of course, this has to be adjusted for every area of Colorado, but there are some helpful generalizations in here...
from realtor.com
It's no secret that life's been pretty good to sellers for the past several years. Even if you had no need—or desire—to move, the housing landscape might have seriously tempted you to put your house on the market anyway. After all, it's hard not to see visions of dollar signs when your neighbors are unloading their homes for tens of thousands over asking price.
But as they say, all good things must come to an end. And you've probably heard that the white-hot housing market of years past is finally beginning to cool.
So if you haven't listed your home before now, did you miss the boat? Absolutely not. But with each passing month, the experts say, you can expect the housing climate to shift a bit more in buyers' favor.
"It’s definitely still a seller’s market in most of the country. But it’s not the same seller’s market that you saw in the last couple of years," says Danielle Hale, chief economist of realtor.com®. "You might have to think about how your home compares to the competition that buyers are going to see when they're shopping. And you might have to price a little bit more competitively, or think about other enticements to attract buyers."
There's still a chance to cash in for top dollar, though, if you move quickly. Here are the biggest reasons to sell ASAP in 2019.
1. You won't be the only listing for long
The top reason sellers have been in the catbird seat for the past several years? Inventory. There simply weren't enough homes on the market to keep up with buyer demand. And when a "For Sale" sign did go up, you can bet a bidding war would soon follow.
"You might have been the only listing in your neighborhood, and you could put your home up at a certain list price and you would likely see multiple offers at or above that list price," Hale explains.
That tide is turning this year, Hale says. That's because the number of homes for sale is finally increasing, albeit slowly. For now, buyers still outnumber inventory. But if you're thinking about selling and don't want to compete with your neighbors, it'll pay off (literally) to list earlier rather than later. (This is particularly true in pricier markets, where inventory is increasing at a faster rate than more affordable areas.)
"It's going to depend on what neighborhood you're in, but we expect it to be more common this year that you won't be the only listing," Hale says.
2. You still stand to make a 'handsome profit'
Home prices have been on a meteoric rise for the past seven years. In January 2012, the U.S. median home price was $154,700. Today, that figure has nearly doubled—to $289,300—and sellers have rejoiced.
Now comes a twist: 15% of all home listings saw price cuts in January, according to realtor.com data.
That might sound like bad news if you're thinking of selling. But hear us out: Those moderating prices, combined with today's mortgage rates (more on that below), mean increased buyer demand for your house.
Plus, it's not that home prices aren't still increasing—they're just not increasing at the frenzied pace of previous years, which often featured multiple offers at or above asking price, Hale says. So even though you might have some more competition as a seller, things are still looking pretty sweet for you when it comes to cold, hard cash.
"Even if you don't get an offer above your asking price, you're probably still going to come away with a handsome profit from being a seller in 2019," Hale says.
But again, it'll pay to put your home on the market as soon as you can—before conditions change.
"Sellers who list their homes earlier in the year tend to get a higher sales price, often above list, and shorter days on market," says Ali Wolf, director of economic research at Meyers Research.
3. There's high demand for homes under $300K
There's more good news if you own a home below the national median price of $289,300. Not only is that inventory increasing at a slower rate than its luxury counterparts, but there are more buyers shopping at those price points.
"If you’re a below-median-price seller, you will see a seller’s market that is as good as what you saw in previous years—maybe even better," Hale says. "You might still see multiple offers coming in quickly, maybe even above asking price."
4. Mortgage rates are at a new low
Something strange has been happening over the past few months. Experts predicted mortgage rates would rise—and at the end of 2018, they were indeed ticking upward as expected.
But since the start of the year, rates on a 30-year fixed mortgage (the most popular home loan) have been falling, sliding last week to a new 12-month low of 4.37%. And of course, those historically low mortgage rates mean you could have more buyers knocking on your door.
Plus, this temporary dip in rates creates an opportunity for trade-up buyers as well. After all, if you're selling your home, there's a good chance you'll need to buy another one.
Bottom line: Now's the time to hustle and get both transactions done.
"Sellers need to take advantage of low rates as much as buyers do," Wolf says. "Sellers don’t want to get stuck in their homes when rates go up and the math no longer makes sense to move."
5. Millennials are flooding the market
Historically speaking, people tend to buy their first home around age 30. And guess what? We've got a whole bunch of people turning 30 in the next two years—nearly 5 million, in fact, according to realtor.com data. So you can count on those millennials to be a driving force in the housing market.
"Millennials want to own a home as much as prior generations," Wolf says. "We saw millennial shoppers scooping up homes in 2018—and 2019 will be no different."
What's more, Hale adds, is that you won't just be seeing demand from first-time buyers. Older millennials in their middle to late 30s have already owned a home for a few years, and could be looking at now as a prime time to trade up.
"From a seller’s perspective, you’re going to have possibly more interested buyers," Hale says. "So that’s motivation to put your house on the market."
Wednesday, March 27, 2019
Tax Benefits of Buying a Home in 2019
interesting tax considerations on home purchasing from lendingtree.com
For many investors, buying a home has always had an almost magnetic pull. First, there’s the promise of a possible long-term return once the house is sold. But homebuying also promises more immediate tax benefits, like deductions on mortgage interest or property tax payments that might help shave a year-end tax bill.
If you are thinking of buying a home soon, you should know some of the more readily available tax benefits of home ownership recently underwent significant changes because of the new federal Tax Cuts and Jobs Act (TCJA), which Congress enacted in December 2017. Unless it’s extended, the law is expected to end on Dec. 31, 2025.
The TCJA swept in extensive tax reform, and in terms of paperwork alone, the IRS estimated it had to create or revise more than 400 taxpayer forms, instructions and publications for the 2019 tax filing season. This is more than double what a typical year requires.
For many consumers, buying a home still makes sense. But there’s no question the new law has muddied the tax picture, and consumers will most likely need time catching up with both the breadth and details of the changes. Read on to see what you need to know about the new tax law now.
Mortgage-related deductions
One of the primary tax benefits of buying a home is the mortgage interest deduction, which means homeowners can deduct the interest they pay on a mortgage for debt related to buying, constructing, or improving either a primary or secondary home.
Before Dec. 15, 2017, the mortgage tax deduction was limited to interest paid on a maximum of $1 million debt on the property for married people filing a joint tax return, $500,000 for married couples filing separately, and $1 million for single filers. Now, however, the rules are different. For home mortgages taken out on or after Dec. 15, 2017, debt caps are lower: $750,000 in for married couples filing jointly; $375,000 for married couples filing separately; and $750,000 for individuals.
What do drops in debt limit mean for potential buyers?
Let’s start by looking at a married couple filing jointly who just bought a home for $1.1 million, putting 20% down and whose mortgage is now $880,000. With the new cap, that couple can now deduct mortgage interest for only $750,000 of that debt.
If you bought your home before Dec.15, 2017, there’s no need to worry: The new law is “grandfathered in” to protect you from the debt cap changes.
