faucets and hardware can give a kitchen a fresh, new look without breaking the bank. Bigger-ticket enhancements, such as new countertops, might or might not be smart, depending on the home and other circumstances. Guild has advised some clients with dated kitchens to add granite and new appliances, to appeal to modern buyers. But Everett urges caution. "Granite is very personal, and someone might hate the color you choose," he said. "They may want to pick out their own granite."

Other big projects. Thinking about finishing your unfinished basement so your home boasts more square footage? Don't bother, Guild said. "You're not going to get the money out of it, unless you were going to do it anyway." Tiffany agreed.

"For major improvements, I tell clients they should do it only for themselves, so they can get some enjoyment out of the improvement. The likelihood of a quick return on investment is not strong."

When in doubt about what to improve, ask your agent.

"The biggest thing is listening to the professional you hired," Guild said.

Everett said he's had several recent sales that involved multiple offers, and in every case, "they [sellers] did everything on my checklist." His advice: "Go out with both barrels loaded and get the job done."

20 things that can raise the value of your home

When you're house-hunting it's important to be able to identify the things that increase the value of a home and those that actually detract. The seller and his agent, after all, will try to convince you that rail line that runs through the backyard is good because it provides extra green space.  

Here are 10 features that can add value to your home:

1. An updated kitchen. "Kitchens are critical," says Robert Irwin, author of "Home Buyer's Checklist." "Today, people like a big kitchen with a lot of workspace."

They look for solid surface counters and high-quality flooring, such as wood, laminate, tile or stone. And they want newer appliances in working order.

Even if it's not huge, it should have "countertops that are serviceable that aren't going to have to be replaced soon and cabinetry in good condition," says Alan Hummel, past president of the Appraisal Institute. "It has to be well-appointed and large enough to fit your needs."

And it doesn't hurt if it opens onto another room. "A lot of families are looking for that openness," says Hummel.
It helps to have a window over the sink, says Don Strong, a remodeler with Brothers Strong Inc., a Houston remodeling firm.

Be wary if renovations are out of character with the community, such as granite countertops in a subdivision where plastic laminate is the norm.

"Will you sell faster? Yes," says Hummel, CEO of Iowa Residential Appraisal Co., in Des Moines. "Will it sell for more? Not if the appointments you've done are significantly higher quality that the rest of the neighborhood."

2. Modern bathrooms. Buyers are looking for "master baths that give a little room to roam," says Hummel.

A big asset: spa or whirlpool tubs. "I'm always entertained by the people who have them in the master bath and don't use them," says Ron Phipps, principal broker with Phipps Realty & Relocation Services in Warwick, R.I. "But it's a big feature."

Some other features buyers are seeking: separate showers with steam and/or multiple jets, double sink, separate room for the toilet.

And make sure the plumbing and hot water heater can handle the job. The pipes have to be large enough to carry an adequate volume of water and the hot water heater has to be big enough to accommodate it. "You need a bare minimum of a 75-gallon hot water heater, and most of my customers have 100 to 150," says Chicago-based home inspector Kurt Mitenbuler.

"You don't want to see that false economy of a $30,000 bathroom but nobody spent a few thousand dollars to upgrade the pipes," he says.

3. A well-appointed master suite. "People are really excited about master suites," says Hummel. The wish list: a luxurious bathroom, lounging areas and walk-in closets.

4. Natural materials. "People like natural materials," says Phipps. "Ceramic tile, hardwood floors, granite. We've gone back to a real appreciation for historically true materials. And simulated works as well. The look is very popular."

In floor coverings -- especially bathrooms or kitchens -- look for ceramic tile or wood rather than linoleum, which can tear, says Strong.

In the rest of the house, wood or laminate products are a plus over wall-to-wall, says Gary Eldred, author of "The 106 Common Mistakes Homebuyers Make (and How to Avoid Them)".

But if you have carpet, it should be a good product and well maintained so that "a person doesn't have to walk in and think, 'I'm going to have to spend five grand right off the bat," says Strong.

5. Curb appeal. "A good first appearance on a home can add as much as 5 percent to 10 percent to the value of the home," says John Aust, president of the National Association of Real Estate Appraisers. "Homes in a neighborhood tend to vary about 10 percent from house to house, assuming all other things are the same."

6. A light, airy spacious feel. "People buy space and light," says Myra Zollinger, owner/broker with Coldwell Banker Realty Center in Chapel Hill, N.C. "I have yet to have anybody walk into a really dark house and say, 'I love this.'"

