Tag Archives: buyer

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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Avoid These Common Mistakes When Buying a Home

With interest rates at an all-time low, this is a great time to buy a home and take advantage of the low rates. Buying a home can be stressful but it doesn’t have to be. With the help of an experienced agent and a little effort to avoid common mistakes, buying a home can be a simple experience.

Hire an Agent
Don’t try to buy a home by yourself. No matter how many homes you have bought, there are lots of things that will need to happen when you are purchasing a home. From finding the property and making an offer to negotiations, inspections and closing, there are lots of things that can come up during this time. Don’t guess your way through. Work with an agent who knows how to work things out to your advantage.

Stick to Your Budget
When you are buying a house, there are many expenses that go into the process. It is important that you stick to your budget because you don’t want to stretch your finances to a point that you are uncomfortable. Start by talking with a mortgage lender who will evaluate your income and credit and give you a preapproval so you know how much you can spend. Their preapproval will be based on certain ratios that allow you to not devote too much of your monthly budget to housing needs.

Don’t Skip Inspections
If you are working with an agent, they will definitely advise you to do inspections on the property so you know what you are buying but even if you aren’t, inspections will help you understand the true conditions and facts of the property you are purchasing and can help you avoid being surprised by something you didn’t know after closing.

Have an Emergency Fund
If you don’t have an emergency fund, it may be a good idea to put buying a home on hold for a little while until you can save more money. When you purchase a home, it will be your responsibility and that means you need to have money to make repairs when something breaks. To give yourself some added protection related to the condition of the home, you might want to consider purchasing a home warranty that would cover some home systems if they failed.

Buying a home doesn’t have to be hard but with this advice and a great agent (pick me!), this can be an exciting time as you purchase a 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 Morning Brew on Unsplash

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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’s a Contingency?

When you are buying a house, there are a lot of things you will have to consider and in many cases you will want certain things to happen before you decide to move forward with buying a house. Situations like these are the benefits of a contingency. A contingency allows you to delay an action until something else happens or doesn’t happen. With home buying, there are many cases where this might be a helpful. Here are a few ways you could benefit from a contingency when you are buying a home.

If you are planning to buy a new home but you have a home to sell, a contingency can be extremely beneficial. You may make an offer on a new home that is contingent upon your current home selling. In this case, you would be allowed a certain amount of time for your home to sell so you can move forward with buying the new home. If your home doesn’t sell in that time frame, the home would go back on the market or you could choose to buy it without selling your current home if you have the resources to do so. This can be beneficial if there is a home you really like that you don’t want to get away from you while your home is for sale. In a seller’s market, sellers may be less likely to accept this option, but it never hurts to ask.

Another contingency that might come up in your home purchase is a financing contingency. This allows you to say the home must appraise for a certain amount or that you must be able to get a loan for the property or you won’t buy it. These contingencies are great ways to protect yourself from being forced to purchase a home that is worth less than you expected or that the lender doesn’t agree to make a loan on. While you can’t technically be forced to purchase a home if you change your mind, there may be penalties for not moving forward with the purchase of the home you have a contract on. These contingencies will protect you from that.

Inspection contingencies are another type of contingency in a sales contract. This allows you time to investigate the condition of the property to make sure it meets your expectations. If a home doesn’t meet your expectations or has major flaws, you will be allowed a certain amount of time to change your mind about purchasing it without a penalty. In some cases, you may find something wrong with the house and the seller agrees to repair it so you will move forward and that is ok too but this contingency will protect you so you aren’t penalized if you and the seller don’t agree.

In the end, contingencies are designed to provide you with protection in the event you choose not to complete a purchase, or you are not able to do so. Without such contingencies built into the sales contract, you could lose your earnest money deposit or even be sued for nonperformance in some cases.  If you have any additional questions 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 Kirk Fisher from Pixabay 

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Fixture vs Personal Property – What Stays and What Goes

When you are buying a new house, you will need to understand the difference in fixtures and personal property. A fixture is part of the house and will stay with the house when you sell it. Personal property will not stay with the home and the seller of the home should take all personal property with them. The most common fixtures in a home are built-in appliances but also frequently include window treatments, blinds and pool equipment. When you are looking at houses, how do you know what will be yours if you buy the house and what will go with the current owners of the home? Here are three questions to ask yourself to help you determine if it will stay or go?

