Category Archives: Buyer Resources

What To Do BEFORE Moving Into a New Home

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Woo Hoo! You bought a house!

After the home buying process is officially over, many homeowners start packing up their old residence and preparing for the big move. But before loading all the furniture, clothing and furnishings into a new home, individuals may want to make subtle changes for either aesthetic or safety purposes.

Making these slight alterations before moving in may facilitate the process and help homeowners avoid these changes after they’re already settled.

Change Locks to Strengthen Security Measures

One of the first moves new homeowners should make is changing the locks to their new home. Although previous owners will be required to give up their keys, neighbors, family members and friends may still have extra copies. New locks and keys are an inexpensive way new owners can protect their investment. In addition, it’s also important to run a security check to ensure all window locks are functioning properly.  Homeowners may also feel comfortable installing an alarm system to maximize their protection.

Adequate security doesn’t only involve locks, but also alert systems. New homeowners should make sure their fire alarms and carbon monoxide detectors are installed with fresh batteries and operate properly.

Paint and Replace Flooring If Needed

Homeowners who plan on making simple changes that may cover a wide area, such as stripping the floors or painting a room, may want to do so before they move all their furniture in. This can help them avoid the hassle of being forced to move all their objects twice to complete the project. In addition, these types of projects, especially removing wallpaper, can be extremely messy and completing them beforehand allows homeowners to protect their items from paint, dust or damage. Believe me, you will thank yourself for doing this!

Cover Kitchen and Bathroom Renovations Early

Similar to replacing flooring, homeowners can escape the inconvenience of moving appliances and other items by making early renovations to kitchens and bathrooms. But more importantly, these types of projects may require professionals to turn the water off for a period of time. This may force new homeowners to go without water for a few days and rely on family members’ or friend’s homes to shower. For this reason, it may be more convenient to finish them before moving in.

Do you have other tips for home buyers? Please share, we would love to hear them!

What to Do When a Home Purchase Deal is Derailed

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Those shopping for a new home may not have a clear idea of what to do if a promising home sale falls through. This is a potential problem for anyone buying a home, although first-time buyers may have a more difficult time with this type of event.

A real estate agent can help buyers prioritize following such a situation, as well as guide them through additional real estate listings to discover prospective homes to check out. Typically, both home buyers and sellers deal in good faith, but even when that is the case, unforeseen circumstances can prevent a deal from concluding successfully.

When a Deal Fails

The first matter for most buyers to handle is to get back their earnest-money deposit, although the reason the deal is called off may determine their ability to do so. Buyers may change their mind about buying a home due to facts revealed in a home inspection or appraisal. If there is a contingency in the contract that allows the buyer to cancel the deal based on such an event, then the deposit will typically be returned.

If not, however, then the buyer’s decision to cancel the deal may mean writing off the deposit. Deals commonly have a provision allowing the buyer to back out if a final inspection reveals some previously unknown problem with a home, or at least allowing the details of a deal to be renegotiated.

For example, buyers may wish to negotiate a different price if it becomes apparent that a home’s insulation is lacking, since they will have to pay for new insulation in order to restore the home to reasonable condition. It is important to ensure a contract has provisions for these circumstances.

Preparing for Purchase

A different possibility is that the buyers may not be able to get as much financing as they expected or need for the purchase. Another common issue that may arise is that a lender’s appraisal may affect the financing they are willing to provide based on the estimated worth of the home. One real estate professional told Bankrate that another point that may not come up until the end of a deal is the approval of a homeowners association or similar organization.

Additionally, buyers may find that state and local real estate laws and practices affect who holds deposits and how contracts are typically constructed. When continuing the home buying process after a failed deal, one expert told Bankrate, buyers with financing trouble may need to wait a while or reconsider their price range before moving on.

If you have questions about the home buying process tweet to us at @Coldwellbanker.

Image via forclosurefish.net

Neighborhood Features to Examine Before Buying a Home

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Location, Location, Location! An obvious and important aspect of buying a home is looking at the home itself, but another, and sometimes forgotten, is exploring the neighborhood. Limited amenities and services, unkempt communities and noisy neighbors can curb a home sale, and to avoid moving into an area that lacks the features owners are looking for, it’s important that buyers examine the community as closely as they do the house.