“If you bought your home in 2014 and you have a million dollars of debt on the books, this particular provision does not affect you,” said Kevin Rose, a certified public accountant and certified financial planner, as well as partner at Market Street Partners in Chattanooga, Tenn.
Home equity line of credit changes
With the new tax law, there’s now also a strong chance some homeowners might have less incentive to take on a home equity line of credit (HELOC), a type of second mortgage that is also a popular tool for using home equity as a way to potentially pay off both home — and non-home — expenses.
Before Dec. 15, 2017, homeowners could take out a HELOC and deduct interest on up to $100,000 in home equity debt, regardless of what the money was used for, even if it was used to pay for non-home expenses like college costs. Now, however, home equity loan interest is still deductible for up to $100,000, but only if it’s used to purchase, build or improve a home. That almost certainly means consumers will now find HELOCs to be less attractive options for paying for personal expenses, and that may cut down on their use, said Rose.
Private mortgage insurance changes
With the new tax law, homeowners can also expect to see a change in the tax status of any private mortgage insurance (PMI) they have to pay. That’s because private mortgage insurance (PMI) premiums are no longer tax deductible. That itemized deduction expired on Dec. 31, 2017, and it’s unknown when — or if — it will be reinstated.
First-time homebuyers are typically required to buy private mortgage insurance if they put down less than 20% of the cost of a home. Meanwhile, PMI insurance is required for any mortgage obtained through the government-insured loan program offered by the Federal Housing Administration (FHA). With FHA loans, down payments can be as low 3.5%, but PMI costs can add up quickly. That’s because an FHA loan now charges an upfront 1.75% PMI fee (as a percentage of the total cost of the loan), and annual charges are .85%.
The PMI deduction is one Congress wrestles with regularly. But Chris Hervochon, a certified public accountant and owner of SOAR — A Better Way CPA in Hilton Head, S.C., thinks the PMI tax deduction was done away with this time because the the larger standard tax deduction many taxpayers now claim is able to capture smaller itemized expenses like PMI, so eliminating the deduction actually makes it easier to prepare taxes.
Standard deduction changes
Anyone shopping for a home now needs to pay particular attention to the standard tax deduction allowed by the IRS. That means deciding whether it might be better to ultimately itemize deductions (and claim mortgage interest deductions as well), or just take the standard tax deduction the IRS allows.
Under the new law, the standard deductions allowed by the IRS increased; for example, for a married couple filing jointly, it went from $12,700 in 2017 to $24,000 in 2018. If a married couple had less than $24,000 in itemized deductions — including mortgage interest — then it might be financially smarter for them to go with the standard deduction.
There is a complicating factor: The new tax law now limits deductions of state and local taxes to just $10,000 for married couples and individuals and $5,000 for married couples filing separately. That means it also sets a cap on how much property tax can be deducted, a huge disadvantage for homeowners who live in states like New York, California, Florida and Texas, where property taxes often reach far more than $10,000 annually.
Here’s an example of how this works: If you’re a married homeowner in South Carolina who now pays $7,000 in state income taxes but your property taxes are $5,000, any property tax amount over $3,000 is not deductible under the new tax legislation.
“If you’re thinking about (taking) a standard deduction of $24,000, it’s kind of tough to get there because you’re now limited to $10,000 of real estate tax and state and local income tax,” Hervochon said.
Before the new tax law, Hervochon used to just ask clients whether they owned a home or rented.
“If they said ‘own a home,’ well, you’re going to itemize,” he said. “Now you can’t get away with asking just that question.”
Rose, for his part, said he started seeing clients trying to prepay their property taxes toward the end of 2017, and “going forward, that’s a big change.”
Tax-free profits
Even with the Tax Cut and Jobs Act, there is one significant tax benefit that is staying the same: the amount of capital gains that can go tax-free after a homeowner sells a house at a profit. For example, married homeowners may now retain up to $500,000 in tax-free profits from the sale of their home, and for single filers the number is $250,000.
To qualify for this exclusion, homeowners must have lived in and used the home as their primary residence for at least two years out of the five years before the sale date.
Moving expenses
Before December 2017, taxpayers could deduct moving expenses if they met certain requirements related to distance and time. But under the new tax law, all deductions for moving expenses have been suspended. The only exception is for members of the U.S. Armed Forces on active duty who relocate per a military order related to a permanent change of station.
Another new development: Employers who reimburse moving expenses for employees must now include those expenses as taxable income in employee wages. Before December 2017, those reimbursed moving expenses could be excluded from income.
The final word
It’s still possible some of the tax benefits described above may reappear once the new tax law expires in 2025. But until then — or until Congress passes new tax legislation — buyers in the running will need to look more closely at the tax benefits of homebuying, including whether they’re comfortable making do with potentially larger loads of debt and fewer allowable deductions.
“Sometimes [people] let the tax results affect their decision-making,” Rose said. “They convince themselves it’s a good tax move, but you don’t want to pay a dollar to save 35 cents.”
Before signing the dotted line, consult your accountant to determine if the tax benefits of buying a home make good financial sense for you.
For many investors, buying a home has always had an almost magnetic pull. First, there’s the promise of a possible long-term return once the house is sold. But homebuying also promises more immediate tax benefits, like deductions on mortgage interest or property tax payments that might help shave a year-end tax bill.
If you are thinking of buying a home soon, you should know some of the more readily available tax benefits of home ownership recently underwent significant changes because of the new federal Tax Cuts and Jobs Act (TCJA), which Congress enacted in December 2017. Unless it’s extended, the law is expected to end on Dec. 31, 2025.
The TCJA swept in extensive tax reform, and in terms of paperwork alone, the IRS estimated it had to create or revise more than 400 taxpayer forms, instructions and publications for the 2019 tax filing season. This is more than double what a typical year requires.
For many consumers, buying a home still makes sense. But there’s no question the new law has muddied the tax picture, and consumers will most likely need time catching up with both the breadth and details of the changes. Read on to see what you need to know about the new tax law now.
Mortgage-related deductions
One of the primary tax benefits of buying a home is the mortgage interest deduction, which means homeowners can deduct the interest they pay on a mortgage for debt related to buying, constructing, or improving either a primary or secondary home.
Before Dec. 15, 2017, the mortgage tax deduction was limited to interest paid on a maximum of $1 million debt on the property for married people filing a joint tax return, $500,000 for married couples filing separately, and $1 million for single filers. Now, however, the rules are different. For home mortgages taken out on or after Dec. 15, 2017, debt caps are lower: $750,000 in for married couples filing jointly; $375,000 for married couples filing separately; and $750,000 for individuals.
What do drops in debt limit mean for potential buyers?
Let’s start by looking at a married couple filing jointly who just bought a home for $1.1 million, putting 20% down and whose mortgage is now $880,000. With the new cap, that couple can now deduct mortgage interest for only $750,000 of that debt.