  1. Is the item permanently attached to the house? Dishwashers and stoves are normally attached to the property in some way unlike a refrigerator, washer and dryer that are just plugged in. Consider window treatments. Blinds are most likely attached to the house as are some window treatments. However, a curtain rod may be attached while the curtain itself is just hanging from the rod meaning the curtain rod would stay and the curtain would go. Ceiling fans, light fixtures and built-in shelving are generally fixtures. Landscaping and fencing will also generally be expected to stay.
  1. Is it a furnishing instead of a fixture? Common furnishings are furniture, electronics, rugs, potted plants and flowers and grills. These items are most often not attached to the house in any way and can just be picked up and moved to a new location. If the home has an outdoor kitchen, look at how things are affixed. A grill that is sitting on the patio is different than a grill that is built into an outdoor kitchen or installed in the ground and attached to natural gas.
  1. What is the seller’s intent? Don’t be afraid to ask questions. Some home furnishings may be negotiable or due to the seller’s circumstances they may be willing to leave something. Did they have something custom made to fit in the house or curtains that coordinate with the wallpaper in the living room? If items really make the house and are unique enough that they aren’t likely to work in other properties, they may be willing to leave them. Another option is to request some personal property as part of your offer to purchase or offer to buy it from them. If you are moving in a house for the first time and don’t have everything you need or just really like the way the home is furnished, this is an option that may help you get settled in your new home faster.

Knowing what stays and what goes can be a tough question, but it is something your agent will be able to help you answer. 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
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 Douglas Sheppard on Unsplash

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What is PITI?

When you are buying a house, there will likely be many things you don’t know even if it isn’t your first time buying a house. Don’t let this discourage you. Just ask questions of your real estate agent so you can be sure to understand exactly what is happening. Early in the home buying process, you are likely to hear your mortgage lender and your real estate agent mention PITI. What in the world does this have to do with buying a house? PITI is an acronym for your mortgage payment that includes Principal, Interest, Taxes and Insurance. This is commonly referred to during the mortgage application process as your lender is determining your credit ratios and making sure your income and loan amounts fall within their underwriting guidelines.

When your mortgage lender is calculating your PITI, the yearly amount of money to cover taxes and insurance on your home are put into escrow and divided by twelve, then added to the principal and interest to make up your total mortgage payment. The “P” in the acronym refers to the principal of the mortgage.  This is the total amount of money borrowed from the lender to make your monthly payments.  With each payment made, a portion of the principal is paid off and there is a gradual decrease in the outstanding balance owed.  Over the life of the mortgage, the principal component of each payment towards the outstanding balance starts out very small and gradually increases so you are paying more money toward the principal each month. As the principal payment amount slowly increases with each payment, the equity in your home increases.

The first “I” in PITI stands for interest and is a charge from the lender in order to borrow the money to purchase your home.  Initially, the largest part of your mortgage payment will go towards the payment of interest.  There are a variety of interest types yielding a variety of rates.  Your lender will assist you in determining which interest type and rate is best for your needs.

Taxes “T” are the next section of the PITI acronym.  These are property taxes that will be paid to the county and city where your property is located. First, the property is given a market value which is determined based on the assessed value of your home and paid into your mortgage’s escrow account each month so your lender can pay it when your taxes are due. The tax on market value can change based on any new property reassessments.  However, major home improvements, such as home additions, will trigger a reassessment consequently increasing the tax levied dependent on the added market value.

The final “I” in PITI represents your homeowner’s insurance cost. This insurance is important to both the homeowner and the lender.  As the homeowner, you are protecting your investment from fire and other disasters. The lender is utilizing the insurance to protect their investment of lending you the money.  The insurance guarantees repayment of their loan should any calamity threaten their collateral.  In the majority of cases, lenders require homeowner’s insurance to be carried as a condition of the mortgage.  There are multiple carriers of homeowner’s insurance, thus shopping around for rates is highly recommended.

