Buying a Home Archives - Kimberly Howell Properties

Downpayments: How Much Should You Pay Up Front?

July 10, 2019 by Matt Stigliano Leave a Comment

If you’re going to be buying a home any time soon, you’re going to need to start thinking about your downpayment. Typically expressed as a percentage of the sales price, the downpayment is often one of the more difficult obstacles for people to overcome on their way to home ownership. You’ll need to budget your money and save up enough to make your downpayment, but how much will you need? You’ve probably heard the rule – you’ll need to save for a 20% downpayment before you buy a home. The logic behind saving 20% is solid, as it shows that you have the financial discipline and stability to save for a long term goal and it can also help you get favorable interest rates from your lender. Additionally, the bigger your downpayment, the less you need to borrow, so the less you’ll pay in interest in the long run.

But there can actually be financial benefits to putting down a smaller downpayment — as low as three percent – rather than parting with so much cash up front, even if you have the money available.

The Downside of a Small Downpayment

The downsides of a smaller downpayment are pretty well known. You’ll have to pay private mortgage insurance (often referred to as just PMI) for years, and the lower your downpayment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20% downpayment, which will put some higher priced homes out of reach for you when searching.

THe Upside of a Small Downpayment

The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20% or three percent, the increase in equity is going to be the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.

The Happy Medium

Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20% and an investment focused, small downpayment. It’s always a good idea to talk with your Realtor and your lender to discuss the potential paths for you and to see what strategy works best for you and your personal needs.

image courtesy of AleXander Agopian

Things to Do After You Move In

April 30, 2019 by khproperties Leave a Comment

It’s move in day! Moving into a new home is an exciting time. So much to do; trying to remember where you put your spoons or your coffee mugs, running up and down steps, paying the movers, meeting the neighbors for the first time while your hair is sticking up and you look like you just rolled out of bed, calming the cat down because she’s probably freaking out right about now…whew. Who else is tired already? Now you’re probably daydreaming about decor and paint schemes and new furniture, but before you get into the fun stuff, there are some basics you should cover first.

Change the locks. Even if you’re promised that new locks have been installed in your home, you can never be too careful. It’s worth the money to have the peace of mind that comes with knowing that no one else has the keys to your home. Even if the sellers handed you all of their keys, you never know if they made one for their uncle that time he stayed for a week or the maid and their best friend has one “just in case.” Changing the locks can be a DIY project, or you can call in a locksmith for a little extra money. It’s also advisable to change the garage door code if you have a keypad entry. Not sure how to do it? Find your model and then look up the manual at ManualsLib.

Steam clean the carpets. It’s always a good idea to get a fresh start with your floors before you start decorating. The previous owners may have had pets, young children, or just some plain old clumsiness. Take the time to steam clean the carpets so that your floors are free of stains and allergens. It will also help freshen up the smell of the new place – it’s amazing how much odor gets trapped in those carpets! It’s pretty easy and affordable to rent a steam cleaner – most HEBs carry them as well as the big box hardware stores. Not in the DIY mood? Call a steam cleaning company and have them arrive before your move in day.

Call an exterminator. Prior to move-in, you probably haven’t spent enough time in the house to get a view of any pests that may be lurking. You’ve probably had a WDI inspection, but those only look for wood destroying insects. Call an exterminator to take care of any mice, insects, and other critters that may be hiding in your home. Here in South Texas we have a lot of creepy crawlies and a good, regular pest control service will help keep the insects at bay.

Clean out the kitchen. If the previous occupants wanted to skip on some of their cleaning duties when they moved out, the kitchen is where they probably cut corners. Wipe down the inside of cabinets, clean out the refrigerator, clean the oven, and clean in the nooks and crannies underneath the appliances. If you’re feeling brave, see if you can pull out appliances like the refrigerator, stove/range, and dishwasher to get under and behind those. Be careful though, those appliances may be attached and can be heavy.

image courtesy of Genista

Which Down Payment Strategy is Right for You?

April 10, 2019 by khproperties Leave a Comment

You’ve most likely heard the rule or had one of your friends give you the advice: save for a 20 percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long term goal. As with any financial plan, you have to look at the pros and cons and determine which benefits you more both in the short and long term. It is always advisable to discuss with your lender and your CPA to see where and how you can maximize the benefits. Larger down payments can help you get favorable rates from lenders, but there can actually be financial benefits to putting down a smaller down payment, something as low as three and a half percent, rather than parting with so much cash up front, even when you have the extra money available.