Richard "Dick" Gaylord, member of the executive committee for the National Association of Realtors, agrees. "That's a very big feature," he says. "I haven't sold many homes that aren't bright and airy."

7. Good windows. "People are looking at exposures and windows," says Phipps. "It's been a cold winter for most of the country and energy efficiency is very important."

Insulated windows are always a plus, says Strong. "Typically, they pay for themselves in five years," he says. The cost: for an average 2,600-square-foot home, estimate about $10,000 for new windows, he says.

Well-placed skylights are also a good touch to add value, says Phipps.

8. Landscaping. Mature trees "are worth $1,000," says Strong.

And having outdoor spaces with touches such as pergolas and Victorian garden swings "can be very helpful," says Phipps.

Appraiser John Bredemeyer remembers one $250,000 home in Omaha that had no landscaping at all. "It was stark," says Bredemeyer, national chair of government relations for the Appraisal Institute, a professional group for real estate appraisers. "It just stood out as unappealing."

Conversely, you don't have to spend a fortune on plants, either. Just keep it "typical with the neighborhood," he says.

9. Lots of storage. Nothing beats an oversized garage, some attic space and plenty of closets. "If you have a two-car garage, do you have extra space for those things we all have -- bicycles, lawn mower, snow blower?" says Hummel. "Space is important."

A nice plus in the master suite? "His and hers walk-in closets," says Irwin.

10. Basement. "If it's dry, it's a plus," says Kenneth Austin, co-author of "The Home Buyer's Inspection Guide." "But it's a negative if it has water problems."

A finished basement adds even more value. "Ten years ago, nobody cared," says Mittenbuler. "Now everybody wants them."

 

Do I really need an agent?

 

 

What is important to buyers?

 

 

10 Hottest Cities For Millennial New-Home Buyers

Most people in the 18-to-34 age bracket spend the bulk of their time trying to get their foot in the door at work and in life. However, a lucky few have managed to put their foot in the door of their very own home.

While saving for a down payment and making mortgage payments may seem out of reach for many Millennials, a recent Builder Online study cited demographic data to show that twenty-somethings are purchasing new homes. The site analyzed home sales from 2012 and 2013 to pinpoint the cities with the largest year-over-year increase in new-home sales among Millennials.

Popular vacation destination Honolulu topped Builder’s list, and while the cost of living in Hawaii is steep, there are other factors to consider when it comes to popular Millennial new-home buyers markets.

“Honolulu was ranked highly by Builder due to growth in new home sales among the 50 largest new-home markets for millennials, meaning that Honolulu has a big base of demand, and it’s growing,” said Jonathan Smoke, Chief Economist for realtor.com®. “That may surprise some because of the high cost of living, but it isn’t always about the lowest cost places to own a home.”

“Markets can be attractive for many reasons to Millennials—and this list screams variety,” Smoke added. “In some places, it’s affordability, but in others it’s jobs, and for Honolulu, I would expect it’s about a lifestyle that appeals to today’s 20-somethings. Be careful in making assumptions that millennials are all challenged by income—some of the fastest-growing companies in the world are headed by Millennials.”

1. Honolulu, HI

2. Birmingham, AL

3. Palm Bay, FL

4. Daphne, AL

5. Madison, WI

6. Sacramento, CA

7. Fort Collins, CO

8. Stockton, CA

9. Cape Coral, FL

10. Spokane, WA

 

 

How often are homes sold above asking price?

A Short Guide to Real Estate Lingo and Acronyms

Real estate ads are usually full of acronyms and terms that are unfamiliar to first-time buyers. Here's a cheat sheet to let you in on the lingo.

 

4B/2B -- four bedrooms and two bathrooms. "Bedroom" usually means a sleeping area with a window and a closet, but the definition varies in different places. A "full bathroom" is a room with a toilet, a sink and a bathtub. A "three-quarter bathroom" has a toilet, a sink and a shower. A "half bathroom" or powder room has only a toilet and a sink.

 

assum. fin. -- assumable financing 

closing costs -- the entire package of miscellaneous expenses paid by the buyer and the seller when the real estate deal closes. These costs include the brokerage commission, mortgage-related fees, escrow or attorney's settlement charges, transfer taxes, recording fees, title insurance and so on. Closing costs are generally paid through escrow. 

