The Rookie’s Guide to Investing in Real Estate

| Jan 25, 2017

When you wrap the covers around you at night, do dreams of townhouses, condos, ski cabins, and beach houses dance in your head? Do you fantasize about becoming the Trump of your town, but don’t know where to start in real life?

If you’ve got the dream and the capital, it’s time to start learning about the basics of investing in real estate. We’ll show you how to get the ball rolling!

Step 1: Hone your deal-hunting skills

Investment properties come in many forms: multifamily residential units, condos, single-family homes, and properties that have been converted into rentals. Finding available properties is as easy as searching real estate listings and hiring a Realtor®. The tricky part isn’t locating property investments, but figuring out which ones won’t chew up your bank account and spit it back out.

And the best way to help gauge a property’s potential—aside from seeing it with your own eyes—is to ask your agent for the unit’s financial statements. This will include what the current owner pays for maintenance, utilities, insurance, and taxes—and, if it’s already a rental unit, how much money flows in from rent.

With rental properties, receiving such paperwork from the listing agent or landlord is par for the course during the sales process; if the home isn’t yet a rental, it may be harder to get. But go ahead and ask the Realtor or home seller for whatever documentation they have to know how much the unit will be costing you per month, outside of your mortgage. 

When reviewing these papers, don’t just believe everything you read. No, we’re not trying to make you paranoid. But investment veterans often call these “liar’s statements,” because they may underreport expenses and inflate rents. So as a rule of thumb, cut the income by 10% and jack up the costs by 15%, and you’ll have a better ballpark idea.

Step 2: Pick a property with potential

A property’s potential goes deeper than the home itself—literally. You’re going to want to look at the value of the land.

Jason Hartman, founder and CEO of Platinum Properties Investor Network, says he figured that out 20 years ago when he was “chasing appreciation instead of cash flow.” Now, instead, he targets low-priced land with slow appreciation and little volatility, since these properties generally have better cash flow as long-term rental properties. In other words, they’re predictable.

Hartman says to check four things:

  • Land value: Figure out this out by using the tax appraiser, a house appraiser, and an insurance company (the insurance company will insure only the house; what’s left uninsured is how much the land is worth).
  • Cash flow: If homes rent for 1% of their value a month (a $100,000 home should rent for about $1,000 a month, not $3,000).
  • Appreciation history: The market should be up “about 3% to 6% over the last couple of decades.”
  • Newsworthiness: The press isn’t writing about it. “Linear markets are boring. No one writes about Birmingham real estate,” Hartman says.

Good schools are important, too, but shouldn’t be the driving factor. “It’s about getting the best school district you can for the price of the house,” Hartman says.

Step 3: Investigate new construction, too

But wait—what are those shiny new houses over there? New builds are another investment option, and they may appear to be “safer”—that is, since they’re new, they won’t have as many potential problems, right? Not necessarily. You should vet the builder and architect of the home—buyers who don’t can be unpleasantly surprised.

“The No. 1 complaint from clients and myself is all related to the contractor,” says Joshua Jarvis of Jarvis Team Realty in Atlanta. For Jarvis, proper vetting means “driving to see the homes they’ve done and talking with their customers.”

So if you’re thinking about buying a recent development from Super Hyper Global Mega Builders Inc., venture out to see the different types of property it has built, even if that means crossing town or city lines. Talk with the people who live there and see what they think about the build quality. Were cheap materials used? Has there been any problem with the wiring? Does the house hold heat? Have any terraces collapsed?

If that sounds like a lot of extra legwork, it is. But there’s no such thing as easy money. You knew that, right?

Step 4: Decide if you want to be a long-distance investor or a local one

This seems like an easy decision. After all, as a rookie investor, you should plan on needing to visit your investment property on a semiregular basis; landlords will need to attend to problems, while rehab projects will need you to keep an eye on the progress to make sure there are no surprises. You could always hand off these hands-on duties to a manager in the area, but that starts to eat into your profits—and the margins on rental units can be thin already.

“It’s hard to deal with issues an hour away,” says Bruce Ailion of Re/Max in Atlanta. Recently, he had to deal with a broken furnace in one of his townhouse rentals, which is 30 miles away. The tenant, just having moved from Europe, didn’t have a car yet, so Ailion allocated money for a cab and two space heaters.

The rub? “I have space heaters in my garage we lend out when these issues arise,” he says. Coordinating efforts for repair was also a hassle. “Being five to 10 minutes away makes dealing with this a lot easier,” he adds.

But there’s one big caveat here: If you’re in a market with lots of ups and downs, look elsewhere.

