A Nice Home Or A Nice Neighborhood: Which Matters More?

When you start shopping for a home, you probably have a very specific image of what you would like that home to look like.  You probably also see the perfect neighborhood surrounding that perfect home.  Every buyer sets out with an image of the house they want to own, but in reality compromises are often necessary in order to stay within your budget.

Compromising On The House

There may be certain things that are non-negotiable when it comes to your new home, such as the number of bedrooms or a two-car garage.  But as you take a look at the homes that are within your budget, you may discover that it is not likely you will get everything on your wish list.  But the great thing about owning a home is that you have the power to remodel it at any time.  Once you are in your new home, you can renovate or even add on if necessary to create the home you really want.  And if you have managed to stay below your budget, you will even have the extra money each month to make some of those changes.

Compromising On The Neighborhood

So you’ve found the house of your dreams, but the neighborhood isn’t precisely what you were hoping for.  Too much traffic, some houses that are becoming run down, or many other issues can mar the area your house is in.  In most cases, you will have to accept that you cannot change the neighborhood, and this means that you have to decide if the problems are things you can live with or not.

In some cases, buying in a run-down neighborhood can be a strategic move.  If many people are buying up the houses and improving them, then your home might one day be worth a lot more.  However, you must realize that this is a risk and it might not work out that way.

Another thing to bear in mind is that if you choose to buy the nicest house in the neighborhood, you may have trouble selling it down the line.  If other houses in the area are available for less, why would anyone buy your expensive house to get into the area?

So Which Matters More?

In the long run, when it comes down to choosing between the right house and the right neighborhood, you should choose the right neighborhood.  While you can change your house for the better, you can’t count on your neighborhood changing; in fact, it might get worse.  So choose the best neighborhood you can afford even if the house there isn’t perfect.

 

When Is The Right Time To Reduce The Price

Every homeowner must set an asking price when listing their home on the market, but what happens when you don’t receive any offers?  Just as it’s important to know when it’s time to sell, it’s important to recognize the right time to reduce the price.

Supply & Demand

If a lot of homes are currently listed on the market or your home is overpriced, it may be time to consider a price reduction if you hope to stay competitive.  If five different stores sold your favorite soda, what would motivate you to buy from one over the others?  If you are like most, the cost would be a leading factor.  The same is true with home buyers, who are looking to get the best value for their dollar.

Hurry Up & Wait

If your home has been listed on the market for what is considered to be a lengthy time for your area, it may be time to consider a price reduction.  This is especially true if you are in a hurry to sell, which may be the case if you are planning to purchase another house upon selling yours.  In some cases, a homeowner will make an offer on another house and that offer will be contingent upon selling their current home.  When this happens, the homeowner is likely to be in a hurry to sell so that they can honor the terms of their new agreement before it expires.  Real estate can often be a waiting game, but sometimes it may be necessary to hurry up the process, through a price reduction, if you need to complete the sale.

Market Value Fluctuations

We all know how the market fluctuates.  If you own real estate, property values can go up one year and fall the next.  If your house is currently listed and the property values have fallen, you may want to consider reducing the price in order to remain in the running with potential home buyers.  If your house is priced far above market value, most lenders would refuse to approve a loan for your asking price.  Having an appraisal would be one way to know how much your home is worth.

 

REALTOR® Recommendations

 

If you’ve hired a REALTOR®, you obviously trust him/her to guide you through the process of selling your home.  If your REALTOR® suggests a price reduction, it may be in your best interest to consider it.  Nobody knows the business like a real estate agent.  They know what buyers want and, in most cases, what they are willing to pay.  If you’ve trusted a REALTOR® enough to hire them, trust them enough to value their opinion.

 

Things Needed After Purchasing A Home

Now that you’ve signed all the paperwork and your loan is approved, it’s time to move in.  But wait!  Before you put your feet up, there are a few things that you will need in order to make your new house a home.

Locks

Regardless of whether you purchase a newly constructed home or one that was formerly owned by someone else, it’s important that you have the locks changed.  Everyone from REALTORS® and contractors to friends and family of the former owner may have a key, which is why getting new locks should be at the top of your list.

Furnishings

You can’t hang your hat without a hatrack, so don’t forget to add some necessary furnishings.  Some homes may include appliances and possibly even some furniture, but most homeowners prefer to decorate their house themselves.  After all, someone else’s taste in decor may not necessarily be the same as your own.  If you purchase from a furniture store, they will handle the delivery for you.  Otherwise, you can hire a moving company.

Appliances & Cookware

Even if your new home is equipped with appliances, you may still need to add a few items into the mix.  For instance, a coffee maker, toaster, microwave or blender may be items you want for your kitchen.  You will also need flatware, tableware and a quality dish drainer to hold your dishes that require the handwash method.

