by Phoebe Chongchua
Some homeowners have a long laundry list of to-do repairs and, interestingly enough, many of those items don't get addressed until (or if at all) it's time to sell the house. In hot real estate markets, repairs are sometimes not done before the sale. Remember bidding wars over properties that needed work? Well, today sellers are looking for the advantage that makes their home stand out. Even though housing inventory declined toward the end of last year, it's expected to rise as more foreclosures tumble into the marketplace this year.
While fixing up a home to sell can be costly, there are some ways to reduce the damage to your wallet. Cheryl Reed from Angie's List spoke to me about important repairs that shouldn't be overlooked. They are: changing your furnace air filters regularly, fixing leaky faucets/toilets, repairing caulking issues in the bathroom and defective electrical outlets/wiring.
"Our experts in the heating ventilation air conditioning industry tell us that 60 percent of all their service calls start because it's a dirty filter issue. If you have a dirty filter, it affects the efficiency of your furnace," says Reed. She says that it's a simple and easy repair that improves the air quality and saves you money.
"You can save about $100 a year if you just change those filters when you should." She recommends checking your air filter every time you get your energy bill. "If it's dirty and you can tell, you can see it; just switch it out. You can buy a number of air filters ranging from moderately good to really expensive and high efficiency, in terms of cleaning the air. You have a number of different options, depending on your budget," says Reed. She also says, depending on health conditions of those living in the home, changing filters more frequently might be necessary. The second repair is annoying and easy to spot. "If you've got a leaky faucet or running toilet, that's going to cost you," says Reed. "If you don't get it fixed you're going to be paying more and more. It can also lead to mold damage. It can lead to a loss of your cabinetry—the flooring in your cabinetry can be rotted away and that can affect your floor underneath and the walls. So you can have a big issue if it's not fixed soon," says Reed.
If there are problems with your home when you begin to show it, buyers will spot them. Reed says, "People who come to your house to check out whether they're going to buy it or not are looking really closely and they're listening really closely too." With plenty of housing inventory on the market, buyers are likely to move on if they feel the house needs a lot of repairs.
"You have to put forth your best impression. These small relatively inexpensive fixes are really important," says Reed.
Dirty tiles and damaged caulking can send a message to buyers that the house may be in need of even bigger repairs. "You're first going to have an aesthetic issue and second that's an indication that you've got a problem that could lead to mold and nobody wants mold in their house anywhere at all—it will grow if you don't have proper seals in your bathroom," says Reed.
"Those are things that you can see every day—sometimes we get so used to seeing them that we forget about them," says Reed. However, buyers don't.
Reed offers this advice, "Pretend you're going to try to buy your own home; what do you see that you wouldn't tolerate?" She says it's worth it to take the steps to fix the problems. Buyers don't want to fix those problems any more than sellers do. Check for defective outlets. Electrical problems are not only irritating but also can be very hazardous. "An electrical fire can destroy your home," says Reed.
Who should do the job? Of course, saving money is always key. Reed says some of these repairs might be suitable for a handyman but she cautions homeowners to be sure that the level of the repair matches the expertise of the person you hire.
"You're going to pay more in the end if you don't check out the person you hire to help you. Make sure that person has a good reputation and if it's required for him or her to be licensed in your area, you really should [use] a licensed person, even if it's more expensive," says Reed. Reed says, you may pay more but you'll get the job done right the first time.

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By LUKE MULLINS
Is 2010 the year to buy a house? It certainly looks that way: After a steep run-up in prices during the first half of the decade, home values have plummeted back to 2003 levels. Fixed mortgage rates are sitting near record lows. And the foreclosure epidemic—while painful for many home owners—has created some wonderful opportunities for bargain hunters. If that's not enough, Uncle Sam is handing out thousands of dollars in tax credits to nearly all first-time buyers and the bulk of existing home owners who close a purchase by June.
[Slide Show: 10 Things to Know About Real Estate in 2010.]
But while the 2010 outlook appears inviting, there's one key catch. "You need to have a stable job," says Mark Zandi, the chief economist of Moody's Economy.com. The economy is showing signs of life, but the unemployment rate is already at 10 percent and expected to go higher. And while those mortgage rates are attractive, buying a house makes sense only if you can bank on your income stream. So before you consider purchasing a home, take a hard look at your job, your company, and your industry.
That said, here are 10 things to know about real estate in 2010:
1. Prices to bottom: After more than three years of falling, real estate values have shown signs of stabilization in recent months. At the national level, home prices slid nearly 9 percent between the third quarter of 2008 and the same period this year, according to the S&P/Case-Shiller home price report. That's a notable improvement from the second quarter's nearly 15 percent annual drop and the first quarter's 19 percent decline. This improvement will give way to a bottom in home prices—finally!—in 2010, but not before additional declines, Zandi says. Zandi projects home prices will hit bottom in the third quarter of 2010 after logging a peak-to-trough decline of roughly 37 percent, based on the S&P/Case-Shiller national home price index. "That means we've got another roughly 10 percent [decline] to go," Zandi says.
2. Mortgage delinquencies up: Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter—the highest delinquency rate in the 37-year history of the Mortgage Bankers Association's National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate—which already stands at 10 percent—will peak at about 10.5 percent in the first quarter of 2010, says Patrick Newport, an economist at IHS Global Insight. Additional job losses mean more borrowers won't be able to pay their mortgage bills. "The [delinquency] rate is going to stay up there for quite a while because the job market is going to be really weak for a while," Newport says.
3. Foreclosures move upstream: The number of foreclosure sales will increase to about 1.9 million in 2010, according to Moody's Economy.com. And while we've already seen a growing number of more expensive homes heading into foreclosure, Heather Fernandez, vice president of marketing at the real estate search engine Trulia, expects the trend to pick up steam next year. (Trulia is a U.S. News partner.) "We are poised in 2010 to see a surge of foreclosures from prime borrowers. Hundreds of billions of dollars in option [adjustable rate] mortgages are set to be recast" next year, Fernandez says. Option adjustable rate mortgages allow borrowers to make lower monthly payments for an initial period, after which the payments adjust—or "recast"—higher. For some borrowers, the new payments can be more than twice their initial payments. Combined with other factors, like the loss of a job, a recasting option adjustable rate mortgage can make borrowers more likely to default. "These are [properties] at higher price points [and] potentially in more desirable neighborhoods," Fernandez says.
4. Mortgage rates to rise: Anyone who purchased a home in 2009 was presented with some extremely attractive mortgage rates. Rates on 30-year, fixed mortgages fell to an average of 4.88 percent in November, down sharply from 6.09 a year earlier. A key factor behind the plunge was a Federal Reserve program, first announced in November of 2008, that purchased debt and mortgage-backed securities from Fannie Mae and Freddie Mac. But the program is slated to expire at the end of the first quarter, and if private investors don't step up, fixed mortgage rates could jump. (The Fed, of course, could always decide to extend the program.) The unwinding of this Fed program, the improving economy, and mounting concern over government deficits could push rates on 30-year, fixed mortgages to roughly 5.5 percent by mid-2010 and close to 6 percent by the end of the year, says Mike Larson of Weiss Research. "Almost all signs to me point higher," Larson says.

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