The Overlooked Financial Advantages of Homeownership

The Overlooked Financial Advantages of Homeownership | MyKCM

There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with homeownership:

As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you.

Ready to start looking for a new home? Begin your search at https://nexthomevictors.realgeeks.com/dani-hallsell/ .  Have a real estate related question? Call, text or email me; I answer questions for free!

Dani

The Benefits of Growing Equity in Your Home

The Benefits of Growing Equity in Your Home | MyKCM

Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.

1. Move-Up Opportunity

With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,

“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”

This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.

2. Gain in Seller’s Profit

ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:

“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”

Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.

3. Out of a Negative Equity Situation

Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,

“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year.

In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”

The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.

Bottom Line

If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.

Interested in knowing what your home is worth in today’s market? Visit  https://www.nexthomevictors.com/cma/property-valuation/

Dani

Maximizing Your Home Value

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Are you ready to list your home for sale? One of the first questions you might have is, “how can I maximize my home value?” Every seller wants to get the best possible price for their home, and fortunately, there are ways to make sure your potential buyers see the real value of your property and allow you to receive top dollar when you sell.

Clean, de-clutter, and de-personalize: The first thing every home seller needs to do is take a critical look at the home and clear out the distractions. Cleaning the house and yard is a must.  Next, remove anything that can draw a buyer’s eye away from the beauty of the home, including family photos, sports memorabilia, religious artifacts, and knick-knacks.  You want the buyer to be able to see their items in your home.

Redecorate:  Professional home stagers will often advise clients to remove and replace furnishings. Even if you love oversized furniture, it can make the room look small. Consider renting more neutral pieces during the listing.

Update carefully: It is not vital for home sellers to have the latest countertops or custom bathtub to get a good value for their home. Often the home updates and improvements sellers undergo cost more than they would lose in sales price without them. If your home is very dated, consider a seller credit instead to allow the buyer to choose their upgrades.

Homes retain value based on a few factors: the location, the condition, and the features. Before you list your house, speak with your REALTOR®, friends and family for an objective opinion about the state of your home, then make any necessary repairs and changes to ensure you get the best value for your home when you sell.

Ready to buy and/or sell a home? Call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Home Buyer: The Internet Can’t Replace Your Real Estate Agent

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We live in the information age and the Internet offers advice on every topic; real estate is no exception. With more and more home buyers starting their home search online, they are bombarded with advice and information-it can be easy to think that you can learn everything you need to know just by reading articles online.

The truth is that your real estate agent does much more than answer your questions and open doors with a special key. A professional real estate agent will be there every step of the way. They have the experience necessary to navigate the complicated home buying process and solve common hiccups that present themselves in every real estate transaction.

Your real estate agent is a local professional. They know the local housing inventory, what is happening in the community that may affect home prices, and they have access to the local Multiple List Service that provides the latest homes for sale (real time), and sold homes.  They have a network of professionals who will work as a team to help you through the process. These include such professionals as lenders, title companies, transaction coordinators, home inspectors, contractors and handymen, home warranty companies and moving companies.

Most importantly, your agent is your ally in the home buying process. They negotiate on your behalf, armed with experience and understanding of customary charges, costs, and terms. They will ensure that the price you pay for the home is fair for the conditions and neighborhood. They will negotiate repairs, if needed and make sure you are protected with the proper contingencies.

The Internet offers lots of great information, but the most critical step you can take when buying a new home is hiring a local professional real estate agent. Their knowledge and expertise can’t be found by reading an article or two online.

Ready to buy and/or sell a home? Call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Home Buying Myths

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Buying a home can seem like a massive undertaking. You don’t need to be a first time home buyer to find the process overwhelming. There is so much information available, how can you tell what’s right and what’s a myth? Understanding the difference can help you make the best decision for you and your family goals.

Here are few home buying myths, and the truth behind them.

