Author: Joseph Bell

Filed under: Buying, Financing

By Kayla Albert

After receiving the preapproval on your home loan — the anxiously awaited first big step toward homeownership — you likely breathed a sigh of relief that the official “proving yourself” part of the process was over.

Not so fast, if you’re searching for a home during the holidays.

Before you get swept up in the tide of frantic holiday shopping, it’s important to know that going overboard on gifts for friends and family can impact the total loan amount you’re ultimately approved for, and it could even kill the approval entirely.

Here are a few ways you can ensure you make it all the way from preapproval to purchase with no hiccups en route.

1. Don’t apply for new credit or rack up new debt.

When you reach the cash register with your arms full of holiday gifts, it’s easy to entertain the idea of opening a store credit card. Just fill out the application, add your John Hancock, and you could be walking away with a significant amount off your total purchase.

However, opening this line of credit requires a hard credit inquiry — one that could ding your credit in the process. In addition, you could impact your debt-to-income ratio or signal to the lender that you are a greater risk than they previously thought.

Tammi Robson, a mortgage broker at Metro Lenders in Denver, tells her clients about the importance of being debt-free or keeping debt levels stable during the home-buying process. This means avoiding major purchases such as a car or that new dining-room set until the entire home-buying process is complete.

“Most lenders do ‘debt monitoring’ during the loan process, meaning they pull internal credit reports,” Robson says. “If new debt shows up or credit scores go down, it will affect loan qualification.”

2. Don’t move around large amounts of money.

While constantly shuttling funds back and forth might be how you manage your money, it can create a huge headache for lenders, who must be able to track the movement of funds from account to account. If they cannot track the funds, the money movement could appear suspicious — a red flag signaling undocumented funds or money troubles they hadn’t seen before.

In addition, if your family is all about doling out the cash for the holidays, you could be putting yourself in a precarious position. Lenders will also be scouring your accounts for any unusual deposits — those that are 50 percent or more of your monthly income — or any unusual cash withdrawals. These will need to be thoroughly explained to maintain your approved status.

It’s all about keeping the status quo between preapproval and closing — something that can be more challenging during the holiday season.

3. Don’t ignore your bills.

A recent study by Neighborworks determined that one in three American adults has no savings on hand. Pair this with an expected holiday spending rate of $805 per person, and it’s no wonder bills become a heavy burden to bear come January.

Unfortunately, even if your holiday spending gets out of hand, loan preapproval isn’t a pass to be less diligent about maintaining a spot-free bill payment history. In fact, it’s more important than ever to make sure all bills are paid on time and in full.

Payment history makes up 30 percent of your credit score, and even one late payment can have devastating effects. How much exactly? According to Credit.com, if your payment is over 30 days late (the typical grace period given by lenders), it could lower your score anywhere from 60 to 110 points — a substantial amount even if you’re starting with a high score.

If that late payment is on an existing mortgage, a lender could opt to deny your loan altogether. Even if it’s not a complete denial, you’ll need to explain in writing why the late payment occurred.

Here’s the bottom line.

If you’ve been preapproved for a mortgage, you’ve successfully cleared one substantial hurdle — a bank or lender has looked at your overall financial health and stamped you as a qualified candidate.

But preapproval is not the same as approval, and now, as holiday sales are calling, it’s important to keep the finish line in sight. After all, you wouldn’t want a few financial missteps to make your dream of homeownership come to a crashing halt.

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Filed under: Buying, Selling

By Devon Thorsby

Real estate agents see and hear a lot, and while shockingly few things surprise them, there’s a fine line between need-to-know and TMI. But the more transparent a client is during the buying or selling process, the better the broker can meet his or her needs.

Luis D. Ortiz, associate broker at Douglas Elliman Real Estate and star of Bravo’s “Million Dollar Listing New York,” equates the nitty-gritty details of a seller’s personal life to a doctor visit. When the doctor asks how often you drink, “everybody says ‘socially’ when really they drink every night,” Ortiz says. “The more transparent you are of a person, the more they can get to the core of the problem.”

