Apr 30, 2015 | Home Buyer Tips
Whether you are preparing to purchase your first home or it has been many years since you last walked through the home buying process, you may be starting to feel overwhelmed at the thought of all of the work that lies in front of you. From concerns about finding the right home to the physical act of relocating all of your belongings after the closing, there is certainly a lot to think about. While each home buying transaction is unique, the most successful home buyers have typically adopted a few behaviors. You may keep these in mind to help you navigate through the process with success.
Keep An Eye On Your Budget
Financial stress when buying a home is common. You may have saved for years to afford your down payment, but there are various expenses that some may have not calculated or planned for. It is important to leave extra funds available for unexpected expenses, such as paying for the appraisal up-front on the home you have fallen in love with. Likewise, keep a close eye on your budget so that you are aware of your financial situation at all times.
Be Available And Flexible
It is imperative that you remain available and flexible as much as possible. Your real estate agent may call you at the last minute with a great new listing that has come on the market, and you may need to be flexible with your schedule to see this property before other buyers do. In addition, you may need to be flexible and accommodating with regards to contract negotiations, working with title company requests and more.
Seek Advice And Knowledge
Buying a home does not have to be stressful, but it also is not something that you do every day. There is a lot for even an experienced home buyer to learn, and you should be prepared to seek advice and to educate yourself along the way. Ask questions as necessary, and use the Internet for additional research.
Home buying is a process, and you may consider taking one day at a time as you proceed through the journey to reach your ultimate goal. A skilled real estate agent can guide you through the process and can help you to more successfully reach your goal. Reach out to a real estate agent today to begin looking for your new home.
Apr 23, 2015 | Home Buyer Tips
When you buy a home, you may have dreams of settling into a beautiful new space that meets your needs and that your family can feel comfortable in. While many will enjoy this vision of domestic tranquility after taking ownership of their dream home, others have had their dream turn into a veritable nightmare due to some simple mistakes or oversights on their part. By understanding these mistakes, you can avoid making them yourself.
Paying Too Much For The Property
One the surface, the main cost of buying a home relates to the sales price, and it is true that your monthly housing payment may be the primary related expense. However, other expenses such as homeowners insurance, property taxes, repair and maintenance costs, utilities and more will all need to be factored into the cost of home ownership. Some buyers believe that because an online calculator or a lending professional tells them that they can afford a high priced home that it is the case. You can review your budget and estimate all related home expenses to determine how affordable a specific property is for you.
Finding Out That The Location Is Undesirable
There are many things that can make a location undesirable, and you should take time to become comfortable with the location before making an offer. Consider, for example, if the neighbors like to throw loud parties on the weekend or if there is a teen driver that likes to speed down the street. If you are buying a property with open land or vacant buildings around it, consider researching zoning, and think about future uses for these properties that could influence value and desire.
Discovering That Your Property Is In Bad Condition
Some home buyers discover after purchasing a property that it is not in the best condition, and some even learn that their home needs tens of thousands of dollars of repair work or more. Even properties that appear to be in great condition on the surface may have hidden issues with the foundation, structure, roof, pipes or electrical work, to name a few. You can order a property inspection to learn more about the true condition of a property.
These are among the most common issues that can turn a dream home into a nightmare. When you work with a local real estate agent when buying a home, your agent can help you to avoid unpleasant and costly mistakes such as these.
Apr 22, 2015 | Home Buyer Tips
Real estate investing comes with many benefits that you may be eager to start taking advantage of. For example, the right rental property can provide you with monthly cash flow coupled with equity appreciation, tax deductions and more, and these can have incredible effects on your overall financial situation. As a first time real estate investor, you may be excited to start searching for a property to invest in, but you may consider following a few helpful tips to make your search more successful.
Determine Your Budget
There are investment properties that range in price considerably, and you will need to know up-front what your budget is before you can begin your search. The right real estate investment will generate revenue to pay your monthly mortgage payment and expenses, but there may be months when your property is vacant. Therefore, in addition to thinking about the amount of down payment that you can afford, also think about how affordable it will be to manage property expenses when the space is vacant.
Consider Different Communities
You may consider being flexible regarding the communities that you invest in. Each community may have a different economic base and primary demographic. For example, some towns or even suburban communities may be largely comprised of college students or military professionals. Think about the benefits between the ease of finding new tenants versus the benefit of having long-term tenants.
Analyze Cash Flow
After you have found a few properties to consider, it is important to analyze cash flow. Each property will be unique with regards to the required mortgage payment, income generated, property taxes and even repair and maintenance needs. While you can estimate these expenses initially, you should request historical operating statements from the sellers early in the process. You will find that some properties can be considerably more profitable than others, so it is important to complete a thorough analysis.
Some real estate agents have considerable experience helping their clients from excellent real estate investments to consider, and they may even complete a basic review of operating statement numbers on your behalf before showing you a property. When you are new to real estate investing, the experience and guidance of a savvy and knowledgeable real estate agent can be invaluable. When you are preparing to make your investment, consider following these tips, and seek the advice of a helpful real estate agent.
Apr 2, 2015 | Home Buyer Tips
While the real estate market in most areas may slow down considerably during the winter months, activity quickly picks up in the spring time. More listings are available for buyers to choose from, but there are typically many more buyers competing for those properties. With the fast-paced and often pressure-filled market activity during the spring, it is easy for buyers to react accordingly and to overpay for the home they fall in love with. By following a few important tips, you can take steps to ensure you get a great deal on your real estate purchase.
