Buying a Home

5 Things to Ask at an Open House

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  1. Why are the sellers moving? Their answer may give you an idea about how motivated the sellers are.
  2. What is the neighborhood like? The house may be perfect, but remember that you’re buying into a neighborhood. Get information on the schools, local amenities, things to do in the area, noise level and whether the property is subject to homeowner’s association dues.
  3. Have there been any offers? The answer will tell you how many other buyers you’re in competition with. If there have been offers, you may want to ask about the timeline so you can make your bid in time to be considered. The number of offers also tells you whether to submit your best offer first, or bid competitively.
  4. What are utilities like at this house? The cost of utilities can be a large chunk of your monthly expenses. Or, it may come as a pleasant surprise that the home comes with energy-efficient appliances.
  5. May I take pictures? It’s good etiquette to ask before you take pictures, particularly if the current homeowner is still living there. This is important for the homeowner’s privacy and security. If nothing else, the agent will appreciate it and you’ll be off to a good start if you decide to make an offer! Most of the times though you will not need to take pictures because the listing agent will have provided a sufficient number of photos for potential buyers in their marketing.

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Buying a Home: The Final Walkthrough

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When buying a home, the last thing you do before you sign on the dotted line is go to the house and do a final walkthrough. This is different than the home inspection and done just prior to the final closing of the sale.

The purpose of this walkthrough is to make sure the house will be delivered as agreed in your contract. You want to make sure the seller is leaving the house in working order and no problems with the house have occurred since the last time you were there.

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Understanding First Time Home Buyer Grants

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What if you could get free money from the government to help pay for your new home? No, this is not one of those scams. By free, I do mean free. You do not have to buy some book or software program from me to find out the info. Just keep reading. This is money that you do not have to pay back. It’s called a first time home buyer grant. Federal funding, as well as many states offer such grants to the public. First time home buyer grants are not as difficult to qualify for as some may think.

 

What Are First Time Home Buyer Grants?

First time home buyer grants are those that are available to those purchasing a home for the first time. These are grants from the federal government, as well as the state. The federal government first time home buyer grants are available from the US Department of Urban and Housing Development (HUD). Not all states offer additional state first time home buyer grants. However, some do. First time home buyer grants exist in addition to any loan programs available.

 

Who Qualifies for First time Home Buyer Grants?

As the name implies, those buying a home for the first time may qualify for first time home buyer grants. Actual qualification criteria is dependent on each individual program. Be sure to get this information when inquiring the applicable agency about first time home buyer grants. Grants.gov is a great place to start when researching this information for first time home buyer grants through the federal government. The state Department of Housing is the best place to start for information on state first time home buyer grants. Some state grants also are listed at Grants.gov.

 

How Do First Time Home Buyer Grants Work?

Each grant will have its own set of procedures. However, general steps taken include writing a grant proposal, filling out an application, waiting for approval, and receiving the loan. What is required to follow that path, as well as additional procedures and steps to take will come from the agency you are applying to. For instance, if you are applying for a grant offered on grants.gov, much of the process can be done directly at the website and additional resources and information is provided. Potential applicants can search for grants on the website based on their situations and locations.

 

How to Apply for First Time Home Buyer Grants?

The application process will be different depending on the program requirements for each individual grant. To apply, simply research until you have found the program that you wish to submit an application to. First time home buyer grants usually have a grant application package that needs to be completed. Once the package has been completed, some programs may allow it to be uploaded through a website, while others may require that it be mailed or faxed. Be sure that you know the procedures of the exact program you have chosen, as they will not all be exactly the same.

 

Creating a Home Buyer Wishlist

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Home buying is often an incredibly daunting and confusing process. With all of the many options available on the real estate market today, it can be very overwhelming to decide what is truly important to you in buying a home. Besides getting pre-approved for funding and knowing what you can afford, it’s most important to be able to separate what you need in your new home versus what you want in your new home. Your real estate agent or professional will happily help you figure out these needs and these wants through the questions he or she will ask you. However, it’s good to have a list of each of these planned out beforehand so that you go into your meeting with your real estate professional well-prepared.

