Tag: Home Buyer Information

Famous last words

Here are five things that home buyers often say that they may later regret. As an experienced real estate agent, I know that each and every buyer is different. However, it is amazing, how often home buyers will say the same things to me. Here’s a fun post of common, famous last words of buyers.

Five things you might say

  1. “I know what I can afford.” I asked that the buyers that I work with get pre-approved before we start looking at homes. Some home buyers find this annoying and tell me that they know what they can afford. You may think that you know, but unless you are in the mortgage business, the odds of you knowing exactly where you stand and what you can afford is slim. Before you look at houses get pre-approved.
  2. “I will never buy a _____ style house.” I know whenever I say never that it too often happens. It is best to leave the words always and never out of any conversation. Keep an open mind and your perfect home may be hiding behind a style of home that you would have never considered.
  3. “I want to sleep on it.” Sometimes sleeping on it means that you miss out. There is a saying that I like to use: “if you sleep on it, you may not sleep in it.” Taking a night or a day to think about it seems reasonable, but depending on the market that you are shopping in, that hesitation could lead to heartbreak. Walking away for an hour to think about it probably will not cost you the house, and will give you a chance to clear your head and decide how you would like to proceed.
  4. “I don’t want to get involved in a bidding war.” You have found the house that you love and you want to buy. When your agent calls, they find out that there are two offers on the home already. Are you going to walk away? More often that not you will have your agent write up your best offer to see if you can buy the home that you love. The fear that buyers have in this situation is that they will pay too much for the home.. Make sure that you have your agent guide you. Have your agent look at comparable properties that have recently sold, so you are making informed decisions.
  5. “We can always increase our offer, but we can’t reduce it.” All buyers want to buy a home for the best price possible.In order to accomplish this some buyers want to write an offer that is unrealistically low. In doing this they risk insulting the seller. In this case you may not get a response. Sometimes even if the price is increase, the seller may not be willing to sell the home to you. Coming in too low may work against you.

As the buyer you are wanting to get the best deal. You also want to be able to find the house of your dreams. You want time to go through the process without the pressure of competing with other buyers. Make sure you connect with an agent to guide you through the process looking out for your best interest along the way. By doing this you can make wise decisions.

How will you feel someday if you buy a house now?

What kind of feelings might you have if you stopped renting and purchased a home now? I know you may be hearing that now is a bad time to buy. You may also be hearing that you should wait for interest rates to drop. May people feel like they just can’t buy a house because prices are too high, interest rates are high and the economy is not what it should be. Well, there may not be a better time to buy a home. All of the concerns that are listed above may apply to next year, and the year after that. It can always feel like buying a home is just too hard and out of reach.

It is not possible for everyone to buy a home. But in 2023, the last data available from Realtor.com shows that 32% of all buyers were first-time home buyers in 2023. In 2022 which was another tough year for home buying, 26% of all buyers were first time home buyers. It might be possible for you to buy a home. Here are some surprising feelings you may have ten years from now if you take the leap and buy a home now.

Glad

The first feeling that you may have is that you are GLAD, you got into the market when you did. The house you purchased is likely going to be worth a lot more money in ten years than it is today.

Wishful

Another feeling you may have is WISHFUL! It is hard to afford one house at any given hime, based on your salary and savings. But in the future, when you look back at the price that you paid for your home, you may be wishing you had purchased more than one home, when you did.

Relieved

RELIEVED is another feeling that you could feel in ten years. You will be feeling relieved because you will see how much more people are paying in rent, than you are paying in your mortgage. You have a pretty consistent monthly mortgage payment. It only adjusts annually if taxes or insurance go up. You are not having to worry about those rental increases.

Successful

Buying a home isn’t always easy, but you have done it. There may be struggles, particularly in the early years when the budget is tight. But you have gotten through it. You are building equity and you can take pride and feel SUCCESSFUL because you did it.

Nostalgia

Even if your first home is not your dream home, it more than likely will not be the house you live in for twenty years. You can pay down your mortgage and upgrade to a nicer home. Even if that first home was not the nicest home, you can look back at it with NOSTALGIA as you remember the memories that were made there.

Stop wondering if you can buy a home. Call Lestel and find out if you can! (970)310-8379

Don’t be afraid of the buyers agent agreement

If you are a buyer, planning to buy a home, you have probably heard that there are changes coming coming in real estate. These changes are regarding how buyer’s agents get compensated. Some agents have been implementing the changes ahead of time, others are waiting until the deadline, 8/17/24. What will be required starting 8/17/24 is that all agents will need to sign a written agreement with a buyer prior to showing a home to a buyer. This agreement will include language that states how much compensation the agent will receive. Signing an agreement with an agent sounds like a new thing, but it really is not. There is no reason to be afraid of signing an agreement.