“If [the investor] lives in an expensive, cyclical market, they’re a gambler. They’re a speculator,” Hartman says.

If that’s the case, head to an area that’s comfortable enough for you to visit when you need to but be conservative enough so it’s not so far away you need a plane—save those cross-country investments for when you’re confident in your investing.

Step 5: Lean on your agent’s expertise

Finally, it really is a good idea to get a Realtor or agent who knows the area. Nick Schlekeway, co-founder of Amherst Madison, a real estate company in Boise, ID, says a common mistake of rookie investors is to “view Realtors as someone to ‘open doors and write the contracts I tell them.’”

Instead, you’ll want to “seek out the services of a qualified Realtor with local market expertise” and listen to them, not just use them as a guide to where you should sign.

Craig Donofrio covers home finance and all things real estate for His work has been featured in outlets such as The Street, MSN, and Yahoo News.
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4 Kitchen Renovations That Increase Your Home’s Value

Interior designer Nate Berkus and real estate experts weigh in on which upgrades are worth the investment (plus three that aren’t).

If you’ve ever fantasized about doing something a bit “unconventional” to your kitchen — say, covering the backsplashes in Moroccan tiles or installing a wood-fired pizza oven — you might want to reconsider. Interior designer Nate Berkus, who moonlights as the artistic adviser for LG Studio‘s high-end line of appliances, warns against investing in upgrades that reflect an overly specific aesthetic. Below, Berkus and real-estate experts share which kitchen renovations increase your home’s value—and which you’ll live to regret.

Anything with personality, like a chandelier, is a potential waste of money.


“The right appliance can make the space feel much more finished and expensive. Plus, they involve almost no construction but change the functionality 100-fold,” says Berkus, who recommends going for ranges, refrigerators, cooktops, and other utilitarian devices with stainless steel finishes. The L.A.-based designer encourages homeowners to replace the entire suite of products simultaneously, if possible, which makes for a more cohesive look.

If you’re forced to choose just one, “do not skimp on the dishwasher,” says Sandra Miller, president of Santa Monica-based real estate agency Engel & Volkers. “It’s often the most overlooked appliance in the kitchen.”


“Anything with personality, like a chandelier, is a potential waste of money,” says Minette Schwartz of the Schwartz Team at ONE Sotheby’s International Realty. Her rationale: More often than not, light fixtures reflect personal taste and can be a major turn-off to a prospective buyer who doesn’t share your style sensibility.


Courtesy of LG Studios

Introducing a neutral color palette for major surfaces like countertops and flooring might just be your biggest return on investment. “It sounds boring, but taste changes, and neutrals are much more universal,” explains Berkus. “You can always transform the feeling of the kitchen through accessories on the countertop, or your glassware, dishware, and paint color—things that can be swapped out easily.”


One of the biggest mistakes people make when starting a kitchen renovation is getting swept up in the latest design trends, says Berkus. “When you install things like crazy-intricate countertops, multifaceted tile backsplashes, and intensely carved molding, I can guarantee you that six months from now, something else will come along to replace that concept.” Miller agrees: “When in doubt, always go with timeless finishes versus the fashionable or trendy.”


“Everyone loves to mimic the kitchens they see on television cooking shows,” says Ida Schwartz of ONE Sotheby’s International Realty. “With the increase of foodies and amateur chefs, we’ve seen that a conversion from an electric stove to a gas stove—in addition to a double-oven—is highly coveted.” One solid option for the aesthete-gourmand hyphenate: LG Studio’s Stainless Steel Built-In Double Wall Oven. Merging modern form and function, the oven has four convection modes and the kind of sleek, smudge-proof finish which would be welcome in any homebuyer’s dream kitchen.


A pizza oven won’t do your bottom line any favors. Same goes for the built-in coffeemaker and hibachi grill. “None of these things maximize the value of your home,” says Minette Schwartz. She also urges people to think twice before installing a washer/dryer in the kitchen—an idea that seems better in theory than reality, because, as Schwartz explains, “most people don’t want to eat where they’re washing clothes.”


“A larger kitchen is really what buyers are looking for when they’re shopping for a house,” says Berkus. He suggests knocking down a wall that separates an adjoining room, or creating the illusion of spaciousness by adding a window. “We live very differently now than how people lived when many of these homes were built, and these days, the kitchen is an all-encompassing space where everybody gathers.”


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Creating your ultimate smart home

Build a smarter home with the best Internet of Things tech and devices

Creating your ultimate smart home

Are you looking to design and build a smart home, complete with connected devices in every room? Do you know whether to go HomeKit, Brillo or SmartThings? Do you even know what that means?