CMA -- comparative market analysis or competitive market analysis. A CMA is a report that shows prices of homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.

contingency -- a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. One example is a buyer's contractual right to obtain a professional home inspection before purchasing the home. 

dk -- deck 

expansion pot'l -- expansion potential mean that there's extra space on the lot or the possibility of adding a room or even an upper level, subject to local zoning restrictions. 

fab pentrm -- fabulous pentroom, a room on top (but under the roof) that has great views 

FDR -- formal dining room 

fixture -- anything of value that is permanently attached to or a part of real property. (Real estate is legally called "real property," while movables are called "personal property.") Examples of fixtures include installed wall-to-wall carpeting, light fixtures, window coverings, landscaping and so on. Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.

frplc, fplc, FP -- fireplace 

gar -- garage (garden is usually abbrevated as "gard.") 

grmet kit -- gourmet kitchen 

HDW, HWF, Hdwd -- hardwood floors

hi ceils -- high ceilings

in-law potential -- potential for a separate apartment, subject to local zoning restrictions 

large E-2 plan -- this is one of several floorplans available in a specific building 

listing -- an agreement between a real estate broker and a home owner that allows the broker to market and arrange for the sale of the owner's home. The word "listing" is also used to refer to the for-sale home itself. A home being sold by the owner without a real estate agent isn't a "listing."

lo dues -- low homeowner's association dues. But find out how "low" the dues are compared to other dues in the area. 

lock box -- locked key-holding device affixed to a for-sale home so real estate professionals can gain entry into the home after obtaining permission from the listing agent 

lsd pkg. -- leased parking area. May come with additional cost. 

MLS -- Multiple Listing Service. An MLS is an organization that collects, compiles and distributes information about homes listed for sale by its members, who are real estate brokers. Membership isn't open to the general public, although selected MLS data may be sold to real estate listings Web sites. MLSs are local or regional. There is no MLS covering the whole country. 

nr bst schls -- near the best schools 

pot'l -- potential

pvt -- private 

pwdr rm -- half bathroom or powder room

REALTOR® -- a real estate broker or sales associate who is a member of the National Association of REALTORS®. Not all real estate agents are REALTORS®.

title insurance -- an insurance policy that protects a lender's or owner's interest in real property from assorted types of unexpected or fraudulent claims of ownership. It's customary for the buyer to pay for the lender's title insurance policy. 

upr -- upper floor

 

HAPPY FATHERS DAY!

Happy Mother's Day!

7 Ways to Make Your Home More Appealing to Buyers

When you're ready to sell your house, it pays to assess your home and make improvements before the for-sale sign goes in the yard. By doing so, you'll help buyers see the beauty of your home -- and that helps put the sold sign up faster. Especially in today's tough market for home sellers, attention to details and a willingness to go the extra mile can make all the difference.
 Here is a list of tips to make your home stand out from the rest.



Be objective
                                            

One of the hardest things for homeowners is to see their house from a buyer's perspective. If you can't be objective about how your home looks, take pictures of it. Take photos from the street, the kitchen, living room and master bedroom. These are the rooms that matter most to buyers.

 

Start at the front

                       

Give the front of your home a makeover. Hire a landscape company to freshen the grounds, trim shrubs and trees, and add mulching. Repaint the mailbox, add new house numbers and hide trashcans. These improvements help hook buyers at the curb, enticing them to view your home.

 

Add Life

 

Invest in good quality real or silk plants. Spindly plants are eyesores. Look in any d¿¿cor magazine and you'll notice how plants are placed attractively in the room. Use these as guides on what plants to buy and where to place.

 

Put Money Into Your Kitchen

 

Investing in the kitchen is one of the best returns on investment for homeowners. The kitchen is the one room that really excites buyers, so make it work for you by adding a new backsplash, fresh coat of paint on the cabinets and trendy pulls. Dated lighting, peeling laminate and crowded countertops will have buyers backing out of the house.

 

 

Set The Table

 

Model homes and homes in design magazines always feature a dining room table that's set, but few homeowners with homes for sale set the formal dining room table. Setting the table makes the room inviting and helps buyers imagine themselves in it.

 

Open The Door To Sales

 

The front door is the first place on your home a prospective buyer sees and touches when they arrive. Repainting or revarnishing the door and polishing up the hardware will create a vision of beauty and buyer anticipation because it says the house is cared for right up front.

 

Create A Focal Point In Every Room

 

Each room should have a feature that defines the space. A focal point helps visually draw buyers into the room -- and where the eyes go, the heart often follows. Using the photos you've taken earlier, plan a focal point for the main rooms of the house, including the kitchen.

