5 People You Need In Your Homeowner Network

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5 People You Need In Your Homeowner Network

So you’re finally a homeowner – congratulations! This is an important step in anyone’s life, and it’s absolutely normal to feel somewhat (or wildly) unprepared for the realities of owning a place of your own. What if there’s an emergency, or what if something breaks? Do you know what to do?

Here’s the good news: Like so many things in life, it’s not what you know; it’s who you know. Some homeowners take years to get all of these names and numbers in their mental address books or their smartphones, but if you start trying to find these essential people in your homeowners’ network early, then you’ll have an easier time handling any problems.

1. An insurance agent

If you have a mortgage loan on your home, then you’re going to need homeowners’ insurance, which protects the asset being backed — otherwise known as “your house” — from risk. And to get the best deals on insurance and make sure you’re fully covered for everything that needs to be addressed, you’ll probably need to talk to an insurance agent about your options.

  • Most home insurance policies cover things like fire, for example, but they don’t automatically include coverage for other adverse events like a flood or an earthquake. Do you really need earthquake insurance? Well, your insurance agent can tell you!
  • You may also be eligible for discounts on other insurance policies when you become a homeowner, like your car insurance. In addition, you may want to increase your coverage for policies like car insurance; now that you’re a homeowner, you have a big asset that could become part of a claim if you get into a bad car accident, you’re at fault, and your insurance doesn’t fully cover the other party’s damages or injuries.

A good insurance agent can make sure you’re covered from all angles so that you can get on with the business of living your life.

2. A cleaner

Maybe you’re the type who really likes to clean — you find it relaxing or rewarding. Even so, you’ll still want to think about finding a cleaner who’s worth the cost in case you’re ever in a bind, such as if a health issue prevents you from cleaning and the mess is driving you bananas, or if you’ve got to leave town for an extended period of time and are thinking about turning your house into a vacation rental while you’re away.

“Worth the cost” can be a relative term! Try to find someone who has references so you can get a good idea of how thorough their cleaning is and how flexible they are with times. A really detail-oriented cleaner might charge more and have fewer time slots available every week or month, but like anything else, you get what you pay for, and it’s probably better to find someone who really knows how to deep clean instead of hiring a relatively cheap cleaner who isn’t actually going to evict all the dust bunnies.

3. A general contractor

As a homeowner, there are always going to be little things that need attention here and there, possibly as soon as you move in. 

  • Chipped crown molding, holes in walls, broken windows, or doors that creak — whatever your issue, living with it might be fine for as long as you can stand it, but at some point, you’ll want your house to look as nice as it possibly can, even if that only happens right before you get ready to sell it. 
  • Maybe you want to do some renovations or even add a room, a shed, a garage, a deck … if that’s the case, it’s even more important to find a reliable general contractor.

A reliable general contractor is one that shows up on time and who can accurately quote a project so that you can budget for it. Reliable contractors can explain timelines, the cost of different materials, offer options, and get the job done on time (or within a reasonable window).

4. A roofer

Depending on the type of shingles on your roof, you may not need to get them replaced at all while you live in the house, but you can bet that any buyers are going to ask when the roof was last replaced. Composition shingles usually last more than a decade but less than 20 years, wood shingles last somewhere between 20 and 25 years, and asphalt shingles can last anywhere from 15 to 30 years.

If you’re not sure how much longer your roof has, then talking to a roofer and making any necessary repairs before they’re needed — so a leaking roof doesn’t damage your house — is a good move.

7. A real estate agent

Of course, you aren’t ready to sell your house as soon as you move in — but keeping in touch with a local real estate agent is still a good plan. 

