Hidden Cost Surprises for First-time Homebuyers

first time homebuyerYou’ve found the perfect home in a great neighborhood that fits your budget!  Congratulations…you’re on your way towards becoming a first-time homebuyer!

Many first-time homebuyers are surprised to find out about the additional, and often unexpected costs, that go with purchasing a home.

But don’t despair or panic just yet because this is where your DeSoto County Realtor comes in!  Together we will discuss the entire process and create a plan so you will be ready and won’t be caught off guard.

First-time Homebuyer Costs

When it comes to purchasing a home, most first-time homebuyers are prepared for the down payment, home owner’s insurance, and various closing costs (like the appraisal and lender fees).  However, there are a handful of other costs they aren’t prepared for.

While it will be hard to prepare for every possibility, you can for most.  So, as you’re putting your home purchase budget together, allocate funds for these potential unexpected costs:

  • Appliances – The current homeowners may take some or all of the appliances with them or the appliances might be on their last leg and will need to be replaced immediately.  Make sure you allow wiggle room in your budget for appliance replacement —- specifically we’re talking about the refrigerator, dishwasher, oven, and washer and dryer.
  • Inspector Finds – You’ll have an inspector tour your potential home well before you sign the papers, so pay close attention to what he finds and the suggestions he makes.  If he finds larger issues, like bad electrical wiring or a weak foundation, think hard about how you will handle these issues down the road if you purchase the house in its current condition.  And double check with your Realtor and Insurance Agent to understand what items are and aren’t covered by the homeowner’s insurance you are purchasing.
  • Remodeling – Kitchen or bath remodeling might be something you have planned for your new home.  If so, create a strategy for how and when you’ll be able to knock out this task.  Include all construction costs/estimates along with a cushion to cover the inevitable surprise costs that come with all remodeling project.
  • Home Improvements – While bigger items, like carpets and blinds, are often covered in the purchase agreement, there are other home improvement items you’ll want to keep in mind as you’ll be handling them yourself.  Even the ‘perfect’ home will need a bit of touching up once you move in, if for no other reason than to truly make it your own.  Allocate money for repairs, painting, and landscaping.
  • Nesting and Lifestyle – Along with paint and a bit of landscaping, there are other costs first-time homeowners often fail to prepare for when creating their budget.  Not only does your budget need to include your mortgage, but it also needs to cover expenses such as cable, electric, water and sewage, and home owner’s association dues (if you’ll have any).  You might also discover that you’ll want a larger bedroom suit because of space or that you’ll need yard equipment now.  Make sure you allot money in your budget for these type of lifestyle and nesting expenses.

It’s true that you can’t be prepared for absolutely every possibility because in life, sometimes things just come up.  However, with the proper planning, you and your realtor will be able to identify most of the potentially hidden costs associated with your new home purchase, giving you the opportunity to plan for how you’ll handle any surprises with out breaking a sweat!

 

How to Search for a Home

When house-hunting fever strikes, it’s easy to let it take over and just download the latest real estate app and immediately hit the streets to tour homes on your own.  If you want to be successful though, there are a few tips and questions you should prepare for first.

To help you find the best possible home for you and your family, here are my best tips on how to search for a new home the right way.

Do Your Research First

Yes, your real estate agent is the expert, but as with anything in life, you want to come to the table prepared.  Do your homework and be proactive!

Check out the neighborhoods you like online and drive around the area on the weekends and in the evenings, so you can get a feel for your potential neighbors, the activity and vibe of the area, the schools, and the overall community.

Understand the Terminology and Process

Purchasing a home is unlike any other purchase you’ll ever make.  It’s both exciting and overwhelming, so you want to be as prepared as possible before you begin the process.

If this is your first home purchase, take time to understand the real estate process and basic terminology.

