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How Buyers Should Prepare for Their Final Walk-Through | Zillow Porchlight

The final walk-through in real estate was designed so that the buyer can confirm the home is in the same condition as when they made their offer and had the home inspected. Its also an opportunity to make sure the seller has actually vacated.

From time to time, a buyer and seller will have negotiated any number of fixes during escrow. The walk-through gives the buyer a chance to make sure all the agreed-upon work has been done to specifications, and that everything is in working order.

Sometimes, buyers are so excited to close that they quickly whisk through the walk-through without taking time to inspect the property. This can lead to small issues once the buyers take ownership. On the other hand, the final walk-through can raise both positive and negative emotions during this final part of the sale process.

It’s smart to take the walk-through seriously. Don’t see it as simply checking a box.  You should run all the faucets and check for leaks. Flush the toilet bowls, open every window and close it and make sure the appliances work.

Here are some tips for buyers to help complete a smooth and effective walk-through.

Don’t do the walk-through the day of closing

A walk-through can uncover repairs that need to be made, but that you didn’t know about before. If you do the walk-through the same day as the closing, there may not be time to get problems remedied.

It’s not uncommon for two walk-throughs to happen. The first identifies some issues for the buyer, and the second makes sure those issues were addressed.

The alternative is to push the closing back to address the issues.  The problem here is that your lender may not have approved a delayed closing. It’s better to hammer out any issues in advance.

Use your mobile phone to check the outlets

Plug a phone into all of the outlets to make sure the electricity works. You want to avoid moving in all your stuff, only to realize some outlets don’t work, and you lack light in a bedroom.

Bring your phone and charger to the walk-through and test all the outlets. It’s quick and easy.

Be on the lookout for the sellers’ leftover belongings

Sellers are notorious for leaving junk behind, so take the time to check the garage and attic, and under the deck. The sellers may just assume you want their old paint cans or a propane tank for a future grill.

In fact, they should leave the place completely empty. Some left-behind items, such as the paint, can be toxic or require special provisions for disposal. For example, one seller left behind all kinds of used oil that needed to go to a certain, state-approved car repair shop to be disposed of properly. These unwanted items become yours after you close.

Be emotionally prepared for a surprise

Buyers often fall in love with a home that’s full of furniture, art and belongings. They see it as a home, and remember a warm feeling.

Fast-forward to the close of escrow and you’re faced with an empty home, which can feel cold, sterile or hollow.

Buyers are often surprised by how they feel entering an empty home. Not only is it absent any furniture and “stuff,” but sometimes an empty home shows its imperfections, too.

The sun may have slightly bleached floors, showing the outline of a rug. There may be carpet stains or holes in the wall from a flat-screen TV or paintings. An empty home tends to show poorly, so prepare yourself before the walk-through.

The journey toward homeownership is often a long one, filled with lots of excitement and ups and downs. The final walk-through is one of the very last steps of what could be a multiple-year process.

Consider the walk-through in advance and prepare for it mentally, emotionally and physically. Know what you want to look for, have a checklist, and keep your emotions and feelings in check. Doing so will make for a smooth ride to the close of escrow.

Two Ways to Determine How Much House You Can Afford

Buying your first home is an exciting process, but it’s not just about finding the features you want. If you’re like most people, price plays a major role in your decision. After all, even if you feel confident that you can afford a property, you’ll still have to convince a lender.

All lenders have unique lending guidelines, but they usually include some of the same key benchmarks. Here are two metrics they’ll use to decide how large a loan to issue you:

1) Your monthly housing costs as a percent of your gross income

2) Your monthly housing costs and other debt repayments as a percentage of your gross income

Two ways of looking at affordability

Conservatively, your monthly housing costs should total 28% or less of your total gross income. By this measure, a single adult with a $50,000 annual salary, or $4,167 in gross pay per month, can pay housing costs of up to $1,167 per month. This includes payments toward your mortgage principal, interest, real estate taxes and homeowners insurance.

This is a pretty straightforward method. However, most people, especially young adults looking to buy their first homes, have additional debt obligations, such as student loans, car payments and maybe credit card debt.

Because of this, lenders tend to evaluate affordability by considering your other debt repayments, in addition to your monthly housing costs and income. The preferred ratio of monthly housing costs and any other debt payments to monthly gross income is generally 36% or less.

This second metric can paint a much more accurate picture of what a first-time borrower can and cannot afford from a lender’s perspective.

 

Different metrics yield different results

Let’s say Jane is single and makes $50,000 annually, or roughly $4,167 in gross income per month. Her monthly debt obligations are as follows: $300 toward student loans, a $470 car payment, and a $100 credit card payment. She wants to buy a house that would cost an even $1,000 per month.