Let’s take a closer look at what must be included in the included in the agreement. There are four items included in the agreement between the agent and the buyer. The four requirements are:

The first requirement

The amount of compensation that the agent will be earning needs to be stated specifically and conspicuously. In the past the buyer may not have known what their agent was earning. Now the buyer has a say in how much their agent will earn and who will pay for that compensation.

The second requirement

The compensation cannot be open-ended and must be objective. For the most part, agents working for the seller have been paid whatever the seller decided to offer the buyer’s agent. It was usually a percentage of the sales price of the home. The seller still may pay the agent that sells their home, but the agreement between the buyer and their agent must state specifically what their agent will be paid. The agreement cannot say, “whatever the seller is willing to pay.” The buyer and the agent will agree what the agent will be compensated. They will also agree how the compensation will be earned. The agreement could be a percentage of the purchase price, a flat fee or an hourly rate, as an example.

The third requirement

The agreement between the buyer and their agent will include terms that limit your agent from being paid more than you’ve agreed upon. For example, the seller may be willing to pay the buyer’s agent compensation in the amount of “X” of the sales price, but if you have agreed upon less than that, the seller can only pay whatever amount you have agreed upon with your agent.

The final requirement of the agreement

The agreement must state that fees and compensation are negotiable. Many people incorrectly believe that there is and was a “standard” real estate compensation for agents. They have always been negotiable. Just because they are negotiable does not mean that your agent will be willing to work for whatever fee you offer them. Each agent will have fees they are willing to work for and may not work for less. You can shop around for agents who will charge the lowest rates. Make sure that you know what services you will be receiving. The level of service may be less than the agent that works for a higher compensation.

The changes were made to benefit the public and to make the process of working with a real estate agent more transparent.

How long will it take to find my next home?

Buyers often wonder how long it will take for them to find the perfect home. It is important to know this in order to plan when to start the home search in earnest. According to the National Association of Realtors it typically takes about ten weeks to find a home. That is based on their data. I do NOT agree. That sounds like an eternity to me.

There is no way to predict how long it will take to find a home. Buyers often take as much time as they have to work with. If you hare not in a rush, you will take much longer than someone that has a short time frame and needs something quick. Market conditions will also affect how long it takes you to find a home. If there are a lot of homes for sale in the price range you are looking and there are not many buyers looking, you will have more control over how long it takes. If there are few homes for sale and many buyers competing for those few homes, it could take you longer to find a home. You cannot control supply and demand. In order to make your home search as efficient and stress free as possible here are some things to be aware of in searching for a home.

Know the areas you like

Know the areas that you are interested in before you begin your home search. You can certainly change your mind, but knowing the areas you are most interested in saves time looking in places you do not want to live. You can focus on the houses, because you know the location that you want.

Know your price

Know your price range. Get pre-approved for a mortgage before you start looking. Accept the reality of what you can afford and look at homes only in that range. Looking at your specific price range allows you to hone in on the perfect house for the money that you can spend. Don’t waste time looking above your price range. I know, you just want to see what a bit more money could buy. It is pointless and makes it difficult for you to like the houses that you can afford. Doing this also adds time to the process due to the psychological and emotional toll that it takes on your during the process.

See houses as soon as they are listed

Make sure you can take time to see a home as soon as it is listed. House hunting can be a daily process, not just saved for the weekend. Real estate cam be fast paced and the good homes sell fast. Try to be the first to see a home and you could be the one to make that home yours.

Make a strong offer

Make sure that your offer is strong the first time. In the world of real estate if you do not make a strong offer the first time you write, you may not get a second chance. The seller may have multiple offers to consider, or the seller may just reject the offer you have presented/. Don’t loose out on the house you want over a few thousand dollars. Make a strong offer the first time.

While you can’t control supply and demand or overall market conditions you can keep the length of time it takes you to find a house to a minimum if you remember these take aways.

Inspection items blown out of proportion

You have fallen in love with the house. You made an offer and it was accepted. The next step in the process is the inspection. The report received, from the inspector has you very anxious. Take a deep breath. Before you jump to the conclusion that it is time to walk away, and find another home that is not falling apart. Remember the purpose of an inspection. The inspectors job is to find every little things that is wrong with the house and things that could go wrong in the near future. There are certainly things that the inspector might find that are deal breakers. But what are things that may not be that big a deal, that have you worried.

Let’s look at some things that the inspection report might point out that can get blown out of proportion.

