Buying a Home in a Buyer’s Market

When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near historic lows, now might be one of the best times in recent memory to buy a home. While buyers have the advantage in today’s real estate market, they still need to be savvy in order to get the best deal.

Some things for homebuyers to keep in mind:

Don’t Try to Time the Market: When home prices are low, it is very tempting for buyers to wait as long as possible in the hopes that prices will decline even further.  This strategy can be detrimental.  Once a home is priced to what the current market will bear, buyers will make offers.  It is best to work with a sales associate to make an offer based upon the prices at which similar homes in the market are selling for.  In a buyer’s market, there are more opportunities for negotiations, but making an offer if there is interest is an important step.

Take Your Time…To a Degree:  The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, this does not mean that homebuyers can procrastinate. It is smart to ask a sales associate how long properly priced homes are staying on the market before going into the contract stage. 

Watch the Mortgage Rates:  While it is true that mortgage rates have risen over the past few years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Be sure to watch the rates and do the math carefully, because changes in mortgage rates are not necessarily cost prohibitive.

 

 

A “Do and Don’t” List for First-Time Home Buyers, Part 2

Today, with an abundance of homes for sale, interest rates at near historic lows and home prices lower than in the past, it may also be the smartest time to buy a home.  Last week, I listed several recommendations for first steps in finding your dream home.  With that same idea in mind, here is simple “don’t” list for first-time home buyers dreaming of home ownership.

DON’T:

• DON’T fall in love with the first house or neighborhood you see.  That Victorian home with the white-picket fence may win your heart at first glance, but don’t fall in love too fast.  You need to keep an open mind to make sure you find the right fit for all your needs.  At the end of your search, it may turn out that the riverfront ranch that’s closer for your commute is a better bet all-around.

• DON’T buy beyond what you can afford.  It’s easy to fall into that all-you-can-eat attitude when it comes to your first home purchase.  You “want it all” when it comes to size, amenities, location, etc.  But remember that your eyes may have a larger appetite than your wallet.  Make sure that the down payment, closing costs, monthly expenses and taxes are truly within your income and savings range before you sign on the dotted line.  

• DON’T treat your home the way you treat your stock portfolio.  It’s unrealistic and unwise to expect your housing investment to appreciate as quickly as you’d hope for your high-risk bonds.  Buying for lifestyle, as opposed to trying to turn a quick profit, will help ensure that you are viewing home purchasing and ownership in the right context.

• DON’T try to time the market.  By the time most consumers sense a major real estate or financial market shift, the tables have typically already turned.  Instead of waiting for a slim and unreliable window of time – and potentially missing out on the perfect home – buyers should focus on their own lifestyles and buy when the time is truly right for them.

• DON’T jump into an overly tempting or confusing mortgage.  When it comes to down payments and mortgages, if it sounds too good to be true, it probably is.  Be sure to read carefully through every aspect of the proposed agreements to fully understand your end of the bargain.  For instance, what seems like an attractive rate now may balloon exponentially a few years down the road.

• DON’T underestimate the value of a trustworthy real estate agent’s on-the-ground expertise.  While being a savvy buyer and doing one’s homework will help on the road to home ownership, a local expert with years of negotiating experience is invaluable when it comes to scouting out the perfect home – and closing the deal.

A “Do and Don’t” List for First-Time Homebuyers, Part 1

For most people, buying a home is the most significant investment they will ever make. Today, with an abundance of homes for sale, interest rates at near historic lows and home prices lower than in the past, it may also be the smartest time to buy a home.

 While the prospect of owning a home is an exciting one, it can often times seem overwhelming, especially for those who are new to the real estate process.   With that in mind, here is simple “do” list for first-time home buyers dreaming of home ownership.

DO:

• DO take time to access and closely review your credit score.  A sound financial track record and solid credit score can help lock in a loan and lower interest rates.  Checking your records with a fine-tooth comb in advance will also ensure that you catch any errors ahead of time, as well as help you better understand how lenders may perceive you.