Getting started when setting up a smart home can be a daunting experience. There are just so many variables – and we’re not just talking about the plethora of choices when it comes to selecting the connected smart scales for your bathroom.

But don’t worry – we’ve got your back. We’ve got a wealth of smart home guides, features and reviews on hand…

Setting up the ultimate smart home

The smart home of the future may be a way off, but the systems powering the internet of things revolution are getting ever more sophisticated. All of the major players – Apple, Google, Samsung and so on – are competing for space in the ever evolving new marketplace.

There’s already a load of HomeKit connected devices (Apple’s platform) and Google’s Brillo’s platform – essentially Android for your house – was unveiled at I/O back in June 2015.

As with every other tech genre, the devices on sale are upgraded rapidly and there’s always a new, killer, bit of kit around the corner. Make sure you read our guide to the most exciting new smart home kit coming in 2016 to find out what’s coming next.

Smart home kit can also save you plenty of cash. The most compelling connected kit is that which justifies its existence by paying for itself and then cutting your costs in half.

Controlling your smart home

What use is your connected smart home if you still have to get up off the sofa to get it working?

Instead, grab yourself a smartwatch and get full control of your life with a quick tap of your wrist. Whether it’s your heating, your media or your home security that you’re looking to fine tune – there will be an app for that.

IFTTT connected devices are also brilliant and there are a tonne of great IFTTT recipes already set up for syncing up your wearables with your smart kit. Alternatively, we’re also seeing the rise of the really universal remote.

The best smart lighting solutions

Wi-Fi enabled bulbs are the easiest place to start if you’re looking to overhaul your home.

They’re easy to use, fun to show off and they double as a superb security measure while you’re away from home. What’s more, some can now even be controlled by wearables such as the Apple Watch and Pebble, and with low power LED tech, they’ll save you money over a bad old incandescent bulb.

Smart thermostats to install

Smart thermostats are designed to give you more control over your home heating. They will learn your habits for when you’ll really need that burst of warmth and heating your home intelligently means big cash savings.

Nest may the the darling of the smart home, but Hive – a British Gas funded upstart straight out of the UK – has big ambitions. Check out our Nest v Hive head-to-head and also see how Nest compares against Honeywell.

Connected kitchen tech

If your fridge isn’t connected to the web, then you’re living in the dark ages. If your cutlery isn’t Bluetooth enabled you may as well be eating your dinner with twigs.

From connected coffee pots to washing machines that know when to start a load based on you location, the kitchen has never been so cool.

Smart home security

The big question with smart security systems is Nest Cam v Piper NV v Canary. They are the big players in a genre that is exploding in popularity.

As well as a smart camera security system, you should also consider connecting your door locks.

Smart locks aren’t perfect: there is that rather large question mark about what happens when they crash and they are expensive. But they are ever-evolving and offer a wealth of features that your regular deadbolt simply cannot.

Connecting the garden

You don’t necessarily need to a back yard to enjoy a smart garden. The connected world has caught up with horticulture.

There are handfuls of sensors at the ready which are adept at picking up those key variables like light, temperature, moisture and soil pH conditions, and there’s some great kit for indoor and outdoors.

Smart home diary

Our editor-in-chief Paul moved into a new house recently; a real blank canvas with the opportunity for making it smart from the off. He’s done all of the boring research so you don’t have to.

For 19 weeks, Paul updated his smart home diary with helpful tips, tricks and guides about the best (and easiest) smart home setups. Take a look…

Week 1: Planning the ultimate smart home
Week 2: Getting started with home networking
Week 3: Deciphering the matrix
Week 4: Burying Ethernet cables
Week 5: Not much happened
Week 6: Things are heating up
Week 7: What smart home platform to use
Week 8: Do I really need a smart washing machine?
Week 9: Smart nursery made simple
Week 10: Lock all the doors, maybe they’ll never find us
Week 11: There’s more to connected speakers than music
Week 12: Plugging the gaps in a connected home
Week 13: Building a Nest
Week 14: Finally moving in
Week 15: Getting my house in order
Week 16: Home security made simple
Week 17: IFTTT recipes gone wrong
Week 18: Sorting out my security holes
Week 19: Final thoughs – over and out


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Are Property Taxes Included in Mortgage Payments?

property-taxAre Property Taxes Included in Mortgage Payments?

Paying property taxes is inevitable for homeowners. The amount each homeowner pays per year varies depending on local tax rates and a property’s assessed value (or a yearly estimate of a property’s market value). If you’re unsure of how and when you must pay real estate taxes, know that you might be paying them along with your monthly mortgage payments.

