Tag: Home Buyer Information

Don’t skip the inspection on a new home

So you have found your dream home, it is a newly built home that has that fresh paint smell, the beautiful countertops and the latest in flooring. You will be the first one to call this place home. You are thinking, why should I bother with an inspection. The house is new. What could be wrong with it? It turns out, there could be quite a bit wrong. New homes aren’t immune to inspection issues. According to a report from the National Association of Realtors, 65% of home buyers who conducted inspection on their newly build homes found issues. The report also found that 24% of those buyers reported that their homes did not pass the inspection. Builders today are under increasing pressure to build new house quickly and efficiently. Whenever you increase quantity, you decrease quality. Builders cut corners.

A home inspection is completely optional. That is the case whether you are buying new or an existing home. When you have an inspection done on a property, you are buying peace of mind. When you pay for an inspection on a new build you are ensuring that the “i’s” are dotted and the “t’s” are crossed. What are some common issues that can be found at time of inspection on a new build?

Plumbing issues

Plumbing defects can be found at time of inspection. This can include improperly installed pipes. An inspection can also show plumbing fixtures or drains that are not installed properly. Plumbing issues can cause water damage and mold growth, nothing that you want included in your new home.

Drainage and improper grading

Another issue that can be found at time of inspection, in a new build is poor drainage and improper grading. When there is poor grading water from gutters won’t drain away from the home and this can cause water damage and flooding around the house.

Roof and siding issues

An inspection can also uncover damaged siding and roofing problems. Siding can look great to you and me, but a trained eye can notice issues. This can include siding that cracked during installation. Other common problems that can be uncovered in an inspection is siding that is not sealed around vents. This can lead to water infiltration. Another way to have water infiltration into your home is with a hastily installed roof. With a hastily installed roof you could have problems like improper flashing around roof penetrations for exhaust vents.

There is more

Other issues that are possible to discover during an inspection could include framing issues, installation issues and structural and foundation problems. All of these issues can be discovered during the construction process, but may not be easy to detect once the house has been completed. When you contract with your inspector find out if the inspection will be a one time inspection or if you can have the property inspected during the build process. Also check with the builder to see if independent inspections are allowed and when they can occur. Remember that typically new homes undergo building code inspections. These inspections include framing, electrical, plumbing and insulation. These inspections ensure that the home meets building codes but they do not look at safety.

Lastly remember that the purpose of an inspection is to hire an objective third party to evaluate the condition of the property. Some of defects that will be uncovered do not affect your ability to safely occupy the home. No home is perfect. Not even a home that is brand new.

Is it worth it to pay more for an updated home?

If you are in the market to purchase a home you are more than likely wanting to negotiate the best price possible. But in the real estate market getting the best deal is not always about getting the lowest price. Rather it is about making smart financial decisions regarding convenience and long term value.

Remodeled sell for more

As you look at homes on the market you may have noticed that updated homes sell quickly. They also sell at higher prices. There currently is a greater demand for homes that have been “remodeled.” This demand is a shift in the market and what buyers want. In the past, buyers were more interested in purchasing a “fixer upper” and doing what was needed themselves. That leaves us with the question are you better off spending more for a home that has been fixed up? How do you decide whether to pay a premium for an updated home or roll up your sleeves and do the work yourself? From an investment prospective the math behind home improvements rarely favors the buyer doing the work themselves.

Do the math

This math is one of the reasons why buyers are willing to pay more upfront, rather than taking on the renovation costs and stress. Are you still trying to decide? Here are some things to consider when deciding if paying more makes sense.

  1. Do you have the time, patience and know how to do the renovations?
  2. Are the updates worth the premium that you are paying. Check to see if you can purchase the updated home for less or the same cost of a home that his not updated plus, how much the renovations would actually cost. Your real estate agent can help you with this.
  3. Remember that cost predictability rarely comes with home renovations. There is always the unexpected that costs more money. If you purchase an updated home you know what you are getting upfront. The updated home will not have the remodel surprises.

Every buyers situation is different. Sometimes buying a home that needs some work can be a good investment. Make sure that you take off your rose colored glasses and do the research to know the real costs of fixing up the home. No matter what route you choose, be sure to involve your real estate agent. Your realtor can help you evaluate, unemotionally what is best. They can also connect you with contractors for the things that you can’t do yourself. Lastly, your agent can ensure that you get the best price possible for your home.

