Lisa Westerman's Blog
With rent prices shooting soaring across the country, many young Americans who were previously happy renting while they saved for a home are now turning to other options.
One common solution is a starter home. If you want to keep your monthly mortgage prices low while being able to build equity and slowly save for your “forever home.” a starter home can be a great option for first-time buyers.
When does it make sense to buy a starter home?
Buying a home means mortgage payments, home maintenance and repairs, and closing costs. However, they can also be a great introduction to the responsibilities of homeownership.
Better yet, starter homes allow you to build equity that can be used toward the down payment of your next home, something that first-time buyers often struggle with. This could help you secure a lower interest rate and avoid costly private mortgage insurance (PMI).
Sounds great, right? But when shouldn’t you buy a starter home?
It might not make sense to buy a starter home if you don’t plan on living in it at least 3-4 years. You might find that the cost of renting is less than that of your mortgage payments and closing costs if you don’t live in the home long enough to reap the rewards.
It also might not be a good idea if your family is going to outgrow a small home in the next few years for the same reasons mentioned above. That makes it all the more important to discuss your long term plans with your spouse before considering a home.
Things to look for in a starter home
1. Resale value
One of the most important aspects of your starter home should be the ability to resell it in the future. Now, there is an endless number of factors that go into the marketability of a home. Key factors include the condition of the home and keeping it well-maintained, as well as the location of the home. Buying a starter home in an area that will attract young professionals down the road is typically a good investment.
2. Small size = low price
It probably goes without saying, but finding a home with a low price, at the expense of square-footage, is most often a smart choice when it comes to starter homes.
Small homes are cheaper to buy, cheaper to heat, and cheaper to maintain. However, since housing prices are trending upward, you’ll likely still see a positive return on your investment in ~5 years time when you’re hoping to buy again.
3. Reasonable home improvements
If you can spare the time, buying a starter home that needs some work can be an excellent investment. It can be more difficult later on when you have a large family to care for and less time to focus on making improvements.
Are you planning on buying a home by a certain date? It’s unfortunate that life can’t go as we plan it all the time! With a bit of planning finding the right home at the right time is possible. Many times, families are looking to buy a home before the end of the summer. This allows them to get settled in and get the kids started in a new school before the start of the year in September. Just because there are more popular times throughout the year to move doesn’t mean that the inventory of homes changes much as to what’s on the market. Whatever the reason for the short supply of homes, you’ll need to be informed and creative in order to land a house in a high demand market when it’s crunch time. Below, you’ll find some tips to help you on your search.
Research Your Location Ahead Of Time
Every housing market has a bit of a down time. You want to pinpoint that period. Does your location have a time of year where people flee the area for vacations? The holiday season can also be a great time to look. There may still be low supply, but there also will be less competition. Do a bit of research in order to find pricing trends. When the prices dip, you’ll know that’s a time where competition for homes is lower.
Always Have Your Finances In Order
When you’re buying a home, no matter what time of year it is, you need to have your lender on call. Make sure that you have been preapproved and that your downpayment money is at your disposal. Sellers like serious buyers who are ready to pass paperwork.
Know What You’re Willing To Compromise On
When you’re buying a home on a timeline, you may not have the luxury of searching around endlessly to meet your wishlist. You should have a few musts, but there may be many things that you’ll need to work with or compromise on in finding the right property. You may be able to find a home in the right neighborhood, but it might not have the granite countertops that you’re looking for. When time is of the essence, your home search priorities need to be set straight.
Don’t Look For Bargains
When you’re in a time crunch to land a home, you don’t want to fool around with price. In order to land a home that you love, you might have to offer a bit more than the asking price. There’s no space for a bidding war, a low offer, or an extended search when you need to buy a home fast.
Home showings are valuable parts of the property buying cycle. If a homebuyer knows what to expect during a showing, this individual can get the information that he or she needs to determine whether a particular house is the right option.
Now, let's take a look at three things that buyers need to know about home showings.
1. A home showing is a commitment-free experience.
There is no obligation to submit an offer to purchase a house following a showing. Instead, a buyer can review his or her options and proceed accordingly.
In some cases, a buyer may want to set up a follow-up home showing as well. A follow-up showing enables a buyer to get a second look at a residence to determine whether it matches or exceeds his or her expectations.
It also may be beneficial to prepare lots of questions before a showing. That way, a buyer can gain deep insights into a home to help him or her decide the best course of action.
2. A home showing enables a buyer to get an up-close look at a house.
During a home showing, a buyer will walk through a house with a real estate agent. A buyer can ask a real estate agent questions about a residence, and he or she may even choose to take notes as the showing progresses.
It generally is a good idea to check out all areas of a house during a showing. Remember, a home purchase probably is one of the biggest decisions that an individual will make in his or her lifetime. With a comprehensive home showing, an individual can gain extensive insights into a residence's age, condition and more.