Paying Taxes With a Mortgage

Lenders often roll property taxes into borrowers’ monthly mortgage bills. While private lenders who offer conventional loans are usually not required to do that, the FHA requires all of its borrowers to pay taxes along with their monthly mortgage payments.

To determine how much property tax you pay each month, lenders calculate your annual property tax burden and divide that amount by 12. Since their numbers are estimates, some lenders require their borrowers to pay extra money each month in case the property tax payments come up short. If you end up paying more property taxes than you need to, you’ll receive a refund. If you underpay your property taxes, you’ll have to make an additional payment.

When you pay property taxes along with your mortgage payment, your lender deposits your property tax payment into an escrow (or impound) account. When your property taxes are due to the county, your lender uses the funds in that escrow account to pay the taxes on your behalf.

Both you and your lender should receive a notice from your local tax authority. If you don’t, it’s best to contact your lender and your tax authority to make sure your property taxes are being paid on time.

Why Can’t I Just Pay Property Taxes Myself?

 Are Property Taxes Included in Mortgage Payment?

Including your property tax payments in your mortgage payments allows your lender to protect himself. If a homeowner is forced into foreclosure, his lender will likely have to pay the remaining property tax amount. That’s why failing to pay property taxes is considered an event of default, allowing your lender to foreclose on your property.

While some homeowners would rather pay property taxes themselves, rolling your tax payment into your mortgage payment allows you to avoid shelling out large amounts of money to tax collectors once or twice a year. Some lenders might even offer to lower your interest rate when you choose to pay your property taxes through an escrow account. Besides, you’ll probably only be able to pay your own property taxes if your loan-to-value ratio is low (i.e. somewhere below 80%).

What Happens When You Pay Off Your Mortgage?

Once your mortgage is paid off, your lender won’t be collecting payments from you anymore. At that point, paying property taxes becomes your responsibility.

Sometimes lenders let their borrowers start paying their taxes directly before their mortgages are paid off. This might happen if you’ve paid down a significant portion of your principal loan balance.

Hispanic family standing outside home smiling with sold sign

Final Word Are Property Taxes Included in Mortgage Payment?

If you’re looking to buy a home in the near future, you may need to speak with your potential lender about paying property taxes. Most likely, your taxes will be included in your monthly mortgage payments. While this may make your payments larger, it’ll allow you to avoid paying a thousand dollars (or more) in one sitting. And with your lender’s help, you can make sure that your property tax payments are made in full and on time.

Photo credit: ©, ©,



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Real Estate Terms Every Aspiring Homeowner Should Know

(Image credit: Anna Spaller)

Looking to buy your first home? Struggling to make sense of an avalanche of new terminology? You’re not alone. Taking your first foray into the world of real estate can feel like being dropped unceremoniously into a foreign country. You’re disoriented, bewildered and you don’t speak the language. If that weren’t enough, it can feel like everyone around you expects you to be fluent from minute one.

Before you visit your first listing—or even pick a real estate agent—make a start towards real estate fluency by learning these 16 terms:

1. Adjustable Rate Mortgage (ARM)

Just like it sounds: Interest rates on ARMs fluctuate during the life of the loan, based on certain market indicators. Loans usually have a limit on how much and how often the interest rate can change.

2. Annual Percentage Rate (APR)

This gives you the actual cost of your loan. An APR will be higher than your interest rate because it also accounts for other fees and costs associated with your loan. Understanding APR can help you compare mortgage loans to determine which is best for you.

3. Appraisal

A licensed appraiser will evaluate and determine the value of a property. Usually involves comparisons to recent sales of similar properties and is used by lenders to determine the limit of what they will lend for that property. Differences between appraisal value and loan amount can cause deals to fall through (meaning: the bank won’t lend you more than the appraisal says the house is worth).

4. Closing Costs

Closing costs encompass the myriad of fees and taxes paid in cash (i.e. not financed into a loan) at settlement or closing. Some of these costs are recurring, such as property taxes or homeowner’s insurance, others are non-recurring, like appraisal fees or title insurance.

5. Contingencies

Contingencies are the portion of contracts that protect either the buyer or seller. Contingencies release the protected party from liability if the certain terms are not met. For example, an inspection contingency means the buyer can negotiate repairs or even back out of the deal on the condition of an unfavorable home inspection.

6. Due Diligence

Buyers: you should do your “due diligence” on a property after entering an agreement with the seller but before the purchase occurs. Due diligence measureslike inspecting the home, researching its history or learning more about the neighborhood help you avoid settling on the wrong house.