If you bought your home before Dec.15, 2017, there’s no need to worry: The new law is “grandfathered in” to protect you from the debt cap changes.
“If you bought your home in 2014 and you have a million dollars of debt on the books, this particular provision does not affect you,” said Kevin Rose, a certified public accountant and certified financial planner, as well as partner at Market Street Partners in Chattanooga, Tenn.
Home equity line of credit changes
With the new tax law, there’s now also a strong chance some homeowners might have less incentive to take on a home equity line of credit (HELOC), a type of second mortgage that is also a popular tool for using home equity as a way to potentially pay off both home — and non-home — expenses.
Before Dec. 15, 2017, homeowners could take out a HELOC and deduct interest on up to $100,000 in home equity debt, regardless of what the money was used for, even if it was used to pay for non-home expenses like college costs. Now, however, home equity loan interest is still deductible for up to $100,000, but only if it’s used to purchase, build or improve a home. That almost certainly means consumers will now find HELOCs to be less attractive options for paying for personal expenses, and that may cut down on their use, said Rose.
Private mortgage insurance changes
With the new tax law, homeowners can also expect to see a change in the tax status of any private mortgage insurance (PMI) they have to pay. That’s because private mortgage insurance (PMI) premiums are no longer tax deductible. That itemized deduction expired on Dec. 31, 2017, and it’s unknown when — or if — it will be reinstated.
First-time homebuyers are typically required to buy private mortgage insurance if they put down less than 20% of the cost of a home. Meanwhile, PMI insurance is required for any mortgage obtained through the government-insured loan program offered by the Federal Housing Administration (FHA). With FHA loans, down payments can be as low 3.5%, but PMI costs can add up quickly. That’s because an FHA loan now charges an upfront 1.75% PMI fee (as a percentage of the total cost of the loan), and annual charges are .85%.
The PMI deduction is one Congress wrestles with regularly. But Chris Hervochon, a certified public accountant and owner of SOAR — A Better Way CPA in Hilton Head, S.C., thinks the PMI tax deduction was done away with this time because the the larger standard tax deduction many taxpayers now claim is able to capture smaller itemized expenses like PMI, so eliminating the deduction actually makes it easier to prepare taxes.
Standard deduction changes
Anyone shopping for a home now needs to pay particular attention to the standard tax deduction allowed by the IRS. That means deciding whether it might be better to ultimately itemize deductions (and claim mortgage interest deductions as well), or just take the standard tax deduction the IRS allows.
Under the new law, the standard deductions allowed by the IRS increased; for example, for a married couple filing jointly, it went from $12,700 in 2017 to $24,000 in 2018. If a married couple had less than $24,000 in itemized deductions — including mortgage interest — then it might be financially smarter for them to go with the standard deduction.
There is a complicating factor: The new tax law now limits deductions of state and local taxes to just $10,000 for married couples and individuals and $5,000 for married couples filing separately. That means it also sets a cap on how much property tax can be deducted, a huge disadvantage for homeowners who live in states like New York, California, Florida and Texas, where property taxes often reach far more than $10,000 annually.
Here’s an example of how this works: If you’re a married homeowner in South Carolina who now pays $7,000 in state income taxes but your property taxes are $5,000, any property tax amount over $3,000 is not deductible under the new tax legislation.
“If you’re thinking about (taking) a standard deduction of $24,000, it’s kind of tough to get there because you’re now limited to $10,000 of real estate tax and state and local income tax,” Hervochon said.
Before the new tax law, Hervochon used to just ask clients whether they owned a home or rented.
“If they said ‘own a home,’ well, you’re going to itemize,” he said. “Now you can’t get away with asking just that question.”
Rose, for his part, said he started seeing clients trying to prepay their property taxes toward the end of 2017, and “going forward, that’s a big change.”
Tax-free profits
Even with the Tax Cut and Jobs Act, there is one significant tax benefit that is staying the same: the amount of capital gains that can go tax-free after a homeowner sells a house at a profit. For example, married homeowners may now retain up to $500,000 in tax-free profits from the sale of their home, and for single filers the number is $250,000.
To qualify for this exclusion, homeowners must have lived in and used the home as their primary residence for at least two years out of the five years before the sale date.
Moving expenses
Before December 2017, taxpayers could deduct moving expenses if they met certain requirements related to distance and time. But under the new tax law, all deductions for moving expenses have been suspended. The only exception is for members of the U.S. Armed Forces on active duty who relocate per a military order related to a permanent change of station.
Another new development: Employers who reimburse moving expenses for employees must now include those expenses as taxable income in employee wages. Before December 2017, those reimbursed moving expenses could be excluded from income.
The final word
It’s still possible some of the tax benefits described above may reappear once the new tax law expires in 2025. But until then — or until Congress passes new tax legislation — buyers in the running will need to look more closely at the tax benefits of homebuying, including whether they’re comfortable making do with potentially larger loads of debt and fewer allowable deductions.
“Sometimes [people] let the tax results affect their decision-making,” Rose said. “They convince themselves it’s a good tax move, but you don’t want to pay a dollar to save 35 cents.”
Before signing the dotted line, consult your accountant to determine if the tax benefits of buying a home make good financial sense for you.
Greenhouses That Are Actual Homes
from moneywatch.com
fun article from moneywatch on people incorporating greenhouses and conventional houses together...
Homeowners across the world are realizing that one of the simplest ways to save money on heating, lighting and food is to move in with the plants.
Greenhouses don't have to be purely recreational hobby spaces exiled to the backyard. Living inside them can provide insulation for an existing structure, define space in an open floor plan or give your kitchen herbs the sunlight they need to thrive.
Practical considerations aside, greenhouses can also be turned into really beautiful places to call home. The greenhouse where Amy and Rob MacMillan lived in Rhode Island is a prime example of how creative renovators can turn "eco-friendly" into "eco-cozy."
If you're going to live in a greenhouse, you should really play up the light and capture that passive solar energy," Amy MacMillan said. "That aspect of the house is great. If you use it to your advantage, and embrace the landscape outside, you can really minimize your heating costs. ... But when it comes to design, you should really focus on playing up the features that make your home so special. That's true when you renovate a house or just move in to a home."
This Newport, Rhode Island, property was once a greenhouse on the Bonniecrest mansion estate. It was converted into a rough living space in the 1950s, but several decades later Amy and Rob MacMillan bought it from a family friend and turned it into a home.
"Basically everything required a custom design because the house is super unique," MacMillan said. "We really just wanted to work with the space as it was -- it has such a specific vibe -- so we did things like turning the linen closet into a space for the refrigerator and a bar area."
In 1976, architect Bengt Warne decided he wanted to have a greenhouse home in Vänersborg, Sweden. But rather than converting an existing structure and moving inside it, he built a normal house -- and then a greenhouse around it.
