Buying your first home can feel like both the best of times and the worst of times. Here are 10 facts nobody tells you when you’re buying your first home.
1. Something will go wrong
No move is ever perfect. Something will get broken or there will be something you’ve forgotten to bring or do. With any luck, the setback will be minor, and you can chalk it up to the old adage, “things happen.”
2. Some of your conditions might not be met
One of the least enforceable clauses in offers to purchase is one for cleaning requests. You can stipulate that carpets, refrigerators and ovens be cleaned. However, if they haven’t been, there is often very little that you can do about it.
If a major repair hasn’t been completed as promised, one of two things will happen: you either won’t take possession of the property on the day you planned or your funds will have to be placed in escrow pending resolution of the issue.
3. If you don’t have the closing fees, you don’t get your new home
Legal fees are due on closing, and your funds won’t be released to the seller unless your lawyer is paid. Closing costs usually range from two to five percent of the purchase price, but be sure to verify this information before arriving on closing day. This money is in addition to your down payment.
4. Good schools increase a home’s value
You’ll pay more for a house in a good school district. Of course, the good news is you’ll get more for it when you decide to sell. If the home you’re planning to buy is your “forever” home and you don’t have, or plan to have children, this may not matter. Still, it’s something to think about.
5. Your neighborhood may be about to change drastically
The municipality may be planning a park, a school, or a playground for your area. Depending on your lifestyle, that can mean profound changes in a short period of time. Check with local administration and the area’s local representative. The first can tell you what the plan is. The latter will have a far better grasp of whether outlined timelines are accurate or not. You can base your decision on the information they provide.
6. You need to read all the documents yourself
It’s tempting when you’re paying a lawyer to review HOA or condo documents to simply delegate this task. However, a close reading of the minutes of meetings will teach you a lot about your neighbors-to-be and help you avoid nasty surprises, like planned increases in fees or devolving renovations that used to be the condo board, or HOA’s responsibility to individual owners.
7. Don’t apply for other credit while mortgage shopping
Applying for a loan or another credit card may seem like a good idea when you’re about to take the home ownership plunge and know you’re going to need to buy things like garden tools, a gazebo, and a grill. Don’t do it unless absolutely necessary. It can negatively affect not only the amount of your pre-approved mortgage, but it can also mean you don’t get pre-approval. Wait until after you’ve bought your home to apply for more credit.
8. You’re going to need “earnest” money
Also known as a deposit, you’ll likely need about $1000 per $100,000 worth of house available when you make an offer. This money is required as a show of good faith and will be held in escrow. You’ll get it back if your offer isn’t accepted, or it may be applied to your down payment. You may forfeit this money, though, if you’re the one who withdraws from the deal.
9. Your neighbors-to-be may be your best source of information
Walk around the area you where you want to live. If you see people out gardening or mowing their lawns, talk to them. Strike up a conversation and explain that you’re thinking of buying. Ask receptive individuals what the neighborhood is like, how long they’ve lived there, and how long they’re planning to stay. If you learn that your new home is located next door to some party animals who blast music every single summer evening, you may not enjoy your own backyard, so you may want to reconsider.
10. Check for rebates you may be entitled to
You may qualify for first-time homeowner rebates. There may be other municipal, state, or utility-provider rebates available, too. Start investigating early. It may make more sense to invest in attic insulation than an air conditioner if you’re going to get a rebate that covers some or all the cost of the insulation. Some areas offer rebates on newer, more energy-efficient appliances. You won’t know that unless you do your homework.
A good real estate agent can talk you through the buying process. Now you’re already ahead of the game with these ten facts nobody tells you, and you’ll be able to focus on offer strategy rather than the fundamentals.
January’s market report for NH just hit my inbox and there was no surprise it was highlighting the lack of homes for sale. This has pushed prices up 23% in January compared to the same month last year. Right now, homes are on the market for less than a month. I’m sure many buyers are wondering if it is a good time to buy or if they should just wait. You may think increasing values means homes are less affordable today. While there are many factors that go into affordability, it boils down to the fact it is not just about the price of the home but the overall cost in the long run. Historically low interest rates stretch your spending power and mean you can save significantly over the life of a loan. Additionally, many experts say it is more affordable to own a home than rent. The cost of renting has been relatively high compared to the cost of owning. Here is a startling statistic - the net worth of a homeowner is 40x greater than that of a renter. While the market is a bit challenging at the moment, the expectation is to see more houses hit the market this spring. Contact me if you’d like to know how to best position yourself to build wealth and become a homeowner this year.
