Now that the wedding is over, you and your spouse are ready for the next exciting milestone: homeownership. There are so many factors you need to keep in mind and you want it to be a pleasant house-hunting experience. The following are just a few things you should take into account when you’re in the market for a new home.
Marriage is a big transition and it may come with some adjustments to your lifestyle. Have a talk with your spouse and discuss your long-term goals, such as whether you want to start a family or move to a different location for job possibilities. You also should take into account the safety of the neighborhood, the school district in which you live and the amount of families that reside in the area. If you’re thinking about having kids in the near future, having great public schools nearby is important.
Discuss what your expectations are for square footage and the general space you want within your home. Keep in mind the space you need for day-to-day activities, family gatherings and your future children. Create a list that helps you prioritize what kind of space is important to you as individuals and as a couple. For example, if you host a lot of parties, you may want to prioritize a large kitchen and living room. If one of you works from home or needs office space, put that on the top of your list.
Keep in mind that compromise is often necessary. Identify which spatial features are and aren’t deal-breakers. House Simple compares some of the things you may want to compromise on, such as the amount of space versus the location, and the fixable faults, like ugly hardware or kitchen countertops.
Bed and Bath Layout
The number of bedrooms and bathrooms in your home is another important factor you should discuss. Talk about whether or not you want your home to be able to lodge many bodies or if you would prefer to not have visitors. Just make sure you don’t go over your budget, because the number of rooms and bathrooms has a major influence on the asking price of the house. Decide if you really need that extra guest bedroom if it means sacrificing a large kitchen or the perfect location.
If you intend to add on an extra bedroom or bathroom in the future, check the county’s code and permit requirements and the potential cost of the addition. HomeAdvisor puts the cost of a total bathroom remodel at an average of $9,348. If this is less than what it would cost to buy a house with an extra bathroom, then it may be worth it to wait and build a bathroom that is to your exact specifications.
When you determine your budget for your home, make sure you include any ongoing expenses the home has. Utilities are a major cost that vary based on the sustainability and efficiency of your house. Consider the cost it may take to upgrade your heating and cooling system, major appliances, and windows and doors. It may cost more upfront but save you a lot of money in the future, so it’s important to figure out what you can afford in the short and long term. You also should be aware of costs like homeowners association dues, structural update costs, property taxes, insurance and any other regional fees.
Look for a home that you can keep safe and sound with solid security features. Search for houses that have trees and tall shrubbery around the lot’s perimeter so they can block the street view of your home. This natural barrier is pleasant to look at and helps prevent burglars from scoping out or monitoring your home.
You also should protect your new valuable asset with a security camera system. Take note of houses you are looking at that have existing CAT5e or BNC security camera cabling. This can save you time and money on security camera installation. Even if your dream house doesn’t have these wires already doesn’t mean that you can’t have this safety feature, though. Installing a full security camera system is not as complex as it once was and doesn’t necessarily require professional installation. Once you know what you’re looking for, you should choose a security camera system that has the security features you need to feel safe and protected night and day, such as HD resolution, long-range night vision, audio capabilities, or ultra-wide angle lenses.
Shopping for your first home as a newlywed couple should be a fun and memorable experience. Be sure to discuss your needs ahead of time, stick to your budget and enjoy the process.
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Fannie Mae’s article, “What Consumers (Don’t) Know About Mortgage Qualification Criteria,” revealed that “only 5 to 16 percent of respondents know the correct ranges for key mortgage qualification criteria.”
Myth #1: “I Need a 20% Down Payment”
Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.
Many believe that they need at least 20% down to buy their dream home, but many programs actually let buyers put down as little as 3%.
Below are the results of a Digital Risk survey of Millennials who recently purchased a home.
As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!
Myth #2: “I need a 780 FICO Score or Higher to Buy”
The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.
Many Americans believe a ‘good’ credit score is 780 or higher.
To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.7% of approved mortgages had a credit score of 600-749.
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.
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So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. More often than not, your agent may have made your offer contingent on a clean home inspection.
This contingency allows you to renegotiate the price paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.
How to Choose an Inspector
Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. Realtor.com suggests that you consider the following 5 areas when choosing the right home inspector for you:
- Qualifications – find out what’s included in your inspection & if the age or location of your home may warrant specific certifications or specialties.
- Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. The more detailed the report, the better in most cases.
- References – do your homework – ask for phone numbers and names of past clients that you can call to ask about their experience.
- Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations often means that there is continued training and education provided.
- Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human after all, and it is possible that they might miss something they should have seen.
Ask your inspector if it’s ok for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed.
Don’t be surprised to see your inspector climbing on the roof, crawling around in the attic, and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace & chimney, the foundation and so much more!
They say ‘ignorance is bliss,’ but not when investing your hard-earned money in a home of your own. Work with a professional you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.
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When disasters strike, they come without warning. This is why you need to prepare for emergencies ahead of time. These 10 tips will help safeguard your home and family, and save you time, money, and stress should an emergency occur.
Protect your home from break-ins. A home invasion occurs every thirteen seconds in the U.S. This alarmingly high rate means it’s essential to safeguard your home from burglars by investing in a home security system.
Know potential threats and emergencies relevant to your location. If you live in the Midwest, tornados are a bigger threat than floods. If you live in California, earthquakes are a real danger. Teach your family about the natural threats common to your location and what to do should one occur. Having a plan and instinctively knowing what to do can save your life in the event of a disaster.
Inspect your outdoor lighting. Make sure to check your outdoor lights to see if any need to be added or replaced. Well-lit homes help deter burglars and prevent accidents.
Perform regular home safety checks. Every month, inspect your home for signs of broken or damaged items. Make sure your roof, basement, attic, pipes, and foundation are in good condition. Check your door locks, garage door, and windows for any broken parts. Regularly fixing up your home will help maintain its value and keep it in great condition.
Test your carbon monoxide and smoke detectors. An average of $12 billion in personal property is lost in fires each year. Protect your home and personal items by routinely testing your carbon monoxide and smoke detectors. Not only will this protect your home and property, but it can also save your life.
Inspect your fire extinguisher. Check the pressure gauge to see if the needle is in the green, and replace or service it if it isn’t. Also examine the hose and nozzle for cracks—you’ll need to replace your fire extinguisher if the handle is missing the locking pin or broken. Should a home fire occur, you will be prepared to handle the situation because your fire extinguisher will be in great working condition.
Create an emergency communication plan. Discuss what everyone in your home will do in case of a disaster. Talk with each family member about their responsibilities, where you will meet, and how to communicate with one another. If communication lines are down, it’s important to have a central meeting location established so everyone can meet and regroup. Discuss different disaster scenarios and come up with a communication and action plan that everyone knows and can enact if necessary.
List relevant contact information and make it easily accessible to everyone. Keep contact information on hand in case of an emergency. While you may keep numbers in your cellphone, it’s smart to keep a hard copy of key contacts in your home. This list can include your primary care physician, poison control, and a trusted neighbor.
Keep 72-hour emergency kits in your home and car. The CDC recommends putting together an emergency kit that includes the following.
- One gallon of water per person, per day
- Non-perishable food that is easy to prep
- A can opener
- Important medication
- A radio
- Toilet paper
Compile and regularly update your home inventory. If you need to file an insurance claim after a blizzard or burglary, it’ll help to have an itemized inventory for your valuable home goods. Store instruction manuals, serial numbers, and important receipts in files that you can access easily when needed.
Incorporate these 10 safety hacks into your to-do list and you’ll be able to safeguard your home, property, and family should a disaster or emergency occur.
Sage Singleton is a home and community safety expert for SafeWise. Singleton has written for a variety of audiences ranging from government sites to lifestyle magazines. In her free time, she enjoys wedding planning, traveling and learning French.
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- 45 million existing homes were sold in 2016! This is the highest mark set since 2006.
- Inventory of existing homes for sale dropped to a 3.6-month supply, the lowest level since NAR began tracking in 1999.
- The median price of homes sold in December was $232,200. This is the 58th consecutive month of year-over-year price gains.
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Smart homes are rapidly gaining popularity. Being able to control numerous features of your home even while you are away is not only convenient, but it can increase security. There are all kinds of ways to turn your home into a smart home. Some are a little more expensive than others. The following five home automation steps can help you get started.
- Control your appliances from your smartphone.
