Best way to increase home value?
Hi, recently bought and moved into my first home and it has been a nightmare to say the least. My inspector was apparently Stevie Wonder, reincarnated. No other explanation for all the major things missed that have had to be addressed or still need to be.…
Hi, recently bought and moved into my first home and it has been a nightmare to say the least. My inspector was apparently Stevie Wonder, reincarnated. No other explanation for all the major things missed that have had to be addressed or still need to be. Anyway, I only put 3% down and used most of my reserves for the down payment and closing - I know, I know. You all can yell at me but what’s done is done. I have good cash flow month to month but I am facing down a few big expenses on top of what I’ve already had to cover (mold remediation primarily). So I’m looking into my financial options. I’d like to avoid more credit cards. I could do a personal loan, of course. Equity loans and LOCs are where I have questions. I know you need more than 3% equity. That said, my house over appraised at closing and has since appreciated a small amount apparently. I’m in a hot market in a HCOL area. So I’m wondering if there’s targeted, smaller things I can do to drive my equity up enough to be able to take out a HELOC or HELOAN, and whether that’s worth the effort over just doing a personal loan? I bought the house for $359k two months ago, it appraised for $365k as a functional one bedroom (see below regarding bedroom), and Redfin has it at $372k currently. I’m in north NJ. For reference to what types of things I’m talking about: I already need to redo my front steps and walkway - it’s not critical but the timber frame is rotted and not attached to the house fascia anymore. Seems like an easy curb appeal with the walkway diy friendly at least though the steps would cost. Garage door could be painted and updated. One bedroom was sold with just a subfloor - I could install some vinyl plank flooring or something else cheap and easy? Not sure if there’s other high impact lower budget items that I could then roll the costs of into a HELOC if I got one later. Or if all of this would be worth the effort vs a personal loan. Looking for advice! ETA: the repairs listed above are examples of small things that I know absolutely could wait. I also know they could help boost my home value and are relatively lower cost. I listed them as possible examples of things I might be able to do to boost my appraisal value. The actual must-do reno is demo-ing a ground level deck that is pitched towards my house driving in water under the sunroom windows every time it rains, then regrading most of my backyard, rebuilding a retaining wall that runs the length of it (including somehow being structural to the deck) and supports my septic drain field, and adding in proper drainage away from my foundation.
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It’s not. I’d love to be able to just ignore it and wait but there’s water coming in under the back sunroom windows every time it rains because the back yard and deck are pitched at the house and foundation, not away. The things I listed were the small items I thought might help drive up my home value, not the big ticket must-fix item which is the entire backyard grading complete with deck tear down and retaining wall rebuild. My credit score is actually 782, thanks. I had minimal debt prior to closing, just a car payment and a couple low balance student loans I kept open because they have a very low payment and were my oldest accounts. No credit card debt going into this. I have a balance on a zero interest card at the moment and a smaller balance on another that will be paid off in the next month. If not, I have another zero interest transfer offer I can use. I’m just looking for a way to keep water out of my house without adding to the credit card load.
So find a temporary way to alleviate that water. Put a lot of soil or whatever around it to change the pitch (idk I'm not a construction guy). It all sucks, but taking out a line of credit on a home you are already struggling with is probably not the right answer. Also call up your inspector. Most offer some form of warranty. That seems pretty unacceptable, and see what they say.
Yeah fair. Sounds like maybe just a smaller personal loan to address the major issue with water in the backyard would be better and then just pay it down as quick as I can and deal with the rest later
And he’s a helluva inspector! #justiceforstevie
Omg I’m so sorry, Stevie! I really thought he wasn’t 🤦🏻♀️
Fair point. Definitely willing to put in sweat equity for whatever is reasonably within my literal physical abilities. Much of the requirements for this big yard project is beyond me but my current thinking for the front steps, for example, whenever I get to them down the line is precast concrete (neighbor worked in concrete apparently and has connections for cheap install) and then diy a paver walkway with those poly paver bases. I’m really not crazy and trying to do everything all at once on credit. Just trying to figure out the best way to pay for this one huge project now.
I mean, I was literally just asking the question of whether I should try that or not for something I don’t actually have the time to save up for. Not sure why people are so pressed that I’m exploring finance options for keeping pools of water out of my home. Idk maybe it’s just me but that one feels like a big deal.
You just moved 2 months ago, you have no money ....that is a big issue. What people are addressing is those two things. Therefore you need to focus on what MUST be done to make the house safe, NOT what can increase home value. There is a difference between the two for you right now.
Because I can physically see the rot in the boards that are just loose and when I was weeding out pachysandra around the front this weekend as recommended by the pest control company, a particularly long root that crossed the threshold pulled the entire ledger board into the air. Felt like a clue, idk
So on my second trip to the house after closing the toe kick was hanging off the end of the cabinet run a bit. I squatted down and saw the mold. That’s also the point that I noticed signs of water damage at the bottom of the end cabinet next to the fridge compartment. The house was purchased without a fridge so that was likely the cause of the water damage. Owner failed to disclose. The mold remediation people also found mold inside the next cabinet over. When looking back at the inspector’s photos you could see it. He mistook it for dirt.
Honestly do nothing in terms of work and just live in the house it’s liveable. You can post on financial subs but there is a major between doing 3% because that’s what you can afford and doing 3% because that’s what you want. Try new 0 arp cards make a list of highest interest rates and pay these off first etc etc. The whole cheap reno for heloc is unreal. Furthermore lenders check credit scores and I assume with all that debt it’s not at a good place.