All of these items together total your PITI and will make up your mortgage payment each month. When you are applying for a mortgage, your lender will let you know this amount, so you know what to anticipate your mortgage payment to be each month. For additional information, reliable recommendations to trusted affiliates or to arrange a meeting to discuss your needs, please contact me today for a consultation. I will be happy to answer any questions you may have about the home buying or selling process, 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.

Image by OpenClipart-Vectors from Pixabay 

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Preparing to Apply for a Mortgage

Your home will likely be the largest purchase you ever make. Because it is a large purchase, very few people are able to buy a home without getting a mortgage. A home mortgage is a long-term commitment and as such, the lender will perform a very thorough check on your financial situation before they commit to loaning you money. If you are ready to buy a home and will be applying for a mortgage, here are some things you can do now to help you prepare.

Start by checking your credit reports. There are three major credit reporting agencies and you should check all of them as they could have different information on your reports especially if there is a mistake. You are allowed to check your credit report once a year for free. The main reason to check your credit report is to look for errors. If you see something that isn’t right, notify the credit agency so it can be corrected. You may find things on your report that you have forgotten about. If there are accounts you are no longer using, don’t close them right now as that can lower your credit score, but you might want to take care of them later after you buy a new house.

Cleaning up your credit report may raise your credit score if you find errors, so this is a very important first step. Your credit score will be a factor when determining the interest rate you get on your mortgage so if there are mistakes that are lowering your score, handling them could raise your score and potentially save you thousands of dollars in interest over the life of your mortgage.

If your credit score is not where you want it to be, the best thing you can do to improve it is to make all of your payments on time. Continue to do this after you purchase a home as this is the most important factor on your credit report.

Prior to applying for a mortgage is not the time to make other large purchases. Your credit score is calculated by comparing how much credit you are using compared to how much credit you have. If you are making a significant purchase, that ratio will change and could possibly change your credit score. If your credit is less than perfect, don’t assume you can’t get a mortgage. Talk to a lender to determine if you can get a mortgage now and if not, a good lender will advise you on what you need to do to improve your credit score so you can buy a home sooner rather than later.

If buying a home is one of your upcoming goals, these are important steps that will help make sure you get approved for a mortgage without waiting forever. 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
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 Clker-Free-Vector-Images from Pixabay 

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What You Need to Know about Buying Rural Property

Have you been thinking about buying a property in a rural area? Whether you are looking for a home in a rural area or a just a piece of land, there are some special considerations you will want to think about that are different from buying a home in other areas.

Probably the most important thing you will want to think about is the intended use of the property. What do you want to use the property for? Are you wanting to have any kind of animals such as horses or chickens? Do you intend to use the property for any kind of commercial activity? Make sure you know what is allowed and not allowed. Even though you own the property, there still can be zoning restrictions that limit what you can do with the property. If the property isn’t zoned the way you would like, it may be possible to change it but that isn’t guaranteed and could take time to make it happen.

Another thing to consider is the adjacent properties and what they are used for. If you are looking for peaceful land to farm and someone is using their land for a use that might disturb that, you will want to know before you make a permanent commitment to it. Even if your property is large enough to protect you from less than desirable neighbors, you still will have to pass neighboring properties every time you leave home. Do you want to drive by an eyesore every time you leave home?

If you plan to build a home on empty land, you will want to carefully consider the placement of the home. Depending on where the lot lines are you’re you could wind up looking at something you don’t want to if you build a home to close to the lines. While you likely wouldn’t build a home there if the property doesn’t suit you currently, remember the owners may change in the future or the current owners may decide to do something different with their property. Waking up next to a pig farm every morning may not be what you are looking for so if you have a large piece of land, it is a good idea to give yourself a buffer around your home site.