Leaky faucet

A leaky faucet. This is something that should be fixed, if for no other reason that it is wasting water. It is also annoying. This is something that is typically inexpensive and easy to fix. Consider fixing after closing.

Cracked window

A small crack in a window. I am not referring to a spot that looks like a baseball went through it, but rather a small hairline crack in a window. A crack that does not affect how the window works, nor does it let cold air in. You probably will not notice it once you move in. Pick your battles and take care of this after you move in.

The roof

The roof. Inspectors have a phrase that they commonly use and that is “at the end of its useful life.” This phrase can be use to describe the roof, furnace, appliances etc. This does not mean that these items are not working, or that they need to be replaced. It is saying, rather, that you should budget for replacement of these items. If you have a major item that is near the end of its life you might asked for a credit from the seller for replacement or a home warranty that would cover the item for the first year of your ownership.

Missing GFCI outlets

The home is missing GFCI outlets. This is most common in older homes, where the electrical work was done prior to codes requiring GFCI outlets. It is not a bad idea to have GFCI outlets. They protect from electrical shock. But this is not something to kill the deal over. The house has been without them all of these years.

Evidence of a past leak

Evidence of a past leak. It is not uncommon, particularly in older homes for an inspector to find water stains. Or as they say, evidence of a past leak. Some may be completely dry, others may not be. As long as you may be able to determine what cause the stain and there is no mold. This may not be a big deal at all. A little paint may be all it takes once you own the home.

Let your real estate agent be your guide through the inspection process. Ask questions of the inspector and your agent so you can make informed decisions. Don’t let the little things stand in the way of you getting your home.

Predictions for the housing market 2024

What are the predictions for the housing market in 2024? This past year has been a tough market. Buyers were struggling to buy and sellers did not want to sell with interest rates at 20 year highs. 2023 was a real estate year that we would like to put in the rear view mirror. What will the predictions for the housing market be for 2024?

Getting better?

Will 2024 be the years that the housing market gets better? The answer to that question is sort of, according to the realtor.com 2024 forecast. (http://realtor.com/housingforecast). One good thing that the report does point out is that things are not looking worse for buyers who have been struggling with affordability. The market is expected to stabilize, but will remain a bit challenging.

Interest rates

The realtor.com annual forecast predicts that home priced will remain high and that mortgage interest rates will not move much. Current interest rates are hovering around 7% and realtor.com believes that they will stabilize around 6.8% to 6.9%. That is certainly better than the peak that was reached in 2023 of 8%, but no where near as low as we saw in 2021. Those low rates look to be a thing of the past, a wonderful memory!

Inventory storage continues

The housing storage may be the biggest challenge of 2024. Sellers that have a low interest rate on their home loan cannot afford to move. This means fewer homes on the market. Those sellers that do list their homes for sale and purchase new ones generally have to do so because of a change in family situation, divorce or relocation.

The bright spot is that builders are continuing to build and hopefully will continue to offer great buy-downs for buyers interested in new construction. This is good news in the market.

With interest rates predicted to remain steady and prices also predicted to remain steady, it does not appear that 2024 will be the year that the real estate market gets the jolt that it desperately needs. Call Lestel to make sure you know what is happening in the market and how it affects you!

What are costly mistakes home buyers should avoid

Making a big step like buying a home, you want to avoid making mistake so your experience is as positive as possible. What are the costly mistakes that a home buyers should avoid? This is part two of this blog post.

Don’t forget to look at new construction

One mistake that buyers can make when purchasing a home is thinking that they cannot afford a new home. Did you know that approximately one in five homes on the market is new construction? New homes are often thought to be too pricey, but builders are responsive to market conditions and often offer incentives to buyers that can be very attractive. These incentives can include rate buy downs and closing costs credits, among others.

Use an experience realtor

Some buyers make the mistake of thinking that they do not need to use an experience realtor. They can do it on their own. Experience is important, particularly when you have someone that is guiding you to make such a major purchase. As a buyer, you should be looking for an agent with at least five years of experience, in the area that you are looking to purchase. You can interview agents to find one that you are most comfortable with. Remember that normally home sellers pay the buyer’s agents commission. This means that using an experienced, local real estate agent costs you nothing and includes their expertise.

Buy the house and the neighborhood

Another mistake buyers can make is falling in love with a house and not looking at or considering the neighborhood, where the home is located. When you look at a house, consider the neighborhood that the home is in. Also consider the schools, where the closest grocery store is and gas station. don’t forget to consider flight paths of airports, power lines, and train tracks. All of these things can affect the desirability and resale of the home.