 

 

Economic update March 22

This week marked the first meeting of the Fed under new Chair Janet Yellen. The Federal Reserve opted to continue the taper of the mortgage and bond-buying program, dropping participation by another $10 billion per month to a rate of $55 billion per month. The Fed Open Market Committee also changed language that stated the U.S. central bank's key policymaking body would begin to consider raising interest rates once the national unemployment rate hit 6.5%. The new change gives the Fed more room in deciding when to raise rates regardless of the unemployment rate. Rate increases are still off in the future but some economists feel that they could move more quickly once they begin. Yellen indicated that the bond-buying program could end this fall with short term interest rates probably being raised about six months later. 

It would be the first hike since 2006. Yellen’s frank talk was dubbed a mistake by many in the media.

Yellen’s remarks caused ripples in the market early in the week but stocks rose Friday on positive economic data. The Philadelphia Federal Reserve's manufacturing-activity index for March came in higher than expected showing an increase in regional manufacturing. The Dow rose this week to 16,302.70 up 1.48% from last week’s close of 16,065.67. The Nasdaq saw a more modest increase to 4,276.79 up 0.74% from last week’s close of 4,245.40. The S&P 500 ended the week at 1,866.40, up 1.37% from last week’s 1,841.13 close. 

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate fell to 4.32%, the rate was 4.37% last week. The 15-year-fixed fell to 3.32% from last week’s 3.38%.  A year ago the 30-year fixed was at 3.54% and the 15-year was at 2.72%. Unfortunately,  rates rose later in the week after the Fed's announcement.  The 30 year rate is closer to 4.5% for loans under $417, 000 and about 4.75% for higher loan amounts. The 15 year is about 3.5% for loans up to $417, 000 and 3.75% for higher balance loans. 

The 10 year treasury note yield rate rose to 2.75% after closing at 2.65% last week. It was at 1.95% one year ago.

The National Association of Realtors^® reported that February home sales dropped -0.4% to an annual pace of 4.60 million units, the lowest level since July 2012. Sales have declined in six out of the seven last months.  The median existing home price is at $189,000, up 9.1% from February 2013. In the West alone, existing home sales rose 5.9% to a pace of 1.07 million from January but were down -10.1% from a year ago. The median price in the West was $279,400, up from 18% from last year. Total housing inventory was up 6.4% in February to 2.00 million existing homes for sale. This represents a 5.2 month supply and is up from the 4.6 month supply a year ago. Distressed homes were 16% of sales nationwide compared with 25% a year ago. The median time on market for February was 62 days, down from 67 days in January, and 74 days a year ago. A total of 34% of homes sold in February were on the market for less than one month. First-time buyers accounted for 28% of all sales compared to 26% in January and 30% one year ago. All-cash sales were 35% of transactions compared to 33% in January and 32% one year ago.

Data from the California Association of  Realtors^®  shows California home sales fell in February, but housing inventory increased as sellers gear up for the spring home-buying season. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 361,210units in February, which was down-0.7% from revised 363,930 in January and down -13.7% from a revised 418,520 in February 2013.  The statewide median price of an existing, single-family detached home declined -1.6% from January’s median price of $410,990 to $404,250 in February.  February’s price was 21.3% higher than the revised $333,180 recorded in February 2013, marking two full years of consecutive year-over-year price increases and the 20th straight month of double-digit annual increases. Inventory improved with the available supply of single-family homes for sale now up to 4.7 months from January’s 4.3 months. The index was at 3.6 months in February 2013. A normal supply is generally six or seven months. In Los Angeles County, the median sold price was $389,080 in February 2014, down -8.1% from January’s $423,570 but up 15.2%from February’s $337,630. Sales in Los Angeles were down -8.9% on a month-to-month basis, and down -14.4% year over year. The housing inventory in Los Angeles is currently 4.6 months, up from 4.0 in January 2014, and also up from 3.3 months a year ago.  Median time on market in Los Angeles is currently 43.6 days down from 46.6 days in January and up from 36.5 days in February 2013.

The National Association of Home Builders/Well Fargo builder sentiment index rose to 47 in March, up from February’s reading of 46. Readings below 50 indicate more builders view sales conditions as poor rather than good. The overall index had been over 50 from June through January. The measure of builders' expectations for sales over the next six months fell one point to 53, the lowest level since May, however builders' view of current sales conditions for single-family homes rose one point this month to 52.

