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7 Fixes to Avoid Major Foundation Problems

Water can damage a foundation in countless ways, so homeowners should look to experts for the dos and don’ts.


September 24, 2021 by Barbara Ballinger

Water is not always our friend. Sure, we drink it, swim in it, and need it to survive, but when it comes to homes, it can destroy the foundation, says home inspector Thomas Dabb of Immaculate Home Inspections in South Orange, N.J.

Water can enter a home from the exterior and interior, so buyers and homeowners need to keep their eyes open for signs of its presence—or worse—its damage.

The good news is that there are many experts available to spot and diagnose a problem and suggest the best fix. Water expert Steve Barckley with Exceptional Stone Products in Livingston, N.J., believes that homeowners should start by doing everything possible on the outside of the homes to correct problems and divert water away from a foundation.

Share these seven solutions with clients to help them minimize a foundation’s damage in various scenarios.

1. Improve grading. The slope of a property may direct water toward the base of a single-family house or multifamily dwelling rather than away. Cracks or openings in the foundation then allow it to enter, as well as through higher-level walls, the roof, and other entry points. Fix: “Be sure the grade slopes away from the house,” says Bill Coulbourne, a structural engineer whose eponymous company is near Annapolis, Md. A berm of soil or a swale with planting can prevent water from making its way to a foundation, says Cary Jozefiak, a home inspector with HomeTeam Inspection in Chicago. Caveats: This approach requires periodic maintenance to be sure the berm doesn’t erode. “It also needs to be directed so water doesn’t move toward a neighbor’s property,” Coulbourne says. Using a French drain to allow water to dissipate slowly from near the foundation into the landscape is more environmentally friendly than introducing it into the street to wash away, says Barckley. French drains also require some preventive maintenance to avoid clogging, Jozefiak says.

2. Waterproof a foundation. Keeping the foundation dry will prevent moisture from accumulating on the outside or entering inside. Fix: If wet, the best fix is to waterproof the exterior perimeter and interior walls of a basement or crawl space to prevent capillary action from building up, says New York City architect Victor Body-Lawson of Body Lawson Associates. “What we try to do is create an envelope around a building so water can’t enter through its skin, sometimes with a rain screen that drains water down and out to a storm drainage system,” he says. A sump pump will help if there’s moisture and water inside. It must drain far enough from a house, so water doesn’t recycle back inside if the property slopes or there’s an opening. Home inspector David Rose of Astute Home Inspections in Plainfield, N.J., suggests the drain be at least 5 feet from a house. A backup battery will prove useful if power fails.

3. Install gutters and downspouts. Water flowing off a roof will land near a house and possibly cause damage over time. Fix: A good line of defense is to have both gutters and downspouts installed around a home or building’s perimeter. The downspouts should extend far enough to carry away the water rather than have it sit near a foundation. Jozefiak recommends six feet away from a house. To keep gutters and downspouts functioning, they must be cleaned. How often to do so may depend on the trees near a house, Coulbourne says.

4. Keep large trees and bushes away from a house. Tree roots and other plant materials try to grow toward water, which can destabilize a structure and penetrate foundations, says Rose. Fix: If large trees already grow near a house, check that plumbing lines are free, and confirm there aren’t foundation cracks. If problems arise, the tree may need to be taken down or bushes transplanted, Body-Lawson says. Sacramento, Calif.-based landscape designer Michael Glassman suggests consulting a licensed arborist to check roots, stability, and if the tree should be removed. “The best time to remove trees is in winter when they are dormant,” Glassman says.

5. Don’t ignore diagonal cracks. Movement, temperature changes, and time may cause foundation cracks to develop. But large diagonal ones require attention from a structural engineer to avoid bigger issues. “Visual clues appear before structural inadequacies do,” says Madison, Conn.-based architect Duo Dickinson. Among the problems are moisture and salt destroying anything made of steel and non-pressure-treated wood, which may rot, Dickinson says. Fix: Cracks suggest settlement and send a red flag that something might be wrong with a foundation, says Body-Lawson. “It might have sagged but it may not deteriorate further. However, if it continues to do so, the foundation needs underpinning.” Cracks that appear in foundation walls due to settlement may be visible in a first floor’s interior, too, says Coulbourne. Hairline cracks are common, but when it’s a quarter-inch in width and V-shaped, it may indicate pressure on an exterior wall.

6. Check for significant leaks and stains, especially efflorescence in a basement. “An unfinished basement is the best basement because it’s easier to see problems,” says Rose. Fix: When a basement is finished, experts recommend looking for clues. For example, a rust color that shows through paint can be a sign of moisture, says Barckley. Efflorescence—white powder left behind from minerals in water—may also appear. Coulbourne says that mold is another indicator, most likely visible at the base of a wall where moisture accumulates. Use your nose, too, he says. “If you walk into a damp basement, you can smell that,” he says. Sometimes areas covered over need to be checked. For example, Rose may pop open ceiling tiles to examine what’s behind them.

