Five Things To Consider Before Buying Your Family A Home

The housing market is hot right now and there are more buyers than there are homes to purchase. The

housing market is booming right now because of the low mortgage rates and a recovering economy. It is reported that 8.3 million to 9.2 million first-time homebuyers will hit the market by 2022. Even though this is a hot market, it might not be the best time for your family to commit to owning a home. Below are several things to consider before diving into the responsibility of homeownership.

1. Pre-approval is a must.

Getting a pre-approval will not only relay the message that you are a serious buyer but will also give you an idea of how much you can spend on a home. When you are pre-approved a seller knows you are a serious contender and puts you above offers with no pre-approval.

"There are two main things a seller wants to know about buyers: Are they willing to pay my price and can they close a deal if we agree?" says Dale Taylor, a realtor in Chicago.

A good place to start is by using an online home-affordability calculator to see how much money you should be able to borrow. Once you have established this, check out several mortgage lenders in your area. It is a great idea to shop around for the best rates and mortgage offers. You not only want the best bang for your buck but you also want to choose a lender who is happy to help answer questions, trustworthy and easy to reach.

2. Do not let emotions make the decision.

You might take a tour of a listing and say it is love at first sight but that doesn't mean you need to jump right in. Look at all the features of the home from a practical point of view. A home on a hill might have awesome curb appeal but might not be the best choice for families with you kids who like to roller-skate or ride their bikes.

According to Trulia.com half of all homeowners find at least one or not more things they do not like about their current home. There might be a cute three-bedroom bungalow that you love, but it might not have any closet space or back up to a busy street. Remember, always think long-term when investing in a home.

3. A home costs more than just the mortgage.

There are many more expenses than just your monthly mortgage payment. There will be real-estate taxes and homeowner's insurance on top of your principal and interest payment. Tax Foundation states that depending on the area you live in, your property taxes will average about 1.1% of your home's value per year. If you need $250,000 worth of insurance coverage, that will be about $1,477. You will also need to add your utilities to the monthly cost.

There are also some upfront fees you will also have to consider. You will need to set aside around 2% to 5% of the purchase price for your closing costs. A local Realtor can help you through this process.

4. There is a big difference between an appraisal and an inspection.

Banks will need an official appraisal and you will need to hire a licensed appraiser. An appraiser will give the bank a firm value of the home. An inspection will let you know if this home is a reliable purchase.

A lot of times buyers will make their contract contingent on the home inspection. A home inspector has certain criteria the home must meet to be deemed satisfactory. It is always a good idea to have a professional inspector inspect the home you are about to purchase. An inspector can make sure everything is up to code before you go through with the contract.

5. Read the whole contract.

Purchasing a home is a long-term investment and one of the biggest milestones in your life. You need to make sure everything in your contract is in order. You might look at a home love it, put it under contract, close and discover they took the refrigerator. You have to make sure everything is listed in the contract. If you do not understand any wording, ask your Realtor to explain the meaning. Make sure you are comfortable with what you sign.

If you decide to go through with purchasing a home, go through a local sales agent. A Realtor can help you find the perfect floorplan that will fit your family, in a neighborhood you are comfortable in, and in the right school district.

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Upgrading to a New Home – Home Selling Tips

Selling your home is one of the biggest challenges a homeowner will face throughout the life of owning a home.  Upgrading to a new home (2nd or 3rd time home buyer) is not only an investment of equity but also a thrilling adventure, but you have to get the first home sold first!  To do this, you need to be a savvy home seller with the determination to make selling your home your number-one priority or “job.”  There are several ways to avoid hardships and heartaches along the way.

First: You can’t always help what a home buyer is going to do, but there are things you can do to protect yourself as the seller.  Be wise and make sure that the person putting an offer on your home can actually afford to buy your home. Make sure they are pre-approved by a lender.  Pre-approved, not just pre-qualified.  Many people can get pre-qualified based on their answers to a loan application and credit check, but when it comes down to actually examining tax returns and verifying employment, there is a big difference.  Turn down any offers of buyers that are unwilling to take this next step.

Second: Examine and inspect your home before your home inspector does. Or, if you feel like you have already made all repairs and improvements to your home before you put it on the market, be efficient about getting the home inspection done as soon as possible. The home inspection is what can make or break a sale, so be proactive and fix what needs fixing and for a great home buyer offer, get the inspection done and be open to the results.

Third: Make sure you don’t “price yourself out of the market” with the sale of your home.  What you think it’s worth and what a home buyer thinks it’s worth can be very different.  Appraisals are pricey, but if you have a strong discrepancy of what you are asking and where buyers’ offers are coming in, you may want to get an appraisal to boost your chances of getting your asking price.  You can even include this information in your listing.

Fourth: Some buyers want to live a rural lifestyle with no rules or restrictions while other buyers prefer to live in a neighborhood with strict HOA rules and guidelines to protect their home investment from losing value. If you live in an HOA protected subdivision, be sure to have the HOA Guidelines available for your potential buyers.  You don’t want them to be blindsided halfway through the process when they find out they can’t keep their cabin cruiser boat sitting in the driveway of this home they just purchased. Information like this can avoid these types of deal-breaking dilemmas.

Fifth: If you purchased your home either as a previously owned home or a new home, you should have gotten title insurance. If you didn’t get title insurance, you are going to want to consider getting an abstract of title for your home to reassure your home buyer that your home has a clear title.  You will want to make sure that all old mortgages have been cancelled and the you personally have not acquired any liens during the time that you have owned your home.

Using the tips above will help you have a smooth home selling process and allow you to upgrade to your next home purchase.  If you are considering buying a new, custom home for your next purchase, Contact Ron Lee Homes today to set up a personal consultation.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

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