Home Search Tips

  • Avoid searching for homes that are over your budget.  Establish your parameters before you start your home search, stay within your budget, and allow some wiggle room for negotiating.
  • Always take your realtor with you when you tour a home.  Their extra set of expert eyes will spot things you might otherwise overlook.  Also, if they let you, snap a few photos and takes notes so you can remember the details about the house later.
  • Before you make an offer, walk through the home twice.  You might be surprised by what you notice the second time through.
  • Speaking of touring a home, open all doors, windows, and cabinets.  You want to know as much as you can about the house before you consider making an offer.
  • If it’s your second walkthrough, bring your tape measure and make sure the house will fit your furniture.  Also, take a moment to just sit quietly in the living and the master bedroom to find out how much outside noise you can hear.  If possible, tour the home first on a weekday and the second time on a weekend so you’ll get a full idea of what the neighborhood is like.

Work with a Realtor

In today’s digital age, with so much information available at your fingertips, many people wonder if they really need to work with a realtor or if they can buy and/or sell a home on their own.

While there are some people who are able to do this successfully, trying to buy or sell a home on your own is risky business and not something most of us should attempt.  The experience and expertise a realtor brings to the table can save you time and money.

A realtor will also make the overall search process easier by doing the legwork for you — they will pull together a list of houses that meet your wants and needs and call to schedule the showings on your behalf.

Ready to get started? Contact me now!

Your 7-Step Checklist for Your Final Pre-Purchase Home Walkthrough

You have found the perfect house and now it’s time to sign the final paperwork. Congratulations!  However, before you head into closing, it is essential that you take one final home walkthrough inspection to ensure everything has been taken care of and no major issues were missed prior to taking ownership.

My final home walkthrough checklist includes everything you want to examine one last time with your real estate agent, for your peace of mind, before closing.

Step 1: Be Prepared

Before you step foot into your future home for your final walkthrough, ensure you have everything you need with you in your Walkthrough Survival Kit for the trip.  Here are the must-have items to have with you:

  • Your real estate agent/realtor (always keep them at your side)
  • Your contract of sale
  • Your inspection summary and any warranties/repair receipts
  • Your cell phone and list or preprogram numbers you might need
  • Your inspector

Step 2: Review All Post-Inspection Repairs

In this step, you will review all items that were identified as needing attention in your Inspection Summary.  If you can have your inspector on hand for this process, that would be best, as he/she will be able to point out where things are up-to-code or where corners were cut that shouldn’t have been.

Step 3: Cleanliness and Move-out Damage

Now that the previous owners have moved out, it’s time to assess the situation.  Let’s take a look to make sure that the house was left in a clean and orderly state and that no major damage was done during their move out. Make sure you check everywhere, including the garage, attic, outdoor shed, and basement.

Spend ample time reviewing the kitchen and all bathrooms as both areas are prime locations for small damages and plumbing issues.  Take some time to inspect appliances, plumbing, and faucets as well.

If you do spot damage, make a note of it and if it’s significant, ask that it either be fixed prior to closing or that a contingency plan/retribution be offered as part of the closing agreement.

Step 4: Inspect Doors and Windows

As you’re going through each room of the house, take time to carefully inspect all doors and windows.  You’re looking for leaks in the seals, doors that are off hinges, locks that don’t work, and windows that stick or don’t open.

It might seem silly, but fixing these type of issues once you move in can be a time-consuming hassle.

Step 5: Test the HVAC and Sprinkler Systems

Next on your list is to fully test the HVAC and sprinkler systems.  To test the HVAC, turn on the heat and go room-to-room to ensure that it’s heating as it should; then, do the same for the air conditioning.

Unless it’s winter and the sprinkler system has been shut down for the season, go ahead and test out the sprinklers.  If it has been shut down and flushed out already, add a contingency to your closing that will help cover any costly repairs that might already be there that you could get stuck with post close.

Step 6: Thoroughly Inspect the Electrical System

Following the same principles, as we defined with the HVAC and sprinkler systems, you should do a detailed inspection of your electrical system prior to closing and identify any issues that might have been previously overlooked.  Here is a list of items you can focus on in your review:

  • All electrical outlets (if there is a reset, make sure it functions)
  • Circuit breaker or breaker box
  • All light switches
  • The doorbell
  • The security system and fire alarms
  • Garage door operating system (interior wall mount, outside code mount, and handheld openers)
  • Outdoor lighting

Step 7: Exterior Walk About

Finally, you should go outside to walk your property and examine the condition of both the outside of the house and the yard itself.  Be on the lookout for missing or damaged siding, cracks in pavement or pavers, gutter damage, or rickety/rotted wood on decks and gazeboes.