There are several features to examine when looking at a neighborhood and it can be helpful if buyers have a clear idea of what they want in a community.

Amenities

Individuals may have a specific set of amenities they want their community to have, which may vary based on their family size, age and lifestyle. For example, individuals with young children may seek out a neighborhood with parks and playgrounds, while other demographics may want more cultural features and entertainment options. Those with an active lifestyle may seek out areas with parks, lakes and outdoor opportunities.

In addition, many parents choose communities based on the school systems, and they can rank different school districts by examining surrounding institutions on their state’s website. Some may offer special types of programs, while others are more geared toward athletics and educational initiatives.

It’s also important to consider proximity to work, major cities and schools as well when buying a home. Buyers should factor in driving distance and time to ensure morning commutes are not excessive and inquire about other forms of public transportation. Because really, who wants to sit in rush hour traffic during dinner time?!

Community history

Buyers may also benefit from examining the town’s history of violent crime, pollution, school test scores and growth. These factors may significantly drive the decision to purchase a home in a certain location, and knowing what to expect beforehand can help owners avoid surprises when they close on a new home.

Further, buyers should find out through the city if any large construction plans are expected to be carried out in the future. This may not seem important initially, but owners who are buying a home in a low-key quiet neighborhood may be dismayed if their town starts building more homes, shops and restaurants in the area. This is especially true for owners who belong to a homeowners association.

Last but certainly not least, talk to people in the community. Have lunch in town and communicate with current residents. Their answers can provide valuable insight regarding the neighborhood you are interested in. In addition to those living in the community a real estate professional can also provide their expert advice on the location you are interested in.

Image via knowtheneighbors.com

Factors to Consider Before Building a Home

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When it comes to buying a home or building one, some consumers choose the latter. Building a home allows them to design their house to their particular needs and specifications. In addition, it gives consumers more control over the building products that are used, how green their home will be and the custom rooms and features the property will exhibit, according to U.S. News and World Report.

However, for all the benefits building a home can bring, there are still other factors individuals should consider that may influence their decision.

Cost

Consumers who buy an existing home sign on to a mortgage, purchase property insurance and cover closing costs and fees. When it comes to building a house, there are additional costs consumers should weigh, such as the price of purchasing the property the house will sit on. In addition, there may also be contractor fees and the costs of zoning permits, the news source explains. There are other costs that new homeowners will take on, such as purchasing appliances, furniture and making upgrades. In cases where consumers are considering purchasing a home, they may save money on appliances that are being left behind, such as refrigerators or ovens, and making small upgrades themselves.

Individuals should weigh the pros and cons of different costs to make sure they are staying within their budgets and making the right financial decision for their circumstances.

Size

Many individuals opt to build homes when they want a particular number of bedrooms or bonus rooms. However, it’s important not to overlook existing homes that have spaces that can be converted, such as basements and attics, especially if they are more affordable. In addition, bathrooms, kitchens and bedrooms can also be renovated for size.

Timing

Consumers who are going back and forth about buying an existing home or building a new one should also take time into account. The process to build a home may take longer than finding an existing home, so individuals should factor in their own timeline for moving. Consumers who are on a time crunch may also want to contact a real estate agent to look at homes in the area to see if any properties meet their needs. Buyers should also take the time it may take to renovate or make upgrades to an existing home into account. When on the fence about building or buying, exploring all available options can help consumers make more informed decisions.

Image via Flickr User Leyla. A

Confessions of a First-Time Homebuyer – The Leap

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I have a confession to make. I work for Coldwell Banker Real Estate and I don’t own a home…yet.

It’s hard to believe but it’s already been 6 years since I officially entered the “workforce”. While I shared in the American belief in the power and true value of homeownership, I just so happened to be entering the “real world” at a time when global economies were all but crumbling and on the verge of collapse. As a 23 year old navigating the “real world” for the first time, I decided to play it safe and rent while I saved money and became acclimated to living on my own and building my career.