In addition, a buyer should not place a time limit on a showing. Depending on the size of a home, a showing may last a few minutes or a few hours. But a buyer who allocates the necessary time and resources to analyze a residence during a showing may be better equipped than others to make an informed decision about a house.
3. A home showing is one of many steps during the homebuying journey.
If a home showing is successful, a buyer may be inclined to submit an offer to purchase. Or, if a showing reveals a house fails to hit the mark with a buyer, this individual can continue his or her pursuit of the perfect residence.
Lastly, when it comes to setting up home showings, it often helps to hire a real estate agent. This housing market professional will make it simple for a buyer to navigate the property buying journey.
A real estate agent will schedule home showings for buyers and keep buyers up to date about open house events. Plus, a real estate agent will help a buyer submit an offer to purchase a home and ensure that a buyer can seamlessly acquire his or her ideal residence.
Reach out to a real estate agent today, and you can kick off the homebuying journey.
Many DIY projects can be a lot more complicated than they appear on the popular home improvement shows. One of the things that isn't often mentioned is that there are a lot of projects that require a permit before you get started creating a magazine-worthy space.
A building permit provides you with protection. It ensures that your work is up to code and no laws are being broken in the process. Permits also spell out who has liability if there are issues experienced by the municipality or your neighbors. Additionally, unpermitted work (like plumbing or electrical) can result in a denied homeowner's insurance claim if there is a catastrophic event like an electrical fire or water damage.
Unpermitted work can lead to a canceled insurance policy or even fraud charges for failing to disclose additions to your home. It can also lead to complications or even cancel the sale of your home down the line. During the home inspection and approval process of a sale, it will be necessary for you to produce all the permits that are on file. Without them, the buyer's lender may be hesitant to give the loan.
Before you pick up a saw, nail gun or screwdriver, take a trip to your local government's permit office. Each location will have its own rules for what projects will require a permit, so it is important to check. Permits apply to both interior and exterior projects like replacing windows or a bathroom remodel. If you hire a contractor for the job, they should know what permits are needed and will fill out and file the necessary paperwork. If you're undertaking a DIY repair, protect yourself by getting educated on what types of permits you may need.
Here is a brief list of projects that typically require a building permit:
- Fences. Before you put in a new fence, check with both your local government and your homeowner's association (if applicable). While not all fences need a permit, there are often height restrictions, or you may be limited to a particular type of fencing and specific landscaping.
- Remodeling the kitchen/bathroom. This includes moving any interior or exterior plumbing or wiring and knocking down interior walls. If you plan on installing a gas stove, this too will require a permit.
- Changing the footprint. Any change to the footprint of your home will require a permit. This encompasses building a deck, adding a room, a garage or shed or even constructing storm shelters and safe rooms.
- Putting in new windows or doors.
- Putting on new siding.
- Installing water heaters or ventilation projects
Not all home improvement projects will necessitate filling out paperwork. If you're redecorating the living room and it only includes paint and wallpaper, new flooring or carpet, it's unlikely that you'll need a permit.
So before you start your next project, make sure you've investigated the proper permits. If you have any questions, feel free to get in touch and I will guide you to the right answers.
When you buy a home, you may wonder what the benefits of having your own realtor to represent you are. If you’re a first-time homebuyer, you probably will have a lot of questions. If you’re a second-time homebuyer you may still have a lot of questions! Buying a home can be a long, tedious process. It’s very helpful to know that you have a knowledgable realtor by your side to represent you and help you through the home buying process. If you’re looking to buy a home in a tough market, hiring your own realtor to represent you as a buyer is especially important.
First, you should consider interviewing some prospective buyers agents in your area. Maybe you can get recommendations from friends and family as well. Learn what you can expect from a top realtor who will represent you as a buyer.
Honesty Is The Best Policy
Your agent should be completely honest with you. While they can’t tell you what you personally want in a home, they should give you every last disclosure. No agent should put a home value or their own commission above their clients. This means that there’s strict documentation that realtors must follow including a code of ethics and standards for practice. A realtor must uphold these promises.
Judging honesty in a realtor can be difficult. An honest real estate agent will help you through the home search process, for example. This is a good place to start. If the realtor points out some of the potential issues that you may have as a buyer in a home, you can see that honesty is one of their main policies.
A realtor should be in frequent communication with you. Even if your home search isn’t active, they will check in, and see where you’re at in the process and if your needs have changed.
Your realtor should alert you if offers have been made on properties that you’re interested in as well. Your buyer’s agent should reply to texts, e-mails, or calls within a short time frame of receiving them. Having a realtor that’s on top of things for you is important when it comes to buying a home since, without their help and information, the perfect home could slip through the cracks for you.
Knowledge Of Rules, Regulations, And Best Practices
Your buyer’s agent should have extensive knowledge of the real estate rules and regulations that are within your state. Each state has different practices when it comes to buying a home. Hiring a buyer’s agent is especially helpful if you are unfamiliar with a state or city. Your agent will be well-informed on all of your responsibilities as a buyer, as well as how and when you should complete these tasks and signings throughout the entire home buying process.