The Commerce Department reported that housing starts were down -0.2%to a seasonally adjusted annual rate of 907,000 units, following January’s revised -11.2% drop (it was originally reported at -16%). Groundbreaking was down -5.5% in West and also down in the Northeast but up in the South and Midwest. Permits to build homes were up 7.7% in February to a 1.02 million-unit pace. Permits for single-family homes were down -1.8% but multifamily permits were up 24.5%.

The February numbers from the Southland Regional Association of Realtors^® show that inventory is on the rise. Inventory increased 37% from a year ago. At the end of February there were 1,419 homes on the market in the San Fernando Valley as compared with 1,033 a year earlier. The inventory rate is currently 3.2 months versus a 1.9 month supply a year ago.  The median home price was $475,000, up 13% from $422,000 a year earlier but down $10,000 from January’s median. Sales in February dropped -16% from a year ago and -8% from January.

The National Housing Trend Report from realtor.com^® showed that the nationwide median list price increased 7.6% year over year to$199,000. The media age of inventory also rose 6.5% to 114 days. The Los Angeles-Long Beach MSA was one of the ten markets nationwide with the biggest year-over-year increase in median price. Prices rose 20% to $449,999.

Home upgrades that pay off

“Any changes you make on your house now should increase your home value later,” says Kermit Baker, project director for the Remodeling Futures program at Harvard University. But which projects will yield the most bang for your buck? Take a look at this list, starting with the upgrades most likely to recoup your investment, and then enjoy that gleaming new kitchen.

1. Painting

Why it pays off: Paint provides dramatic results with little investment. If you decide to hire a professional to do the work, expect to pay $3,600 to $6,000 for the interior of an average American house (about 2,400 square feet). An exterior paint job will run $5,000 or more. Can’t decide on a color? Gerri Willis, the anchor of Open House on CNN, says that pale yellow homes tend to sell faster and for more money. Barbara Richardson, the director of color marketing for Glidden and a noted color-trend forecaster, explains, “Yellow is optimistic and inspirational. It gives people joy and the sense that brighter times are ahead.”

2. Adding Siding

Why it pays off: According to the 2007 Cost vs. Value Report, a study conducted by Remodeling magazine, fiber-cement siding (which is made of sand, cement, and cellulose fibers and costs an average of $13,200) is estimated to recoup about 88 percent (or $11,635) of a home owner’s initial investment. While vinyl can crack, split, and warp and aluminum tends to dent and fade, easy-care fiber cement holds up well against the elements and is resistant to fire, rotting, and termites.

3. Building a Deck

Why it pays off: A deck will provide you with more than a place to flip burgers and soak up the sun. “Buyers see a deck as offering a seamless transition from inside to out,” says Jerry Levine, president of the Levine Group, an architectural and construction firm in Silver Spring, Maryland. Experts suggest using natural, rustic wood. In 2007 wooden decks (as opposed to concrete or composite ones) reaped an impressive return on investment: Home owners who spent an average of $10,350 on lumber and labor could expect to recoup $8,840, or 85 percent of their costs.

4. Updating the Kitchen

Why it pays off: You really can’t go wrong with remodeling your kitchen, which can net up to 83 percent of the cost. “People know that renovating can be a nightmare, and potential buyers will appreciate that you did the dirty work for them,” says Vern Yip, a designer and the host of HGTV’s Deserving Design. “But stick with high-quality fixtures, like stainless-steel appliances and granite counters, and don’t pair them with a cheaper material, like laminate.” A word of caution: If your house is a tiny two-bedroom bungalow, don’t bother splurging on, say, a high-end stove. “You’ll never get your money back by installing fancy appliances in a smaller home,” says Leslie Sellers, vice president of the Appraisal Institute, an association of real estate–appraisal professionals in Chicago. And if an appliance overhaul isn’t in the cards, “you can easily make cosmetic updates on a kitchen that’s in decent shape,” says Steven D. Bullock, a designer in New York City and a certified member of the National Kitchen & Bath Association, in Hackettstown, New Jersey. For example, if your existing appliances are in good working order, coat them with electrostatic paint to give them a metallic or enamel-type finish. And you don’t have to rip out your cabinets, either.

