Tag Archives: buy

Want to Increase Your Net Worth? Buy a House

Financial security is important to all of us. You may think about it from the perspective of being able to take care of your family or the freedom to retire at a younger age or even just the comfort of knowing you have the security to care for yourself. Whatever your reason for wanting financial security, there are several ways to increase your net worth and bring you the financial peace you are looking for.

  1. Make more money. This may mean getting a second job, furthering your education to get a better job or asking for a raise if you have been in your current position for a while and have a good performance record.
  2. Spend less money. When you cut your expenses, you will be able to pay off debt faster and increase your savings. This will work two-fold to increase your net worth.
  3. Buy a house. Almost annually, a study is done to show the comparison between the net worth of homeowners and renters. A recent study revealed homeowners are worth more than 46 times more than renters. Why is this so? There are a couple reasons to consider. Homes are likely to appreciate while your mortgage stays the same. Over time, your home is very likely to appreciate in value. Even during an economic downturn, decreased values are most often temporary and will begin to rise again before too long. When your home value rises, your mortgage still stays the same. When the value of your rental rises, your landlord is likely to raise the amount of your rent to compensate for the change in value.

Another thing to think about is that when you pay your mortgage, you are able to recover most of that money (and sometimes even more due to appreciation) when you sell your home. When you rent a home, the money you spend can’t be recovered when you move out of your rental. You have just helped the landlord increase their net worth. Owning a home acts as a forced savings plan since you must pay your mortgage to keep the bank from foreclosing on you. With each month and year, you pay your mortgage, you are growing your equity in your home. Over time, your equity increases, and you are able to take advantage of that equity when you choose to sell your home. Assuming the value of your home has increased while you owned it coupled with your equity, you can see a nice return on homeownership with a little time.

Statistically, this makes a great case for homeownership but only you can decide what is right for you. If you don’t plan to stay in one area for a long time, this may not be the best time for you to buy a home. If you do plan to stay in one place for a while, it might be a good time to consider buying a home while increasing your net worth at the same time. If you have any additional questions or concerns about buying a home, I will be happy to answer any questions you may have, help you to find your dream home and/or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.

Image by Nattanan Kanchanaprat from Pixabay 

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Buying a Home? Don’t be Surprised by These Extra Expenses

When you are buying a home, you are fixated on one price and that is the big one that you may be paying for over the next 30 years. While that is definitely the most important price, don’t let that be the only thing you think about. There are many other expenses you will encounter when purchasing a home and they could add up significantly. If you haven’t budgeted for extra items, don’t let them sneak up on you and cause your household budget to become unrealistic. Don’t be surprised by the necessary expenses you will encounter throughout the home buying process.

Here are some of the additional expenses you should expect when you buy a home. Take these expenses into account before you buy so you aren’t surprised by them at closing.

Closing costs. Closing costs are part of every home transaction and can add up to thousands of dollars on top of the price of your home. In some cases, your lender may allow you to finance some of your closing costs along with the purchase price of the home and you may also negotiate with the seller to pay a portion of your closing costs as part of the contract. Either way, expect closing costs to total 2% to 4% of the price of your home.

Taxes and insurance. Real estate taxes vary greatly depending on the value of your property and the tax rate where you live. While property taxes are frequently paid via your escrow account and therefore added to your monthly mortgage payment, this will increase your monthly payment and may push that payment beyond an amount you are comfortable with. Insurance will also be added to your escrow account so don’t forget it either. You will definitely need homeowner’s insurance and could need other coverage depending on the location of your home. Make sure your monthly payment leaves room for these items.

Homeowners association fees, condo fees, and utilities. HOA and condo fees are normally paid by your landlord when you rent, as are many utilities such as water and garbage. You will be responsible for them once you own your home. Be sure you have room in your monthly budget for these expenses.

These extra costs can add up, but don’t let them scare you off from buying your own home. As long as you budget for these added expenses before you buy, you won’t have to worry about getting in over your head.

Even if you aren’t buying your first home, it’s easy to forget about some of these items when you get excited about a new home. Take a little time to plan your household budget before you get too far into the homebuying process, so you aren’t surprised by anything after you fall in love with your new home. For additional information on purchasing a home or the home buying process, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.