Well that was then and this is now 

As with most change, it happens gradually over time as opposed to overnight. So I’m not quite sure when it happened, but I recently realized that I’m ready. I want to own my own home.

Here are the top 3 reasons why I feel like now is the time for me to buy a home:

  • In speaking to my mortgage advisor and agent, I quickly realized that I could quite possibly be paying LESS for my mortgage than I do for rent.
  • I’ve spent well over $70K in rent over the last four years and will never see any return on that money. Not a penny. Conversely, paying a mortgage is like setting money aside into a savings account
  • Renting feels like an extended expensive hotel stay. I want to feel settled and place down real roots in a home and move forward into the next phase of my life with my girlfriend.

Now here comes confession number 2. I’ve worked for one of the preeminent real estate brands on the planet for the last few years but oddly found myself feeling lost and not sure of what really went into the process of buying a home.

If I had to give one word of advice to anybody who has come to the “I want own my own home now” epiphany for the first time like I recently have, it would be to contact and work with a licensed real estate professional immediately. Promptly after my girlfriend and I realized that we were ready and committed to buying a home now, we reached out to Coldwell Banker Residential Brokerage agent Jill Biggs on coldwellbanker.com She called us back quickly and the next day we were in her office in Hoboken meeting.

And since I’m naturally a nervous person, her simple explanation of how the homebuying process works removed all my worries and reservations. It’s actually not all that complicated after all! Historically, 40% of home buyers are first-timers like me ,so hopefully the insights and learnings I come across in the coming weeks will prove helpful.

Wish us luck!

Why First Time Homebuyers Should Shop Around

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Homebuyers, particularly inexperienced ones, often become enthusiastic about pursuing the first home they look at. I can personally attest to this as I am in the process of house hunting for the first time.

It is common for first time buyers to contact an agent after seeing a property and say they are sure they want to buy it. This sort of hurried enthusiasm is not necessarily as promising as it sounds, as it is often beneficial to buyers to examine several properties before deciding to make an offer.

The Process of Buying a Home

Buyers should have a general idea of what they are  looking for in a home as well as what general area they would like to live in. The process of looking at different properties can often help them refine their criteria. Because it is common for buyers to adjust their expectations and reconsider their desires throughout the process, buying the first home seen can be problematic.

Doing so means there is no time or opportunity to compare homes or re-evaluate properties. Often, comparing two homes is how buyers decide what factors are more important to them. For example, buyers may initially think that they want to have a larger backyard, but decide when actually looking at homes that one with a smaller yard is more appealing.

Beyond individual homes, the chance to look at different neighborhoods may also be lost. It is important for buyers to remember that neighbors can be as important as where and how large a home is. For example, parents with young children might find that the chance to live near other families is worth more than an extra bedroom.

Pacing the Home Search

Looking for a home can be a complex process. For busy individuals balancing the search with other aspects of life, it may become difficult or stressful. Buying the first home they see may be a way for some buyers to try to cut the process short.

Many buyers who initially wanted to buy the first house they looked at were later glad they did not end up doing so. Again, I have just recently gone through this experience with a home that I fell in love with but realistically was just too small for my family. Looking back I am so glad my husband was able to snap me back to reality!

Unfamiliarity with local markets can also play a part, since buyers may not initially understand what types of choices are available to them in a given city, town or region.

Working with a real estate agent can help to guide you through the home buying process and will give you expert advice and insight on the best way to compare homes and locations.

5 Tips for Saving for a Down Payment on a Home

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Lately, it seems like every time I get together with friends the topic of buying a home comes up. This makes sense since a majority of my friends are either engaged, newlyweds, or new parents…all major lifestyle changes. Almost every conversation someone says

“I can’t afford the down payment of purchasing a home.”

It makes me wonder, how many people are deterred because they honestly don’t believe they can afford the down payment? A common misconception seems to be the belief that one can only buy a home if they have 20% of the purchase prices which just isn’t the case.

