4 Things That Shouldn’t Worry You When Buying a Fixer-Upper

By Anica Oaks Gauging a potential fixer-upper is a complicated undertaking that requires experience, knowledge and good judgment to know the difference between a serious fault and a cosmetic flaw. There are many different things that you should look at and consider when buying a fixer-upper; however, there will likely be several obvious problems that you don’t need to worry about too much: Ugly Paint and Siding Even the most hideous paint or siding can be removed. Most fixer-uppers have exterior issues, so buyers expect to redo a lot of the outside of the house in the months or years after the purchase. As long as the wood supporting the walls, windows and roof is in good shape, the external aesthetics can be easily modified to suit your tastes. Damaged Doors Dented, dirty and well-worn doors can certainly be an eyesore, but they’re also relatively easy to replace. Replacing aging wooden doors with modern material gives the new homeowners a chance to inspect and reinforce the entire molding. It’s also a good opportunity to replace locks on all doors and windows with a fresh set. Broken Windows Even a few panes of broken glass can impact the overall aesthetic of a home. Fortunately, it’s also one of the easiest problems to address when improving a fixer-upper. Talk to comprehensive window professionals to develop tailored solutions that are both economical and effective. There’s nothing wrong with simply replacing old windows with something new, but you can also modify the entire molding to fit a new style or size. Deck and Patio Problems For some homeowners, a solid wrap-around deck is...

3 Money Tips for New Homeowners

Being in your first home is an exciting time in your life. But coming up with a down payment may not have been the toughest part of it. Aside from buying furniture, painting and decorating, and making those first fixes, you should probably give your finances an overhaul to accommodate the costs of homeownership. Financial experts from The Motley Fool offer three important money tips: Create a new budget. A lot more will change in your monthly budget than the difference between your rent and your mortgage payment. You may be taking on utility payments for the first time, or those costs may increase depending on your new square footage. If you suddenly have a lawn to maintain, that will be a new expense. Money managers suggest you track all your expenses for at least three months, then update your budget as needed. Prepare for repairs and maintenance. Most homeowners spend between one and four percent of their home’s value on repairs and maintenance. So, if your home is worth $300,000, expect to shell out anywhere from $3,000 to $12,000 a year on upkeep. If you need to do something major, like replace a faulty heating system or roof, your costs could climb even higher. Aim to pad your emergency savings so that you have funds to tap when needed—somewhere between three and six months’ worth of living expenses. Be ready to meet tax payments. Unless you’ve rolled your mortgage insurance and property taxes into your monthly mortgage payments, you will face a good-sized property tax payment twice or sometimes four times a year. Be aware of the amount, and set aside...

HOAs and How They Can Impact Your Purchase

There are a multitude of things house hunters need to consider before choosing a home, such as price, location, schools, distance to work—the list goes on and on. Most homebuyers may not think about the costs and rules associated with buying a house that’s part of a homeowners’ association; however, it is an issue they may run across. For those unfamiliar, a homeowner’s association (HOA) is a legal entity that manages a shared housing complex—that doesn’t just mean a condo or a series of town homes. In some cases, it includes a suburban housing development with shared space or a specific neighborhood. If a home is part of an HOA, the information should be available right in the MLS. You can always ask your REALTOR® to be sure. The last thing you want is an unexpected fee tied to your home purchase. Though the costs vary, most HOAs collect monthly dues and the money is earmarked to fund activities or repairs for fellow participants. This could include things like block parties or lawn maintenance. Keep in mind that you can’t “choose” to be excluded from an HOA. If you buy a home that has one, you’re required to be part of it and pay the dues. The structure of an association can vary, depending on the total number of members, but most have a president, treasurer and some elected board members. When you’re part of an HOA, there are rules you must follow. And depending on how strict yours is, it can be a pain. For instance, there may be a rule about what color you can paint your...

How Much Money Do You Need for a Down Payment?

Buying a home often requires years of saving for a down payment, which is money that a buyer pays upfront toward the cost of a house. This is the immediate equity that a buyer has when purchasing a home. Unless buying with cash funds, the rest of the money comes from a loan. Different lenders require different amounts of money down based on a variety of factors. Lenders refer to a down payment in terms of a percentage of the purchase price. Private Loans Private lenders typically prefer that buyers put down 20 percent. Some will accept lower down payments, but those borrowers are considered a higher risk. Lenders want a guarantee and require borrowers with lower down payments to pay for mortgage insurance. This is a policy that pays the lender if the borrower defaults on the loan and the house winds up in foreclosure. The cost of mortgage insurance depends on the size of the down payment and loan, as well as the borrower’s credit score. Mortgage insurance tends to be expensive, which is why many people decide to put off buying a house until they can save enough money to put down 20 percent. If you put down 20 percent, you will have a better chance of being approved by a private lender, and you will also generally qualify for a lower interest rate, fees and monthly payments. Government Programs The Federal Housing Administration (FHA) allows borrowers to obtain mortgages with as little as 3.5 percent down. FHA guarantees a portion of the amount borrowed and offers loans at lower rates than private lenders. FHA charges...