Tips for buying in an HOA

After considering the pros and cons of an HOA you are ready to go looking at houses to purchase. Knowing that the home that you choose to purchase might in in an homeowner association. Here are some tips to ensure that you are ready for the life in an HOA if your dream home is located in one.

Tip number one:

Read all of the rules and regulations BEFORE buying. In the State of Colorado the contract has dates and deadlines for when the buyers must be provided with all of the HOA information. This includes rules, regulations and the financial information regarding the HOA. Once the information is received the buyer has the right to cancel the contract, due to finding the HOA docs unsatisfactory. This could be because you find out the HOA has a maximum weight for dogs of 25 pounds. You have a wonderful black lab that weights 75 pounds.

Tip number two:

Another things to remember when you are living in an HOA is to follow the rules. Once you have purchased your property and moved in, you need to follow the rules. They are not suggestions. You cannot bend or or change the existing rules. Not following the HOA rules and regulations can mean you are charged fines.

Tip number three:

Stay informed. Your HOA will communicated with you and let you know proposed changes in rules and fees. Your HOA will also provide you with meeting minutes so that you can stay informed about issues before the HOA board.

Tip number four:

Attend board meetings. Reading the minutes is great, but being present for the annual meeting is even better. The more involved you are the more informed you will be. Being involves allows you to have a say in community decisions.

Tip number five:

Join the board. Most HOA.s are needing board members to volunteer their hime to join the board. Serving on the board lets you directly influence decisions that are made that affect your neighborhood. As a board member, you are able to affect policies and advocate for your interests.

HOA’s are not entirely good or bad. Whether you buy a home in an HOA or not is a personal preference. If you valued the amenities and services that the HOA offers, an HOA could be a good fit. Make sure that you know what you are getting into. Making an informed decision is important. Once you are in an HOA be sure to follow the rules and get involved.

Is buying a home in an HOA for you?

Home buyers often have mixed feelings about homeowner association. (HOA’s) On one hand they often have nice amenities like pools and parks. They also can help to maintain the neighborhood standard. On the other hand, they do come with monthly fees. HOA’s come with rules and regulations that need to be followed. These rules may feel a bit stifling.

If you are looking to buy a home, it is important to sort out how you feel about HOA’s. It is getting more difficult to avoid HOA’s. The number of HOA’s has skyrocketed recently. Locally, most homes that have been built in the last 20 years are in a neighborhood with a home owners association. So, let’s weigh the advantages and disadvantages to help you sort out if you would want to buy a home that is apart of a HOA.

Advantages of buying in an HOA

  1. They provide amenities that you might not have if you were not a part of the HOA. Some HOA’s provide swimming pools, workout gyms, parks and clubhouses. These are great features if you use them. If you will not use these amenities, this may not be an advantage.
  2. HOA’s make it possible for you not to have to deal with neighbors that are not taking care of their homes. Most HOA’s have standards that have to be met. Exterior maintenance will need to be maintained. These standards will keep the neighborhood looking good and help keep property values going up.
  3. Another benefit of a home in an HOA is that there are often maintenance items that are taken care of for you. This can be things like snow removal or lawn care. Other times that can be all exterior maintenance. If you do not like doing these things, this is something you will probably consider a huge benefit.

Disadvantages to buying in an HOA

  1. Those wonderful amenities that I talked about under advantages to buying in an HOA, come with a price. Depending on the amount of services you are receiving from the HOA and the amenities, the HOA fees may make be uncomfortable. The HOA fees may be enough to make the home unaffordable.
  2. HOA dues go up. It is rare, but it is not unheard of for the dues to stay the same, or in rare cases, go down. Please expect and plan for the dues to go up an dup.
  3. HOA’s have rules and the rules are enforced. Make sure that you can live within the rules of the community. They may not allow you to fly the flag of your alma mater from your porch. Are you okay with following that rule and all of the others?

After considering all of the advantages and disadvantages you can see that living in an HOA is not for everyone. If you value the amenities, being a part of a community and are able to follow the rules of that community then living in an HOA could be a great fit.

    Avoiding Regrets

    Are you wondering if 2025 will be the year to move and buy a a home? If you are, you are not alone. Deciding whether to move and buy a home is a big decision. If you are considering a move, it is completely natural to fell anxious and unsure. It is a big change. You will be leaving something you know for the great unknown. That can be exciting, but you may be leaving familiar people and places behind. Will you regret this move? Most people do not regret moving somewhere new!

