Author: Greg77

Do you want to buy a home? (No, that isn’t one of the questions.) If the answer, however, is “yes,” then there are more questions you’ll need to ponder before you’re truly ready — even if this is your fifteenth fix-and-flip instead of your very first home.

Before you start adding properties to your “favorite” list on your most-visited real estate portal, consider the many possible answers to these questions and then decide what’s best for you. Even if you enjoy making big decisions by the seat of your pants, you’ll find that a little bit of thinking and planning before taking the (huge!) step of buying a home will give you confidence that you got a good deal … and the ability to find a place that’s absolutely perfect for you.

What do I want?

Homes don’t just come in the single-family residence flavor — you can buy a condo, an apartment, or a duplex, for example, and it’s possible that one of those options makes more sense for you and your lifestyle today than a single-family home would.

Homes also aren’t built in isolation. There will be neighbors, traffic, weather, and many other factors and features beyond your control.

What’s an ideal level of neighborhood walkability for you? Would you prefer to be close to your gym or yoga studio chain, or a hiking trailhead? What kinds of schools or pet facilities are nearby? Is the area close to any large cultural or sports centers? What’s the crime rate like? What’s the commute like, and is there decent public transportation? Are any or all of these things good or bad for you, personally?

Only when you’ve taken time to thoroughly think about and narrow down the type of home and the area where you want to buy should you start thinking about other aspects of your dream home — like the finishes, the size of the kitchen, and whether it has a big back deck or a gas range instead of an electric stove.

Some of those preferences will be just that, and some will be deal breakers. If you’ve got a large-breed dog and really require a big backyard, it’s okay to put that on your “must-have” list — but try to keep that list significantly shorter than your “nice-to-have” list. You might be surprised by how your preferences shift once you begin actually looking at homes available on the market, so it’s good to have some kind of idea of how important each home feature is to you and your lifestyle and also know where you have a little room to compromise.

It’s smart to keep your options open at every stage of this decision-making process. If you don’t have a friend who lives in the type of house and area that you’re eyeing, it might be a good time to connect with a local real estate agent. They’ve helped people just like you buy a home before — and they might know about perfect neighborhoods that aren’t even on your radar, or which items on your must-have list are easy to implement yourself if a home doesn’t currently have it. Hire a great lawn service in Port Orange to take care of the lawn so you don’t have to.

What can I afford?

Financial experts typically advise that buyers spend no more than 30 percent of their total monthly income on housing. Another rule suggests that you spend a little more than double your annual income on a house.

Your mortgage payment is going to cover not only the cost of the home itself, but also interest on the mortgage loan, homeowners’ insurance, and property taxes. And depending on the size of your down payment, you may also need to pay private mortgage insurance on your loan, too.

You can look up property tax information by county; it’s calculated as a percentage of the home’s value, so property tax can shift up or down depending on the housing market, but don’t count on it staying steady for the 30-year duration of your loan.

A local insurance agent can also give you a good idea of what you’ll be paying for homeowners’ insurance on the property. And this is an area where you might actually be able to save a little money elsewhere — if you have a car, you often will receive a discount for packaging your auto insurance and homeowners’ insurance with the same carrier. You might also want to consider some ancillary insurance, like flood or earthquake insurance (and flood insurance is required on some homes).

The mortgage interest rate is going to depend on a few factors — your current credit score and the current market mortgage rates. A loan officer can help you figure out what your current options might be and may even offer suggestions for how to improve your credit score to get a better rate while you’re saving up for that down payment.

Speaking of the down payment: Don’t forget that whatever you bring to the table will be applied to the home sale amount, so you probably won’t be asking for a loan that’s the exact price tag of the home. For example, if the home you want to buy costs $200,000 and you have $40,000 (20 percent) to put down on the home, then you’ll be borrowing $160,000 from the bank instead of the full $200,000.

There are online calculators that can help you assess some of these factors, but again, here it’s smart to talk to a real estate agent. An agent can also refer you to a local insurance agent and loan officer so you can start figuring out what you need to do to become a real-deal homeowner.

Am I financially prepared?

This is a tough question to answer, and it’s one big reason why you might want to start talking to real estate professionals early on in the process — there’s a lot you can do to help make this purchase one of the smartest financial decisions of your life, and most of it happens before you start dreaming up that perfect place to live.

