Foreclosure filings have decreased slightly for the past three months in a row, according to RealtyTrac. While that’s certainly welcome news from a short-term perspective, the larger picture concerning distressed properties remains grim. October 2009 marked the 45th straight month of year-over-year increases in foreclosure activity. In the third quarter of this year alone, there were still more foreclosures than in all of 2006.
At the RISMedia Power Broker Perspective Panel on Distressed Properties, RealtyTrac’s Rick Sharga noted that the year will end with about 3.3 million households having gone into foreclosure. And because of rising “shadow inventory” another 4 million properties are expected to hit foreclosure status in 2010.
The Obama Administration’s recent push to accelerate the pace of loan modifications to keep struggling borrowers in their homes also has a dark side. Some 50-60% of those whose loans are modified are expected to redefault eventually nonetheless.
This massive inventory of distressed properties continues to put significant downward pressure on home prices nationally, and makes it tempting for real estate practitioners to slip into a state of powerlessness and discouragement. That’s a huge mistake.
Just ask Mark Stark, CEO of the Prudential Americana Group. He could be forgiven for a fair degree of despondency about these seemingly horrific events in the real estate world. He’s based in the foreclosure epicenter of Las Vegas, where homes that a year and a half ago listed for $444,000 are now on the market for $150,000, and still barely moving.
But appearing as RISMedia panelist he was positively evangelical in his remarks to real estate pros about coping with a changed market:
■Don’t label your market. Take “good” and “bad” out of your vocabulary. What’s happening now is an event, and it’s your challenge to be informed, work through the problems and find answers.
■You need to live in the truth. Don’t confuse the facts with what you’d like the facts to be.
■Question your limiting beliefs. Ask yourself tough questions and acknowledge that sometimes you will be wrong.
■Be part of the solutions and the opportunities. There will be more opportunities from this debacle than there were before. A lot of good will come out of this–eventually.
By Wendy Cole, Senior Editor, REALTOR® Magazine
Milicki & Associates, Inc.
110 Evans Mill Dr. Suite 103
Dallas, GA 30157
770*874*2022
866*966*3022
information@milicki.com
www.Milicki.com
Wednesday, November 18, 2009
Wednesday, November 11, 2009
$8,000 homebuyers tax credit extended
President Obama reups popular tax credit through June 2010 and expands it to include people with higher incomes and some who want to trade up into new homes.
NEW YORK (CNNMoney.com) -- President Obama signed an extension and expansion of the first-time homebuyers tax credit on Friday.
The $8,000 credit was scheduled to lapse on Dec. 1 but will now be in effect through the end of June. Homebuyers must sign a contract before April 30 and close by June 30.
The income limits were also raised: Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.
The bill also made more homeowners eligible to claim the credit on their taxes. First-time buyers -- those who have not owned a home in the past three years -- still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.
"The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules," said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.
Who qualifies?
Nicholas provided four scenarios illustrating how the tax credit rules for existing homebuyers will apply:
• Harry owned a home in 2001 and 2002 but sold it to relocate for a job. He would qualify for the $8,000 first-time-buyer credit because he has not owned a home in the past three years.
• Sue purchased a home in 2004 and has lived there since. If she decides to buy a new home, she would qualify for the $6,500 tax credit because she has lived in the same residence for five consecutive years in the past eight.
• Jane purchased her home in 2002, lived there for five consecutive years before she rented it out in 2007. She would qualify because she was an owner/occupier for at least five consecutive years in the past eight.
• Mark purchased a home in 2006 and lived there for the past three years. He would not qualify because he is neither a first-time homebuyer nor someone who lived in the same primary residence for five consecutive years out of the past eight.
How it helps the economy
Legislators and industry experts expect that the credit will encourage buyers such as Jane and Sue to move up their purchase plans.
"This bill will shift demand from the second half of 2010 into the first half," said Pat Newport, a real estate analyst with IHS Global Research. "As a result, home sales and prices will get a boost in the first half of 2010, with payback in the second."
That's not a bad thing, according to Bill Kilmer, vice president of advocacy for the National Association of Home Builders. It's important to stabilize real estate markets quickly to help bring the economy out of its tailspin.
The original $8,000 tax credit appears to have helped accomplish that goal: Home prices have inched up the past few months, according to the S&P/Case-Shiller Home Price Index.
Would it have happened anyway?