She’d qualify for a mortgage based on the first metric. Monthly housing costs of $1,000 only equals 24% of her gross income, which is lower than the 28% target.

But when Jane’s other debts are factored in, she wouldn’t qualify. Her total debt repayments equal $1,870 each month, or almost 45% of her monthly gross income. This is almost 10 percentage points higher than the suggested 36% — and it’s why lenders almost always use the second metric in conjunction the first. Together, they provide a more comprehensive view of the borrower’s situation.

Options for the prospective homebuyer

Luckily, there are several options for Jane:

• She could look for a less expensive house. If she spent $650 per month on housing costs, she’d pay 36% of her monthly gross income toward housing and other debts — equal to the preferred ratio.

• She could make a larger down payment to decrease her monthly mortgage bill, if she has enough money saved.

• She could wait to purchase a home until after she pays off her car and credit cards. This would put her mortgage and other debt at 31% of her monthly gross income.

Of course, some lenders will provide loans that are a bit outside of your budget, which is why it’s important for potential homebuyers to stay disciplined and buy only as much home as they can afford. Buying a home can be a very emotional process, especially if you’ve never done it before. By carefully thinking about your current financial situation before you start shopping, you can control some of these emotions and make the right call about the properties you view.

Now that you know two of the most popular metrics lenders use to approve loans, you can more confidently pursue your piece of the American dream with the purchase of your first home. Cheers!

You Don’t Need a Home Inspection, Plus 6 More Things Real Estate Agents Should Never Say – Real Estate 101 – Trulia Blog

If your agent says one of these phrases, they could be leading you astray.

There are times in life when you really should have just kept quiet. Like that time you asked when the lady at the grocery checkout was due (except she wasn’t pregnant). Or the time you asked your co-worker how her vacation was (not realizing she had been at a family member’s funeral). As these foot-in-mouth moments show, there are some things your real estate agent should never say to you when you’re shopping for a home for sale in San Antonio, TX.

Here are the seven things your real estate agent should never say to you. If they do? It might be time for a change.

1. “You don’t need a home inspection”

As in, don’t have anyone look over the house to make sure it’s OK to live in? Yeah, that’s a major red flag. No matter what type of home you’re buying — a condo, townhome, duplex, single-family — always, always get an inspection. “Every buyer has the right to have a home inspection,” says Rachel Hillman, owner of Hillman Homes in West Newton, MA. “Even if a home is new or the condo has exterior maintenance that is covered in the condo fee, there are benefits to having a home inspection. Buyers will learn how to take care of the property as well as understand the life expectancy of the systems in the house.”

2. “I read the contract for you, just sign on the line”

You can probably hear your mother whispering firmly in your ear right now: “Always read a contract before signing.” And she’s right. There’s no telling what things could’ve been snuck into the contract. “As real estate agents, we read a lot of contracts and work closely with attorneys, but we are not attorneys,” explains Hillman. “An agent should never tell a buyer to sign something that they have not read. This is probably the most expensive asset in their portfolio, and they should have attorney representation. Don’t sign a contract unless you have read the contract and had an attorney review it for you.”

3. “That smell will go away”

Don’t believe them: It won’t. “Real estate agents will say that a dog or cat smell will dissipate once the animals are removed, and that’s not the case,” says Caroline Blazovsky, a national healthy home expert and home inspector. “Urine can penetrate walls and flooring, leaving behind smells, and animal proteins can take years of cleaning to remove. Many people purchase a house and find they cannot live in the home due to animal proteins. This is more common than you think! Ducts need to be cleaned and flooring assessed to make sure that you are not going to encounter a problem once you move in.” Whether it’s pet smells or cigarette odor, if you’re set on the home, Blazovsky recommends negotiating duct-cleaning costs into the purchase price, as well as negotiating the cost of new carpeting, if needed.

4. “The house has city water, so you’re safe”

Not so, says Blazovsky. “Real estate agents often see a treatment system and think the water has been taken care of. Do not assume this. Have your water tested on any sale, city water or well,” she warns. “This is something you cannot change once you move into the home. Some houses have high chlorination byproducts, elevated chlorine levels, arsenic, lead, radiological, and chemicals in the water. Never assume the water is OK just because your real estate agent tells you it is city water.” Testing isn’t cheap — a water test will run you about $300 — but it’s much better than finding out the hard way that your water isn’t safe.

5. “I know you only want to spend a certain amount, but let’s look at these homes that are listed over budget”

Your real estate agent knows going into the home-search process how much you want (and can afford) to spend. So if they bring you a home that’s above your budget, be wary. “An agent must know and should respect a client’s budget — and be aware that even though the client may be approved for a higher figure, if the preference is for a less expensive property, those are the properties that should be shown,” explains Don Tepper, a real estate agent with Long & Foster in Alexandria, VA.