It’s true that many home buyers often confuse their home-buying needs with their wants. That’s why a wish list is often recommended by many real estate experts, because it’s extremely helpful when narrowing down what you’re in a home. By having a wish list already drawn out, it helps in the process of elimination of homes that will never fit their needs. However, many home buyers can dismiss homes that would perfectly fit their needs because they do not have any of their wants – even if those wants would be able to be added later on. Of course, it’s extremely rare that you will ever get everything on your wish list in the end. What homes you will eventually have access to are often defined more by your budget than your wish list – but it helps you to be more realistic.

Here’s an example of a wish list which is separated into home-buying needs and wants.

Examples of Needs

  1. Adaptions for disabilities or handicaps
  2. Adequate number of bathrooms
  3. An eat-in kitchen
  4. Enough bedrooms to accommodate your family and/or friends
  5. Garage or basement for storage needs
  6. Lots size to accommodate children’s play area
  7. Proximity to a particular school
  8. Reasonable square footage for comfortable living space
  9. Single floor living for health reasons

Examples of Wants

  1. Bay windows and skylights
  2. Entertainment centers
  3. Decks and Patios
  4. Great views
  5. Granite Counter tops
  6. Hardwood floors
  7. Pool or Jacuzzi (Unless needed for medical reasons)
  8. Upgraded lighting fixtures

Everyone obviously has considerably different lists of needs and wants. By creating your own wishlist, it helps you evaluate homes more accurately as you go through the research process. Then, sharing this list with your real estate professional helps narrow down your search even further while also opening you up to new options. The goal is to find a house that includes all of your needs and meets as many of your wants as is practical in your budget. Sometimes you may need to get creative and find homes that have many of your needs while also being able to then accommodate your wants at a reasonable price still within your budget. But the wish list goes a long way in making sure that you can limit the possibility of buyers’ remorse and get the most for your money in buying the right home for you.

Photo credit: iStockPhoto

5 Important Considerations for Choosing a Home Loan

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When you’re shopping for a new home, it’s important to shop around for your financing. Of course you want to get the most value for your money when purchasing a home, but you should also pay close attention to what types of home loans are out there.

Here are a few things you should consider.

  1. Definitely shop around for your home financing. As the interest rate and terms of your mortgage can have major impacts on what you’ll be able to buy, you want to have the best possible deal for the long-term. Don’t just settle on a single lender.
  2. The percentage rate on a  home loan matters. Even just 0.5% can make a big difference. For example, a 30 year loan of $200,000 at a 5% fixed-rate, will cost you about $22,000 more in interest than if the interest rate was instead set at 4.5%. Even a quarter of a percentage point can make a difference.
  3. Be aware of fixed vs variable interest rates. While variable rates can often be lower, be sure that there is a reasonable ceiling on the variability of your rate. Typically, fixed rates are much better due to the long-term planning ability they allow.
  4. Closing costs are an important expense to keep in mind. Mortgage companies will charge additional fees which include appraisals, origination fees, and title charges. Even credit checks may be charged to you, as well.
  5. Simply being pre-qualified for a loan doesn’t mean you should spend the absolute maximum allowed by your financing. A good rule of thumb is that your mortgage – which includes principal and interest – plus property taxes and homeowners’ insurance shouldn’t be more than 30 percent of your gross monthly income.

By considering these five items, you’ll be able to shop smarter for home loans and be aware that the smallest details can save you thousands, if not tens of thousands of dollars in the long run.