The glass shell surrounding Nature House -- or "Naturhus" -- covers about 984 square feet of space. In addition to providing a sunny and warm environment for plants, it also insulates the small inner 492-square-foot dwelling from the cold and cuts the property's estimated electric bill in half. Both structures are heated by an eco-friendly wood-burning oven and a hot water masonry heater.
Naturhus features a large Mediterranean fruit and vegetable garden, which is sustained by a system that recycles the home's gray water and compost to feed the plants. The garden has kiwi, figs, peaches and grapes for wine, among other things that would normally never grow in the chilly Swedish climate.
Famed interior architect and designer Grégoire De Lafforest, known for working with brands like Hermès and Cartier, used a small prefabricated greenhouse structure to define kitchen space in this Parisian Rue Voltaire loft. This former warehouse space used to have a completely open, 1,100-square-foot floor plan and De Lafforest divided it into six sections that he calls "a village of six small houses," according to Dornob.com.
While this greenhouse is used for cooking rather than growing plants, the loft is full of sunlight and reminders of the natural world. The most prominent example is the tall pine tree in the center of the dining room, which can be seen from inside the glass enclosure. Presumably to avoid the mess of falling pine needles, De Lafforest didn't install a live tree. He cut and dried the branches, and then re-attached them to the tree truck with plastic needles.
This greenhouse in Bucks County, Pennsylvania, was inspired by an innovative nearby restaurant: Terrain Garden Café in Glen Mills. Terrain's indoor-outdoor space was appealing to Groundswell Design Group architect David Fierabend, according to Houzz.com, but he also thought his clients would appreciate the restaurant's bright colors and unique display of antiques. Once the clients ate lunch at Terrain, they were sold on building that kind of live-in green space.
A patio made out of recycled railroad tires and a succulent garden connect the main home to the greenhouse, where the homeowners get a beautiful 360-degree view of their 6-acre property. The greenhouse features heated concrete floors and a large fireplace so it can be used during Pennsylvania's cold winters. An array of potted plants and a display of vintage watering cans help retain the greenhouse feel, but these rustic details are balanced with industrial furniture pieces and mixed textures.
"Camouglage House 3," designed by Tokyo-based architect Hiroshi Iguchi, is a glass greenhouse home that blends in perfectly with its surroundings. It's located in Nagano, Japan, a mountainous and lush area with lots to offer. But the forested area outside the property didn't fully satisfy Iguchi, who decided to add some extra space for growing trees inside.
fun article from moneywatch on people incorporating greenhouses and conventional houses together...
Homeowners across the world are realizing that one of the simplest ways to save money on heating, lighting and food is to move in with the plants.
Greenhouses don't have to be purely recreational hobby spaces exiled to the backyard. Living inside them can provide insulation for an existing structure, define space in an open floor plan or give your kitchen herbs the sunlight they need to thrive.
Practical considerations aside, greenhouses can also be turned into really beautiful places to call home. The greenhouse where Amy and Rob MacMillan lived in Rhode Island is a prime example of how creative renovators can turn "eco-friendly" into "eco-cozy."
If you're going to live in a greenhouse, you should really play up the light and capture that passive solar energy," Amy MacMillan said. "That aspect of the house is great. If you use it to your advantage, and embrace the landscape outside, you can really minimize your heating costs. ... But when it comes to design, you should really focus on playing up the features that make your home so special. That's true when you renovate a house or just move in to a home."
This Newport, Rhode Island, property was once a greenhouse on the Bonniecrest mansion estate. It was converted into a rough living space in the 1950s, but several decades later Amy and Rob MacMillan bought it from a family friend and turned it into a home.
"Basically everything required a custom design because the house is super unique," MacMillan said. "We really just wanted to work with the space as it was -- it has such a specific vibe -- so we did things like turning the linen closet into a space for the refrigerator and a bar area."
In 1976, architect Bengt Warne decided he wanted to have a greenhouse home in Vänersborg, Sweden. But rather than converting an existing structure and moving inside it, he built a normal house -- and then a greenhouse around it.
The glass shell surrounding Nature House -- or "Naturhus" -- covers about 984 square feet of space. In addition to providing a sunny and warm environment for plants, it also insulates the small inner 492-square-foot dwelling from the cold and cuts the property's estimated electric bill in half. Both structures are heated by an eco-friendly wood-burning oven and a hot water masonry heater.
Naturhus features a large Mediterranean fruit and vegetable garden, which is sustained by a system that recycles the home's gray water and compost to feed the plants. The garden has kiwi, figs, peaches and grapes for wine, among other things that would normally never grow in the chilly Swedish climate.
Famed interior architect and designer Grégoire De Lafforest, known for working with brands like Hermès and Cartier, used a small prefabricated greenhouse structure to define kitchen space in this Parisian Rue Voltaire loft. This former warehouse space used to have a completely open, 1,100-square-foot floor plan and De Lafforest divided it into six sections that he calls "a village of six small houses," according to Dornob.com.
While this greenhouse is used for cooking rather than growing plants, the loft is full of sunlight and reminders of the natural world. The most prominent example is the tall pine tree in the center of the dining room, which can be seen from inside the glass enclosure. Presumably to avoid the mess of falling pine needles, De Lafforest didn't install a live tree. He cut and dried the branches, and then re-attached them to the tree truck with plastic needles.
This greenhouse in Bucks County, Pennsylvania, was inspired by an innovative nearby restaurant: Terrain Garden Café in Glen Mills. Terrain's indoor-outdoor space was appealing to Groundswell Design Group architect David Fierabend, according to Houzz.com, but he also thought his clients would appreciate the restaurant's bright colors and unique display of antiques. Once the clients ate lunch at Terrain, they were sold on building that kind of live-in green space.
A patio made out of recycled railroad tires and a succulent garden connect the main home to the greenhouse, where the homeowners get a beautiful 360-degree view of their 6-acre property. The greenhouse features heated concrete floors and a large fireplace so it can be used during Pennsylvania's cold winters. An array of potted plants and a display of vintage watering cans help retain the greenhouse feel, but these rustic details are balanced with industrial furniture pieces and mixed textures.
"Camouglage House 3," designed by Tokyo-based architect Hiroshi Iguchi, is a glass greenhouse home that blends in perfectly with its surroundings. It's located in Nagano, Japan, a mountainous and lush area with lots to offer. But the forested area outside the property didn't fully satisfy Iguchi, who decided to add some extra space for growing trees inside.
6 Beautiful Natural Built Homes
from offgridworld.com
Natural built houses are gaining popularity all over the world, and the come in many shapes and sizes. Some small, some large, some quaint and still more and on the verge of fantasy cottages in a fantasy land. Practical, inexpensive, and structurally sound, natural homes are one of the most aesthetically pleasing, and versatile homes in the world. Building with natural materials is pleasing, and there’s something to be said for the intrinsic contentment that comes from building a house with your bare hands. Here are some of the most spectacular natural homes in the world!