6. “I don’t do email”

Sure, they may be one of the kindest agents in town, but if they resist the use of technology when it comes to communicating with you and sending documents (especially if it’s your preferred method of communication), you should be concerned. Home sales today are very digital: You should expect to receive and sign documents electronically, and be able to have a short conversation with your agent via text if you prefer. “In a market where homes are selling quickly, an agent who can’t operate current business technology will not be able to ‘win’ the contract for you,” says Wendy Flynn, a real estate agent with Keller Williams College Station in College Station, TX. “This is especially true for a listing agent: 90% of homebuyers look for homes online first. If your listing agent can’t get your home online effectively to promote it, you are at a great disadvantage.”

7. “I’ve set up 20 homes for you to look at today, and we’re on a tight schedule. We can spend only 10 minutes at each home”

Hold your horses, cowboy! “Homebuyers need time to look closely at a home and process what they are looking at,” explains Flynn. “When you see too many homes at once, homebuyers — not to mention their real estate agents — cannot remember which house had the yard they liked or had the old appliances that would definitely need to be replaced. My max schedule is to view six homes across two hours. The only time I’ll make an exception to this is when a buyer is coming in from out of town and only has one or two days to look at properties.”

So You Wanna Buy a House? Step 5: Pick the Right One | Fox News

You’ve done your research, saved up for a down payment, and found a Realtor you adore. Now comes the next step in our weekly, step-by-step 2016 Home-Buying Guide: Find your dream house already!

This is the really fun part, although it does come with its own unique challenges. Even if you love the entire process of house hunting, the options can be overwhelming. Ranch or Colonial? Suburb or city? Small apartment or palatial townhouse? Built-in 40-foot waterslide or stand-alone 40-foot waterslide? It’s hard not to feel like you’re drowning in the possibilities.

To help winnow the myriad options to find the perfect place for you, heed these tips — and happy searching!

Have a long chat with your agent

Here’s the simple truth: Only you will ultimately know which home is just right for you; however, a good agent will have a better handle on the market. Not only is your Realtor keeping a constant eye out for newly listed homes you might love, but he can also quickly go through your wish list and help you understand what is (and what isn’t) realistic.

 

So be sure to tell your agent not only what you’re looking for, but why you’re moving, too.

“Are [you] downsizing? Moving closer to work? Accommodating a growing family?” asks Nathan Dart, a Realtor in Rockville, MD. The reason it all matters: A savvy Realtor will point out things you might not have considered — such as the importance of a one-story home if you’re near retirement and planning to stick around for the long haul.

Don’t worry about timing

Patience is difficult. You want your new home right away. Waiting for something to fall into place can feel like endless purgatory. But that doesn’t mean you should rush the hunt.

“I’ve had clients who spend years in house-hunting mode,” says Gretchen Koitz, a Realtor with The Koitz Group in Bethesda, MD. Not that this is necessarily a good thing either.

Certainly there’s nothing wrong with finding a great home right away. But it’s best not to prioritize timing above all else unless it’s absolutely necessary (during a relocation, for example). Koitz says the idea of purchasing one of the first homes they see can be “very unsettling” for buyers. “They somehow think they’re not doing their due diligence if they don’t look for a predetermined amount of time,” she says. “Since we never know what’s coming on the market, we also never know when ‘your’ house will show up.”

See beyond the decor

Most people are terrible decorators, and you’re allowed to be turned off by an ugly home. But you shouldn’t let stylistic choices affect your judgment of what a home could be. As Koitz puts it, “‘I hate the red paint in the dining room’ is not a valid concern.” Look beyond those garish drapes to the bones beneath. Is the picture window hidden behind them stunning? Is the hardwood floor good quality, despite the stained rugs layered on top? Think of the long term. Remember, the current owners’ raggedy stuff will leave with them.

Bring a camera

When you’re shopping for homes, remembering which one had the dark parquet floor and which one had the wall-to-wall shag can get more confusing than you might think. After a dozen showings, recalling exactly what bothered you so much about the bathroom of one home (perhaps it was the toilet facing the shower?) requires an impeccable memory and keen attention to detail. So skip the mental heavy lifting by snapping pics of every room you see. If you want to go above and beyond, consider categorizing them on a computer by house and room.

Tune in to how you feel

Not to get too woo-woo spiritual about it, but house hunting isn’t just about what you see. It’s also about how you feel.

“A big part of home buying is pure emotion,” says Koitz. And this swirl of feelings may surprise you, drawing you toward homes you never thought you’d love and away from ones that hit every box on your checklist.

