How to make a successful offer in today’s housing market | Advertising | columbiatribune.com

Prospective homebuyers can get encouraged by the current market. Nearly 68 percent of homes sales today are to individual buyers, compared to 53 percent in 2011 when investor and cash deals were at their peak. Still, competition for housing is hot.

“In a competitive market, your offer may be one of many. But you can take steps to increase your chances of success,” says Chris Bowden, senior vice president of HomeSteps, the real estate sales division of Freddie Mac. The experts at HomeSteps and Bowden are offering homebuyers five important tips for making an offer in today’s market:

 

• Understand your finances. While it’s not nearly as fun as house hunting, fully understanding your finances is critical to helping you determine your price limit and whether your budget can cover necessary upgrades, as well as monthly expenses for general upkeep and utilities, which can run hundreds of dollars monthly.
• Act fast. When home inventory is low, the sooner you can make an offer, the better. Get pre-approved if you know you’ll need a mortgage to buy. It will help you act fast and make a confident offer.
• Make a solid offer. A strong offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent who is active in the neighborhoods you’re considering will be instrumental in helping you put in a solid offer based on recent sales of similar homes, the condition of the house and what you can afford.

Always ask the seller for a home warranty as part of your initial offer. That way, you’ll be covered if appliances or mechanicals fail or break down after you’re in the home.

 

Set your offer apart from the competition by including a letter to the seller, or offer the seller the ability to rent back their home for some period of time after closing. This can be your chance to connect beyond just dollars. Talk to your agent about other ways to make your offer resonate.

• Prepare to negotiate. Be prepared for counteroffers. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford. Your agent will aid the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.
• Get a home inspection. Once you’ve signed the purchase contract, always get an independent home inspection so you know the true condition of the home. If the inspection uncovers undisclosed problems you can typically renegotiate the terms or cancel the contract More tips, insights and home buying resources can be found by visiting myhome.freddiemac.com. While house hunting is fun, home buying should not be taken lightly. For best results, get prepared. Smart strategies can help you make a successful offer on a property.

If spring/summer a good time to sell, then fall/winter the best time to buy

Since spring and summer months are notoriously the best time to sell real estate, fall and winter may be the ideal months to buy real estate.

1. Fewer buyers are in the market – less competition

Competition for houses drops off in the fall, a time when most people consider it to be off-season in real estate. But there are still homes for sale – and in some cases, there’s just as much inventory as there was during the spring and summer. Fall means new inventory and repositioned old inventory that did not sell in the prime season.

This puts you in a great position to negotiate. Fall homebuyers should consider making aggressive offers, followed by more aggressive negotiation. Many sellers are motivated to sell before the holidays. If possible, buyers should let these sellers know that they can close before Thanksgiving or before the school winter break.

 

 

 

2. Sellers are exhausted

Some sellers who put their homes on the market during the prime selling times of spring and summer might have been overconfident by listing their homes for more than buyers were willing to spend. After months of little or no action, these sellers are often ready to make a deal.

Sellers who were unrealistic earlier in the year about price will now be more willing to reduce the price come fall. Because there are fewer buyers and because the sellers are now eager to sell, they are more inclined to take the lower offer than wait another six months for spring to come around.

3. Sellers become more serious

Not all homes on the market in fall are summer leftovers. Some people need to sell in the fall because the timing is right. Maybe they were having a home built and it’s now ready. Maybe they need to move because of a job. The sellers with houses on the market in the fall tend to be serious. That means sellers could be more open to negotiating and accepting a lower offer.

4. Fall is a better time of year to buy

Waiting until the fall (to buy) gives you an advantage when learning about a home and the neighborhood. You’ll be settled in your home and can take precautions – like setting up that new alarm system.

5. You’re the center of attention

Because spring and summer are ideal times to buy a home, real estate agents are usually busier then. And that could mean you might not always get the attention you want. This is also true for other professionals you’re working with to buy a house. Service providers, such as mortgage lenders and title companies, can often respond more quickly since the summertime crazy market has slowed down.

The same goes for movers. Because summer is peak moving season, people often experience more delays and service issues, such as moving companies reaching capacity and running out of trucks to pick up shipments. The probability of experiencing a delay goes way down in the fall season.

6. You can take advantage of end-of-year sales to outfit your home

More than likely you will be making improvements to your new home after your purchase. Most likely you will need to buy items to maintain your home, and if appliances did not convey with your purchase, you’ll need buy those as well.