  • Your agent is often the first to know not only who’s buying (and moving in) and who’s selling (and moving out), but also whether there are any new developments planned nearby, where the best restaurants and home improvement stores are located, if there’s a new hiking or biking trail planned, and much more.
  • When you are ready to sell, your real estate agent can help you decide what needs to be changed or fixed to make your home one of the most enticing in the neighborhood, can give you a good idea of when would be the best time of year to put your house on the market, how to price the place, and hold your hand from beginning to end. That’ll be easier to do if you’ve maintained a relationship with the same agent over time instead of scrambling to find one only when you’re trying to sell.
  • Plus, like your neighbors, a real estate agent can often help you fill in any gaps that are missing in your own personal homeowner network of helpers.
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Answers To Your Questions About Home Inspections

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Answers To Your Questions About Home Inspections

If you’re not familiar with home inspections, then you might have a lot of questions about what gets inspected, how thorough the inspectors are, why you even need one, and what you can expect if you’re walking with an inspector through the house you’re hoping to buy.

There’s a lot to know about home inspection, and your questions deserve answers. Here they are!

What is a home inspection?

A home inspection is an event that is basically exactly what the name implies: A home inspector walks through the home, looking at specific elements and features of the house, and then provides a report about anything that needs to be repaired.

Why would I want a home inspection?

An inspection is a good idea anytime you want a full rundown on any issues or problems with your house. 

If you’re already living there, it’s a lot less necessary than if you’re buying the home — when you will most definitely want an inspector to check for any potential red flags.

They’ll be your problem after closing, and big issues can sometimes affect the insurability of your house (which, in turn, affects your loan eligibility), so home inspections are most common after an offer is made on a house but before the closing finalizes the deal.

What does the home inspector look at?

There are six essential parts of an inspection that you can expect every inspector to hit. They are:

  • The roof and attic,
  • The basement and foundation,
  • The plumbing,
  • The electrical setup,
  • The heating or air conditioning systems,
  • The interior of the house,
  • The exterior of the house.

Depending on where you live and what common problems tend to manifest in the homes, you might also want to think about hiring a pest inspector, a sewer line inspector, or even ask about an engineering report to evaluate the home and plot’s structure and stability.

And in areas where radon is prevalent, or where there’s a lot of humidity, you may also want to ask about radon or mold testing (some home inspectors do this as an add-on part of the package).

How much does it cost?

The price of the home inspection is going to depend on the size of the house. You can typically expect to spend around $300 on a home inspection, but smaller properties (less than 1,000 square feet) might cost only $200, whereas larger homes (more than 2,000 square feet) cost upwards of $400 to inspect. Ask an inspector or a real estate agent in your area what they usually cost to get a closer estimate.

Do you need an inspector for a new house?

It’s always a good idea to get a home inspection — even in a brand-new house. You don’t want to find out there’s a problem after you move in, and an inspection is the best way to figure that out. So follow the “trust, but verify” process with your builder: Trust that they did their very best to get your home in the best condition possible … then verify that they did just that with an official inspection.

Should you attend the inspection?

It’s usually a smart idea for the buyer to attend the inspection in case they have questions for the inspector or want to follow up on any notes the inspector makes. Many inspectors today use new technologies that allow them to include photos of any issues or potential problems, but there’s nothing like being there in person to better understand exactly what’s wrong and how to fix it.

What happens if a problem is uncovered?

If everything is not in good shape with the home you’re about to buy, there are options. Usually when this happens, the buyers and the sellers start negotiating again — this time, to figure out who’s going to pay for the necessary repairs. 

 

Buyers might be able to ask for some money to be knocked off the final sales price to accommodate for the problem, or sellers might decide to go ahead and fix it before closing.

If everyone can come to an agreement that suits everybody, then the sale can move forward.

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5 Essential Financial Steps To Take Before Investing In Real Estate

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5 Essential Financial Steps To Take Before Investing In Real Estate

If you’ve been thinking about investing in real estate, getting your finances in order before you start searching for properties and scheduling appointments will save you from money headaches in the long run.

Real estate investments could be one of your largest investments, and unless you have cash ready to invest, you’ll need a plan for financing and a plan for cash flow in the future. Here’s what you need to do before heading out to the property shop. 