“Agents have a secret saying, which is that ‘Buyers are liars,’ says Koitz. “We don’t mean that buyers really mean to lie, but that what they think they want in a home often goes out the window when emotion kicks in.”

Don’t forget your must-have list, but don’t feel bad about skipping something you thought you wanted. A wonderful house without a his-and-her bathroom is still a wonderful house — you just might have to shuffle your expectations.

“It’s important for buyers to keep in mind that there is no such thing as the perfect house,” Dart says. “At the end of the day, you’ll find some place that hits the high notes and that includes the things that were most important to you.”

5 Quick and Easy Ways to “Green” Your Home for the Winter

For many homes, utility usage is the primary culprit when it comes to increased energy bills. If you’re searching for a way to lower your monthly utility costs, consider sustainability. While going completely green is tricky, there are several simple (and completely DIY-able) ways to lower your energy consumption.

 

Photo courtesy of Danoweb Studios, Inc. in Tipp City, OH

#1 Install a Programmable Thermostat

 

Programmable thermostats are among the easiest and most cost-effective methods of reducing energy usage. Many are accessible via a smartphone, so you can set timers and schedules to ensure you’re not wasting energy while you’re away from home. If you’re curious about a programmable thermostat, hire a home energy auditor to evaluate your needs. Based on your home’s arrangement and past usage, an inspector will be able to suggest the appropriate model.

 

#2 Prevent Air Leaks

 

During winter months, faulty caulking around windows and doors can lead to a sizeable loss of warm air. By securing any cracks or holes around your windows and doorframes you can expect your monthly heating bills to drop considerably. Caulking is typically a DIY project, but you can hire a professional if you don’t have the time yourself.

 

Photo courtesy of Johnny Taylor, Inc. in Warsaw, NC

#3 Insulate the Water Heater

 

Because of the location of your water heater (usually somewhere impacted by cold weather — garages or basements), it could be working overtime to keep your water warm. To reduce the hot/cold cycles, consider the installation of an insulation kit. Similar to your home, insulating your water heater will help it hold in warmth for a longer period of time. If you would prefer a pro to tackle this job, local plumbers are available to help with the install.

 

Photo courtesy of Distinctive Designs By Janelle, LLC in Sterling, VA

#4 Install Window Treatments

 

Window treatments can significantly impact the energy efficiency of your home. Exposing rooms to sunlight in the daytime while utilizing plantation shutters or heavy drapes at night will dramatically cut down on heat loss. Window treatments are also an easy way of updating the look of your home without over-extending your budget.

 

#5 Check and Repair Roof Damage

 

Roof damage is a major heating and cooling headache. Contact a roofing professional to inspect your roof and repair any missing shingles, cracks or additional problems. A roof inspection will also identify any small issues before they become larger problems — especially if you’re expecting snow.

 

Conclusion

 

Adopting an attitude of sustainability concerning your home is a smart move if you’re trying to cut costs (and carbon emissions). While planning your green transition, make sure to schedule the necessary home inspections. Having a professional evaluate your home will ensure that your steps toward sustainability (regardless of size of cost) are as calculated as they are practical.

10 Tips to Avoid Getting Burned by a Kitchen Remodel – Trulia’s Blog – Life at Home

Before you start cooking up a kitchen remodel plan, consider these helpful suggestions.

When it comes to making magic happen during a kitchen remodel, there are oodles of options you can cook up. Which means there is a lot that can go wrong.

Before you take the hammer to your old kitchen, read these 10 tips to avoid getting burned on a kitchen remodel.

1. Don’t overspend

Consider the market and decide whether a low-, medium-, or high-end kitchen remodel makes the most sense. Costs can run the gamut from $2,000 for a simple paint-and-hardware upgrade to $50,000 if you’re installing expensive countertops and luxury appliances.

Evaluate neighborhood comps to keep from overspending (or underspending). You may not get your investment back installing travertine in your tiny starter, and let’s face it, you’ll never see Formica in a high-end home. So check out for-sale properties in your area before shelling out for high-end upgrades.

2. Avoid an identity crisis

Don’t try to remodel a ’50s ranch-style kitchen into a contemporary cooking space. All homes, however humble, are built in a certain architectural style. Work with it, not against it. Otherwise, you’ll spend too much money and time on a complete overhaul, and you’ll likely end up with a kitchen that looks out of place.

3. Keep the plumbing where it is 

Moving water and gas lines to reconfigure sinks, ovens, stoves, or dishwashers is extremely costly, especially in older homes. So keep any pipe-connected elements where they are — and keep some extra cash in your pocket.

