Thinking about Buying your First Home? 5 Big Considerations for your Purchase

If you are ready to start the search for your first home, it is especially important to align yourself with an experienced Realtor to assist you in this purchase. Recent statistics show that about 37% of real estate buyers are purchasing for the first time. This leaves an additional 63% of the market as repeat buyers that are in most cases older {53 years of age vs. 31 years of age (avg) for first timers}, often more experienced in major life decisions and transitions, and frequently with higher credit scores, greater economic stability, and a prettier picture to offer mortgage lenders. **2011 National Association of REALTORS profile of home buyers and sellers: http://www.realtor.org/prodser.nsf/products/186-45-11?OpenDocument

Youth and inexperience are certainly not valid reasons to shy away from a home purchase, but you will need an advocate who knows the market and can guide you to this exciting milestone. I’d like to share a few important considerations for those of you considering your first home purchase. If you have a friend or family member thinking about taking the plunge, feel free to send this information their way.

  1. Get real with your mortgage lender about your TOTAL house payment on any property you are interested in. PITI: Principle + Interest + Taxes + Insurance is what makes up your monthly payment. If you are moving from an apartment or other rental property, you will also want to consider your monthly HOA, or Home Owner’s Association dues. Some neighborhoods have them, some don’t, but you’ll want to be aware of these additional costs when shopping for your home.
  2. Supersize may not feel so super when you take a look at your monthly utilities. First time buyers often neglect to consider the big picture in terms of the additional costs in dollars, and in time, of owning a home. Ask your Realtor to find out what the utlities bills average for a home you are especially interested in, and consider the costs of either hiring lawn maintenance providers for a large yard, or taking on this task yourself.
  3. Don’t waste time or energy “window shopping” for a home you can’t afford and won’t qualify for a mortgage on. If your budget allows for a $120,000 condo or townhome, work with your Realtor to find the best condo or townhome you can afford! As you move up the property ladder, a snazzier single family home may be in your future. It’s okay to dream, but don’t set yourself up for disappointment. A knowledgable Realtor will hone in on your wants and needs and show you attractive options in your actual price range, and keeping it real will keep you happier in the long run.
  4. Speaking of “what you can afford”, make sure you QUALIFY FOR HOME FINANCING before you begin a home search. A Realtor can direct you to reputable mortgage professional(s) you can choose from before you begin your search, and knowing what you can afford, and what you qualify for before you start shopping is vital.
  5. Be careful with your credit until your home purchase is effectively done. There is nothing more shocking to a first time buyer than learning that their dream of buying a home has been effectively killed by the purchase of a car, expensive furniture, or anything else that might affect their credit. Just don’t do it. Lenders pull a buyer’s credit to qualify them for a mortgage to begin with, and will also pull credit shortly before the closing of the sale to ensure the buyer’s credit remains in good standing and that they still meet the qualifications for the mortgage terms. Taking out a vehicle loan or charging furniture on a store credit account can change the fine balance of your credit picture and sour the deal. For most buyers, a shiny new set of wheels does not outweigh the benefits of their first home purchase.

Are you thinking about Buying your first home, or your next home? What about finally sticking a For Sale sign in the yard now that the sun is shining? I’m here to answer all of your questions, big and small, and to assist with all of your real estate needs. Let me know how I can help.

Jack Meyers

jackestate@aol.com

303.263.3050

Twitter: @jackestate

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Home Improvement ~ Dollars & Sense (Part 2)

We’ve discussed home improvement projects that will likely not repay you when it’s time to sell, and a few thou-shalt-nots that should be avoided altogether in regard to projects in your home. Let’s talk about projects that are worth your time, effort and money, and are better choices in term of home investment.

The Winners (in no particular order):

BIGGER can definitely be BETTER- adding square footage is a good thing.                                                                                                                                                                                               Tips to remember: hire a licensed contractor with a good reputation, and ensure that all improvements to your property are properly permitted (if your add’l space is not on file with the city, you technically cannot count the space when selling- GET A PERMIT), don’t hesitate to add a bathroom if you can afford it and it makes sense for your home- you can expect a 65% + return on the addition of a bathroom in your home. Consider finishing wasted or empty space like an unfinished basement, attic (great for a charming extra bedroom), or even small spaces like nooks under a set of stairs to build a closet or small office space.

Get Cookin’ with a KITCHEN IMPROVEMENT.                                                                                                                                                                                                                                          You don’t have to spend a fortune to add significant value to your home through a kitchen update. For most buyers, the kitchen really is the heart of the home- as such, any smart improvements will give you bang for your buck. Granite counters are currently appreciated by buyers, but you don’t have to drop big bucks. Refinish or reface your existing cabinets, add new hardware (don’t forget the hinges!), replace appliances with stainless as you are able, update the tile, paint the walls or install a tile backsplash. Each of thes improvements can be affordable, and do-it-yourself with minimal skills and a little advice from your local hardware store. Nationally, kitchen updates bring in a 70% or higher return on investment.

Take it Outside with a NEW or IMPROVED DECK.                                                                                                                                                                                                                                   This is where pulling permits and working with an experienced contractor really matters. Building a safe, sturdy deck that will last the test of time is vital to contributing to resale value when it comes to outdoor spaces. Consider a material like Trex, a composite material that requires no paint or stain and will look great for years. On average, deck additions can return 75-85% or more, depending on materials used, the views from your deck, and your local climate. Treat your deck as a true extension of the living space inside your home, and when it comes time to sell, treat the space accordingly with punchy accessories (outdoor fabric on pillows and seating) and healthy plants.

Bring on the BATHROOMS                                                                                                                                                                                                                                        You, and most certainly your folks, were likely raised in a home with- *gasp* – a single bathroom for the entire family!! Those days are gone, and buyers not only pay more, but generally expect a home to have more than one bathroom. Additional bathrooms will always help a home sell faster and for a better price, and updating outdated bathrooms will make your morning routine more enjoyable while you live in your home, and gather a significant return- typically 90% on a mid-range $10,000 remodel. Do your research before you choose finishes and fixtures, and avoid being overly taste-specific in this space. Buy the very best materials you can afford, and stick with neutrals if you can. White subway tile, shades of gray or taupe, classic chrome fixtures- these are classic finishes you won’t regret 5, 10 or more years down the road, and neither will future buyers of your home. Bring in color and personal style with towels and artwork, and leave the big expenses neutral and classic for the best investment bet.    

Other Worthy Improvements                                                                                                                                                                                                                                 Master Bedrooms, New Windows, New Siding, and basic Landscaping Improvements are also worth consideration when planning updates to your home. Looking down the road to the future sale of your home when planning improvements means you’ll not only enjoy your home more now, but reap bigger rewards when it’s time to list your property.

Thinking about updating? Call me to chat about your ideas, and how they might affect the resale value of your home now or in the future.

Jack Meyers

jackestate@aol.com

303.263.3050

Twitter: @jackestate