buyers

What You Need To Know If You’re Ready For Homeownership

January 10, 2023 by khproperties Leave a Comment

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says:

“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”

Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them.

Top Motivators To Buy a Home

Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds:

95% believe the cost of renting is too high
35% think owing a home is an important wealth building tool
16% seek the sense of security owning a home provides
37% plan to use it as an investment property

No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile.

Key Obstacles and How To Overcome Them

Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting pre-approved, and exploring down payment options, it’s a lot to wrap your head around.

The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:

The Mortgage Process Can Be Intimidating

In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.

An article by OwnUp helps explain why the mortgage process is so challenging for buyers:

“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”

While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online.

It’s Hard To Know How Much You Need To Save

In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses.

What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says:

“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”

Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs. Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.

Why Can’t Buyers See Past the Furniture and Decor?

February 23, 2016 by khproperties Leave a Comment

You’ve heard it a million times – you need to stage your home in order to get it sold. You’ve done everything you could think of, but why can’t buyers see past the furniture and decor? Why are they so hung up on your family photos or whether your bedroom looks like it was taken from the pages of a magazine? Why are you rearranging furniture and packing items up for storage? It’s frustrating enough to put your home on the market and have strangers coming into your home, but to have them judging your personal style and taste? No one enjoys that. So what is it about buyers that makes them completely unable to see past the furniture and decor and hone in on the true object of their attention – the house they’re about to buy. If you want to know about the best Denver office chairs from Interior Concepts, you can click here and find out!

The whole psychology of buying a home can be quite fascinating to watch. As real estate agents, we see and hear a lot. From comments about the choice of paint colors to comments about your taste in furniture, we’ve heard it all. Even logical, rational people who you’d expect to be able to see past your wall of family photos will inevitably stop in front of them and take a look. Your couch is not to their liking, but what does it matter? They’re not buying the couch. It just doesn’t make sense that they can’t see past the furniture…or does it? If you’re planning to revamp your bedroom with new pieces of furniture or sectionals, you may want to take a look at this page, Home Accents II – Bedroom Furniture in Myrtle Beach.

The trick to understanding the buyer mindset when you’re selling your home isn’t as hard as you might imagine it to be. Think back to all the memories you’ve created in your home. Think of all the milestones you’ve passed. Think of how much your home has been involved in your life. Buyers have those sorts of thoughts too, except they haven’t lived a day in the home yet. They have to rely on you to sell them that story. They want to know what your life was like when you lived in the house. They want to picture themselves living a new life in your home and the easiest way to do that is to look around and see what you have done. It may seem a little odd, but the buyers are looking to place themselves mentally in the home and the lifestyle that goes along with it and even though you and the buyer may be polar opposites, they have no other frame of reference to look to…just your stuff.

It’s easy to feel awkward about someone poking around your life in such a way, but it makes sense when you put yourself into that mindframe. So take a step back and look at your home through the eyes of a buyer – give them what they want and need and get that home sold. Yes, it is a place of great memories for you, but remember, you’ll be making new ones as soon as you get this home sold and move somewhere new.

image courtesy of denise carbonell

A Letter to a First Time Home Buyer

October 24, 2013 by Matt Stigliano 1 Comment

The other day I referred a first time home buyer who had some questions to one of our agents. The buyer had a couple of questions and was looking for advice and help with a particular home they had their eyes on. The agent copied me on their response, and with her permission, I wanted to share it here. It covers some basic questions that everyone has and also is good insight into why you should choose to work with a Realtor.

I have edited the letter slightly in order to keep the buyer’s name and personal information confidential.

I don’t really know what Matt covered as far as lenders and Realtors go and why you should or shouldn’t use one over the other, but here is my take on the matter. I was in the Air Force for twenty-two years and moved fifteen times. I have bought and sold more than thirteen homes over the years. I have used Realtors and not used them. I have used internet lenders and I have used local lenders. I have used my bank lenders and I have used mortgage brokers. What really matters is that you find people who you trust and want to work with and who are willing to give you all the information you need to make a smart decision on the single largest investment you are going to make at that time. Yes, you can do searches on the internet, but because Texas is a non-disclosure state, not all the information on homes is on the internet and much of the information on homes is inaccurate. The listings that most websites (Zillow, Realtor.com, Homes.com, Hot Pads, Trulia, etc.) have are not updated on a regular basis and don’t have accurate information to make a sound decision on pricing. If you look at Zillow’s Zestimate information page it will tell you that as far as Texas, it’s accuracy is only I believe now 8% and San Antonio I think is up to 6% accurate. Not good statistics and this is because we are a non-disclosure state meaning we aren’t allowed to disclose sales data to the public as a whole. Now, if you are just looking at homes and want to see what might be possibly out there, it is fine, but the sale prices might not be accurate and many times the home might already have a contract on it or even sold or no longer on the market.

