You’ve decided to buy your first house and you’re probably very excited about it. Without the right guidance, buying a house can be a long and stressful process that requires a lot of money and decisions. Here are some tips you’ll want to look over as you dive into the home buying process.
Know What you can Afford: Make sure you look at ALL of the expenses when you’re budgeting for a house. Calculate what your monthly payment will be with all the additional costs that come with a new home such as property taxes, interest, insurance premiums, homeowner’s insurance, and so on. Also consider cost of commuting, utilities, and upgrades. Factor these into your currently monthly budget to see how your mortgage payment will fit into it.
Get Pre-Approved: What this means is that a mortgage lender has checked your credit and verified your income and assets. This will help you to further determine what you can afford and how much you’re eligible to work with. This will also give you an edge with sellers who are looking for a quick and smooth deal.
Learn About the Neighborhood: Remember, you’re not just moving into a house, but into a community, so it’s important that you know what kind of place you’re moving to. Visit at different times of day to get a sense of the noise and traffic level. Determine the distance from various stores and the type of neighbors you’ll have. If the amenities and the demographic don’t fit your lifestyle then you might not be comfortable here no matter how perfect the house might be.
Work with a Local Agent: Once you find a neighborhood that works for you, look for an agent who has worked there for a while and has knowledge of all the different aspects of the community. Be sure to ask them any questions you have about the area that may be important to the contract process.
Identify your Potential Down Payment: Depending on your comfort level, there are many programs available with varying down payment. We have home financing program that offer zero and low-down payment options as well as the standard 20% down payment options. Your Loan Originator can help you review your situation and find the best solution to fit your needs.
Have the House Inspected: No matter how perfect a home may appear to be, it’s a safe idea to have a trained professional inspect the overall condition of the property. This could help you avoid a lot of unexpected future repairs that might have cost you a fortune. If the inspection unveils serious issues that the seller did not disclose, you should be able to withdraw your offer and get your deposit back, or you can negotiate to have the seller pay for the repairs.
Keep Saving: Just because you bought your home doesn’t mean you should stop putting money aside. It’s always a good idea to have an emergency fund ready for any sudden home repairs or other emergencies that might occur.
Those gleaming stone countertops and the state-of-the-art appliances. The wide-plank hardwood floors. Hmmm. What a gorgeous fireplace. You’d think those would be the things today’s homebuyers’ value most. But you’d be wrong. It’s green grass.
According to a recent survey from the National Association of Landscape Professionals (NALP), 79% of Americans say that the lawn is one of the most important features of a house when purchasing a place to live. The bigger surprise is that millennials value a gorgeous lawn even more than their parents.
So, what is it about an expanse of green that is such a turn-on? House Beautiful magazine says that perhaps buyers value appearances even more these days than they did before, and curb appeal matters more than we ever would have thought. In these days of outdoor kitchens and living rooms, however, it makes sense. Having a space to hang outdoors might be one of the reasons this feature is so important to prospective homeowners. The survey also said that 77% of people enjoy relaxing in their yards at least once a month and that more people visited public parks and playgrounds than movie theaters, pools, bowling alleys, museums, and even beaches. While the source for these stats might be a bit biased, if this survey is accurate at all, it has to make you think. A generation obsessed with all things tech is nostalgic for running through the grass? And they are willing to spend their Saturdays mowing it?
A recent realtor.com article by Lisa Johnson Mandel tells of a millennial California couple as classic examples of lawn-lovers. In their late 20s and with one toddler, they bought a fixer-upper with a good-sized yard rather than a brand-new home in a tight-knit housing development, saying that you can always remodel a kitchen, but you can’t change the size of your yard. She also cited the couple’s desire to plant a garden, have room for pets and add a few solar panels — all part of her generation’s penchant for self-sufficiency. Surprisingly enough, the couple is also not in favor of raising children whose idea of recreation is computer gaming.
The survey also found that 47% of Americans said they entertain in their yards at least once a month, while 57% said they use their yards for recreation at least monthly. When you think fire pits and water features, it all makes sense that Americans are increasingly celebrating the moments of their lives outdoors in their own yards.
Of course, the same research showed that plant and grass-gazing even through a window can reduce stress and lower blood pressure. But it goes one farther, says that neighborhoods with tree-lined streets and larger yard trees have reduced crime rates.