To get the most out of your relationship with your real estate agent, avoid these red flags that can end up landing you with the wrong agent or the right one running for the hills.

Telling an Agent You’re Not Sure About Selling

Agents typically don’t collect a fee until their client either sells his or her current home or purchases a new one. Any time and money spent before then on marketing and other services is out of the agent’s pocket. Simply dipping your toes in the water to see if your house generates interest — and then pulling back — isn’t going to be very enticing for a broker.

“I’m not sure I’m going to take that seller on as a client,” says Greg Cooper, manager and broker at Berkshire Hathaway Home Services in Indianapolis. “The process costs everybody time and money, so why waste it unnecessarily?”

And as Ortiz points out, putting your house on the market experimentally can have adverse effects on other homes that are actually for sale. “It gives the buyers [a] perception that the apartment is not sellable [or] that the market may be turning into a buyer’s market,” Ortiz says.

Saying You Don’t Have a Time Frame

Not having a deadline can leave brokers unsure of your commitment. Agents understand when their clients have a strict time frame, and can appreciate a few extra days or weeks to close a deal on the right home. But being told they have no target date to sell or purchase a home will leave them wondering if they’re wasting their efforts.

Cooper says serious homebuyers will typically have a reason, such as a growing family or moving for a job, that brings about the change in living situation. A lack of deadline puts up a flag that you may also lack commitment to carrying out a deal. “My question for them would be, ‘Why do you have all the time in the world? What are you trying to accomplish?’ That goes back to, ‘We’re not really sure what we want to do,’ and that’s just not a situation, in all candor, that’s beneficial 98 percent of the time to the client and the broker,” Cooper says.

One of the first questions Ortiz asks on any listing appointment is why the homeowners is selling. “You have to know if this person is real or not,” Ortiz says. “I want to know because that sets the conversation and what my expectations should be.”

Lying About Your Motivation

Your real estate agent will have to know a lot about you — your financial health, your needs and wants in a living space and any life-changing events that could cause you to buy or sell at a specific time — to do his or her job properly. In order to work successfully with your agent, honesty is the best policy.

Cooper says one of the first questions he asks potential clients is why they are looking to sell, primarily to get a full understanding of the clients’ needs and how he can best fill them. “If I’ve got a seller who is changing jobs or who is going through a divorce, those things clearly affect the motivation level they have to sell the home,” he says.

An agent you’ve carefully selected and can trust will keep your personal life private. And by knowing your reason for moving, he or she can better meet your needs. Joe Manausa of Joe Manausa Real Estate in Tallahassee, Florida, says full disclosure can also help prepare agents for what they may face down the line. He gives the example of spouses left in the dark: “There are times we’ve been hired to sell a home, and after they sign the documents I get a call from one of them saying, ‘Hey, he doesn’t know it, but we’re getting divorced, and that’s why we’re selling.”

Overpricing Your Home

You’ve hired a professional to help you throughout the process, and it’s important to give the agent enough breathing room to be the pro, particularly when it comes to pricing. Starting the process with nonnegotiable expectations is a good way to get off on the wrong foot.

Manausa explains that overpricing your home will often leave it on the market longer because the right buyers won’t see it. “People go online and the first thing they do is they shop by price range. If you’re overpriced, the people that do see your house [are] comparing it to nicer houses — they don’t want to see yours,” Manausa says.

Asking Your Friends What They Think Your Home is Worth

The only thing worse than coming up with your own unrealistic number could be having friends come up with the number, especially when they’re not in the real estate business.

Ortiz says a friend’s pricing recommendation often show how kind the friend is but has nothing to do with the actual value of the home. “They’re all your friends and they’ll tell you for the sake of telling you your house is worth $20 million [when] it’s only worth five dollars,” Ortiz says.

Rather than have the agent compete with other opinions, keep your friends’ kind valuations of your home to yourself.

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Filed under: Design, Home Improvement

By Kerrie Kelly

Dining rooms are a wonderful place to express your style through furniture, lighting, art, and color. Here are five favorite dining room styles, and the elements that make them so appealing.