4. Watch out for the wrong floor plan

If you do have the budget to rearrange appliances, make sure to keep your floor plan in mind. Does it follow the natural triangular traffic pattern between the refrigerator, stove, and sink? Is the dishwasher next to the sink? It should be. Otherwise, you create a mess every time you walk across the room with a dripping dish in your hand.

5. Don’t trash existing cabinets

If your old cabinets are quality wood and still in good working order, you’re in luck. This is one of the first things to check when sizing up a pre-remodel kitchen, since cabinet frames are the most expensive component of the entire space.

It’s quite simple to give salvageable cabinets a face-lift. Three common ways to repurpose cabinets include: adding new doors and drawer fronts, relaminating fronts and sides, or repainting.

6. Never DIY spray paint

Have the cabinets cleaned and lightly sanded, then hire a professional painter to spray them. Don’t try to DIY this one; a couple of cans of spray paint from the hardware store just won’t do the trick. A professional spray job can make ugly cabinets look factory-new. You can’t get the same look by painting or rolling the cabinets yourself.

7. Don’t scrimp on new hardware 

Home remodeling superstores carry a great selection of door hardware. Choose knobs and pulls that complement your architectural style, and don’t cut corners. It’s like a nice piece of jewelry — an added touch that makes the whole outfit (or room) work.

Don’t forget to remove and replace any old, painted-over hinges with shiny new ones. It may be time-consuming, but it’s very inexpensive, and it makes a huge difference.

8. Take advantage of free advice

Check out large home improvement centers for free, computer-based design services that help lay out your kitchen. Their professionals are at the leading edge of today’s decorating trends, and their services include one-on-one client assistance as well as in-home consultations, complete project management, and installation services.

9. Don’t mismatch appliances 

When buying new fridges, ranges, and dishwashers, stick with the same brand. Fortunately, appliance manufacturers have begun creating good-looking, low-priced lines with matching sets — giving your kitchen a designer look for much less. With a little research and some smart shopping, you can find affordable appliances that look very high-end.

10. Don’t forget to budget for sinks and fixtures 

Get the best possible faucet, one with a pullout spray attachment or a gooseneck with detachable head. It’s a necessity — and the difference between good and great is only $50 to $75. Stick to one consistent fixture finish since mixed finishes can look patchwork.

Tips for the Millennial homebuyer | Valley News

The youngest generation in the real estate market are those who were born between 1982 and 2004 and are known in today’s society as “The Millennial” generation. Typically, the era we are in now is the first opportunity this generation has had the opportunity to seriously consider buying their own home. Certainly, they are not taking the same approach as their parents and grandparents before them.

Never has a generation of first time homebuyers entered the market with the recent real estate recession fresh on their minds while carrying record high student loan debt and faced with high unemployment rates while the mortgage industry continues to make it more difficult than ever to pursue a favorable home loan. It’s no wonder that the Millennial Generation has not been so quick to jump on the home ownership train in pursuit of the American Dream!

As a generation, the Millennials have the unique position to have witnessed their parents and grandparents struggle with real estate, after buying their first home in their 20s and early 30s. They saw the frustration and despair as many lost family homes and fortunes as the economy headed south into a deep recession. It’s natural that many Millennials were soured on the whole idea of home ownership…but it shouldn’t.

The perfect time to buy

There are two conditions that effect every homebuyer – the price of the home and the price of money.

Home prices dipped to their lowest value somewhere around 2010-12. Since then, prices have slowly been increasing. Today there are still many affordable homes on the market, but prices are continuing to climb and it is unlikely, short of another economic disaster that prices will ever be this low again.

It’s important to remember that real estate is a long-term investment that has traditionally done very well for a lot of people in a lot of different circumstances. Real estate prices always seem to come back and flourish – based on the economic theory of ‘Supply & Demand.’ So long as you keep yourself in a good financial position and can avoid being reckless with your investment (borrowing against it and using your home as an ATM, for example) you should not have any problems riding out the ups and downs of any real estate market.

The other condition that will have a great bearing on the purchasing power of the Millennial homebuyer is the cost of money which translates into home loan interest rates. Today, even with the recent increases to the Prime Rate, interest rates are still in the range of historical lows.

Many Millennials will smartly only consider a home loan with an interest rate that is fixed for the entire term of the loan and not allow themselves to approach a slippery slope with low teaser rates that are certain to change in a few short years. Millennials see the variable rate loans as one of the big problems that forced many older homeowners from the family home earlier this century.

Seek advice

While Millennials have a command of all things Internet today – especially on their Smart Devices, they still need to consult with a professional real estate agent. For a young person who is seriously considering the purchase of a home, they have obviously reached a level of maturity and have come further along in life than many of your peers. Yet, with all of their wisdom they should still seek the assistance of a professional real estate agent to help them understand and grasp the entire home buying process. It’s important to find a real estate agent that not only understands your needs but has a strong grasp of the local neighborhoods, the school system (even if the buyer does not have children – or plan on it for some time – schools sell houses, so think ahead to the resale) and the demographics of the area being looked at for the new home.