Photo credit: Pixabay, Public Domain

4 Things to Do When Preparing to Buy a Home

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Before we begin, I would like to share a great quote from one of America’s founding fathers about preparation:

“By failing to prepare, you are preparing to fail” – Benjamin Franklin

Buying a home takes a great deal of preparation. There are many different things you need to consider before even beginning the home-buying process. In today’s real estate market, affordability is more of an issue than ever. Many home-buyers believe that they need near-perfect credit to even qualify for financing. While that’s not entirely true, the better your credit is, the more likely you’ll have a chance on securing the financing for the home you truly want.

The preparation for the home-buying process can be fairly daunting, and it’s easy to miss a step. To help you out, here are X things you can do to help prepare.

1) What is my credit score?

Unfortunately, credit scores are everything in today’s world of financing. It’s crucial to keep an eye on your credit score consistently for a wide variety of reasons. But if you’ve been paying all your bills on time, especially things such as rent if you’ve been in an apartment, this is something you can use to your advantage when trying to get pre-approved for a mortgage.

2) Getting pre-approved for a mortgage

Securing pre-approval for a mortgage is perhaps the number one way to make sure you will have the financing that you will need to have for buying a new home. So what is pre-approval exactly? It’s when you sit down with your lender, armed with a wide array of financial documents that will help the lender decide just what you are able to afford. Getting a pre-approval letter is extremely valuable ammunition when it comes to home-buying, as you know what you will realistically be able to afford. You don’t ever want to start a home search before getting pre-approved unless you have some other financing available to you ahead of time. You don’t want to set yourself up for unrealistic expectations.

3) The bigger the down payment, the better

Obviously, the best way to buy a house is to pay cash for it. This is simply not realistic for most people, however. Most lenders will want a significant down-payment available. The National Association of Realtors says that while most FHA-approved loans require only 3.5% percent of the total purchase price, most lenders want as much as 10% or 20%.

The Realtor.com website has excellent information about the pros and cons of larger down payments. Ideally, you want at least 10% of the purchase price for a down payment. The more of a down payment you have, the better interest rate you will have, and the more equity you’ll immediately have in your house that you can borrow against later.

4) Make sure finances are in order before doing heavy research

This might be the most important thing to remember when preparing to buy a home. You don’t want to put too much time into actually looking at houses before you know what your lending firepower looks like. Certainly, you can look into neighborhoods and get a general idea of the home prices, especially if moving is an absolute necessity for you. But you don’t want to end up aiming too high or too low. You want to have that general number. Make sure you have plenty of money for that down-payment and make sure your credit is in order. Otherwise, you may be spending a lot of time trying to buy a home that you can’t afford, and that’s the last thing you want.

We hope these four things will help you prepare for your home-buying journey. Whether you have the financing or not for the home of your dreams, it’s important to know the facts before you dive headlong into the process. As Benjamin Franklin said, you must prepare. A lender will be more likely to lend if you have everything in order and have done your financial homework. If you prepare properly, you may find that you can afford more than you think!

Photo credit: Wikipedia

7 Reasons to Look at a Home in Person VS Online

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Many home-buyers today do a lot of research online before they ever look into visiting homes in person. While there’s nothing wrong with doing research online, it’s important to understand that actually touring a home in person is the most important part of the home-buying process. Your REALTOR is always your first line of defense in this case, as online listings can be deceiving in what they show versus the reality of what they’re selling. Here are seven reasons why you should always look at a home in person versus just looking online before making any sort of commitment or offer.

1)      The Home’s True Size

With camera tricks and wide-angle lenses, a home can be made to look far larger in photographs than it truly is in person. By visiting the home in person, you get a true sense of the space, whereas online listings will be made to aggrandize the space.

2)      Photoshop Dream vs. Reality

Photo processing programs can make homes look far newer than they actually are. It’s very easy with programs such as Adobe Photoshop to clean up walls, floors and ceilings. In person, you get to see the reality. You may discover upon your actual visit that there is damage to the walls, floors, or ceilings that wasn’t visible from the pictures.