Is Buying a House in Foreclosure a Good Idea?

When shopping for a new home, everybody wants to get a good deal. Many buyers consider properties in foreclosure because they are often available at below-market rates. While you may be able to find the home of your dreams for less money than you thought, there are some factors to consider. Advantages of Foreclosed Properties Houses in foreclosure are typically sold at prices below market rates because banks want to get rid of them as quickly as possible. This can allow savvy buyers to score great deals. If you want to own a home in a pricey neighborhood or with expensive amenities, but you have a limited budget, you might be able to get what you want with a foreclosed property. Another reason to consider a house in foreclosure is the potential to make a profit in the long run. Since foreclosed properties are sold at low prices, if your house appreciates in value and you sell it in the future, you stand to earn a significant profit. Potential Problems There are some downsides to consider. One of the most important is that the condition of the house may be sub-par. If the owners were unable to pay their mortgage, they might have also put off necessary repairs and maintenance. Since foreclosures are generally sold “as-is,” you would be responsible for making those repairs. That could significantly increase your costs and also delay your move-in date. Sometimes people living in foreclosed houses are problematic. They might want to stay and need to be evicted, which can be a lengthy process. They might also be angry about losing their home...

The Master “Change of Address” Checklist for Your Next Move

Any time you move to a new home, things change. A new neighborhood, new people to meet and a new address. With the stress of a big move and the excitement of starting the next chapter in life, there are important tasks that need to get done, but are inevitably put on the back burner. Once your boxes are unpacked and you start to settle in, the next step is to identify any and all places where your address needs to be updated. Trying to figure out every company, account or personal document that needs to be updated can be just as stressful as move-in day. So, instead of digging through your mail and potentially missing a bill, check out this master list of all necessary (and possible) places you may need to update your address. Government Agencies: Post Office DMV – License, Vehicle Registration (Plates, if you moved out of state) IRS/Other Tax Agencies Social Security Administration Voter Registration Financial Providers: Banks/Credit Card Company Loan Providers Accountants Utilities: Gas/Electric Company Cable/Internet/Phone Provider Cell Phone Carrier Insurance Companies: Health/Dental/Life Insurance Provider Car Insurance Provider Home/Renter’s Insurance Provider Personal, Family & Pets: Employer Doctor/Dentist Schools (If you have children) Veterinarians (If you have pets) Memberships & Services: Online Accounts (Amazon, PayPal, etc.) Streaming Services (Netflix, Hulu, etc.) Subscriptions (Magazines, meal delivery, etc.) Clubs/Organizations (Costco, BJs, Sam’s Club, etc.) Gym And last but not least, don’t forget to update your friends and family of your new address. Once you make your way through this checklist, you can officially call your new house your home! Reprinted with permission from RISMedia. ©2020. All rights...

5 Ways to Know Whether a Fixer-Upper Is a Good Deal or a Money Pit

For homebuyers on a tight budget, it’s tempting to consider buying a home in need of repairs; it may grant you access to a coveted neighborhood or a larger home than you could otherwise afford. But sometimes, a fixer-upper can be more than you (and your budget) bargained for, and the home seller is the one who ends up with the great deal by unloading their problem home on you. Money Crashers offers these five things to watch for that could be signs you’re investing in a money pit. The listing says ‘as-is.’ This signals that the seller is not in a position to make any repairs before selling. Before you proceed with such a home, find out exactly what repairs will need to be made and get a quote or two from a contractor. If you’re afraid of losing the home while you investigate these costs, make an offer with an escape clause in the contract. Also, be aware that the appraiser must sign off on the house as habitable, which is a condition for most home loans. You smell moisture. If the air smells damp or musty in the home, it could be a sign of water damage and mold, which can quickly make a home uninhabitable. Have a mold test done and carefully investigate ceilings for leaks, and basements and foundations for cracks. Sloping or sagging floors. If the floors look uneven or seem to be sloping, this could be a sign of serious structural damage. A simple way to know for sure is to place a marble on the floor and see if it rolls on its own....

