My husband and I had never given much thought to home repair. That changed this summer when we bought a 70-year-old house in San Francisco.
Although the house is in great shape, we still have repaired our sprinkler hose, cared for our banana tree and tried to find a contractor to replace a picture window with a rotten frame. And in each case, the first item on our home-repair checklist was: Take a look at the Web.
For home improvements large and small, the Internet combines the resources of a public library and the knowledge of a jack-of-all-trades neighbor down the street. But while it’s possible to find advice on something as simple as changing a light bulb or as arcane as finding a vendor for solar-power panels, the Internet will take you only so far down the home-repair path. You still have to do the hardest part offline. Only time and sweat equity see the repairs to their completion.
Consider the daunting task of finding a contractor. Like so many other important searches, the Internet can provide a useful substitute to friends or family in searching for service people. And because the best sites have systems for screening their referrals, they’re good at directing you to reliable people, says Rob Enderle, an analyst at the market research firm Giga Information Group, Santa Clara, Calif.
A handful of sites help locate home-repair contractors. Microsoft Corp.’s MSN Web network offers an area called HomeAdvisor, which lets Internet users find information about home-repair projects and locate repair specialists. Other sites offer referrals and other information for services from pest control to plumbing, heating, electrical and appliance repairs. MyHomeKey.com, for instance, asks you to indicate your appliance brand, age, model number and the nature of the problem. The site gives you an estimate of the cost of the repair and lets you schedule appointments. Home-improvement sections of such popular search engines as Overture, Dogpile, Google and Yahoo! also have links to contractor-referral sites.
My husband and I went online hoping to find a contractor who could replace the front window and frame in our house before we were scheduled to move in, 3 1/2 weeks later. We chose ImproveNet.com, one of the earliest and best-known contractor-referral Web sites in the Bay Area. The Redwood City, Calif., company got its start in 1996 and expanded nationwide through the Internet in 1997.
At the ImproveNet site, we typed in the kind of project we were interested in, the approximate square footage involved, our budget and information about the house. The next day, ImproveNet sent us an e-mail assigning the project a number and telling us it was contacting possible contractors in our area. The company keeps a national database of about 30,000 contractors that it prescreens for credit and legal histories, insurance coverage and comments from customers. It forwards the customer’s contact information to professionals in the area. Then, the first four contractors to contact the customer and request a meeting are charged a small fee and receive the rest of the information about the job. The contractor who wins the project pays a fee to ImproveNet equal to a small percentage of the job’s total cost.
Unfortunately for us, everything after the initial registration took a very long time. Indeed, almost immediately we seemed to go from Internet speed to contractor speed. For starters, it was 18 days before we heard from an interested contractor. He sent us an e-mail asking us to contact him within three days to discuss the project. We exchanged phone calls and agreed he would come a week later to inspect our window and draw up an estimate.
The contractor came, checked out the window and then told us it would take as long as six weeks to come up with an estimate. He explained that the job involved a half-arch window and he needed to talk to window manufacturers to get prices.
Our hopes of having the job done before we moved in were, well, out the window. And what’s more irritating, the contractor still hasn’t gotten back to us with the estimate — 10 weeks later.
We could have asked our project manager at ImproveNet to prod the contractor along, or to get us someone else who could do the job more quickly. ImproveNet used to assign a project manager with such duties to each customer looking for a contractor. But so few customers called on their managers that ImproveNet says the service was discontinued when the company reorganized Oct. 1.
Of course, we also could have called the contractor ourselves to track down the status of our window estimate. But instead, we decided to let the window languish while we took care of more pressing jobs.
When it comes to projects you can do for yourself, the Web can replace a whole library of home-repair guides. Yahoo offers handy calculators in its “Living” section for jobs like painting, where home-improvement types can plug in wall measurements and find out how many gallons of paint they’ll need. There are calculators for concrete, tile, wallpaper, drywall and lumber, too, all of which allow people to better estimate the quantities they need to buy at their local hardware stores.