Final Home Walkthrough Outcome

Once you’ve completed your final walkthrough, sit down with your inspector and real estate agent and put together your plan.  Identify items that must be fixed before closing, items that can be covered via a line item or addendum to the closing documentation, and items that are super small and you are willing to cover yourself.

Once you’ve established your list and you are comfortable with what you’re asking for, your real estate agent will handle it for you and you’ll be able to relax knowing that you’ll be walking into closing with things in perfect order.

Have more questions on what to look for during your final home inspection walkthrough?  Contact me and I’ll help you through the entire process!

Home Value: Estimate Before You Sell

Are you considering selling your home?  Before you start the process of putting your home on the market, do a quick home value estimate first.  A quick estimate will give you an idea of whether or not selling will give you a good enough return on your investment to make now the right time to sell.

Home value estimators also provide a great guide for bidding on a potential home you are interested in.  The estimator will give you an idea of what homes of similar value go for in the same area.  While your realtor will provide you with more information to use in your final offer, an estimator is a great first-line of reference during the process.

Here are two home value estimators I recommend:

Home Value Estimator by NerdWallet

Home Value Estimator by Chase

Once you have your home value estimate, contact me and let’s discuss optimal pricing and get started on the process of getting your home on the market!

 

Why Work with a Realtor

work with a realtorIn today’s digital age, with so much information available at your fingertips, many people wonder if they really need to work with a realtor or if they can buy and/or sell a home on their own.  While there are some people who are able to do this successfully, trying to buy or sell a home on your own is risky business and not something most of us should attempt.

For those of you who have ever wondered what are the advantages come with working with a licensed realtor, here are five good reasons for you to consider:

  • A Realtor Will Have the Education, Experience, and Expertise: Instead of trying to become an expert yourself, why wouldn’t you hire someone who has spent years in the industry, who knows the ins and outs, and who understands how to avoid the potential pitfalls that come with inexperienced buying and selling of property?  A licensed realtor knows the laws and industry requirements and can guide you through the entire process.  With an experienced realtor in your corner, just think of all the time you can save researching how to do it yourself and how much more time you can spend doing things you love instead…like watching cat videos!
  • A Realtor Will Have Your Back: Throughout the course of the process, your realtor will have your back fielding calls and questions from the buyer’s agents, handling general inquiries, and managing showing appointments on your behalf.  A realtor will also be able to filter calls and emails, ensuring you only have to respond to qualified offers, which will save you time and keep your stress level down.
  • A Realtor Knows the Neighborhood and How to Price for Success: Realtors are entrenched in the areas they serve, so they have the knowledge about your neighborhood and surrounding areas.  As such, they are familiar with growth prediction trends, pricing stats and comps, and selling cycles.  They will know how to price and sell your house quickly based on market conditions and will your advisor, guiding you through the purchase process, ensuring you don’t overpay for your area or it’s expected future growth.
  • A Realtor is a Skilled Negotiator and Can Handle the Paperwork:  An experienced, top producing realtor will be able to negotiate far better than the average buyer or seller — partly because of their years of experience and partly because they are emotionally removed from the transaction.  They are trained to present a client’s best interest and are skilled in the art of negotiation.  A seasoned realtor is also able to quickly balance and process all of the required paperwork, ensuring that you’ll never miss a deadline or incur excessive fees for misfilings or late filings.
  • A Realtor Forms a Long-term Relationship:  When you work with a realtor, you will form a long-term relationship, one that will last long after closing.  As a trusted advisor, they will be available for calls and consultation for years to come.  As with most relationships, it will grow over time and you’ll discover extra benefits, like those that come with referrals, both to and from your realtor, and their availability and willingness to support you in a future real estate transaction.

Ready to get started selling your current house or buying your dream home?  Contact me and let me help guide you through the entire process!