You can invest in new appliances that have this feature, or you can replace electrical devices, such as sockets or plugs, with a smart version. A smart power strip is another option. It is as simple as plugging it in and connecting your devices or appliances. Each plug in the power strip works independently. Android and Apple are supported by the power strip and you can control these devices from anywhere. You can turn any appliance on or off, get notifications when a television, computer, or other device is turned on, monitor carbon monoxide levels, and more.
- Know how to control the security system.
Although most people have security systems in place, it is very beneficial to be able to control them from anywhere. When automated access is used, you can limit access to certain areas of the home, such as your office. In addition, your phone can notify you in the event of a problem even when you are not home. Cameras can be used so that you can see every room in your home from your smartphone. Outdoor cameras will allow you to see who has been on your property when you are at work or elsewhere.
- Save energy by adding your heating and cooling to an automation system.
If you are gone all day and want to keep heating or cooling costs down, you simply lower or raise the temperature setting. Then you can put it on a comfortable level a half hour or so before you will arrive home. This gives the home time to warm up or cool down before you get home, so you are not heating or cooling an empty house. You can also control blinds with this system, allowing sunlight in for your plants and helping to warm the home during the winter.
- Learn how to communicate with your home.
You can control your home using technology similar to what is used when you talk to your smartphone to tell it to dial numbers or look up information. Microphones and a software program which is put on your computer is the simplest way to set up your home to respond to voice commands. The system is set up to recognize words or a phrase to perform virtually anything from turning on or dimming lights to opening drapes, turning on music, enabling or disabling alarms, and more. If you want to know what the weather is like before going out, simply ask. The systems can be set up to answer questions, as well. There are many systems to choose from and with advances in technology, they are doing more and becoming less expensive.
- Install a home theater system.
An automated home theater system will provide you with the feel of a movie theater in your home. Movies, videos, music, and more can be streamed throughout your home and even in outdoor areas used for entertaining. An app for your smartphone is simple to use to control all of this and more. Control the lighting for optimal viewing of movies. The sound can be adjusted, providing you with surround sound that is more like what is experienced in movie theaters.
These are just a few of the ways of making your home smart. Not only does an automated system in your home provide convenience and comfort, but it will also give you peace of mind.
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It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year.
The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2016. Here is a graphic showing the results:
The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,820,000.
That number spiked to 2,140,000 by May!
What does this mean to you?
With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.
It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.
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Washington State finished the year on a high with jobs continuing to be added across the market. Additionally, we are seeing decent growth in the area’s smaller markets, which have not benefitted from the same robust growth as the larger metropolitan markets.
Unemployment rates throughout the region continue to drop and the levels in the central Puget Sound region suggest that we are at full employment. In the coming year, I anticipate that we will see substantial income growth as companies look to recruit new talent and keep existing employees happy.
HOME SALES ACTIVITY
- There were 19,745 home sales during the fourth quarter of 2016—up by a very impressive 13.4% from the same period in 2015, but 18.7% below the total number of sales seen in the third quarter of the year. (This is a function of seasonality and no cause for concern.)
- Sales in Clallam County grew at the fastest rate over the past 12 months, with home sales up by 47%. There were also impressive sales increases in Grays Harbor and Thurston Counties. Jefferson County had a fairly modest decrease in sales.
- The number of available listings continues to remain well below historic averages. The total number of homes for sale in the fourth quarter was down by 13.7% compared to the same period a year ago.
- The key takeaway from this data is that 2017 will continue to be a seller’s market. We should see some improvement in listing activity, but it is highly likely that demand will exceed supply for another year.
- Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 7.1% but were 0.4% higher than the third quarter of the year. The region’s average sales price is now $414,110.
- In most parts of the region, home prices are well above historic highs and continue to trend upward.
- When compared to the fourth quarter of 2015, price growth was most pronounced in Kittitas County. In total, there were eight counties where annual price growth exceeded 10%. We saw a drop in sales prices in the notoriously volatile San Juan County.
- The aggressive home price growth that we’ve experienced in recent years should start to taper in 2017, but prices will continue to increase at rates that are higher than historic averages.
DAYS ON MARKET
- The average number of days it took to sell a home in the fourth quarter dropped by 15 days when compared to the fourth quarter of 2015.
- King County was the only area where it took less than a month to sell a home, but all markets saw decent improvement in the time it took to sell a home when compared to a year ago.
