Better Homes and Gardens Real Estate Life

Tag: buying tips

  • Focus the Hunt

    Finding the right place is the most difficult step in the home buying process. Keep these things in mind to help hone your search.

    NEW (NOT FOREVER) HOME

    First-time buyers might want to look for a starter home (length of stay: three to five years) instead of their dream home, so they can save money and build equity.

    SQUARE FOOTAGE (NOT ROOM COUNT)

    In the past, counting bedrooms and bathrooms would help you get a sense of how big a home is. But today’s construction methods and fix-and-flips allow builders and remodelers to be creative with tight spaces. “Think about how spacious you want your home to feel,” says Joseph Magsaysay of Better Homes and Gardens Real Estate Preferred Properties in St. Louis. “Usable square footage is a better indicator of roominess and comfort level than bedroom and bath counts alone.”

    LOCATION (SHORT AND LONG TERM)

    If you plan to stay in your home for longer than five years, think beyond nearby coffee shops and proximity to work. Also look at long-term needs like schools and hospitals that become more important as you age.

    SOURCE: BETTER HOMES & GARDENS® MAY 2022 ISSUE

  • Let’s Talk Money

    Best Mortgage Practices

    Before you start comparing houses, find a lender who can work with your financial situation and offer the most mortgage options. Five things to keep in mind:

    PREQUALIFIED VS. PREAPPROVED
    Mortgage prequalification gives buyers a sense of how much home they can afford. Preapproval requires documentation of the buyers’ financial stability and credit history. Being preapproved lets sellers know you’re serious and ready to buy.

    COMPARE AND SAVE
    Many assume their local bank will deliver the best mortgage rates and terms. But online banks can also have competitive rates. Websites like bankrate.com and nerdwallet.com use your ZIP code, credit score, and other loan factors to see a list of competitive and licensed lenders.

    MORTGAGES ARE NOT ONE-SIZE-FITS-ALL
    Ask your lender to explain the different mortgage options—such as fixed rate and adjustable rate—and help you determine the best financial fit.

    NO-MORTGAGE OPTIONS
    In 2021, 30 percent of home purchases were all cash buys. Some buyers are independently wealthy or investors. Others stockpile savings for years, choose to take out loans against retirement funds, or cash out stock options.

    MORTGAGE SAVINGS
    It can feel like a mortgage goes on forever. The simple step of making two extra payments a year—by paying half the monthly payment every two weeks instead—can shave years off your mortgage and save you thousands of dollars in interest over the lifetime of the loan. Check with your lender first to make sure it’s a viable option for you.

    Ways to Save on Home Insurance

    These tips can save money for first-time buyers and current homeowners.

    SHOP AROUND
    Like mortgages, it saves to shop around. Check out sites like hippo.com and policygenius.com to find the best coverage for the lowest cost in your area.

    BUNDLE UP
    Insurance companies offer discounts when you combine services. Auto and homeowners insurance are likely pairings, but recreational vehicles (ATVs and boats) and life insurance can also be combined.

    ADD SAFETY AND SECURITY FEATURES
    Putting in an alarm system, security cameras or installing an overhead sprinkler system, rather than just a smoke detector, may get you better rates.

    GET THE COVERAGE YOU ACTUALLY NEED
    Tragic stories exist of people being underinsured, but many people are overinsured and don’t realize it. Did you opt for a fine jewelry rider, forgetting that you have since gifted the family heirlooms? Did you mistakenly add earthquake insurance, although there hasn’t been one in your area in known history? The insurance you purchase needs to mesh with the reality of your risks and estimated losses. Look up weather risks, appraise any jewelry and art, and consider whether it is worthwhile to opt in or out of riders and additional coverage.

     

    Other Costs to Note

    EARNEST MONEY
    Also known as good faith money or deposit. It’s a portion of the down payment buyers include with their purchase offer.

    HOME INSPECTION
    A report conducted by a licensed inspector that gives buyers a better understanding of the condition of the home and what should be fixed.

    CLOSING COSTS
    Fees and processing expenses for obtaining a loan, usually around 3–5 percent of the home purchase price.

    MONTHLY FEES
    Property taxes, association dues, and utilities (could include garbage removal).

     

    The Key to Success in a Competitive Market
    “Home buyers should be preapproved and flexible on closing and possession dates.”
    —Katie Butler of Better Homes and Gardens Real Estate Reliance Partners in Sacramento, Yolo, and Placer counties

     

    CAUTION: DON’T WAIVE CONTINGENCIES
    Last year, some people felt compelled to waive contingencies (for financing, inspections, appraisals, and more) to make their offer look more desirable to a seller. Contingencies are safeguards for the buyer, so waiving them absolves the agent and seller from any responsibility.

     

    SOURCE: BETTER HOMES & GARDENS® MAY 2022 ISSUE

  • Checklists for Buying and Selling a Home

    Moving into or out of a home can be chaotic. Make sure these tasks are on your “don‘t-forget“ list.

    Before You Move In

    Line up insurance
    Lock in your insurance provider and plan so you’ll have coverage the day you officially take ownership.

    Contact utilities
    Have electric, gas, water, and internet services placed in your name and new address.

    Forward mail
    Stop by the post office to forward your mail to your new address or do it online at USPS.com (it ’s free). It’s best to allow two weeks’ notice.