7. Earnest Money Deposit

Also called a “Good Faith Deposit.” You pay this when giving your offer as a sign of good faith regarding your intent to purchase.

8. Escrow

Whether or not you’re required to have an escrow account or how long you’re required to have one will vary depending on your loan and lender. An escrow account allows the mortgage holder to collect not only your interest and principal payments each month, but also 1/12 of the estimated total of your taxes and insurance for the year. You might also pay an advance on your taxes and insurance—say, 6 months’ worth—into an escrow account at closing. When the bills are due, the lending bank uses the money in your escrow account to pay your tax and insurance bills on your behalf.

9. Fixed Rate Mortgage

A loan with a fixed interest rate across the life of the loan (15 to 30 years). Determining whether an ARM for FRM is right for you depends on a variety of factors.

10. Multiple Listing Service (MLS)

Computer service used by real estate agents to view property details for homes on the market.

11. Pre-Approved

Some argue that there is no distinction between pre-approval and pre-qualification for a loan. Others strongly disagree. Generally, a pre-approval is more in-depth than a pre-qualification: Pre-approval follows a credit check and thorough verification of your finances. A pre-approval letter states that, barring appraisal issues or other problems, you are approved for a loan. It’s important to note that this is not a guarantee of a loan.

12. Pre-Qualified

Like pre-approval, a pre-qualification does not guarantee that you will get the loan. It tends to hold less weight than a pre-approval, but will give you a good idea of the maximum loan amount you could secure.

13. Prepayment Penalty

These aren’t as common as they used to be, but it’s still important to check whether your loan comes with a prepayment penalty or not. To pay down your loan quicker and avoid paying as much interest, you can make additional payments towards the principal of your loan. Because banks want you to pay ALL the interest, some slap homeowners with a penalty charge for paying off the balance early.

14. Principal

Your mortgage principal is the amount you actually borrowed to buy the home. You pay interest in addition to this principal.

15. Private Mortgage Insurance (PMI)

Usually only required if your down payment is less than 20%. Meant to protect your lender in the event you default on your loan. The cost of your PMI varies based on multiple factors, but is typically between 0.5% and 1% of the entire loan amount, annually. So you could pay roughly $40-$90 per month for every $100,000 you borrow. You can ask your lender to cancel your PMI once you’ve built equity of 20% in your home, meaning the amount you owe on your mortgage is less than 80% of what the home is worth (a new appraisal, refinancing or remodeling can help convince the bank to cancel your PMI sooner).

16. Zoning

If you’re interested in running a home business, adding rental space or making other significant changes, you need to make sure local laws and ordinances will allow for those changes or activities. Investigate zoning laws as part of your due diligence checklist.

Of course there are dozens of other real estate terms you will encounter during the home buying process. That’s why it’s important to find a real estate agent you can trust to help guide you through the process: Learning the above terms will help you feel more confident when you begin your search, but you’ll need a trustworthy, competent agent to help explain everything and navigate the legal and financial intricacies of buying your first place.


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How People Upgrade Their Kitchens and How Much They Spend

Here’s what our research team found out about how much people are spending on kitchen renovations — and on what

The kitchen is the most popular room of the home to renovate, according to Houzz research, and those who choose to remodel the heart of their home have some definite preferences. After all, the No. 1 reason they choose to renovate this area is no longer being able to stand the old kitchen — can anyone out there relate?

The 2017 U.S. Houzz Kitchen Trends Study, from a research team led by Nino Sitchinava, Houzz’s principal economist, reveals that homeowners updating their kitchens prioritize changing out countertops, backsplashes and sinks. A majority of kitchen renovators are also choosing a more open feel for this room.

The study surveyed more than 2,700 Houzz users in the U.S. who own homes and are in the midst of a kitchen renovation, have recently completed one or are planning one in the next three months. Read on to learn what people are doing with these important rooms.

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Survey Reveals That People Want Bigger Homes—Except in this One Country

(Image credit: Nasozi Kakembo)

For many people, bigger is still better—especially when it comes to their homes. Sure, that motorized monstrosity known as the Hummer is no longer in production, and McMansions have fallen out of favor in recent years as tiny homestickle our imaginations. But according to a new survey, in much of America, size still matters—and big isn’t big enough.

Point2 Homes, an online real estate marketplace, surveyed 29,000 homeowners in nine countries and found the average home size in the United States to be 1,901 square feet. That’s second largest in the world behind Australia, but 38% of the Americans surveyed said they still want a bigger house.