Natural built houses are gaining popularity all over the world, and the come in many shapes and sizes. Some small, some large, some quaint and still more and on the verge of fantasy cottages in a fantasy land. Practical, inexpensive, and structurally sound, natural homes are one of the most aesthetically pleasing, and versatile homes in the world. Building with natural materials is pleasing, and there’s something to be said for the intrinsic contentment that comes from building a house with your bare hands. Here are some of the most spectacular natural homes in the world!
Tuesday, February 26, 2019
10 Things to Do the Week Before Listing a Home for Sale
helpful info from moving.com
If your home is about to go live on the market, you’re probably feeling a mix of nervousness and excitement—and possibly a bit of stress about whether you will sell quickly. Selling your home is as much as a mental exercise as it is a real estate transaction, and it’s totally normal to be facing a bit of jitters. On the bright side, there is plenty that you can do in the week before listing a home for sale that can help ease your mind, and that may even help your home get under contract faster. As with most aspects of selling a house, taking active steps is usually going to get you better results than just sitting back and waiting for everything to fall in line on its own. So here are 10 things to do now, before your home goes live.
1. Start spreading the word
Just because your home isn’t technically ready for showings yet doesn’t mean that you can’t start the process of letting people know it will be available. Some realtors will provide you with a “coming soon” sign that you can post up in your front yard, but even if yours doesn’t, you can take the initiative and start letting people know on your social channels. Listed houses are often at their most desirable right when they hit the market, so the more interest you can generate right in the beginning, the better.
2. Toss out, recycle, or donate what you don’t need anymore
You may not be ready to pack up and move yet, but that doesn’t mean you shouldn’t be getting rid of stuff. Buyers want to be able to see themselves in homes when they go for a showing, and having a bunch of the previous owner’s things lying around can really mess with that vision. In addition to helping buyers imagine themselves living in your home, editing down your things now will be a big help when you need to clear out for last-minute showings.Go through each room (yes, even closets—buyers will want to look in there) and organize unwanted items into three piles—trash, recycle, and donate. Try to donate or recycle as much as possible instead of sending things to the landfill.
3. Start staging
Staging is the art of designing your home to highlight its best features. And even if decorating isn’t your strong suit, it’s a part of the home selling process you can’t really ignore—49% of buyers’ agents state that home staging has a positive effect on how buyers view a home, according to the National Association of Realtors’ 2017 Staging Stats report, and 21% of buyers’ agents say it increases the value of a home and decreases the time it sits on the market. The week before listing a home for sale is a great time to start staging, since you’ll have some time to really make sure it’s done right. And don’t feel like you have to spend a ton of money to do a good job; it is definitely possible to stage your home on a budget.
4. Figure out a plan for kids and/or pets
If you have little ones at home—two-legged or four—make sure that you have a plan in place for when showings happen. The house should be completely empty when prospective buyers come through, which is an inconvenience on your end but something that has to be managed. If you don’t have a lot of flexibility, talk to a trusted friend, neighbor, or family member and see if they can arrange to help you out in the event that your kids or pets need a place to go during a showing.
5. Set expectations with your realtor
The first couple of weeks that a home is listed for sale tend to be pretty busy in terms of market activity. Talk to your realtor now, in the week before you go live, about expectations you have about how things should go so that you know exactly what to anticipate. This includes the lead time you would like to have between showing requests and the showings themselves (two hours is usually a good way to go), any rules you have for when buyers and their agents are in your house (let your realtor know if you’re a no-shoe household so they can provide booties), and anything else that will be harder to control once the listing is active.
6. Boost your curb appeal
In addition to staging inside your home, you also want to put some effort into making the exterior of your home look as inviting as possible. After all, while the saying may be not to judge a book by its cover, people often do. Trim your lawn, remove any weeds, and tidy up as necessary. If your siding or driveway could use a refresh, use a power washer to clean them off and have them looking good as new. For other easy ways to improve your home’s curb appeal, check out these tips.
7. Find another place for personal items
A fundamental part of selling your home quickly and in as stress-free a manner as possible is depersonalizing it. Because again, buyers are trying to picture what their life would be like in your home, and that can be hard to do when they’re surrounded by somebody else’s family pictures. The week before listing a home for sale, go through and remove as much personal items as you can. This includes pictures, papers, and pretty much anything with your name on it (and definitely anything hanging up on the fridge). Don’t throw these things out, obviously, but do store them somewhere safe and out of view. It will feel a little bit weird to live in your home without all these personal things around, but it’s worth it if it means your home gets scooped up faster.
8. Stow away valuables
A large majority of the people who go to home showings are doing it with the best of intentions, but there are certainly horror stories of people who go in looking for valuables to take. It’s always better to be safe than sorry, so find a safe storage spot for things like jewelry, checkbooks, medications, and anything else that may be of strong interest to somebody else. If you don’t have one already, purchase a fireproof safe that you can store these items in, and then move it to your car when you’re going to be out and know that showings will be taking place. It’s a small step to take, and one that you’ll definitely be upset you didn’t take if something goes missing.
9. Do some repair work
The week before you list is a great time to make sure all small repairs are taken care of. Fixing up chips or cracks in paint, scuff marks, and loose cabinets will go a long way toward ensuring that your home looks its very best. If there are any major repairs that you plan to take care of, start looking into your options now so that your agent can let buyers know that fixes are in the works.
10. Deep clean
Part of the stress that comes with living in a for sale house is having to keep it museum-levels of clean all of the time. There’s no such thing as just leaving the dishes out for another day when there’s a chance that a buyer might come through. Start the process early and get going with a blank slate by setting aside a day for giving your home a top-to-bottom deep clean. Follow the same tips you’d use to clean a home upon move-in, making sure to get in all of the nooks and crannies. It won’t be fun, but at least it will be easier to ensure your home is as clean as possible for showings when they do start happening.
Selling a home is a major transition long before the moving truck arrives. Using the week before listing a home for sale to get your bearings and optimize your property for a quick sale is a smart idea for all sellers, and will definitely make the entire process easier on you and your family. If you ever have any questions about additional things that you should or should not be doing, ask your realtor about it. They’re there to make your own role easier as much as they are to facilitate the sale itself. So take a deep breath and then dive in—the more you get done now, the more simple the whole thing should go.
If your home is about to go live on the market, you’re probably feeling a mix of nervousness and excitement—and possibly a bit of stress about whether you will sell quickly. Selling your home is as much as a mental exercise as it is a real estate transaction, and it’s totally normal to be facing a bit of jitters. On the bright side, there is plenty that you can do in the week before listing a home for sale that can help ease your mind, and that may even help your home get under contract faster. As with most aspects of selling a house, taking active steps is usually going to get you better results than just sitting back and waiting for everything to fall in line on its own. So here are 10 things to do now, before your home goes live.
1. Start spreading the word
Just because your home isn’t technically ready for showings yet doesn’t mean that you can’t start the process of letting people know it will be available. Some realtors will provide you with a “coming soon” sign that you can post up in your front yard, but even if yours doesn’t, you can take the initiative and start letting people know on your social channels. Listed houses are often at their most desirable right when they hit the market, so the more interest you can generate right in the beginning, the better.