But critics still see the program as being ineffectual because it rewards buyers who would have purchased a home anyway. Newport estimates that fewer than 400,000 of the 2 million who have claimed the original credit made their purchases solely because of the tax advantages.
Furthermore, buyers do not, in reality, receive the entire benefit. "The credit helped prices stabilize," said Newport. "So the credit has been split between seller and buyer. The sellers are getting higher prices and buyers paying more than they would have without it."
The housing industry, however, is pleased with the extension, although the credit has not been quite as effective as they hoped.
The industry thought the credit would provide a ripple effect, with sales to first timers triggering as many three additional "move-up" sales.
That did not happen, according to Lawrence Yun, NAR's chief economist.
"It did not have the chain reaction impact it was supposed to," he said. "Instead, many first-timers turned to vacant, foreclosed or other distressed properties the sellers of which were unlikely to be move-up buyers."
So, the tax credit helped prop up the low end of the market without having much impact on the rest of the spectrum. Expanding the benefit to existing homeowners should boost those segments. That should produce additional benefits, according to Yun.
"Preventing further price decline or even nudging prices up a bit stabilizes housing wealth, which makes homeowners more comfortable in their spending," said Yun. "They're more likely to go out to the stores or buy a new car. That provides a boost to the overall economy."
Milicki & Associates, Inc.
110 Evans Mill Dr Suite 103
Dallas, GA 30157
770-874-2022
866-966-3022
information@milicki.com
www.Milicki.com
NEW YORK (CNNMoney.com) -- President Obama signed an extension and expansion of the first-time homebuyers tax credit on Friday.
The $8,000 credit was scheduled to lapse on Dec. 1 but will now be in effect through the end of June. Homebuyers must sign a contract before April 30 and close by June 30.
The income limits were also raised: Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.
The bill also made more homeowners eligible to claim the credit on their taxes. First-time buyers -- those who have not owned a home in the past three years -- still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.
"The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules," said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.
Who qualifies?
Nicholas provided four scenarios illustrating how the tax credit rules for existing homebuyers will apply:
• Harry owned a home in 2001 and 2002 but sold it to relocate for a job. He would qualify for the $8,000 first-time-buyer credit because he has not owned a home in the past three years.
• Sue purchased a home in 2004 and has lived there since. If she decides to buy a new home, she would qualify for the $6,500 tax credit because she has lived in the same residence for five consecutive years in the past eight.
• Jane purchased her home in 2002, lived there for five consecutive years before she rented it out in 2007. She would qualify because she was an owner/occupier for at least five consecutive years in the past eight.
• Mark purchased a home in 2006 and lived there for the past three years. He would not qualify because he is neither a first-time homebuyer nor someone who lived in the same primary residence for five consecutive years out of the past eight.
How it helps the economy
Legislators and industry experts expect that the credit will encourage buyers such as Jane and Sue to move up their purchase plans.
"This bill will shift demand from the second half of 2010 into the first half," said Pat Newport, a real estate analyst with IHS Global Research. "As a result, home sales and prices will get a boost in the first half of 2010, with payback in the second."
That's not a bad thing, according to Bill Kilmer, vice president of advocacy for the National Association of Home Builders. It's important to stabilize real estate markets quickly to help bring the economy out of its tailspin.
The original $8,000 tax credit appears to have helped accomplish that goal: Home prices have inched up the past few months, according to the S&P/Case-Shiller Home Price Index.
Would it have happened anyway?
But critics still see the program as being ineffectual because it rewards buyers who would have purchased a home anyway. Newport estimates that fewer than 400,000 of the 2 million who have claimed the original credit made their purchases solely because of the tax advantages.
Furthermore, buyers do not, in reality, receive the entire benefit. "The credit helped prices stabilize," said Newport. "So the credit has been split between seller and buyer. The sellers are getting higher prices and buyers paying more than they would have without it."
The housing industry, however, is pleased with the extension, although the credit has not been quite as effective as they hoped.
The industry thought the credit would provide a ripple effect, with sales to first timers triggering as many three additional "move-up" sales.
That did not happen, according to Lawrence Yun, NAR's chief economist.
"It did not have the chain reaction impact it was supposed to," he said. "Instead, many first-timers turned to vacant, foreclosed or other distressed properties the sellers of which were unlikely to be move-up buyers."
So, the tax credit helped prop up the low end of the market without having much impact on the rest of the spectrum. Expanding the benefit to existing homeowners should boost those segments. That should produce additional benefits, according to Yun.
