Posted by JoAnn M. Drabble on 1/31/2018

1. Buy for the long run. Assume youíll own your home for at least five years.

A home is a significant investment, not to mention a linchpin of stability. According to the Zillow Group Consumer Housing Trends Report 2017, the majority of Americans who sold their homes last year had lived in their home for at least a decade before selling.

Some are even staying for the long haul. Almost half (46 percent) of all homeowners are like me ó living in the first home we ever purchased. In short: Buy a home you want to live in ó one equipped (or ready to be equipped) with the features and space you need, both now and in the future.

2. Buy to improve your life, not to speculate with your money.

Your home is more than a financial investment; itís where you sleep, eat, host friends, raise your children ó itís where your life happens.

The housing market is too unpredictable to buy a (primary) home purely because you think it will net a big short-term financial return. You will most likely be living in this home for several years, regardless of how it appreciates, so your first priority should be finding a home that will meet your needs and help you build the life you want.

3. Focus on whatís important to you. Donít be distracted by features you donít need.

Todayís housing market is short on inventory, with 10 percent fewer homes on the market in November 2017 than November 2016.

So, focus on finding a home you can afford that meets your needs ó but donít get distracted by shiny features that might break your budget. Nice-to-have features often drive up the price tag for things you donít particularly value once the initial enjoyment wears off.

Make a list of your basic needs, both for your desired home and for your desired neighborhood. Stick to finding a home that meets these needs, without buying extra stuff that adds up.

4. Determine a budget and stick to it. Donít look at houses above that budget.

Itís important to set a budget early ó ideally before you even start looking at homes. In todayís market, especially in the more competitive markets, itís incredibly easy to go over budget ó 29 percent of buyers who purchased last year did.

The most common culprit? Location. Zillowís data indicates that urban buyers are significantly more likely to go over budget (42 percent) than suburban (25 percent) or rural (20 percent) buyers.

Thereís nothing inherently wrong with that. Local schools matter, and psychologists tell us that a short commute improves your life. But be realistic about your local market and about yourself. Know what youíre willing to compromise on ó be it less square footage, home repairs or a different neighborhood.

5. A 20 percent down payment is ideal. If you canít afford that, consider a smaller down payment, or lower your budget.

If you can afford it, a 20 percent down payment is ideal for three reasons:

  • Buyers who donít put a full 20 percent down pay a premium, most commonly in the form of private mortgage insurance (PMI). This is less financially punishing than it used to be, given todayís low mortgage rates. A monthly mortgage payment (with PMI) may be lower than a monthly rental payment in many markets ó but still.
  • Buyers who put more down upfront typically make fewer offers and buy faster than those who put less down. Zillow research found that buyers with higher down payments make 1.9 offers on average, compared to 2.4 offers for buyers with lower down payments (after controlling for market conditions).
  • A higher down payment reduces your financial risk. You donít want to owe more money than your house is worth if local markets dip when you need to sell.

6. Keep a six-month strategic reserve after down payment. Stuff happens.

While a down payment is a significant expense, itís also important to build up a strategic reserve and keep it separate from your normal bank account.

This reserve should cover six months of living expenses in case you get sick, face an unexpected expense or lose your job. A strategic reserve will not only save you from financial hardship in the event of an emergency but also provide peace of mind.

When we accumulated a strategic reserve, my wife and I finally felt ready to build for our future. Without it, we were living from paycheck to paycheck, anxiously managing our cash flow rather than saving or budgeting.

7. Get pre-approved, and if you want to avoid uncertainty down the road, stick with a boring 30- or 15-year fixed-rate mortgage.

The pre-approval process requires organizing all your paperwork; documenting your income, debt and credit; and understanding all the loan options available to you. Itís a bit of a pain, but it saves time later. Pre-approval also shows sellers that youíre a reliable buyer with a strong financial footing. Most importantly, it helps you understand what you can afford.

There are a variety of mortgage types, and itís important to evaluate all of them to see which is best for your family and financial situation. Those boring 30- and 15-year mortgages offer big advantages.

The biggest is locking in your mortgage rate. In short: A 30-year fixed mortgage has a specific fixed rate of interest that doesnít change for 30 years. A 15-year fixed mortgage does the same.

These typically have lower rates but higher monthly payments, since you must pay it off in half the time. Conventional fixed-rate mortgages help you manage your household budgeting because you know precisely how much youíll be paying every month for many years. Theyíre simple to understand, and current rates are low.

One final advantage is that they donít tempt you with a low initial payment to buy more house than you can afford.

8. Comparison shop to get the best mortgage.

Though a home is the biggest purchase many of us will ever make, most home buyers donít shop around for a mortgage (52 percent consider only a single lender).

I certainly didnít. This did save me some annoying phone calls and hassle, but it cost me $40 or $50 every month, for years. The difference of half a percentage point in your mortgage rate can add up to thousands of dollars over the lifetime of the loan. Itís important to evaluate all the available options to make sure youíre going with the lender who meets your needs ó not just the first one you contact.

