Setting a budget for your home purchase is an important decision. You need to know how much you can afford each month and translate that into the amount you can afford to take out on your new mortgage. When you start house hunting with that budget in mind, you may find to your dismay that you are not seeing many homes in the price range you have set that match your needs.
There are three choices you have in this situation. The first is to wait it out, keep looking, and hope the house you want comes up on the market in your price range. The second is to compromise and buy a house that is affordable but not really what you want. The final choice is to look at raising your home buying budget.
How Much Will It Really Cost?
The first thing to consider when you are looking at raising your maximum purchase prices is what difference it will make in your actual monthly payment. In many cases, the difference may not be as difficult to handle as you might think. Pull out that mortgage calculator and figure out what it would cost you per month to go $25,000 over budget, $50,000 over budget, or even $100,000 over budget. Sometimes even a small raise in your maximum price can put you into a whole new class of available homes.
Do You Have A House In Mind?
So you drove past a house for sale the other day and fell in love, but it’s out of your price range. Take that number home and punch it into your loan calculator. Can you afford that house, even if it might be a stretch? Are you willing to consider making other budget cutbacks, such as on entertainment, to have the house of your dreams? How important is it to have everything on your wish list?
If having the right house is important enough, and the increased price is not going to strain your finances too much, you can consider going for it. Remember that you can always offer less than asking price, and hope to get that dream home for a price closer to the original budget!
A little flexibility is always a good idea when you start searching for the right house. Sometimes spending a little more will save you later in terms of property value. It can also save you from having to move again when you decide the compromise to save money was not worth it.
Whether it’s the character and charm of an older home with its original features, hardwood floors, and wood burning fireplace, or the quaint historic feel of the neighborhood in which it is found, there is a certain appeal to older property. But purchasing an older home may involve additional work and costs that a newer home may not. With a little research and preparation, however, you may find that purchasing an older property may be the right decision for you. Here are a few things to consider before making an offer on an older home.
Age Of The Home
Depending on where you live, an older home can mean 30 years to 300 years. Naturally, this is the first point to consider when deciding whether an older home is right for you. The age of the home, the foundation, and the roof can make a big difference in the type of maintenance it will require, how frequently things may need to be replaced, and the difficulty and expense of replacing them. You will also want to know what kinds of materials were used in the construction of the home.
Age Of The Features
Older homes can sometimes have very old features and appliances lurking within them. Be sure you consider whether or not you will have to replace the kitchen appliances, and be sure to ask when features such as the furnace were last replaced. The age of the home you are looking to purchase may also mean that your decoration budget will have to include costs that you might not have originally anticipated.
Importance Of Home Inspection
The importance of getting a home inspection cannot be understated when purchasing any home, but when in the market for an older home this is a step that should also be done with the utmost care and by a true professional. A home inspection can find problems that are more common in older homes, such as electrical and plumbing issues.
Knowing what you are getting yourself in for when purchasing an older property can make all the difference in finding a home that is right for you. Older homes can certainly be a rewarding purchase, and if you recognize the maintenance costs and any potential renovation costs you will be prepared to make your new house a home.
When purchasing a home, especially for the first time, you are going to encounter a lot of terms and jargon you may never have heard before. “Property survey” is one such term you may encounter in the process, and it is often not considered one of the more important parts of the home buying process, but it is an essential part of any home purchase closing process and should not be overlooked.
What Is A Property Survey?
A property survey is a document, usually in the form of a map or sketch, that outlines all the prominent features of a property, including the house and the physical boundaries of that property. It can also include other items, such as natural features on the property, including ponds or lakes, and man-made features such as pools. These property surveys must be completed by a professional qualified to carry out a property survey, and usually have to be done within six months of any change of deed.
Why Do You Need A Property Survey?
