David Higgins' Blog
When you move into a home that you worked so hard to buy, it’s an exciting and overwhelming time. The biggest problem with a new place is that you don’t know your surroundings very well. Even if you have just moved down the street, there’s a lot of new things to be discovered from new neighbors to new places to explore.
One thing that many new homeowners overlook is the way in which their new home functions. Do you know where the circuit breakers are? What about that switch in the corner of the living room that doesn’t seem to do anything? While the seller's disclosure and your home inspector will give you a wealth of information, you can gain a lot of knowledge just by asking questions.
Sellers may not be eager to answer too many questions at first for fear that their answers could jeopardize the sale of their home. You can safely ask a lot of questions at the final walk-through or at closing since the seller will know that they’re secure in the transaction.
What’s Strange About This House?
While you wouldn’t word a question to a seller in this exact way, you do want to know if there’s anything unique or anything that you should anticipate about the home. Remember that you should be subtle, yet curious in your question asking.
What Type Of Repairs Have Been Made?
While you expect that most repairs will be on the disclosure statement, anything that has been done in the past is noteworthy as well. It’s helpful to know what’s been done in the house in the past so you have an idea of what to keep an eye out for.
Where Are The Important Utility Boxes In The Home?
Not all home inspectors are created equal. Your inspector may not be great at educating you as to where things are in the home like the circuit box, the water switches, the pump, or the controls for the furnace. The seller can often show you the location of these items in the house. This will prevent you from a lot of confusion starting at the time you move into the home.
Have You Enjoyed Living In This Neighborhood?
You can discover a lot about a neighborhood if you just start a conversation about the seller’s own experiences. You can learn a lot through this simple question. Are there any crazy dogs in the neighborhood? Where are the best places to eat in the area? While you may not ask these questions directly, you can gain some powerful information just by being curious and conversational.
Gaining a good rapport with your seller can get you places. You’ll know a bit more about the home and the seller will even feel more friendly towards you. The seller could even leave some cool stuff behind that they don’t need like a microwave, a piece of furniture, or a patio set. All you need to do is be friendly and curious and you’ll be off to a great start in your new home.
If you’re hunting for a new home, it can be tempting to make an appointment to view as many as possible. However, it can be a better use of your time to narrow down the search beforehand and eliminate houses from your list based on some at-home research. That way you can use those extra hours for fine-tuning your home search and make sure you visit only the houses that will suit your every need.
In this article, we’ll teach you some ways to research a home, neighborhood and town before you take the time to visit.
Things to Research about Your Potential New Neighborhood
So you’ve found a listing that looks nice. Your next step should be to find out as much as possible about the area the home is in to make sure it suits your needs.
A good first step is to head over to Google Maps to find out which amenities are in the area. Schools, banks, grocery stores, restaurants, hospitals, parks… the list goes on. This is also a good time to map out how long it will take you on average to drive to work from this house and to see if it will lead you through any high-traffic areas that might affect your daily schedule.
You can also research other homes in the area to see if the house is selling higher or lower than average. This will give you a question to ask the real estate agent if you choose to reach out for further information.
Another step to take on Google for this home is to look up statistics for things like neighborhood crime, ratings for the school district, and the state of local businesses.
Is the area up-and-coming with healthy businesses and low crime? If so, it could be worth pursuing further.
If you’re planning on having children or already do, the quality of the education could be of importance to you.
Finally, get an idea of the local tax rates so you know how much you’ll owe the government for your property and excise taxes.
Researching the house itself
If you’re comfortable with the town and neighborhood, there’s still some research you can do online before you schedule a showing.
See if you can find out if the house belongs to a homeowner’s association. Look up their rules and fees to see if they’re agreeable to you and your family’s lifestyle and plans for the future.
Look up the sale history for the home. If there are several recent sales, this could be a sign of problems with the home or neighborhood. Similarly, if the price has increased or decreased dramatically more than nearby houses, consider asking the real estate agent why this is.
Finally, see if you can view the number of days the home has been on on the market, commonly abbreviated as “DOM.” This will give you some insight as to how desirable the home and neighborhood are.
Once you have all of the information at your disposal, you’ll be in a position to decide whether or not to schedule an appointment to view the home.
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.