Donna Forest, donna@donnaforest.com, 603-731-5151 (c), 603-526-4116 (o)
Valentine’s Day is around the corner but buyers have been writing love letters long before Feb. 14th. It continues to be a competitive market for buyers as they vie with others to purchase the small number of homes for sale. To help sway sellers, buyers may write a letter to them explaining why they love their house, complete with photos. While the purpose is innocent, love letters can unintentionally lead to bias and housing discrimination. Offers accepted on any basis beyond price, terms, and merit might violate fair housing laws (and it doesn’t matter if there was no discriminatory intent). Letters can convey information resulting in implicit bias favoring one buyer over the other. For example: “The large backyard will be perfect for our 3 children.” “We look forward to being close to our church.” Letters can also backfire by unknowingly offending a seller based on some personal comment.
The Fair Housing Act prohibits the denial of housing based on race, color, religion, national origin, sex, familial status, and disability. The act was created so every American would have an equal opportunity to seek a place to live, without being afraid of discrimination. While love letters are not illegal, they could lead to legal issues. I do understand why letters are written, and that most sellers are very receptive to them; however, given the potential for problems, maybe it’s best to avoid letters all together. Buyers should focus on writing the best offer possible and sellers should review offers based on their terms and conditions.
donna@donnaforest.com - (603) 731 5151
Here are some common misconceptions when purchasing a home.
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We can find a loan AFTER we find a house.
- The first step in the home buying process is to get pre-qualified so you know how much you can afford. A letter from the lender should be submitted with any offer.
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We get a better price if we work directly with the listing agent.
- By definition, listing agents represent the sellers’ interests. Not yours. A buyer’s agent’s duty is to help you through the whole transaction.
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Zillow’s “Zestimates” are an accurate estimate of market value.
- Zillow uses an automated system to compute values of homes. It can’t take into account many other factors such as superior workmanship, recent upgrades or even major structural issues.
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The lower we offer the more the seller will come off their asking price.
- In this very competitive market, low offers will most likely be ignored or rejected by sellers. Buyers are competing with other buyers for homes. Properties are selling at or over their asking price in most cases.
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You need a 20% down payment.
- There are many loan programs available with financing up to 90-95%. If you qualify for an FHA loan, you only need 3.5%.
As an accredited buyer’s representative, I can help you successfully navigate the home-buying process. If you want to achieve your home ownership goals, give me a call. 603-526-4116; www.DonnaForest.com; Donna @DonnaForest.com
Purchasing a home is one of the largest financial investments you’ll probably make. It also can be a very emotional one as well. Here are some tips to help take the stress out.
- Work with a Realtor that not only is knowledgeable but also is comfortable fit with your personality.
- Don’t look for perfection. Every house has tradeoffs; focus on the most important features.
- Get pre-approved for a mortgage before you start looking.
- Don’t nickel & dime when it comes to negotiations. Yes, negotiating is part of the process but over-negotiating can kill the deal.
- Keep in mind that there is no “right” time to buy. Second-guessing interest rates or trying to time the market is next to impossible.
- Don’t ask for too many opinions. Some input from friends or family can be helpful. Too much – it’s confusing. Listen to the advice of your Realtor.
Give me a call if you are looking for a knowledgeable Realtor to help guide you through the home buying process! 603-526-4116; www.DonnaForest.com; Donna @DonnaForest.com
Teamwork from the Team that works –Better Homes & Gardens Real Estate - The Milestone Team
If your New Year’s resolution is to buy a home this year, don’t be discouraged by the fact it is a sellers’ market. Below are some great tips to help you be prepared.
- Get pre-qualified for a loan; better yet get pre-approved. (Pre-approval requires submitting a loan application & necessary documentation)
- You could be competing with other buyers for the same house so be mentally prepared you may have to offer over asking.