Tailored and Traditional

Traditional style is all about the details: intricate carving, unique upholstery, textured linens, and statement lighting contribute to this exquisite look. Take your style traditional by focusing on architectural details like embellished table legs or an ornate console serving as a bar.

Paneling is also a classic element found in traditional dining rooms. A gray-toned wall with bright white trim creates a crisp and clean look. Top off the style with an eye-catching chandelier and a few sconces along the wall for ideal ambiance.

Some other style-boosting elements? Mixed finishes, graceful decorations, and textured rugs balance the look.

Modern and Modish

The modern-style dining room takes many shapes and forms, but some themes are very prominent and consistent throughout. Abstract art serves as a must-have focal point in any contemporary setting, but especially in a dining room. Modern art and decor add just the right amount of movement to an otherwise structured style.

Clean lines and crisp corners are another important detail in contemporary design. Whether your chairs’ frames are perfectly rectangular, or your table’s angles are prominent and precise, having perfectly formed 90-degree angles is key to a modern motif.

Other favorite contemporary design elements include high-gloss finishes, metallic details, and sleek and simple tablescapes.

Courtesy of Zillow Digs.

Restful and Rustic

Rustic design often conjures up images of old log cabins and less-than-lovely ski lodges. Because the rustic look is so heavily influenced by wood and organic textures, it’s best to keep it as light and airy as possible, adding in elements of contemporary and traditional designs.

Try creating fresh farmhouse style with exposed beams, a distressed dining room table with bench seating, and plenty of greenery. Details like barn-inspired doors, nailhead trim, and reclaimed wood offer up a refined version of the classic rustic style.

Cool and Cottage

If you’re partial to the calm and collected vibe of the Nantucket shoreline, you might be a fan of cottage design. This cozy and unpretentious style offers a light and bright alternative to traditional design with distressed wood elements, tons of texture, and simple, elegant lighting. You can’t go wrong pairing a seagrass rug with an ornate dining table.

Keep colors soft and sinuous with tones of gray, beige and white, and lightly add pattern with an area rug, table linens, or upholstered chairs. Other cottage elements to consider: gentle patina on surfaces like tables, consoles, and shelves, slipcovered chairs, and curated tabletop decor.

Trendy and Transitional

Taking cues from modern and traditional design, the transitional style is a cultivation of contemporary elements and classic architecture. Minimal accents and culled accessories lend a clean touch to a timeless dining room setting, and the less-is-more-approach is alive and well throughout the space with statement lighting and just a few curated fittings detailing the space.

If you’d like to mimic the transitional style further, consider these design elements: crisp window treatments, a calming color palette, and organic decor.

While these are only a handful of the possible design styles to outfit your dining room, they are great starting points.

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Filed under: Buying, How To

By Susan Johnston Taylor

As families gather for the holidays, some adult children or their parents will broach the topic of real estate and how to make that first home purchase.

For parents who have the funds and desire to help adult children buy a home, gifting a down payment is one of the most common ways to help. But it’s not the only option.

Here’s a look at several ways parents can assist their children in becoming homeowners.

Gifting a Down Payment

For an owner-occupied property (not an investment property), mortgage lenders typically allow borrowers to use money gifted from a family member as a portion of the down payment. However, if it’s a recent gift, the borrowers must be able to prove the origin of those funds and provide a letter affirming that the money is a gift and does not need to be repaid.

Bob Collins, a mortgage broker with Signal Hill Mortgage in California, says parents gifting a down payment often treat it as “here’s your inheritance in advance,” so they can see the benefit of that money during their lifetime.

This approach puts the gift-giver under some scrutiny with the lender, but not nearly as much as other options. “All we have to do is verify that they have the funds to give, and we get a gift letter,” says Greg Cook, a mortgage consultant in Southern California. “Then they send the money to the settlement agent, and as long as it matches up with the gift letter, we’re good to go.”

If the gift exceeds the Internal Revenue Service’s annual gift tax exclusion of $14,000 per recipient per year, then it may require extra tax paperwork. However, a married couple could each give $14,000 to a child and a child’s spouse, for a maximum of $56,000 in four separate gift checks.

