How To Buy When Interest Rates Are High

An image of a home depicting how to buy when interest rates are high

So you are wondering how to buy when interest rates are high? Don’t worry you have come to the right place. There are strategies that you can use that can make home ownership possible! Here are some tips to get you into a home that you can afford and enjoy. You may feel like you know exactly the neighborhood or town that you would like to live in. If you expand your search you may be able to find a home that you love somewhere that is more affordable and can work perfect for you.

How To Buy When Interest Rates Are High, Loan Types and Loan Options

  • The favored loan, for most buyers is a fixed rate mortgage, but what would your payment look like if you were to get a variable rate mortgage? Have a frank discussion with your lender and ask for assistance exploring what is best for you.
  • Remember that when you purchase a home you are not stuck with the loan and the interest rate on the loan. You can refinance when interest rates become more attractive in the future. Interest rates go up and they also come down.
  • Look into grants and down payment assistance or gift funds. Not everyone has a rich uncle that they can call and get a chunk of change from. But do you know if you qualify for no interest down payment assistance? That does exist and you might be able to obtain it. Check with your lender and see if you might be able to qualify.

Home Ownership Equates to Building Wealth

Remember that buying a home to live in is a great way to build wealth. Owning your own place can protect you from ever rising rents. Having a place of your own you can paint the walls the colors you want and enjoy making the place yours. That is how to buy when interest rates are high. So, don’t be discouraged by what you hear in the news. Contact us today and get a recommendation for a lender. Explore whether now is the right time for you to buy!

Common Home Inspection Tests

An Image of the Lead and Radon Brochures to communicate the idea of Common Home Inspection Tests

Congratulations! You have been searching for a home to buy for awhile now and you are so excited. This is because you have a home under contract. Now it is time to call the inspector and get the inspection set up. This is something you should do even if the seller has had the home pre-inspected and even if the contract that was accepted said that you would take the property “as is.” It is important to know what condition the property is in and if there are any issues that you need to plan on addressing now or after closing. In order to find out you will need the inspector to run some common home inspection tests.

Call The Inspector!

So you call the inspector that was recommended by your real estate agent (We Always Recommend Advanced Inspections) and you are ask a bunch of questions. What kind of questions should you plan on having to answer and what is the best answer for those questions? That is what this blog post is about.

Common Home Inspection Tests: Radon

One question that you are sure to be ask is if you would like to have a radon test performed in the property. Radon is a naturally occurring gas that has been determined to cause lung cancer if you are exposed to high concentrations. You have to decide if you are concerned about it. The test costs about $150. The system to mitigate the radon, if the home that you have under contract has a high concentration, is about $2,000. If you are not concerned and do not test for it, know that when it comes time to sell, your buyers may test. If the level of radon is high you will have to disclose and may have to pay for the mitigation system.

Sewer Scope

Another question that your inspector will ask is whether you would like to pay to have a sewer scope preformed on the sewer line for the property. The sewer scope will cost about $200. Should you have this done? The quick answer to that question is that it depends. Is the house older than 25 years? Does it have large trees in the front yard? If the answer to both of those questions is yes, it is probably a good idea to have a sewer scope. If the house is 5 years old and it is located in a new neighborhood with little tiny or no trees, it might be $200 that you could save by not having it done. You can ask the inspector’s recommendations.

Common Home Inspection Tests: Mold and Lead

Other tests that can be performed are tests for mold and for lead. These are not common tests. If the home was built prior to 1978 it has lead based paint. That is a common fact and there is no reason to test. Detailed lead tests can determine if there is lead pipes in the home. Lead pipes would have been used in older construction, pre-1970. The test for mold should be done if there is reason for concern. The inspection is an important part of the under contract process. Getting an inspection and the appropriate tests performed can give you great information. This is vital so you know as much as you can about the home that you are purchasing.

Those are the Common Home Inspection Tests. Contact us for more information or to have your best interests represented when buying your next home.

Red Flags When Buying A Home

Buying a home is an exciting, stressful, and can be a fun process.  What are some important things that all buyers should pay attention to and look out for while shopping for your home?  Here is a list of ten red flags to look for when buying a home. 

