Tag: Home Buyer Information

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.

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.

Under Contract Process Expenses

What to expect during the under contract process. You are ready to buy a home. You have saved your dollars and you have your down payment. But you want to know what will the costs be over and above the down payment. That is a great question. You need to be ready for all under contract process expenses.

Earnest Money

A picture of cash and keys demonstrating Under Contract Process Expenses

The first money that will be required is the earnest money is oven required within a few days of the contract being accepted. It is not uncommon for the earnest money to be required to be provided within three business days of contract acceptance. The earnest money amount is what is requested by the seller and is apart of the contract. Sometimes when wanting to ensure your contract is accepted you may add to the earnest money amount. Doubling the requested amount or even tripling the amount requested by the seller. The earnest money is provided in the form of a personal check that is cashed and be credited to you at closing or you can provide the title company with a wire for the funds. 

Under Contract Process Expenses: Inspection

The next cost that you will have once you have a property under contract is the cost of the inspection.  Most inspectors charge based on the location of the property and the square footage of the home. The larger the home the more expensive the inspection. The cost can run anywhere between $400 to $750.  Inspectors usually expect payment before they begin or at time of the inspection.

Appraisal

Another cost that you can expect to pay as a part of the process is the cost of the appraisal. How this cost is handled depends on the lender that you are working with. Some lenders want the money at time of the contract acceptance others will make the appraisal apart of closing costs. Make sure know what you the expectation is. If you are required to have the money upfront that can be as much as $500 to $800 that you will need to pay at time of contract acceptance.  

Buying a home has expenses as a part of the process. This post gives you some idea of what to expect in terms of under contract process expenses. Contact us so that we can be your guide through the process of purchasing a new 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.

What Do Real Estate Agents Actually Do?

Popular culture has probably painted a picture for you of real estate agents. This might be anything from a cut throat negotiator to something along the lines of a used car salesman. In honesty the truth depends on which agent you talk to. However, professional real estate agents probably all fall somewhere along the lines of what is discussed below. So what do real estate agents actually do?

Hint: It’s a lot more than showing property, and coming to closing

It depends on who they are representing (buyer or seller). This is because there are vastly different roles that a real estate agent must fulfill. Let’s take a look at each of these roles.

What Do Real Estate Agents Actually Do When Representing a Buyer?

A buyer’s agent certainly shows a lot of property. However, they must also be a neighborhood and community expert. Buyer’s agents spend a lot of time researching. They do this in order to remain knowledgeable about pricing and the overall condition of the market. Research also allows them to find you homes that match your criteria. Being an expert on neighborhoods and the current market is vital. This is important in order to aid their clients in selecting a home and location that best meet the buyer’s needs. They will be able to tell you about specific builders’ construction practices. Along with this they can show you which homes to select and which to avoid.

The buyer’s agent must also be a negotiation expert in order to get their client’s offer accepted. This is actually only the beginning as buyer’s agents must also guide the transaction through the under contract process. During this phase the home needs an inspection and appraisal. Depending on the outcome of these inspections additional negotiation may be required. You want to make sure you have a skilled negotiator in your corner. This will allow the home buying process to work out in your favor.

Good Real Estate Agent’s Don’t Just List It And Leave It

What Do Real Estate Agents Do (Open House Sign)

As a seller’s agent the responsibilities change. It is vital to have the listing shown in the best light. This means home staging and professional grade photographs. It also means clearing up issues prior to the property going on the market. Some of these might include minor repairs or ensuring that permits are in order. It really is a case by case basis as no two properties are the same. Once the home is on the market a seller’s agent must be knowledgeable about their listings. They will field many emails and phone calls with questions about the property.

Having spent a great deal of time with your home getting it ready for sale will allow them to know your home inside and out. Absentee agents who never see your home are missing this crucial experience. A seller’s agent will need to negotiate both the initial offer and condition of the property at time of inspection and appraisal. During the under contract process they may also have to address questions of title, insurance or other issues. A knowledgeable and experienced agent can easily solve these issues. This is in sharp contrast to an inexperienced agent who may panic. There are very few new problems in real estate. A seasoned agent has probably seen most of them and can easily advocate for your best interest.

We are highly experienced representing both buyers and sellers in Fort Collins and Northern Colorado. Contact us today and let us guide you through the real estate process. Doing so will allow your interests to be best represented.