Avoid Making Impulsive Or Emotional Decisions
There are many reasons why buyers may overpay during the spring months, and these range from the feeling that they must act quickly to make an offer on a property they love to the belief that they need to offer the asking price even if they feel the price is too high. Some may even be involved in a bidding war with another buyer, and they may structure an offer based on emotion rather than on sound real estate fundamentals. While you may need to move quickly during the spring months, you also should avoid making impulsive, emotional decisions. Spending a little time researching the property and structuring an intelligent offer will generally not kill a deal.
Create A Firm Budget
All home buyers regardless of the season should create a firm budget. This should include a personal monthly budget so that they can determine what home ownership costs are affordable for them, and it should also include a buying budget that accounts for a down payment and closing costs. Keep a trained eye on this budget, and do not deviate from it.
Be Willing To Walk Away
When you fall in love with a property and envision your family living in the space for years, it is easy to develop an emotional attachment to it. While you may be excited about a property, you also should be willing to walk away if the transaction becomes too costly for you through negotiations and counter offers. Remember that there are many other properties on the market to choose from that may be more affordable for you.
Seeking representation from a skilled real estate agent is an important step to take when buying a home. A real estate agent can help you to define your goals and to remain true to them, reminding you of your needs and specifications as well as your budget for your purchase. If you are ready to start looking for a property to purchase, seek assistance from an experienced real estate professional today.
Mar 17, 2015 | Home Buyer Tips
Few people consider the tax implications of buying a home, but there are many. Here are a few ways buying a home can impact the amount of tax you pay.
Mortgage Interest
Most people put down the minimum amount of money needed to buy a home and finance the rest, usually over 30 years. This means that, especially in the early years of the loan, most of what they are paying are the finance charges. The good news is that all that interest is tax-deductible for people who itemize their deductions, which adds up to several thousands of dollars in deductions annually. You also can deduct interest on home equity loans, up to a certain amount.
Property Taxes
Another way that buying a home affects your taxes is property taxes. In most jurisdictions, property taxes are based to some extent on the price you pay for your home, meaning the more you pay, the higher your taxes will be. The positive is that, just as with mortgage interest, those property taxes you pay are deductible if you itemize deductions on your income tax return.
Points
Points are up-front fees you pay to lower the interest rate on your home mortgage. If you paid them when buying your home, you can deduct the entire amount on your tax return. If you paid points on a refinance or home equity loan, you have to deduct them a bit at a time over the entire term of the loan.
Tax-Free Appreciation
One of the reasons many people treat homes as an investment is the favorable tax treatment on profit from a sale. For example, in the United States as long as the home is your principal residence for at least two years out of the five years before you sell, you can exclude up to a $250,000 gain from capital gains taxes, or $500,000 if you are married.
Retirement Accounts
Buying a home for the first time is one of the few situations in which the government allows you take money from retirement accounts early without paying a tax penalty. For example, you can take up to $10,000 out of an individual retirement account without having to pay the early withdrawal penalty, although you still might face income taxes if your contributions were tax-deferred.
If you are considering buying a home, contact a real estate professional to discuss the potential tax and other benefits.
Mar 5, 2015 | Home Buyer Tips
It can take a time and effort to find the perfect home to purchase. After you have found that home, you need to convince the seller that your offer is the one they want to choose. There may be multiple offers made at the same time, and you may be in a situation where you are competing for the home.
Even if your offer is the only one the seller receives, there is no requirement that they must accept the offer you make. Crafting an effective offer that will catch the seller’s attention is important, and you may be able to accomplish this by following a few tips.
Offer Close To The Asking Price
One of the first things most sellers will look at when they receive an offer is the price you are offering to pay. You may feel as though the seller is asking too much for the home, and your agent may advise you to offer a lower price. On the other hand, there may be multiple offers, and you may feel as though you need to offer a price higher than what is being requested. With your real estate agent’s advice in mind, consider that a seller will be more inclined to accept an offer if it is close to what they are asking. If your offer is too low, they may decline it without looking at the other merits to your offer.
Request A Quick Closing
When you prepare your offer, one of the factors that you will have control over is the requested closing date. Sellers generally want to close quickly, but this is not always the case. Each market is unique, but a general rule of thumb is to offer a closing date that is 21 to 28 days away, contingent on mortgage approval. You may work with your real estate agent and mortgage company to determine when a reasonable closing date is. However, offering a quick closing generally shows that you are a motivated buyer.
Choose A Shorter Option Period
A sales contract has an option period, which allows the buyer to back out of the deal for any reason. This may be a time when you get your third party reports, such as the property inspection, completed. A shorter option period may be preferred by sellers. This is because the buyer is generally locked into the contract contingent on mortgage approval after the option period has expired.
Offer A Higher Non-Refundable Good Faith Amount
When you make an offer, you will also give the seller a good faith or earnest money deposit. The amount of the deposit will be disclosed in the contract, and you will typically hand it off after the offer has been accepted. This is the amount of money that you stand to lose if you do not follow through on the terms of the contract. A higher good faith or earnest money amount shows that you are serious about buying the home.
There are many factors that a seller is thinking about when reviewing an offer. While the entire offer will be reviewed fully, the fact is that these factors are generally given significant weight in most seller decisions. You can work with your real estate agent to structure the best offer possible.