Too Much Scent

While looking at home you may walk into a home that smells like air freshener.  Every where you walk in the home you see another plug in or sent producing product.  This is a red flag and the owner of the home could be covering offensive odors.

Red Flags When Buying A Home: Poor Tile Work

A photo of a tile backsplash demonstrating red flags when buying a home

Sometimes home owners take on projects that they know nothing about and they struggle to complete these projects.  Tiling can be a project that looks so easy on the home improvement shows.  Bad tiling can cost a lot to un do and re do.  Check grout lines, and tile alignment. Cracked grout can be a sign of major issues. It won’t be long before these tiles start coming loose. It may also be a sign of water damage underneath the tile. Misaligned tiles are indicative of a home owner completed job and should give you pause. Best case scenario the tile will always be crooked. Worst case, a much shorter life span for your tile.

Foundation and Maintenance Issues

These problems can show up through uneven floors, cracks in walls, sticking windows and doors and gaps that can be found around doors and windows. Poor maintenance in the home can indicate that the seller has ignored other issues.  Poor maintenance can also shorten the life of furnace and a/c units. 

Red Flags When Buying A Home: Beware of Water Nearby

A photo of a tile backsplash demonstrating red flags when buying a home

Water front property is beautiful but can mean more expense to you as the buyer and additional problems.  Water front property can indicate that there is a higher chance of flooding. The property may also require flood insurance. 

Beware of Water Inside

Water can also cause problems inside. Mold is a four-letter word in real estate.  A small bit of mold can cost thousands of dollars to address.  Make sure that bathrooms are inspected for mold.  Check under sinks in kitchen and bath for small gray or black spots. Look for water damage. Musty odor can indicate that you should check further to ensure that the home that you would like to buy does not have water damage. Check ceilings for water damage and even make sure that your inspector checks the attic too.

Cosmetic updates can be the reason that you fell in love with the home.  Beware and make sure that those great updates are not hiding something that could be a deal breaker if you knew about it. Bad ventilation can allow moisture to stick around and create mold.  Make sure that bathrooms have working vent fans. 

Red Flags When Buying A Home: Wonky Windows

Another important thing to watch for is wonky windows.  What is a wonky window?  That is a window that does not open smoothly.  A wonky window can signal foundation issues.  Moreover, windows are pricy to fix and repair.  

Buying a home is exciting.  It is important to know what you are buying.  Watch out for these red flags when buying a home. Get the home inspected to ensure that you are not taking on more than you can handle. Some of the issues listed above are not quick or inexpensive fixes.  You should enjoy home ownership and not feel burdened with a problem that costs thousands to correct. Your inspector should be able to find issues like those listed above.  Then you can make an educated decision to buy.  Let us be your guide through the process. Contact us today.

Home Buyer Frequently Asked Questions

How do agents get paid?

This is one of the most common home buyer frequently asked questions. The seller in a transaction will pay the agent who markets the home and a fee to the realtor that assists the buyer with the purchase of the home. Realtors that work with buyers are typically paid a success fee when the home closes. They buyer typically does NOT pay for the realtor’s services. I am free to you!

Home Buyer Frequently Asked Questions, Why should I use a buyer’s agent?

A buyer’s agent looks out for the best interest of the buyer. Wouldn’t you like a trained, knowledgeable
professional looking out for your best interest when making the biggest financial decision of your life?

Why Should I use an agent when buying new construction?

Have Lestel show you the new construction in the area that is in your price range. She can tell you about
the builder, their reputation and share with you about the neighborhood. She can also negotiate the offer for you. Lestel understands the complexities of the fine print in the builder’s contract and can help you make good decisions regarding options. A new construction representative is there to sell you more features and more house. Lestel can help you set limits and be your guide through the process. Lestel can step in, on your behalf if there is a problem. She is there for you!

Home Buyer Frequently Asked Questions, What are the costs of buying a home?