7. Learn why interior or patio floors may slant. It could be that a house is settling, which happens over time, says Body-Lawson. “Old houses may sag a little and then stop,” he says. But if the floor or patio was level and now slants, it might be time to hire a structural engineer, says Jason Chang of Jersey Inspections in Verona, N.J. Fix: Floorboards, tiles, and carpet can be picked up, joists shimmed, and a new layer installed, says Body-Lawson. If water gets under pavers outdoors, they may need to be taken up, the pitch of the patio checked, a membrane or drainage system installed, then pavers put back, Jozefiak says.

Barbara Ballinger

Barbara Ballinger

Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).Comment

Small home art studio

5 Emerging Home Design Trends to Watch


August 18, 2021

With more time spent on activities in the home, flexible design is becoming increasingly important to homeowners. Also, they want to bring more outdoor elements inside. These are among the latest home trends, according to Houzz, a home design and remodeling resource. Houzz researchers identified the top emerging home design trends based on search insights from homeowners and home professionals at its site.

Here’s an overview of the five emerging trends Houzz identified in its report, 2021 Houzz Emerging Home Design Trends:

Dedicated activity spaces

Homes are being used for a greater number of activities as well as for entertainment. As such, Houzz identified growing interest for art studios, an increase of nearly 10 times over the past year, as well as home bars and wine cellars, home theaters, gyms, and offices.

The outdoors head indoors

More homeowners are seeking to tie their indoor spaces to the outside with more greenery and nature. Site searches for artificial plants and trees as well as indoor pots and planters are up significantly over the past year, according to Houzz. Also, the color green is offering that nod to nature, with a significant uptick in searches for green kitchen cabinets, bathroom tile, accent chairs, and bedrooms. One in five homeowners recently surveyed are opening up their kitchen spaces more to the outdoors, such as with slide-away panels.

Outdoor elements inside the home

Living room updates

As more people sheltered in, they gave their living rooms a refresh. Searches for living rooms are up 52% compared to a year ago. Accent pillows and home accents have seen the biggest increase, along with abstract paintings, display shelves, and slip or chair covers.

Stylish living room

Flexible design

Homeowners are seeking flexibility in how they use their space. As such, TV armoires with pocket doors, queen-sized Murphy beds, and nesting side tables, which all can increase the uses for a room, have jumped in popularity. Swivel accent chairs and daybed sets are also being used to create flexible rooms. (Read more: Designing the Perfect Pop-Up Office)

Home staging and design tips: Styled, Staged & Sold blog

Luxury fabrics, materials, and colors
The Houzz survey identified that fabrics, materials, and colors are going “glam” with more searches for velvet, gold, and crystal.

Interior of a luxurious house

Swimming pools in all shapes and sizes

Interest in swimming pools has surged during the pandemic. Searches for swimming pools and pool houses more than doubled in the second quarter of 2021 compared to a year earlier, according to Houzz. Homeowners are showing an interest in a variety of pool styles, shapes, and designs. For example, searches for pools with water features are up the most, as well as rectangle, lap, infinity, plunge, and geometric pools.Source: “2021 Houzz Emerging Home Design Trends Report,” Houzz (Aug. 18, 2021)Comment

The Construction Conundrum

The Plan Collection

The Construction Conundrum

With inventory still low, more home buyers look to plan B: new builds. But that, too, has become tough with land and labor growing scarcer and supply chain struggles lingering. Help clients navigate alternatives.


July 29, 2021 by Barbara Ballinger

3 Takeaways:

  • Material and labor shortages require longer wait times.
  • Prefab, spec, and pre-designed plans can help curtail long time frames.
  • Building codes and the property’s topography should be thoroughly assessed to avoid setbacks.

As the pandemic housing boom continues, many buyers are still losing out on homes as they go up against higher bids. Some are now seeking out land and new construction to get the home they want.

But this strategy has its own set of peccadillos, including a shortage of buildable sites, which associate real estate broker Kim Cantine, with Halter Associates Realty in Bearsville, N.Y., says is not brand-new. “My area is experiencing its fifth year of low land inventory,” she says.

Land prices have also climbed and are experiencing bidding wars, Cantine says. To cope, some home buyers look to the popular 1980s alternative of tearing down a house to build a new one, says Ben Brittingham, vice president of marketing and sales with MN Custom Homes in the Seattle area.

MN Custom Homes

However, that’s not a solution either since builders, architects, and contractors are swamped with requests, and building materials and appliances are priced higher and are frequently out of stock. Those performing the work can charge more or take only jobs they prefer.

What’s a frustrated buyer to do? Real estate agents and brokers can enable them to explore all options and find a big dose of patience.

Buy a Stock Building Plan

One way to shorten the new construction process and pare costs is to go with an existing house plan, a process like buying off the shelf rather than developing a custom plan. Tim Bakke, director of publishing at The Plan Collection, a 30-year-old company that now has more than 22,000 plans in its inventory and continues to design new ones, says a predesigned plan can shave a few months off the process and cut the design cost by at least $7,000 to $8,000, depending on the complexity and cost of labor.