Photo by Alexander Mils on Unsplash

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What to Know About an Appraisal Report

Without an appraisal on your home, most lenders will not even consider making a loan. An expert opinion of value is required before they will allow a property to serve as collateral. Usually the appraisal is ordered by the lender from an independent appraisal company, but it’s not unheard of for the homeowner to order an appraisal for a variety of reasons including insurance purposes.

Fannie Mae Form 1004 or Uniform Residential Appraisal Report is the most common form of residential appraisal.  This form is used when the lender or homeowner requests a “full appraisal” since it requires an interior and exterior inspection.

Learning how to read an appraisal report will help you understand how the appraiser arrived at his opinion of value.

The first section of a Uniform Residential Appraisal Report will identify the property and detail any improvements on the property. There are a variety of ways to identify the property such as property address and legal description. In addition to identifying the property, there will be sections describing the neighborhood and your home in detail. Comparable properties can be found and evaluated after the appraiser identifies the characteristics of the appraised property.

Section two contains the chart listing all the comparables and the adjustments. Essentially, the second page is a way for an appraiser to “show his work” and justify his opinion of market value. In most cases, the comparables will be sales from within the last six months and within a half-mile radius of the subject property. This prevents the need for the appraiser to make any significant adjustments based on time and neighborhood.

The values of the comparables begin as the listed sales prices, and those values will be adjusted based on how they compare to the subject property. The gross adjustments will then be added or subtracted from the sales prices to arrive at the adjusted values. The appraiser then uses these adjusted values to arrive at his opinion of the subject property’s market value. A lender may not accept the appraisal If the gross adjustment is too high.

An appraiser may also provide an income value and cost value. The income approach is used to evaluate the estimated value of income producing properties such as rental homes, and the cost approach is normally used to estimate replacement costs for insurance purposes.

Additional pages of the appraisal will include supporting documents such as photos of the subject property and surrounding neighborhood, sketches of the subject property, any contracts that were considered during the appraisal process and copies of any other pertinent documents.

Understanding how to read a Uniform Residential Appraisal Report will help you to spot any potential mistakes and have the peace of mind that the appraisal is accurate, as well as to bring them to the lender’s attention before they become an issue. Contact me for a consultation. I’m happy to answer any questions you may have about buying or selling a home, help you to find your dream home or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of jarmoluk/Pixabay.com

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Don’t Forget to Ask the Seller these Questions When you are Buying a House

Don't Forget to Ask the Seller these QuestionsYou have been house shopping for months and have finally found a home that you think might be the one. After looking at so many houses that weren’t quite right, it may be hard to know if you have found the home for you. As you investigate the home to determine if it is what you are looking for, you probably have a lot of questions that you want answered. Who better to ask then the person selling the home? Here are some questions you will likely want to get answers to.

  • What is your favorite thing about the house and what is your least favorite thing about the house?
  • What changes or upgrades did you make to the house while you owned it? Do you have receipts for any of the recent work you have completed?
  • Will you share a list of the home professionals you have used to help you take care of the house? This could be anyone who has made repairs along with landscaping professionals, painters and housekeepers.
  • Do you have or have had children in the local school system?
  • Where and when does trash and recycling get picked up?
  • Is there anything currently wrong with the house that needs to be repaired? You may not get an honest answer here, but it can’t hurt to ask.
  • Why are you moving?
  • Will you provide the average cost of your utility bills?
  • Where do shipping carriers leave packages?
  • What will you miss the most when you move?
  • Make sure you receive copies of the seller’s property disclosure for your review.
  • Is it an active neighborhood to live in?
  • How long have you owned the home?

The seller may not want to answer your questions or may answer some of them but shy away from others. Don’t let this upset you. Like any kind of research, do the best you can to find out everything you would like to know but don’t lose focus if the seller won’t tell you where their packages get left or why they are moving. For additional information regarding the home buying process, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
800 421-7005 office
866 278-7765 efax
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.

Image courtesy of terimakasih0/pixabay.com


 

Are you Ready to Close on Your Home?

Are You Ready to Close on Your HomeWhen you are buying a new home, there are lots of preparations you will need to make so that you are prepared when it is time to close. If you haven’t bought a home before or it has been a while, you may not think of everything you need to take care of. Here are some things you won’t to make sure you don’t forget.