Wouldn’t it be great to coordinate your home purchase with sales on items you’ll need? September is a great time for buying carpet and paint. October means lawn mowers go on sale, and appliances and cookware are cheaper in November. November is also a great time to take advantage of retailer holiday sales items, which seem to be abundant that time of year.

October’s Real Estate Hot List | Realtor Magazine

The median list price of properties nationwide zoomed to a new record for the month of October, reaching $250,000. That is 8 percent higher than a year ago, realtor.com® reports.

“We are seeing evidence of stronger-than-normal demand this off-season, as buyers remain eager to make purchases,” says Jonathan Smoke, realtor.com®’s chief economist. “As a result, the number of homes for sale declined more in October than at any other point this summer, and left us with 11 percent fewer active listings than last October. That’s the biggest monthly inventory decline since July 2015.” Homes for sale in October are selling 2 percent more quickly than they did a year ago, according to realtor.com®’s data.

And a handful of markets are seeing the majority of that activity. Realtor.com®’s research team compiled its monthly list of the 20 hottest markets in the country. In these markets, homes are seeing high demand (as measured by listing views by market on realtor.com®) and getting quick sales (measured by days on the market).

California cities continue to dominate most of the top 20. However, a new city emerged this month’s list: Boston. The Boston metro area – which includes Cambridge, Newton, and parts of New Hampshire – leaped 17 spots this month to land in the top 10. Boston saw the median age of its inventory decrease by a full week.

The following are the 20 hottest U.S. markets in October, according to realtor.com®:

• San Francisco
• Denver
• Vallejo, Calif.
• Dallas
• Fort Wayne, Ind.
• San Diego
• San Jose, Calif.
• Boston
• Stockton, Calif.
• Columbus, Ohio
• Modesto, Calif.
• Detroit
• Santa Rosa, Calif.
• Sacramento, Calif.
• Eureka, Calif.
• Colorado Springs, Colo.
• Fresno, Calif.
• Waco, Texas
• Nashville
• Santa Cruz, Calif.

How much does a home inspection cost? – Bankrate.com

While another expense might seem like the last thing you need when you’re buying a house, most experts recommend a professional home inspection to get a better idea of what condition the property is in and what expensive problems might be lurking.

“It’s important for homebuyers to understand that home sellers come with a variety of personalities and motivations and that a small percentage will absolutely lie and do whatever it takes to unload their home,” said home inspector Scott Brown, owner of Brightside Home Inspections in Syracuse, New York.

Even the most honest sellers, however, can be unaware of hidden flaws in their homes — problems you might not want to deal with. Learning about any issues before you fully commit to a home purchase makes the home inspection cost worthwhile.

RATE SEARCH: Compare mortgage rates on Bankrate.

The cost of a home inspection 

“Inspection pricing is fairly dependent on the individual market,” Brown said. “The cost of an inspection tends to increase with the age of the home and the square footage of the home.” Both factors increase the time it takes to complete the inspection, hence the higher cost.

Nationwide, the home inspection cost for an average home should be between $350 and $600, he said.

Other factors that affect how much an inspection can cost are how different the home is and how far the inspector has to travel to reach the home. In addition, home inspectors with more experience may charge more than ones with less experience.

Consumer review website Angie’s List reports a national average cost of $473 for a home inspection, with a range of $375 to $550 for most inspections. A survey by HomeAdvisor.com found that nationwide, most homeowners spent between $267 and $371 for an inspection.

Getting a fair price

The best way to discern whether an inspector is charging you a fair price is to see what other inspectors in your area are charging for homes like the one you want to buy. You may be able to shop online — some inspectors publish their fees on their websites.

For example, Domicile Consulting, a home inspection company in Chicago, states on its website that it charges as little as $350 for a 1-bedroom studio or condo and $725 for a 6-bedroom single-family home, with the price potentially varying based on the job’s complexity.

Another option is to call at least 3 inspectors, ask about their experience, give them the pertinent details about your home, and ask what they would charge to inspect it and how long the inspection will take.

You can also ask to see a sample report to get an idea of how thorough each inspector is. A sample report that indicates a more thorough inspection might justify an inspector’s higher price. The answers you get from asking around will give you a range to determine what you should pay.