The three most important factors to buyers are that the lender offers a loan program that caters to their specific needs (76 percent), has the most competitive rates (74 percent) and has a history of closing on time (63 percent).

9. Spend no more than a third of your after-tax income on housing (unless you live in an especially pricey market).

Itís better to regret spending too little on your home than spending too much. One-third of your after-tax income is a manageable amount. This isnít always possible if you live in a place like San Francisco or New York, but itís still a good yardstick for where to be.

10. When getting ready to buy, always be willing to walk away.

Buying a home is a time-consuming, stressful but ultimately rewarding endeavor ó if you end up closing on a home that meets your needs. But itís important to manage your expectations in case you donít immediately find a home you can afford with the features you need.

Always be prepared to walk away if the sellers donít accept your offer, the home doesnít pass a rigorous inspection or the timing isnít right. Hold fast to your list of must-haves, stick to what you can afford and donít overreach or settle.

Itís no tragedy to miss out on any particular house. Remember that youíre playing the long game. You want to be happy 10 years from now.





Posted by JoAnn M. Drabble on 1/23/2018

Let's face it Ė no one wants to deal with a long, arduous homebuying process. Fortunately, we're here to help you simplify the process of acquiring your dream residence.

Now, let's take a look at three tips to ensure you can enjoy a hassle-free home shopping experience.

1. Consider What You Want from Your Dream House

What separates an ordinary house from a dream residence? The answer to this question varies depending on the homebuyer, and how you answer the question may dictate your homebuying success.

If you enter the housing market with a list of home must-haves, you'll be better equipped than other property buyers to streamline the homebuying process. Thus, you should think about your home must-haves and wants closely.

Differentiate home must-haves from wants Ė you'll be glad you did. For example, if you have kids, you may need to find a house that's located near top schools. On the other hand, you may want to own a home with a swimming pool. But if you find a top-notch house that offers plenty of great features but lacks a swimming pool, you might not shy away from submitting an offer on this residence.

2. Get Pre-Approved for a Mortgage

If you enter the real estate market with a mortgage in hand, you should have no trouble finding a house that won't force you to break your budget.

To get pre-approved for a mortgage, you'll want to meet with local banks and credit unions. These lenders can outline the mortgage approval process and provide you with a variety of mortgage options.

Furthermore, if you have mortgage questions, banks and credit unions are available to provide expert responses. These lenders employ friendly, knowledgeable mortgage professionals who can help you make an informed mortgage decision.

3. Work with a Real Estate Agent

When it comes to buying a house, it pays to receive comprehensive assistance. Thankfully, real estate agents are available in cities and towns nationwide, and these housing market professionals can help you acquire your dream house in no time at all.

A real estate agent understands the challenges commonly associated with buying a home. However, this housing market professional also knows exactly what it takes to overcome myriad homebuying challenges.

For instance, a real estate agent will negotiate with a seller's agent throughout the homebuying cycle. By doing so, a real estate agent can help a buyer get the best price on a residence without the hassle of a stressful negotiation.

Let's not forget about the extensive homebuying expertise that a real estate agent possesses, either. A real estate agent understands all stages of the homebuying process and is happy to share his or her insights with a property buyer. Therefore, if you ever have homebuying questions, a real estate agent is ready to respond to them.

There is no need to deal with an anxiety-ridden homebuying process. Take advantage of the aforementioned homebuying tips, and you can keep things simple as you go from homebuyer to homeowner.




Categories: Buying a Home   buying tips  


Posted by JoAnn M. Drabble on 1/16/2018

If you plan to buy a house and want to achieve the optimal results, you should perform a home inspection. In fact, there are many reasons why you should allocate significant time and resources to conduct an in-depth house inspection, and these include:

1. You can gain unprecedented insights into a home's condition.

Although you might have fallen in love with a house when you first saw it, a home inspection may make you rethink your decision to purchase a residence. To better understand why this may be the case, let's consider an example.

If you conduct a home inspection and discover a wide range of problems with a house, you have a tough choice to make. In this scenario, you can continue with a home purchase as planned. Or, you may be able to make a viable argument that a seller should perform assorted house repairs or reduce his or her sale price based on the inspection results.

Ultimately, a home inspection provides you with insights that you may struggle to gain anywhere else. And if you perform an extensive home inspection, you may reap the benefits of this evaluation for years to come.

2. You can avoid the risk of paying too much to acquire your ideal residence.

As a homebuyer, it is important to do everything possible to get the best price on a house. But even if you conduct real estate market research, you risk spending too much on a house if you ignore a home inspection.

With a house inspection, you can learn about various home problems, along with the costs associated with such issues. Then, you can use this information to determine whether your initial offer is sufficient, or whether you should request a reduced home price based on a residence's condition.

3. You can limit the possibility of costly home repairs.

Thanks to a home inspection, you can identify home issues that otherwise may lead to costly repairs down the line. You then can use this information to decide whether you can complete myriad home repairs on your own, or whether professional support is needed to perform house improvements. And if you are overwhelmed by the costs associated with many potential home repairs, you can always walk away from a home sale at this time.