"Preventing further price decline or even nudging prices up a bit stabilizes housing wealth, which makes homeowners more comfortable in their spending," said Yun. "They're more likely to go out to the stores or buy a new car. That provides a boost to the overall economy."
Milicki & Associates, Inc.
110 Evans Mill Dr Suite 103
Dallas, GA 30157
770-874-2022
866-966-3022
information@milicki.com
www.Milicki.com
Friday, November 6, 2009
Tax Credit Extended and Expanded
As of – Thursday, November 5th – that bill has passed and will be sent to President Obama for his signature
Upon Passing the extension of the HomeBuyers Tax Credit there will be several changes to assist homebuyers. It is no longer limited to First-time buyers bu has been extended to others also looking to purchase a home.
Let's summarize the changes quickly:
Once President Obama, has signs the bill, the expiration date for the credit will move to April 30, 2010.
First-time buyers who have not had interest in a principle residence for three years are still eligible, and the maximum amount remains the same – $8,000 for married couples, $4,000 for those filing separately.
Current homeowners, who have consecutively maintained the home they want to sell as their primary residence for five of the last eight years, are also eligible. However, the maximum amount for those homeowners is lower: $6,500 for married couples and $3,200 for those filing separately.
The tax credit may not used to purchase a home for more than $800,000. All buyers who want to get the credit must include documentation of the purchase on their tax returns. (Usually a copy of the HUD statement given at closing will suffice)
Milicki & Associates, Inc.
110 Evans Mill Dr Suite 103
Dallas, GA 30157
770-874-2022
866-966-3022
information@milicki.com
www.Milicki.com
Upon Passing the extension of the HomeBuyers Tax Credit there will be several changes to assist homebuyers. It is no longer limited to First-time buyers bu has been extended to others also looking to purchase a home.
Let's summarize the changes quickly:
Once President Obama, has signs the bill, the expiration date for the credit will move to April 30, 2010.
First-time buyers who have not had interest in a principle residence for three years are still eligible, and the maximum amount remains the same – $8,000 for married couples, $4,000 for those filing separately.
Current homeowners, who have consecutively maintained the home they want to sell as their primary residence for five of the last eight years, are also eligible. However, the maximum amount for those homeowners is lower: $6,500 for married couples and $3,200 for those filing separately.
The tax credit may not used to purchase a home for more than $800,000. All buyers who want to get the credit must include documentation of the purchase on their tax returns. (Usually a copy of the HUD statement given at closing will suffice)
Milicki & Associates, Inc.
110 Evans Mill Dr Suite 103
Dallas, GA 30157
770-874-2022
866-966-3022
information@milicki.com
www.Milicki.com
Tuesday, November 3, 2009
Senate Votes On Home Tax Credit
Senate Committee Says YESHouse & Senate Vote Next!
BREAKING NEWS: Senate Plans to Extend and Expand Tax Credit
The Senate has reached a compromise on extending and expanding the $8,000 tax credit for 1st time home buyers, a boost for the housing industry and a great opportunity for both buyers & sellers!
While its final passage remains uncertain, the agreement would extend the existing credit for 1st time home buyers, worth up to $8,000, plus offer a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.
The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor.
This Is Great News For Buyers and Sellers!
There are incredible properties available for buyers at prices that may not be seen again in our lifetimes. This means that more buyers will be in the market and that increases the odds for sellers. Insiders do not expect these incentives to be renewed again so buyers must take action now to get pending contracts before April 30th 2010.
Stay tuned for additional details as the legislative process continues. Please contact your elected officials and encourage them to "vote yes" to pass this important legislation!
The Window Of Opportunity Is Officially Open - Don't Miss It!
Please Contact Us To Get Started Today!
