When you are deciding which homes and neighborhoods you like, there are a few key points to keep in mind. Millennial’s are often the best educated buyers – in terms of; searching out homes on their own via the internet, obtaining information regarding the homes, neighborhoods, schools… However, they also are the most at risk, when it comes to buying a home.
Reason being? They don’t always take into consideration all the factors that will influence them for years to come. This is a somewhat comprehensive list, of the issues, I always went over with my clients before even taking them out .
Finances and Looking Into The Future
You have saved up your down payment, probably gotten with a lender to see how much you can afford, what the cost will be monthly and are ready to go right? Well, think about this for a moment, do you want kids? Most young couples think one day they want a family. So why am I referencing this? Are you aware – if you are both working, of course you can afford a bigger home, newer, more updated, in a nicer neighborhood. But, what happens when you start having kids; are you both going to continue working?
If not, did you check the cost of childcare on a monthly basis, it is often as much as a mortgage payment! So you say, ‘Then we’ll just cut back on our expenses; eating out, little trips, a new car, vacations… do you realize, you have just become HOUSE POOR !
This usually occurs if you have a realtor who is trying to UPSELL YOU. Avoid these realtors at all costs. They begin showing you homes in your ‘price range’ and slowly, increase the price range because you haven’t been able to find what you want yet. Bad decision! You must stick to your budget, or you may run into difficulty in the future. If they continue, find another realtor. There are plenty of realtors who will have your best interests at heart …
As I mentioned earlier, I often try to counsel buyers to consider a home that you can afford on one person’s income, not both. Remember, childcare is very expensive. Why not buy a starter home, maybe needs updating, something you can afford to do before you have kids. This is the best way to build your home’s value and appreciation. Then, if your now ready for a bigger home, you will probably make a nice profit on this smaller home, because of your hard work and patience. Don’t look at your first home as your ‘dream home’, but rather a stepping stone to your future dream home.
Choosing The Right Realtor
With all wants and needs figured out, find a buyers agent to represent. If you think you are going to save money going thru the listing agent, you are wrong. They work for the seller, by contract, and have a fiduciary responsibility to get the highest price possible for the home! A buyers agent works for you! Because they work for you, they can get information about the home, neighborhood, future taxes and much more. For example, the taxes on the ‘Home for Sale ‘ are based on the price the Seller paid, possibly 10-15- or 20+ years ago. All these factors must be taken into consideration while setting your budget, and figuring your monthly expenses. Don’t forget, a second income now is great cause you can put the extra money into your new house. Then when you sell, and can make a profit … for your next home! Here are 5 Tips to Selecting the Right Real Estate Agent to SELL Your Home!
Now a Closer Look at Which Homes to Consider and Why
This section, of course, depends on which part of the country you live in, but is a general rule for most areas. Don’t buy a home, which sides, backs or fronts onto a main road. Location, location, location! Yes you can get a much better price on one of these homes. Why? Because they will always sell for less approximately 10-15% less then the average of the neighborhood they belong to. They are harder to sell, take much longer in most cases. Even if the comparable sales of the neighborhood are great. The appraiser will be required to use, at least one comparable sold which also sides, backs or fronts on a main road. I even go as far as to try to get my clients to buy at least three homes in from a main road.
Avoid buying within a half mile of any apartment complex. Never buy a home which backs to anything commercial. Your appraisal will reflect this and the appraiser will have to use comparable sold’s which also have commercial properties in them. They may look like really good deal, but remember, they are priced attractively because, they must reflect this factor. No amount of updating will improve your resale value, and you could loose money in the end.
How Important is the Style of Home???
Neighborhoods are somewhat uniform; ranches, colonials, new construction… But, be careful in mixed neighborhoods. This means homes with a large combination of different styles of homes; colonials, ranches, tri-levels, quads. This is where you need to be very careful. While a tri-level or quad offers more space and square footage, they are usually the least favorite style of homes. Why, too many stairs, no flow from one room to another, and no possibility of opening the floor plan.
The most popular homes are colonials, ranches, cape cods, and the homes which offer the most opportunity to make money. Ranches are actually at the top, because they are easily renovated as compared to colonials or capes. So if you are looking to make the highest potential profit when you do sell, ranches provide an excellent opportunity to increase your square footage and save money in the process.
Why Are You Buying?
It is still the American Dream to buy and own your home. But there are many more reasons to buy then you may have ever thought of. Renting pays your landlords mortgage, and you aren’t building equity or real credit for the future. There are tax deductions for owning a home, and many more advantages discussed later.
The season you’re buying is very important as well. Spring will always be the busiest time for the real estate industry, typically a very good time to have a larger inventory to choose from. However, buying in the ‘off season’ has many advantages. Buying a Home During the Holidays
If you want to get a ‘good deal’ that would presumably be the same season where buyers and sellers go hand in hand right? While that may be true in some cases, check listings in the fall and winter. There is much stronger possibility of landing a very good deal because there are fewer buyers and less inventory which often make those who have to sell, more negotiable.
Be prepared, because there is less inventory, corporate transfers are under way and these buyer’s, your competition, are looking hard! Try to find a home which has been on the market awhile, and needs to be fixed up. This is a great way to build equity.
Lake Front Homes
Lakefront homes are at the top of the list for most buyers, at least once during your lifetime. However, be aware of the really important issues, you must consider, before ever buying a lakefront home. I wanted to add a few of my own, since I have sold hundreds of lakefront homes.
For example, have you ever thought, let’s buy a waterfront home that needs work then fix it up and sell it for a profit. That is another option, but be careful here. There Are Questions To Ask When Buying a Waterfront Home.
Issues to Watch When Adding on to Lakefront Homes
There are many circumstances, which can arise after the sale and inspection. To start with, the inspection report is often incomplete. Many lakefront homes were originally little cabins, which have been torn down or added onto. In many areas the assessors do nothing more then walk around the home, check the work permits and leave, often without ever going in the house.
Once the assessment is done and you’ve put all this money into a new addition, what if the new property assessment doesn’t add up to what you’ve put into the home? Eventually, it will sell, but it certainly is not a ‘flip opportunity’. Now you must wait for the surrounding homes to appreciate in value. So, the first thing you do is get a ‘replacement cost evaluation’, from your homeowners insurance agent. This means, keep every receipt from a new disposal to a new roof. Send them all to the insurance company so you are covered for the money you have in the property, vs what the assessor has valued your home at. Lakefront Homes; Buy, Build or Remodel
New construction homes have many advantages. You get to choose the floor plan, room sizes, design the kitchen to your tastes, upgrade appliances if you wish, choose everything! Your biggest advantage now is to use a realtor that specializes in new construction. They can be the ‘heavy hand’. Meaning, they will fight for your interests and have more success, due to their experience with new construction.
Many a builder in my day, tried to skip a few steps, substitute materials, so be sure you pick out everything, take notes, photograph the process along the way and begin a ‘punch list’ of items that you want fixed, repaired or replaced and keep it all in a file. During the process, you should be checking the work several times a week, especially when the flooring, appliances, fixtures, dry walling and when the brick for the exterior arrives. Since you are there, you are making sure none of the wood is damaged, tiles broken or bricks don’t match … Again, a real estate agent experienced in new construction is your safest bet, because they will be the ‘Buffer’ between the builder and you during this time period. Should you Go it Alone When Buying From Home Builder via Realtor.com
Wendy Weir Relocation – Real Estate Agent, Relocation Specialist, Birmingham, MI
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