3)      The Truth of the Neighborhood

Home staging can make a place look like a homeowner’s paradise. But when you actually visit where the home truly is, you may discover that it is not quite the neighborhood that you expected. This is something that a good REALTOR will be sure to tell you about before you ever visit a place.

4)      Only Positive Information

Online listings will most often only show positive information to try and fool potential buyers into thinking they’re looking at more of a jewel than they actually are. A good REALTOR will always be truthful will you, but a third-party selling online most often will dress up what they’re trying to sell just to fool people into visiting a place that if certain truths were known would never attract visitors.

5)      Most Online Listings are Sold by For Sale by Owner Parties

Most online listings that look too good to be true probably are. As mentioned earlier, a good REALTOR will always point out the pros and cons of any given location. But a For Sale by Owner situation, which online listings typically are, will often exaggerate certain features or conveniently omit certain details to help the sale. REALTORS are bound by the REALTOR Code of Ethics to be truthful about everything – even when the home is staged, a REALTOR must tell you about the home’s warts as well as its pros.

6)      Getting Too Attached to What You See Online

Because of how fake online listings can actually be, it’s likely that someone will see a place that they fall in love with. Even upon arriving, they’re still thinking of the space in a positive light, and the emotional attachment that was made online makes them miss important warning signs that a place may not really be suitable for them.

7)      Patience is a Virtue

With the tendency in today’s society of impulse buying, the prettier a home looks online, the more likely a buyer will overpay. This is why it’s best to check with a REALTOR if something looks too good to be true. Be patient and be sure to examine a place thoroughly before making an offer. The price listed online for a certain home is very likely not what it’s actually worth in reality. But being dressed up enough online can make for overspending, which is exactly what For Sale by Owner sellers want.

A good REALTOR will be sure to tell you what the home is actually worth. You could save a lot of money by being patient in your home-buying decisions. Even a home with warts may be worth buying, but you could end up saving tens of thousands of dollars by doing your homework.

This is not to say that an online listing couldn’t be truthful. But more often than not, online listings will be dressed up to look larger and prettier than they actually are. More often than not, there will be one or two major things that will conveniently go unmentioned in the listing. Online listings tend to prey on the emotional attachments one can get by seeing pretty pictures while just browsing the web. If something looks like too good to be true, as the saying goes, it probably is. Be sure to always ask your local REALTOR about a certain neighborhood before you go to actually check it out. Chances are that REALTOR will know about that home, or know someone who does.

So while online listings from For Sale by Owner may make buying a home seem incredibly convenient, that convenience could come at a cost, in buyer’s remorse or over-payment at closing. REALTOR’s online listings will more often than not be staged, but the REALTOR responsible for that listing is required to tell you the truth of what they are selling. For Sale by Owner listings are not held to the same standard. Although they are still not supposed to blatantly lie, a lie by omission can be just as harmful, and too many For Sale by Owner property sellers have gotten away with them.

The next time you see your dream home available online, it might be exactly what it appears to be. But more often than not, it will not be. Contact your local REALTOR and make sure you’re getting what you think you are. If you’re not, you may be able to use that REALTOR’s advice to strike a bargain that the seller is hoping you wouldn’t.

Photo Credit: boulderite via Compfight cc

Should You Be Buying A Fixer Upper Home?

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In recent years, it has become popular to buy what is most commonly called a “fixer-upper” house. As a REALTOR, we have sold many of these sorts of homes over the years, and because they tend to sell well-below regular market value, they tend to sell fairly well. However, some home-buyers don’t inevitably realize what goes into a fixer-upper.

One of our team recently found a great infographic on Pinterest that we shared to one of our own boards with other great infographics and links to resources for home-buyers. We call this the “Buying a Home” board. This particular infographic was a diagram from Credit Sesame that outlined some of the questions you need to ask yourself when thinking about buying a fixer-upper.

Here it is:

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As you can see, the diagram leads to a lot of YES and NO answers, but there are some questions here that deserve more in-depth answers. Let’s break it down one question at a time:

Do you have a lot of free time?