Milicki & Associates, Inc.
www.Milicki.com
information@milicki.com
770-874-2022
110 Evans Mill Dr. Suite 103
Dallas GA, 30157
Thursday, October 29, 2009
$8,000 home credit still in play
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: October 29, 2009: 10:51 AM ET
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
It's still not clear where President Obama stands on the issue. Last week, Housing Secretary Shaun Donovan said the administration wanted to review more data to better assess the cost of the credit before weighing in.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($250,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
First Published: October 28, 2009: 4:14 PM ET
Last Updated: October 29, 2009: 10:51 AM ET
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
It's still not clear where President Obama stands on the issue. Last week, Housing Secretary Shaun Donovan said the administration wanted to review more data to better assess the cost of the credit before weighing in.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($250,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
First Published: October 28, 2009: 4:14 PM ET
Wednesday, October 28, 2009
Cash in: Tricks for buying a home at the bottom
Barbara Corcoran shares insider tips to help homebuyers in this market
By Barbara Corcoran
TODAY
While others argue over whether this really is the bottom, savvy buyers are taking advantage of the best market in years to purchase a home. If you’re an aspiring homeowner, here’s the know-how you need to snatch up a bargain — where to look, what to watch out for, and how to get financing that will make your home-ownership dreams come true. The best kinds of homes to look for
1. A property with a clear ending! That is, a clear ending when it comes to estates, trusts, divorces and foreclosures.
2. A seller in trouble. Sellers who are behind on their property taxes, have a failed business or just need cash.3. A scorned homeowner. Just like a scorned lover, the homeowner had another buyer who just backed out. They will almost always sell the house for even less.
4. A shopworn listing. A home that’s been on the market for more than 60 days or a home that’s had numerous or aggressive price drops always signals a good deal to be had.
5. A home with an overgrown yard. It always means the homeowner is ready to give up.
6. A vacant home. No one likes to pay a mortgage on an empty house.
Some don'ts to keep in mind7. Don’t go for a short sale unless you have plenty of time. They can drag on and on because of the bidding process and you can end up paying the same money or more, with all the increased costs, repairs and the rise in interest rates, while waiting to close.
8. Don’t compromise on what you’re looking for just to get a “good deal.” It’s no deal if it doesn’t meet the criteria you want in your home.
Insider tips to spot the seller ready to take a low bid
1. Check the closets. See if the wife’s or husband’s clothes are no longer there.
2. Check the tax records. Find out how much the seller owes. You can get the records at the county clerk’s office, and in some municipalities the town records are online.
3. Look for give-away words. In advertising, words like “bring offer” or “drastically reduced” mean exactly that.
4. Ask your agent to pull the listing history on the house. It includes how many times the home has been listed and what the price reductions have been.
5. Let the seller talk! If the sellers are home at the showing, let them talk. Often they’ll say more than they should, like, “We close on our new home next month.”
How to get the financing you need as a buyer
1. Order the house appraisal first. The appraisal may come in lower than the price you plan to bid!
2. Ask the seller to pay part of your closing costs. It reduces the cash you need up front.
3. Ask not-for-profit organizations about financing. They’re good advocates for consumers who otherwise get overlooked or taken advantage of by major banks and mortgage companies. Check out NACA (Neighborhood Assistance Corp. of America), NHS (Neighborhood Housing Services) in your part of the country, and ACORN.
4. Review your own credit report early. Correct any errors in the report and fix everything possible before you shop for a home.
5. Ask for owner financing. Many older homeowners are not buying another home and like the idea of a steady 5 percent return using their old home as collateral.
6. Ask for a family contribution. Many parents are very happy to help the first-time homebuyer and their grandchildren secure their first home.
7. Prequalify for financing with your lender or mortgage broker before you begin your search.
8. Don’t take no for an answer. If you’re turned down by a local bank, you may still be approved by a national mortgage lender. If you’re turned down by a national lender, you’re often approved by your local bank.Milicki & Associates, Inc.
110 Evans Mill Dr. Suite 103
Dallas, GA 30157
770-874-2022
866-966-3022
information@milicki.com
www.Milicki.com
Tuesday, October 27, 2009
Pick the right pro at the right price
To keep a lid on home-improvement costs, hire only the expertise you really need.
By Josh Garskof, Money Magazine contributing writer
October 23, 2009
(Money Magazine) -- For anything from a small upgrade to a major remodeling job, perhaps the most important decision you'll make is whom to hire. You'll seek out a top-notch worker with a stellar reputation, of course, but first you'll have to decide what kind of expert you're looking for.
That choice can have a dramatic effect on the cost of your project. Whether you're wondering if you really need an architect to design your new den or debating whether a handyman can handle your wiring job, here's how to figure out which pro to call.
Specialist or handyman?
The difference: Electricians, plumbers, and other specialists have the know-how to tackle any project in their area of expertise, but they cost at least $75 to $100 an hour.