1. Create A Financing Plan

If you have strong credit, consistent W-2 income, and a sizeable down payment, traditional financing could be your best option for your first real estate investment since interest rates are typically low and the terms are attractive.

“Figure out how much you can afford based on your current expenses, and how much cash you’ll need to have on hand for renovations and upgrades.

Make sure you know where your liquid funds will come from to improve your chances of landing a good deal. With cash, you can move faster, which will motivate most sellers.

2. Review Your Credit Report And Keep It Healthy

Request a copy of your credit report through one of the credit bureaus and make sure you dispute any errors or provide an explanation for any derogatory issues or late payments.

  • Keep your credit score from slipping by:
  • avoiding any new credit inquiries, 
  • canceling any credit accounts,
  • lowering your limits with any creditors.
3. Get Mortgage Pre-Approval

With an approved mortgage in hand, most lenders will lock in an interest rate, so if rates fluctuate upwards while you’re searching for the perfect investment property, you can relax knowing that your rate isn’t going to change.

To get pre-approved for a mortgage, you’ll need to have the following in order:

  • Personal documents: Two forms of government-issued ID, your social security number, as well as proof of ownership of other property, including your primary residence or other investment properties.
  • Tax returns: For the previous year, and potentially for the last two years.
  • Proof of income: W2s, paycheck stubs, 1099s, or if you’re self-employed, a year-to-date profit and loss statement. 
  • Proof of assets: Bank statements, 401Ks, IRAs, and money held in stocks or mutual funds.
  • Summary of all debt: Primary property loan(s), credit card balances, student loans, and all monthly payment amounts.
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4. Stay Competitive By Doing Your Homework

Just because your financing is approved, doesn’t mean you’re ready to start shopping. Do some comparison shopping and contact other lenders to see what kind of interest rate they can offer.

A few percentage points might not seem significant, but can save tens of thousands or more over the lifetime of a loan and affect your monthly cash flow.

Consider checking with a bank other than the one you bank with; they might be very likely to be more competitive to win new business. 

5. Liquid Funds

Based on your financing plan, you’ll have figured out:

  • How much cash you need to have in hand for a down payment and closing costs. 
  • How much money you’ll need for renovations or repairs if the properties you’ll be considering aren’t turn-key. 

Consider your cash flow from month to month to make sure you’re not projecting negative cash flow. Or if you are, that you have a backup source of cash such as drawing from your personal accounts.

The goal of real estate investing is usually to make money. As your investment style evolves and matures as a real estate investor, the amount of risk you can withstand is bound to change. Keep your original goals in mind, and do your homework to help position yourself to enjoy the financial returns. 

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What Your Agent Should Do For You?

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What Your Agent Should Do For You?

Just like in any other profession, there are good real estate agents … and there are, unfortunately, subpar real estate agents, too. But how do you know if you’ve got a dreamboat or a dud handling your real estate transaction? One way to know whether you’ve got a good agent (or not) is to consider some of the tasks and activities that a really good agent will manage for a client, then apply what you’ve learned to your own agent. If you don’t have time to track down all of the things that a good agent should be doing for a buyer or a seller, then you’re in luck: We’ve compiled a list so you don’t have to.
Ask you about your homeownership needs (and hopes)

It’s dangerous to make assumptions at the best of times, but when it comes to shopping for a home, assumptions are downright dangerous. So if you have an agent who assumes … everything … be wary.

A good agent should ask you questions -- lots of them -- about where you've lived, what you liked and disliked about both the home and the neighborhood, where you work, how long you plan to stay there, your future family plans, and more.

This is all to the greater good of helping you find the right place and possibly revealing a neighborhood or property type that wasn’t on your radar: Start here

Recommend a mortgage broker

If you don’t already have a mortgage broker to help you with your loan, then your real estate agent should be providing referrals for someone trustworthy. (And any agent worth his or her salt should definitely ask if you’re pre-approved!)