I found the Web sites operated by well-known retailers like Home Depot Inc. and Lowe’s Companies Inc. very helpful. Home Depot offers calculators to determine things like the air-cooling capacity needed to cool any room in a house, or a how-to instruction guide for repairing a deck, including time estimates. The Home Depot site also lets shoppers buy as many as 20,000 items online, and search for merchandise by SKU, or stock-keeping unit, number. Consumers can track the delivery of their package on the Web.
The Lowe’s Web site offers a how-to library that can be searched by topics such as home and garden. When my husband tried his hand at weeding, he punctured our sprinkler hose, which sprung a leak near the side of the house. Lowe’s Web library presented a section on choosing and repairing garden hoses, which offered us tips on patching the holes. Lowe’s informed us that specially designed hose tape or simple electrical tape can do the trick. My husband used electrical tape to seal the two small holes. It worked perfectly. We haven’t had any leaks since then.
General how-to Web sites such as eHow.com and About.com can provide helpful information, including how to install everything from sheet laminate to cabinets. Are fluorescent light bulbs really more efficient than incandescent bulbs? (Yes.) How long have cockroaches been roaming the Earth, let alone your kitchen? (More than 400 million years.) How do you remove crayon stains from walls? (Spray area with spot-stain remover; brush area with toothbrush).
We Have Bananas
The Web even helped us with our banana tree. We have a wonderful mature banana tree in our front yard, but the leaves have started to look torn up and yellowed. We worried that the tree might be sick, particularly after one of the branches bent near the base and drooped on the ground. The Home Depot site told us the best way to trim the branch. And for more information on how to care for the tree, we searched the Web for “banana tree care” and found several discussion groups, including one at Raingardens.com.
There we found a question from a fellow banana-tree owner whose tree had the same problem as ours. The person wanted to know what caused the lower leaves on his tree to turn yellow.
Another participant had replied that the yellowing on his tree apparently had coincided with a very cool week in April when air and soil temperatures had dropped at night. The reader said the cool soil slows the nutrient uptake, and one of the symptoms of nutrient deficiency is yellowing lower leaves. The person answering went on to explain that the tree required a regular monthly supply of a fertilizer and that the yellowing would disappear as temperatures warmed and growth resumed.
The advice certainly sounded reasonable and helped reassure us that our banana tree might be experiencing a short-term problem that we could solve with palm or citrus fertilizers.
We’re still in our first year as homeowners, but already the Internet has helped us in a surprising number of ways. A Web browser, it turns out, can be a pretty handy addition to your toolbox.
YONKERS, N.Y. (April 10, 2002) — It’s a night out for 51-year-old Pat Matfus and her sister, JoAnn Blanchard, 47, and what better way to spend it than learning how to lay ceramic tile?
To the delight of the Home Depot here in this New York City suburb, that’s just what the sisters — and a crowd of other women — were doing not long ago during a “Ladies Night” clinic at the store. Ms. Matfus, who by day is admissions director at a long-term care facility, and some others stepped up to spread mortar, place tiles and apply grout, while Ms. Blanchard, who is a wood-shop teacher’s aide, and the rest of the group watched. They all learned about wet saws for cutting tile, chalk lines for alignment, placing spacers between tiles to keep them even, and how to fix mistakes.
Some had epiphanies. “Is that why you get cracking? That’s what they did wrong installing my tile!” Ms. Matfus cried out.
It’s no secret that women have been purchasing and using tools and other home-improvement products for years. But they are now doing so in greater numbers. Both Home Depot Inc., the nation’s largest home-improvement chain, and Lowe’s Cos., No. 2 in the field, estimate that about half of all purchases made in their stores are by women and that women influence many additional buying decisions.
It’s a trend that is partly due to demographics: Single women make up the second-largest group of home buyers after couples, according to the National Association of Realtors. But it is also a response to increased marketing to women by retailers and tool manufacturers. Black & Decker Corp., for one, ran a novel commercial around Christmastime last year for its Navigator power saw that only at the end revealed the tool had been wielded by a white-haired woman in a housedress (and tool belt).
Currently, all Home Depot stores offer a variety of classes and clinics open to both men and women. The company says women-only classes began cropping up store by store several years ago as an alternative to “Monday Night Football.”
Last year, Home Depot required all of its stores to hold a women-only woodworking course that was “very successful,” says Kim McKesson, a merchandising executive for the chain, which is based in Atlanta. For now, the company doesn’t require all stores to hold special clinics for women on a regular basis but it seems to be heading in that direction, says Ms. McKesson.