If you aren’t already connected with a loan officer, start here. These people are experts in the different types of loan available to you and how you can optimize your financial standing to give you a great jumping-off point.

You may need to do some work on your credit score before you can buy, and a loan officer can also hook you up with an expert who can comb through your credit report and tell you which debts to pay off first as well as lay out a six-month plan for polishing everything until it’s shiny.

And while you’re working on your credit, do yourself a favor and look up what down payment programs might cater to your situation. Depending on your age, state of residence, whether you’re a first-time homebuyer (it still counts if you’ve reverted to renting for several years!), and a few other factors, you might be eligible for free money that can only be applied toward a down payment on a home. Some programs supporting responsible homeownership require recipients to attend a few classes about buying a home and how to pay off a mortgage — but that’s time well spent if the payoff is four to five figures of cold, hard cash to put down on a home.

When you feel as financially robust as possible, ask your loan officer to pre-approve you for the loan amount you can afford. This will make it possible for you to immediately place an offer on a home if you find one that you love instead of waiting for lender approval … and you’ve already gotten through the hard part, so you might as well make it official, right?

How do I make the best bid possible?

There’s nothing like jumping through all of these hoops — not to mention the home search process — only to place an offer on a home and discover that you were outbid. Or, on the flip side, that you could have offered less and still been successful!

This is where a real estate agent becomes truly valuable in the process; they’ve seen offers that flew and offers that flopped, and they do this every day. If you’re not working with an agent yet, find one and ask for some data about homes sold on the same block (ideally) or in the same neighborhood that are a comparable size, in comparable condition, and have comparable features.

An agent can also help guide you if you’re about to make an offer that’s bound to be rejected because it’s too far below market standards — or if you might be able to get a deal because a home has been languishing on the market for longer than normal and the sellers are reducing the price weekly.

And a good agent can also help you regroup and get back in the game if the offer on your dream home is rejected.

Sometimes a seller considers list price to be a jumping-off point in negotiating a final sale — and sometimes that list price is set in stone and the seller isn’t going to be moved. Your agent can give you a feel for whether you really were offering a number well below market expectations or whether it’s more likely to be a seller’s inflexibility.

When you can answer the first three questions confidently, it’s time to start searching for a home — and when you can answer the fourth effectively, you’ll be walking away from the deal with keys to the front door in your hand.

Rank and Rent

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There comes a time in every homeowner’s life when he or she realizes: “I am not the same person I was when I bought this place.” Maybe your lifestyle or your family configuration has changed, or maybe the house just isn’t as appealing as it was when you signed that ream of paperwork on closing day.

If you’re thinking about moving on, then there are a few questions you need to ask yourself before you take the plunge and list the house. When you can answer these questions, you’ll know you’re in the right place emotionally and financially to move on to your next space.

What is my home worth?

You can find almost anything on the internet, and that includes an estimated value of your home. How convenient!

But before you go galloping off to Zillow or Redfin or even a brokerage website to try to figure out how much your house is worth, take a deep breath and resolve to remember one thing: “I shouldn’t believe everything I read on the internet.”

It’s possible that an automated estimate is going to be spot-on, but those algorithms depend on numbers that might or might not be accurate, like the condition of your property, the square footage, any features or amenities you’ve added (or removed), and recent sales of properties nearby that could be comparable to your own home.

A better way to figure out how much your home might be worth is to look at your most recent property tax bill. Your property taxes change with the value of your home, so if you look at your property tax rate from last year and figure out your state’s assessment rate (usually not quite the total value of your home — it’s somewhere between 80 percent and 90 percent of the home’s total value, depending on the state), that can help you get a little bit closer in terms of pinpointing price.

You can also talk to a professional about your home’s value; a real estate agent who sells properties in your neighborhood every day is going to be able to give you a more accurate idea of how much your particular, specific home might capture on the current market.

And a real estate professional can also explain what you can do to your home to help inch that number upward a little bit. Then you can make the call as to whether or not you want to make any upgrades or take the estimated price as-is. Which leads to the next question …

How can I sell at the highest price possible?

When you’re selling anything, you want to get fair market value for the item you’re releasing, and that’s exponentially truer for your house, which is probably the biggest purchase you’ve ever made.