Real estate agents work on real estate transactions every day, and they have contacts who can help with mortgage, title, appraisals, inspections, and beyond. Use them!

Give you feedback on the neighborhoods

Unless you’ve lived in a neighborhood your entire life — and even then! — there will still be things to learn about the place where you’re buying your home. 

A good real estate agent should be able to answer your questions and explain how each neighborhood compares against the others.

You’ll probably have questions about everything from where to buy groceries to where to walk to dog to what people do for fun on weekends, and your real estate agent should help answer those questions.

Help you find a home

You might think that finding a home is as easy as looking it up on the internet, and for some lucky people, maybe it is. But most buyers have to check out endless potentially unsuitable homes before they find “the one” that’s their long-term best fit, and pictures (especially on the internet) can be deceiving.

An agent should hook you up with an MLS feed that will alert you when a home that meets your criteria hits the market — and agents should also help you come up with alternate strategies if the going is just too tough in your price range.

Price the home correctly
  • For sellers, this is one of the most critical jobs that your agent will complete — and if they don’t do a good job, you could lose tens of thousands of dollars. Pricing the home correctly right out the gate is absolutely vital to selling the home quickly and for fair-market value.
  • Some agents will inflate the possible sales price and tell sellers that they can always reduce the price if they don’t get an offer. Although this is certainly true, those agents are misrepresenting a bigger truth: your listing is going to get the most attention from qualified buyers within the first 48 hours of hitting the market. 
  • It’s not typically wise to go with the agent who offers the highest sales price; instead, ask prospective agents how they calculated that sales price, whether it lines up with the typical price-per-square-foot in your area, and how long homes priced in that range tend to stay on the market.
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Market the home well

One reason why sellers hire a real estate agent in the first place is that the agent has a marketing platform to use to advertise the home for sale. Some homes require more marketing than others, but agents should have a plan to market every home they list. 

And marketing goes far, far beyond "put it on the MLS, Zillow, and realtor.com -- then pray you get a qualified buyer."

If you don’t know the listing agent’s plan to market your home — or worse, if you don’t think the agent has a plan at all — then that’s a huge sign that your agent might not be the best fit for you.

Help you pick an inspector

When a buyer is financed for a home loan, the lender is going to want to know that the investment is solid — that the house doesn’t have any major issues, for example. That’s where the inspector comes in, and the inspector will have to enter the picture before closing.

Your real estate agent should help you find an inspector and answer any questions you have about whether the inspector’s price tag is reasonable.

Attend the appraisal

A lot of agents do not consider attending the appraisal to be particularly pressing — and that’s fine. 

But if the appraisal comes in under the sales price and there were no agents present to answer questions or help the appraiser figure out the home's value, then you've got a problem that might not be very easy to solve.

Many buyer’s agents will make a point to attend the appraisal and make sure that the appraiser has access to everything he or she needs and can get any information necessary to complete the appraisal thoroughly. Is yours one of them?

Communicate, communicate, communicate

A lot can change between putting an offer on a home and actually moving in. 

The real estate agent should be the person who knows all of the different parts and pieces of the transaction -- and is willing to serve as the point of communication between them.

If the appraisal is delayed, or there’s an issue with the loan, then the agent is one who is communicating that information to the people on each side who need to know. An agent’s job is to make the transaction easier for you, and that typically means managing the messages for everybody.

 
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5 common mistakes first-time homebuyers make

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5 common mistakes first-time homebuyers make

Buying a home is always an anxiety-ridden process, and that goes triple for anyone who’s embarking on homeownership for the very first time. There’s so much to do and so much you don’t know that “overwhelming” hardly seems like an appropriate description of how it feels.

Even though you don’t want to scare yourself away from the entire process, you still need to be wary of falling into a few common traps that first-time buyers generally don’t avoid. If you’re aware of these five potential mistakes — and able to keep yourself from making them — then you’ll be saving yourself some significant stress on your homebuying journey.