  • The first step is finding the Right House: Before you head out shopping, speak with a lender to understand your financial options and the monthly payment you can afford.  There is nothing more disheartening than finding the “home of your dreams,” only to find out it is out of your price range.
  • You can’t buy a home without perfect credit: The truth is there are many loans available which still offer reasonable interest rates for those without that ideal credit score.  Once again, start your home buying process by speaking with a lender.
  • You need 20% down payment: First time home buyers can use FHA financing for as low as 3.5% down. There are other programs too, such as VA and some conventional loans with less than 20% down.
  • Interest rates are going up; I can’t afford a home: Back in the 1980’s interest rates were up to 18% and people still bought and sold homes! No matter what the interest rates are, your lender will tell you what you can afford to buy considering principal, interest and tax payments.
  • You don’t need an Agent: An agent not only knows the market and can help you with value, but also customary charges, negotiations, and solutions to common hiccups. Your agent will also be your liaison with lenders, Title companies, home inspectors, Home Warranty companies and home contractors.
  • New homes don’t need a home inspection: Every home should have a home inspection by a licensed inspector to check for existing or potential problems.

Buying a home is one of the most important financial decisions you are likely to make in your lifetime. Take the time you need to understand the process and learn from the professionals; don’t assume that everything you read is right.

Ready to talk with a lender? Send call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Buying Your Dream Home When Inventory is Low

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If you are actively searching for a new home, you know that low inventory of homes for sale has made things difficult for buyers.  In a “Seller’s Market” there are not many homes for sale, and when a new home comes on the market, it is met with multiple offers.  Not only do these homes sell within days, but often over asking price.

If you are a buyer in this market, you may feel overwhelmed. However, with a solid strategy, you can still find your dream home, even when inventory is low.

  • One Step at a Time: Home buying is not a one-time moment, but a series of steps. Make decisions as they come, as you move through the process; make sure each discovery is one you can live with. Your REALTOR should provide you with a Home Purchase Process to help with the buying process.
  • Start with a Lender: Understand your financial possession and lending options before looking for a new home. There is nothing more disappointing than finding the “home of your dreams,” and then discovering that you cannot qualify for the loan to buy it.   Most buyers have an “idea” of how much they can afford to buy, but a lender can tell you what mortgage you can qualify for and the monthly payments with principal, interest, and taxes.  You will also receive a Pre-approval letter from your lender so the seller will feel comfortable accepting your offer when submitted.
  • Write a Competitive Offer: You don’t want to over-pay for a new home, but if the property is priced at Market Value and you want it, offer that amount. If you don’t, the next buyer will.
  • Keep Contingencies to a Minimum: Stick to the basics: home inspection, well and septic, attorney approval, and finance approval. If you are buying with FHA financing, you may ask for 3% towards your closing cost, and if you have a home to sell, you may include a 72-hour contingency.
  • Write a Clean Offer: Make it easy for the sellers to say “Yes!”.

Ready to look at new construction options? Please send me a message using the box to the right, or call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Five Things You May Not Have Considered When Selling Your Home

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How are your closets looking? Are they stuffed to the brim with never-used guest towels, old toys and the fine china you never use? Here is a tip: if your closets look like they can’t fit another thing inside, buyers are going to assume your house does not have enough storage space. And storage space is as important to most buyers as the number of bedrooms and bathrooms!

Here are five home selling secrets to consider when selling your home. 

  1. Your Closets Should be Mostly Empty: Every buyer is looking for storage, and you’ve likely outgrown yours. Appeal to potential buyers by de-cluttering your closets, or even putting some of your extra items into an off-site storage unit while your home is on the market. Make sure that what you do leave behind is neat and organized. For advice on how to prepare your home for a move, download the Betty-on-the-Move-Your-Moving-eGuide.
  2. Web Appeal is the New Curb Appeal: By the time a buyer shows up to look at your home, they will have likely toured it via online photos. What does this mean? First, your home needs to look its absolute best when the listing photos are taken. Second, it’s essential to include all the home’s best features in the online listing photos. Whether it be a hot tub, a large backyard or an excellent basement bar area, your buyers should know what to expect when they arrive for a showing or open house.
  3. The First two Weeks are the Most Important for Sellers: If you think you’ll price your property high and bring down your price gradually if needed, think again. Homes receive four times the traffic in the first two weeks after listing so a property lagging on the market can be a red flag to today’s buyers. Think about the eager buyers who will see your home in “Just Listed” ads across the web and in email alerts, and offer them a fair price right away. The feeling of getting early showings or an offer will far outweigh the feel of an offer that comes after you’ve lowered your price a month later.
  4. You Need to be Ready to Show at Any Time: Today’s buyers are excited and competitive. They may be willing to drop everything to see your home the minute it comes across their screen. As a result, you must be vigilant to clean your house after every meal and between laundry days. Don’t leave for work, or even a quick trip to the store, without making sure your home could be toured before you return.
  5. Be Ready to Sweeten the Deal: We are still in a moderate seller’s market, so most sellers are at an advantage. But if your home isn’t quite modern enough, or isn’t as nice as the one down the road, you may have to sweeten the pot by paying closing costs, buying a home warranty for the buyer, or even just getting a pre-sale home inspection so buyers are confident in your home’s ability to sell as-is.

