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Home improvements are made for a variety of reasons. Sometimes those reasons are confused in the mind of the homeowner. That explains the first of the common mistakes listed below.

1. Not Being Clear About Your Purpose

With any home improvement, you should be clear about why you are doing it, so you can be clear about whether it is worth the cost. People often confuse their motivations, saying that a given project is not only to make the home more livable for them, but is an “investment” as well. The problem is, it may not be an investment that yields any return.

In a report recently in Remodeling Magazine, the average cost and added value of various home improvements was shown for different areas of the country. The worst remodeling projects, including creating a home office, only returned about half of the cost in added value. With the best, including a basement remodel, you get back about 90% of what you spend.

Let me do the math for you: every single one of the improvements in every area of the country was a money losing proposition on average. Now, it is true that some are better than others. The average attic bedroom addition only cost $13,000 more than it adds in value to the home, while you lose $30,000 on the average master bedroom suite project. It is also true that if you are knowledgeable and creative, you can add more in resale value than you spend.

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Buying a home is often a stressful process, because it is usually the single largest purchase of your life. Even if it isn’t your first house, it’s easy to make a mistake that costs you hundreds or thousands of dollars. Here are three common mistakes to avoid.

1. Paying Too Much

This isn′t about over-paying for a particular home. That mistake is tough to make if you will be borrowing to buy. An appraisal will be done, and the lender will probably refuse to lend enough for you to buy an over-priced house.

The common mistake here is following the advice of real estate agents, lenders and even your friends and family, who will often encourage you to buy a more expensive home than you can afford. They may call it an “investment″ and claim that real estate always goes up in value, so you should get as much as you can. Of course, recent history shows that home values don’t always go up, and this kind of thinking has a lot of families facing foreclosure now.

Buy what you feel comfortable with. If you can’t easily make the payments, even after a short layoff from work, you may be overextending yourself. And watch out for lenders “solutions″ to this problem (see number 2).

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Home improvements are made for a variety of reasons. Sometimes those reasons are confused in the mind of the homeowner. That explains the first of the common mistakes listed below.

1. Not Being Clear About Your Purpose

With any home improvement, you should be clear about why you are doing it, so you can be clear about whether it is worth the cost. People often confuse their motivations, saying that a given project is not only to make the home more livable for them, but is an “investment” as well. The problem is, it may not be an investment that yields any return.

In a report recently in Remodeling Magazine, the average cost and added value of various home improvements was shown for different areas of the country. The worst remodeling projects, including creating a home office, only returned about half of the cost in added value. With the best, including a basement remodel, you get back about 90% of what you spend.

Let me do the math for you: every single one of the improvements in every area of the country was a money losing proposition on average. Now, it is true that some are better than others. The average attic bedroom addition only cost $13,000 more than it adds in value to the home, while you lose $30,000 on the average master bedroom suite project. It is also true that if you are knowledgeable and creative, you can add more in resale value than you spend.

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The Seattle area’s real estate market showed signs of stabilization in September, according to new statistics released Monday.  Especially in the critical market for single-family houses in the four-county central Puget Sound area, said Glenn E. Crellin, director of the Washington Center for Real Estate Policy Research at Washington State University.

Sales of houses and condominiums in those counties rose nearly 4.1 percent in September compared with the same month in 2007, and nearly 4.2 percent in King County alone. The last monthly increase for the region was 4.8 percent in February 2007.

The main reason for the stabilization in year-to-year numbers is the mortgage crunch hit the Seattle & Redmond real estate area hard in August 2007, when the region already had an increasing number of homes chasing a shrinking pool of buyers. That crunch showed first in the data from September 2007.

The median sale price fell last month by 8.3 percent to $295,000 overall compared with September 2007 and by 3.7 percent to $380,315 in King County.
Total active listings at the end of September were 10,889, down by about 1,500 or about 12 percent from a year earlier.

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