So do you need a Realtor, I believe you do so you aren’t wasting valuable time looking at homes with bad data, trying to schedule showings, and making offers on homes that aren’t available anymore or their prices have changed. Additionally, a Realtor; worth their salt will also be able to tell you how long a home has been on the market, how much the seller might owe on the home, get you the seller’s disclosure, help schedule inspections with a reliable inspector, help you make a sound offer, and get you in touch with a local lender. Why you ask is that important? When I was moving and buying and selling homes, I found each and every time that internet lenders were never available when I needed to talk to them. There was never just one person I could call and talk to when I needed an answer or my Realtor or title company needed an answer. There were also hidden fees that I found about, always on the day of closing, and I either had to buy or sell the house or lose the deal. Additionally, using a traditional bank lender sometimes can be tricky as they work traditional bank hours. We all know that we look at homes during the off hours and weekends, so why not have a lender that does the same? That is why I like my lenders to be available 24/7 like me. I feel if my clients have to look for their home in their free time, then I need to be available…and so should my lenders. We are a team, right?

So that is my take on the matter. Probably more than you wanted so I will get off the soap box. I don’t know what you want to do about this house now that it is off the market, but like I said, you do have options. We can also set up searches for other homes in the area as well as see if there are other homes you might be interested in and are still on the market.

I am available by phone, text, and email. So please feel free to contact me any time. I am up pretty late at night, so don’t worry about that either. I work weekends as well.

I truly hope to hear from you soon and look forward to helping you find a home.

image courtesy of paul-simpson.org

Seller’s Temporary Residential Lease

April 15, 2013 by khproperties Leave a Comment

Does the thought of packing up all of your precious belongings, scheduling movers, utility shutoffs, and wrangling the kids, pets, and spouse into a packed car send shivers down your spine? Is it made worse by the thought that you could go through all of that only to have the contract on your house go wrong at the last minute? To avoid making those last few days leading up to closing even more tense and stressful, consider using a Seller’s Temporary Residential Lease. Sellers can request and negotiate to lease their home back from the new buyers after closing. There’s a simple two page form called the “Seller’s Temporary Residential Lease” that gets added to the contract and there have been times that it has been a true lifesaver for our clients.

With this form, you negotiate a set per diem rental rate and possibly offer up a security deposit. Commonly, the per diem rental rate is calculated by taking the buyer’s new monthly payment and dividing by thirty, but it’s all negotiable. Once everyone signs at closing and the deal funds, the buyers become the rightful owners of the property and the old owners become their tenants. Standard landlord/tenant relationship rules apply and generally payment for the anticipated term of the lease is paid all at once up front. This leaseback can extend for a few days or a few weeks, just no longer than 90 days. So if the new home you’re purchasing isn’t quite ready or if you just want an extra few days of certainty before busting out the boxes, consider this as one more option in your real estate tool belt.

There is also a “Buyers Temporary Residential Lease” which is used when the buyer needs to move in before closing. It is not as common as there are some legal issues with doing this, but it can be used in a pinch.

10 Things Buyers Shouldn’t Do

April 12, 2013 by khproperties Leave a Comment

Never, ever do these ten items

As a home buyer, you face a lot of challenging decisions as you make your way through the process. Why throw a monkey wrench into the system when you can easily avoid some of the common mistakes that buyers make? Avoiding these ten items will help your home buying adventure run much more smoothly and help alleviate the stress that buyers and their agents face.