When you purchase a home you will need to pay for your inspection and appraisal up front as a part of the under contract period. When you close on your home you will need to pay your closing cost and your down payment. How much your closing costs and down payment will be depends on the type of loan that you get. You will need to talk to your mortgage lender to get more information.

What will my monthly payments be?

Your monthly payment will depend on several things. It will depend on how much you are borrowing, what
your interest rate is on your loan, what your real estate taxes are on the home and how much you are paying
in homeowners insurance. If you are paying private mortgage insurance that will also effect your monthly
payment. While you can estimate these figures with a mortgage calculator, your lender will be able to let you know what to expect before you close on your new home.

Home Buyer Frequently Asked Questions, What do I do when I find a home I want to see?

When you find a home that you would like to see, whether on the internet or driving around, call Lestel. If
you contact the agent that has the sign in the yard or the one that is mentioned on the website, you will be contacting the agent working for the seller and who is looking out for the sellers best interest. If you look at a home with another agent Lestel cannot represent you or negotiate the offer for you.

What are the benefits of working with Lestel?

Lestel Meade has been a full time Realtor since 1998. Real estate is her career. Put her Experience, Enthusiasm, Education and Energy to work for you! Contact her today.

New Construction Around Fort Collins

Northern Colorado is an ever growing and changing area. With that comes a lot of development and a lot of new construction around Fort Collins. So you may find yourself thinking about purchasing a new construction home rather than something existing. If this is the path you want to take there are a few things you should know before pulling the trigger on a new construction home in and around Fort Collins, CO. 

First of all it is important to bring an agent. The reason is in the name. An agent is an advocate on your behalf. The builders rep is there for the builder. A lot of people think that by going unrepresented they will save the money. Money that would have otherwise gone to cover their agents commission. This is a common misconception. In reality the builder will charge you the same amount for the same house as the person who walks in after you with their agent. Your agent is there for you to look out for your best interests. As well as negotiate for you and have the hard conversations for you.

In order to make sure you get to work with an agent you need to select one prior to going out to the model home the first time. This is not to say that you can’t still be represented if you have already done this as we have negotiated for clients after this point, but it makes it very difficult. Instead select your agent and have them accompany you to any new construction developments you are interested in. Obviously one of the best realtors in Fort Collins and Northern Colorado is Lestel Meade. So this decision should be the easiest one you make.

Have Lestel show you the new construction in the area that is in your price range. She can tell you about the builder, their reputation and share with you about the neighborhood. She can also negotiate the offer for you. Lestel understands the complexities of the fine print in the builder’s contract and can help you make good decisions regarding options. A new construction representative is there to sell you more features and more house. Lestel can help you set limits and be your guide through the process. Lestel can step in, on your behalf if there is a problem. She is there for you! Contact her today.

Tips To Make A Competitive Offer

Home buyers get ready for a wild ride this spring.  We are shaping up to have another spring buying season that has low inventory and a high number of buyers.  With this being the case, it is important to know how to navigate this market. In order to put you in the best position to win when you write an offer on a home.  Here are 5 tips to make a competitive offer.

Listen to your real estate agent.  

Connect with an agent you trust and let that agent guide you.  Do not trust you emotions.  Your agent can help you stay focused on what is important to you and not allow you to compromise on your must haves or your financial needs.

Tips To Make A Competitive Offer, Know your budget.

It is important to know how much house you can afford.  It is also vital to be pre-approved before you start looking.  Only 44% of today’s prospective buyers are pre-approved.  This alone can help you stand out as a strong, serious home buyer.  It can give you an edge in a competitive offer situation.

Be ready to make a decision.

When you find a home you like be ready to write an offer right away. According to The National Association of Realtors the average property sold today is receiving three offers and is only on the market a total of a few weeks. That is from when it goes on the market to closing.  That means that you do not have the ability to “sleep on it” or you will not be sleeping in the home you love.

Tips To Make A Competitive Offer, Make a fair offer. 

This is where the agent for the buyer should call the listing agent to find out what is important to the seller so that those wishes, if possible can be included in the offer. This is not the type of market for a buyer to get a “deal.”  Your agent can help you arrive at an offer that is based on the market value of the home, based on the location, condition and recent sales in sales in the area.