Lowe’s has been working for some time to make its stores female-friendly but doesn’t hold special how-to clinics for women. However, the chain says it knows anecdotally that more women are attending its general classes.
The rationale behind Home Depot’s ladies’ nights is straightforward: “If you teach a woman to change a toilet, she feels a lot more confident about walking into a Home Depot and talking hammer and nails,” says Don Harrison, a spokesman for Home Depot.
A case in point: LaWanda Greene of Pensacola, Fla. Ms. Greene has had perfect attendance at “Ladies Night at the Depot,” which began at her local Home Depot last fall. Ms. Greene, 58 years old and divorced, used to hire a handyman when she needed minor work done on her home. Now, she can change faucets, fix toilets and use a power drill with impunity. “I’ve bought bits for my drill and some sawhorses,” says Ms. Greene, who is an executive secretary. “Some day I’m going to get a router. I’d like to get into cabinetry.”
Deeanna Enfinger, the Home Depot sales associate in Pensacola who pushed for women’s classes there, admits there was some concern it might be “politically incorrect” to shape a class for women, particularly since there already were well-attended, non-gender-specific classes.
“I said, being a military wife, I know there’s a need in the community for classes to help women,” says Ms. Enfinger, 25 years old. The first clinic at Pensacola, which has a big U.S. Navy base, was held a week after Sept. 11; the project involved using a scroll saw to cut out a plywood emblem in the shape of America. Subsequent classes taught the women how to install a toilet, hang wallpaper, patch holes in drywall and hang a door. A recent class centered on gardening.
When the lessons stop, the students often shop. After a class on how to use a power drill properly, Ms. Enfinger says the store sold five drills to participants: a Black & Decker basic model; two higher-priced DeWalt brands, also made by Black & Decker; and two medium-priced Ryobi drills, made by TechTronic Industries Co., Hong Kong.
Women say a major draw of the clinics and classes is working in a group. “Women look at projects very differently than men do,” says Ms. Matfus, one of the do-it-yourself sisters at the Yonkers class. “Men work alone, but women work in packs. We look to each other for support and encouragement,” adds Ms. Matfus. So the siblings dragged a friend to the class. “She called the next day and said she had so much fun she’s definitely going back for closet-organizing class,” says Ms. Blanchard.
While the women’s clinics at the store are expressly that, men sometimes show up. Among do-it-yourselfers attending the tile class in Yonkers were Cynthia Golding, 30, and her husband, Robert, 29. “Should I add an ‘a’ to the end of my name?” Mr. Golding asked as the sign-in sheet went around.
The Goldings plan to retile a bathroom in their apartment in nearby Scarsdale. Ms. Golding was down on her gloved hands and padded knees strenuously yet neatly pushing the 12-inch-by-12-inch tiles onto a section of prepared flooring. She deftly inserted rubber spacers between the tiles. Her husband, taking notes in the back row, said, “I can see who’s going to be running this job. I’ll make lunch.”
Most people wouldn’t take a six-week Australian vacation during a major home renovation. But then again, most people aren’t as confident about the roles of architects and contractors as Leo Butzel and Robbie Reaber, a retired Seattle couple who have updated their 1950s waterfront home four times since 1989.
Ms. Reaber and Mr. Butzel had already redone their blue-tiled bathroom with modern green slate surfaces and remodeled their kitchen and dining area by the time they tackled the master bedroom in 1995. But while they’d worked directly with contractors on the bathroom and kitchen projects, they knew that their ambitious plans to reverse the master bedroom and bathroom — flipping the adjoining rooms around to different sides of the house, and moving walls, electrical outlets, and plumbing — would require hiring an architect.
“The contractor wanted the architect’s drawings because it was a major job,” says Ms. Reaber. Because reversing the two rooms would require changes to the house’s plumbing structure, as well as new walls and electrical outlets, Ms. Reaber says the architect and contractor communicated closely during different phases of the project. After hearing the couple’s idea about switching the rooms, the architect generated drawings and remained in contact with contractors.