Tempt yourself with properties out of your price range/budget: Before even taking the first step in house hunting, make sure that you have an idea of what you feel comfortable spending for your monthly payments. Talk to a reputable real estate agent or loan officer to get a feel for what that equates to in sales price. You may qualify for a larger amount, but if those higher payments stress you out each month, is it really worth it? Why even go look at a home that is completely out of your range?
Expect to demolish a seller in negotiations: Yes, it feels fantastic to get a deal on a home, or walk away from closing with equity, but you should remember that not every seller can afford to take a beating or huge loss. If you pound a seller down on price up front, they may not be willing or able to work with you on repairs down the road. Plus, the market is changing and it’s becoming a seller’s market in many areas. By coming in super low, you may risk offending the sellers or losing out to a more realistic (higher offering) buyer.
Justify price based on other listings: Size doesn’t always tell the full story. Honestly, as a seller you can list your price at whatever number you want – realistic or not. When you’re buying a house an appraiser will look only at similar properties that have sold. A closed sale means that two parties (and probably a bank) came together to determine a solid value. Keep this in mind both in deciding what to offer and when considering future.
Lie: While lying is generally discouraged in all areas of life, there’s a reason it’s especially discouraged in real estate. Things get ugly and they get ugly fast. Lying on a mortgage loan application constitutes fraud and you can go to jail for it. Lying to your agent handicaps them when they try to give you sound advice. Lying to a seller breeds hostility and can tank a deal fast. It’s far better to be truthful, even if there is a problem. Most of the time the problems can be resolved (given a bit of time, skill, and luck), and being forthcoming and honest puts everyone in a better position to solve the issue quickly and effectively.
Skip inspections: Mold, water damage, improper building codes, electrical wiring hazards – all things that may not be visible at first glance on a home. Electrical transient analysis through etap training helps in analyzing circuit breakers and power systems as well as Electric Benders For Rigid Conduit. HVAC units, plumbing leaks, water heater repair, foundation cracks, and holes on the roofs are some of the repairs you need to look out for. Isn’t it worth having those items thoroughly checked out up front so you can 1) have sellers correct problems; 2) know what you’re likely in for down the road; or 3) back out before you get in over your head? Even new homes aren’t immune from problems, code violations, and costly mistakes.
Quit or change jobs: If you’re getting a mortgage, there are strict rules and guidelines for verifying that you have the income to be able to pay off the huge debt a bank would be taking on on your behalf. If that income source suddenly vanishes or changes in any way, lenders suddenly start to feel very bad about that risk. If a job change can’t be avoided, it’s good to know that you’ll need at least two paystubs from the new company and staying in the same field really helps. But, if at all possible, hold off on those employment changes until after the sale.
Take on new debt: Yes, this means hold off on applying for or opening new credit cards no matter how sweet the discount. Don’t buy furniture. Don’t buy a new car – or even a used one. And really, don’t start charging those new décor items from Pier One on your credit cards either. Lenders will pull your credit scores at the time of loan application and again at closing. All of these things can impact and change your credit score, which could mean that you lose on a loan. And a house. And time. And money. Don’t risk it.
Believe everything you read on the internet: Real estate laws and customs vary immensely from state to state, so you always have to consider the source when reading blogs or real estate articles. Even the verified experts may only be experts in a particular region which has nothing in common with the one in which you’re buying. Also, if something’s important to you (schools, crime, or neighborhood amenities) then take the extra time to verify it from other sources. And, believe it or not, even in the MLS, mistakes can happen.
Stop yourself from asking questions: There’s a lot that goes into buying a home and at times it can be quite overwhelming. Staying silent can lead to confusion or conflict down the road. Even if you’ve already asked a question, ask it again and again until you feel comfortable with the answer. Take notes. Be involved in the process. This is a huge investment – be an active part of it.
Go it alone: Real estate purchase contracts are legally binding documents full of small caveats and provisions that you may not even consider when thinking of buying a home. Even when buying a new home, it’s completely worth it to use the expertise of a quality REALTOR® to provide a wealth of information and negotiating skill. From comps to property condition pitfalls to resale considerations and negotiating skills, agents deal with these matters day in and day out. Go with a pro. It won’t cost you anything. (sellers predominantly pay REALTOR® commissions in Texas).

…and don’t miss “10 Things Sellers Shouldn’t Do” if you’re on that side of the coin.

image courtesy of mueritz