Home buyers enter the process with one of two mindsets. There are those who know what kind of house they want – the number of bedrooms and bathrooms, the type of kitchen and maybe whether or not they want a yard. Then there are those who know where they want to live, such as a specific school district or neighborhood, but haven’t completed a wish list of home features.
Seldom does a buyer tell his/her real estate agent that she wants a “three-bedroom, two-bathroom home with a gourmet kitchen, a fireplace and a pool in the backyard, located on J Street in the Mountain Shadows neighborhood.”
While it’s important for your real estate agent to know what features you want in a home, “location, location, location” is just as important, important, important.
Even if you know exactly what you want in a house and perhaps have one picked out, it’s important to scope out the neighborhood before committing fully to buying.
Don’t Believe What You Hear
Especially when you are new to an area, it’s easy to believe what residents tell you about the various neighborhoods. Remember, however, that everyone has different opinions and personal tastes. When someone says, “This town’s schools are not as good as that town’s schools,” keep in mind that everyone has differing needs, wants and preferences. One man’s ceiling is another man’s floor.
There is nothing quite like first-hand information. If good schools are important to you, do the research yourself instead of relying on what others consider “good.” GreatSchools.org lists schools’ test scores and features reviews from parents.
Crime statistics can also be found online. You can also call the police or sheriff’s department in the area for more information on crime statistics.
Google maps are great for figuring out routes from the new house to your job, to a particular school, or to the nearest shopping center and they give you the mileage and a rough estimate of the time it will take to get there. You can also use Google maps’ earth view to see what’s around the neighborhood – are there railroad tracks running behind the property? Is there a huge water tank nearby? Is the property too close to a highway for your liking? What’s that large industrial-looking building one block over?
A lot of your preliminary neighborhood research can be done online, but it’s not a substitute for actually checking out the neighborhood in person.
If you commute to work, you should take “a test drive.” Whether that’s driving, taking the train or bus, it’s a good idea to actually make the commute during normal commute hours to see if it fits your lifestyle. You don’t want to settle into a home only to find out that the commute is a nightmare — far worse than you had expected.
Drive through the neighborhood at different times during the day and evening, on both weekdays and weekends, looking for anything that may be considered an annoyance. Is the street much busier during the weekday rush hour than you had anticipated when you first saw it on a quiet Sunday afternoon?
You may also want to drive around to see how far it is to stores, schools, parks, gyms, houses of worship, and other places that are important in your life.
If you don’t drive, walk the neighborhood. Locate the nearest public transportation stop and see for yourself what the walk is like to the store and other local conveniences.
Check Municipal Records, Local News
Check the neighborhood and surrounding area for anything that may impact the home’s value. Look for things like a high number of foreclosures nearby, new developments in the works, and upcoming zoning changes. You can also find out a lot about what’s going on in a town or neighborhood by reading a local newspaper or checking out a local Patch.com if there is one for that town.
Find a Local Agent You Can Trust
Especially if you’re moving to an area that is new to you, it’s important to find a local agent who is familiar with the area(s) you’re considering. You want to make sure you find a trusted real estate professional who knows the neighborhoods, the schools, the shops, the restaurants, distances to highways, etc. – all the factors that are important to you when considering where to live.
If you’re considering a move to Northern New Jersey, give me a call. I have lived here my whole life and can help you with the inside info you need to find the perfect home.
Happy New Year! I hope your 2014 is filled with peace, happiness and good health.
What will happen in the real estate market this year? Many pundits are predicting slightly better sales in 2014 than in 2013. But the KCM Blog‘s headline today took a different view:
Housing Predictions for 2014: Sales Will Surge
Among the reasons cited are (1) the number of first time home buyers are expected to rise, and (2) many move-up buyers, who have been trapped in their homes because of negative equity, will finally be able to make that move because of rising property values.
So you've decided to take the plunge and buy a new house! How much can you afford?
Here's something to think about:
Your lender decides what you can borrow but you decide what you can afford.
Lenders are careful, but they make qualification decisions based on averages and formulas. They won't understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected -- for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.
Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn't be more than 28 percent of the buyer's gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn't be more than 36 percent.
That's how much you can borrow. Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.
Many buyers and sellers think that with the holidays and winter approaching, they should wait until spring to make a move. Au contraire!