Though the design won’t be custom, choices are sufficiently varied in number of bedrooms and bathrooms, style of layout, number of levels, amount of outdoor space, and many other features. The exteriors are also diverse, from the popular modern farmhouse look to more traditional Tudors and Colonials. One drawback, Bakke says, is that substantial changes, such as structural walls being moved, can’t be made without incurring added costs. But if a buyer thinks they may want more space, Bakke suggests starting with a larger footprint to have square footage to manipulate.

The Plan Collection

Build Custom

Hiring an architect or builder to design a house from the ground up is a major undertaking that requires making countless decisions, such as the size of the kitchen, height of ceilings and windows, number of bedrooms and bathrooms, type of doorknob, and even width of hallways. The advantage of this route is it gives homeowners more of what they want for their budget. “They can put solar panels on the roof to lower costs and make it passive and environmentally friendly, for example,” says Los Angeles–based attorney Robin Finch, a real estate partner at Greenberg Glusker.

The downside to building custom is that the process takes typically three to six months for the design, time to secure permits and approvals, and, depending on the size of the project, 12 to 16 months for building under normal non-pandemic conditions, says architect Victor Body-Lawson of Body Lawson Associates in New York City. Costs are also generally higher: The architect often charges a design fee (4% to 10% of construction costs) and a 10% contingency fee. On top of this, materials and appliances have jumped by as much as 20% per month in the current frenzied climate, he says.

Go With a Spec Home

Buyers have another possibility—selecting a house that a builder is constructing or has finished as a stand-alone residence or perhaps as part of a development. Depending on when clients buy affects how many choices they get to make, says Brittingham. If the house is finished, they buy what the builder has selected. But if framing has just begun, they may be able to make choices in such categories as tiles, countertops, vanities, flooring, cabinets, lighting, and more. Some builders offer choices at different price levels, such as laminate at a certain cost or pricier marble at a higher cost.

One distinct advantage is that the price point may be 10% to 20% less than a custom home because of economies of scale—though this is not guaranteed due to COVID-19, says Brittingham, whose homes average $2 million to $6 million. 

Think Prefab

Prefabricated home options have increased, with more companies building houses in a factory, says Sheri Koones, author of several books, including Prefabulous and Sustainable. Many of these companies are seeing great demand, including for houses to help house those experiencing homeless, she says.

Because of the building boom, the supply chain for this sector has been disrupted, too, says John Colucci of Westchester Modular Homes in Wingdale, N.Y. “We are not only paying top dollar for materials, but the lead times have created a slowdown. That being said, modular is still faster than stick building since we managed to keep our labor. We are all so busy, but some would-be customers are sitting on the sidelines,” he says.

Westchester Modular Homes

Factors Home Buyers Should Weigh Before Proceeding

How much will a house cost? Buyers must be realistic—they should budget 15% to 20% more than they expect the house to cost, especially as COVID-19 has increased costs of materials, appliances, and labor, Bakke says. When a mortgage is needed, Bakke says, it’s wise to remind buyers to consider the rule of not spending more than 28% of their monthly gross income. Others think the percentage should be based on overall life goals, which is why consulting a financial planner is wise. New construction requires a construction or bridge loan that converts to a traditional mortgage when the house is completed.

Duo Dickinson Architects

How much square footage is needed? Figuring out size can be tough in the abstract. Some 2,500-square-foot homes, for example, seem larger than others, which often depends on the amount of hallway space, height of ceilings, windows, and light. It’s best for buyers to walk through existing homes to get an idea and list which rooms they want and dimensions. Architect and author Sarah Susanka started her “not-so-big house” movement decades ago to emphasize the importance of having every inch count and spaces do double duty, which may help cut costs.

Homeowners should also bear in mind that square footage is the single biggest driver in determining building costs, says Bakke. The cost varies widely in different parts of the country. According to 2019 U.S. Census Bureau data, the median price per square foot for a contractor-built single-family home was $114, but these days many cite higher prices of $300 to $400, and in certain cities like San Francisco and Boston they may rise to $600, says Madison, Conn.–based architect Duo Dickinson. Finishes also affect pricing.

How much detailing is included in a plan? After interviewing two or three architects or builders to design the house, home buyers should check references (like from a local American Institute of Architects list), licenses, insurance, and referrals and decide—or go with a design from a plan company. It’s critical to read the plan to be sure everything is included and in the right place, including windows, electrical outlets, roofing trusses, stairs, doors, and plumbing. A bank may need detailed construction drawings and a site plan, according to Bakke. If a buyer doesn’t understand how to read a plan, suggest they learn from sites such as The Basics: How to Read Architectural Plans.

Why is the site key? The spec house builder will have vetted the land choice, but a custom house requires a buyer find a suitable lot. Not all lots—even those that are the same size—meet that criterion. Some require trees to be removed, septic systems and power lines to be added, and soil to be tested, says Dickinson. Body-Lawson says the geological makeup should be studied because it may cost more to excavate a rocky or wetlands site, if allowed. Information about the area’s broadband capability is important, particularly as many people work from home.

A professional on the team also needs to check town rules about land records to be certain there are no outstanding liens and to know the setback limits. These days, some information can be gleaned from aerial photographs and mapping systems that a building department usually has, says Dickinson.