• DO explore mortgage pre-approval.  A pre-approval will let home buyers know where they fall financially while informing the mortgage company that they are ready to buy. Additionally, getting this early go-ahead will help others involved with your purchase know that you are serious about home ownership – and well-qualified.

• DO line up your “all-star” team of professionals before game day.  A team of experienced professionals is essential to making the home buying process simple and seamless.  Start by interviewing and selecting an agent who you “connect” with.  That agent may also be able to help you identify suitable lawyers, mortgage lenders, home inspectors and others who play a role in the process.

• DO anticipate your future needs and buy for lifestyle.  Try to anticipate how long you’ll live in your next home and plan for major lifestyle changes when possible.  What may make a perfect starter home for a couple might not work as well when children come into the picture.  Remember, people move for lifestyle reasons and your first home will likely not be your last.

• DO hone in on your housing priorities.  Your ideal home may have a porch, a pool and five full baths.  But before you start looking, make sure to separate your “must-haves” from your “nice to haves,” so you know where you can compromise to meet your budget.

Next week, I’ll look at a few “definite don’t”s.

 

Inexpensive Renovations That Can Increase a Home’s Value

Home value is top of mind for many homeowners.  Renovations and remodeling can play a critical role in both increasing the value of a home and ensuring that it stands out to potential buyers.

Here are affordable home improvements for potentially increasing the overall value of a home, without breaking the budget:

• Reface Kitchen Cabinets. Kitchen updates are among the smartest remodeling projects when it comes to “upping” the resale value of a home. But homeowners do not need to spring for an entire new cabinet set to improve the room’s appeal. Refacing existing cabinets, applying a fresh coat of paint or replacing tarnished pulls and knobs with new hardware might be just the quick fix a kitchen needs to make it look and feel like new.
• Improve the Lighting. Updating lights and lighting fixtures is another simple enhancement that does not require a major investment. Replacing old bulbs with stronger, more energy-efficient compact fluorescent bulbs will brighten up the house and make it more inviting – while cutting down on energy costs over the long term. In addition, replacing recessed lights in a dining or living room with an affordable chandelier or installing accent lighting to draw attention to artwork or other room features can create an entirely fresh ambiance.
• Freshen up a Fan. An updated ceiling fan can give a room a more contemporary feel, but purchasing a new one isn’t always a necessity when looking to upgrade. Improving an existing fan is simpler than homeowners might think and does not have to come at a high price.  First, try unscrewing the fan blades and turning them over. Typically, blades have alternate colors or patterns on the reverse side. If not, simply add a coat of paint and reattach. One can even install new pull chains to complete the look as well as match the fan accents to new lighting fixtures or cabinet hardware.
• Hang More Mirrors. It sounds simple, but the addition of a mirror on any wall adds depth and light to a room, making even the smallest space seem larger. Mirrors also add elegance and charm to a home’s decor, and often at a reasonable price.
• Break Out the Paint Brushes. Applying a couple coats of paint can make a remarkable difference and is always a low-cost, high-return project. Try a warm, neutral wall color that can make a room seem more spacious, create a more modern feel and appeal to a wider variety of buyers.
• Install Laminate Flooring. Even if the cost of hardwood or tile floors is out of the question, homeowners can easily install laminate flooring in their kitchens, hallways and bathrooms – provided that floors are level with those in adjacent rooms. Laminate flooring can hide chipped tiles or old linoleum and give the room a more modern feel.
• Refinish Your Appliances. Purchasing brand new matching appliances can cost thousands of dollars. However, for a few hundred dollars, an appliance refinisher can re-enamel the surfaces of appliances covering up any out-dated colors that may be ruining the look of your kitchen.
•  Spruce up Your Home’s Exterior. When planning to put money into a house, homeowners should not overlook simple exterior renovations that can add substantial worth and attract more buyers. A freshly-mowed lawn, a clean, even walkway and a few well-placed bushes can make a huge difference.