Good real estate agents will have years and even decades of practical industry experience. They will have a firm grasp as what to do and what not to do when it comes to buying a home. A good real estate agent will know what options are available in the local housing market that will fit the needs of today’s Millennial homebuyer.

Along with local real estate knowledge it is important to find an agent that you trust. Use your gut to narrow down the field but take the time to interview at least three different agents from three different brokerages. Remember, the agent works for the buyer and they are not doing you a favor to help you find a home – they will be paid, by the seller for their expertise and service. Choose wisely.

One important note about real estate and real estate agent – All Real Estate is local, and your real estate agent should be Too! Please don’t fall into the trap of selecting an agent because they came recommended (or worse – you have a personal connection with) but live outside the area you want to live in. It’s true that every California real estate agent is licensed to sell any property in the entire state – residential, commercial, land, etc. – but for your needs you want a local residential specialist. Anyone else wants a commission and may not have your bet interest at heart.

Mentors

While your real estate agent will be legally responsible for the transaction and should have the most detailed information that is important there is nothing like having a mentor who has been through the experience and made their own mistakes and enjoyed their own successes. Perhaps a parent, grandparent of a colleague at work can share what they did right and what they did wrong. Many times the stories they share are dated and the facts may be off – but the experience is real and worth your weight in gold if it helps you avoid a pitfall or helps you find the perfect home.

Neighborhoods

Millennials, like no generation before them, have more information at their fingertips (on any topic they desire) and know how to easily access it. While the data that comes to them from the Internet is very important, there is no substitute for driving a neighborhood.

It’s not only the housing that should be inspected but take the time to check out the local school – sure, there is lots of data on the Web about every school, but is it astatically pleasing or covered in graffiti? Are there large grass fields for sports and play or is it nearly all asphalt and concrete?

What about the local grocery store? Do you like the butcher and the produce departments? Is there a good yogurt shop nearby? Coffee shop? Do you like the local movie theater and other recreational facilities?

What is important to you and do you like what you find within a reasonable walking/driving distance…or do you feel like you would have to leave the ZIP code to do your shopping?

There are a lot of different elements to picking out the right neighborhood – especially if it is one you may not be familiar with. Location is not only important to the Millennial buyer today but will be a strong factor when it comes to reselling the property and nothing is more important to the value of a home than its location.

Cost of ownership

While purchasing a home, the biggest expense is, of course, the purchase price. However, keep in mind that there are many other fees and expenses with buying a home that typically must be paid for at the time of service. This will include home inspection costs, appraisal fees, loan costs and many other nickels and dimes will be spent.

Your real estate agent should be able to provide you with a good estimate as to what the purchase expenses will be. Of course, once escrow closes and you own your new home, there undoubtedly be cosmetic issues (paint. flooring, appliances, etc.), decorating costs (perhaps some new furniture) and even landscape expenses that you’ll want to budget for.

Aside from your monthly mortgage payment (principal and interest) there is also property taxes and homeowner’s insurance. Utilities can be expensive and should be budgeted for before you buy. Of course, there will be ongoing maintenance issues with every home and need to be budgeted for.

Patience is a virtue

Millennials are not the only generation that want instant gratification – it happens to the best of us. You must realize that the process takes several months at best and may extend out six months to a year or even longer. There are many hurdles to overcome and until escrow closes almost anything can happen and set the process back. Purchasing a home is not for the faint at heart and should the process should be approached with persistence.

Take your time and don’t rush into a situation that makes you feel like your settling. While it is unlikely that what you end up with may not include every attribute of your dream home, it’s important to know what you are willing to compromise on and what you’re not. Don’t allow anyone to pressure you into jumping into something because you can. Slow down, continue to research and continue to take the advice of your real estate agent and mentors. Take the time to know and understand the buying process and you’ll be in a much better position to make a knowledgeable decision.

Parting thoughts

The process is a long and complicated one that only you are in control of. You can make as many offers on as many different homes as you are interested in. You can go through the negotiation process on several different homes (try to limit yourself to one at a time) without actually making the commitment to buy. You only get to hand the money over (fund a home loan) once – and only if you are happy with the property…so choose wisely and buy a home that will truly make you a happy Millennial Homeowner!

Mortgage Rates Retreat for 4th Week | Realtor Magazine

Mortgage rates continue to fall, with the 30-year fixed-rate mortgage now averaging well below 4 percent.

