Buying – Page 6 – Mel Foster Co Blog

Five Reasons To Buy Now Instead Of Spring

Posted on February 28, 2014

With housing prices and mortgage rates on the decline, now may be the best time to consider purchasing your new home. It may seem like a hassle to consider a major purchase and a move, especially during this year’s exceptionally brutal winter, however there are several reasons why waiting it out might not be in your best interest.

Rising Interest Rates

According to Freddie Mac, Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association, 30-year mortgage interest rates are projected to be over 5% by February 2015. This increase brings interest rates almost an entire percentage point higher than current market rates.

Dwindling Supply

Inventory in many regions is on the decline. Buyers in markets nationwide are beginning to find that their choices are becoming ever smaller, as the once large assortment of homes continues to decrease.

An Increase in Prices

Homebuyers will find that they are going to pay both a higher price and incur a higher interest rate if they wait until spring. In the long run, higher sales prices and interest rates could mean hundreds of dollars more in a monthly mortgage payment.

Home Ownership Creates Wealth

In a recent study, it was found that the net worth of an average homeowner was 30 times greater than the net worth of a renter. Whether you rent or own, you pay a mortgage. Would you rather pay down your own mortgage or your landlord’s?

What Buyers Want In A Kitchen

Posted on February 7, 2014

An updated kitchen can help you get top dollar from a buyer. This list tells you where to spend your remodel dollars to get the attention of buyers and your best return on investment.

Professional grade stove

Look for options like a flat griddle or a cooktop for a searing pan or wok. Even if buyers don’t cook, nothing says quality in the kitchen like a beautiful, high-end stove.

Premium countertops

Granite still reigns supreme, but quartz is becoming popular as well. With a quartz product, like Caesarstone, you get the appearance of granite without the upkeep.

Hardwood floors

Hardwood and tile are popular in the kitchen. If you are considering a flooring change, stay away from linoleum and concrete. These products are least popular.

Stainless appliances

Stainless is still the finish of choice. Investing in stainless appliances that will stay with the home when you sell is a better choice than buying less expensive white or colored appliances.

Five Tips For First Time Buyers

Posted on June 6, 2013

Say goodbye to throwing away rent money every month and hello to owning your own home. It’s an exciting time in your life and following a few simple tips can make it a rewarding experience.

1. Know what you can afford.

Gather one year’s worth of your household expenses. Include credit card payments, loans, auto insurance, groceries, utilities and entertainment expenses for each month. All money that goes out each month needs to be tracked, even that $4 coffee once a week. Figure your monthly take home pay, minus the list of expenses, and that gives you a ballpark figure of what you can afford to spend. But remember, this includes your monthly mortgage, taxes, insurance and maintenance. Be sure to leave a cushion for emergencies.

2. Get pre-approved.

This step includes having lenders scrutinize your credit history and score, so make sure your credit history is accurate before this step. Read our blog, How To Prepare For Pre-qualification, for help in getting ready for this step. (include hyperlink to Dec 11 blog article, http://www.melfosterco.com/blog-detail.html?id=8)

3. Make a want vs. need list.

Set realistic priorities and make clear distinction between what you really need versus what you want. Your need list includes things you cannot live without and will be different for each person. Commute time and number of bedrooms usually fall into the need category. Stainless appliances could be added in the future, so they fall into the want category.

4. Scope out the hood.

Gather information about taxes, schools and crime rates from the neighborhoods you are considering. Take a drive through the neighborhood at night and ask yourself, “Would I feel comfortable walking alone at night in this neighborhood?” If you see neighbors outside during one of your drive bys, stop and ask about the area. Find out if there is a dog that barks all day, a loud motorcycle that starts at 5 am or neighbors who like to have loud parties well into the night.

5. Find a trustworthy home inspector.

It’s wise to always have a home inspection before you buy. There could be dangers hidden behind walls, even in new construction. It’s always better to know about potentially costly repairs before you buy a property. You can also use that the home inspector finds as leverage when submitting an offer. Sellers are often willing to fix issues before you move in as part of the sales agreement.