1. Not understanding your down payment options

The biggest headache for so many first-time buyers is the down payment. If you’ve ever bought a car, then you’re probably familiar with the concept — it’s money that you contribute to the total cost of the purchase.

  • A down payment of just a couple thousand dollars can get you a head start on your car. If you don’t have a certain amount to put down on your home loan, however, you might find yourself paying private mortgage insurance (PMI) on the lifetime of the loan.
  • Depending on your credit score, the bank and other factors, PMI could cost between 0.5 percent to 1 percent of the total loan amount.
  • Most banks require at least a 20 percent down payment before they will waive the need for PMI on the loan. And most homes in this area cost about $300,000, so that means a buyer would need to bring $60,000 to the table in order to avoid PMI.
  • Some government organizations and lenders try to incentivize first-time homeownership by offering free down payment grants or loans to qualified buyers. Depending on your age, income level, credit score and other factors, you could qualify for free money to wrap into your down payment; a full rundown of programs is available at downpaymentresource.com.
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2. Not getting prequalified for a loan

Between the amount of money you plan to put down on the home, the potential PMI and other cost factors, your monthly cost could be significantly more (or possibly less) than some of those calculators will show you online.

But also much like hiring someone to clean the house, the amount of stress that hiring a pro can alleviate is noteworthy and often well worth the expense.

This means you will need to talk to a mortgage loan officer and submit a slew of documentation, from your monthly pay stub to your credit score, in order for that loan officer to tell you how much money you can get for your home loan. It’s a little bit painful, but the prequalification letter you’ll get as a result is much more credible than a quick qualification you can pull up on an app — and that means sellers will take it more seriously when it comes time to put in an offer. 

3. Not finding a qualified real estate agent

If it’s at all possible, see if you can find an Airbnb or another vacation-rental type of setup where you can crash for a night or two — preferably closer to a week — so you can try your new neighborhood on for size.

Well, maybe. But in areas with red-hot markets, you’re probably not seeing the most updated listings -- that home you just fell in love with online might be under contract before you can set up a time to tour it.

Not only can an agent make sure you have access to listings the second they hit the MLS, but a qualified agent should also provide expertise on the area where you want to move. Whether that’s feedback on who can help you with homeowners’ insurance quotes to warnings about some of the frequent pitfalls of owning a home in that neighborhood in particular, a qualified agent is an invaluable resource.

4. Not spending the night in the neighborhood

If it’s at all possible, see if you can find an Airbnb or another vacation-rental type of setup where you can crash for a night or two — preferably closer to a week — so you can try your new neighborhood on for size.

  • Is an 8 a.m. arrival time at work still reasonable with this neighborhood’s commute?
  • Where are the closest grocery stores, parks, rec centers and hiking trails? 
  • What are the overnight noise levels? If there’s a train that rolls through town in the early hours of the morning, you’re near a highway or a flight path — and any of that is going to disturb you — then it’s best to figure it out before you’re spending your first night in your new home and wake up to unpleasant (and unexpected) noises. 
  • At the very least, you can learn enough about the neighborhood to know how close to (or far away from) the bus line you need or want to be and target your home search accordingly.
5. Not understanding what’s fixable and what’s a deal-breaker

Those drop panels in the ceiling are hideous, and you can’t imagine how anyone can fit into that miniscule bathtub. Are those annoyances that can be fixed or deal-breakers that mean you should pass on the property entirely?

This is another area where a good real estate agent can help. They see so many houses in various stages of repair and updating that they can show you where you can claim another foot or two for bathtub space (and help you figure out how much it will cost and who’s trustworthy enough to take on the job) or let you know that the ceilings are too low for any changes to make much of a difference.

None of these mistakes will keep you from buying a home of your own — but they could delay the process and cost you hundreds (if not thousands) of dollars at the end of the day. But if you’re able to avoid them, you’ll be signing the closing papers on your dream home before you know it!

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