Traditionally, home buyers need a down payment between 10 percent and 20 percent of the purchase price. During the housing bubble that figure dropped sharply, even down to zero. But loans that didn’t require a down payment are now seen as one of the culprits of the mortgage crisis, because they allowed people to buy homes they couldn’t afford.

These days, it’s rare to get a mortgage without contributing some of your own cash. And if you’re trying to buy a home that was foreclosed or through a short sale — where the purchase price is below the amount owed on the house — a larger down payment can speed up the process. Regardless of the percentage that one is considering putting down here are some tips to save up for the down payment.

1. Decide How Much House You Can Afford

The first step is to set your savings goal. Research home prices and determine how much you can afford. Calculators can be found on most bank websites and on the FHA site at www.fha.gov.

As of Feb 2013, the median price of existing homes in the U.S. is $173,600, according to the National Association of Realtors. A 5 percent down payment for a home that price would be $8,680. A 20 percent down payment would be $34,720. If you’re able to save 20 percent, lenders will not require you to purchase Private Mortgage Insurance, which will reduce your monthly expenses.

2. Set Up a Savings Plan

You’ll also need to create a savings plan and set a deadline for reaching your goal. One method is to find the difference between your current housing costs and your projected monthly mortgage payment, and put that much away each month.

This system has the advantage of allowing you to decide if you really earn enough to afford the home you want. “In some cases, if a homeowner is paying a low rent, doubling that payment can be quite a shock, even if the bank says, ‘You meet our guidelines,’” said Mike Hines, homeownership services director for the Sacramento, Calif., office of the NeighborWorks America.

Open a separate savings account for your down payment to minimize the temptation to tap the money for other needs. Also setting up automatic transfers to your new account will lessen the chance you’ll spend the money elsewhere.

3. Pare Back Expenses and Raise Cash

Review your spending habits and determine where you can find extra cash. If you’re determined to buy a house as soon as possible, try living like a tightwad. Start by putting away the credit cards. Then cut out cable TV, switch to a less expensive cell phone plan and reexamine other aspects of your spending until you’ve pared back to just necessities. Use coupons at the grocery store and stay away from the mall. Hold a garage sale or sell unused items online. There are dozens of books and blogs you can turn to for frugal living advice that can help accelerate your savings.

4. Borrow From Your 401(k)

Most 401(k) plans allow participants to borrow from their accounts to finance a downpayment. Some advantages to these loans include an easier acceptance process, generally lower interest rates than bank loans and the fact that you’ll be paying the interest to yourself. Although they don’t count toward your overall borrowing on your credit score, a mortgage lender may note such a loan as part of your overall debt load.

A key drawback is that the money will not be growing for your retirement, and if you leave or lose your job, you’ll have to pay the entire amount back or face stiff penalties plus taxes.

5. Find Out if You Qualify for Assistance

If you’re hoping to take advantage of the down market but haven’t got that much saved, you may be able to find help through various programs.

There are FHA-backed programs in every state. Most are aimed at low- and moderate-income, first-time homebuyers and usually require recipients to make some contribution. Visit the agency’s website at www.fha.gov to learn if you qualify for a program in your area.

The Veterans Administration and the Agriculture Department are among other government agencies that offer down payment assistance.

Last, but certainly not least, stay focused. Once you really commit to this goal stay with it. The second you are handed the new keys to your home it will all be worth it!

Which Home Flaws Should You Ignore?

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During the home buying process, most individuals keep their eyes peeled for flaws and features that may make or break their decision to buy the property. After all, few people are willing to purchase a home that will cost them thousands of dollars to repair. Before anything else it is important to realize the following…

No House is Perfect!

However, when buyers find flaws, it’s important to differentiate between features that should be ignored and those that should be addressed.

Understanding the difference between the two can prevent buyers from passing up their almost-perfect dream homes. Conversely, it can help decide when it is right to just walk away.

