Our Real Estate Blog
Buying a house is arguably the most expensive purchase most people will make in their lives. With real estate prices steadily rising year after year, many Americans are finding ways to save on housing.
At the same time, rent prices too are increasing, especially around metro areas where many young Americans are entering the workforce. With costs rising and wages stagnating, it can be hard to find an affordable place to live while still building equity that can be used later on down the road.
One option that many Americans are considering is the fixer-upper route. However, it takes know-how and a lot of hard work to make this method a good choice to save you money. In this article, we’ll tell you how to make certain buying a fixer upper is a good idea and what costs you can expect along the way.
Adding up the costs
Buying a house that needs work means you’ll need to spend a good amount of time calculating costs and getting quotes from professionals. Even if you’re familiar with several home maintenance tasks, there are some jobs that are safer if left to the pros. This isn’t only a matter of physical safety, however. If you start a job that you aren’t qualified to finish you could end up paying much more than if you had just hired a licensed professional to do the job in the first place.
When estimating costs for reparations and renovations, aim high. It’s better to plan for it to be more expensive and have more left over than to underestimate your projects and go over budget.
Get an inspection report
If you aren’t sure whether or not you want to go through with a deal, make sure you have an inspection contingency clause in your contract. This will enable you to back out if the home inspector makes you aware of any costs that you weren’t told about by the seller.
Don’t forget added costs
There are several closing costs you’ll be responsible for as a buyer. Make sure you keep tabs on how much you can expect to spend closing on the home. If you’re going through a mortgage lender, they are required to give you an estimate of closing costs.
Once you know the purchase price of the home and the closing costs, make sure you account for other aspects of your renovations, such as getting required permits.
If you do plan on taking out a loan to cover the cost of renovations, be smart with how you get and pay back that money. One option is the FHA 203(k) loan or renovation loan.
Renovation loans help you save on closing costs and simplify the lending process by giving you one loan that accounts for the cost of the renovations and of the home itself.
Buying a home is a complicated process with a lot of opportunities to make costly mistakes. There’s no high school class to prepare you for buying a home but there probably should be. If you’re a first time homebuyer and you came across this article looking for advice, congratulations--you’re already doing the most important thing you can when making a big financial decision: the research.
In this article, we’ll cover some of the most common mistakes that first time homebuyers make when entering the real estate market. We’ll break it down by the three main phases of home-buying: saving for a home, hunting for a home, and signing a mortgage.
Saving for a home
One of the first lessons that all first time homeowners quickly learn is that being able to afford your monthly mortgage payments doesn’t mean you can afford a home. Many first time buyers are often coming from living situations where certain utilities are included (water, heat, electricity, etc.). Aside from those obvious expenses, there are also things like property tax and home insurance to budget for, both of which may increase. Finally, when you’re living in an apartment and your faucet breaks, you simply call the landlord. When you own a home, especially an older home, be prepared to spend on repairs and to start learning basic maintenance skills that will save you money.
The hunt for your first home
Now that you’re aware of the costs, it might be tempting to jump in and start looking at homes. Another common mistake first time homebuyers make is to waste time looking at homes before they’ve met with a real estate agent or have gotten pre-approved for a loan. Start there, then once you know the scope of your home search, you’ll have a much more relaxing hunt for your new home.
Another mistake that first time homebuyers make is to underestimate the time and commitment it takes to find a home. When you work with a real estate agent, make sure you are available at all times. Keep your phone nearby, stick to your schedule for viewing homes, and keep a list of each home you’re considering. Showing initiative and dedication won’t just help you stay organized, it will also show your agent and the home seller that you are worth their time.
One of the most common mistakes that buyers make when it comes to their mortgage is to fail to shop around for a lender. In fact, the Consumer Financial Protection Bureau found that only half of all buyers considered more than one lender for their home.
Buyers, first time and repeat, often think their credit report is set in stone. What they don’t realize is that the three main credit Bureaus (Experian, Equifax, and TransUnion) can all make mistakes on your credit. Check your detailed credit reports and fix any errors long before applying for a mortgage to increase your chances of getting a good rate.
If you avoid these common mistakes and continue to do your research along the way, you should be able to save yourself some headaches and some money in the long term.
If you intend to purchase a great house at a budget-friendly price, you should craft a homebuying timeline. That way, you can decide the best ways to achieve your homebuying goals.
Ultimately, creating a homebuying timeline can be simple – here are three tips to ensure you can develop a successful homebuying timeline.
1. Know When You Want to Move
For those who want to buy a house, it helps to consider your current living situation. By doing so, you can determine the necessary steps to relocate from your current address and acquire your dream residence.
If you presently own a house, you may need to sell it before you purchase a new home. Or, if you currently rent, you may need to give your landlord sufficient notice prior to your relocation. But if you consider the aforementioned factors closely, you can set a deadline for your move.
With a deadline in place, you can start your dream home pursuit. And once you find this residence, you can submit an offer and proceed with a home purchase.
2. Get Your Finances in Order
If you want to develop a successful homebuying timeline, it generally is a good idea to consider your financial situation as well. Because if you lack the necessary home financing, you are unlikely to be able to acquire a wonderful house any time soon.
As you develop your homebuying timeline, you may want to meet with banks and credit unions. These financial institutions can teach you about a wide range of mortgage options and help you get the financing that you need to buy your dream house.