The takeaway? Don’t assume that a seller’s market means you’ll get multiple offers and your choice of well-qualified buyers. Be realistic about how your home will be received, and you could end up selling sooner.

Ready to list your house and start looking for Your NextHome? Send me a message using the box to the right, or call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.

Dani

Investing in Real Estate to Diversify Your Portfolio

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Serious investors know the value of a diversified portfolio. In addition to stocks and bonds, real estate should be included in your investment mix. One way to accomplish this is to purchase, hold, rent or flip actual real property as part of your investment strategy. Real estate is a solid asset which can provide annual income, asset appreciation, and quick profit. To be successful in real estate investing, it is critical that you identify what skills you have and your tolerance for risk. Then choose a type of investment that works for you and repeat that model.

Investors can make significant profits by both flipping properties as well as holding them as rentals. The difference boils down to a few considerations.  First, what kind of income are you seeking: active or passive.  Actively buying, fixing and flipping properties is quick cash that requires careful timing and effort. Rental properties, on the other hand, offer passive long-term income which accumulates over time. Additionally, the property value increases during this time. The downside is that you must invest time in property maintenance and tenant management.

The second concern is the risk. Flipping property is not traditional investing where you buy and hold investment. Flipping is speculation. When purchasing a flipper,  you must carefully gauge the cost of refurbishment, remodeling and the cost of the holding time into the price valuation, then carefully market the home and realize the profit. Any number of variances can go wrong which can cause the value to drop and profits to diminish or even disappear, such as a delay in remodeling or a slow real estate market.

Keeping in mind that real estate is a substantial capital investment, it’s helpful to learn as much as you can.  These eight basic tips will give you some direction as you venture into real estate investing.

  1. Location, Location, Location: One of the most critical aspects of a successful real estate investment is the location. The right neighborhood, street or community can make thousands of dollars of difference
  2. Consider Wholesale Properties: Watch for properties listed below market value. Foreclosure lists, courthouse auctions and short sales are just a few of the options to buy below market value.
  3. Understand the Tax Advantages: Before you invest, visit your tax professional and learn about write-offs, business taxes, and tax breaks. Figure these numbers into your plans.
  4. Manage Your Credit: Leverage is essential in real estate investing. Determine your ability to gain loans and correct any mistakes in your credit report.
  5. A budget for the Unexpected: Have a fund available to draw on for the unexpected. Even the most carefully planned project can have unexpected costs.
  6. Don’t Over-Extend: After evaluating the risk, be honest about your ability to handle the negative possibilities the opportunity could present.
  7. Invest for the Long Term: Real estate investing should not be viewed as a “get rich quick” scheme.
  8. Be Patient: Wait for the right opportunity for your skills and budget.

Real estate offers solid investment opportunities. Investors can realize a profit and positive cash flow with careful planning and research.

Ready to begin investing in real estate? Send me a message using the box to the right, or call, text or email me!

Dani

 

 

Why is the Market Value of Your Home Important when You Decide to Sell?

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Nothing is more frustrating to a home seller than to have their home sit on the market without an offer. Selling a home is a big decision and an emotional one. By the time a homeowner determines the time is right to sell, they are ready to move. Besides, keeping a home show-ready is exhausting, so a listing that sits is frustrating.