2. Toss out, recycle, or donate what you don’t need anymore
You may not be ready to pack up and move yet, but that doesn’t mean you shouldn’t be getting rid of stuff. Buyers want to be able to see themselves in homes when they go for a showing, and having a bunch of the previous owner’s things lying around can really mess with that vision. In addition to helping buyers imagine themselves living in your home, editing down your things now will be a big help when you need to clear out for last-minute showings.Go through each room (yes, even closets—buyers will want to look in there) and organize unwanted items into three piles—trash, recycle, and donate. Try to donate or recycle as much as possible instead of sending things to the landfill.
3. Start staging
Staging is the art of designing your home to highlight its best features. And even if decorating isn’t your strong suit, it’s a part of the home selling process you can’t really ignore—49% of buyers’ agents state that home staging has a positive effect on how buyers view a home, according to the National Association of Realtors’ 2017 Staging Stats report, and 21% of buyers’ agents say it increases the value of a home and decreases the time it sits on the market. The week before listing a home for sale is a great time to start staging, since you’ll have some time to really make sure it’s done right. And don’t feel like you have to spend a ton of money to do a good job; it is definitely possible to stage your home on a budget.
4. Figure out a plan for kids and/or pets
If you have little ones at home—two-legged or four—make sure that you have a plan in place for when showings happen. The house should be completely empty when prospective buyers come through, which is an inconvenience on your end but something that has to be managed. If you don’t have a lot of flexibility, talk to a trusted friend, neighbor, or family member and see if they can arrange to help you out in the event that your kids or pets need a place to go during a showing.
5. Set expectations with your realtor
The first couple of weeks that a home is listed for sale tend to be pretty busy in terms of market activity. Talk to your realtor now, in the week before you go live, about expectations you have about how things should go so that you know exactly what to anticipate. This includes the lead time you would like to have between showing requests and the showings themselves (two hours is usually a good way to go), any rules you have for when buyers and their agents are in your house (let your realtor know if you’re a no-shoe household so they can provide booties), and anything else that will be harder to control once the listing is active.
6. Boost your curb appeal
In addition to staging inside your home, you also want to put some effort into making the exterior of your home look as inviting as possible. After all, while the saying may be not to judge a book by its cover, people often do. Trim your lawn, remove any weeds, and tidy up as necessary. If your siding or driveway could use a refresh, use a power washer to clean them off and have them looking good as new. For other easy ways to improve your home’s curb appeal, check out these tips.
7. Find another place for personal items
A fundamental part of selling your home quickly and in as stress-free a manner as possible is depersonalizing it. Because again, buyers are trying to picture what their life would be like in your home, and that can be hard to do when they’re surrounded by somebody else’s family pictures. The week before listing a home for sale, go through and remove as much personal items as you can. This includes pictures, papers, and pretty much anything with your name on it (and definitely anything hanging up on the fridge). Don’t throw these things out, obviously, but do store them somewhere safe and out of view. It will feel a little bit weird to live in your home without all these personal things around, but it’s worth it if it means your home gets scooped up faster.
8. Stow away valuables
A large majority of the people who go to home showings are doing it with the best of intentions, but there are certainly horror stories of people who go in looking for valuables to take. It’s always better to be safe than sorry, so find a safe storage spot for things like jewelry, checkbooks, medications, and anything else that may be of strong interest to somebody else. If you don’t have one already, purchase a fireproof safe that you can store these items in, and then move it to your car when you’re going to be out and know that showings will be taking place. It’s a small step to take, and one that you’ll definitely be upset you didn’t take if something goes missing.
9. Do some repair work
The week before you list is a great time to make sure all small repairs are taken care of. Fixing up chips or cracks in paint, scuff marks, and loose cabinets will go a long way toward ensuring that your home looks its very best. If there are any major repairs that you plan to take care of, start looking into your options now so that your agent can let buyers know that fixes are in the works.
10. Deep clean
Part of the stress that comes with living in a for sale house is having to keep it museum-levels of clean all of the time. There’s no such thing as just leaving the dishes out for another day when there’s a chance that a buyer might come through. Start the process early and get going with a blank slate by setting aside a day for giving your home a top-to-bottom deep clean. Follow the same tips you’d use to clean a home upon move-in, making sure to get in all of the nooks and crannies. It won’t be fun, but at least it will be easier to ensure your home is as clean as possible for showings when they do start happening.
Selling a home is a major transition long before the moving truck arrives. Using the week before listing a home for sale to get your bearings and optimize your property for a quick sale is a smart idea for all sellers, and will definitely make the entire process easier on you and your family. If you ever have any questions about additional things that you should or should not be doing, ask your realtor about it. They’re there to make your own role easier as much as they are to facilitate the sale itself. So take a deep breath and then dive in—the more you get done now, the more simple the whole thing should go.
There Goes the Neighborhood: Watch Out for These 7 Red Flags When Buying a Home
good considerations on the buying side from realtor.com
Finally, you've done it: You've scoured the market for available homes—and then some—and found one you can't stop thinking about. It's time to make an offer!
But before you put your money on the line, take a peek around the neighborhood. We won't use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can't change the neighborhood. And if your hood is on the decline, you just might have a helluva time offloading your home when you decide to sell.
A bad neighborhood isn't always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we've identified seven red flags that should give you pause before you sign on the dotted line.
Red flag No.1: Too many houses are on the market
There's nothing wrong with two or three listed houses on the same street. But if you see an army of "For Sale" signs, consider looking elsewhere.
"This points to illiquidity in the market and pricing pressure, which is a risk for buyers," says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.
Of course, the hue of this particular red flag depends on the reason for those "For Sale" signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there's a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.
Red flag No.2: The schools are enrolling fewer students
Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there's no physical room to grow.
"Shrinking class sizes are a red flag," Bernstein says.
There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it's certainly something to consider.
Red flag No.3: The area leans industrial
A nearby strip of cute boutique stores might be a nice selling point, but reconsider the purchase if the closest commercial influences lean toward the industrial.
"Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise," says Ralph DiBugnara, the vice president at Residential Home Funding.
Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.
Red flag No.4: There are lots of empty storefronts
Don't just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?
"Empty storefronts can tell you a lot," Bernstein says. "They point to less disposable income of residents than clearly there once was."
Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don't have money for dinner out, they probably don't have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.
Red flag No. 5: The Stepford style is in full force
You might love the homogenous, well-groomed suburban look (and there's nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?
If all the neighborhood's homes (and landscaping) look suspiciously similar, "explore how restrictive the homeowners association is," says Susanna Haynie, a Realtor in Colorado Springs, Co. "It could be an issue."
Red flag No.6: There's no parking
Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse's car? If the streets have bumper-to-bumper traffic, think twice about buying in the
neighborhood—especially if the home lacks a garage or carport.