THE DOWNSIDE

The downsides of a smaller down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20 percent down payment, which will eliminate some homes from your search.

THE UPSIDE

The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three and a half percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.

THE HAPPY MEDIUM

Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment focused, smaller down payment. Your real estate agent can provide some answers and introduce you to a lender as you explore your financing options. Sitting down with the lender and discussing the finer details of your goals and your plans can help you make the best decision for you at this particular point in your life.

image courtesy of Mukumbura

A Few Tips for Online House Hunting

March 29, 2019 by khproperties Leave a Comment

House hunting online is a great place to start your search, but it can never replace good old-fashioned viewings of homes in person. Good listing agents will always be excellent at highlighting the best features of the home and drawing your attention, but always keep in mind there may be more than meets the eye. We all have to start somewhere with our searches and online is certainly a great place to begin – it’s why we built this website. To make the most of your time and efforts and in order to gather a well-rounded picture of online real estate listings, try to keep the following three things in mind during your online house hunting.

Stay up to date. When you are just beginning your search, make sure you find a site that feels comfortable to you and pulls up-to-date listings directly from the multiple listing service (MLS) where real estate agents actively post their most current homes for sale. Many online resources update less often or fail to remove listings that are off the market, making it more difficult to sort through the clutter. This has definitely improved over the years, but there are still some sites out there that let old data linger for far too long or don’t have the best, most reliable info. Might we suggest our easy to use search?
Pictures can be deceiving. Real estate photographers are experts at showing a home in the best possible light. Many use tools and strategies to boost appeal, such as wide angle lenses to make areas look larger and creative editing to make colors and textures really pop. Photoshopping grass or blue skies is common these days, so be aware that what you see in the photo may not be what you see when you step out of the car. Many real estate agents will avoid using photos that are not flattering or show unappealing parts of the home, like small closets or outdated bathrooms.
See it to believe it. Once you find what appears to be your dream home online, give us a call and schedule a showing. You want to take the opportunity to vet the home in person and explore every part of it before beginning the offer process. Your real estate agent will help you cover all your bases and will ask questions you may not have thought of. Take your time and get a good look – this might be where you spend the rest of your life, so you want to make sure it’s the one you want.

Avoid Stress When Buying A Home

March 14, 2019 by khproperties Leave a Comment

It’s always good to remember to leave the stress behind when buying a home. There is a lot going on during the transaction and it’s easy for the best of us to let it get to us. Take our advice with these 5 simple secrets to a stress free transaction. With a little preparation, communication, and flexibility, you can be on your way to a smooth sailing transaction. Of course, the best way to have a stress free transaction is to call a Kimberly Howell Properties agent (you knew we were going to say it!). Want a downloadable PDF to share with your friends?

Are Your Negotiations Killing The Sale?

March 11, 2019 by khproperties Leave a Comment

Negotiations can be a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties – the so-called “win-win” situation. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly and make even the most agreeable sellers quickly say no and shut down the process. Negotiations are both an art and a science and there are plenty of opinions on how to best handle them, particularly when it comes to real estate. Here are five of the most common negotiation tactics we see that buyers can resist to avoid killing the sale.

Lowball offers. Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept and if you’re not even approaching the low end of that range, they won’t even consider the offer. While we encourage our sellers to look at all offers and counter even the lowest of them, sometimes the lowball offers backfire and no amount of change in the offer price will get the sellers back to the negotiating table.
Incremental negotiations. Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities. This can be especially true in hot market where multiple offers are common – someone is going to step up with a bigger, better offer quickly and you’ll find yourself left holding the bag.
“Take it or leave it.” Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it. Remember, a seller spent their life in this home so it often means a lot more to them than just price.
Nitpicking after inspection. Obviously if a home inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. Whether you’re asking for price concessions or the actual repairs, remember that most people are simply not going to fix everything.
Asking for more, more, more. Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to feel that they’re doing all of the giving. Give a little to get a little as they say…the more flexibility you show, the more flexible they will become.

image courtesy of rbrwr