Buying a home should be one of the most fun times of your life, not stressful. As you look for your first home, next home, or dream home, keep in mind these tips for making the process as peaceful as possible.
Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the Buyer’s Agent you chose is both highly skilled and a good fit with your personality. One thing to look for is responsiveness. Looking at sites with agent reviews like Zillow is a good way to see what others have found from their experience regarding agent responsiveness, local knowledge, process expertise, and more!
Remember, there’s no “right” or perfect time to buy. When you find that perfect home, don’t try to second-guess interest rates or the housing market by waiting longer — especially if your purchase timeline is for 3-5 years or longer or you risk losing out on the home of your dreams. In a low inventoried market like we are in right now with less than 4 months of housing supply in much of our market, this can cause others to jump in and make offers and you might miss out! Zillow is predicting housing prices up 4% nationally this year so the 2014 housing market probably won’t change fast enough to make that much difference in price except for up, and a good home won’t stay on the market long. Last fall mortgage rates showed us just how quickly they can go up! Rising 150 basis points or so from the lows of last summer, we now see rates in the 4.5%-4.625% range and probably moving higher over the next six months. As the economy perceptively improves so will mortgage rates move higher!
Know that no house is ever perfect. I have built homes before that I still saw things I would change or do differently next time. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Ask the seller to address them upon inspection and prior to closing or if unimportant, let the minor ones go.
Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price in a market like this one where inventory is so low we are back in a “Seller’s Market” or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take and meeting in the middle! This is a distinctly different market than it was 2-3 years ago when there was 15-18 months’ supply of housing sitting on the market and aging rapidly with high days on market. Seeing in certain areas of our market homes going under contract in “days” once again!
Plan ahead and “first things first!” Buyers contact me every day wanting to know when we can go see a specific property! I always try and educate Buyers I work with that the first thing that needs to be done, is to get pre-qualified for a mortgage. Takes minutes and hours not days anymore! Most of the time it can be done online without ever having to go to a mortgage company or bank! Don’t even need financial docs most times to get pre-qualified! The lending process is drastically different than it was 6-8 years ago. If it has been that long (or longer) since you last purchased a home, don’t assume because it was no problem before to get financing that today is going to be the same. Also, and this is important for first time home buyers, getting a mortgage is more than having a good credit score and a job! It is about a combination credit score, “documented income,” access to down payment funds, and falling into a precise range of “debt to income” ratios that determine how much house you can afford! Waiting until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for the home inspection is too late! Too, it makes your offer weaker, and in the presence of this being a “Seller’s Market” once again with multiple offers, low inventory, and homes not staying on the market long it might cause you to miss that purchase you are looking to make on that next, first, or dream home because you weren’t ready to fully make the strongest offer you could. Presenting an offer contingent on a lot of unresolved issues will make your offer much less attractive to sellers.
Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.
Look at differences in MI or Mortgage Insurance. Most are still going FHA. FHA mortgage MI has gotten much more expensive over the past six months. Look at differences between FHA and a Conventional mortgage as to whether you can qualify and the cost of doing both!
Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.
Choose a home first because you love it; then think about appreciation. While U.S. homes are expected to appreciate at an average of 1-2 percent annually above inflation between now and 2020 from one report I recently read, a home’s most important role is to serve as a comfortable, safe place to live.
For more information about the home buying process please contact me! Let me take your stress so you can relax and enjoy your new home!
For many, it’s the American Dream: Life, Liberty and the Pursuit of… Golf Course Living. In 2011, the first Baby Boomers turn 65 and the demand for golf course real estate in Sunbelt states will likely skyrocket as Boomers look for homes in a climate conducive to their hobby.
But those who have long dreamed of living adjacent to fairways and greens could be disappointed. Development of a golf course community is exceedingly rare in this slumping economy. After almost two decades during which new golf course communities spread like wildfire across the Sunbelt, both the real estate and golf industries have suffered major setbacks.
In 2010, builders started on 15,000 homes in the Dallas-Fort Worth area, according to Ted Wilson of Residential Strategies, Inc. That’s down nearly 70% from the 51,000 housing starts in 2006.
