Rita Horvath's Blog
You found the perfect home. It has everything you want from location to bedrooms to that art studio in the back, AND the mortgage payment will be lower than or the same as your current rent. You got qualified for the loan and the agent has all the paperwork ready to go. So that’s it, right? Time to buy!
In all the excitement of finding that new home, it’s easy to ignore the warning signs of “overspending” and forget that there are more costs than just the mortgage payment. This can be a dangerous game because once those papers are signed, you are stuck with your purchase.
Additional Monthly Costs
For the best home-buying experience, calculate ALL your monthly costs and try to budget that into your life before you make any final decisions. Determine what you are willing to give up in order to get that extra bedroom or live in that perfect neighborhood. Some additional monthly charges include:
- PMI “Private Mortgage Insurance”: Pay attention to the mortgage you qualify for and make sure to calculate for PMI in your new monthly budget if it applies. PMI exists to protect your lender in case you default on your mortgage loan. It’s usually included when you have a lower credit score or a smaller down payment and can range from $75 to $300 per month or more.
- Homeowners Insurance: You’ve been paying renters insurance for a while now probably, but homeowners’ insurance is a completely different ball game. Your insurance cost will be based on the estimated cost to fix or rebuild your home after a catastrophic event, NOT its market value. That means any special features with historic value, specialty windows, etc. will increase the price. Also check out if the home is in a weather damage area, somewhere prone to tornadoes, flooding, hail, etc. It also covers everything inside your home from furnishings to clothes and electronics. The more stuff you have, the greater the cost to insure it.
- Property Tax: Unlike tenants, owners pay taxes to local governments for schools, roads, city governments, etc. These vary greatly from area to area, so be sure to find a good local property tax calculator to help estimate what those charges will be. If you’re buying a home in a new neighborhood or a gentrifying one, there may be additional taxes to cover the cost of roads, streetlights, parks, and other new area features.
- Association Fees/Dues: Nearly all condos belong to Home Owners Associations (HOAs). Depending on the neighborhood you choose, your single-family home may belong to one as well. HOAs handle neighborhood maintenance including streetlights, pool upkeep, exterior maintenance, parks, and even security. HOA dues can range from $50ish per month up into the hundreds of dollars or even more.
- Services: You know all those utilities and local services currently included in your rent? As an owner, you must pay for all of them separately. That means water, power, trash, sewage, recycling, internet, cable, and phone bills all get added on top of your monthly payments as well. Some cities such as Austin, Texas, also have local monthly fees separate from property taxes, usually to cover extra city features like parks.
The most difficult costs to calculate or plan for are maintenance costs. If your landlord currently covers bug treatments, light bulbs, paint, carpeting, landscaping and generally all other maintenance, you will need to try and estimate how much of that you’ll need to pay for in your new home. There is no one else to pitch in, so this can end up being a huge additional cost.
So, How Do I Buy a Home Safely?
First, find yourself a good agent. A well-qualified agent who is familiar with your area and property needs can help you figure most of these costs. All you must do is ask. If your agent is unable or unwilling to help you plan for these, find yourself a new agent.
If you've conducted an in-depth search for your dream house but still have yet to find your ideal residence, there is no need to worry. In fact, you can revisit your homebuying strategy and revise it as needed. This will allow you to restart your house search and increase the likelihood that you'll discover your dream home sooner rather than later.
Ultimately, there are many reasons to revisit your homebuying strategy, and these include:
1. You can consider why you're searching for a house.
There are many reasons why an individual may choose to buy a home. By revisiting your homebuying strategy, you can think about why you want to purchase a house and proceed accordingly.
For example, if your initial goal was to buy a home near the top schools in a particular city or town, you may want to refocus your house search to achieve the optimal results. Or, if you now find that you'd prefer to own a house in a big city instead of a small town, you can update your house search.
2. You can evaluate your home must-haves and wants.
After attending open house events and home showings, your homebuying criteria may have changed. As such, now may be a good time to revisit your homebuying strategy so you can update these criteria.
Think about things you've liked and disliked as you've viewed various available houses. You can use your open house and home showing experiences to revamp your home must-haves and wants, and as a result, reenter the housing market with a fresh perspective.
3. You can review where you want to live.
As you've searched for homes, you may have found that houses in certain cities and towns are more appealing than other residences. Thus, you can revise your homebuying strategy to focus on residences in your preferred cities and towns. This will help you accelerate your house search and ensure you can find a home in a city or town where you want to live.
Of course, conducting a home search on your own often can be difficult. But if you hire a real estate agent, you can receive plenty of support throughout the homebuying journey.