Furthermore, you should check your credit score when you craft your homebuying timeline. If your credit score is low, you may need to improve it prior to buying a house. Thankfully, you can account for this factor as you map out your homebuying strategy and plan accordingly.
3. Collaborate with a Real Estate Agent
Developing a homebuying timeline may prove to be challenging. Luckily, real estate agents are available who can help you take the guesswork out of purchasing a house.
A real estate agent can teach you the ins and outs of buying a home. As a result, this housing market professional will enable you to enjoy a quick, seamless homebuying experience.
Perhaps best of all, a real estate agent can make it easy to acquire a terrific house on your timeline. This means if you want to purchase a top-notch house as quickly as possible, a real estate agent will do everything possible to make your homeownership dream come true. Comparatively, if you want to take a slow, gradual approach to buying a house, a real estate agent is ready to respond to your homebuying needs.
When it comes to buying a house, it helps to have a timeline in place prior to starting a house search. Fortunately, if you use the aforementioned tips, you can streamline the process of establishing a successful homebuying timeline.
One question that crosses many homebuyers’ minds is “Will it be cheaper to buy or build a home?” There’s many pros and cons of both new and older construction homes. The price you pay is a big part of how the entire decision breaks down.
Prices for existing homes vary widely based on where you live. The same principle goes for buying land and constructing a home. You can check on the specifics of the price per square foot in your area for more details. These costs could have the biggest impact on how you go about the path to homeownership and what area you decide to settle down in.
Keep in mind that new homes are often more spacious. This drives the cost per square foot down, yet there’s more square footage in the home.
Cost Of Upkeep
Any kind of home has its regular maintenance tasks and costs that are included with the job of homeownership. Landscaping, the servicing of appliances, the upkeep of filters, and heating and cooling system maintenance are all a part of owning a home. If you buy an older home, however, you’re guaranteed to have a few more costs to worry about. If appliances are on their last leg or the roof is nearing the end of its lifespan, you’re going to need to foot the bill for the replacement cost.
A new construction home can have issues as well, but it’s less likely to happen. The problems that happen in a new construction home are more likely to be due to building issues. Newer homes can, however, have a protection of up to 10 years with a new construction warranty.
The Great Outdoors
When you buy an existing home, one of the major perks of it is that the landscaping is mature. There’s no need to plant grass, bushes, and flowers because there’s usually something in place. It’s less of an expense to have something to work with when it comes to landscaping. Trees that have been strategically placed can often add a lot of value to a property.
On the other hand, building a new home can add years to the process of a finished landscape for a home. You’ll need to deal with tedious upkeep and spend thousands of dollars to get the property’s outdoor spaces looking green and beautiful.
Energy Efficiency And Technology
If you buy a new home, you have the advantage of keeping up with the latest technology and energy efficiency standards. New construction homes are usually much more efficient than older homes. In a new home, you also have the advantage of being able to install smart technologies like thermostats and security systems to streamline with construction. These tools make your home more secure and easier for you to manage.
There are a few different advantages to both buying an existing home and buying a new construction home. Your needs and your budget will determine the decision that’s right for you.
Want to find your dream house quickly and effortlessly? You're not alone. In fact, many homebuyers across the United States browse the real estate market regularly in the hopes of finding their perfect residence.
Fortunately, there are numerous ways for homebuyers to accelerate the process of purchasing a house, and here are three tips to help homebuyers discover their dream houses without delay.
1. Set Realistic Expectations for Your Home.
When it comes to finding a residence, it is important to note that every house has its strengths and weaknesses. Thus, you'll want to set realistic expectations before you begin your search for the perfect home and differentiate the must-haves from the must-wants.
For example, you will need electricity, hot water and other utilities at your new home. On the other hand, you may want a house that features an indoor swimming pool, a fenced-in backyard and other deluxe amenities, but you need to keep in mind that you can live without these features as well.
Make a checklist of what you need and what you want from a future house. By doing so, you can simplify your home search and move one step closer to checking out houses that fulfill your needs perfectly.
2. Get Pre-Approved for a Mortgage.
What good is finding your dream home if you are unable to afford it? Instead, get pre-approved for a mortgage before you start your home search – you'll be glad you did. This will allow you to establish a budget for your home search and browse properties accordingly.
Don't forget to consult with multiple lenders as you explore your mortgage options. If you meet with a variety of banks and credit unions, you can find out about all of the financing options that are available.
Furthermore, be sure to check your credit score and get a copy of your credit report from each of the three major reporting bureaus (TransUnion, Equifax and Experian). You are entitled to a free copy of your credit report from each of the major reporting bureaus annually. And if you obtain a copy of your credit report, you can find out your credit score, work to improve it and boost your chances of securing a mortgage.
3. Employ a Real Estate Agent.
Hiring a real estate agent is essential for those who want to accelerate the homebuying process, and for good reason. With a friendly, professionally trained real estate agent at your side, you can learn about new homes that are available, submit offers on residences and more.
Your real estate agent will act as a liaison between you and a home seller. As such, he or she will work on your behalf to ensure you can purchase your dream home as quickly as possible.
Find a real estate agent to help you move along the homebuying process. This housing market expert will be happy to respond to your homebuying concerns and queries, and ultimately, make it easy to navigate each step of the homebuying journey.