Specialist home inspections

Similar to how a doctor who is a general practitioner might recommend that you visit a specialist after making a determination about your medical condition, home inspectors will recommend specialists to homebuyers to provide insight on any alarming findings, Brown said.

A structural engineer or foundation specialist might be recommended to further assess a foundation problem, for example. The specialist can provide quotes and recommendations on how to fix the issue. Get a specialist opinion before releasing the inspection contingency in your purchase agreement so you can use it as a negotiating tool with the seller.

The cost of specialists’ assessments varies widely by field and by company, Brown said. A roofing specialist might provide a free quote, hoping to get the work. A plumber might charge $100 for a site visit, while a structural engineer might charge $800.

Bill Leys, who performs specialty deck inspections for homebuyers in California, says the extra costs for specialized inspections can save a buyer tens of thousands in costs to repair hidden damage. The things he typically finds that home inspectors miss on decks, for example, are poorly affixed railings, dangerous glazing and dry rot in hidden or difficult-to-access areas.

Refuting a poor home inspection

If after the fact you don’t think the home inspection was very thorough, is there anything you can do?

“There are specific items that must be covered in most states,” Brown explained. “If those items are all covered, the client doesn’t have much recourse other than [to] write a poor review or hire another inspector for a different perspective.”

Brown said if a client felt this way, it could indicate the inspector was not clear ahead of time about what will and won’t be inspected. Most homebuyers aren’t knowledgeable enough to realize that an inspector might have overlooked something. If the inspector misses a single item that the buyer notices, the average inspector will be professional about it, apologize and amend the report, he said.

If a buyer finds a major problem after moving in, Brown said they can:

• Ask for a refund of the home inspection fee.
• Ask the home inspector to rectify the situation by paying for the fix.
• File a lawsuit.

But some home inspection contracts limit the client’s recourse to suing for the amount of the home inspection cost.

Terrified to Buy a Home? Your Top Fears Debunked | Realtor.com®

You wake up in a cold sweat. There’s something lurking in the dark, visible by flickering computer light. Something’s haunting you. It’s… the real estate listings! Deep down, you’d love to own a home, but whenever you take steps beyond idle window-shopping, a chill runs up your spine, and paralyzes you from moving ahead. We get it—you’re about to make a life-changing purchase, and you’re spooked. The main thing that home buying has in common with horror flicks: The fears are (mostly) mere figments of your imagination.

So in case you’re harboring some heebie-jeebies, here are some of home buyers’ top concerns—tackled head on so you know what you’re really dealing with.

Fear No. 1: ‘I’m afraid I can’t afford a home’

Some house hunters are possessed by worries that their entire savings account will get sucked into a black hole if they buy. Then they’ll never be able to afford vacations, or new clothes, or food beyond beans and rice or mac ‘n cheese ever again.

 

The reality: Depending on what and where you’re buying, you’re not likely to drain your savings account, according to Bill Golden of RE/MAX Metro Atlanta Cityside. “There are many loan programs out there that can help first-time home buyers with down payment assistance,” says Golden, “or that don’t require a severed arm and leg in order to get a mortgage.”

The best way to determine how financially ready you are to buy a home is to talk to a loan officer. Alternatively, you can also enter your income, debts, and other info in realtor.com®’s home affordability calculator, to see exactly how much you can afford to spend on a home without going broke.

Fear No. 2: ‘I’m worried I won’t be able to buy a home I actually like’

The current economic climate may lead some buyers to believe that buying means they’ll end up living in a version of a “Saw” movie set—a windowless pit with exposed plumbing. (Without the severed limbs, however.) Fact is, interest rates are low, allowing homeowners to snag a great deal and pay less over the course of their loan. “Also, with the economy being in a downturn, many fantastic properties are being sold for under value,” says Tyler Ferguson, owner of Stone Reinvented.

Fear No. 3: ‘What if I buy a money pit?’

We’ve all seen that movie of the same name where Tom Hanks‘s life and bank account are shredded, thanks to a rapidly disintegrating old house. But hey, that’s just a movie—most houses aren’t money pits, and even if there are potential issues lurking in the shadows, like a leaking pipe, you can do plenty to protect yourself. Before the sale, “hire a good home inspector,” says Green. He or she should be able to see signs of water damage, or any electrical and plumbing red flags. A home inspector will also advise you on potential repair costs, which can provide leverage for you to go back to the sellers and lower the price you pay.