To curtail costs, Body-Lawson recommends that homeowners try to buy undervalued land, which may mean a site farther from town or with fewer features on buyers’ wish lists—such as a chance of forgoing mountain views. They should also avoid overbuilding for their area, since prices may not continue to rise.

Why secure multiple bids? For the actual design, the buyer should secure three bids that compare apples with apples. Bakke says any contractor or builder hired should have experience in the homeowner’s area, so they understand the topography and local building codes. Sometimes, a bank may ask a builder to complete a review application to be sure the person is licensed and insured and has a history of successfully completing projects, Bakke says.

Take Time to Draft a Detailed Contract 

With so many details to consider, and so many different work crews involved in the process—including subcontractors and landscapers—it’s critical that a homeowner have contracts with all those involved, which a real estate attorney should review. Los Angeles–based attorney Robin Finch of Greenberg Glusker suggests bringing in an attorney early in the process, even before land is bought.

The contract should specify the amount of the down payment, how much to pay at specified time periods, how to handle change orders, the amount to hold back until everything on the punch list is completed satisfactorily, for what reasons a contract can be cancelled, and for how long a warranty guarantees work such as a house settling, says Ann O’Connell, an attorney and legal editor at Nolo, a legal publisher of books and software based in Berkeley, Calif.

At the same time, these tough COVID-19 times require flexibility, says architect Katy Flammia, design director of the Hudson, N.Y., office of New York City–based Spacesmith, an architecture and interior design firm. “We’re finding with construction that it’s almost impossible now to establish construction costs, which we used to keep the design within our client’s budget. What our clients could buy a year ago is different than what it costs now, and we’re seeing almost weekly price increases,” she says. Furthermore, she cautions clients to be flexible. “They may want to have a list of alternates in materials and scope, and even construction method alternates such as prefab components,” she says.

Some of the former ways that homeowners could protect themselves in their contract may no longer be included. Because of COVID-19 work delays, shutdowns, and price increases, it may be impossible to convince an architect and general contractor to agree to include financial penalties, known as liquidated or punitive damages, if someone gets sick and is off the job for a while or if prices rise higher than they expected, Finch says. So much is market driven, she adds. To resolve any potential problems on either side, it’s best if mediation can be stipulated as a recourse rather than litigation, due to lawyer and court costs and time, says O’Connell.


What About Those Rising Lumber Prices?

Lumber prices—plywood, hardwood, and softwood—have soared across the board. In fact, costs are up 130% since the start of the COVID-19 pandemic more than a year ago, adding $30,000 to the price of a new home, according to the National Association of Home Builders.

Because of the prices, as well as significant shortages, many architects, builders, and home buyers are asking two key questions: How long will the surge continue and why did it happen in the first place? Tony Uphoff, president and CEO of Thomas, which provides analysis and tools that reflect the buying process, says his company data shows a steady surge in sourcing activity for lumber over the last year.

“The situation,” he says, “has been long in the making. As a country, we have relied on Canadian forest lumber whose supply has diminished in recent years.” Part of the problem is also due to tariffs going up, which resulted in further withering demand in the U.S. due to the increased prices. As a result, Canadian mills began to shut down locations to protect themselves against lost revenue, he says, adding, “This initial step was magnified as we entered the early stage of the pandemic. Then, with many working from home, they began to evaluate their living quarters. Some sought more space, which drove a spike in residential housing prices and new construction. And many already owning a home spent more time and took on more projects.” The upshot, he explains, was “exacerbated demand on an already fragile lumber supply chain, which drove prices to an all-time high.”

And there’s more, he says. “The continued result is that some builders are pausing their work on new construction projects due to the high lumber prices. Other construction companies report that even at high prices, they are having difficulty sourcing supply through their established supply chains.”

But some good news has been emerging for several weeks. Sawmills have increased output over the last year and another increase is expected, according to Alex Hickey in her “Morning Brew” report. Most recently, prices started to fall, though what will happen over the long term is anybody’s guess. Homeowners and the professionals working on their homes are wise to keep an eye on prices and anticipate a possible seesaw effect, especially as COVID-19 numbers ramp back up.

Barbara Ballinger

Barbara Ballinger

Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).

Top 10 Issues Affecting Real Estate in 2021

Man on video call from home


June 24, 2021

Remote work and mobility are expected to have the most significant impact on real estate over the next year, according to The Counselors of Real Estate’s list. The group identified current and emerging issues expected to have an influence over real estate in the 2021-2022 cycle. Remote work and mobility and its influence over commercial buildings globally was named as the top issue, followed by technology and ESG (Environment, Social, and Governance).

“The pandemic was a stress test, revealing vulnerabilities, appetites, and new and increased risks,” says Michel Couillard, global chair of The Counselors of Real Estate. “These themes present themselves in the 2021-2022 Top Ten Issues, which are highly interconnected and indicative of a newly changed and further evolving real estate environment. We have been awakened to some familiar but nascent areas of importance, namely cybersecurity, supply chain, and price instability. None of these are new concepts, but in a span of months or even just weeks, we saw high profile hacks, shortages of resources like microchips, lumber and labor, and rising prices across the board.”