    No regrets

    A reason study on regret (https://studyfinds.org/the-road-not-taken-what-do-americans-regret-the-most/) nearly one third of baby boomers shared that they have regrets. Some of these regrets go way back more than thirty years and they still think about them more than three times a month. That is baby boomers, but what about younger people? Millennials report that they have regrets too. Some of these regrets include spending too much money, fighting with friends or family, and not speaking up for themselves. Notice that making a move or buying a house isn’t some of the top reasons for regret. In fact, only seventeen percent of those surveyed expressed regret over moving to a new area. This compares to half the people regret spending too much money. So, if you are thinking about moving, but are worried you might have regrets, flip that around and worry more about how you will feel, the future if you don’t take that step to buy a home and move now.

    Work with an agent

    Real estate agents can help you avoid regret. Working with an agent can make a huge difference by helping you reduce the chances that you will make a decision that you might later regret. Agent can share market insights with you. They know how to spot trends, and can help ensure that you buy at the right price. So you will have no regrets about spending too much money.

    A real estate agent can also secure terms that benefit you. This will reduce the risk of buyers remorse. Agents know the different neighborhoods and the lifestyles that they offer. This will help you to find the right fit for you. Another thing that a real estate agent offers is emotional support. Your agent can be a great listener, help you cope with the feelings that you are wrestling with. Finally they can help you to make connections that will make you feel at home sooner. With the right agent by your side you can avoid any buyers remorse and find a home that fits you, your lifestyle and your future plans.

    The Cost of Renting

    If you are a renter, you’ve probably noticed that the cost of rent is high. But you have never known anything else, renting is what you do. Purchasing a place of your own is not something that you can even imagine. But have you ever consider the cost of rent over a lifetime? While you have been renting, have you ever thought about the long term costs of renting? Thinking about the big picture could be something that will motivate you to explore the idea of owning a place of your own.

    According to a study done by Self Financial (https://www.self.inc/info.lifetime-cost-renting-america/). The average American will spend a staggering $333,065 on rent and related expenses over their lifetime. That is roughly $25,260 per year from age 22 to age 35. In Colorado, the annual number is more like $41,598. Additional costs include $12,145 for moving. The study factored in that renters move every couple of years. That is a lot of money. You may be asking why the study only figured from age 22 to age 35. I believe this may be because they figured that by that age many renters would have purchased a home. The study also factored in some additional expense like many renters only get about 25% of their security deposit back.

    How can you keep the lifetime cost of renting down? It is scary to think of handing over that kind of money to a landlord. Let’s talk strategy and figure out how to minimize how much you spend on rent in a lifetime.

    Live with family

    The first way to save money on rent is to live with family for as long as possible. Not everyone can or wants to live with their family between the ages of 22 and 35, but if you can you are saving money. The reality is that many young adults do find themselves living at home. Eighty five percent of parents that were interviewed for the study listed above are thrilled to have their adult kids move back home. So live at home adn make an effort to save as much money as you can until you can afford to purchase a place of your own.

    Move less often

    Another way to save money on that lifetime cost of rent is to not move as often. The study mentioned above revealed that the average renter moves every 27.5 months. The study went on to say that a move, can cost a renter as much as $12,000. So if you rent, try to minimize how often you move. Not moving can add up to significant savings.

    Don’t damage your rental

    Another thing to consider when trying to save money is to avoid damaging the rental you are living in. The study above provided this statistic, 26% of renters surveyed claim to have lost their security deposit at least once. It is also estimated that renters will lose 25% of their security deposit over the course of time that they rent. It is true that landlords can sometimes make it tough to get your deposit back. But if you leave the place clean and it great condition, your landlord will not really have a reason to keep your deposit. This can save you money!

    Renting for a period of time in life is almost unavoidable. There is nothing wrong with renting. But if you would like to purchase a home in the future, use this tips to save money. Then that down payment will be ready and waiting when you are ready to buy a home.

    What NOT to Expect from Sellers

    Congratulations you are under contract to buy a home. You are very excited and can hardly wait to move in. But what can you expect during the next phase of the transaction. Here are some things to remember that you should NOT expect of the seller during the under contract process.

    No excessive showings

    The first thing to remember, once you are under contract, is the house still belongs to the seller. During the under contract period the seller should allow you to get into the house for the necessary inspections. The seller should be willing to allow an additional quick showing for measurements. But, over and above those showings, endless visits to the house for whatever reason should not be expected. It is important to realize that it is still the owners home. They are living their lives and getting ready to move. They do not need a parade of people regularly visiting their home once the home is under contract.