Be a flexible Negotiator.

Once a seller has received your offer they can accept the offer, reject the offer or counter with their own changes.  In a competitive market it is important to be flexible.  The seller may want a different closing date or want to keep the washer and dryer for example. Being flexible, can mean success for you in the negotiation process. Now what is important and also be ready to walk away if the seller is asking too much.

During the emotional time of buying a home trust your agent to help you keep you on tract, navigating  the market so in the end you end you becoming a home owner. Contact us so that we can guide you through the process.

Home Search Blueprints

Whether you are a first time home buyer or an experienced homeowner, doing your homework before looking for a home is the key to saving you time and helping you get the best value for your money. How is it that your real estate agent helps you? Here are some home search blueprints.

  1. The first step in shopping for a home is to make sure that you have financing ready to go! Your agent can recommend trusted lenders that will take you through the pre-approval process so you are ready to go shopping for your home.
  2. Your Realtor helps you find a home. But more than that, they provide you with information on neighborhoods, schools and the locations so that you can make good decisions on a home that best fits you. Your agent helps you clarify your needs and wants and provides you with property options that meet your specifications as much as possible.
  3. Now it is time to write the offer and negotiate. Your realtor will analyze the value of the home and advise you on what your initial offer should be. The market affects what you can do, but a good negotiator can tip the scales In your favor. Your agent will direct you on how to proceed with the seller’s response to your offer.
  4. Inspection time! Your agent knows the best home inspectors in the area. They will recommend
    the best that can help provide you with the true state of your home that you are interested in buying.
  5. Once you know about the condition of the home it is time to negotiate repair requests. Your agent can help you understand the inspection report and help you evaluate what is important to you to have repaired by the seller or if you should asked for a concession at closing. Realtors help you focus on what repairs to asked for and what to let go of. They can also provide a list of trusted workers.
  6. Your realtor handles all of the details so that your home purchase goes smoothly. They keeps everyone informed. They monitors the loan process so that you can successfully get to closing.
  7. Closing Day! You only need to get through closing to finally get your home, but details can make the difference on that final day. Everything from making sure you bring your driver license to making sure that the wire is received by the title company. Your agent does everything she can to insure that your closing day goes off without a hitch.

Follow these home search blueprints and use an experienced agent. Your agent is your experienced guide through the process from beginning to end. Contact us today.

Plan Ahead to Sell Your Home

If you are thinking that 2022 is the year to sell and move you need to plan ahead to sell your home.  Spring, as I am sure you have heard, is a hot time for sellers and when the real estate market bursts to life.  2021 was a strong market all year long with interest rates being at near record lows.  Spring 2022 is expected to be a great real estate market for sellers. To have your home ready for market by spring, what should  you be doing to prepare?  It may not take as much time as you might think but it is good to prepare so that you are ready to go when the time comes.

The first step is to contact Lestel.  Have her do research on the market in the price range of your home.  You need to know how long it might take to sell your home.   As a seller you need to think backwards.  If it takes 45 days to sell your home and you want to be in your new home by June 1st. You will need to be putting your home on the market early to mid-April. 

Lestel can also tell you is if there are things you need to prepare your home for sale.  Should you be replacing the tired carpet or does it look just fine given our current sellers’ market.  She will make suggestions that will help you maximize what you are able to sell your home for.  She will not suggest you spend money if you will not get more than the money back for improvements.

For example, she does suggest that you replace carpet.  That will cost $5,000.  She will make sure that you get at least $7,000 more for the expense and effort.  It is not worth it if your home would only be worth $5,000 more. Lestel can make some staging suggestions also.  This is not the full staging appointment that she does when you get the house on the market. Instead it is things that you can start doing to prepare like decluttering or furniture rearranging.

Next step is, by the mid to end of March, it will be important to have Lestel do a market analysis on your home.  The reason for waiting until just before you are ready to put your home on the market is so that you have the most up to date, accurate information on the market. Recent sale prices of homes that are similar to your will guide the pricing of your home. 