In some states a property survey is required for a number of reasons. From the perspective of a home buyer, your mortgage lender will usually want to see a recent property survey of the home and land you are purchasing for their records. Also, you will need one for title issuing, and for your municipal office to calculate your property tax. It is also important to note that if you plan on doing any renovations to your home after you purchase it, you will need it for your contractors. This gives them a clear picture of the features of the property as it stands, and the boundaries of the property itself.
What Does It Cost, And Who Is Responsible?
In general, there are two types of property surveys—house location surveys and cadastral surveys—and in most cases it is the buyer who is responsible for the cost of the property survey. If you are just planning to get the required documents for your mortgage lender, the more inexpensive house location survey is the way to go. If there are any doubts about the property, however, such as whether a particular feature lies entirely on the property or not, it is a good idea to go for the more complete survey. In these cases you may be able to convince the seller that you require it in order to make a choice about whether you will purchase the property or not.
It is always advisable to have a REALTOR® who will help you navigate through this process, and they can give you the best advice on making a choice that is right for you.
While all this work may seem like a lot of effort to put forth for what may turn out to be just red tape, if there is a serious problem with the property you are hoping to buy and it goes undetected, what should be your greatest investment may turn out to be your greatest liability.
When we think of selling a home, the services a REALTOR® can provide usually seem worth the cost of their commission, but what about as a buyer? What can a REALTOR® do for you as a home buyer, and is the commission worth the services they can provide? Here are five great reasons you should hire a REALTOR® when you are in the market for a new home!
REALTORS® Can Help You Determine Your Budget—With a few simple pieces of information, a REALTOR® can help you pre-determine what kind of budget you may be looking at for your new home, and can match you with potential lenders that are right for you.
REALTORS® Have Access To Resources You Don’t—While a lot of real estate listings are available online, there are still resources and listings that are only available through a REALTOR®. If you are looking for something very specific, having their insider knowledge may be crucial to finding that perfect home.
REALTORS® Can Read Between The Lines Of Listings—There are a lot of catchy phrases that often appear in home listings, and your agent can tell you what they really mean.
REALTORS® Increase Your Negotiating Power—A REALTOR® cannot only increase your ability to negotiate things like price, they can also give you advice on things like contingency contracts and required paperwork.
A REALTOR® Can Help You Navigate Through The Closing Process—The closing process can be a complicated process, and a REALTOR® can make sure all the details are addressed and that you are making a good financial investment.
Purchasing a home is a huge financial investment, and having a professional REALTOR® looking after your interests through the process is important.
Most people who are in the market for a new home are aware of the costs associated with purchasing a home and moving, but closing costs can be expenses that may be overlooked, especially for first-time home buyers. The amount of the closing costs will depend on where you live, the type of home you are purchasing, and the type of mortgage you are going to carry, but in most cases they can equal anywhere from two to four percent of the purchase price of your home. So before planning your home purchase budget, here are some hidden expenses that you may want to include.
In general there are two types of closing costs, recurring and non-recurring. Recurring costs include things like fire and flood insurance, property taxes, and mortgage insurance; these are expenses that will have to become part of your monthly budget and in most cases are often anticipated by new home buyers. Non-recurring costs are one-time costs that are associated with closing a home purchase, and in most cases make up the bulk of extra expenses. Non-recurring closing costs usually include:
- Title Policies
- Wire Fees
- Attorney Fees
- Transfer Taxes
- Home Protection Plans
- Natural Hazard Disclosures
- Home Inspection
- Lender Fees
Depending on your particular circumstances, the actually closing fees may include just a few of these costs, or even include ones that are not listed here. Purchasing a home is a huge investment and expense, and getting a clear picture of the cost before signing your name on the dotted line is important. Your REALTOR® can usually give you a detailed list of these expenses.
Finding the right house for your family is important, but so is finding the right neighborhood. A kid-friendly neighborhood goes beyond simple safety issues and good schools. It should offer plenty of opportunities for your kids to meet other kids and engage in fun, safe activities. Here are a few ways to spot a kid-friendly area.
Look At The Parks
Just having a local park nearby isn’t quite enough. Different play structures work for different age groups, and some parks may be run-down or better for different activities.