Tools

When you move into a new home, there will likely be some things to do that require the use of tools.  Whether you need to assemble furniture, a desk for your office or just need to tighten some bolts here and there, a good set of tools is a necessity.

Personal Touches

No home is complete without personal touches that represent the new owner’s taste, so don’t forget to include them on your shopping list.  Pictures, paintings, special window dressings, accent pillows, plants, decorative throws, accent rugs and bedding sets will create a custom interior that’s all about you.  Other things to consider include portable air cleaners, water filters, an answering machine, wastebaskets and a bathroom plunger.

Outdoor Décor   

If you like to entertain, equipping your backyard accordingly is a must.  Patio furniture, an outdoor grill, landscaping tools and garden supplies are essential to creating an outdoor atmosphere that your family and friends are sure to love.  Speaking of the outdoors, don’t forget to purchase a lawnmower and trimmer unless you live in a subdivision where lawncare is included in the maintenance fees.  If you live in an area that’s prone to snowfall, keep this in mind when shopping for maintenance supplies.

The best way to tackle a large list of necessities is to keep a pad of paper nearby and write down each item as you think of it.  Think about each area of your new home and do a mental inventory of what is needed.  There will always be new items to add to the list, but you will cover the basics with your handy checklist of necessary items for your new home.

 

Negotiating With A Buyer

Depending on the market in which you are selling, your position in the negotiations with a potential buyer can be either a very comfortable one or a difficult one.  In a buyer’s market, you might not have much wiggle room in terms of price and contingencies.  In a seller’s market, you might have a lot of room to negotiate.  Either way, there are a few things you should know going in.

How Low Will You Go?

Before you even begin negotiations with a buyer, you need to have a bottom line; this is the lowest price that you will accept for your home.  Your REALTOR® can help you to determine a realistic selling price for your home, but only you can decide what you are comfortable accepting.  Be prepared to turn down offers that are below that amount, no matter how much you want to sell.

Keep Your Cards Close

Potential buyers don’t need to know that you have already bought your new home and badly need to sell this one.  Keep that information to yourself and make sure your REALTOR® does, too.  When a buyer senses that you are anxious to sell, you will quickly find that you have lost negotiating power.

You do have to disclose any problems with the home that are already known, especially if there has been a home inspection and the issue was brought up.  You don’t have to tell them about repairs you have already made unless it helps your sale, such as a new furnace or a new roof.

Beyond The Money

While the amount of money you get for your home might be the most important thing for you, to the buyer there might be other items that can help seal the deal.  Try adding other incentives instead of going lower on your price when you counter an offer, such as taking care of some repairs or paying closing costs for the buyer.  There are plenty of methods your REALTOR® can help you with to come to an agreement with a buyer without sacrificing the bottom line.

Negotiating can be a tough process, but with a little help from a professional and some sound advice, you can get through it and get your house sold for a price you can live with.

 

Will You Qualify? What You Need To Get A Mortgage

If you are a first time homebuyer, navigating all the new information about homeownership, the home buying process, and mortgages can seem overwhelming.  If you are beginning the mortgage shopping process, but have no clue as to what information you’ll need and whether or not you’ll even qualify, here is some information that may make the process a little smoother.

Will I Qualify For A Mortgage?

There are essentially three things that lenders look at to determine whether or not you qualify for a mortgage.

Income Verification

When purchasing a property, all income of a homebuyer must be validated by a mortgage underwriter in order to receive a loan.  Income verification can be done using several types of documents such as a W-2 statement, paycheck stubs, or income tax statements that show proof of income. These documents usually will have to span a period of two years or more to show you have a history of a steady income.  Income proof can include such things as child support payments, disability payments, or income from the Social Security Administration.  These additional monthly payments can increase your potential to qualify for a mortgage, as well as the amount you will qualify for, but like regular income, must be validated in order to count.

Debt-To-Income Ratio

Another important factor in getting a mortgage will be your debt-to-income ratio.  This involves looking at your total debt load and monthly payments, including car payments, credit card debt, and any student loan debt.  If the ratio of debt exceeds 40 % of your income, you will likely have to pay off some debt before you will qualify for a loan.  In this case you may want to seek out the advice of a financial advisor to help with this process.

Credit History

The final consideration that lenders will take into account in determining whether you qualify for a mortgage is your credit history and score.  They will not only be looking for a strong history of on-time payments for all your debts, but also that you have already established credit.  You can arm yourself with this information by getting your free credit report from sources such as Equifax, so that you are able to check that it is accurate and up to date.

When getting a mortgage, being prepared with a little background research and all required documents will make the process simpler and less stressful.  Armed with this information, you will be able to get the best possible deal with a lender who is right for you.