What’s hiding behind those walls?

Posted on March 4, 2013

A well-staged house might be hiding a dirty little secret. Black mold. Fire damage. Shoddy home improvements. Pet stains below the carpet. You can’t always tell the true condition of a home just by walking through, but it’s hard to hide damage from a home inspector.

If you are buying a home, getting a home inspection is one of the single-most important “checks” you need to conduct to make sure the home is safe and secure. An inspection can be several hundred dollars, but uncovering what lies within before you own the house has several advantages.

Peace of mind – you’ll know moving in the actual condition of your new home.
Negotiation tool – if there are issues that need to be corrected, you can lower your offer price or ask the seller to fix the problems prior to closing.
Easy out – if the inspection reveals issues that are too big or unsettling, you can opt out of buying the house.
Plan for the future – the inspection may reveal minor updates that don’t pose safety issues that you may be able to address down the road.

The inspector will take several hours to fully inspect a home. You may be able to be in the home while the inspector works. If not, you should receive a detailed report that includes plumbing, electrical, mechanical and roof analyses. You inspector can usually tell you how many years you can wait before replacing a roof or major appliances or mechanicals including hot water heater and air conditioning unit. You might also be required to have a termite inspection.

Purchasing a home is one of the biggest financial investments you’ll make. Take the extra step to have an inspection and protect yourself from moving into a money pit.

Go In As A Winner

Posted on February 18, 2013

Making an offer is a huge commitment and you need an agent on your side to come up with terms and an offer price. You might know how much house you can afford, based on your loan pre-approval, but knowing how much you should pay is a different story.

Your agent is an expert in local market conditions and has data to help you settle on a fair offer price. Reviewing comparable properties that have sold in the neighborhood is a solid tool to determine your offer price. This information is readily available to your agent.

Sellers have a reason for wanting, or needing, to sell their home. By asking the right questions during an open house, you can get a good feel for what will motivate the seller to accept your offer. Your Mel Foster Co. agent can help you prepare questions in advance to determine if price, timing or contract terms are most important to the sellers. This knowledge will give you leverage when negotiating.

Once you make the offer, it is customary to leave earnest money with the seller or seller’s agent. In a seller’s market, the buyer should put down a solid deposit to entice the seller to accept their offer. On the other hand, if it’s a buyer’s market, a larger earnest money deposit may prompt the seller to accept a lower purchase price.
Your agent is your advocate, looking out for your best interest to make sure you don’t overpay for a property or agree to terms out of fear of losing the house of your dreams. Rely on your agent to make sure you come to the table with a winning offer the sellers will accept.

How to prepare for pre-qualification

Posted on December 11, 2012

You’re ready to commit to a mortgage. So what’s the next step? Either before you start making plans to find an agent or at the same time, you need to meet with your bank or lender. Pre-qualification is the very first step in determining how much house you can afford and how much a lender will be willing to loan you. There is typically no cost to pre-qualify but there is also no commitment from the lender at this point to loan you money. It’s a dry-run of the pre-approval process and will help you set important spending boundaries.

Get a handle on your financial situation and gather up all the paperwork your lender will likely want to see. Be prepared to show these documents: tax returns from the last two years; all W-2 tax forms from the last two years; all account statements, such as credit card, checking and saving accounts; three most recent pay stubs; a letter of promotion notice, if this applies to your job situation; CDs, 401k, 457 and all other retirement account statements; and identification, such as drivers license.

The information you gather can be used to determine how much house you can afford. Click here to use the online calculator.

Once you meet with your lender, he or she will determine if you pre-qualify and will explain the terms of the loan, closing costs and other inspections that may be required to secure a loan at that institution.

The next step in the homebuying process is getting pre-approved by the bank. This is a tentative commitment from the lender for mortgage funding and will be explored in greater detail in future blog posts.