A real estate agent understands exactly what it takes to find a great residence in any city or town. He or she can help you revamp your homebuying strategy and streamline your house search.
In addition, a real estate agent will set up home showings, keep you up to date about new houses that become available and help you navigate the homebuying cycle. Once you find your dream house, a real estate agent will make it easy to submit a competitive offer to purchase this residence. And if you ever have concerns or questions about purchasing a home, a real estate agent is ready to respond to them.
Revisit your homebuying strategy today, and you could move one step closer to finding and purchasing your ideal residence.
If you recently listed your home, you may expect many offers to purchase to come your way in the near future. However, the house selling journey can be difficult to navigate, and there are many signs that indicate offers to purchase your home may be unlikely to arrive any time soon. These signs include:
1. Homebuyers are not scheduling showings.
Homebuyers often set up showings to view residences. And if buyers like what they see during a showing, these individuals may request a second showing or submit an offer to purchase a house.
Comparatively, a seller who receives no home showing requests for many days, weeks or months after listing a residence may be in trouble. This seller may need to perform home upgrades to help his or her residence stand out from the competition. Or, the seller may need to lower his or her house's initial asking price.
2. Homebuyers are not attending open houses.
An open house event is designed to provide buyers with an enjoyable experience. The event allows buyers to walk through a residence at their own pace. And if a buyer likes a house, he or she may request a one-on-one showing or submit an offer to purchase.
On the other hand, if no buyers attend an open house, a seller may need to modify his or her property selling strategy. This individual should consider the buyer's perspective closely and think about why buyers may choose to avoid his or her residence. Then, the seller can tweak his or her house selling strategy accordingly.
3. Comparable houses in your area continue to sell.
If a seller finds his or her residence lingers on the real estate market while similar houses sell quickly, there may be one or many problems with this individual's house. Although a seller may wonder why his or her house fails to stir up interest from buyers, a real estate agent can offer expert support. In fact, a seller can work with a real estate agent to determine the best course of action to promote his or her house to the right buyers.
Typically, a real estate agent meets with a house seller and helps this individual craft a property selling strategy. A real estate agent and home seller work hand-in-hand to figure out how to list a house, showcase it to buyers and maximize the residence's value. And when a real estate agent and home seller put a home selling plan into action, the results can be significant.
Let's not forget about the support that a real estate agent provides once a seller receives an offer to purchase, either. At this point, a home seller may be uncertain about what to do. But a real estate agent will help a home seller review all possible options and make an informed decision.
Simplify the house selling cycle – hire a real estate agent, and you can get the help you need to generate interest in your home as soon as it becomes available.
Selling a house should be an enjoyable experience – not a stressful one. Yet problems may arise that cause a home seller's stress levels to rise. Fortunately, we're here to help you identify and alleviate home selling issues before they get out of hand.
Now, let's take a look at three tips to help you enjoy a worry-free house selling experience.
1. Learn About the Real Estate Market
Take a look at the prices of houses in your city or town. By doing so, you can see how your residence stacks up against comparable houses and determine how you should price your home.
Furthermore, evaluate the prices of recently sold houses in your area. This housing market data enables you to see how long it takes houses to sell and whether property sellers are receiving offers to purchase at or above their residences' initial asking prices. Then, you can find out whether you are preparing to enter a buyer's or seller's market and plan accordingly.
2. Identify Your House's Strengths and Weaknesses
Conduct a home inspection – you'll be glad you did. An inspection takes only a few hours to complete and enables a property expert to review your residence both inside and out. After the inspection is finished, you'll receive a report that highlights any underlying problems with your residence. You then can use this report to prioritize home repairs and transform property weaknesses into strengths.
It may be beneficial to remove clutter from inside your house and enhance your residence's curb appeal too. That way, you can make it easy for homebuyers to fall in love with your house whenever they view it.
3. Collaborate with a Real Estate Agent
A real estate agent is a home selling professional who is happy to help you navigate the property selling journey. In fact, he or she will make it easy to minimize stress from the moment you list your house to the day you complete your home closing.
Usually, a real estate agent will learn about you and your home selling goals and craft a custom property selling strategy. A real estate agent next will set up home showings and open house events to promote your residence to prospective buyers. And if a buyer submits an offer to purchase your home, a real estate agent will help you decide whether to accept, reject or counter this proposal.
Let's not forget about a real estate agent's industry expertise, either. A real estate agent understands the ins and outs of the house selling journey. And if you ever have concerns or questions about selling your home, a real estate agent is ready to respond to them.
The home selling journey may seem daunting at first. But ultimately, there is no need to stress as you prepare to list your house. Take advantage of the aforementioned tips, and you can boost the likelihood of a worry-free home selling experience.