“The yield on the 10-year Treasury stabilized around 2 percent this week, and the 30-year mortgage rate dipped 2 basis points to 3.79 percent,” says Sean Becketti, Freddie Mac’s chief economist. “The recent market turmoil has given the Fed pause. As was universally expected, the Fed stood pat this week but kept its options open for a rate increase in March. … A hesitant Fed, sub-4-percent mortgage rates, at least for a little while longer, and strong housing fundamentals should generate a three percent increase in home sales this year.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 28:

How Has Buying a Home Changed Since Your Parents’ Time? – Real Estate News and Advice – realtor.com

Those who love babbling on about millennials’ narcissism, sense of entitlement, or ungodly love of selfie sticks are missing out on the big picture: These are the people forever transforming the world of home ownership.

Older millennials, in fact, are now the biggest group of first-time buyers. It’s a brave, new world! If you’re part of it and thinking about buying your own place, you might naturally turn to Mom and/or Dad for advice. Good call. But be aware that things have changed quite a bit since they bought their first home—you know, the one you grew up in, stealthily sneaked into at 2 a.m. as a teen, and finally escaped as an honest-to-God adult.

But exactly how much have things changed, really? To find out, we decided to compare the home-buying and ownership experience today with back when your parents bought their first place in the ’80s—a time when twee floral patterns were all the rage, “Sesame Street” was still on free TV, and Apple’s best-known product was … applesauce.

Let’s jump into the realtor.com® DeLorean and go Back to the Real Estate Future: 1985 versus 2015. Buckle up!

 

Fact 1: Millennials rule, but more buyers are older

Compared to the good (?) old days, Americans are delaying homeownership, just as they are delaying marriage. Sure, older millennials may be making their impact felt on first-time home buying, but the overall age of homeownership is steadily rising. The median age of home buyers was 33 in 1985, and now it’s 44, according to the National Association of Realtors®. Having a more mature career salary also helps in buying a home at today’s prices.

Fact 2: It’s not just Mr. and Mrs. Smith

Three decades ago, the home-buying club was almost exclusively married couples, who made up 81% of all owners. Now that number has declined to 67%; single females (15%), single males (9%), and unmarried couples (7%) are steadily on the rise.

Fact 3: Prices keep going up and up and up

Home prices have been steadily increasing, much to buyers’ dismay. Your parents probably paid around $80,000 for your childhood home in 1985; you’re facing about 1.75 times that price. NAR data show that the median sale price of existing homes was $222,400 in 2015.

Over the same time frame, household income increased 127% from $23,618 in 1985 to $53,657 in 2014 (the latest data available), according to the U.S. Census Bureau.

That combination of factors has led to low homeownership rates. In the third quarter of 2015, the Census Bureau reported that the homeownership rate, not seasonally adjusted, hit 63.7%—the lowest level since 1989. Stringent mortgage standards are another hurdle for would-be home buyers, says our chief economist, Jonathan Smoke.

Fact 4: Bigger homes, more bathrooms

In 1985, a typical home purchased was 1,610 square feet. That number has grown to 1,900 in 2015, according to NAR. At the same time, American families are shrinking, from 2.69 people per household to 2.54. (What does a 2.54-person household look like? We’ll save that for a future article.)

How do people make use of that extra space? More bathrooms, mostly. Say goodbye to the days when the whole family crammed into one tiny loo in the morning. Most for-sale homes on the market now have two bathrooms, and newly constructed homes are usually built with more than three bathrooms, according to the NAR and the Census Bureau. This is a positive development.

Fact 5: Luxe features are more plentiful, and disco is dead

The standard of living has improved over the years. Central air conditioning and dishwashers—things you can hardly picture your home, much less your life, without—only made it into half of households 30 years ago, reveals the American Housing Survey.

Aesthetics have also shifted. The ’80s taste for mauve is now a turnoff for home buyers, as are brass, track lights, and Laura Ashley floral comforters. And, perhaps saddest of all, disco-influenced decor has gone the way of … disco.

10 Things to Know When Buying a House – ZING Blog by Quicken Loans | ZING Blog by Quicken Loans

An exhaustive search for the perfect house has finally led you to the one that just feels right. Now it’s time to actually put an offer in and buy the place. Where do you start?

We’ve put together our top 10 tips on the buying process.

Are You Ready to Buy?

First things first: Is this the right time for you to buy a house? A few factors go in to this consideration.

1.   Getting the Best Possible Rate

When people hear about mortgage rates in the news, they’re often hearing about the baseline mortgage rates set by the Federal Reserve. While it can be nice to understand how these are set, they actually have very little bearing on your personal rates because no one gets the baseline.

More important to determining your personal mortgage rate is the acronym IPAC: income, property, assets and credit. When mortgage lenders make loans, they have to judge the relative risk of the loan. That’s what IPAC is all about.