Here’s a closer look at the top 10 issues on CRE’s list for 2021-2022:

1. Remote work and mobility

The pandemic greatly disrupted the workplace as many employees began to work remotely—and still are more than a year later. Commercial properties may need to be repositioned as the workplace adapts to more flexible and even shareable spaces.

“As we emerge from COVID-19 into a new world replete with local and global disruptions alike, our industry has been forced to recognize that adaptability and resiliency are paramount in real estate markets,” says Couillard. “It is undeniable that the pandemic’s disruption significantly impacted human behavior in how and where people have chosen to work. Now, with an escalating return to ‘business as usual,’ and workers beginning to return to offices, landlords, and companies nevertheless are facing repositioning of the workspace and the benefit of easily adaptable and shareable spaces. …. Property owners and managers should be flexible in order to accommodate these demand-driven changes in the desired use and location of space.”

2. Technology acceleration and innovation

The Counselors of Real Estate also ranked the acceleration and adoption of technology as having the second greatest impact on the real estate industry. “The stressors were not about new tech, but about the acceptance of it,” Coulliard says. “Lockdown-driven changes in our work, the economy, in social structures, and in our personal behavior forced the industry to put any earlier reluctance aside.” Growing technology themes include artificial intelligence, machine learning, the Internet of Things, and cybersecurity, the report notes.

3. ESG at a tipping point

Environmental, social, and governance (ESG) initiatives are growing. In 2020, ESG funds more than doubled net new money intakes. “The growth in recent years is fueled by multiple drivers, including consumer shifts, regulatory requirements, trillions of dollars of wealth transferring to generation Z and millennials committed to philanthropic living, a blurring of work and societal expectations, and a full sprint to attract and retain top talent,” the report notes.

4. Logistics

“Whether it’s a port, rail line, pipeline … manufacturing facility, warehouse, farm, ranch, or grocery store, all these real estate assets are a critical segment in the supply-chain funnel that is logistics,” the report notes. “How logistics is functioning impacts the utilization of commercial real estate. Redundancy and the ability to process disruption are two key elements required to support the fast-moving, high-volume requirements of modern-day logistics in the ‘shop-online-and-deliver-to-me’ era in which we find ourselves.”

5. Infrastructure

The Civil Engineers estimates the U.S. infrastructure funding gap in 2021 to be $2.6 trillion, a 24% increase compared to 2017. “The COVID-19 pandemic, climate change, and heightened societal interest in social and economic equity have redefined infrastructure imperatives beyond the significant ongoing necessity for improved roads, bridges, airports, ports, mass transit, and other traditional infrastructure needs,” the report notes. A proposal on Capitol Hill sets out to allocate $110 billion in new spending to bridges and roads, $65 billion to expanding access to broadband, and $48.5 billion to public transit, and more. Stay updated here: NAR resource page on transportation and infrastructure in real estate

6. Housing supply and affordability

The National Association of REALTORS® and the Rosen Consulting Group released a report last week calling for a “once-in-a-generation” response to address decades of underinvestment and underbuilding in the housing market. The nation has faced a shortfall of 5.5 million to 6.8 million housing units since 2001, according to the report. Housing groups are calling on lawmakers to expand access to resources, remove barriers to incentivize new development, and more. Read more from NAR’s report on this: ‘The State of America’s Housing Stock Is Dire’

7. Political polarization

“Political friction is holding back America’s economic productivity,” the report notes. “We are squandering resources as we try to address problems that arise from the partisan divide rather than problems confronting us as common issues …. And the real estate industry’s well-being is a function of our economic growth.”

8. Economic structural change

Economic growth is mostly an unknown. As the report notes, how do we assess the real potential of the economy for sustainable growth? What numbers indicate a true trend and which are merely adjustments from the low bottom of the second quarter of 2020? Which behavioral changes made by U.S. households in the pandemic will persist? The ability for businesses to anticipate what’s next is met with challenges. For example, “even though real estate investors may reasonably expect an uptick in demand in the coming year, the ability to anticipate when occupancy and rent will rise frustrates underwriting,” the report notes. “We are observing many investors increasing their focus on property management aimed at retaining tenants and defending cash flow, while selectively seeking ‘value-add’ properties amenable to active asset management. The thinking is ‘focus on what you can control’ during this period where macro-level uncertainty is the governing headwind at the policy level in terms of the structural problems in this economy.”

9. Adaptive Reuse 2.0

The term is not new but the focus is getting bigger. CRE refers to Adaptive Reuse 2.0 as “The Neighborhood Approach.” It aims to address the challenges of what to do with defunct suburban malls and thousands of empty big-box retail stores that are surrounded by desirable and affordable neighborhoods. It requires a re-examination of suburban communities in repositioning and transforming areas that could be at risk for blight. A number of projects have been completed or are underway to help reconnect communities, prevent blight, and restore green space.