A handyman doesn't have that depth of experience but has the advantage of breadth: He'll not only hang your ceiling fan but repaint the ceiling too. You'll typically pay just $25 to $50 an hour for an independent handyman. Franchises such as MrHandyman.com and HouseDoctors.com will charge you more -- $50 to $100 an hour -- but are likelier to insure and bond their crews. (Both handymen and specialists may tack on an extra fee for small jobs.)
How to decide: For jobs that involve inside-the-wall changes to electricity, plumbing, or heating or cooling systems, go with a licensed specialist.
General contractor or several tradesmen?
The difference: A general contractor will handle a renovation, addition, or remodeling job from soup to nuts, bringing in whatever subcontractors he needs -- plumber, tiler, roofer, and so on. In exchange he'll mark up the subs' fees by 10% to 20%. Or you could hire those same contractors yourself and save thousands.
How to decide: If you need only one or two subs -- perhaps a plumber and a granite guy for those new counters -- and you're a veteran home improver, go for it on your own. Otherwise, a GC will spare you the hassle of getting referrals and doing due diligence on a host of pros as well as the delays and cost overruns you'll encounter by juggling multiple tradesmen yourself.
Architect or contractor?
The difference: When a contractor designs a project, he looks for efficient, cost-effective ways to achieve your goals: A family room addition is likely to be a boxy appendage off the kitchen, for example.
An architect is trained to design the new space around your family's lifestyle and to weave it seamlessly into the existing house. But his fees will also add at least 5% to 10% to your project cost -- and his design will probably cost quite a bit more to build than a general contractor's.
How to decide: Bring in an architect for any project that involves a significant alteration to your floor plan or exterior or will entail spending more than 10% of your home's value. You'll stand a better chance of coming away with a design that adds charm and value to your house.
http://money.cnn.com/2009/10/23/real_estate/home_improvement.moneymag/index.htm?postversion=2009102305
By Josh Garskof, Money Magazine contributing writer
October 23, 2009
(Money Magazine) -- For anything from a small upgrade to a major remodeling job, perhaps the most important decision you'll make is whom to hire. You'll seek out a top-notch worker with a stellar reputation, of course, but first you'll have to decide what kind of expert you're looking for.
That choice can have a dramatic effect on the cost of your project. Whether you're wondering if you really need an architect to design your new den or debating whether a handyman can handle your wiring job, here's how to figure out which pro to call.
Specialist or handyman?
The difference: Electricians, plumbers, and other specialists have the know-how to tackle any project in their area of expertise, but they cost at least $75 to $100 an hour.
A handyman doesn't have that depth of experience but has the advantage of breadth: He'll not only hang your ceiling fan but repaint the ceiling too. You'll typically pay just $25 to $50 an hour for an independent handyman. Franchises such as MrHandyman.com and HouseDoctors.com will charge you more -- $50 to $100 an hour -- but are likelier to insure and bond their crews. (Both handymen and specialists may tack on an extra fee for small jobs.)
How to decide: For jobs that involve inside-the-wall changes to electricity, plumbing, or heating or cooling systems, go with a licensed specialist.
General contractor or several tradesmen?
The difference: A general contractor will handle a renovation, addition, or remodeling job from soup to nuts, bringing in whatever subcontractors he needs -- plumber, tiler, roofer, and so on. In exchange he'll mark up the subs' fees by 10% to 20%. Or you could hire those same contractors yourself and save thousands.
How to decide: If you need only one or two subs -- perhaps a plumber and a granite guy for those new counters -- and you're a veteran home improver, go for it on your own. Otherwise, a GC will spare you the hassle of getting referrals and doing due diligence on a host of pros as well as the delays and cost overruns you'll encounter by juggling multiple tradesmen yourself.
Architect or contractor?
The difference: When a contractor designs a project, he looks for efficient, cost-effective ways to achieve your goals: A family room addition is likely to be a boxy appendage off the kitchen, for example.
An architect is trained to design the new space around your family's lifestyle and to weave it seamlessly into the existing house. But his fees will also add at least 5% to 10% to your project cost -- and his design will probably cost quite a bit more to build than a general contractor's.
How to decide: Bring in an architect for any project that involves a significant alteration to your floor plan or exterior or will entail spending more than 10% of your home's value. You'll stand a better chance of coming away with a design that adds charm and value to your house.
http://money.cnn.com/2009/10/23/real_estate/home_improvement.moneymag/index.htm?postversion=2009102305
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