    No early move in

    It is not uncommon to want to check and see if it is possible to move a few things in to the house before closing. It may happen that you end up in between places to live for a period of time, before you can close. If this happens it can be difficult to find a short term rental. In this situation, the question can come up, can we move in early? This is a tough request for the seller. The seller is trying to time their own move. It is also not in the best interest to allow for early move in or to allow the buyers to just move in a few things. When working with the seller, I always tell them to just say NO to this request.

    No deliveries

    Another thing that might happen, during the under contract period is needing to have things delivered to the new house. It would be so easy to just have it delivered early, before closing, and then you would not have to move it. As a buyer, if you are deliberately having Amazon or Wayfair deliver things to the house before closing you are not being appropriate. It is not the sellers responsibility to store or keep track of your belongings. The house is not yours until after closing. It is not uncommon for a piece of mail to be delivered to your new home before you close, but that is different than a delivery. No deliveries until the house is yours.

    No head start on renovations

    As a buyer, you may be buying a fixer upper. You are so anxious to get started on the renovations. It would be great if you could start before closing. You would like to ask the seller if it is okay. The short answer is NO! I know, I know, You just want to paint or have the hardwood floors sanded. Until it is your house, you need to stay excited and wait until after closing.

    This blog post must seem like a lot of no’s. It is. Until after closing, the house belongs to someone else. Things happen and closings do not happen. If you have moved in or had things delivered to the home, what will happen now? Be patient and enjoy the process. The home will be yours soon enough. Schedule things to happen and packages to be delivered after closing.

    2024 Real Estate in Review

    What were the trends driving the real estate market in 2024? The year just ended was a mix for buyers and sellers. It was not an easy year for home buyers over all. It was particularly hard for first time home buyers that were dealing with higher interest rates and higher prices. The real estate market appears to be split into a couple of dominate groups. One is the first group is the first time home buyer that is struggling to get into the market. The other group is the current home owner, that may have a lot of equity and might be able to buy their move up home with cash.

    First time home buyers

    The percentage of first time home buyers has fallen to an historic low of only 24% according to the National Association of Realtors (NAR). As an example, prior to 2008 first time homebuyers made up 40% of the market. Today first time home buyers are finding that it take a lot of money to enter into the housing market. They have been hampered by high rent and may find themselves having a hard time saving the money for a down payment. The first time homebuyers that are able to get into the market to buy a home are older. The median age of first time home buyers in 2024 was at an all time high of 38 years of age.

    Cash buyers

    The other side of the real estate market in 2024 was the cash buyer. Cash buyers soared to an all time high of 26%, according to NAR data. Paying cash allows for these buyers to avoid a mortgage and the high interest rates that soared to over 7% in 2024. According to NAR, 31% of the repeat home buyers were able to pay cash for their home purchase. This is thanks to the appreciation that home owners have seen over the last several years.

    Home sellers

    That is the picture for homebuyers. What was 2024 like for home sellers? Nationally, home sellers were typically able to sell their properties at 100% of their asking price. This is the highest recorded list-to-sell median since 2002. Due to high demand sellers were likely to sell their homes quickly also. The majority of home sellers did not need to offer a sales incentive.

    Bright spots in the market

    There are two very bright spots in the housing market. One is for single women with no children or SINKs as they are called. Household with single incomes, women in particular, made up 20% of the home sales over the last year. Young males, on the other hand, only make up 8% of the home sales.

    The other bright spot in the housing market is new home sales. New home sales nationally accounted for 15% of home sales. That is the highest number in seventeen years. Homebuyers are drawn to new construction for many reasons. Some reasons include the incentives that are being offered by builders, including a buy down of interest rates on the buyer’s loan. New homes also provide buyers with the ability to customize their home design and the ability to avoid renovations and problems with major mechanical systems in the home.

    The National Association of Realtors update for 2024 shows a real mixed bag regarding the real estate market. First time homebuyers are struggling and sellers are doing well. The best way to stay updated on the market and how it affects you is to connect with an agent that you know like and trust that can guide you and help you to make good decisions in the market.

    Are you ready to take out a mortgage?