10. Bifurcation of capital markets

Debt capital markets have been volatile since the pandemic, namely public markets like commercial mortgage-backed securities, mortgage REITs, and agencies such as Freddie Mac and Fannie Mae. “Mortgage REITs took a significant hit early in the pandemic, with some recent recovery driven by restructuring credit lines and paying down credit facilities that experienced margin calls,” the report notes. Still, the “market continues to be flush with debt capital liquidity, despite property type and market uncertainty. Looking out to the remainder of 2021 and into 2022, performance will dictate the amount of distress and losses, and risk management should dictate markets, property types, leverage, loan structure, and pricing for mortgage debt. The next year should also tell us if commercial real estate debt was too rich and whether perceived risk underestimated where pricing should have been.”

Learn more about each of these issues:

6 Tips to Bring Your Curb Appeal Back to Life This Summer

Selling the outside of a home is just as important as selling the inside. Here are ways to instantly give the exterior an update.


July 5, 2021Design & Architecture

Submitted by HomeLight(link is external)

If you’re looking to cash in on this booming seller’s housing market,(link is external) you may want to put more focus on the home’s exterior. A home’s outward appearance plays a big role in whether potential buyers want to tour the interior. HomeLight, a real estate referral company, offers up several ways to give the home’s curb appeal an instant makeover:

Modern house exterior at dusk, with patio

1. Update the light fixtures

Updated light fixtures can change the way the front of a house looks but has an added benefit of making it safer when you use brighter bulbs too. Most outdoor lighting fixtures are much smaller than they should be. (That may had been intentional on the builder’s side; smaller fixtures are less expensive.)

Tip for choosing the right fixture: When you’re choosing a new light fixture, take cues from the home’s architecture, color, and your location. For the size, choose a fixture that’s one-third of the height of the door if you have only one light and one-quarter the height if you have a light on both sides of the door.

2. Upgrade windows and doors

Updating your windows and doors are a great way to improve the overall look of your home while also being energy-efficient. Consider adding window boxes, shutters, or even painting the trim for an added pop of color.

When upgrading the front door, be sure to choose a new door that matches the home’s style. Or you could follow the latest front door trends for 2021–glass elements, custom hardware, wood stains, or darker paint colors.

3. Paint

Painting your house is a huge task, but it can pack a huge punch! Just imagine the statement you’d make by ditching the boring beige, dulled white, or dated yellows. If you want to modernize your house, consider painting the house black or navy blue. Or, if you want to achieve that comfy-cottage look, try a light shade of gray or even a very pale shade of pink.

4. Add wood and/or stone elements

Adding wood or stone elements to the exterior can help give a home a “wow” factor. Even if you don’t want to put stone veneers on the exterior, you could add stone and wood elements in other ways, like by using stone to line the walkway, a wooden fence, or even stone or wooden lawn ornaments.

5. Hire a professional landscaper

There’s a huge difference between do-it-yourself landscaping and landscaping that’s completed by a professional. A professional landscaper can make your lawn a luscious green carpet that’ll make you want to kick off your shoes. They’ll know which native plants to choose to make a yard warm and inviting. They can also create water features, intricate flower beds, build retaining walls, and more.

6. Refinish walkways and the driveway

The walkways and driveway get a lot of use, and all that wear and tear will need an update over time. A professional landscaper or hardscaper also can upgrade your driveway and walkway by using stone, brick, or cement. But if you’re on a budget, a good power-washing may also give a curb appeal boost.

Best Upgrades for Hosting
Source: Top Agent Insights for Spring 2021(link is external), HomeLight

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More Homebuyers Making 20% Down Payments and Waiving Appraisal and Inspection Contract Contingencies


June 23, 2021Mortgage FinancingFHA ProgramsVeterans AffairsBy: Scholastica (Gay) Cororaton

Homebuyers who make a 20% down payment and waive appraisal and inspection contingencies are on the rise, based on the May 2021 REALTORS® Confidence Index (RCI) Survey which reports monthly transactions from a random sample of REALTORS®1.

Among all buyers2 who obtained a mortgage in May, the share of mortgages associated with at least a 20% down payment rose to 52% in May 2021, up from around 40% in 2011. Among first-time buyers, nearly one in three made a down payment of at least 20%, up from around 25% in 2011. This trend reflects the decline in the share of buyers who obtain mortgages insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA) which insure zero and low downpayment loans.

Line graph: Percent of Buyers Obtaining a Mortgage Who Made a Downpayment of at least 20%, April 2011 to November 2020

Buyers With Conventional Financing Edge Out Potential Buyers Obtaining FHA and VA Loans

According to information provided by REALTORS®, conventional conforming mortgages (mortgages that conform to guidelines set by Fannie Mae and Freddie Mac), accounted for 74% of mortgages obtained by homebuyers in May 2021, an increase from about 65% during 2018 through 2019. Meanwhile, the share of FHA-insured mortgages to total mortgages in fell to 14% in May 2021 from about 20% in past years. The share of VA-guaranteed loans has also decreased to 7% in May 2021 from about 10% in past years.