"I'm always on the lookout for a lack of parking," DiBugnara say. "It's best to visit at night or on weekends to really, truly tell what will be available to you once you live there."
Unless you commute primarily by foot or bike—or you're OK spending your weekends circling the block—the neighborhood may not be a good fit for you.
Red flag No.7: Surrounding homes aren't well-maintained
A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.
Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept
as more expensive ones. It's about pride. Neighbors with no pride in their home's appearance and upkeep decrease property values for everyone.
Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights.
"If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage," DiBugnara says. Fixing these major problems "could be a major expense, hassle, or detriment to your value later on."
Finally, you've done it: You've scoured the market for available homes—and then some—and found one you can't stop thinking about. It's time to make an offer!
But before you put your money on the line, take a peek around the neighborhood. We won't use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can't change the neighborhood. And if your hood is on the decline, you just might have a helluva time offloading your home when you decide to sell.
A bad neighborhood isn't always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we've identified seven red flags that should give you pause before you sign on the dotted line.
Red flag No.1: Too many houses are on the market
There's nothing wrong with two or three listed houses on the same street. But if you see an army of "For Sale" signs, consider looking elsewhere.
"This points to illiquidity in the market and pricing pressure, which is a risk for buyers," says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.
Of course, the hue of this particular red flag depends on the reason for those "For Sale" signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there's a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.
Red flag No.2: The schools are enrolling fewer students
Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there's no physical room to grow.
"Shrinking class sizes are a red flag," Bernstein says.
There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it's certainly something to consider.
Red flag No.3: The area leans industrial
A nearby strip of cute boutique stores might be a nice selling point, but reconsider the purchase if the closest commercial influences lean toward the industrial.
"Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise," says Ralph DiBugnara, the vice president at Residential Home Funding.
Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.
Red flag No.4: There are lots of empty storefronts
Don't just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?
"Empty storefronts can tell you a lot," Bernstein says. "They point to less disposable income of residents than clearly there once was."
Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don't have money for dinner out, they probably don't have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.
Red flag No. 5: The Stepford style is in full force
You might love the homogenous, well-groomed suburban look (and there's nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?
If all the neighborhood's homes (and landscaping) look suspiciously similar, "explore how restrictive the homeowners association is," says Susanna Haynie, a Realtor in Colorado Springs, Co. "It could be an issue."
Red flag No.6: There's no parking
Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse's car? If the streets have bumper-to-bumper traffic, think twice about buying in the
neighborhood—especially if the home lacks a garage or carport.
"I'm always on the lookout for a lack of parking," DiBugnara say. "It's best to visit at night or on weekends to really, truly tell what will be available to you once you live there."
Unless you commute primarily by foot or bike—or you're OK spending your weekends circling the block—the neighborhood may not be a good fit for you.
Red flag No.7: Surrounding homes aren't well-maintained
A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.
Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept
as more expensive ones. It's about pride. Neighbors with no pride in their home's appearance and upkeep decrease property values for everyone.
Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights.
"If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage," DiBugnara says. Fixing these major problems "could be a major expense, hassle, or detriment to your value later on."
Monday, January 14, 2019
7 must-do’s before buying a home
good considerations from bankrate.com
7 must-do’s before buying a home
“Wanting” to buy a home and “being ready” to buy a home are two completely different things.
A Bank of the West study found that 56 percent of Millennials believe owning a home is more important than paying off debt or retiring comfortably. They may want to buy a home but they might not be ready for it.
Even as many are still hoping to achieve their American dream of buying a home, that doesn’t mean everyone is financially prepared.
Here are seven things you need to do before you buy your home.
Pull your credit report and check your score
Review your budget
Get preapproved
Beef up your down payment
Get an agent
Don’t skimp on an inspection
Make a plan B (and C)
1. Pull your credit report and check your score
Your credit report and corresponding score are your golden tickets to buying a home. They showcase your credit responsibility and worthiness. Your credit score can seriously impact your mortgage rate. The higher your credit score, the lower your interest rate will be. This means you’ll end up owing a lot less money over the life of the loan.
our credit score is broken down by:
Payment history: 35 percent
Credit utilization: 30 percent
Length of history: 15 percent
Types of credit: 10 percent
New credit: 10 percent
You can pull your credit report for free from Bankrate to go over your credit history. Cleaning up your credit report is one of your first steps to pre-buying a home. If there are errors, call one of the three major credit bureaus — Equifax, Experian, and TransUnion — to have them removed.
If you’re noticing a high credit utilization, start chunking away at your debt. See if you can consolidate your debt, refinance for lower interest payments, or transfer a big credit card balance to another card with friendlier repayment terms. Keep your utilization below 30 percent of your total limit.
Avoid getting new credit within a year of buying a home since it can cause a temporary dip in your score. The length of your credit history matters, too. The longer your credit history, the more credit-responsible you look.
2. Review your budget
If you’re working on a clean bill of credit health, give your budget a hard assessment. Use the 28-36 rule to see where your money is going. This is when your maximum household expenses shouldn’t exceed 28 percent of your gross monthly income. Your debt, like credit cards and loans, shouldn’t exceed 36 percent.
Your debt-to-income ratio, or DTI, is important to lenders for determining how much home you can afford and if you’re a good candidate to receive a mortgage. You might discover you need to make some adjustments, like spending less on travel and clothing, for example, to make room for a mortgage payment.
Fine-tuning your budget pre-homebuying will allow you to put extra cash towards a down payment, closing costs, or potentially higher home costs than you’re paying right now.
3. Get preapproved
With a stellar credit score and a solid down payment built up, you might feel confident in buying the house of your dreams. But until you get preapproved, that house will stay in your dreams.
Getting prequalified is nice, but it’s not the same thing. A prequalification is only based off information you give a lender. A preapproval is completing a mortgage application that pulls all your financial records.
Lenders base how much money they’re willing to give you based on your entire financial existence: your income, debt, and credit history all pay a crucial role. But it’s also there to show you how much home you can afford. If you know you can only get a $200,000 loan, you won’t waste your time looking at half a million-dollar homes.
It’s important to remember that you don’t need to settle on the first lender you find. Browse through different banks, online lenders, and credit unions to see which ones offer the best terms. Compare interest rates, fees, and the terms for paying back your loan. Consider working with a mortgage broker to help you weed through your options.
4. Beef up your down payment
Down payments for homes and cars are very similar: the higher the down payment, the less each monthly payment will be. But homes are much more expensive, which means the more you can put towards your down payment, the better off you’ll be every month.
It can be difficult to keep stashing money away for a down payment when you’re trying to afford basic necessities right now. Try cutting back on things you can manage, like dining out, grocery spending, unnecessary purchases, and travel.
Your debt might be holding you back as well. Try making larger debt payments every month until it’s completely paid off. Then the money you were putting towards your debt can now go to your down payment fund.
5. Get an agent
Whether you’re looking for a home 300 miles away or three, it’s a good idea to find someone who knows the neighborhoods better than you.