Offering a Family Loan

Given the current low interest rates on savings vehicles such as certificates of deposit, or CDs, relatives with cash to spare might choose to loan money to a family member to buy a home in lieu of the buyer getting a traditional mortgage. “It’s a win on both sides,” says Dan Yu, managing principal of EisnerAmper Wealth Advisors in New York. “If Mom and Dad went to the bank and said, ‘What will you pay me for a five-year CD?’ If the son or daughter went to the bank to try to borrow on a 30-year mortgage, they might have to pay 4 percent. Both sides of the family win, and mom and dad are earning a higher interest rate [than they’d get from a CD].”

However, as Yu points out, “it’s not just Mom and Dad, but rich aunts and uncles do this as well.” Assuming the lending relative has the liquidity to make the loan and is prepared to do so, the homebuyer would be able to make an offer not contingent on financing and potentially offer the seller a quicker closing, which could be an asset in competitive markets where all-cash offers are the norm.

One thing to remember with family loans is that it still needs to be at arm’s length, meaning it follows the IRS’s proscribed interest rates based on the term of the loan.

If earning interest isn’t the goal, the relative giving the loan could choose to forgive up to $14,000 in interest per year under gift tax exclusions ($28,000 if they’re lending to a couple). Otherwise, lenders have to report interest payments as taxable income, just as they’d report interest from CDs or money market accounts. Borrowers can deduct mortgage interest (assuming they itemize their tax deductions) just as they would with a traditional mortgage.

Co-signing the Mortgage

In cases where an adult child’s income is too low to qualify for a mortgage on the home they want, having a parent co-sign the mortgage might help. If they can afford to take on the obligation, some parents may prefer this option if the alternative is their child buying in an area they consider unsafe or undesirable.

However, co-signing is a bit of misnomer in this case. “They’re really a co-borrower, and they’re in the deal as much as the kids are,” Cook says. “They’re under the lender’s microscope to the same extent: income, credit, current debt load, all the things that we look at for the kids.” If the child’s income is sufficient to qualify for the remaining balance on their own in the future, the loan might be refinanced in just his or her name to relieve the parents of liability.

One potential downside for parents is that the mortgage will show up on their credit as an outstanding loan obligation, which could complicate refinancing or buying another home in the future. “They’ve created an obligation for themselves that could limit anything they might want to do moving forward,” Collins says. Also, if the child misses mortgage payments, that will also impact the parents’ credit.

With all these options, you should consult a financial advisor first to make sure you can comfortably afford to help without jeopardizing your financial security. You may also want to consult your tax preparer about potential tax implications, and, depending on the circumstances, ask a lawyer how to structure the legal paperwork in case your child divorces or defaults on the loan. Nobody plans on things going awry with real estate transactions, but it can happen, so it’s best to be prepared.

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Filed under: Buying, Celebrity Homes

Ever wonder how much the home from “Poltergeist” or “The Amityville Horror” would set you back? We did the research to find out what these classic horror homes are worth.

Love ’em or loathe ’em, horror movies take center stage leading up to Halloween. But how much attention have you really paid to the horror movie homes behind the on-screen supernatural events?

In honor of the scariest season of the year, Trulia dug up the locations where some classic horror movies were filmed or where the events that inspired the scary scripts took place. Then we looked at home prices (including lots of Los Angeles real estate) for similarly sized homes in the same city, neighborhood, or ZIP code. From the instantly recognizable house in “Insidious” to the unassuming suburban home from “Poltergeist,” each of these horror movie homes has a (terrifying) story to tell — and a corresponding real estate value.

Are the prices as shocking as the horror movies themselves? You be the judge.

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Filed under: Home Improvement

By Teresa Mears

It’s officially fall, which means winter is not far behind. The good news is that winter weather in much of the country is expected to be milder than last year’s frigid conditions, and heating costs are also projected to be lower, according to a report from the U.S. Energy Information Administration. But the cost of heating one’s home still is likely to be a considerable expense in most parts of the country.

Heating is expensive enough already, so you don’t want to pay for heat that escapes out windows, doors and cracks instead of staying inside to keep you warm.