Line graph: FHA, VA, and GSE Mortgage Financing, January 2018 to May 2021

Highly Competitive Market Is Resulting in Appraisal and Inspection Waivers on Contract Contingencies

According to REALTORS®, sellers are wary of the appraisal and inspection process. REALTORS® have reported that buyers who make an offer using FHA or VA financing find it hard to compete against other buyers who are offering cash or using conventional financing.

“It is extremely difficult for FHA/VA buyers to get accepted in a multiple offer situation. They are on the bottom of the hierarchy”

“Buyers using VA Loans are being discriminated due to ‘known low appraisals with VA loans’ which is not right at all.”

“VA Loans are at a complete disadvantage — sellers need to be offered an incentive to give more consideration to a VA Loan offer. There are a lot of misconceptions regarding VA appraisals and VA loans.”

Appraisals present a hurdle for homebuyers with VA and FHA financing at a time when prices are rising fast and homes are selling swiftly with little inventory on the market. In May 2021, the total inventory of homes (unsold) on the market was equivalent to 2.5 months of the monthly sales pace, well below the ideal level of 6 months. Appraisals, which are based on comparable sales and/or automated valuation, will always lag behind the “real-time” price based on current demand-supply fundamentals. In May 2021, the median existing-home sales price rose at a record high of 24% year-over-year, the highest annual pace since 19693. VA appraisals take anywhere from 5 to 15 days4, but properties are typically on the market for 17 days.

Homebuyers are waiving appraisals in order to close the transaction quickly. REALTORS® reported that among contract contingencies waived by the buyers, the most common contingency that buyers waived was the appraisal contingency (28%) followed by the inspection contingency (25%).

Bar chart: Percent Distribution of Contract Contingencies that Buyers Waived in May 2021

Homebuyers who are able to waive contract contingencies are those who pay cash or use conventional financing. In contrast, FHA and VA buyers are not able to waive the appraisal or inspection contract contingencies according to FHA and VA guidelines. The home inspection assesses the condition of the home and the property location to ensure that the home meets minimum property requirements (MPRs) pertaining to the safety, structural soundness, and sanitary conditions (e.g., space requirements, entry/exit, drainage, topography, HVAC systems, gas connection, roofing/crawl spaces, lead/radon, etc.).5

FHA inspection standards may be tougher to meet, especially for sellers who want to sell the home “as is.” For example, the FHA inspection guidelines require that the “heating unit is adequate and in good working condition,” the “water heater in good working condition,” that there are “working smoke detectors in the home,” and that the “sink in good working condition and with no leaks.” In fact, FHA standards sometimes even involve stipulations beyond the house itself (e.g. “If the home is in close proximity to an airport and its flight pattern, that may result in extreme noise hazards that could disqualify the home from being financed with an FHA loan.”).6

While inspection standards are important for ensuring that buyers are protected, they can create a disadvantage for prospective homebuyers in a highly competitive housing market. First-time homebuyers, buyers with less than excellent credit scores (FHA borrowers can have a credit score of as low as 580), and low-income and low-asset borrowers who are not able to afford a 20% down payment are mostly likely to get disadvantaged.

A home is the largest investment most people make in their lifetime. Buyers should be protected so that the price paid for the home is worth its value. Unfortunately, in a housing market where sales are moving swiftly, the time to undertake the inspection and appraisal is creating a hurdle for buyers obtaining FHA-insured loans who are typically first-time buyers and buyers obtaining VA-guaranteed loans.

1 The May 2021 survey was sent to 50,000 REALTORS® who were selected from NAR’s more than 1.4 million members through simple random sampling and to 5,876 respondents in the previous three surveys who provided their email addresses. There were 3,316 respondents to the online survey which ran from June 1-8, 2021; among these respondents, 1,653 had a client. NAR weights the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.

2 The RCI Survey asks the respondent about the characteristics of their last transaction during the month. These transactions make up a random sample because the characteristic of the last transaction (e.g., whether the buyer obtained government or conventional financing) is random.

3 NAR started tracking single-family existing home sales since 1969 and total existing-home sales (single-family and condos/coops) since 1999. Single-family home sales make up 88% of existing-home sales in May 2021.

4 VA Appraisal Fees and Timeline Schedules, is external)

5 Chapter 12, Minimum Property Requirement, is external)

6 Ibid, is external)

Gay Cororaton, Senior Economist and the Director of Housing & Commercial Research, NAR

Scholastica (Gay) Cororaton

Research EconomistScholastica Gay Cororaton is the Research Economist for the National Association of REALTORS®.

Home stagers show how lighting can improve a home’s presentation for showings and online photos.

Brass Lights

May – June


by Melissa Dittmann Tracey
Key Takeaways

A home with dated lighting fixtures is a major turnoff to potential buyers, say 45% of 1,000 surveyed real estate pros.
Decorative lighting chandeliers and pendants in geometric shapes and in brass or gold metals are among the hottest design trends.
Home stagers advise using soft white lightbulbs and layering in lights—using overhead fixtures, lamps, and natural light—to achieve the most inviting light.
Lighting matters for making strong impressions. In a 2020 survey of 1,000 real estate professionals conducted by HomeLight, a real estate referral company, 45% of respondents said a home with outdated light fixtures can be a big turnoff to potential buyers. Decorative light fixtures—often referred to as the “jewelry” of home design—and natural light can instantly change the feel and look of a space.