7 Insurance Factors to Consider When House Hunting

If you plan to buy a house, you’ll also need to purchase homeowners insurance. An insurance policy can help protect you, your family and, of course, your new home in case the unforeseen happens. Because coverage can add a significant amount to the overall cost of homeownership, however, it may pay to keep in mind that certain features of a home can affect the price and availability of insurance. To help you save and ensure that you’re properly protected, the Insurance Information Institute offers some factors to consider when house hunting: 1. Quality and location of the fire department. Houses that are located near highly rated, permanently staffed fire departments usually cost less to insure. This also holds true for homes that have a hydrant nearby. 2. Proximity to the coastline. Houses located on or near the coast will generally cost more to insure than those further inland. They’ll also likely require a separate hurricane or windstorm deductible. In some coastal communities, private homeowners insurance coverage may not be readily available. Instead, you may need to purchase insurance through a state-run insurance program. 3. Age of the home. A stately, older home can be quite beautiful, but ornate features like plaster walls, ceiling molding and wooden floors may be costly to replace and can raise the cost of insurance. And plumbing and electrical systems can become unsafe with age and lack of maintenance. If you’re considering buying an older home, find out how much it’ll cost to update these features and factor that into the cost of ownership. 4. Condition of the roof. A new roof matters to insurers...

Top 10 Reasons to Hire a Buyer’s Agent

Why Have a Buyer’s Agent When Purchasing a House? Buying a house is one of the most significant undertakings you’ll make in your entire life. It’s not simply about finding the right home for you and your family; more than anything, buying a house is about making the right financial investment on a long-term basis. Before you even put down your earnest money deposit, an exceptional buyer’s agent will have been doing several things for you, including searching for the right property and starting the due diligence process when you do. There are a plethora of reasons you should turn to a buyer’s agent when you start the house-buying process. Below are some of the most essential reasons to hire a buyer’s agent when purchasing your next house: 1. It’s Free One of the first things you need to know about hiring a buyer’s agent is that it’s not going to cost you anything. That’s right; 99 percent of the time it won’t cost you a dime! A buyer’s agent will be paid by the home seller once the home is sold. Not only is it free, but a buyer’s rep will be saving you both time and money. As always, it’s essential to have a good working relationship with an agent. In other words, make sure you find one that you feel comfortable working with. 2. Going to the Listing Agent Isn’t Smart For some reason, lots of buyers think they’ll get a better deal if they go to the seller’s agent. This is one of the biggest myths in real estate and could cost you considerable money in...

So You Want to Buy a Vacation Home? Consider This First

If you’re in the midst of hunkering down for a chilly winter, you may find yourself dreaming of warmer locales. If only you had a second home somewhere more climate-friendly to escape to… If those dreams are getting closer to becoming a reality and a vacation home is on your to-do list, be sure to take these four steps first: 1. Really research locations. Make sure it’s a place you’ve spent lots of time in, and, therefore, want a permanent place there. A warm climate is only one attraction. Also consider ease of access (can you hop in the car, or does getting there require connecting flights?), weather-related concerns, like flooding or severe storms, community amenities and access to the services you’ll need. 2. Get your family’s input. Many envision a vacation home as the place where they’ll gather the whole family for summer break and holidays, but it doesn’t always pan out that way. If you’re investing in a second home that you want your family to frequent, be sure to include them in the conversation. Their idea of the perfect location may not match up to yours. 3. Analyze affordability. If you’re really crunching the numbers to make this happen, make sure you’re not putting yourself in a financially tight spot. Perhaps you’re planning to rent out your second home when you’re not using it. If so, make sure you’re willing and able to take on the responsibilities of being a landlord, and factor in the costs that come with that, as well. If you’re going the Airbnb route, check into regulations and fees associated with the location you’re buying...

Tips for Buying a Foreclosure

By Bill Gassett Are you considering buying a foreclosure or bank-owned home? It can be tempting to look at foreclosed properties if you want a bargain, but are the lower prices really worth the potential problems? A different approach is needed when you are looking to buy a foreclosed house. Below are some tips and tricks to make the process smoother. It’s essential to know that these kinds of real estate transactions can be a bit riskier than your traditional purchase. Quite often, first-time homebuyers are under the impression that foreclosure properties are the bargain of the century. While at times there is a discount, don’t expect it to be monumental. If only going from a renter to a homeowner translated into instant equity. Unfortunately, it rarely ever works that way. Keep your eyes wide open and use these simple tips for buying a foreclosure: Is It a Good Idea to Buy a Foreclosed Home? A foreclosed property has been recovered by the lender when the owner was unable to keep up their mortgage payments. The lender wants to get as much of their money back, and they want to do it quickly. This leads to foreclosed homes coming on the market for less than the value they really offer. For buyers, this can present an excellent opportunity to save thousands on the house. There are some downsides and potential pitfalls to purchasing a foreclosed property, and it won’t be for everybody. If you’re happy with the higher risks involved and can move quickly on a deal, this could be a way to get a decent discount on a home. Here’s what you’ll need to do...