Features to ignore

There are several cosmetic characteristics that buyers should overlook when making the decision to purchase a home. This is primarily because new homeowners can make the changes themselves quickly and efficiently, and may benefit from personalizing their new purchase to their own tastes. For example, old or unappealing paint or wallpaper is a quick fix that can transform the way a home looks. Repainting a home, whether buyers choose to hire a professional or take on the task themselves, is also cost-effective, and individuals have several options when it comes to colors and textures.

The same holds true for other small fixes and improvements, such as doors, closets, cabinets and fixtures. These features are inexpensive to replace and most are do-it-yourself projects. In addition, home improvement stores and warehouses are typically stocked with a variety of options and materials owners can choose from to individualize their new purchase and give their home a more modern look.

Features to address

Home buyers may choose to address flaws that will be expensive to replace to avoid being forced to take on the task themselves. For example, outdated furnaces, air conditioning systems and electrical outlets can run into the hundreds or thousands of dollars to replace. Home buyers may choose to either ask current owners to replace these systems prior to closing on the home or negotiate a discounted price for the property. In addition, buyers may request that owners make updates on kitchens or bathrooms that are significantly outdated and in need of renovations.

Lastly, buyers should hire a home inspector to pinpoint significant and costly repairs, ranging from foundation and structural issues to mold, mildew and water damage. These repairs should always be addressed and negotiated before closing on a home.

Want more tips? Visit coldwellbanker.com.

Is the F Word Stopping You From Becoming a First Time Home Buyer?

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For the past two years I have been dreaming of becoming a first time home buyer, but there has been something stopping me and I can finally admit it. It’s the dreaded F Word…Fear! The thought of buying a home terrifies me.  You may laugh considering I work in the real estate industry but like many other renters I am scared to make that leap into home ownership.

I currently rent a 2-bedroom apartment in West Orange, NJ. There is plenty of room for me, my husband Joe and our cat Rory to live comfortably.

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One of the biggest benefits of where we currently live is we are just five minutes away from my parents who live in my hometown of Livingston. Our rent is low enough that we have the financial freedom to enjoy dinners out, vacations and an occasional shopping spree (ok, maybe that last part is just me).  While this all sounds great, I still get a pain in my stomach every single time I write out my rent check knowing it is going right into someone else’s pocket and not toward my own possession. Does this sound familiar to you?

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Joe and I have jobs we enjoy and our joint incomes, one would think, should allow us to buy a home. So what’s stopping me? That dreaded F word again…FEAR. Recently, a friend who owns a home in our town asked how much we pay for rent. When I told them our rent they laughed and said it was nearly $400 more than their mortgage payment! Again, instant stomach pain. And with that pain my apprehension returns. Can I truly afford owning a home? What about taxes? How much of a down payment can we make without living on Ramen Noodles for the next few years?  Am I willing to give up the luxury of living near my parents to afford the starter home I have been dreaming of? Are you seeing a pattern emerge? Yes, all of these unanswered questions revolve around finances!

After renting for two and a half years I am ready to face my fear. I headed to coldwellbanker.com and checked out the rent vs buy, monthly payment and affordability calculators.

calc Is the F Word Stopping You From Becoming a First Time Home Buyer?

As I suspected, the rent vs buy calculator clearly indicated buying a home would be the best long term decision financially and the affordability calculator gave me a higher number than I had predicted! Moving into the town where we currently live is something we could definitely afford and if we expand our search radius we can even get more home for our money. As a Jersey girl, I think I know all the towns I would be interested in but I am still going to check out the lifestyle calculator to identify towns that meet our lifestyle needs. I think I will save that adventure for another blog post.

After looking at and accepting the numbers my next move will be consulting our accountant and my other advisor, my dad who has been in the real estate industry (with Coldwell Banker) for 20+ years, to learn about tax implications and other costs associated with buying a home.  This has been a major step for me in my journey toward buying a home. These tools are all available on the first time home buyer section of coldwellbanker.com and are ready for you to try at your convenience. Remember…the only thing to fear is fear itself, so go ahead and run the numbers! You may be surprised; your dream to own a home may be closer to reach than you thought.

Are you going through the same process as me? Leave a comment and let’s chat!