Fear No. 4: ‘I’m worried I’ll overspend’

The asking price for a house may seem like an unholy amount of money. But keep in mind, that’s just what the sellers are asking for—what they get could be a totally different picture. Your Realtor can help guide you to a realistic offer. “A good agent will know the price points of the areas you’re targeting and can back them up with historical data and comps,” says Crystal Green, a Manhattan real estate agent for Level Group. Since you can search the prices of homes that recently sold in any area, it’s easier to find out what the neighbors paid and gain better insight before you place an offer.

Fear No. 5: ‘I’m leery of buying during an election year’

A presidential election year makes many buyers want to hide under the covers until Nov. 8 when the political curse lifts—especially this year. “Everyone talks about uncertainty during campaign season,” says Green. But think about it: Unless you’re one of those people who really will move to Canada if so-and-so becomes president, will the election actually affect where you choose to live? “If you’re fairly confident that you’ll remain in a home for three to five years, you should net a profit at resale,” says Green.

Fear No. 6: ‘It’s just safer to rent’

Sure, renting means you aren’t trapped in one place, as you are with homeownership. Yet for Scott Forman, divisional vice president of Cross Country Mortgage,” rent money disappears without allowing you to build any equity over time. That’s truly scary.” He estimates that by paying about $100 a month more, many renters could own their own home—and receive tax deductions. If in doubt, use a rent vs. buy calculator to crunch the numbers and see whether it’s renting or buying that wins out in your area.

Buying a Home in 2017? 7 Steps You Must Take Now

If you’re thinking about buying a home in 2017, October to December is the perfect time to “warm up” for the house hunt so you can hit the ground running in the new year. And whether you’re looking in Athens, GA, or Athens, NY, the prep work is relatively the same.

The Appraisal Process: What You Should Know – ZING Blog by Quicken Loans | ZING Blog by Quicken Loans

If you’re looking to buy or sell a home and don’t have much knowledge about the appraisal process, now is the time to learn more.

To help you understand the home appraisal industry, we’ve compiled some information on what a home appraisal is, what to expect from the process and why getting an appraisal in rural areas can sometimes take longer than in non-rural areas.

What’s an Appraisal?

A home appraisal is an estimate of your property’s value based on the location, condition and recent sales of similar homes in the surrounding area.

So an appraisal is an estimate of how much your property is worth – it sets the amount that lenders will let you borrow for a property.

If an appraiser determines that a home is worth $150,000, a mortgage company won’t lend someone more than $150,000 to purchase that property, and would probably lend less, as 100% financing is rare. The appraiser’s job is to let the lender and the potential buyer know how much the house is worth.

How Does the Appraisal Process Work?

When an appraiser comes to your property, they gather all the information about it, including taking pictures and measurements. Then they research the housing market and find comparable properties that are up for sale or recently sold.

 A comparable property is one that is similar to the property you’re selling. So if your home has two bedrooms, then the appraiser is going to keep an eye out for two-bedroom homes to compare it to.

How exactly is an appraiser selected? A lender selects an appraisal management company (AMC) to work with. Your given AMC selects an appraiser for you. The AMC will assign an appraiser who has knowledge of your type of property within the market area. The appraiser will come to your house to make sure that the value they’re putting in the appraisal is accurate.

According to Tal Frank, who has worked in residential lending for 20 years and is the president of PhysicianLoans of Ohio, when the appraiser completes the report, it will be sent to the AMC for review. If there are mistakes, corrections are made by the appraiser. Once approved, the appraisal is sent to the lender, which then reviews the report. If there are any errors in the report, it will be sent back to the AMC for changes. If it’s good to go, the lender will deliver a copy of the report to you.

“Typically appraisals are required because the lender needs to have a value for the collateral-based loan that they are giving,” says Mike Brocker, a licensed real estate appraiser with Title Source. “Without that appraisal, the lender has no idea if the collateral is enough to secure that loan.”

Delayed Appraisals in Rural Areas

If you live in a rural area and want to get an appraisal, the process can take longer than you might expect. Since there aren’t as many appraisers in rural areas, it can take months to get an appraisal done because of a supply-and-demand issue. For example, in states such as Oregon, Colorado and Washington, there is unfortunately a lack of appraisers.