Clearly, there are many reasons to perform a home inspection before you finalize a house purchase. If you hire an expert real estate agent, you can receive plenty of support as you prepare for a home inspection too.

A real estate agent is happy to put you in touch with the top home inspectors in your area. Plus, a real estate agent will attend a home inspection with you and is ready to provide guidance throughout the evaluation. Perhaps best of all, a real estate agent can meet with you after a house inspection, go over the inspection results with you and help you make an informed decision about whether to proceed with a home purchase.





Posted by JoAnn M. Drabble on 1/9/2018

You may think of downsizing as something that makes sense when you have an empty nest. Larger families do, of course, need more room. Downsizing can also be financially strategic and rewarding for you and your family if you have the opportunity to do so.


How Much Is Your Home Worth? 


There comes a point in your life when the amount of money that your home is worth is very important. Maybe you need the money for retirement and are looking to move to a cheaper city or state. Maybe itís time for you to pursue your goals and dreams. Whatever the reason, your home is a very large asset.  


If you downsize, youíll have a bit more money available to invest for your future. You may even consider buying an investment property. If all of your money isnít tied up in a home, youíll have a bit more freedom to do other things with your money.


A Smaller Home Means Smaller Expenses 


When you downsize your home you end up with much lower expenses for your housing. Youíll save big on both utilities and home maintenance. Youíll be surprised as to how much extra cash youíll have each and every month that youíll be able to use for other things like investing, travel, or other expenses. Youíll have the ability to do things beyond simply achieve that one dream goal of home ownership. 


What If You Donít Already Own A Home?


Thereís a lesson to be learned here for renters as well. If youíre getting ready to buy a home, you may want to think small. A smaller home that can suit your needs will allow you to save thousands of dollars over the life of the mortgage on your home. Remember that a mortgage payment is more than just the cost of the home. Youíll need to include things like taxes, insurance, mortgage insurance, heating, electricity, and more. The smaller the house that you buy, the less all of these things will cost. Think of what you could do if you invested that extra money that you saved on all of these things each month. 


What Would You Do With The Money You Save?


Having a big, beautiful home is a fantastic goal to achieve. You may have other dreams that you want to pursue in addition to owning a home. While downsizing isnít for everyone, many people use the money they save to do some pretty incredible things like:


  • Travel
  • Go back to school
  • Buy a vacation home


The Negatives Of Downsizing


If you move into a smaller home, there are a few drawbacks. For one, youíll have less storage and will actually need to downsize your amount of belongings as well. Youíll also have less room for visitors if hey come to stay. If grandkids frequent your home, you may be hesitant to sell and find a smaller place. It may also be difficult to find what youíre looking for at a certain price in a specific area. Think carefully before you decide to downsize and see if it has the right benefits for you.





Posted by JoAnn M. Drabble on 12/26/2017

If you want to buy a terrific house at a budget-friendly price, it generally is a good idea to plan ahead as much as you can. In fact, with a homebuying strategy in place, you can boost the likelihood of a fast, seamless homebuying experience.

Now, let's take a look at three tips to help you craft a successful homebuying strategy.

1. Think About Your Homebuying Goals

Do you want to live in a warm-weather region? Or, would you prefer to buy a house in a city or town where you can experience all four seasons? Regardless of where you want to live, you need to think about your homebuying goals and incorporate them into your homebuying plan.

Make a list of what you want to find in your dream house Ė you'll be glad you did. With this list, you can narrow your home search.

Also, it often helps to review your future plans as you put together a homebuying strategy. For example, if you intend to return to school, you may want to consider houses located near top colleges and universities. On the other hand, if you plan to settle down and start a family, you may want to pursue houses near parks and other family-friendly attractions.

2. Consider Your Financing Options

Buying a house likely will be impossible without home financing. Fortunately, there is no shortage of home financing options available.

Oftentimes, it is beneficial to meet with a variety of banks and credit unions. These financial institutions can teach you about myriad mortgage options and help you get pre-approved for a mortgage.

Once you have your home financing settled, you can incorporate a budget into your homebuying strategy. Then, you can check out available houses and avoid the risk of overspending to acquire your ideal residence.

3. Consult with a Real Estate Agent

Developing a homebuying strategy sometimes can be tough, particularly for those who are crafting a homebuying plan for the first time. Lucky for you, real estate agents are available nationwide who can help you complete a successful homebuying journey.

A real estate agent is happy to meet with you and discuss your homebuying goals. He or she also can review your homebuying strategy and offer expert homebuying recommendations.

Let's not forget about the support that a real estate agent can deliver during the homebuying journey, either. A real estate agent will set up home showings, keep you up to date about new houses as they become available and negotiate with a seller's agent on your behalf. Perhaps best of all, a real estate agent will help you minimize stress throughout the homebuying journey and ensure you can purchase your dream home in no time at all.

If you want to get the most out of the homebuying journey, creating a homebuying strategy is a must. Take advantage of the aforementioned tips, and you can craft a successful homebuying strategy.




Categories: Buying a Home   buying tips  




JoAnn M. Drabble