4 Tips for Home-Buying During the Colder Months

By Meghan Belnap Are you planning to move? Is it going to be cold when you relocate? Here are four ideas to help make the home search process faster and more convenient during the colder months. Attend cozy open houses. Use the time you’re looking for a home to mingle and fight the winter blues. Go see what’s open in your area, check out a new location or inspect a home you really want. Open houses provide many opportunities, including the chance to mingle and network. Even if you don’t like the house you visit, you may hear of others nearby. You’ll find many houses for sale in the winter that have open houses, and checking them out in person can show you exactly what the house will be like during the colder months. Read the home inspection reports. While it’s chilly outside, pull up a comfy chair and a mug of hot chocolate or coffee and do some research. With the bad weather and cold air that come with the season in some areas of the country, it’s easier to sit inside and get the monotonous part of moving out of the way first. Plus, getting some of the boring stuff done early gives you more time to spend on the fun things like getting open house gifts. Look for drafts and other leaks. There’s no better time than winter to check out houses for sale. With the home working at the highest level, potential buyers can easily check out windows and doors for air leaks. Gaps are easier to find because drafts are often present when the winter wind...

How to Prepare for Making an Offer on a House

So you’ve found the perfect house and you’re ready to move forward and make an offer. The number you put forth is one of the most important decisions you’ll make in the entire home-buying process, so before you make that offer, be sure to consider the following: You might not be the only bidder. Chances are, especially if you’re in a hot market, or simply on a desirable street in a particular neighborhood, that there will be a competing bid or two on the home. If that’s the case, before you raise your offer, dig deep and decide what this home means to you. If this is truly THE house for you, then go ahead and raise your bid if you can afford to. Consider writing a letter. While not effective in every situation, sometimes a personal letter to the seller can help make your offer more attractive. Talk to your real estate agent to find out if the seller has a particularly strong emotional attachment to the home, in which case, a letter describing why the home means so much to you could make a difference. For some sellers, it may mean a lot to know their home will pass on to someone who will love it as much as they do. Be prepared for a counteroffer. If the seller considers your bid too far below the asking price, they may come back with a counteroffer. Take a deep breath, and keep in mind that the seller can only negotiate with one buyer at a time. If you can’t afford their counter but are intent on pursuing the house,...

Can Building a New Home Be Cheaper Than Buying an Old One?

By Meghan Belnap In most cases, it makes sense to search for older things rather than their newer counterparts when you want to save money. This doesn’t, however, always hold true when it comes to buying a home. Here are several factors that can lead to older homes costing more than new construction: Energy Efficiency One of the great things about buying a new home is that everything inside is new. This generally means that most of the appliances and systems were built in the last few years, which in turn means that they tend to be more energy-efficient. On top of better appliances, newer homes feature the latest in design for insulation, from the framework to the material used in building. This means that, over time, the cost of owning new construction can actually be substantially less than the cost of owning an older home. Perks Specific to Older Homes Sometimes buying an older home can also cost more simply because it has perks that aren’t available in new homes. Classic architecture, antique fireplaces or period-specific additions can command a great deal of money, and they’re simply not features that you get in a newer home. Buyers who want these features are willing to pay a premium, which drives up the price of homes that have those touches. As such, new construction may be much cheaper in comparison. Maintenance Costs Older homes cost more to take care of than newer homes, if only because time tends to be unkind to any building. In the short term, at least, it’s also more likely that a homeowner would have to replace big-ticket...

4 Ways to Ensure a Smooth Closing

Buying a house is a thrilling experience! But before you can cross the threshold, you have to get through the closing…which, unfortunately, can be a confusing and stressful process for many. While every homebuyer’s situation is different, there are some steps everyone can take to make sure the closing goes as smoothly as possible: Have cash available. Make sure you have extra cash that is easily accessible well ahead of the closing. You will need the cash to pay some of the closing costs, and be sure to build in a 10 percent buffer for final costs that come in higher than estimates. Have all your documentation ready to go. Ask your lender and real estate agent to provide you with a list of every piece of documentation you will need for the closing. Make sure it is complete and gathered ahead of closing day, so that you have time to double check and troubleshoot as needed. Preserve your credit score. Keep in mind that your loan approval was based on your credit score at the time you signed the purchase agreement for your home. If you’ve taken out any new loans or debt since then, such as a credit card or car loan, this could affect your credit score and jeopardize the home loan. Wait to make any large purchases until after the closing, and make sure you’re paying everything on time. Keep your employment steady. Don’t change jobs or decide to quit and start your own business prior to closing. Keep your employment record and income steady. Settle the inspection. Review the inspection and make sure you are satisfied with the...