“There are just not enough appraisers to go around, and they have a big area to cover,” says Sam Heskel, president of Nadlan Valuation, an AMC. “This will have a real impact on the mortgage and home buying industries. Closings will be delayed, maybe by several weeks, depending on the area.”

If you live in a mountainous or rural state, getting an appraisal can also take longer because of the vastness. It’s difficult to find comparable properties since houses can be located far away from each other. And the appraiser needs to see the house, so their drive time could be longer!

Deb Tomaro, a broker associate at RE/MAX Acclaimed Properties, said that finding comparable homes is a challenge, especially since the recent sales also have to be within a certain radius.

Tomaro has even had lenders send the appraisal back and say that they need another comparable home of the same age or on the same side of the highway.

“It can be that specific. I have a deal right now that is delayed because the construction type is a berm home and the lender is requiring another comparison of a berm home style,” says Tomaro. “There just isn’t one. So the lender isn’t willing to do the loan.”

To offer advice on selling a unique home in a rural area, Tomaro recommends being ready to list when you know another similar property has recently sold. That way, you’ll know for sure there’s a recent comparison.

Causes of Appraisal Shortages

An appraisal management company doesn’t send just anyone with a camera and tape measure to your property.

“Becoming an appraiser today is a lot harder than it used to be. There’s more education and licensing required,” says Heskel. “Today, to become an appraiser, one needs a four-year degree, passing an exam, and an internship or apprenticeship of 2,500-3,000 hours. That works out to be about two years working as an apprentice.”

One shortage problem, Heskel explained, is that some lenders won’t accept work from appraisal apprentices because their appraisal reports can’t be submitted to a lender. This creates more work for the appraiser training the apprentice, and the apprentice could possibly become the appraiser’s competitor.

“The number of appraisers in the U.S. has decreased by 20% between 2007 and 2015, according to the Appraisal Institute,” says Frank.

What can home buyers or sellers do about this? The best thing you can do is to start your house hunt sooner and be prepared for some delays.

“The longer answer is that the professionals in a transaction, the real estate agents and the loan officer, need to be on the same page and set the proper expectations with their clients for the appraisal turn time,” says Frank. “Buyers should start their home search earlier if possible and sellers should allow for more time to close once under contract. As long as all parties anticipate the challenge in advance, it will really not be that big of an inconvenience.”

10 tips for choosing a Realtor

Let’s be honest: Most of you put more time and energy into finding a hairdresser than you do into choosing your Realtor. Think I’m kidding? I’m not!

How many of you would dare go to the first available stylist at a hair salon you just wandered into? Not many! Yet, time and again, we meet people who choose their Realtors exactly that way. When you are buying or selling your house, you are making a major life decision. It’s a decision that affects your heart, your life, and your wallet — likely the biggest financial investment you make in your life.

That’s why it is so important to choose the right person to guide you through the process. You want someone that understands the nuances of both the emotions and the numbers. It’s a tall order, but here are my top 10 tips for choosing the right real estate professional.

RELATIONSHIP WITH YOU. Whether you are buying or selling, it’s important to “click” with who you are working with. You will be spending a lot of time together for a few months, so be sure it is someone you trust and enjoy being around.

RELATIONSHIP WITH OTHER AGENTS. Reputation is everything in the real estate business. You want to make sure your Realtor is respected by other agents in the community and works with others easily. Your agent should know the agents that frequently do business where you are buying or selling. There is a lot of agent networking done behind the scenes so it’s important your agent has their finger on the local pulse.

AREA KNOWLEDGE. In addition to knowing the other agents in the area, your Realtor should actually know the neighborhoods. That means knowing what else has sold, what’s on the market now, and what the lifestyle is like in the area. If you’re buying, you will want an agent who not only can tell you when a house is a good choice, but where you can get the best pizza.

EXPERIENCE, NEGOTIATION & PROBLEM SOLVING SKILLS. You need an agent who has been around the block and has seen all of the problems that can come up in the course of a transaction. The agent’s job does not end once you are under contract. Often, the biggest problems can occur between contract and closing. You are dealing with 30 pages of legally binding contracts; it’s essential your agent knows his or her way around the contract.

COMMUNICATION. Make sure you find an agent that communicates in the style that you do. Do you prefer phone calls, texts, email or in-person discussions? Make sure your agent can communicate with you in the way(s) you prefer.