A low appraisal is a possibility when you’re buying a home. This can happen for a variety of reasons. If it happens to you, don’t panic!
Once you get an offer accepted on a house you love, it may feel like a huge weight has been lifted off of your shoulders. As any seasoned homebuyer will tell you, this is only the beginning!
It can be tough for both the buyer and the seller when a deal seemingly falls apart due to an appraisal that comes in too low. This is a common occurrence and there are ways to work around it.
Reasons For A Low Appraisal
There are a few reasons for a low appraisal including:
Insufficient sales data for the area can often skew appraisal numbers
Lenders may only lend up to a certain percentage of the appraised value
If the appraisal comes in lower than what you offered for the purchase price of the home, you’ll need to come up with the rest of the cash upfront in order to purchase the property. There are other options for you if you do come into this situation.
The Appraisal Contingency
The appraisal contingency is built into your sales contract and is a protection for the buyer, allowing them to walk away without financial burden if the appraisal comes in too low. This allows you room for negotiation on the seller’s part if they really are motivated. The contingency clause isn’t a one-size-fits-all protection. Even with this clause, you could end up spending more out of pocket cash or walking away from the deal completely. It’s simply a protection.
What If The Appraisal Is Wrong?
The appraisal can be submitted for review. The appraiser would need to explain why they didn’t use comparable sales provided by the lender. The property can also be completely reevaluated. In addition, you can request a separate appraisal from your lender. The seller may even pay for the second appraisal in order to keep the deal from falling through.
Don’t Offer More Than You Think The Property Is Worth
When you base huge financial decisions on emotions, you could end up in a bad situation. Your offer that wins the house can quickly become a case of regret as a buyer. Many times in a tight real estate market, you’ll need to make decisions fast. If you have a general idea of property values and work with a realtor to make an informed offer, you’ll be in better shape to avoid a big headache. While you may be able to afford paying more than a house is worth, it’s not a smart financial decision.
Low Appraisals Are An Opportunity
A low appraisal should be thought of by the buyer as an opportunity to renegotiate the sale price of the home. This step in the home buying process is a protection for you as a buyer for one of the biggest purchases that you’ll ever make.
Before you embark on a search for your dream house, it helps to know what to expect during the homebuying journey. If you understand the true cost of purchasing a home, you can map out your property buying strategy accordingly.
Now, let's take a look at three factors that may impact how much you spend to acquire your ideal residence.
1. The Price of a Home
The initial asking price for a house is not necessarily set in stone. In some instances, you may be able to negotiate with a seller and receive a lower price.
However, regardless of the price you negotiate with a seller, you are responsible for paying for a residence. And if you fail to receive a mortgage, you may struggle to make your homeownership dream come true.
It often helps to get pre-approved for a mortgage. That way, you can enter the housing market with a budget in hand. Pre-approval for a mortgage also may enable you to speed up your home search and ensure you can quickly discover a residence that falls within your price range.
2. Closing Costs and Other Homebuying Fees
After a seller accepts your offer to purchase his or her home, there may be various fees that you'll need to pay to finalize your house purchase.
For instance, a buyer who conducts a home inspection will need to pay for this evaluation. He or she likely will need to pay for an appraisal and any closing costs as well.
As you get ready to pursue a house, you may want to put aside extra funds for any potential costs you may encounter throughout the homebuying cycle. Because if you have the necessary funds at your disposal, you may be better equipped than ever before to seamlessly navigate the homebuying journey.
3. Moving Expenses
After you buy a home, you will need to relocate all of your belongings to your new address. To do so, you probably will require moving boxes and packing supplies to ensure your personal belongings can safely reach your new house. As such, you should account for these expenses prior to starting a house search.
Of course, you may want to hire a moving company too. If you want to find out what it costs to hire professional movers, you may want to receive quotes from multiple local moving companies sooner rather than later.
If you need help getting ready to search for a home, a real estate agent is happy to assist you. A real estate agent can offer lots of insights into the potential costs you may encounter at each stage of the property buying journey. In addition, a real estate agent will help you narrow your search for your dream house, conduct home showings and much more.
Start planning for potential costs associated with the homebuying journey – you'll be glad you did. If you budget for the property buying journey, you could increase the likelihood of enjoying a quick, stress-free homebuying experience.