    Arrange moving help
    Hire a moving company, rent a truck, or gather boxes for a moving party with friends (free pizza and beer always help). Keep in mind rental vans and trucks are busiest on the first and last of the month when most leases and rental periods end.

    Meet the neighbors
    Introduce yourself and give neighbors your number before you move in—in case they have questions about people coming and going. The Nextdoor app lets you connect with neighbors and find lost pets.

    Before You Sell

    Toss and donate
    If you haven’t used it in a year, it’s not worth packing up and moving to a new place or paying for storage. Websites like caringtransitions.com help older adults and their families with downsizing, estate sales, online auctions, and relocating.

    Think like a buyer
    Real estate agents agree: It ’s all about making rooms look larger and livable. “Less is more,” says Scott Vaillancourt of Better Homes and Gardens Real Estate The Masiello Group in Bedford, NH. “Try to depersonalize and declutter so that prospective buyers can envision their families moving in.”

    Do an inspection
    Have a friend walk through your home with fresh eyes and give honest advice for fix-ups. Another option: Pay for your own home inspection (around $400) and get a heads-up on the repairs potential buyers may ask to have done.

    Not sure about selling? Consider renting your home
    Keeping your home as a rental (short- or long-term) might be a good option if you don’t need to sell it to buy another. Ask your real estate agent if it makes sense in your area.

     

    SOURCE: BETTER HOMES & GARDENS® MAY 2022 ISSUE

  • Seven Ways to Simplify the Process of Buying a House

    Whether it’s your first house or what you hope will be your last, buying a house is often a very stressful process. Until the moment you take possession of your home, there’s always a chance something could go wrong. Here are seven ways to simplify the process of buying a house.

    1. Get your paperwork in order

    Start getting your paperwork in order before you even start looking at properties online. If you’re applying for a loan, you’ll need your last two years’ worth of tax returns, current pay stubs, bank statements for the last three months, cancelled rent checks, or copies of your lease. You may also need your divorce decree and bankruptcy paperwork if either of those situations apply. Remember that getting money out of a 401k or a trust for your down payment or outright purchase can take longer than you anticipate, so find out how long it’s going to take and what’s involved if that’s a route you’re considering.

    2. Find a real estate agent you can trust

    Before you start the mortgage or loan application process, finding out what’s going on in the market is vital. Interview at least three real estate agents, and listen to what they say about what you’re likely to get for the house you’re selling. In addition, speak with them about what you’ll likely pay for your new one.

    Once you’ve heard the same price ranges three times (assuming all the agents you meet with agree, which they should), choose the agent with the best track record of sales in your area, the best online or personal recommendations, and the one you like best. Staging, keeping a home show-ready, and listening to tactfully delivered feedback from people who’ve viewed your home means you’re going to be interacting with your agent a lot.

    3. Start researching banks, credit unions, and loan officers

    While it might seem simpler to use a bank or credit union that offers home buyers one-stop shopping, what the term really means is the bank has a vested interest in the sale through controlled business arrangements with realtors, attorneys, and possibly even home inspectors, and may receive a portion of the commissions. That’s no way to guarantee objectivity. To check a loan officer’s record, ask for their ID number and take a look at NMLS Consumer Access. If you’re using a mortgage broker, check their credentials with the Better Business Bureau.

    4. Get your financing in order

    Once you’ve chosen your loan officer, bank, credit union, or mortgage broker, get pre-approved for a loan or mortgage and get a pre-approval letter. This will not only help you figure out what you can afford before you start looking, it tells realtors and sellers you’re serious. Depending on how long your search takes, you may need to renew your pre-approval—they’re usually only valid for 60 to 90 days.

    5. Find a home inspector you can trust

    If you’re looking at older homes, a good home inspector will be able to warn you of areas where there are problems with termites, water seepage, or shoddy construction. Do your due diligence. One of the best ways to find a good home inspector is to talk to a tradesperson you’ve used in the past, one who takes pride in their work and wants everyone in the industry to do the same. Try to find a home inspector who’ll let you accompany them when they make their inspection so you can ask questions on the spot.

    6. Consider investing in title insurance

    While it may seem like an unnecessary expense, making sure there are no liens against the property you’re buying is important. The last thing anyone needs is to find out the home they just bought is owned by someone other than its previous occupant. It costs between $1,000 and $3,000 on average, or .05 percent of the purchase price. You can sometimes get a reissued title insurance policy if the seller went through this process. That can save you some money. Get your real estate agent to ask the seller’s realtor about this. Additionally, some banks may require you obtain title insurance if you’re getting a mortgage, so be sure to inquire with your lending officer.

    7. Get your tradespeople lined up

    If you’re already a homeowner and have been through renovations or repairs,  you may have a plumber, an electrician, a roofer, a flooring person and a general carpenter you know and trust. If you’re moving to a new city or you’re a first-time homebuyer, you’re going to have to rely on in-person and online recommendations.

    One of the best places to find good tradespeople is an independent home supplier. They know who’s sloppy and who’s not, and they’ll often have business cards for tradespeople behind the counter. Here’s hoping these seven ways to simplify the process of buying a house make the experience a little less stressful. Happy hunting!