“A lot of time we’re generating energy that we’re sending out into the air,” says Marianne Cusato, the housing advisor for HomeAdvisor.com and an associate professional specialist at the University of Notre Dame School of Architecture.

Fall is an ideal time to make repairs that will make your home more energy efficient, both saving you money and keeping you warmer. Even if you can’t afford major repairs such as a new furnace or new windows, there are small things you can do to save big bucks on heating costs — and you can handle most of them yourself.

“Homes can lose heat in a lot of different areas,” says Anne Reagan, editor-in-chief of Porch.com. “I think that there’s a lot of things that can be fixed in someone’s home.”

Here are 13 hacks to winterize your home while also trimming your heating bill.

Caulk around windows. Warm air can escape and cold air can enter your house if the area around your windows has cracks. Caulking needs to be replaced periodically, and you should check every fall for holes that need to be patched, as well as holes anywhere outside your house. “You want to make sure your [home’s] envelope is secure,” Cusato says.

Replace weatherstripping around doors. If you can see light around the edges of your doors, you need new weatherstripping. “A small weatherstripping costs you five or six dollars, and it will save you hundreds of dollars in electrical bills,” says J.B. Sassano, president of the Mr. Handyman franchise company.

Close up your fireplace. Make sure your flue closes all the way, and check whether you can feel air coming in when it’s closed. Glass doors around your fireplace opening are another way to keep warm air in and cold air out of your house.

Put up storm windows and doors. If you have older windows and doors, adding storm windows and doors can help considerably. Window insulation film is another option to provide a layer of protection. “It really insulates the window,” Sassano says.

Add heavy drapes and rugs. Changing light summer drapes for heavy winter drapes was common in earlier times, and it’s still helpful, Reagan says. Drapes can keep the room warmer, while putting down rugs provides a layer of insulation above the floor.

Improve your insulation. Insulation deteriorates over time, so you may want to add more material in your attic. Other places to add insulation are in crawl spaces and exposed areas of decks. Sassano also recommends creating a false ceiling in unfinished basements and insulating between that ceiling and the living area. An insulating cover over your attic opening also helps trap in the heat.

Cover your water heater. You can buy a water heater blanket for around $20 at the hardware store that will keep the tank from losing heat as quickly, saving you money on your heating bill.

Get an energy audit. Many utility companies will provide a free energy audit and give you suggestions on improvements you can make to your home. You can also pay for a more extensive energy audit. “They’ll look at all the places you’re losing energy,” Cusato says.

Change your furnace filters. If the filters are dirty, your furnace has to work harder. In most homes, filters should be changed monthly in the heating season. You should also have your furnace serviced periodically to make sure it is working properly. “It’s easy to overlook but it can mean your system isn’t working efficiently,” Cusato says.

Get a programmable thermostat. The newest thermostats can learn your family’s habits and set themselves to keep the house cooler when no one is there and warmer when the home is occupied. You can also purchase a more basic programmable thermostat. Prices vary considerably, depending on how sophisticated you want your thermostat to be.

Lower your water heater temperature. You can lower it from 140 degrees to 120 with no ill effect, Cusato says. And 120 degrees is the temperature recommended by the Consumer Product Safety Commission.

Replace less efficient windows and doors. Adding double-pane or triple-pane windows, insulated doors and insulated garage doors will significantly improve the energy efficiency of your home.

Lower the thermostat. It’s actually more comfortable to sleep in a colder home, and you can always add more blankets. When you’re awake, wear a sweater or sweatshirt to stay comfortable with a lower thermostat setting.

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Filed under: News, Buying

By Blake Miller

With the recent news of catastrophic flooding in South Carolina to other stories of homes blowing up because of broken gas lines or vanishing into a massive sinkhole, you might be ready to Google your address to find out if your little abode is all that safe where it is.

“A lot of property owners wait until it’s too late [to figure out if their home is in a safe location],” says Peter Di Natale, president of Peter Di Natale & Associates Inc., a general contracting and construction management firm in Cold Spring, N.Y. “You have to think top to bottom, from the roof to the basement.” (And don’t overlook these neighborhood details, either.)