- In the final quarter of the year, it took an average of 64 days to sell a home. This is down from the 78 days it took in the third quarter of 2015, but up from the 52 days it took in the third quarter of 2016. (This is due to seasonality and not a cause for concern.)
- We may experience a modest increase in the time it takes to sell a home in 2017, but only if there is a rapid increase in listings, which is certainly not a given.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. For the fourth quarter of 2016, I actually moved the needle a little more in favor of buyers, but this is purely a function of the increase in interest rates that was seen after the election. Higher borrowing costs mean that buyers can afford less, which could ultimately put some modest downward pressure on home prices in 2017. That said, the region will still strongly favor sellers in the coming year.
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According to ATTOM Data Solutions’ 2017 Rental Affordability Report, buying a home is more affordable than renting in 354 of the 540 U.S. counties they analyzed.
The report found that “making monthly house payments on a median-priced home — including mortgage, property taxes and insurance — is more affordable than the fair market rent on a three-bedroom property in 354 of the 540 counties analyzed in the report (66 percent).”
For the report, ATTOM Data Solutions compared recently released fair market rent data from the Department of Housing and Urban Development with reported income amounts from the Department of Labor and Statistics to determine the percentage of income that a family would have to spend on their monthly housing cost (rent or mortgage payments).
Rents have been surging faster than home prices in about 37% of the markets measured. Daren Blomquist, Senior Vice President of ATTOM Data Solutions warns that rising interest rates could be the tipping point of affordability:
“While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017. In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year.”
Rents will continue to rise and mortgage interest rates are still at historic lows. Before you sign or renew your next lease, meet with a local professional who can help you determine if you are able to buy a home of your own and lock in your monthly housing expense.
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Becoming a homeowner for the first time is an exciting and stressful process. However, once the papers are signed and the keys are in your pocket, your work really begins. Homeownership can be fraught with financial and emotional perils, especially if you’ve been renting from a landlord up until now. Landlords are on the hook for not only minor repairs, but also major upgrades, yard work, taxes and fees associated with building ownership, as well as normal upkeep such as painting and cleaning carpets.
Before You Buy
The best way to make a smooth transition to your new home starts before you buy. A proper inspection can alert you to problems that already exist with the property. New homes shouldn’t have many issues, but it’s always wise to get an inspection anyway to ensure that everything has been installed properly. After inspection, you want to work on your budget. You should build home maintenance and upkeep into your monthly budget.
A basic rule of thumb for your maintenance budget is to put aside 1 percent of your home’s purchase price per year. This means if your home costs $300,000, then you should put aside about $250 a month for major home repairs. Of course, new homes shouldn’t need immediate major repairs, but by saving this money from the get-go, you’ll never have nasty surprises when an appliance breaks down, or when you need a new roof in 10 years.
Tips to Maintain Your Home
Once you’re in your home you’ll want to stay on top of maintenance. This doesn’t just mean yard work, gardening, snow removal and window cleaning, although all those things are important. You’ll want to do an annual survey of your major appliances. This should include things you don’t usually see or think of, such as your water heater, furnace or boiler, and air conditioner.
You should know what these things look like when they’re performing properly, and you should have the name of a trusted HVAC professional, plumber and electrician just in case you should ever need them. You should also keep a close eye on your roof and any plumbing pipes that are visible, as these can often be some of the most expensive repairs. Catching a problem early is always ideal.
Another difference between renting and owning is your financial state. The first year you own a home your taxes will be much different, so even if you do file your taxes yourself, this year might be the year to turn to a tax professional.
You’ll also have to have money to spend to fill up your new home! Chances are you have a lot more square footage to work with now, and you may need additional furniture or even appliances if your new home didn’t come with them. Start reading reviews and comparison-shopping early on for things like washers, dryers and lawn mowers if you can. Buying a lawn mower in May is far more expensive than buying one in January. While it might seem silly, the last year models are usually very similar when it comes to appliances, so figure out when the new versions are released. Floor models (appliances that have been out for people to look at) are also a great choice, as they haven’t actually been used.
The best part of owning your own home is that it is all yours. You can paint, arrange and decorate to your heart’s content. However, the worst part of owning your own home is that it’s all yours, and if there’s three feet of snow to be shoveled, water pouring out of the toilet or a dryer that just won’t dry, these are all problems you’ll have to figure out how to fix—with a little help from the pros, of course.
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