Your down payment may play into your rate as well.

2.   Down Payment

Once you know what kind of shape you’re in with IPAC, it’s time to move on and consider the down payment. A down payment is required unless you’re applying for a VA loan.

You may not need to save as much as you think. If you’re looking to get a conventional loan, both Fannie Mae and Freddie Mac have multiple options for paying a small down payment. Fannie Mae has a 3% down program. For an FHA loan, you may be able to commit as little as 3.5% to the down payment.

If you can afford it, there are some advantages to setting aside more for your down payment, such as not having to carry mortgage insurance, getting a lower rate on your mortgage insurance or eliminating your monthly mortgage insurance payment altogether with PMI Advantage.

3.   Get Approved

Typically, sellers take offers from people who have already worked with a mortgage lender more seriously. They know you’re backing up your offer with hard data on how much you’re able to borrow.

With Rocket Mortgage, you can get a rock-solid mortgage approval while you’re standing in an open house. Fill out some basic information on yourself, pull your own credit and share your income and asset information from one of our trusted partners and you’ve got a mortgage approval in minutes. You can even use your phone and take pictures of documentation with our app for iOS and Android.

Negotiation Process

Once you’ve been approved and found the house that feels right, it’s time to put an offer in.

4.   Earnest Money Deposit

When you get ready to put in your offer, it’s time to set aside the earnest money deposit. This is a small amount of money you put in when you sign the purchase agreement. This deposit serves as the seller’s assurance that you’re serious about this transaction and want to move forward.

When your loan closes, the earnest money deposit can be applied to your down payment or other closing costs.

5.   Appraisal

For most loans, the next step is the appraisal to determine the home’s market value. This will tell the mortgage company if they’re loaning you the appropriate amount of money. Your house is collateral for your mortgage. It’s important that the appraisal come in at or higher than your negotiated purchase price; lenders aren’t allowed to give you a loan for more than the home is worth.

If the appraisal comes in below the agreed purchase price, the seller has a couple of options: come down in price to match the home value or abandon the deal. Have a backup plan in case the seller chooses the latter.

6. Know the Market

What’s the market like for the house you’re trying to get? One of the best possible negotiation tactics is knowing where you stand.

Some questions to ask yourself in order to determine the best possible offer include the following:

• What are the sales prices like for comparable houses in the neighborhood? Aim for an apples-to-apples comparison; two-bedroom bungalows should be compared with other two-bedroom bungalows of the same square footage.
• How long has the house been on the market? If it’s been listed for a long time, the seller might be willing to come down in price.

7.   Get a Home Inspection

Getting a home inspection isn’t always required, but it’s a good thing to do. A trained inspector will be able to go through your house and point out things that are issues or could be issues in the near future.

The inspection report provides a negotiation point. If there are problems with the house that are found during the inspection, you can make the sale contingent on fixing the problems. Alternatively, you could choose to fix the problems after closing but purchase the home at a lower price.

8.   Seller Concessions

Let’s say you want the house at a certain price but the seller isn’t going to accept an offer lower than the list price. Instead, maybe they’d be willing to pay for part of your prepaid interest points at closing or your title insurance fees. These are known as seller concessions.

Mortgage discount points are prepaid interest at closing. By prepaying, buyers can get a lower interest rate. One prepaid interest point is equal to 1% of the loan amount, and you can get them in increments as little as 0.125%.

For example, for a $100,000 loan, purchasing two points might save you $100 a month on your payment. Two points cost $2,000, so you need to stay in the house at least 20 months in order to break even. If you can get the seller to pay for all or part of the points, that’s like free money.

The amount a seller can pay in concessions is limited to a certain percentage of the loan amount, depending on the type of loan you’re getting. Concessions on VA loans are generous.

9.   Lender Credits

Another way to keep closing costs down is with lender credits: roll closing costs in to the cost of the loan over time. When you use a lender credit, you take a slightly higher interest rate in order to have the lender pay for some or all of the closing costs associated with your loan. You end up paying your closing costs over the life of the loan rather than having to spend a ton of money to close the loan upfront.

10.  Moving In

Now that you’ve gone through the mortgage process and closed your loan, it’s time to get moved in. Everyone knows they should either hire movers or recruit strong, young friends. However, there’s a million little things we forget about.

When you move in, make sure the power company knows so that the lights actually come on when you hit the switch. The same principle applies to water, cable and Internet services. Make sure to have everything lined up ahead of your arrival.

Another thing to think about is all the places you need to change your address. Some examples include your driver’s license, places where you receive bills, at-home prescription requests and your child’s school. We recommend you do this two weeks before moving.