- Don’t wait too long to make a decision – good homes sell quickly.
- Make a clean offer with as few contingencies and as large an earnest money deposit as possible. Be flexible with your closing date.
- Be ready to compromise on your needs vs. wants in a home.
By following these tips and remaining optimistic, 2020 may just be the year you become a new homeowner! Contact me and put my 26 years of experience to work for you. 603-526-4116; Donna@DonnaForest.com; www.DonnaForest.com
Teamwork from the Team that works –Better Homes & Gardens Real Estate - The Milestone Team
When you’ve just moved into a new community, getting involved with your neighbors and neighborhood can be a great beginning to a happy life. Our communities can be pillars of support when we need them or friendly faces we’re happy to see each day. Through volunteering, joining clubs and groups, taking part in community sports activities and hosting events, you can bond with those who live around you and create a wonderful home for yourself – and others.
Here are 5 ways to get more involved in your community:
Many big cities and small towns have carnivals, holiday gift boutiques, formal dinners and similar charitable events to bring the community closer together. Attend these events and enjoy being a part of shared experiences. You’ll likely meet people who have many of the same interests as you do, which is a good way to form friendships.
- Attend or host charity events
Children often enjoy becoming members in Girl or Boy Scout-type groups, YMCA memberships, parks and recreation classes or mommy and me groups. Often, parents of kids in these programs go on to become friends for life. If you don’t have little ones, it’s still possible to coach, teach a craft, be a dance instructor and get involved in your community in other ways.
Families can get to know neighbors by becoming active in after-school programs. Even if you don’t have kids, meet new people in your neighborhood by volunteering your time to these activities.
- Get active in after-school programs
How can you help those who share your small part of the world? Perhaps tutoring, offering legal aid, mentoring, teaching a language, organizing a food bank or visiting the elderly in your community resonates with you. Children can often be persuaded to join the community volunteer force by teaching older adults all the ways of the Internet.
Volunteer in a local clinic, hospital, nature center, library or community center. Volunteerism is a superb way to meet people and contribute skills and talents to those who might need them. Not only will you probably experience a sense of accomplishment after sharing the gifts you have to offer, your neighbors will likely notice your contributions and consider you a valuable member of the community.
- Become a community volunteer
If you have a community center or other public space available, use it to form friendships while you learn something new. Sometimes taking turns meeting in members’ homes, either weekly or monthly, is a good way to break the ice with small talk or enjoy truly enriching conversation. Think about planning a series of special gatherings or ongoing drop-in events.
Learn more about the people who live near you by starting conversations within your community. This is easily done through book clubs or groups that come together to make jewelry, create art, cook and learn new languages. Ask your immediate neighbors if they know about any clubs or meetups you can join. If there aren’t any, start one yourself.
- Start conversations
While you till, water, plant and harvest, try to get to know the members of your community. Tell stories of where you came from and ask others about their backgrounds. If you have kids, get them involved with a beginner’s food scrap garden and encourage neighbors to bring their children to participate too.
Join a community garden in your neighborhood, and if you don’t have one, start one. Growing organic produce on a shared plot is a great way to connect with people near you. It also helps everyone involved develop a deeper understanding of the importance of keeping the air, water and ground clean and safe in a community.
- Join a community garden
The good thing about getting involved in your new community is that if there aren’t gardens, clubs, organized activities, volunteer opportunities or other programs in place for you to meet people, you can always be the facilitator of these types of gatherings. Your new neighbors will probably be glad you took the initiative to provide ways to connect.
Source: www.bhgre.com
In order to take the mystery out of the closing process for buyers, here are some basics on the process:
- You do a walk-through the day before or morning of the closing to ensure the house is in the same general condition as when the offer was made and things are left that were supposed to be there (e.g. appliances).
- Your lender hires a closing agent who creates a statement outlining the loan amount, loan costs, recording fees, title insurance premiums, escrows for insurance & taxes, state transfer tax, tax prorations, and the deposit. This will show how much money you will need to bring to close.
- You are charged for any oil/propane/firewood/pellets left. This may be put on the closing statement or paid by check to sellers.
- Be prepared to sign lots of paperwork at the actual closing! The funds you bring should be on a bank check or previously wired to the closing agent.
