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Must read for all first timers; it can be as easy as shopping if you knew this in advance.
When we are first timers and newbies the chances that we missed one or two points in our quest can cost us a lot; the more we know the better our decision.
Buying your dream home for a reasonable price can be a bit of a tightrope walk. Here are a few tips on how to buy the home you want, for a price close to what you’d like to pay.
Real Estate tips for Owning a home, it is a long-term commitment of time and money as your real estate agent keep on saying . Homeownership may allow you to take advantage of tax benefits, and with a 30-year fixed-rate mortgage, your monthly payments will be stable for the life of the loan
Homeownership can offer financial security and stability
There are no landlords with homeownership. Be sure you have the time and money to care for your property.
You will damage your credit if don’t pay your mortgage on time
Be prepared to decide. It is essential that you are prepared. Know what you want, as well as what you need, from a prospective property. That way, you are ready with a timely offer as soon as you locate the property that is right for you.
Stay on top. Keep abreast of developments in the local real estate market. We will work with you to ensure you are on top, whenever a new listing hits the market. If a new property becomes available, do whatever you can (within reason) to be available for viewings.
Prequalify your mortgage. Sellers will tend to be more comfortable negotiating with an individual who can prove their dedication, in both intent and ability, to purchasing their home.
Contingencies. Try to secure a mortgage contingency for yourself. Aside from that, try and limit contingencies to those that are strictly necessary, for your financial situation or peace of mind. Any hurdle or restriction to a sale (delaying closing to a specific date, selling your current home prior to moving, etc.) can turn an otherwise excellent offer into a debatable one.
Offers. Before making an offer, we will make sure that we have compiled all relevant data for the property. When you’re ready to make the offer, be sensible as well as aggressive. Too aggressive (and too low) and you may offend the seller or lose out to another interested buyer. You don’t have to bid your ceiling immediately. Be intelligent. Take our experience and enhance it with your decision.
Beware buyer’s frenzy. Don’t get caught up in the competition of bidding. It’s not that sort of contest, and the highest bidder doesn’t necessarily “win.” Not if winning costs you more than you’re willing to spend.
Don’t skimp on inspections. Home inspections may cost you part of your budget, but they’ll save you money in the long run. You want to ensure that your potential investment is a sound one.
Owning your home is considered the American Dream by many, and here’s why:
Overall, buying a home can be a good investment but you need to remember you will become your own landlord. You are now responsible for the maintenance and upkeep of your home and property. This means that:
Due to unforeseen circumstances, there is also a chance that risks may arise:
Be sure to weigh these potential benefits and risks carefully before you start your search.
Buying a home is a big financial investment – perhaps the biggest one you'll make in your life. Be sure to do your homework and carefully evaluate how you want to live and how much you can comfortably afford.
Homeownership can be very rewarding if you are properly prepared, know what to expect, and make informed financial decisions.
Is buying a home right for you? It may make sense if you:
The costs of renting or buying are varied, making it hard to tell which makes better financial sense. Use our Rent vs. Buy calculator to evaluate the costs as illustrated for Sally and Darren in the example below.
Sally and Darren want to know if it makes better financial sense to rent or buy given their current $1,400 rent payment. How much home can they buy knowing they can afford a $1,400 monthly mortgage payment and can make a 5% down payment?
Monthly rent = $1,400
Monthly renter's insurance = $10
Annual rent increase = 3.6%
Purchase price = $200,000
Down payment = 5% ($10,000)
Annual property tax = $2,000
Annual homeowners insurance = $500
Annual home maintenance = $2,000
Mortgage rate = 4.5%
* These inputs will result in a monthly mortgage payment around $1,400 when factoring in PMI
We've also put in other assumptions and costs for Sally and Darren, including: a 3% home appreciation rate, a $1,500 origination charge, $1,000 for settlement services, 3% for selling costs, a 33.8% state and federal tax rate, and a savings rate of zero.
With this scenario, Sally and Darren will save $92,216 by buying instead of renting over a seven year period. If they stay in their home for 15 years, they will save $273,558. Over 30 years, they’ll save $887,450.
Armed with this knowledge, Sally and Darren are better prepared to answer the rent vs. buy question.