The truth is there is only one reason why a listing doesn’t sell and eventually expires…price. It’s always the price. There is a price at which any, and all, homes will garner offers. Even the most run-down foreclosure will receive offers when priced low enough. Home sellers naturally want to get the best possible sales price for their home, but it’s important to be realistic. Present the house in the best possible light and offer it at market value.

So how can you determine the market value of your home? Talk to a local REALTOR®; they are the experts in your community. Only local real estate agents and appraisers have access to complete and reliable information by affiliation with the local Multiple List Service.

The market value of a property is merely the amount of money a buyer will pay for it. On the other hand, the assessed value of a home is based on a complex set of calculations to determine property taxes, and rarely the same as the market value. A professional appraiser determines the appraised value of a home, and that is the value your REALTOR® will be shooting for.  If the house is overpriced and the appraisal comes in lower than the sales price, the buyer may not have the extra money to buy the home since the bank will only mortgage up to appraised value.

Past transactions reveal market value so your REALTOR® will use the sales prices of homes sold in your neighborhood during the past six months that are similar to your home. He/she will also take into consideration location, condition, and upgrades of your home and the comparable homes. Current homes on the market in this location will also be taken into consideration when determining market value.

There is nothing to be gained by pricing a home above market value, and sellers lose valuable time by trying to do this. A listing will always get the most attention when it’s new on the market. This is the time to create excitement and get offers. When the house is over-priced, it will also be over-looked and eventually, the listing expires.

Curious to know the market value of your home? Through my membership with the National Association of REALTORS® and Realtor Property Resource® (RPR), I can give you an estimated market value for homes anywhere in the United States. Simply send me a message in the box to the right. I’m always available via phone, text, and email too!

Dani

At Home with Captain Bri – Fall Home Maintenance

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My name is Captain Bri, and my wife has asked me to share my knowledge, know how and experiences when it comes to taking care of your home. Taking care of my house and vehicles is somewhat of a hobby of mine and something I enjoy doing.

The one immutable fact I have learned over the years is that if you take good care of your home and your vehicles they will take care of you. I know I am dating myself here by quoting an old Fram oil filter commercial. In the commercial a mechanic was telling people that if you didn’t change your oil on a regular basis and use a quality oil filter your engine could fail. The jingle was “you can pay me now or your can pay me later” referring to a small payment now for an oil filter or a much larger payment later for a new engine or extensive engine work.

I am a whole hearted believer in that saying and practice it always when it comes to my home and vehicles. In my neighborhood for example, I see where many of my neighbors have not kept up on painting the wood trim on their house and it is now rotted and in need of replacing. What’s worse is that some of it has been let go for so long that the OSB wood behind the trim is rotting as well, causing very costly repairs.

Since we are approaching fall in Michigan, I thought my fall check list might be a good place to start.

Lawn care
Usually in the month of October I spread Scotts Turf Builder WinterGuard Fall Weed and Feed on my lawn to feed and protect it from the harsh Michigan winters and help it bounce back quicker in the spring. I waited until mid-November one year but found my grass had already entered the dormant stage so all I did was waste my money on a “winterizer” that never got into the grass blades. I also do one of my three yearly power edgings in the fall which I do late October or the first week of November. Power edging in both spring and fall will keep the lawn looking manicured, and less dirt will accumulate making the edging easier than only edging once a year.

Home exterior
Every fall as in the spring and summer I do what I call a “calk walk.” Unfortunately, for my particular home, our wood trim goes right to the edge of all the windows and requires calking and painting every year. A contractor told me that our home builder should have had the edge of the windows going behind the wood trim. Instead, we have the edge of the windows meeting the trim flush. My calk walk is simply walking around the house with a calking gun and I calk where it is needed and then paint over the calk once it is dry. Some calks are not paintable, so make sure you buy paintable calk. For the higher parts of my house, I have my painter come every fall and calk and paint the second story trim.

Sprinkler system
If you have an in ground sprinkler system it needs to be blown out by a landscaping company that uses a powerful air compressor, usually in October. Also turn the valves to the hose bibs off in the basement and install covers over the hose bibs outside to keep them from freezing during winter. The covers can be found at most hardware stores, Lowes or Home Depot and are easy to install.