So, if you are a Realtor offering advice to sellers at this point, you may want to bump up the emphasis on green. Instead of spending so much money inside the house, have your clients hire some lawn and garden pros to spiff up the outside. It is, after all, the first thing potential buyers will notice.
Source: House Beautiful, Realtor, Multivu, TBWS
We've all seen it. For weeks or months, we glance over as a real estate agent's "for sale" sign stands at attention outside a house in our neighborhood. Balloons fly over the mailbox on weekends, when open houses take place. Then we see a "sale pending" sign go up. A deal must have been struck. Weeks go by, and we expect that sign to go from pending status to that word that makes all Realtors want to hoist a few — "sold." Instead, we see the pending sign come down. What happened?
Not sure how the term got coined, but that house "fell out of escrow." It's as if bad news dropped onto everyone's heads because one party or the other in a transaction didn't perform or a discovery was made that made it impossible for the sale to close. If you are the buyer, how do you protect your purchase and make sure you get to the finish line?
First, prepare yourself for the inspection, especially if the home is nowhere near new. Unless the home had been fully renovated recently, there WILL be some surprises in the inspection report. No matter how gorgeous the kitchen, how well kept the home, or how the sellers reassured their agent that all was well with the house, people don't know what they don't know. Even the owners. So, go into the process with a realistic understanding that the condition of the home may reflect its age, especially behind the walls.
Just because the inspection uncovered a few troubling discoveries, don't think it's over 'til it's over. While the defects and recommended repairs end up on inspection reports can be a lot to digest, you have every right to expect a renegotiation for anything major. Your Realtor should be able to guide how much seller cooperation is reasonable, so it doesn't put your home purchase at risk.
Think of your purchase as a photo, where the photographer tells everyone to smile and pose, but not move. That's how you should think of your pre-approved loan status (all cash buyers need not worry about this, of course). Your pre-approval should be a snapshot that is frozen in time, with no movement taking place until you are handed the keys to the city. Hold off the "happy purchases," on credit like a new car, a bunch of new appliances you are dying to install, or a house full of new furniture. Even if you pay cash for those items, it has the potential to affect the very funds the lender used to show that you have additional savings beyond your down payment monies. Your pre-approval is based on your credit score and your debt-to-loan ratio and any noticeable change to those figures during escrow, and you could find yourself with no financing. This is all scrutinized one last time at the close of escrow, along with verifying the appraisal matches the sales price. Financing issues are a huge reason the "sale pending" sign can come down.
Lastly, don't get caught with your proverbial pants down when you go to sign on the dotted line. The last thing you want is to get to your closing and realize you forgot one of the documents you need. Take your driver's license, passport, or some other government-issued photo ID, proof of your homeowner's insurance, a copy of your sales contract for your own reference, any and all home inspection reports, paperwork the bank used for loan approval (your lender will tell you what to take), a notarized document giving you power of attorney if your spouse is on title and not at the closing, and a bank check or wire transfer for the full amount of your closing costs (another figure your lender will supply and you should have studied for accuracy before closing.) You may not need all of it, but if the escrow officer needs any of it and it's not readily available, your closing can drag on until it is provided. And if you've already got your moving van arranged, that can ruin the party. Of course, double-checking with your loan officer is always a good idea.
When you moved in 20 years ago it was new. It was gleaming. Its glass shelves reflected the excitement with which you chose it among the dozens of models on the floor of the appliance store. But now it's sweating and leaking. It's cycling on and off, letting you know that it's badly in need of repair or, worse, should be replaced.
With a major appliance like this, whether you repair or replace it is a matter of dollars and cents — or perhaps sense. If it costs you half the original price of the unit to fix it then it might be time to say goodbye, replacing it with a new, more efficient model, according to Consumer Reports, whose web site offers repair-or-replace timelines for appliances.
No one will tell you this when you buy one, but Consumer Reports also says that a side-by-side refrigerator with an ice maker is more than twice as repair-prone as top-or bottom-freezer models without an ice maker. They cite a report in which more than 27,000 subscribers reported the issues they had with more than 53,00 broken appliances, electronics, lawn equipment, and more. Ice makers seem to be the culprit, with the repair rate at 36 percent for side-by-sides and 28 percent for top-bottom models. Bottom freezers without an ice maker? 15 percent.