“The majority of the architect’s work was done, maybe two-thirds done, before the contractors began,” she says. “We had total faith in the contractor and architect.” She and Mr. Butzel were able to relax abroad while plaster flew back home.
Architect or Contractor?
This year, Americans will spend $175 billion on face-lifting — in some cases, fork-lifting — their homes, according to the National Association of the Remodeling Industry (NARI) in Des Plaines, Ill. The figure represents a 20% growth in remodeling spending since 1999. Yet, despite that growth, consumer’s confidence about how to work with architects and contractors hasn’t necessarily increased. Ms. Reaber’s and Mr. Butzel’s confidence are the exception rather than the rule.
“People no longer feel they have to live in a home as it is when they bought it,” says Gwen Biasi, NARI’s director of marketing communications. “Homes have become many people’s hobby.” But whether that hobby calls for knocking down walls and reconfiguring floor plans, or simply updating lighting fixtures, flooring, and countertops, hiring outside help to do the work can confuse homeowners.
Architects are necessary whenever a home remodeling calls for changing a home’s “footprint” (making an addition, or altering room sizes and shapes) or making major changes to plumbing, electrical, or heating systems. Architects will explore a homeowner’s lifestyle and use of the house, assess the house’s structure, and draw up construction plans that address both the owner’s desires and the structure’s requirements. Depending on their city’s codes, homeowners may also need to submit plans with an architect’s seal before beginning work.
On the work side, contractors actually execute architects’ design plans, rolling up their sleeves and doing the installation and building. Many remodelers can hire contractors directly without using an architect. This is especially true when the project involves replacing appliances, surfaces, cabinetry, or other built-in furnishings or making additions within a single room (a loft for children, an extra closet) but not breaking down existing walls.
Homeowners who work with an architect ultimately have to hire contractors (directly, or through the architect) to do the work, while those who go straight to contractors often learn that contractors want the advice of an architect before proceeding with changes. It’s possible to hire a general contractor to oversee a multistep project that subcontractors can address — pulling out all of a room’s cabinetry and appliances, rewiring the room, then installing new cabinets and appliances, for instance.
But some homeowners skip the general contracting and go direct to subcontractors — a process that might save some money, but could extend a project’s time frame, according to Mark Brick, president of B & E General Contractors Inc., Glendale, Wis. “If you don’t know the proper procedures, it’s often useful to hire a general contractor,” says Mr. Brick. “He’s your quarterback.”
Of course Mr. Brick would think so: He operates a so-called design-build firm, which employs both architects and designers under one roof and handles projects that cost $75,000 and higher. Design-build firms account for 20% of NARI’s 6,000 members, and their numbers have grown slightly in recent years. These companies attempt to blend the best of architecture and general-contracting businesses under one roof.
Mr. Brick says that going to an architect for designs and drawings but hiring general contractors separately can lead to higher costs, since an architect’s design fees may not include the cost of general contractors’ work. An architect alone, he says, can’t control the cost of contractors — meaning a client could get a dream design that is ultimately too expensive to execute. Going directly to a general contractor might be faster, he says, but could still lead back to an architect if subcontractors run into trouble.
“Our advantage is we can work within a client’s budget,” he says. “Because we do the full realm of the work, we can make suggestions that make a project workable.” Architectural consulting and drawings account for only 2% of his firm’s typical project costs, he said, with contracting and materials representing the rest.
Key Question: Why Are You Remodeling?
Some of the confusion about whom to hire, says NARI’s Ms. Biasi, may stem from the different reasons homeowners remodel. Ms. Biasi attributes the remodeling boom to the country’s aging housing stock, much of which was built during construction booms in the 1950s and 1970s. Homeowners often remodel old homes out of structural necessity — a maneuver that often requires an architect’s help. Many also choose to make additions rather than buy a new home. Ms. Biasi says that in 1999, the most recent year data are available, 5.1 million out of 44.4 million remodeling projects involved additions to a home’s original footprint.