Spend money on those important things, not on unimportant cosmetic things
You will usually get another appraisal to see if your value increased. And also there’s a seasoning period usually before you can start taking out equity. But honestly, you might be in way too much in the weeds. Not everything needs to be addressed right now. Mold, yes. Subfloor bedroom? Not really immediate concern. I’d honestly just put something over it so it feels nice or if it’s second story, make it a bit sturdier. But doing reno completely on cards or loans is bananas knowing that you don’t have the money for it. My kitchen needs to be updated. The grout on the tiles are crap from DIY from the previous owner. But as it is now, I probably got a good few years or a lot more before it starts being a problem. Prioritize. I literally used cinder blocks for steps on my side porch because i’m not ready to deal with the porch yet.
It sounds like you have an issue with a deck that's a major problem. The rest is minor. So it's a deck that's built wrong and allowing water? Just tear down the deck, its ground level so just get rid of it. Grading is annoying but it's not rocket science, it's DIY-able depending on severity. Just do that, get some friends to help.
Get good at DIY. Don’t look to boost your equity just so you can borrow against it — the thing about HELOCs is it’s a secured loan meaning if something happens and you can’t pay, your house is on the line. So I would get away from thinking about your equity that way for now.
You need to stop about boosting your home value. And focus on a long game of slow fixed you save up and pay outright for.
(Stevie Wonder is still alive)
A. I think inspectors are junk, nothing surprising there. B. I have to question if you are approaching this right. You are trying to do big projects that will take on debt, to get credit taking on more debt, to fix some issues with the house. Just slowly, as much as that sucks, fix the major issues one at a time. It doesn't have to be RIGHT NOW. You can space projects out, and usually it will be fine.
How do you know the timber frame is rotted and not attached to the house fascia anymore??
How did you find out about the mold and the inspector missed it?? Just curious because I wonder if we should be checking for signs early on
I'm not an expert at all Wondering if you can just remove the deck (and not replace until you save up)? That gets the rotten wood away from the house and it might help with the water thing. If water still goes to the house after the deck is gone, can you put sandbags or cement bags (which will harden when wet) while you wait to save money. Those are just some uneducated guesses. I wondering if you talk to some reputable contractors, they might be able to give you some more educated budget options. To your original question, still not an exerpt but I really doubt a bank cares about minor fixes before a loan. They probably care about appraisal. And they already done one. But again, uneducated guess. maybe ask a couple of realtors or even ask a coule of lenders what would help you get a bigger loan. Is taking on a side hustle an option for the money - instead of a loan?
Do renovation at the speed of cash. I doubt you will get a HELOC with almost zero equity. Work overtime or do a side hustle to pay for repairs.
If it makes you feel better our home needs water diversion from the downspouts to further from the house, we can’t use 10ft downspouts unless I want it in my neighbors yard. So the plan is to do a French drain to the front of the yard near the silver maples. Water shows up in our basement during heavy rain events…it showed up in my parents’ house…my grandparents’ house…etc. they all have sump pump to remove the water. We do too. It’s not idea obviously but short of ripping your entire basement apart to put a water barrier in it’s probably going to keep happening. It’s not ideal, at least our case, and is something we need to address sooner than later, but it isn’t going to cause our 100 year old home to sink away into a hole. It’s been here 100 years with this problem. I don’t think a few more are going to be the kiss of death. Also slow down, we bought our home last year and have just been spending the first year learning its quirks, getting settled, and saving up money again. Now that we’ve done that we’ve started some interior projects, like putting light fixtures up on bare bulbs.
Reality check first. Your home appraised for $6,000 more than your purchase price. That does not automatically mean you have $6,000 of equity. The appraiser who did that report had your sales contract in hand. Their job was to determine whether the deal you negotiated made sense, and while they are not supposed to aim for that number, it is still sitting right in front of them the whole time. A brand new appraisal done today could just as easily come in under your purchase price, and that would not be unusual at all. Market value is not a fixed number that holds steady, it shifts with conditions day to day and isn't even a specific number, it's a range. The appraiser comes up with a range of values and then places your home within that range at their discretion. Redfin's estimate is not an appraisal either, it is an algorithm guessing off comps. None of these numbers are money in your pocket until a lender's appraiser confirms it with a fresh report tied to an actual loan. If you drained your emergency fund on this purchase, my honest advice is to focus on rebuilding it before you focus on boosting appraisal value. Something else will break. Water heaters fail, HVAC systems act up at the worst time, plumbing gives out. Owning a house means having cash set aside so you are not scrambling to borrow every time something goes wrong. On the DIY question, it depends entirely on your skill level and whether the work looks professional when it is done. An appraiser and a future buyer can both tell when a project was done poorly. A bad DIY job does not add value and can actually decrease it, so only take on what you can execute cleanly. Here is the bigger issue though. The steps, the garage door, the flooring, those are all nice to have but they are cosmetic. Your real problem is a deck pitched toward the house, water running under your sunroom, a retaining wall that is also structural for your septic drain field, and no proper drainage. That is not a "someday" project. Water intrusion and a compromised retaining wall near a septic field can turn into a much bigger and much more expensive problem the longer it sits. That is the item I would prioritize funding first, cosmetic upgrades second. On financing, a small HELOC or HELOAN typically needs more equity cushion than you currently have on paper, and the closing costs and appraisal fees may not make sense for the amount you would qualify to borrow right now. A personal loan gets you money faster with less red tape, though usually at a higher rate. Given you have a true structural and drainage issue that needs to happen regardless of appraisal value, I would price that project out first, then decide which financing option actually pencils out for the amount you need. TL;DR Your equity is smaller than it looks on paper, and appraisals shift with market conditions rather than holding steady. Rebuild your reserves before chasing appraisal boosts. Skip the cosmetic stuff for now, the deck drainage and retaining wall issue is the real priority since it protects your foundation and your septic system. Price that job out, then compare a personal loan against a HELOC/HELOAN based on the actual amount you need, not the other way around.