There are good reasons, if you are thinking of buying or selling, to do it NOW rather than waiting for spring. Here are some of them, recently published in the KCM Blog:
5 Reasons to Buy A Home Now Instead of Spring
by The KCM Crew on November 25, 2013 in For Buyers
Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:
Supply Is Shrinking With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.
Price Increases Are on the Horizon Prices are projected to appreciate by over 25% from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.
Owning a Home Helps Create Family Wealth Whether you are rent or you own the home you are leaving in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.
Interest Rates Are Projected to Rise The Mortgage Bankers Association, the National Association of Realtors, Freddie Macand Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the end of 2014. That is an increase of almost one full point over current rates.
Buy Low, Sell High We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.
5 Reasons to Sell Before Spring
by The KCM Crew on November 19, 2013 in For Sellers
Many sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now.
Only Serious Buyers Are Out At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping.
There Is Far Less Competition Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale.
The Process Will Be Quicker One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers.
There Will Never Be a Better Time to Move-Up If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 25% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come.
It's Time to Move On with Your Life Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.
If you're thinking about buying or selling, DO IT! Call me! Happy Thanksgiving!
The homebuying process can be exciting, but also stressful. When there are a large number of buyers in the market for real estate, the odds of being able to purchase your desired home can be low. However, getting a mortgage preapproval prior to home shopping can dramatically increase the odds of success.
Make Mortgage Preapproval Your First Step
A mortgage preapproval should be a homebuyer's first step when purchasing a home. A borrower can choose to meet with a lender or get an initial preapproval over the phone. The preapproval process is similar to the actual mortgage process and will, in fact, eliminate a lot of time after a home has been chosen.
When obtaining a mortgage preapproval, the borrower will complete a mortgage application and submit the necessary documentation to the lender. The lender will pull a credit report and examine the borrower's credit.
Based on all of this information, the lender will determine the amount of funds that the borrower qualifies for. The borrower will receive a preapproval, which states the amount of funds that the lender agrees to lend provided that certain conditions are met. While a preapproval is an important first step, it is not the final mortgage approval.
Impress Homesellers With Your Mortgage Preapproval
One of the advantages of having a preapproval is that this letter can be shown to real estate agents and sellers when looking for a home. By doing so, both the agent and the seller know that the borrower can qualify for a certain amount of funds. It is proof of the borrower's financial standing and ability to proceed with the home purchase.
Another advantage is that some of the work that is involved in obtaining a mortgage is already done. The lender has already examined the borrower's financial situation, including credit, income and assets. During the preapproval process, the lender will also discuss the most appropriate type of mortgage program that fits the borrower's needs, whether it is a conventional loan or a government loan.
This is significant because not all sellers will accept a buyer who is using a government loan. Knowing the details of what type of loan is appropriate for the borrower, the agent can then show them homes that will fit their preapproval both for cost and type of funding.
How Mortgage Preapproval is Determined
The preapproval is determined by putting the information given to the lender through automated underwriting. In most cases, the preliminary loan file goes through a preprocessing before the preapproval is given to the borrower. Since there is an actual examination of the borrower's documentation, the borrower will also receive a list of additional information that may be needed. The borrower can then submit this information while shopping for a home.
Once a home is found and the sales contract is signed, processing the loan is faster since most of the work for the credit file has been done. The final process involves income and identity verifications, ordering and receiving the appraisal, ordering title documents, obtaining insurance, etc. The final underwriting is the last step before the loan file is sent for closing.
The preapproval process is an important part of a home purchase. Since there is a lot of information involved in obtaining a mortgage, it eliminates many last minute problems that can arise. Obtaining a mortgage preapproval helps the home purchase process go smoothly.
Interesting article from the KCM Blog today:
Above is a graph of the movement of the 30 year fixed mortgage rate since the beginning of 2012.
If you're thinking about buying, here's an interesting article about what happens if you wait..... with home prices and interest rates both rising, delaying your purchase can make a big difference in your monthly payment.
BUYING A HOUSE... THE COST IF YOU WAITED
As an Accredited Buyer’s Representative (ABR®), it is my goal to help you enjoy the home buying process and find the exact home you are looking for. Therefore, I wanted to share this article that I came across to help you avoid some of these homebuyer mistakes. Please let me know if you have any questions.
Common Mistakes Made by First Time Homebuyers by Heather Wright. Copyright © 2003-2013 Real Pro Systems LLC. All rights reserved.