Tag Archives: Home Buying Information

Get the Best Deal on Your Home

The more people there are bidding on your dream property means less chance of getting a great deal on it. Competition is generally considered a healthy, natural happenstance in life. Unfortunately, the same cannot be said for buyers looking into real estate. Here are some tips you should know as a buyer that will help you negotiate the best real estate deal.

Determine whether you want an established home or a fixer-upper. Houses can sometimes be priced comparably even though one may need significantly more work than another. Understanding property values in your area can help.

There’s nothing worse than insulting a seller with a lowball offer before you’ve even done your research. If you find that house you’re looking for, look for comparable sales in the area. A good seller will know what houses in his/her market are going for, so don’t try to outsmart them.

There are other ways to get the “discounts” you’re looking for. In your proposals ask for things that you’d like to see done, or left in the house. Keeping appliances or replacing carpet or other amenities in the home are good ways to save money on changes or additions you’d make anyway. Getting these into the agreement can help you save on your bottom line.

That said, don’t get caught holding all the cards. Remaining in a bidding war over a few thousand dollars is meaningless on a 30-year loan, especially if the house you’re looking at it is your dream home. It’s OK to stand your ground for a good deal, but don’t run yourself out of the deal by asking for too many things at once.

Find out why the seller is getting rid of the home in the first place. If you find out if it’s because of job relocation, divorce, retirement or any number of other factors, you may be able to come to a better understanding which often means a better deal.

Following these guidelines will help improve your chances of getting the best on your home. Contact me today for a consultation. I will be happy to answer any questions you may have, and/or help you find your dream home.

 

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 Flickr.com/kteegarden

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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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Virtual House Hunting

The buzz word virtual is attached to everything today. Virtual learning, virtual meetings, virtual shopping and now virtual house hunting. Sure, there are a few things that you really can’t do virtually but with the Coronavirus pandemic, people have figured out unique ways to adapt almost any situation and searching for a new home is no different. Here are some ways you can expect to search for a new home with virtual tools.

Virtual tours are common to find on homes for sale but have seen significant updates in recent years. It is now common in many price ranges to find 3D tours that incorporate a floor plan of the house with photos and walk you through the home step by step. These tours allow you to feel like you are walking through the home from the comfort of your computer or smartphone. While a tour like this may not make you 100% sure the home is for you, if you don’t like the 3D tour, you will likely be able to eliminate the home from consideration and not need to see it in person.

Another issue with home searches now is that you may be moving to a new area but unable to travel. Once you have viewed any tours available for the properties you are interested in and narrowed down the search to your top choices, your agent can schedule appointments to view the properties and connect with you over Facetime or Skype to allow you to walk through the property with them. Since your connection will be live, you can ask questions and the agent can go through the home at your own pace and show you any area you want to see. This is a great option if you are unable or uncomfortable with viewing the home in person at this time.

Working with an agent who is familiar with the latest technology will make it easier for you to purchase a home at this time. After you select a home you would like to make an offer on, I will prepare the contract and send to you for electronic signatures so there is no risk during signing. While the property is under contract, the home inspection will still need to take place but the inspector can share information with you after the inspection so you can review any issues.

If you have purchased a home before, this may be a little different than your last experience, but it doesn’t have to be scary or overwhelming. I will work with you each step of the way to make sure you are comfortable and understand everything that is going on and are ready to move forward. 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 Vlada Karpovich from Pexels

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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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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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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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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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Why Buy a Home Warranty

When you are buying a home, your real estate agent will likely offer you a home warranty to purchase. As you are making so many decisions to go along with buying a house, you may not really understand what you are purchasing or not purchasing.

What is a home warranty and how does it work?

Think of a home warranty as insurance on the working parts of your house. Like insurance, everything isn’t covered but many things will be, and each home warranty will detail the items that are and are not covered. Suppose your air conditioner stops working. What would you normally do? Without a warranty, you would try to find someone to come look at it and make repairs and hope they know what they are doing. With a home warranty, you call the home warranty company and they will send a professional that has previously proven to be a reputable contractor. You will pay a small service fee according to your warranty and the warranty company will cover the rest. If the item can be repaired, that is covered and if it has to be replaced, that is covered too. In the end, you pay a lot less for the repair.

How much will a home warranty cost?

The cost of a warranty will normally run between $300-$500 depending on the size of your home though with really large homes and some add on options, the cost could be slightly more. The fee covers your property for one year. In addition to the upfront cost of the home warranty, you will also pay a service fee each time you use the warranty. Service fees typically range from $50-$100.

Think of a home warranty like health insurance for your home. You pay something up front for the peace of mind of knowing things will be covered if something breaks and then lesser amounts when you need something. Like health insurance, all items aren’t covered under a home warranty so it won’t cover everything that goes wrong, but it will cover some of the larger items.

What a home warranty is not.

A home warranty is not to cover routine maintenance items such as a new roof, new carpet or new light fixtures. It also will not cover something that is damaged in a storm, fire or other catastrophe. Your homeowners’ insurance policy would cover that.

If you aren’t sure where to purchase a home warranty, you can find many options online or ask your real estate agent for a recommendation. Even though you may not be buying a home right now, they can still offer you advice on a home warranty. Home warranties are renewable each year if you want to continue the coverage. While some years, you may not use it at all. If you have something break, you will be thankful for coverage to cover the majority of your repair costs. Think about the last home repair you had to make and the cost of it. If nothing else, a warranty will allow you to budget your costs, so you have fewer unexpected financial surprises when it comes to taking care of your home. For additional information on home warranties, 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 ClassicallyPrinted from Pixabay.