Of course, many remodels simply address aesthetic changes to a home — replacing appliances, flooring and cabinetry or counter materials — that can be handled by contractors alone. Kitchens and bathrooms are the most frequently updated rooms, she says, because they’re the most used rooms in a house and the most likely to look worn or outdated. The color and material of appliances also changes from year to year. Right now, built-in wine racks or wine cellars attached to kitchens are in vogue, as are solid-surface (versus Formica) countertops. “The rage for the last three or four years has been stainless-steel appliances. People have made their kitchens look commercial,” Ms. Biasi says. “But in 10 years they’ll want to change that.”
Prior to their bedroom remodeling, Ms. Reaber and Mr. Butzel enjoyed researching their own home designs and hiring contractors through word-of-mouth — a process aided by Ms. Reaber’s prior job as an accountant at an architecture firm. At one point, the couple even fired a kitchen designer and replaced her ideas with computer-aided-design software renderings.
For some projects, architects and contractors say, acting as your own general contractor can be a manageable process. Elaine Chen, a 34-year-old advertising executive in New York, took this approach. Ms. Chen, who budgeted $25,000 to renovate the 900-square-foot Manhattan condo she bought last year, took blueprints from her 1970s space and made her own decisions about what she calls a top-to-bottom remodel of its kitchen and dining area.
“I want to replace the linoleum floors, all the appliances — including my brown 1970s refrigerator — and add a dishwasher. I also want to put in all new cabinets, and create a breakfast bar that cuts through the wall dividing the kitchen from the living room,” she says. “Since I’m the kind of person who really enjoys researching home design…I don’t think I need an architect,” says Ms. Chen, who hasn’t completed the project. “Architects can also help you source materials, but since my budget will only allow for mass-market cabinets from Home Depot or Ikea or the like, there’s not much they could do there to help.”
She already has located contractors through friends. Among them: the doorman who outbid rivals for a job sanding her floors. Ms. Chen says she wasn’t sure if he’s licensed as a contractor, but her condo association includes him on an approved list of repair and remodeling vendors. So given the board approval and his bid, she felt confident.
Architects Speak Up
Ms. Chen’s approach irks architects like Bryan Welty, of Welty & Associates, Dallas, who believes architects can help with more than just major home remodels. Mr. Welty is so concerned by the perceptions that architects produce only artsy and expensive designs for big-ticket remodels that he’s launched a Web business called virtualarchitect.com to market architects’ services for a broad array of remodeling projects.
“The perception is that rich people bring in an architect for any job and that most other people don’t need one,” he says. “A well-trained homeowner who knows what he or she wants can get by” without an architect, he acknowledges. “If you’re building a couple of closets in a bedroom, maybe you don’t need one.”
However, he says, consulting an architect isn’t always expensive. For instance, his firm worked with a family that wanted to build a wall replacing an entry between a kitchen and dining room. They got a $200 estimate from a contractor willing to build a plain wall between the rooms. Then they approached Mr. Welty, whose firm designed a dividing wall with built-in benches on either side, a plan that made creative use of space and cost $400 — a price that included the $200 contractor fee. The family used the architect’s plan.
David Grellier, a British architect based in Bremerton, Wash., who spent several years working in contract and design roles while applying for his American architecture credentials, frequently gets calls from people who just want to hire him for consultation or for design alone — for which he charges $2,500. Typically, he works on home remodels that cost $25,000 and more. “You hit problems when a builder thinks he or she knows more than they really do,” he said. “A good builder knows when they’ve gotten in over their head.”
That was the case with Mr. Butzel and Ms. Reaber’s builders, who wanted advice on their 1995 bedroom remodeling. These days, Ms. Reaber says, she and her husband are “done” with making changes to their 1950s home. She likes to show guests the effects of the remodeling they’ve completed over the years, including the way the master bathroom and its whirlpool tub offer a view of the water and access to a deck that was once steps from the bed.
“We bought it for the view,” Ms. Reaber says. “We’ve really changed everything.”
— Ms. Doherty is a free-lance writer in Seattle.
Buying or selling a home is the last thing most people want to think about this time of year. But for those in the holiday-season real-estate market, there are ways to avoid hassles and downsides — and maybe even profit from the timing.
Take Michael and Lea Sterling. After seeing home prices soar in the Monmouth County, N.J. area, the frustrated would-be homeowners are hoping this season’s holiday rush will keep rival buyers out of the market.