Maybe they’ve caught a glimpse at what homebuilders are up to down the street. The average size of a newly constructed single family home in the U.S. rose to a bigger-than-ever 2,687 square feet in 2015. That’s 54% bigger than the average new home built 37 years ago, which is the average age of an owner-occupied home in the U.S. (and more closely resembles the actual size of most people’s living quarters).

(Image credit: Natalie Jeffcott)

Not surprisingly, the countries with the largest homes have high incomes and lots of room to build. Australians reported the largest average home size at 2,032 square feet, and were even hungrier for space than us Americans: More than half, 55%, dream of an even bigger house.

Canadians, who live in the third-largest homes at an average of 1,792 square feet, were the only respondents who weren’t collectively longing for a bigger house, but perhaps an even smaller one. In what can only be described as a refreshingly Canadian perspective, more of our northern neighbors chose 1,000-1,500 square feet as their ideal home size than any other size range.

British respondents report living in slightly tighter quarters, in an average home of 1,590 square feet. But they aren’t afraid to dream big: A full 38% of Brits surveyed want a home twice as large as their current one.

(Image credit: Point2 Homes)

Elsewhere in Europe — in Germany, France, and Spain — the most desired home size was between 1,000 and 1,500 square feet. And while 62% of Brazilians surveyed would like a bigger home, it’s all relative: About half said they live in homes of less than 1,000 square feet, and most would like a slightly bigger home of between 1,000 and 1,500 square feet.

Meanwhile, with the average household size slowly shrinking in the U.S. as more young adults delay marriage and kids, Americans now have more space per person—656 square feet—than anyone else. (Of course, some of us make do with much less personal living space.) That’s a lot more elbow room than British respondents reported (454 square feet) and almost twice the personal space of those in Brazil (348 square feet).

(Image credit: Point2 Homes)

And yet, all that room is apparently still not enough. A similar 2015 survey by Trulia found that 43% of Americans wanted a bigger home than the one they currently lived in. And even among those already boasting enormous digs — homes that were 3,200 square feet or bigger — 25% said they still wanted an even bigger house.

Something about the size of a city block in Brazil, presumably.

You can see Point2 Homes’ full findings on their blog.


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7 Expert Home Staging Tips You Can Do Yourself

Quick fixes to sell your house faster.

When you’re putting your house on the market, preparation and presentation can be the keys to selling faster and for a better price. While curb appeal improvements can definitely help, interiors are always the most important selling point. “Most buyers today shop for homes online, making a home’s web appeal just as important as its curb appeal,” says Jeremy Wacksman, Zillow’s chief marketing officer. “To sell a home fast you want to attract as many potential buyers to your listing as possible. Featuring high-quality, staged listing photos and videos are a great way to boost your home’s virtual appeal and help it stand out in today’s competitive marketplace.” Home staging doesn’t have to be a costly, time-consuming process—especially if your house is already in good shape.  “You want buyers to be able to easily envision themselves in your home, so it’s important to de-clutter and remove personal items that might cloud that vision,” says Kerrie Kelly of Kerrie Kelly Design Lab, a Zillow Digs expert​. “Neutral colors, small details, and reorganizing furniture to make your space feel roomy and inviting are all easy and affordable ways to make your home more appealing to future buyers.” The team at Zillow Digs recently surveyed interior design experts and real estate agents for their tried-and-true DIY home staging tips. Take a look at the top ideas they shared exclusively with below:


Add Mirrors

Photo by William Abranowicz

A mirror not only adds some style to a space, its reflective quality can open up a room, making it brighter and seem less cramped (even if it’s tiny). “If you lack artwork, consider picking up a sizable mirror at your local home store,” Christina Salaway of Eleven Two Eleven Design says. “It will make your space feel more curated and designed.”


Replace Window Treatments

Photo by William Abranowicz

If you have old and heavy drapes, toss them for something more modern and breezy. “Simple, functional window coverings on opened windows allow a space to breathe and appear visually larger and more open,” says Kelly. Choose floor-length curtains and hang them from the ceiling instead of at the top of the window frame.


Buy Crisp, White Towels

Photo by Mark Viker/Getty Images

To stage your bathroom, go with monochromatic hues. “Put all-white towels in your bathrooms,” says Marc Thee of Marc-Michaels Interiors. “Colored towels don’t feel spa-like and they can seem dingy and add heaviness to a space. White towels feel fresh and clean.”


Upgrade Rugs

Photo by Hero Images/Getty Images

“Buy rugs that actually fit your rooms and your furniture,” says Salaway. For a living room rug, avoid one that’s too small; make sure at least the front legs of your couch or chairs are touching the rug. The right-sized rug in a complementary style to the room will make the space look larger and feel more “pulled together.”