AVAILABILITY. Be sure your agent works when you don’t! This is especially important for buyers. Pinpoint what days and times are typically best for you to tour properties and make sure your agent is available during those times. Some agents work part-time or only during regular working hours. Make sure your schedules will align. If you’re selling, be sure the agent or someone on their team is taking calls and emails about your home seven days a week.

MANAGING THE BUYING AND SELLING PROCESS AT THE SAME TIME. Buying and selling homes at the same time? Then it is imperative that you pick an experienced agent who knows how to manage the process. There are many ways to approach this process that won’t make you crazy. A good agent can walk you through the different options.

RELOCATION CONNECTIONS. If you’re buying or selling in the D.C. metro area with the other end of your transaction out of the area, pick an agent who has great referral connections in other markets. You want both of your agents on the same page so your contracts, dates and deadlines work together seamlessly.

PRICING, PREPARING & PRESENTING YOUR HOME (IF YOU’RE SELLING). Sellers, it’s crucial for your agent to know how to price, prepare and present your home to the market properly. Getting maximum exposure requires your Realtor to have a marketing plan that includes a fantastic website, a mix of traditional and digital marketing, an outreach program to other Realtors, a buyer database and public relations efforts.

OUTLOOK ON THEIR BUSINESS & THEIR CLIENTS. Does your agent constantly strive to improve their service to their clients? Do they operate like a true business or more like a part-time job out of their house and their car? Is their focus on creating lifelong clients or on getting the next deal done?

7 Tricks To Get The Best Mortgage Rate | Huffington Post

If you are a run-of-the-mill Joe or Jill, buying a house is probably the single largest financial commitment that you will make during your lifetime. What makes the stakes even higher is the fact that most of us plan to buy a house only once in our lifetime; hence getting it right the first time around becomes even more important. However, getting the best deal is never that easy as multiple factors play a role in determining how high or low your mortgage payment would be. The following are a few tips to get the best possible deal on your mortgage.

A High Credit Score is an Asset

 

It all starts here, doesn’t it? A few late and missed payments later, you suddenly find that your credit score has tanked and you are being denied or being charged prohibitively high interest rates for additional credit – be it a credit card or a mortgage. In this regard, a high credit score can play a key role in securing you the house of your dreams backed by an affordable mortgage. But to get to the point where your credit score becomes an asset, you need to start with the simple things, make all your payments – phone bills, rent, credit card dues, etc. on time and definitely no missed payment. Then there’s the matter of outstanding debt obligations, the lower the outstanding credit in your name, the better off you will be when it comes to handling the mortgage. It is therefore best to get a copy of your credit report and check your score before you apply for a home loan.

Compare Multiple Offerings

 

In case you haven’t been living under a rock, you know that there are choices aplenty when it comes to choosing a mortgage – perhaps one too many. This even after the fact that, subprime lending has been relegated to the position of a historic misadventure. But apart from being spoilt for choice, this also can be the source of a bit of confusion as every one of those will differ in one way or another – interest rate, lock-in details, tenure and so on. Then there is the common mistake of comparing based on only a single criterion such as the interest rate. Don’t make that mistake and compare available options based on multiple criteria such as processing charges, loan tenure and interest rate before zeroing in on an option that suits your requirement. A number of websites offer you the option to check your mortgage options.

 

Ensure that Multiple Credit Checks don’t happen

 

Here’s another common mistake that many prospective applicants make – they apply for multiple mortgages thinking that they can pick the one that offers them the best deal. The problem with this is that, all of these separate applications lead to separate credit checks. Whenever a prospective lender checks on your credit score, it counts as a hard look and future lenders who check your credit report will be able to see the details of these checks. When multiple credit checks show up on your report within a short time period, it will portray you as a credit hungry individual and reduce your chances of being approved for a mortgage. But it does not end there, in case one or more of these lenders rejects your application, your credit score will take a nose dive and make it even more difficult to get approved for credit in the future.

 

The Home Equity Conundrum

 

Home equity or down payment is among the most important considerations when you are planning to get a mortgage. The logic is simple, the more you pay as down payment, lower your mortgage payments will be. The normal down payment is 20% of the house’s purchase price. However, you can pay more or less as per your financial situation. That said, in case you go for lower amounts, your monthly mortgage payments will tend to increase and you will also be charged interest on this extra amount; so you can end up shelling out quite a bit by the time you pay off your mortgage.