“I have a price range that is low for our area, so there’s not a lot of selection to begin with,” Mr. Sterling says. “But I think the holidays is a good time to shop for houses because there will be less competition for what’s out there.”
Unfortunately, while the competition may be less fierce, the pickings may be slim. Homeowners tend to avoid putting their homes on the market in December, unwilling to have their families’ lives disrupted by home shoppers and curious neighbors traipsing through their homes.
Others choose to wait until the traditional spring home-buying season, when a greater number of buyers means homes are likely to attract multiple offers.
The good news for buyers, though, is that the homes that are for sale usually are hitting the market because the homeowner is under pressure to sell.
“People who are selling homes at this time of year are often dealing with special circumstances — maybe they’ve recently divorced or have to relocate for their jobs,” says Bill Supple Jr., president of Picket Fence Preview, a producer of “for-sale-by-owner” publications in Burlington, Vt. “So these sellers are highly motivated, which for the buyers is half the battle.”
Despite the stresses, buyers and sellers alike can turn home shopping this month into a smart move. Here are pointers for those intrepid enough to dive into the real-estate market this season.
Keep It Bright and Simple, Sellers
Holiday home sellers not only have to contend with a smaller pool of potential buyers. They also have to deal with the stress of having strangers peeking into every nook and cranny amid the holiday din.
Real-estate experts generally advise home sellers to go with what works all year around — paint the walls neutral colors, remove all excess clutter, keep the house clean and tidy, do what you can to enhance its “curb appeal” and be willing to show the home whenever possible. But this season brings its own added nuances to each of these chestnuts.
Don’t Ignore the Holidays … Don’t forego the Christmas tree or do away with your usual Hanukkah celebration because your home’s up for sale. Just stick with the less-is-more approach. Seasonal wreaths, twinkling lights and festive home decor can all add charm and warmth to your home. But a tree worthy of Rockefeller Center or a garish light display that puts a strain on your town’s electric grid poses a distraction when you need buyers focused on your home.
Keep Gifts Out of Reach. The prospect of having strangers tour your home when you’re not around is always unsettling. But this time of year, when heirlooms, expensive holiday decorations and gifts are on display, it can be downright dangerous. “I caution sellers to be very careful about who you let into your home around the holidays because you don’t want people looting what’s under your Christmas tree,” says C.D. “Chip” Boring, owner of RE/MAX Realty Plus in Sebring, Fla. So go ahead and decorate your home, but keep gifts, cherished decorations and your best china packed away in a safe place.
Use Light to Your Benefit. It often isn’t possible to get a fresh coat of paint on the walls in the middle of the holidays. On top of that, the dark days of December don’t make things any cheerier. “People are looking to buy space and light, and in December you tend to have many more darker days,” says Myra Zollinger, a realtor with Coldwell Banker Realty in Chapel Hill, N.C.
But all is not lost. Use the festive occasion to brighten up your home. Holiday lights in the windows can be a particularly nice touch. And if you’ve got a fireplace, get it going before buyers tour your home. (Fire Marshall Bill alert! Just make sure the flames are far enough from holiday decorations to avoid fire.) “You also want to make sure the walkway is clear and that any outside lights are on,” Ms. Zollinger says.
Give Them a Sense of Smell. Heat apple cider and cinnamon on the stove to scent your home with the delicious smell of the holidays, and maybe put out a tray of baked cookies or holiday candies for buyers. The idea is to radiate the warm sense of hominess buyers are seeking. Just don’t go overboard with the aromatherapy. “Remember that a lot of people can’t even walk into stores that sell scented candles because they have allergies or their senses are just too sensitive for it,” Ms. Zollinger says.
Brace for Delays. Time may be a determining factor on whether you accept a bid, but even under the most ideal circumstances problems may crop up that delay the closing. Since a number of professionals — lawyers, realtors, home appraisers, inspectors, loan officers — may be necessary to bring the sale to its conclusion, it’s likely holiday plans and travel will make scheduling tight.
“Buyers and sellers sometimes assume that realtors and other professionals are there 24 hours a day,” says Steve Goddard, a realtor with RE/MAX Beach Cities Realty of Manhattan Beach, Calif. “But this time of year they may be not immediately available.” When possible, work with your realtor and buyer to schedule appointments before the last two weeks of the year, when many businesses are closed and workers are away on vacation.