    Most buyers buy their home by taking out a mortgage. That can feel like a huge commitment and something that you may not feel like you are ready for. CNBC reported that an estimated 7.9 million renters were actually income “mortgage ready” to buy a home. What does that mean? It means that those people were qualified to buy and could have bought a home. This information is according to an analysis for the 2022 American Community Survey by the U.S. Census Bureau. Some of the people that were questioned may be perfectly happy to continue to rent. Others may not have been aware that they could qualify for a mortgage and would have bought if they knew that they could. If you are currently renting, but would love to buy, here are four things that may be keeping you from knowing that you are “mortgage ready.”

    Fear of Rejection

    The first thing that may be keeping you from applying for a mortgage is the fear of rejection. No one liked getting rejected, that is understandable. You may be underestimating your financial abilities and over estimating the strictness of the mortgage requirements. If you look past your fear and reach out to get pre-approved you can find out. Most lenders will also make a plan with you, if you are not ready. The plan can get you to a place that you are pre-approved.

    Not Feeling Worthy

    You may not feel like you are homeowner material. If you did not grow up in a family that owned a home, you may not feel that it is something that you can or should do. Renting is all that you have ever known. You may not see the benefits. The number one benefit is to build wealth.

    Thinking the Process is too Difficult

    Another reason you may not take the step to get pre-approved is because applying for a mortgage sounds like it is too complicated. The process probably sounds like it would require a lot of paperwork and time. The whole process from application, to closing can take 3 weeks to a month. But the pre-approval process may take you only a few minutes. In many situations a lender, that will be providing you with the loan, can tell you if you qualify, and how much money you can spend in a few short minutes. All you have to do is give them a call or fill out an online application, providing them with some basic information.

    Assuming that Renting is Cheaper

    A common misconception is that renting is always a more affordable option than buying a home. This may be another reason why you have not looked into applying for a mortgage. Depending on your area, and market conditions, buying a home can be more cost affective than renting. In addition. homeownership allows to grow your net worth by building equity. There are also potential tax advantages.

    Don’t shut the door on homeownership before you explore if you can qualify and if the situation makes sense for you to buy. Call or email a trusted lender and real estate agent to explore your options.

    The Fed cut rates. Why are they still high?

    If you are like most buyers, sellers and even some real estate agents, you get excited when the Federal Reserve cuts benchmark interest rates. After all, shouldn’t lower rates from the Fed mean lower interest rates for mortgages? It is understandable that so many people believe that a fed rate cut leads directly to lower mortgage rates. It is a common misconception. Media outlets fuel this assumption, highlighting potential benefits to home buyers and sellers.

    What are rates based on?

    So, what does a rate cut really mean for buyers and sellers? When the Fed cuts rates they are typically trying to stir the economy by making borrowing cheaper in the short term. Mortgage rates, don’t always move in lockstep. The Federal Reserve controls short-term interest rates. But the 30 year fixed rate mortgage rate follows long-term rates. The long term rates are primarily influenced by the bond market-specifically the yield on the 10 year U.S. Treasury Bond. Since mortgage lenders tend to set their rates based on what’s happening with these long-term bond yields this is the key thing to watch. But, even watching the 10 year U.S. Treasury Bond doesn’t give you a clear picture of what to expect regarding mortgage interest rates and where they are going. There is so much more that goes into whether interest rates go up or down. It is hard to predict even for a mortgage expert or economist.

    How it affects you

    Of course mortgage interest rates matter somewhat when you are deciding to buy or sell a home. The current interest rate will make a difference in your monthly payment and what you can afford. Remember, if you can afford the payment, whether you buy or sell a house should be based on if it makes sense for you personally. For example, if you need to sell a home because you are getting a divorce or because you just had a new baby, you should make the change in your housing because it is important to you personally. Interest rates, whether they go up or down this week, should not really matter.

    Home Buyers

    So what do the Fed’s interest rate changes mean for home buyers and sellers? It is important to understand that mortgage interest rates are influenced by complex factors. This includes, but is not limited to, the Federal Reserve. As a buyer you should stay informed about what is happening in the economy. You should work closely with your lender to get a feel for what mortgage rates likely will do and how that could affect you. Don’t want to time the market perfectly. There is no perfect. Lock your rates when the numbers work for you.

    Home Sellers

    As a home seller, it is easy to get caught up in the belief that the lowering of rates will mean that home buyers will be flocking to your home. Lower rates may mean more buyers in the market. The most important thing for you to focus on when selling your home is pricing your home competitively and making sure it looks its best.