Here are the top ways to ensure your new home is out of the danger zone.

Check the Flood Map

In addition to the all-important flood zone map, which your real estate agent can provide, “keep in mind that flooding from storms or water main breaks will hit homes the hardest that are on a ground pitch angled downhill,” says Di Natale. “Check how level the ground is. It’s not difficult to have the dirt and grass regraded so it slopes gently away from the house towards the yard instead of into the house. You can imagine how preferable that would be to a flooded basement or first floor of a home.”

Check the Crime Rates

“I know it sounds silly and maybe too simple. However, knocking on the neighbors’ door is sometimes like opening the floodgates to information,” says Justin Udy, a real estate agent in Midvale, Utah. “Ask about the property, the neighborhood, and any issues they are aware of. Typically, neighbors are an open book and love to talk about their area, the good and the bad.” Including crime.

Not feeling chatty? Check out Trulia’s maps, which feature neighborhood guides that identify high-crime areas as well as flood plains and natural disaster probabilities. Adds Heather Leikin, a real estate agent in Los Angeles: “Consider the type of crimes [as in burglaries versus DUIs], rather than if there is crime.”

Check the Trees

Think that towering oak tree won’t cause your home any harm? Think again. “I once had a tree fall on a gutter that created Niagara Falls down the side of the house when the next rain came,” says Di Natale. How do you know if your trees could be a problem? Call in an arborist or tree specialist, who oftentimes will provide free consultations to homeowners and potential homebuyers.

Check for Gas

Not if the home has natural gas but, rather, where those dang gas lines are actually buried, says Leikin. “If you are concerned about proximity of the larger gas lines to your house, contact your local gas utility,” she adds. “There should be a map of your area that shows how close major gas lines are to your new home.

“This is especially important to know after numerous pipeline explosions in the United States.” Enough said.

Check for Natural Disasters

Californians aren’t the only ones who need to know if they live in an earthquake-prone area. To be in the know about just which natural disasters — tornadoes, hurricanes, earthquakes, etc. — could wreak havoc on your potential new home, Patty Brockman, a real estate agent in Portland, Oregon, suggests checking with your insurance carrier. “Have them investigate whether or not the property is in a flood plain, earthquake, or slide area,” she says. “It’s always best to seek out the experts, rather than rely on someone’s opinion.”

Check the Sellers’ Disclosure Carefully

Legally, sellers have to disclose if their home’s basement, for example, tends to flood. Which means that sellers’ disclosure form can be a valuable tool in detecting what hazards may await you when you purchase your new home.

“If there is any area of question, consider going back and asking more questions,” suggests Udy. “It’s routine for me to ask, ‘Tell me more about that’ or ‘What did you mean when you mentioned XYZ?'”

Check with the City

Some of the most valuable information about your home’s danger probability can be found with the city government. “I always recommend owners be involved with their city planning office and code enforcement,” says Udy. “Depending on the size of your city, a seasoned planner or code enforcement officer may be able to tell you what projects people are doing, what is in process, and things to be aware of [such as planned neighborhoods, which could cause potential flooding to your backyard].”

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Filed under: Design, How To

By Lindsay Jackman

For a renovation budget of $5,000, you can add some serious functional upgrades to your home. Kitchens and bathrooms are smart places to focus your dollars. They are hardworking rooms that you’ll enjoy using, but also among the first rooms a future buyer will want to see.

Another practical way to increase the function of your house is by adding living space. While you can’t do an actual home addition for $5,000, you can create a functional outdoor living space that increases your usable square footage.

Here’s how to complete each of these three renovation projects on a $5,000 budget. (If you have a little more to spend, consider what you can do for $10,000.)

Upgrading to Custom Kitchen Cabinets

​Creating a more functional and beautiful kitchen is a win-win, and one way to achieve that goal is by upgrading your cabinetry. For this price-point, you could design cabinets that work for you, the way you use your kitchen, and your kitchen layout. Custom cabinets allow you to maximize storage for the space that you have.