Don’t Swing at a Low Ball. If your home is in one of the many real-estate markets that continues to see strong demand, chances are you’re likely to get offers at or near your asking price even at holiday time. But home prices have leveled off in many areas of the country, and that may embolden buyers to offer a sharply lower bid than you’d typically see during the hectic spring shopping season.
Depending on your circumstances, their offer may be right for you. But before you take the first offer tendered, evaluate the total costs involved in selling your home (realtor fees, moving costs, etc.) and decide whether you can afford to accept a price that’s lower than what you’re asking.
And Think About Taxes. If you’ve owned your home for at least two out of the last five years, you’re allowed to exclude up to $250,000 ($500,000 for those married filing jointly) of any gain on your home sale. But if you’ve owned your home for many years and live in an attractive location, you may be looking at a profit that exceeds even these generous levels. If this is the case, think carefully about setting a closing date. If you have significant losses this year, it may be wise to try and schedule the close in December to offset the gain this year. If, on the other hand, your personal income is likely to be significantly lower next year, closing in January may let you benefit from lower capital-gains rates. Consult a tax specialist for advice.
Buyers, Make the Most of Your Bid
Obviously most homebuyers would like to be in the market when there’s the largest possible inventory of homes, but that isn’t always possible. Would-be holiday homebuyers tend to be highly motivated to buy a home for personal reasons — maybe a lease is set to expire on an apartment rental or there’s a need to move a family to another location before the end of the school winter break.
Other home shoppers view the holidays as a window of opportunity, says Robert Irwin, author of “Home Closing Checklist.”
“Savvy buyers realize that sellers aren’t going to have as many offers, and sellers may be more interested in looking at offers they may have turned away other times of the year,” Mr. Irwin says.
The important thing here is to avoid letting the anxiety of home shopping during the holidays rush you into buying a house that you aren’t crazy about just for the sake of getting into a home, or push you into buying a bigger house than you can afford.
If you have found a home that fits your lifestyle and budget, there are a number of ways — some applicable all year around — to raise the odds that your offer will come up a winner.
Show You Can Pay. The must-have home-shopping document this season? A letter from your lender saying you’re preapproved for a loan, subject to the home appraisal and survey, Mr. Irwin says. “To at least be a player, you’ve got to be preapproved for the loan, and the lender has said it will loan up until a certain amount,” he says. “Prequalified just means you appear to qualify for a loan.”
Up What You Put Down. When a seller needs to have a deal done by the end of the year, money talks and promises walk. A large down payment will give the seller the confidence to take the home off the market because you have more on the line if the deal falls through. So do what it takes to claw together the biggest down payment you can afford.
The holidays offer the perfect excuse to hit up parents or grandparents for financial gifts (they can give up to $11,000 each, tax-free). Also, the fact that you’re home shopping gives you a great excuse to stick with inexpensive “it’s the thought that counts” gifts and skip pricey presents for friends and family.
Be Flexible With the Close. While it isn’t always practicable for buyers this time of year, you may win a homeowner over with a less-than-attractive bid if you allow the owner to set the closing date — whether they want to move fast or take their time until the holidays are over.
Remember to Sell Yourself. Try to make a good first impression should you get a chance to meet the seller, either at an open house or on a walk-through, says Mr. Goddard of RE/MAX Beach Cities Realty. He also suggests writing to the seller. “What I’ll do is have a buyer write a letter saying, for example, how they grew up in the area or how much they’ve always loved this house and want to raise their kids here,” he says. Sending your letter along with a holiday greeting in a seasonal, nonreligious greeting card can also help to set your offer apart.
And Don’t Fret About Taxes. Though significant tax breaks accompany homeownership, don’t rush to close a deal in December thinking you’ll reap huge benefits on your 2003 tax returns. Even if you close this year, you probably won’t make your first mortgage payment until February. As for any “points” you pay to get a lower rate, you’ll get the benefit this year or next. The difference isn’t so great that it should rush you into making a bad decision.
— Ms. Cullen writes the Fiscally Fit column for The Wall Street Journal Online.