Photo by Carolyn Barber/Getty Images

We know you went to great lengths to make your home your home, but now that you’re trying to sell it, keep in mind that not everyone has the same tastes. “Take out personal photographs and everyone’s clutter,” says Thee. “You want the potential buyer to be able to envision their lives inside the house.”


Reorganize Bookcases

Photo by William Abranowicz

And while you’re tidying everything up, give your shelves some style. “Remove 25 percent of your books entirely, and then rearrange what’s left so that some books are vertical and some are stacked horizontally,” says Salaway. “Place a couple of trinkets within the bookcase to function as accents and bookends. This will add character and personality to the room while also lightening up your bookcases.”


Deep Clean

Photo by Hero Images/Getty Images

No prospective buyer wants to walk into a house with a dirty bathroom or scuffed-up walls. Take some time to clean every room in your house, but beware of cleaning smells. “Don’t overpower homes with scented items,” says Christina Esala of Tierra Antigua Realty. “They will think you are hiding something. Instead, make a batch of chocolate chip cookies and leave on the counter for future buyers.”


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What credit score is needed to buy a house?

Photo credit: ©iStock/Courtney Keating

Ah, the dreaded credit score. It’s one of the biggest criteria considered by lenders in the mortgage application process — three tiny little digits that can mean the difference between yes and no, between moving into the house of your dreams and finding yet another overpriced rental. But despite its massive importance, in many ways the credit score remains mysterious. If you don’t know your number, the uncertainty can hang over you like a dark cloud. Even if you do know it, the implications can still be unclear.

Is my score good enough to get me a loan? What’s the best credit score to buy a house? What’s the average credit score needed to buy a house? What’s the minimum credit score to buy a house? Does a high score guarantee I get the best deal out there? And is there a direct relationship between credit score and interest rate or is it more complicated than that? These are all common questions, but for the most part they remain unanswered. Until now.

Today, the mysteries of the credit score will be revealed.

The Basics. What is a credit score?

Your credit score isn’t just for getting a mortgage. It paints an overall financial picture. The term “credit score” most commonly refers to a FICO score, a number between 300 and 850 that represents a person’s creditworthiness — the likelihood that, if given a loan, she will be able to pay it off. A higher number corresponds to higher creditworthiness, so a person with a FICO score of 850 is almost guaranteed to pay her debts, whereas a person with a 300 is considered highly likely to miss payments.

The formula for calculating a FICO score was developed by Fair, Isaac and Company (now called, simply, FICO), and while the specifics remain a secret so that no one can game the system, FICO has made the components of the score public. The formula takes into account the following factors, in descending order of importance:

  1. Payment History – Have you made timely payments on your debt in the past?
  2. Amounts Owed – How many lines of credit do you have, and how high is the balance on each?
  3. Length of Credit History – How long have you been using credit?
  4. New Credit – Have you opened several credit accounts recently?
  5. Types of Credit Used – What combination of credit cards, retail accounts, installment loans and mortgages do you have?

In general, the first two factors, payment history and amounts owed, make up 35% and 30% of the total score, respectively. The length of credit history accounts for 15% and the final two factors, new credit and types of credit used, account for 10% each. But those weights can vary for each individual borrower.

All of the information necessary to calculate your credit score can be found on your credit report, a detailed history of the way you have handled debt over the past few years. If you’ve missed payments on your Visa, opened a new MasterCard, paid off an auto loan or forgotten to pay your bill at Sears, it will appear on your credit report. Before applying for a loan, it’s a good idea to get a copy of your report and to learn your credit score. This will keep you from being unpleasantly surprised and can allow you to fix any mistakes on it.

What is a good credit score to buy a house?

If only it were that simple. When trying to answer the question, What credit score is needed to buy a house? there is no hard-and-fast-rule. Here’s what we can say: if your score is good, let’s say higher than a 660, then you’ll probably qualify. Of course, that assumes you’re buying a house you can afford and applying for a mortgage that makes sense for you. Assuming that’s all true, and you’re within the realm of financial reason, a 660 should be enough to get you a loan.

Anything lower than 660 and all bets are off. That’s not to say that you definitely won’t qualify, but the situation will be decidedly murkier. In fact, the term “subprime mortgage” refers to mortgages made to borrowers with credit scores below 660 (some say below 620 or even 600). In these cases, lenders rely on other criteria — reliable source of income, solid assets — to override the low credit score.