Installing a Tile Shower

Nothing says luxury in a master bath like a standing tiled shower with glass door. For $5,000, you could remove the standard bath insert and surround and put in a custom tiled shower. For additional function, tile in a corner bench and soap shelf. You’ll feel like you’re visiting a luxurious resort in the comfort of your own home.

Create an Outdoor Living Area

Boosting square footage is a great idea for you and future buyers, but additions are expensive. Adding a fabulous outdoor patio can drastically increase your usable living space for a much smaller price tag.

The options for patio material include chipped granite, pavers or flagstone. Adding mulch in beds surrounding the patio will really make a visual statement, and keep the patio from looking like it’s floating in your backyard.

Build a pergola or covered seating area to create more visual appeal and boost the space’s usability. You can hang lights or fans overhead in the structure — and if it’s covered, you’ll have a spot to escape the weather.

While this upgrade benefits you, it’s also a big selling feature. Most homes don’t have an attractive outdoor living area, and adding this amenity will make buyers flock to your listing.

Any of these three updates will make you love your home in a whole new way. You can’t go wrong with improving kitchen storage, upgrading your current bathroom, or increasing your potential living space by taking to the outdoors.

See more home design inspiration.

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Filed under: Celebrity Homes, Investing, Selling

By Melissa Allison

Financial maven Suze Orman is set to turn a tidy profit on a small apartment in the Plaza, New York’s famed hotel and residences.

Orman is asking $4.5 million for the 1,279-square-foot unit, as Curbed New York first reported.

Orman got a deal on it in 2007, when she paid $3.68 million. A similar apartment with Central Park views was going for $3 million more, the talk-show host told The Wall Street Journal.

Real estate investing isn’t her thing, Orman said, adding that she pays cash for homes. “If I can’t write a check for it, I can’t afford it,” she said.

Like a grown-up version of Eloise, the 1950s children’s book character who lived in the Plaza, Orman enjoys the apartment’s location and perks, including room service, housekeeping and an upscale food court, she told the Journal.

She and her wife, Kathy Travis, considered the white-gloved butlers a little over the top, and their unit needed a year-long remodel to pull it out of Motel 6 territory.

Now it’s a luxurious one-bedroom, two-bath apartment with herringbone hardwood floors, silver-leaf crown moldings and a chandelier in the bedroom. It comes furnished with designer furniture and window treatments.

Living at the Plaza also means in-building access to some of New York’s storied hangouts, including the Palm Court, the Oak Room, the Champagne Bar, the Rose Club, and the Grand Ballroom.

The listing agent is Corcoran‘s Charlie Attias.

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Filed under: Design, Home Improvement

By Geoff Williams

Even if you love where you live, if you own a home that you purchased from someone else, you’ve probably looked around your house before and wondered: “What was the builder thinking?”

But not everyone goes that route. Plenty of people pay to have their home custom-built. In other words, some homeowners are the builder — or at least, they’re the ones pulling the strings and making the hard decisions on how small or big their residence should be and what features it should have.

And if that’s what you’re doing, you don’t want to look around your house someday and wonder: “What was the builder thinking?”

So if you’re spending money on a custom home, keep these eight things in mind.

Have Details in Place Before You Start Building

That means not just knowing how the floor plan will look but knowing how the rooms will be designed, says Jonathan Macias, a real estate broker and the president of the Macias Realty Group in El Segundo, California.

“Designing a house seems easy, but the amount of choices out there can be overwhelming for many. What color tile, what size, what pattern, will it match with the walls, what cabinets will go with this, what about the faucet?” Macias says. “All of these questions could be just for one small bathroom.”

In other words, you don’t want to be agonizing about how a bathroom should look and holding up your contractors. Speaking of which …

Hire the Right People

It should go without saying, but let Macias say it: “Do make sure you get all licensed contractors and professionals. Make sure they are properly insured and get references from past work.”

Don’t Build Too Big

Sure, you may have a lot of stuff and you might look longingly at mansions and want the same thing, but if that’s the route you want to take, then think long and hard about what you’re about to do. What may be right for you now may not be right for you in 10 years, or even next year.