A real estate agent is on the hunt for your best interest because they want you to find the right home and buy it. Agents get their commission after a home is sold, so you don’t have to worry about costs up front.
Not all realtors do the same great job. So if you’re on the hunt for a great one, do your research. Look for one with top-notch credentials that has a proven track record. It’s similar to interviewing someone for a job, so talking to a potential agent’s former clients through may help you determine if they’re the right fit for you.
6. Don’t skimp on an inspection
You might think getting a home inspection is unnecessary. After all, you toured the home yourself and you would’ve seen major issues. True, maybe you can spot the big problems, but what about the small ones?
Home inspections go over every single detail of your home, from walls and appliances to the roof and drainage. Getting an inspection is a major part of buying a home because if there is, say, a water leak, you can take this issue back to the seller for negotiation. Either they fix the problem before you buy it or they lower their asking price of the home to accommodate the new cost of fixing the leak.
7. Make a plan B (and C)
As you’ve diligently prepared for your future home, you might not have considered what might happen if it doesn’t work out. What if your down payment is a little low? What if you don’t get the lender with the best terms? What if your dream home has an old roof?
Regardless of the setback, build the “just in case” options into your plan. If your down payment is too low, maybe you get an FHA loan instead of a conventional one. If you don’t get the lender with the best terms, maybe you get the second-best terms. That old roof may save you a lot if you talk the seller down, but you’ll need to make sure you can afford to replace after you close on the home.
Throughout the entire home-buying process, you will face different options for every single step you make. It’s important to remember how your choices are impacted along the way.
7 must-do’s before buying a home
“Wanting” to buy a home and “being ready” to buy a home are two completely different things.
A Bank of the West study found that 56 percent of Millennials believe owning a home is more important than paying off debt or retiring comfortably. They may want to buy a home but they might not be ready for it.
Even as many are still hoping to achieve their American dream of buying a home, that doesn’t mean everyone is financially prepared.
Here are seven things you need to do before you buy your home.
Pull your credit report and check your score
Review your budget
Get preapproved
Beef up your down payment
Get an agent
Don’t skimp on an inspection
Make a plan B (and C)
1. Pull your credit report and check your score
Your credit report and corresponding score are your golden tickets to buying a home. They showcase your credit responsibility and worthiness. Your credit score can seriously impact your mortgage rate. The higher your credit score, the lower your interest rate will be. This means you’ll end up owing a lot less money over the life of the loan.
our credit score is broken down by:
Payment history: 35 percent
Credit utilization: 30 percent
Length of history: 15 percent
Types of credit: 10 percent
New credit: 10 percent
You can pull your credit report for free from Bankrate to go over your credit history. Cleaning up your credit report is one of your first steps to pre-buying a home. If there are errors, call one of the three major credit bureaus — Equifax, Experian, and TransUnion — to have them removed.
If you’re noticing a high credit utilization, start chunking away at your debt. See if you can consolidate your debt, refinance for lower interest payments, or transfer a big credit card balance to another card with friendlier repayment terms. Keep your utilization below 30 percent of your total limit.
Avoid getting new credit within a year of buying a home since it can cause a temporary dip in your score. The length of your credit history matters, too. The longer your credit history, the more credit-responsible you look.
2. Review your budget
If you’re working on a clean bill of credit health, give your budget a hard assessment. Use the 28-36 rule to see where your money is going. This is when your maximum household expenses shouldn’t exceed 28 percent of your gross monthly income. Your debt, like credit cards and loans, shouldn’t exceed 36 percent.
Your debt-to-income ratio, or DTI, is important to lenders for determining how much home you can afford and if you’re a good candidate to receive a mortgage. You might discover you need to make some adjustments, like spending less on travel and clothing, for example, to make room for a mortgage payment.
Fine-tuning your budget pre-homebuying will allow you to put extra cash towards a down payment, closing costs, or potentially higher home costs than you’re paying right now.
3. Get preapproved
With a stellar credit score and a solid down payment built up, you might feel confident in buying the house of your dreams. But until you get preapproved, that house will stay in your dreams.
Getting prequalified is nice, but it’s not the same thing. A prequalification is only based off information you give a lender. A preapproval is completing a mortgage application that pulls all your financial records.
Lenders base how much money they’re willing to give you based on your entire financial existence: your income, debt, and credit history all pay a crucial role. But it’s also there to show you how much home you can afford. If you know you can only get a $200,000 loan, you won’t waste your time looking at half a million-dollar homes.
It’s important to remember that you don’t need to settle on the first lender you find. Browse through different banks, online lenders, and credit unions to see which ones offer the best terms. Compare interest rates, fees, and the terms for paying back your loan. Consider working with a mortgage broker to help you weed through your options.
4. Beef up your down payment
Down payments for homes and cars are very similar: the higher the down payment, the less each monthly payment will be. But homes are much more expensive, which means the more you can put towards your down payment, the better off you’ll be every month.
It can be difficult to keep stashing money away for a down payment when you’re trying to afford basic necessities right now. Try cutting back on things you can manage, like dining out, grocery spending, unnecessary purchases, and travel.
Your debt might be holding you back as well. Try making larger debt payments every month until it’s completely paid off. Then the money you were putting towards your debt can now go to your down payment fund.
5. Get an agent
Whether you’re looking for a home 300 miles away or three, it’s a good idea to find someone who knows the neighborhoods better than you.
A real estate agent is on the hunt for your best interest because they want you to find the right home and buy it. Agents get their commission after a home is sold, so you don’t have to worry about costs up front.
Not all realtors do the same great job. So if you’re on the hunt for a great one, do your research. Look for one with top-notch credentials that has a proven track record. It’s similar to interviewing someone for a job, so talking to a potential agent’s former clients through may help you determine if they’re the right fit for you.
6. Don’t skimp on an inspection
You might think getting a home inspection is unnecessary. After all, you toured the home yourself and you would’ve seen major issues. True, maybe you can spot the big problems, but what about the small ones?
Home inspections go over every single detail of your home, from walls and appliances to the roof and drainage. Getting an inspection is a major part of buying a home because if there is, say, a water leak, you can take this issue back to the seller for negotiation. Either they fix the problem before you buy it or they lower their asking price of the home to accommodate the new cost of fixing the leak.
7. Make a plan B (and C)
As you’ve diligently prepared for your future home, you might not have considered what might happen if it doesn’t work out. What if your down payment is a little low? What if you don’t get the lender with the best terms? What if your dream home has an old roof?
Regardless of the setback, build the “just in case” options into your plan. If your down payment is too low, maybe you get an FHA loan instead of a conventional one. If you don’t get the lender with the best terms, maybe you get the second-best terms. That old roof may save you a lot if you talk the seller down, but you’ll need to make sure you can afford to replace after you close on the home.
Throughout the entire home-buying process, you will face different options for every single step you make. It’s important to remember how your choices are impacted along the way.
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