5. Replacing the Windows

Why it pays off: If you’re experiencing cool and blustery weather…in your living room, it’s time to buy new panes, pronto. Not only are you losing precious heat but your utility bill could also be skyrocketing. “Energy-efficient windows eliminate drafts, so your home feels warmer,” says Sellers. Last year home owners who spent $11,400 on 10 three-by-five-foot insulated vinyl or aluminum-clad windows got an 81 percent ($9,240) return.

6 steps to get the best mortgage rate

If you're in the market for a mortgage, chances are you've been instructed to shop around for the best rates. But just because you've been told to shop around doesn't mean you know how.

First, you'll need to contact a lender to get your credit scores. Craig March, a personal mortgage consultant with Inlanta Mortgage in Janesville, Wis., says you should share your credit scores with other lenders rather than letting each one you contact pull your credit history, because multiple inquiries could lower your scores.

 "There are so many different credit score models that the score you see as a consumer may not be the same as the one a mortgage lender sees, so it's important to get your score from a lender," says Mark Richards, a senior mortgage loan officer for TD Bank in Washington, D.C.

Brian Martucci, a mortgage lender with GetLoans.com in Washington, D.C., says every borrower must be prepared to answer the following questions before a lender can provide an accurate mortgage rate quote:

• How large is your down payment? Interest rates vary according to your loan-to-value ratio.
• Are you buying a single family home or a condominium? Martucci says a borrower purchasing a condominium with a loan-to-value ratio above 75% will pay a one-quarter percentage point higher interest rate.
• Are you refinancing or purchasing? Interest rates may be higher on a refinance, especially if you are taking out cash, which could raise your rate by one-eighth of a percentage point.

Your plan for the best rates

No. 1: Establish a baseline. Get a referral from someone you trust and contact the recommended lender to obtain your credit scores and discuss your loan options. Your lender can help you compare Federal Housing Administration and conventional financing, as well as various loan terms, so you can make an informed decision on which loan program and terms you want before you contact other lenders.

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No. 2: Contact a mix of financial institutions. Interest rates fluctuate constantly for a variety of reasons, including the occasional promotion of a particular loan product by a financial institution. For example, some lenders who are eager to generate more purchase loans might offer the best mortgage rates for homebuyers but not for refinancing homeowners, says Martucci. Sometimes a credit union or bank will introduce a new loan product and offer better mortgage rates in order to entice borrowers, says March.

"It's best to diversify and try a mix of places, such as a direct lender, a regional bank, a credit union, a community bank and a national bank," says March.

No. 3: Decide when you want to close. The length of your lock-in period will impact your mortgage rate, so discuss your target close date with each lender and ask about the charges for different loan-lock periods.

"Make sure you tell the lender when you expect the closing to be, because you want to lock in the interest rate for the right length of time," says Richards. "Many lenders charge one-eighth percent more if you must lock-in the loan for 60 days. If you need a 90-day loan lock, your interest rate could be as much as one-third percent higher."

No. 4: Ask about fees. The variation in fees associated with a loan are one reason why you shouldn't comparison shop solely based on the best advertised interest rate. Sometimes a mortgage at a lower advertised rate can end up costing you more because of all the fees associated with it.

"Some lenders blend all their fees into a loan preparation fee, while others separate them out, so be sure to ask for the total amount it will cost to close the loan," says Martucci.

Generally, a mortgage with higher fees should have a lower interest rate, says March.

If you're refinancing, use HSH.com's Tri-Refi Refinance Calculator to compare your options for paying closing costs. Experiment with the options to find out if you should you wrap the closings cost into the loan amount, pay them in cash or choose a "no-cost" mortgage.

No. 5: Consider whether you should pay points. One of the largest expenses can be the points attached to a particular loan. Each point is equal to one percent of your loan amount.

"You need to make sure you discuss with each lender how the loan will be structured in terms of whether you are paying points or not," says March.

If you intend to stay in the home for the long term, such as 10 years or more, you may want to pay points to keep your interest rate as low as possible for the life of the loan. If you plan to sell in a few years, paying a lot of cash upfront to pay points may not be worth it, says Richards. A lender can show you the difference in interest and monthly payments to help you decide whether worth it to pay points.

No. 6: Call lenders on the same day. Because mortgage rates fluctuate constantly, you should call lenders as close to the same time as possible on the same day to compare rates, says Martucci.

"If possible, call within the same timeframe, because a bond rally could mean that mortgage rates have dropped dramatically from the morning to the afternoon," he says.

After you have organized your financial information, follow the six steps above to ensure that you get the best mortgage rate available.