“I meet potential clients in my office almost weekly who tell me, “We built a 6,000 square-foot home, but now we’re dying to downsize to something smaller. Most families don’t even need 5,000 square feet, and a home as small as 2,500 or 3,000 square feet won’t feel small if it’s designed properly, says Andy Stauffer, owner of Stauffer and Sons Construction, a homebuilder in Colorado Springs, Colorado.

“A larger house is just more expensive and harder to maintain and clean,” Stauffer says. “According to the National Association of Home Builders, a custom home in the USA costs an average of $105 per square foot to build. That means by eliminating even 500 square feet in a home that you don’t need, you’ll save over $50,000.”

Think About the Resale Value Now

Even if you never intend to sell your home and plan to pass it to descendants, assume that you might sell it someday, Stauffer says.

“It’s simply a fact of life. Most of us don’t know for sure where we’ll be in 10 or 15 years, as much as we’d like to think we do,” he says. “I recently spoke to a real estate agent who had some clients that built a five-story custom home. They loved it but when it was time to sell, they had to drop the price by tens of thousands of dollars and sell at a significant loss because nobody wanted to buy a five-story home and walk up and down the stairs all day long.”

So build your dream home, but don’t make it a nightmare for someone else, Stauffer advises: “Don’t go crazy.”

Keep Your Mortgage Within Reason

You can always add to your home later, creating the dream house when you can afford it, and build your realistic home now, suggests Joan Fradella, a family mediator in West Palm Beach, Florida.

When she built her home in 1998, she wanted to stick to keeping the mortgage balance low, and so Fradella was careful not to go, as Stauffer says, “crazy.” She was going to have a luxury kitchen and bathrooms built into her home, but she didn’t, settling for more modest layouts, reasoning that she could later.

“I also didn’t get the crown molding and French doors because I knew we could do that ourselves,” Fradella says. And, indeed, her mortgage remained reasonable.

Don’t Sacrifice All of Your Amenities

Looking back, Fradella feels it might not have been a terrible idea to have included some of those “extras,” provided her mortgage hadn’t been too much higher. Because as it turned out, she says, “Life happens, your kid starts to play hockey; [goes] to private school, then college.”

She still hasn’t added any upgrades, and she’s been living in her home for 18 years.

Yet, she stands by her advice. “You will be surprised how quickly a $200,000 home becomes $400,000 in upgrades,” she says.

Preventing your house from becoming an economical abyss means knowing what upgrades are “must haves,” says Brian Brunhofer, president of Meritus Custom Builders, a Chicago-area builder that specializes in custom homes. “For example, carpet can always be switched out to hardwood floors later, but a full basement is something you should decide on now,” he says.

Brunhofer also points out that lending now is relatively inexpensive. As long as you don’t go crazy, “it can be much more economic to stretch and plan for those features in your budget now,” he says.

Of course, it’s in every builder’s best interest if you do include those upgrades now, since that’s more money for the builder, but it doesn’t mean Brunhofer isn’t right.

Check In on the Work

Keep the surprises for holiday gifts and birthday presents. Don’t get sucked into the idea that it would be fun to have someone drive you up to your new house, while blindfolded, so you can have a surprise unveiling (as you may have seen on home improvement reality TV shows). Because you might wind up stuck with a big mortgage on a house you’re not thrilled with.

“Visit the site during construction,” advises Nicole Cannon, a residential architect based in Los Angeles. “Make sure things are matching your expectations and ask questions if they don’t. The worst option is to remain quiet and end up with something that you are unhappy with or have to pay to fix after the fact.”

Don’t Let Your Dream Home Cloud Your Reality

Let’s end this on admittedly a bit of a downer — to prevent you from having an unhappy ending when building your own home.

Cannon warns that having a house custom built can be an amazing experience, but it can also be a stressful time, and no matter what you might be thinking, “it will not solve all of life’s challenges,” she says. “I’ve had more than one client who thought that building a new home would bring their significant other closer, and a new home would solve their marriage problems. It’s tragic when a home is completed and goes on the market immediately due to divorce.”

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