But what about the expensive built-in you had installed that fits seamlessly into your kitchen and looks as if it's part of the cabinetry? The report admits they are worth repairing. Forbes writer Stacy Freed talks about how her Sub-Zero gave out and she called the "Appliance Whisperer" to diagnose the problem. He placed his tool bag on the floor and opened the unit, finding the original product information seal. He asked Freed if she knew how old the unit was. She admitted that all she knew was the brand name and that it was in place when she bought the house 5 years earlier. Oh. And that it matched her cabinetry. He pointed to a small sticker on the inside of the freezer. It read, "NOV86."
According to Sears Home Services, a typical refrigerator has a life span of 10 to 13 years. But Sub-Zero, Wolf and Cove (according to their representatives) say their products should last at least 20 years, with some still in existence at 50 years old. You can extend the life of a refrigerator by keeping it clean to reduce the chances of accumulating bacteria, make sure there is proper ventilation around the outside and the inside (built-ins have vents), and don't overcrowd it.
Today's models use less energy than older refrigerators and, since they're on all the time, a new one can save you money in the long run. Look for tears, gaps or air leaks in the door gaskets; change your water filter and clean the dust off the condenser coils a couple of times a year. Signs the big guy has got to go include the need for constant repairs, excessive condensation, the motor is running hot, it’s loud, and its energy efficiency is making your monthly utility bills higher than they should be. Refrigerators are one of the highest energy-consuming appliances in your home.
You can find out just how inefficient your unit is with the EPA's handy-dandy calculator, which can be programmed with the type of fridge you have (side by side, French door, model year, capacity, and your own state's electricity price per kilowatt. The calculation lets you know approximately how much you spend annually on electricity for your fridge and how much you will save in dollars and carbon pollution over five years. In Freed's case she was paying $881 for a unit that was putting out 2,510 pounds of carbon pollution over five years.
A lot of repairs can still be made on all brands of refrigerators, but it comes down to cost. Most people will repair a fridge it's $300 or less—and that could cover fans, motors, some electrical devices. But if it's a problem with a sealed system like Freed's, you might be looking at a repair that's half the cost of a new fridge.
She considered that in 1986 her Sub-Zero had cost the original owner of her home $3,000 — a lot of money back then. To buy a similar-style Sub-Zero replacement now, she was looking at something north of $10,000. So, in the end, she had her repairman clean the coils and install a new compressor. It took a few hours of labor and $900 later, her older, high-end fridge was fixed. Fortunately, Sub-Zero keeps parts on hand for 15 to 20 years — a good, long time, but it's also a reason to stock up on a few parts and be ahead of the game.
Source: Consumer Reports, Forbes, TBWS
When you bought the place, it was a blissful move up to a larger home, where all your kids had their own rooms, and there was no fighting over who got the bathroom.
But what about the newly vacant nest? Just when you got the house paid off you discovered missing your kids (or celebrating their newfound independence) left you with a lot of rooms that have no real purpose anymore. Here are some ideas for feathering your now empty nest for the next stage in your life:
- Home gyms are among the most popular ways to use extra space. Your 10-second commute to this new room will find you canceling gym memberships and saving money in the long run. If you have some workout machines at home, transform your spare room into a gym. Even if you just buy some weights, a yoga mat, and other inexpensive equipment, you can turn your unused room into something useful.
- A playroom can come in handy if you have entered "grandparentville." No need to trip over toys or mess up the well-kept living room. Paint the walls with chalkboard paint so they can write on the walls, store all of their toys in the room, and allow them to play. They'll love a space of their own, and you'll love not having a mess all over the house.
- What about a place just to chill all on your own? Sound pretty good to escape the craziness of the day and creating a contemplation room. Decorate it in colors that are easy on the eye — whites, and beiges — with comfortable furniture, throw pillows, and blankets. All designed to clear your head, meditate, and relax.
- Just because you're no Harry Potter doesn't mean you shouldn't have your own library. For the bookworm in you, install bookshelves to the ceiling, add comfortable, sophisticated places to sit, and throw in cozy area rugs to make a comfy and inviting space. Ah — your favorite book, a cup of tea, and candles.
- What about that home theater you always wanted? Just because the room isn't huge doesn't mean you can't plant a few recliners in it, shove them against a far wall, and put up a big screen. You may even want to invest in a theater-style popcorn popper.