Home stagers offer up four ways to help find the right light for your properties.

  1. Swap out dated light fixtures. Decorative lighting that makes an artistic, sculptural statement is a growing trend in home design. Bell says popular fixtures for chandeliers or pendants include geometric or ball-clustered shapes, spiral chandeliers, and gridded honeycomb compositions. Many of these fixtures are in gold and brass metals to make them a room’s focal point, says home stager Krisztina Bell, founder of No Vacancy Inc. and Virtually Staging Properties Inc. in Atlanta. “Builders, flippers, and investors are renovating and updating homes to impress potential buyers, and lighting is one of the features they’re going all out on to really make a statement,” Bell says.
  2. Filter in natural light. Dated window treatments—like valances, drapes, and curtains—not only block natural light but also risk making your sellers’ home look outdated, said nearly half of real estate pros in HomeLight’s survey. “Let as much daylight into the room as possible,” says Audra Slinkey, president and founder of Home Staging Resource, a training center for the staging industry. “Usually this is best done by removing dated window coverings and trimming back greenery on the outside.”
Geometric Lights

Geometric Lights
© No Vacancy Home Staging

Overgrown shrubbery can also block light and any picturesque views. Bell says her team of stagers often recommends removing drapes and opening blinds—and pulling them all the way up—to expose windows. This creates “less distraction so buyers focus on seeing themselves living in a home, not observing the purple curtains or heavy traditional gold draperies left behind,” Bell says. “Ensure the sun’s rays are flooding into the property as much as possible.”

  1. Use softer bulbs. Swap out high-intensity lightbulbs for warm or soft white ones with a lower Kelvin rating, Slinkey suggests. “The best lightbulbs to purchase for lamps are LEDs with Kelvins at 2700 to 3500 tops,” Slinkey says. “They give the most flattering light to a living space.” Keep all the lightbulbs at the same wattage. “Consistency is key in good lighting, especially for taking photos of a staged home,” Bell adds. “A mix of cool and warm tones can make it challenging for photographers to get that perfect shot.”
  2. Layer in the lights. Don’t rely solely on overhead fixtures to light up spaces. “Stagers often will layer the lighting with at least two table lamps and possibly a floor lamp, depending on the size of the room,” Slinkey says.

Using lamps for uplighting against a wall can make a room feel taller. Height and scale matter, too.

To layer lighting near a standard-sized sofa and side table, Slinkey suggests that the combined height of the table and lamp should be 58 to 66 inches. “In a room where people are moving around, it prevents them from having to look into the bulb from either a seated or standing position,” Slinkey explains.

And lighting that sits too high can appear disconnected from the sofa or other adjacent seating.

Dimming can also help highlight certain room features. A dining room becomes more dramatic if there is lower light on the periphery and brighter light on the table, especially if the light is showing off crystal and silver on the table, says Al DeGenova, a longtime lighting industry marketing executive.

Bulbs and windows aren’t the only light sources at your disposal—reflective objects such as mirrors can work, too. “Mirrors can be placed opposite a window, over a fireplace, or near a lamp to reflect the ambient light in the room and have a multiplying effect,” Bell says. Plus, “oversized mirrors that lean against a wall can help a room appear larger.”

See Getting the Right Light to better understand the variety of lightbulbs available today and how to chose the right ones for a home.

Melissa Tracey
Melissa Dittmann Tracey
Contributing Editor
Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine. She can be reached at Follow her on Instagram and Twitter: @housingmuse

Make Your Spring Listing Shine With Updated Style

Homes are selling quickly, but buyers still want a move-in-ready property that fits today’s styles.


March 22, 2021StagingBy: Patti Stern

by Patti Stern

While the housing market has seen a boom in homebuying demand since the onset of the pandemic, inventory is lacking and will most likely continue to be limited. That doesn’t mean active spring buyers will settle for less than the best. Today’s buyers continue to look for properties that feel move-in-ready and those they can easily envision living in. That means updating outdated decor with modern styling to get the most bang for your real estate buck.

The transformations below feature homes recently staged by our team that pair the homeowner’s furnishings with neutral wall colors, on-trend accents, and new arrangements to add engaging, fresh appeal.

Before/After Living Room
Before/After Dining Room
Before/After Bedroom

For each of the rooms pictured above, we kept most of the existing furniture and added neutral paint, removed dark curtains, and replaced outdated accents with modern rugs, wall art, accent chairs, bedding, and pillows.

Before/After Living Room
Before/After Living Room

To update, brighten, and showcase the distinctive features of the rooms pictured above, we completely removed the sellers’ furniture and curtains and replaced them with neutral pieces that had cleaner lines and modern accents.

For more examples of interior decorating and home staging, visit is external)

Patti Stern

Patti Stern

Patti Stern, principal, interior decorator and professional stager of PJ & Company Staging and Interior Decorating, has been decorating and staging homes since 2005.