Don’t wave inspections

Once you have your future home under contract, the next step, in the process, is inspection. Do not make the mistake of thinking, I can totally fix that, when you see the list of things that are wrong with the home. Do not let your excitement in buying your home, cloud your thinking. Ask your agent what is reasonable to have the seller fix, given the current market conditions. Follow your agents lead and understand the costs of what needs to be done.

When buying a home avoid making mistakes that can cost you money. Have a great agent guide you along the way and enjoy your home buying experience.

Are High Interest Rates Discouraging you from Buying a House?

A picture of a toy house to demonstrate the idea of Are High Interest Rates Discouraging you from Buying a House?

Are High Interest Rates Discouraging you from Buying a House? What do you do when you are ready to buy but the high interest rates have you discouraged?  You get creative.  The typical mortgage for buyers to obtain when purchasing, is a thirty year fix rate mortgage.  There are other mortgage options available. When interest rates are high you might be better off obtaining an adjustable mortgage, with a lower interest rate.  If that sounds scary, it shouldn’t. There are loan programs out there including a seven year ARM?  This loan offers an interest rate that stays fixed for the first seven years of the loan. In real estate you will hear agents say, you date the rate and marry the property. What this saying means is that you find the house that you love that you can live in for a long time and you refinance to bring your rate down when rates drop. There are other options available.

Explore other loan options

There are other loan options that will provide a lower the interest rate on the mortgage for awhile. An option available is called the 3/2/1 buy down. This mortgage works by having the interest lowered for the first year, then going up the second year and the third year, the loan is at the rate it will be for the life of the loan. As an example  the rate for the first year might be four percent. 

The second year the rate goes to five percent and the third year the rate is at six percent.  When you take out this type of loan there will be upfront costs. The upfront amount that you pay is the amount that the lender is not earning by reducing the interest for the first two years of the loan. The benefit is not long term.  You need to make sure that you are able to comfortably pay the loan in the third year at the higher interest rate. 

Don’t let high interest rates keep you from buying

A picture of text on a board to demonstrate the idea of Are High Interest Rates Discouraging you from Buying a House?

Are High Interest Rates Discouraging you from Buying a House? Higher interest rates do not need to discourage you from buying a house. There are creative solutions for the higher interest rates that we are experiencing. First step is to meet with a knowledgable, trusted, creative mortgage loan officer to explore what might work best for you.  Next, find a property that you love and a mortgage that will work for you until interest rates improve. When interest rates drop, then refinance your loan. Don’t let the interest rate keep you from buying.  Get into the market. Remember, if you need a recommendation for a good lender. Contact us!

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!

How Do Water Rights Impact Your Property?

Water, water, water. If you live in town you are use to turning on the faucet and water coming out. You pay the bill every month and the water is available to use. It seems like you have an unlimited supply. You hear about water shortages but feel that they don’t affect you. So, how do water rights impact your property?

Source of Water

What is your experience if you live outside a municipality in Northern Colorado? One of the most important aspects of buying a rural property in Colorado is understanding the water supply. Water is important. Someone has once said that water is life. Most properties in the country are serviced by a well, district water or a spring.

Drill Baby, Drill

If you are purchasing a property and would like to drill a well what are the types of wells and how are they different? One type of well that you might obtain is a household well. Household well is for use only inside the house. No exterior watering of plants, animals, or even washing your car. The rule is only inside the house also includes not filling a hot tub. This is restrictive.

How Do Water Rights Impact Your Property, Domestic Wells

An image of Colorado Irrigation Ditch depicting How Do Water Rights Impact Your Property?

The other type of well that you might obtain is a domestic well. Domestic wells are typically associated with rural properties. A domestic well allows for normal indoor use. A domestic well, also more than likely will allow for the watering of an outdoor animal like a horse, a donkey or maybe a goat. Watering can also typically allow a garden and/or a lawn. Additionally, a domestic well does not allow for unlimited water use. The well permit that is received when the well is drilled will provide information about, the well test report, the depth of the well and the pumping rate of the well. Moreover, make sure you understand what you have or what you are getting and what you can legally do with that water.

How do you find out what type of well a property has that you might be interested purchasing? Request a copy of the well permit. Read this over. Look for the type of well in the well description. You also can call the Colorado Division of Water information desk. 303-866-3587. Leave the address of the property and you will usually receive a return call with on 24 hours.

How Do Water Rights Impact Your Property?

The right to use water is a right. Even rain water collected in buckets and barres are not necessarily available for the landowner use. In Colorado unless a property owner has specific legal rights to use rain water they are compelled to leave water where it is.

Water is precious in the west. Know what you are getting when you are purchasing a property or drilling a well. Do your due diligence. Make sure that you can use the water the way that you would like. That is how water rights impact your property. If you have specific questions we can help. Contact us today.