Take a drive past the local parks and look for well-kept play structures and grounds. Also check that the parks offer play structures that are appropriate for your kids’ age group. Many now offer a range of structures for varying ages, allowing kids to enjoy them for many years to come. Keep an eye out for graffiti or litter that may indicate the park is a hangout for people you might not want around your kids.
Check For Recreation
Beyond parks, a neighborhood that offers recreational opportunities for kids is important. Look for recreation centers, local swimming pools, libraries. and more to indicate that you will be able to keep your kids entertained and learning throughout the year, without having to go far from home.
Ask for a copy of the local parks and rec department’s activities guide and flip through it to see what’s available for kids. It will give you a good idea of how that area caters to children.
Look At The Statistics
A quick look at statistics will tell you how many families with kids the same age as yours live in that neighborhood. It will let you know you’re looking at a home in an area filled with families like yours.
Neighborhoods with a lot of families tend to be kid-friendly simply by the nature of the residents. They are already aware of the presence of kids and will drive more slowly and carefully, and will anticipate the noise of kids playing.
You have probably already looked at crime for the area, but there is more to safety than that. Can your kids safely ride bikes or walk down the street in the neighborhood?
Some older areas don’t have sidewalks, forcing kids to ride in the street. Busy streets can be a danger to kids at play. Look for neighborhoods with quiet streets low on traffic and safe areas where kids can walk and play.
Short sales can offer really great deals on homes, but the process of buying a short sale property can be difficult and drawn out. If you’re willing to be patient and put in a little extra work, you could get a lot more house for your budget.
Be Prepared To Be Patient
Buying a short sale property isn’t as quick as a standard sale. Because the owners are attempting to sell the property for less than they owe, the sale must be approved by the bank—and in many cases there is more than one bank involved. Waiting for the full approval to come in can take months, and can fall through if one bank’s approval expires while you wait on the other.
If you want to buy quickly and are looking to move as soon as possible, short sales may not be the right choice for you.
Look Past The Cosmetic
Many homes that are being offered as short sales have been neglected for a long time. In some cases, this is because the owner knows that there will be no profit made from the sale and has stopped caring; in others it is because the reason for the short sale is that the owner is in financial trouble and can’t afford to fix things.
When you walk into a short sale property, be prepared to look past damage and maintenance issues. Remember that you are able to purchase the home at such a low price in part because it needs work. The key is to be aware of what needs to be done and how much you can expect it to cost, and add that into your anticipated purchase price.
Even if you have your sights set on a particular house, it’s a good idea to keep shopping while your offer is under review. Short sale offers frequently fall through, so spend the time looking at other homes while you wait. If your offer is declined or the sale falls through for any other reason, it’s good to have other options lined up.
Hire A Good REALTOR®
The paperwork involved in a short sale is complex, as is navigating the process. An experienced real estate agent can make sure that things go more smoothly and take less time.
Look for a REALTOR® with a history of handling short sales. They’ll be able to offer you clear advice and help you to know when a short sale is a great deal or more work than it’s worth.
When you’re ready to head out and look at those potential future homes, there are a few things you can bring along to make the experience more helpful as well as more efficient. Packing a small house-hunting bag with these items will make sure that you make an informed decision and don’t forget the details of each home.
A Pad And Paper
This is useful for jotting down notes about each home, including things you liked and things you didn’t, and repairs that might be needed. Simply write the address at the top, and then as you look at the property write down your thoughts and observations.
Many people come home after looking at a few houses and can’t recall which one had the rosebushes out front or which one needed a new water heater. The notes will make it easy to remember these details and keep track of which houses are your best bets.
Sometimes a picture is even better than a note. Taking a few pictures of the home as you go through it (as long as the current residents don’t mind) can really help in making the decision later. Be sure to ask if photographing is ok, especially in a currently occupied home.
It’s also helpful to take pictures of small details to help you remember, and even just a general photo from the street. You can also photograph surrounding areas such as parks and schools.