Plan ahead to sell your home in advance of when you want your home on the market can minimize stress and maximize what you get for your home.  The extra time can make a big difference. Contact us to start today.

Rent Vs. Buy Which is Better?

The Advantages Of Home Ownership:

  • It’s your place. You can decorate the way you want.
  • Homes typically increase in value and build equity. Additionally, owning a home is one of the best ways to build long term wealth.
  • Your costs are more stable then renting. Rent costs typically increase a minimum of 3% per year.
  • Interest and property taxes are tax deductible. Additionally, owning a home does offer many tax advantages that can save you money.

The Disadvantages Of Home Ownership:

  • You are responsible for maintenance of your home. This can be as simple as a toilet repair or as complex and expensive as a roof or furnace replacement.
  • Owning a home is a long term financial commitment.
  • Owning ties you to a location. Moreover, it makes it hard to just pick up and move.

Let The Math Do The Talking

In most situations if you plan to stay in the area it is better to buy instead of rent. If you need to figure out whether buying is best in your situation this rent vs buy calculator will help you decide. You have learned what it takes to buy a home, now it is time to get ready to do so. Before doing anything else you must get your finances in order:

  • Pay down your debt.
    • Pay off your credit cards, car loans etc. Your total debt should be no more than 38% of your income.
    • Once you pay off credit cards make a habit of paying them in full every month. Do not carry a balance on your cards.
  • Get your down payment together.
    – Start saving.
    – Ask for a gift (talk to that rich uncle).
    – Pay yourself first. Deposit a predetermined percentage in your savings account, then live off the rest of your paycheck.
  • Clean up your credit.
    • You generally need a credit score of 650 to get a mortgage. The higher your credit score the lower your interest rate will be. The lower your interest rate the lower your monthly mortgage payment
    • Repair bad credit, talk to your mortgage loan officer about how to do this.
    • Establish credit if you don’t have any. Talk to your mortgage loan officer for tips on how to establish credit.

Contact us and when can help you get started today.

What to Know When Buying a Home?

Let’s take a look at some information that it is helpful to know about the process of buying a home.

What does it mean to get Prequalified

IMG_2790-HDR1) This is an easy, free process that helps a home buyer determine how much money a home buyer can borrow to purchase a home. In order to get prequalified the potential home buyer must consult a mortgage loan officer. Get recommendations from friends or your real estate agent on a good mortgage company and loan officer that will get the loan completed and offer you a competitive interest rate. Additionally, in the process of getting pre-qualified the loan officer will pull credit, look at your assets and income.

2. What is the difference between pre-qualification and pre-approval for a loan? Once you are pre-qualified the next step is to get pre-approved. It is more detailed step in the process and requires a more in-depth assessment of your ability to purchase. Additionally, more information will be required by your loan officer. They will asked for pay stubs, bank statements and tax returns. Moreover, the reason to get pre-approved is that you are viewed by sellers and the realtor for the seller as being serious and stronger when you place your offer on a home. This may give you an advantage.

What Are Closing Costs

IMG_2589-HDR3) Closings costs are the fees that are charged to the buyer for the services that are preformed to process and close the loan. These may include appraisal fees, title insurance, recording fees, loan closing fee and more. These closing costs could be shared with the seller. This should be discussed with your realtor.

4. What is included in a mortgage payment? Typically a mortgage payment includes principal (a part of the amount that you borrowed), interest (a charge for holding the loan), property taxes, and home owners insurance. Your payment may also include private mortgage insurance. Moreover, If PMI is included depends on what percentage of down payment you had when you took out your loan to purchase your property.

IMG_21835. What is PMI? PMI is private mortgage insurance. This is additional insurance that is required by your lender when your down payment is less than 20%. Moreover, this protects the bank against loss if you default on the loan.

6. What is hazard insurance? It is insurance that is purchased to protect you from any financial loss on the property such as fire, wind, hail or other hazards.

What to Know When Buying a Home? Now you know some of the terminology and information that is helpful to know in purchasing a home. Contact us to set up an appointment to get more information and to learn more about the steps to home ownership.