  • Cleaning supplies gathered for initial cleaning or a cleaning crew scheduled. While the sellers should leave your home relatively clean, there are likely some areas you may want to clean yourself to make sure they meet your standards. Have your supplies ready so you can do this right away and get started moving in sooner. If you are using a professional, confirm their availability and make arrangements to meet them at the property to let them in.
  • Pack what you will need for the first few days (or longer if your mover is scheduled later) so that you have the things you can’t live without in case it takes you a little while to sort through all of your boxes. These items should include a wide variety of things so you have the basics such as toiletries and medicine, a few days worth of clothes, toilet paper, some snacks and drinks, pet care items if you have pets and anything your children can’t live without like a special stuffed animal or toy. Also, pack your chargers and necessary electronics separately so you can get to them easily.
  • Have you taken care of transferring all of the utilities into your name? Most companies will just make the switch on the day you request and don’t need to come out but take care of this in advance in case they need some time to get the transfer scheduled. You should plan to have everything in your name as of the day of closing. While you are handling utilities, make sure you have taken care of any necessary insurance. Your mortgage lender will need this information as well so this should be done in advance but if you aren’t getting a mortgage, don’t forget this step.
  • Do you plan to have the locks changed on the house? Go ahead and schedule a locksmith to come to the home so you can get this done right away.
  • Are there any appliances that you need to purchase? Go ahead and make arrangements for those. If you are purchasing them, don’t open any new credit accounts or spend significant amounts of money that might change your credit situation. Your mortgage lender will do a final credit check before closing and new accounts may change your credit score and cause an issue with your loan. If you need to open a new account to make your purchase, do your research and select your appliances and wait to finalize the purchase after closing.

All of these items will help you make sure you are ready for closing and don’t have any surprises that you aren’t prepared for. For additional information regarding the home buying or selling process, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
800 421-7005 office
866 278-7765 efax
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.

Image courtesy of photomix-company/pixabay.com


 

Prioritizing Your Home Needs versus Your Wants

Prioritizing Your Home Needs vs Your WantsWhen you are ready to buy a home, assuming you have taken care of determining how you will pay for your home, the next question you are likely to ask yourself is what kind of home you are looking for and begin to make a list of your needs and your wants. It’s really easy to have trouble distinguishing needs from wants but if you take some time to do this, it will help you narrow down your housing options, so you are able to select the right home for you without being overwhelmed by all of the choices. If more than one person will be making decisions about your home, you should both make a list of your priorities, so you can then come up with your final list together.

Now, how do you determine what is a need compared to a want? A need might be the number of bedrooms or bathrooms in your home or the size of your yard or garage. A want might be a pool, fenced yard or new flooring. How do you figure out what you can’t live without when compared to what might be more enjoyable? Here are some questions to ask yourself to help you decide:

  • How many people will be living in the home?
  • Do you need land for a special purpose?
  • Does the home need to be in a certain location relative to work, school or other activities?
  • How many bedrooms will you need?
  • How many bathrooms will you need?
  • Do you need to be able to park a company vehicle on your property?
  • Do you have lots of tools or lawn equipment that needs to be stored somewhere?
  • Do you have a frequent need for a guest room for visiting friends or relatives?
  • Do you have an activity that you would like to be able to do easily like run without being on a super busy street?
  • Do you need an office in your home, so you can work?
  • Do you have significant savings for repairs that might be necessary, or do you need to select a home with recent updates?

Most of the answers you have to these questions will help you come up with your list of needs, but you will need to evaluate your answers and determine where that item falls in your list of priorities. You may want a four bedroom home with a guest room for family to visit but if that puts you $25,000 over your budget to add the extra bedroom, you may have to sacrifice that for the home office that you will work in every day or the option to be within a few miles of your children’s school. Prioritizing your needs will help you get the most for your money without sacrificing anything that is truly important.

Being realistic is important and your trusted real estate advisor can help you with this. Start with your mortgage lender then after determining your budget, work on your needs and wants list and start searching for your new home. For additional information regarding the home buying process, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.

 

Nancy Davidson
Mammoth Village Properties
760 937-2301 mobile
800 421-7005 office
866 278-7765 efax
nancy@mammothcountry.com
www.MammothCountry.com
CA Broker’s License #01264041

Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The EasternSierra. Visit my website for detailed information regarding today’s real estate markets.

Image courtesy of 905513/pixabay.com