FallHose

 

Air conditioner
I put a cover over my air conditioner once I know we won’t be using it until spring. (I have heard you don’t have to cover them in the winter, but I still do to protect it from the elements.)

Mushroom Lights
We have low voltage mushroom lights in the front and back of our house so each fall I go around and replace the bulbs. One year I didn’t, and by late January I was down to one mushroom light lit in the back yard around the patio and with all the snow I couldn’t replace them until the spring thaw. It is a tedious job but worth it for the aesthetics and the security.

Garage
One thing most people aren’t aware of and neither was I until I learned the hard and expensive way, is to lubricate your garage door spring every fall. At some point that spring will fail but if you lubricate it every year it will extend its life.  I do it in the fall before the air becomes dry during winter. There are garage door lubricants, but any lubricant will do. While I am lubricating the spring, I also lubricate the garage door hinges, pulleys and chain.  When you lubricate the garage door spring with spray lubricant, the lubricant will drip down onto the floor so I have invented what I call the “spring diaper”, which is a fabric sling that catches the excess lubricant.

While in the garage replace the battery in the garage door key pad and replace both light bulbs in the garage coach lights. Once winter hits I want all of that taken care of.

Basement
Once we are no longer using the air conditioner and begin using the furnace, I reverse something I do in the spring. In late spring I close all the main floor flapper valves in the ducting in the basement to force more cool air to upstairs bedrooms (it really works.) and in the fall I open all those flapper valves.

Since I am already in the basement, I install a new furnace filter (it is recommended you change every 90 day, but I do every 60 days) and a new water pad in the furnace humidifier. I buy two water pads in the fall and install one as soon as we start using the furnace and then another one in late February. Also, if you have never had the air ducting professionally cleaned, it is a good idea to do at least once. After that, keeping up on your furnace filters will help keep the ducting clean.

Waterpad

Furnace & Fireplace

One of the most important things on our fall home checklist is the furnace and fireplace. If you haven’t had a furnace inspection in a while it is probably a good idea to get one done. During the inspection you want to discuss the igniter with the inspector and maybe have a new one installed if yours is old. The old silicon carbide igniters are good for about 3-5 years where the newer silicon nitrite igniters have roughly twice that life span.  Getting these items completed in the fall will keep you from having your furnace and/or igniter fail when it’s 20 degrees out and you really need it.

If you have a wood burning fireplace and you use it regularly you will want to have a chimney inspection and cleaning. A very dangerous build up of creosote can coat the inside of your chimney and can ignite and even explosively causing a chimney fire. Choose an inspector/cleaner who is CSIA certified when having this done.

We have a gas fireplace and it is recommended that you have your gas fireplace inspected every year for gas leaks and other anomalies such as debris in the chimney that may lead to insufficient venting and non complete burning of the natural gas. Some HVAC professionals recommend having a CO2 detector near the fireplace for this reason.

Clothes dryer
One thing I always make sure to do on my spring and fall checklist is cleaning out the dryer tube. They make a special round brush that you can find at any hardware or appliance store and the brush has a long flexible handle. Simply remove the plastic dryer vent louvers and insert the brush and push it in as deep as you can.

I do this several times and then turn the dryer on “fluff” to help push any residual lint from the dryer tube before re installing the vent lovers. Dryer fires due to lint build up in the dryer tube are all too common and easily preventable by cleaning out the dryer tube. I do mine twice a year but the frequency of cleaning the dryer tube is certainly predicated on the use of your dryer. A family of six will need to clean the lint out more often than a family of three.

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Window cleaning
Every spring and fall we remove our windows and clean out the tracks and clean the windows. You should also check the weep holes to makes sure mold is not forming and they freely let water drain out.

Garbage Disposal
My plumber recommends running ice through the garbage disposal on a regular basis to keep it clean and running freely so I am adding this to the check list for all four seasons.

Although I have no formal training in home maintenance, I hope you find my ideas and suggestions to be helpful. Click here to download our Fall Home Maintenance Checklist

Thank you, and enjoy your home!

Captain Bri