This is perhaps the number one question. While you can always hire a contractor to do most of the fix-up work, when you buy a fixer-upper property, you’re still going to have to put a lot of your own time in to make sure things are coming together the way you expect.

If you don’t consider yourself “handy” or you feel that you are “constructively challenged,”then it would seem that a fixer-upper may not really be for you. However, if you’re really set on buying a fixer-upper, and are willing to spend the money, we can help refer trusted trades people to you to help out. If you are still unsure, you can schedule a consultation with us to help guide you in the right direction.

However, if you don’t have a lot of money to spare to hire trades people or remodeling professionals, and don’t really have the time to do-it-yourself, then buying a fixer-upper may still not be a good idea.

Did your dog dig up bones in the back yard? Are the neighbors involved in illegal activity?

These are two very good questions, even if the one about digging up bones is a bit goofy. Keep in mind that some properties remain deserted for a reason. Location is everything in real estate, and some neighborhoods simply are not friendly ones that people want to move into. Of course, there are many fixer-uppers in perfectly good neighborhoods for a great many reasons.  We can let you know if the property you’re looking at is really in a good area to move into. If it’s not, we’ll advise you that you’re better off leaving it alone.

You’re sure you’re not just having delusions of being the next Bob Vila?

People have always loved Bob Vila and shows like This Old House because of the amazing transformations that homes in the care of the right professionals can undergo. However, you need to have a good vision of what you want your fixer-upper to actually become.

Then again, you may find a great design-build company that can lead you through the process to make it into the home of your dreams. If you’re in need of someone like this, and have the budget for it, we can help to refer you to the right people.

Does the house you hope to fix up have any of the following issues: termites, asbestos, mold, lead paint?

As is the case with some fixer-uppers, a great deal of the problems with the home can be due to termite infestations and mold build-up, meaning that massive reconstruction may be involved. You may want to steer clear of homes that have had these problems, as a near total rebuild of the home may be necessary.

Also, homes that still have a good deal of asbestos and lead paint in them will require a great deal of investment to see that all of the asbestos and lead paint is safely removed. Safe asbestos and lead paint removal highly expensive and may not be worth the cost to you.

Therefore when considering any fixer-upper property, ask about whether any of these four issues exist. We can advise you about the potential costs of dealing with them.

Will you live at the house while it is under construction?

It’s perfectly fine to not actually live in the house while it’s being fixed up, especially if you have trusted pros doing the work. But if you do plan to live there, be warned that you may end up with what the infographic calls “sawdust in your cereal.” While you wouldn’t necessarily literally end up with sawdust in your cereal, living in a construction zone can definitely be a challenge.

If you don’t have somewhere else to stay during the construction, and really don’t want to deal with the stress that trying to live in the middle of a work zone can cause, a fixer-upper likely isn’t for you. There needs to be a lot of patience involved, as things don’t always go according to schedule.

Do you hear voices and does your hair stand on end when you’re in the basement?

While this last point sounds a bit goofy, if you’re feeling spooked out by a home when you’re in the basement, it may not be for you. Whether you believe in hauntings or not, you may want to find out the history of this home and whether you really want to bother with fixing up a “haunted house.”

If you’re willing to put the time and effort, and money, into restoring a home to its former glory, or give it a new life entirely, then a fixer-upper is a great investment. However, take these questions into great consideration. If you are thinking of buying a fixer-upper, however, please feel free to give us a call about any questions you might have. We may just have the property you’re looking for!

Also, if you’re looking to list your home, and it could be classified as a fixer-upper, we may also be able to suggest some quick fixes that might turn away potential buyers. We hope that we can offer you our experience whether you’re buying or selling a fixer-upper, and lead you in the right direction towards your next home.

Photo Credits: Grandpa & Grandma T. via Compfight cc & Pinterest