Apart from the extra interest charges, there is also the matter of the private mortgage insurance, which is mandatory in case you make a low down payment on your new house. If not anything else, it will just add to your mortgage burden in the long term. The ideal way to deal with this conundrum is to make as much of a down payment as possible without completely hampering your budget and also finding an affordable house, instead of your dream home.

Choose your mortgage tenure wisely

 

It is only natural that you explore multiple tenure options when you are seeking a home loan that works for you. If you seek a longer mortgage term, individual EMI payouts will be lower as compared to a shorter one. But the lower EMI payout comes at a price. The longer your repayment term, the more your absolute interest payouts i.e. the more expensive your mortgage. So be very careful when making this decision, as you need to look out for a tenure which minimizes your interest payout while ensuring that your individual EMI payouts are not prohibitively high. Using a home loan EMI calculator would definitely help you make an informed decision regarding the most affordable tenure for your home loan.

 

Qualification for Special Programs

 

God might have created everyone equal, but the man made financial sector works a bit differently. Some groups of individuals qualify for a reduced rate of interest based on meeting some predetermined qualifying criteria. Find out if you or your spouse qualify for any such programs, as this will make it a lot easier for you to afford your dream house. Some of the leading schemes with regards to a mortgage include VA loans, FHA loans, USDA loans, first-time home buyers program and so on. Information regarding these and other special programs can be found online as well as through various state-sponsored and federal agencies.

 

Get the Closing Cost Issue Sorted

 

The moment you finalize or close the purchase of your house, you have to deal with closing costs. These costs are usually equal to 3% of the home’s purchase price and comprise multiple factors including processing charges, appraisal costs, fee for title insurance and charges for underwriting. If possible do include this in your research for the cheapest mortgage. However, more often than not, the charges are similar, no matter which lender you decide to go with. But trying never hurt, so do take some time to shop around for the lowest closing cost before making this key financial decision.

 

Conclusion

 

You are well within your rights to look for details not just when you are indulging yourself during a festive sale, but also when you are purchasing a new car or a house. So make the most of available resources and follow the seven key tips mentioned above to get the best mortgage deal that you can afford. Keeping in mind that your mortgage is a long term financial commitments, even small savings over the term can accumulate into quite a corpus, which adds to your savings and can be used for other investments as well as luxuries in the future.

What Is the Average Price per Square Foot for a Home — and Why Does It Matter? | Fox News

If you’re hoping to buy a house, the very first dollar figure you’ll want to know is the home’s price, of course. But a close second is its price per square foot — and the average price per square foot for a home in that neighborhood (or the median price, which is actually a better representative of the middle ground). Here’s what you should know about these numbers, and how to use them to your advantage as you shop for a home.

How to calculate the price per square foot for a home

Typically, a home’s price per square foot is prominently featured on the listing — both online as well as in those property information sheets you get at an open house.

But a home’s price per square foot doesn’t tell you much on its own. This number is best understood in comparison with similar homes nearby. So your next step should be to type in the city, neighborhood, or ZIP code of interest into a site like realtor.com/local. This will give you the median price per square foot for homes in that area (as well as median asking price, closing price, and number of homes for sale — all useful info during a house hunt).

What’s the average price per square foot for a home?

According to the latest estimates, the median price per square foot for a home in the United States is $123. But that can vary widely based on where you live and other factors. For instance, on the low end, you’ll pay $24 per square foot in Detroit; on the high end, in San Francisco, $810.

Why such a wide range? Well, it’s no secret that certain neighborhoods are considered more desirable than others, and fetch a higher price as a result.

“The hotter the neighborhood, the higher the price per square foot,” says Anthony Stellini, a Realtorwith RSR, a division of the real estate firm Nourmand & Associates. But odds are you knew that already. What you may not know is how this info can help you get a better deal on a house. More on that next!

How price per square foot can help you negotiate

When you run your comparison of a home’s price per square foot with the neighborhood median, you’ll be able to suss out whether a place is a bargain or overpriced.

Let’s say you see a home you love priced at $150 per square foot, but then you find that the median price per square foot for the neighborhood is $135. This suggests the home you’re looking at could be priced too high — which spells an opportunity for you to negotiate for a lower purchase price. Just point out to the sellers that homes of similar size in the area are going for much less. Or, conversely, if the median price per square foot is $135 but this home is only $120, you may have a bargain in your crosshairs that you should snap right up!