A Measuring Tape
Will your sectional fit into that family room? Can you get a king-sized bed into the bedroom? There’s only one way to know for sure. Measuring spaces lets you get a good idea of where and how your things would fit into a potential new home.
Bring along a measuring tape so that you can make quick notes on the size of rooms as well as the size of doorways you’ll need to fit things through when you move in.
Before you go, make a checklist of the things that are most important to you in a new home. As you look at the home for sale, check off which items it offers. This will create a quick reference guide for you when you sit down to compare homes later.
Especially if you look at a large number of homes, it can become confusing in hurry. These few items can reduce confusion and help you to make the best possible decision when it comes to buying a new home for your family.
Whether your kids have moved out or you simply want a lower mortgage payment, downsizing your home has a lot of benefits. You’ll save on utilities, have less to clean, and less to maintain as well. Before you get ready to move to a smaller home, consider these important points that will make the transition smooth.
Is Storage An Issue?
When you have been living in a larger home, you may not realize just how much stuff you really have. Moving to a smaller place can make it clear in a hurry, because it simply won’t all fit.
While you can give away some things or hold a garage sale, there are always things you simply can’t part with. They may be of sentimental value or things you really need for the future. Consider what sort of storage the new place has. If you can’t fit everything, you might need to look into renting an off-site storage unit for the things you don’t need frequently.
Will The Furniture Fit?
Large furniture does well in large spaces, but may make a smaller room appear cramped and tight. Before you move, a change to smaller furniture might be in order.
Take a measuring tape and get measurements of both the furniture you currently have as well as the rooms in your new home. If things won’t fit well, it might be a good idea to consider going for smaller furniture pieces that will make the new home appear more spacious than it is, and make things less cluttered as well.
Small Space Solutions
Smaller homes require different ways of using the space you have. If you don’t have room for a full guest room anymore, combine a guest room and an office by using a futon or fold-out sofa rather than a bed. If you don’t have an extra room at all, pick up a high-end air bed that can be tucked in a closet when not in use and brought out when you have guests.
Organization is key in smaller homes as well. There are a wide variety of storage options that will allow you to fit more into that smaller home and still stay organized. Look for closet and cupboard shelves and organizers to maximize your storage space.
A smaller home can save you money and cleaning time, but does require some adjustments. Prepare for downsizing ahead of time and the move will be smooth and simple.
When buying a home, location is always one of the most important considerations. Most buyers consider the obvious, such as the quality of the schools, commute distance from work, neighborhood safety, and even things like the view. But there are other things to keep in mind when choosing the location of your new home.
Proximity Of Emergency Services
A house out in the country has its appeal, but how far away is the fire department? The distance in an emergency can cost you precious minutes that could save lives or valuable property. Beyond that, a home insurance company may charge you more if your home is not within a certain distance from the fire department, to ensure their interests are protected as well.
Look for a home that is accessible to emergency vehicles; narrow streets or long winding country roads may make it difficult for larger vehicles to approach. Remember that in an emergency, every second counts.
How Close Are The Schools?
Many schools have rules about how far away you need to be to qualify for bus services; if you’re within the range your students will either be walking or relying on you for a ride. In inclement weather, that could become a problem.
The proximity of schools can have other unintended issues as well. Consider the noise and traffic that can result from being too close to a school. A high school with a football field or marching band can create a lot of noise, and you may find cars parked on your street during large events.
Living up on a hill gives you beautiful views, but what happens when the roads become slick due to ice and snow? You could find yourself trapped at home, or away from home, and unable to get in or out until the roads are safe again.
Consider how frequent such weather is in your area when choosing a home that has steep streets approaching it; in areas where this is common you might want to look for a house that has a more level street.
Every factor about a home’s location should be taken into consideration before you buy. Make a checklist of the important things about where your new home is located and take it with you as you look at homes. While your new home may not meet all of your criteria, it should meet the most important ones to make sure you are safe and comfortable.