Buying a unique property calls for a qualified real estate agent. Land use laws can be complicated and confusing. Don’t risk buying a property that isn’t right for you by handling it yourself. It is also important that you find the right agent to help. Don’t rely on an agent that specializes in intown sales. Find someone with the experience you need that can help you figure out exactly the right property for you. For additional information regarding the buying property, 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 Darmau Lee on Unsplash

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How to Handle a Disaster When Under Contract

You have finally found your dream home and are just two weeks away from closing when the unthinkable happens. It can be something as simple as the air condition breaking right before closing or something more complicated like a fire in the home or a broken pipe that floods the house. No matter what the situation, try your best not to panic, which could be really hard depending on the severity of what has happened.

Remember that until you own the home, the seller is responsible for it so any damages will be their responsibility to repair. If you want to proceed, it may just be a matter of timing that slows you down while repairs are made, and the property is returned to the condition it was in when you made the offer on it. The most important thing to do is to be open with your concerns and questions to make it easier to come to an agreement with the seller about how to move forward.

If you are selling a home at the same time, this could also affect that transaction if you are unable to move out when you planned to. Again, honesty is the best policy and the only way to come up with a workable solution for everyone. If you are still able to move and close on your current home, you may be able to find a temporary rental to stay in while repairs are completed or the buyers may be willing to delay closing until you are able to move. There is no simple solution to this kind of problem and many different people may go into determining the outcome.

From a contract perspective, you will be protected from closing on a home that has been damaged. The property is expected to be in as good or better condition at closing then when the contract was signed. If the condition changes, the seller should be responsible for returning it to its prior condition. If that can’t be done easily or they refuse to do so, you would have every right to terminate your contract on the home, but you still may have some logistics to work through related to the termination of the contract.

While some real estate transactions proceed like clockwork, scenarios like this are when you will be thankful to have an experienced real estate agent helping you with the process. They will guide you through any negotiations or discussions necessary to determine the best path to move forward and assist you with any required contract changes, so all of your paperwork is in order. If things go beyond what your agent is comfortable with, they will be able to help you find an attorney to assist you with your needs. Contact me today if you are in the market to purchase a new home and I will be happy to help you start trying to find your dream home. I will be happy to answer any questions you may have regarding the contract process, buying a home or help you to 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 Николай Егошин from Pixabay 

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Understanding HOA Fees

Whether you are buying your first home or your 10th home, if you have never lived in a community with an HOA or homeowner’s association, you need to make sure you understand how it will impact you if you are buying a property that is ruled by an HOA. Before you jump in, take time to understand the fees, the rules and what is expected of you if you own property within an HOA.

Fees

Fees are what most people think of first when they hear HOA and they come in many different ranges. Fees may be monthly, quarterly or annual and come in all different sizes depending on what they cover. Some HOAs require you to make a one-time payment into the homeowner’s association when you purchase a property. This money is kept in a reserve for future expenses, such as adding amenities or updating certain common areas.

The most common fee is a recurring HOA fee. These can be paid monthly, annually, quarterly or by any other timetable. Fees are generated per lot so if you own more than lot, you will need to pay your fees for each. In return for your fee, you may receive access to different amenities and services. The following are common items covered by HOAs.

  • Utility costs for common areas
  • Trash pickup
  • Ongoing landscaping such as mowing or trimming. This is most often just for common areas but can be for individual yards too in some cases.
  • Maintenance of amenities such as pools, tennis courts, playgrounds and more.
  • Maintenance of roads or other common areas
  • On-site security or gates

While you are not responsible for the actual work involved in maintaining the amenities, your portion of the HOA fees will help cover the expenses for these items and you must pay your portion for the ongoing costs.

Understanding the Rules

While the fees may be what first comes to mind with an HOA, make sure you think about any other restrictions in place under the HOA as well. Do you have a boat or RV that you plan to park on your property? Make sure your HOA allows that or you will need to secure off site parking. Restrictions also may be placed on changes you make to your home and may require you to request permission before making an addition, painting the exterior of your home or adding a pool among many other things. While an HOA can provide some nice amenities and services that maximize the value of your property, the HOA will place limits on you and you don’t want to be surprised by those.

Before you commit to any home, whether it has an HOA or not, make sure you take the necessary time to understand the property and any restrictions on it thoroughly. If the property has requirements that don’t meet your needs, the sooner you find out the better. For additional information on HOA’s, 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.

Image by 12019  from Pixabay 

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