If you know your neighbor’s house sold for ten figures more than the highest estimate you’ve been able to find for your own home, that can be a tough reality to swallow. But this is where real estate professionals really earn their keep — they can explain why that house was so desirable (maybe if you’re honest with yourself, you can admit that your neighbor’s view is much nicer than yours, for example), and they can also show you where you do have some room for (price) improvement.

If you don’t want to call in a professional, then start with things that can spruce up almost any dwelling. One of the first and most important steps to selling your home for top dollar is to get the place deep-cleaned from floor to ceiling, including washing the windows and scrubbing down all of your kitchen appliances.

Start by attacking the clutter; it’s much easier to clean a room that doesn’t have a lot of furniture or objects in it, so even if you’re hoping to move up to make space for all your stuff, it’s a good idea to start cleaning out the items that you know you don’t want to move with you. If there’s still a lot left, consider a shed or an off-site storage facility where you can stash things without packing it all in your closets (where buyers are most definitely going to be looking). If you have a junk drawer or even a “junk room,” now is the time to start corralling that beast.

Then get cleaning. There’s no detail too small — make sure every room in the house sparkles to the best of your ability and smells fresh and aired-out.

There may be quite a few additional projects you could tackle to increase your home’s value, such as adding a deck, remodeling the kitchen, or even adding entire rooms in some cases. Those are good opportunities to discuss with a real estate professional, who can share feedback about whether the project is going to be worth the eventual return on investment when you sell the home — and what projects will net you more money for your property.

Real estate agents also know stagers and home photographers. When a buyer falls in love with your home, it’s most likely going to be from an online listing, so your listing photos should be as high-quality as possible — that might mean bringing in a stager to spruce up the rooms and a photographer to capture the results.

How long will my home be on the market?

No one can predict the future, but experts who work in the industry can usually come close. If you haven’t called an agent yet, you might need to in order to get the information you’ll need to answer this question.

Ultimately, it depends on what the housing market is like in your area, but there are a lot of anomalies within a housing market — even in markets that seem red-hot, sometimes sellers make a mistake and overprice a home that then languishes for weeks or even months longer than more realistically priced homes. And there are some neighborhoods or even specific blocks where buyers seem to be willing to do just about anything to get their foot in the door — and other geographies where they might need to be lured in a little more aggressively.

The number of days that homes stay on the market gets shorter and shorter as housing heats up, but that number is absolutely contingent on the initial list price. Homes that need to reduce their prices to attract qualified buyers will remain on the market significantly longer than homes priced competitively from the start. It’s really important to get the initial list price right if you’d like the home to sell quickly. (And remember: The longer that house takes to sell, the longer you as the seller will be responsible for keeping it in showing condition for buyers — seven days a week.)

So even in markets where houses seem to be flying off the shelves, it’s smart to talk to someone who sees those sales up close and personal every day. They can give you an educated estimate about the amount of time it should take your property to get from list to close.

How can an agent help?

Selling a home is a huge life event that encroaches on just about every aspect of your existence, from your meals to your work schedule to how often you do laundry and vacuum up pet hair. It can be an incredibly stressful time, and a real estate agent is a personal advisor that can help sellers make the best decisions possible while keeping track of all the details.

A good real estate agent will help you find the best price for your home, list it for you on the MLS, and handle all the marketing — from photos to open houses to glossy brochures to Facebook ads. A good agent can manage your showing schedule for buyers who want personal tours and can help you decide which offer to accept if you happen to receive more than one … and a good agent is absolutely essential during the negotiation process, especially if the buyer is making demands that the seller isn’t prepared to address.

A good agent will also know the best plumbers, electricians, and general contractors in the area who might be able to make any repairs or changes to the home before it closes. He or she can manage the transaction timeline, alerting you when an inspection or appraisal is about to happen and keeping you in the loop regarding financing and every other aspect of the deal.

A good agent can also help you do all of this while you’re simultaneously looking for a new place to live and can help you manage that, too — including what to do if you find a home before your current house sells.

And depending on your personal situation, there are local real estate agents who specialize in divorce, estate sales, and other tricky life events involving a home transaction.

Selling a home is as simple as listing it on the MLS and waiting for an appropriate offer to come in — but there’s so much more involved that most sellers can’t handle it on their own. Answering these questions will get you a head start, but don’t skip talking to an agent or three when you’re actually ready to list that home; they’ll be able to point out what you didn’t know you were missing.

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