New golf course construction has also taken a major hit. The overbuilding of courses in the 90’s and early 00’s oversaturated the market. When the recession descended upon the industry, many courses were forced to close, some in the middle of construction.
With every rule, however, there is an exception. In 2010, only one course opened in The Metroplex. What vaults this course from exception to veritable anomaly is it is part of a residential community.
The Old American Golf Club, located in The Colony’s The Tribute Resort Community, opened its doors to public play in September 2010. In addition to fairways, greens, bunkers and water hazards, The Old American features brand new residential lots alongside select sections of the course and dozens more just off it. In the desert that is the current landscape of new golf course development, The Tribute is an oasis, affording golfers the opportunity to live alongside the game they love.
The Old American and The Tribute were brought to life by Matthews Southwest, a DFW-based developer that has transformed The Metroplex’s real estate market through urban redevelopment and suburban lifestyle development. In The Tribute, Matthews Southwest saw the opportunity to deliver a suburban community where people could enjoy their hobbies right outside their front door. The community’s location on the shores of Lewisville Lake, combined with The Old American and The Tribute Golf Club (opened in 2005), has provided residents with access to golf, boating and fishing.
Even in the down economy, builders and homeowners have pounced on the opportunity The Tribute presents. Matthews Southwest reported a more than 100 percent year-over-year increase in residential lot sales at The Tribute in 2010. The community’s 1,150 acres showcase many of North Texas’ most prominent and distinguished builders, offering home designs that emphasize the Old World-themed atmosphere of The Tribute and begin in the 240’s.
As Baby Boomers and golf enthusiasts search for a place to live in harmony with the game they love, they may be hard up as developers and builders continue to tighten purse strings. However, The Tribute serves as proof that golf course real estate still has a pulse in the Heart of Texas.
Did you notice the lack of the words “First Time” in the title. Here’s a little something for those of us who already own a piece of the American dream. If last year’s tax credit was enough to get first time buyers into the market, let’s hope that this stimulates things even more.
Congress and President Obama have seen fit to extend the Home Buyer Tax Credit into 2010, and they have significantly increased the scope of the incentive. It is now available to anyone homeowner who meets certain income guidelines and sells their home between Nov 7, 2009 and May 31, 2010. And the definition of sell is now translated as enter into a contract to sell by May 31, 2010 and close by Jul 31, 2010.
Homebuyer Tax Credit — Revised November 2009
|FEATURE||Jan. 1 – Nov. 30, 2009
Rules As Enacted
|Nov. 7 – Apr. 30, 2010
Rules As Enacted
|First-time Buyer – Amount of Credit||$8,000 ($4,000 married filing separate)||$8,000 ($4,000 married filing separate)|
|First-time Buyer – Definition for Eligibility||May not have had an interest in a principal residence for 3 years prior to purchase||Same|
|Current Homeowner – Amount of Credit||No Provision||$6,500 ($3,250 married filing separate)|
|Effective Date – Current Owner||No Provision||November 7, 2009|
|Current Homeowner – Definition for Eligibility||No Provision||Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years|
|Termination of Credit||Purchases after November 30, 2009.
(Becomes April 30, 2010 on November 7, 2009)
|Purchases after April 30, 2010|
|Binding Contract Rule||None||So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close|
|Income Limits (Note: Increased income limits are effective as of November 7, 2009)||$75,000 – single
$150,000 – married
Additional $20,000 phase out
|$125,000 – single
$225,000 – married
Additional $20,000 phase out
|Limitation on Cost of Purchased Home||None||$800,000
November 7, 2009
|Purchase by a Dependent||No Provision||Ineligible
November 7, 2009
|Anti-fraud Rule||None||Purchaser must attach documentation of purchase to tax return|
Source: National Association of Realtors
The tax credit to existing homeowners is up to $6,500, so if you were thinking about upgrading the homestead, now is definitely the time to act. Low interest rates, great buys available in the market, and a tax credit to boot – it’s the “perfect storm” for making the move to the larger house, or the incentive to finally downsize into the cozy home, depending on your vantage point of life.
In upcoming posts, I’ll examine some financial strategies for accessing this tax credit during the course of your transaction. Stay tuned…