Your agent will help you through this process, but knowing what to expect can alleviate many concerns. Give me a call if you want an experienced Realtor helping you! 603-526-4116, www.DonnaForest.com, Donna@DonnaForest.com
Buying a home is one of the largest investments you will make. Here are some tips to help you prepare:
- Don’t do it alone. Use an experienced agent who can provide you with invaluable advice through the process.
- Get pre-qualified with a lender before going out to look.
- Don’t overbuy. Look at all the expenses including heating costs, utilities, insurance, needed home repairs, etc.
- Check out the neighborhood at different times of the day and week before committing to buying. Get information on the town and the schools.
- Think re-sale. A house in a bad school district or on a busy street will impact the future value and limit your target audience.
While buying a home is an emotional experience, it is a business transaction as well. Preparing yourself in advance will help avoid costly mistakes. Call me if you are looking for an Accredited Buyers’ Representative to help find your new home. 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com
If you’re lucky enough to have reached the time in your life when you can seriously contemplate buying a vacation home, there’s much to be excited about. According to the National Association of Realtors, one in eight homeowners are thinking of buying a second home. While summer may be the time of year you start to think longingly about sun, sea and sand, it may not be the best time to buy a cottage.
Here are some things to consider when you’re buying a vacationhome.
Peak of season is seldom a good idea
Avoiding peak seasons makes sense in supply and demand terms. Peak season, whether you have your eye on a Vail ski chalet or a Cape Cod sea shanty, is when the area in which you’re looking is at its finest. Since vacation homes can be sentimental investments, many who’ve inherited them rent them out as additional sources of income so they can hang onto a property. They may be sharing it with siblings or have had to buy them out. They also may be part-time vacation home investment owners who got in early on a new resort but need to ensure 100 percent occupancy during peak season to make their investment pay off.
Aim for the final weeks of the high season to make your offer or hold off until just after peak season ends. If you’re looking for a summer vacation home, the time between Labor Day and Thanksgiving is the perfect window of opportunity.You’ll still take possession early enough in the year to be able to get a glimpse of what future summers can hold, and you’ll also have a chance to do any needed repairs before winter sets in. Then you can spend the winter planning what you need to do to make the place your own the following summer.
If you’re looking at a winter vacation home, spring is the best time to make an offer. While diehards may still be renting or occupying their vacation homes, hoping to get one or two more days of spring skiing or boarding in, most will have placed their properties on the market. Just be careful not to leave your offer for too late in the year if the area you’re interested in is remote. Some owners board up their properties for the off season, making it harder to get viewings. Also, don’t forget the power of spring mud. Properties accessible through three seasons may become harder to access during spring thawing and flooding.
Be sure the time is right
Before buying a vacation home, you need to think long and hard about a whole host of considerations. First and foremost is whether you will be able to use it enough to make it worthwhile for you financially. Even if you buy a vacation home and plan to rent it out to defray expenses, that means your time there will be limited. While you may love a cottage on a lake in fall, not everyone else does. If you can’t afford to spend the 4th of July at your own cottage, this may not be the time to buy.
Second, have you considered all the duplicate expenses involved? Whether you want your vacation home to mirror your principal residence in all ways, you can’t escape the fact that you’re going to need two of everything now. Unless, that is, you want to treat every weekend you spend at your vacation home like a camping trip (which may well be the case). You’re not going to want to haul lawn mowers and leaf blowers to the cottage every summer weekend. That goes double for appliances, linens and furniture. You’ll also have a second set of bills for property taxes, insurance, yard maintenance, internet and cleaning costs. In addition, there may be HOA fees, too.
Third, what are your vacation goals? If you want to visit every continent and are running out of time to tackle Asia and Africa, does a vacation property make sense? If you find you’re drawn to experiential vacations like hiking the Appalachian Trail, swimming with the dolphins or building someone else a home with Habitat for Humanity, a vacation home may be an anchor you don’t need.
On the other hand, if you know you can afford to invest in a second property and have a long-term plan to use it as a home base while you globe trot in retirement, or if you want your family to have the freedom of the great outdoors while they’re growing up, it might just be time to seize the day.
Source: www.bhgre.com/bhgrelife