If we had to name the absolute lowest credit score to buy a house, it would likely be somewhere around a 500 FICO score. It is very rare for borrowers with that kind of credit history to receive mortgages. So, while it may be technically possible for you to get a loan with a score of, say, 470, you would probably be better off focusing your financial energy on shoring up your credit report first, and then trying to get your loan. In fact, when using SmartAsset tools to answer the question, What credit score is needed to buy a house?, we will tell anyone who has a score below 620 to wait to get a home loan.

What interest rate can I get with my credit score?

Photo credit: ©iStock/danielfela

While a specific credit score doesn’t guarantee a certain mortgage rate, credit scores have a fairly predictable overall effect on mortgage rates. First, let’s assume that you meet the highest standards for all other criteria in your loan application. You’re putting down at least 20% of the home value, you have additional savings in case of an emergency and your income is at least three times your total payment. If all of that is true, here’s how your interest rate might affect your credit score.

  • Excellent (760-850) – Your credit score will have no impact on your interest rate. You will likely be offered the lowest rate available.
  • Very good (700-760) – Your credit score may have a minimal impact on your interest rate. You could be offered interest rates 0.25% higher than the lowest available.
  • Good (660-699) – Your credit score may have a small impact on your interest rate. This means rates up to .5% higher than the lowest available are possible.
  • Moderate (620-660) – Your credit score will affect your interest rate. Be prepared for rates up to 1.5% higher than the lowest available.
  • Poor (580-620) – Your credit score is going to seriously affect your interest rates. You may be hit with rates 2-4% higher than the lowest available.
  • Very Poor (500-580) – This is trouble. If you are offered a mortgage, you’ll be paying some very high rates.

Consider this a rough guide. Depending on your individual circumstances, the effects of your credit score on your interest rate may be smaller or larger than those listed above, but the general message should be clear. Having a credit score below 660 can make taking out a mortgage significantly more expensive. How much more expensive depends on the size of the loan you’re taking out and on the rest of your financial picture.


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The Design Trends (That You Haven’t Heard About Yet) That Are Going to Heat Up in 2017

(Image credit: Marisa Vitale)

As a design editor, it’s my job to stay on top of (and decode) potential trends in the industry. There are some that are low hanging fruit (for 2017, it’s clear the color green is a front-runner, plants are now “it” items, and there will be a prevalence of natural/boho materials like terra-cotta), but others kind of fly under the radar until all of a sudden, you start noticing them everywhere. You know when you learn a new word, and from that moment on, you begin to hear it in every other sentence? It’s like that, and, I predict, these seven trends will also be like that. Remember we told you first!

Animal Print

We’re talking tiger and cheetah prints here, not whimsical block-printed elephants and blowfish (though we certainly love that interpretation of “animal” prints). The experts at design resale website Chairish reported that sales in the glam, wild prints are up and strong, so I wouldn’t be surprised to see more leopard racing onto home accessories like pillows and throws.

(Image credit: Caitlyn Cartlidge)

Tole Lighting

Part of me thinks tole (and no, it’s not a misspelling of toile as I once thought), is an extension of the “granny” movement that started brewing in past years. It’s folky, reminiscent of (better?) times, and incredibly charming. For those not interested in the minimal movement, you might want to start digging up these painted, floral lighting pieces and candelabras made of sheet metal from your local thrift store before they become too coveted.

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Op Art

The abstract, ethereal prints that have flooded the art market in recent years are still going strong, but stronger, crisper op art made popular in the 1960s and ’70s is set to make a comeback in 2017 and beyond, particularly in vibrant violets and neon colors.

Statement Rugs

I’ve always been a huge supporter of rugs that double as art pieces. Heck, find a rug you love, that really speaks to you, and build a room around it (it’s a great place to start a design scheme, by the way). Southwestern motifs started popping up in the second half of 2016, and I’m personally happy to report that bold floor coverings like these, as well as other punchy designs, will be even more prominent this year.

Avant-garde & Innovative Lighting

I had an inkling after last summer’s ICFF that lighting was about to go off script. There were a handful of innovative makers introducing lighting that could be customizable by its owner (and we’re not talking light intensity), and since the show, I’ve seen more and more of the same thing. Look out for LED bar lighting that you can play around with to create something entirely new (shapes, words, and beyond).

Classics Revisited

Even though reports showed that the antiques market was struggling to sell (particularly to the younger set) in recent years, I have an inkling that traditional silhouettes from centuries past will be more broadly accepted (and desired). But because antiques don’t typically come cheap, there will be a crop of manufacturers reintroducing new takes on old classics.

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