3 Things every baby boomer should consider before buying or selling a home

We’re sure you’ve read about it: baby boomers aren’t moving and they’re wrecking the real estate market. They’ve decided to age in place, just when so many buyers want to buy a home.

To read real estate news about the baby boomer generation one would think the entire generation is passively aggressively thumbing their nose at both home buyers and real estate agents.

However, that reporting may not be entirely accurate. After all, who was it that kept the housing market afloat during the recovery from the Great Recession?

And, while it’s true that Millennials have a large presence in the housing market (39 percent of homebuyers), the two older generations (anyone 55 and older) make up 37 percent of home-buying pool.

If you haven’t bought or sold a home since the kids were in diapers, you’ll need to brush up on the basics if you plan to sell or buy. And we would love to help you.

1. Carefully reconsider ageing in place

“Ageing in place.” It’s one of those buzz phrases the media came up with to describe older Americans who “stubbornly” refuse to move and plan to live out their lives in their current homes.

And, many of them do. But many haven’t thought through that process. As the knees start creaking, the arthritis sets in and we become winded carrying groceries up a flight of stairs, reality sets in.

It turns out, that many boomers are realize that ageing in place doesn’t necessarily mean ageing in this place. According to a recent study by Home Instead Senior Care, one in four boomers are planning on selling their current home and buying a smaller, more age-appropriate one.

You know: one story, less square footage and low-maintenance, inside and out.

2. What will you do with your current home?

Your choices here are limited. You can sell the home (which many older, downsizing Americans plan to do) and use the equity you’ve built up for the new home. Or, you can rent it out and, if the home is paid off, enjoy the monthly income from your tenants.

Renting it out does come with drawbacks, however. Being a landlord, even if you do hire a management company, comes with many downsides. We always recommend that our boomer clients speak with their financial planners before making the decision.

3. Hiring the right real estate agent

Yes, this section does seem a bit self-serving. But, hiring the right real estate agent to help you out with selling and buying or selling and renting is critical.

I have many past clients who told me they were sick and tired of real estate agents speaking down to them, as if they are children. Condescending, full of outdated stereotypes and pushy is how many of my clients describe these agents.

We hope to be among the agents you interview to partner with you during this life transition. And, please, interview several. Don’t lower your expectations because you are in the driver’s seat.

We hope that you won’t entertain the thought of working with an agent who treats you as if you’re a doddering “senior citizen” and one that feels he or she knows best what is right for you.

Only you (and your financial planner) can and should make that decision.

High expectations for those you hire to assist you are good. Ensure that each agent you interview understands your expectations and listens, hears you and lets you know how he or she will help.

Please reach out to us – we’re happy to help.

Are you ready to stop renting and become a homeowner?

It’s a fact that homeowners are wealthier than those who rent homes. In fact, the average net worth of U.S. homeowners is $231,400.

Renters? $5,200. Crunch the numbers and you’ll learn that the net worth of homeowners is 44.5 percent higher than that of renters.

Sadly, the net worth of those who rent has actually decreased from $5,500 in 2013, according to the Federal Reserve’s Survey of Consumer Finances.

If you’d like to get on the homeowner wealth train, but are not sure if you’re ready, ask yourself the following questions.

 

How secure is your employment picture?

Love your job? More important, does your job love you? Job security – knowing you’re in it for the long haul – is a good sign that you can take on a monthly mortgage payment and be responsible for maintaining a home.

It’s also one of the things a lender will look at when considering how risky it might be to lend you the money for a home.

While it’s not impossible to get a mortgage when you’re new to a job, lenders like to see a two-year minimum tenure. If the new job is in the same field as your old one, it shows commitment to a field of work, which is attractive to lenders.

 Do you have any money saved?

Don’t believe the myth that you need 20 percent of the purchase price of a home for a down payment. While this may have been true in the past, it isn’t any longer.

Depending on your circumstances, you can obtain a mortgage for nothing down or a down payment as low as 3 percent. Then, there are the many down payment and closing cost assistance programs.

You will, however, need a bit of cash when you purchase a home for the earnest money deposit, down payment, closing costs and moving expenses.

If you don’t have any savings, you may not be ready to buy a home. If you do have some money set aside, speak with a mortgage broker to find out if you qualify.

How’s your credit?

If you’re unsure, order your free annual credit report from AnnualCreditReport.com. This is the only site authorized by the federal government that offers free credit reports.

A strong credit score (as compiled by Fair Isaac Company, or FICO for short) is higher than 700. Borrowers with strong scores get lower interest rates so raising your score is a worthy endeavor.

This doesn’t mean you can’t get a mortgage with a lower score, because you most certainly can. In fact, the Federal Housing Administration (FHA) wants to see a score of 580 or higher but even those with lower scores may otherwise qualify.

It isn’t as difficult or time consuming as you may think to raise your credit score. Learn “How Student Loan Borrowers Improve their FICO Scores” at FICO.com. And, learn some general information on how to raise your credit score at NerdWallet.com.

Do you need more room?

If you’re currently in an apartment, the chances are good that you’d like or maybe even need more space. Apartments by their very nature are typically small and very cramped. Worse, they lack sufficient storage space.

Especially if you’re starting a family or hope to soon, dreams of a house may be swimming in your head. If so, you may be ready to become a homeowner.

 Are you tired of paying your landlord’s mortgage payment?

Paying rent every month and watching that money go into someone else’s bank account gets old after a time. As mentioned earlier, one way to accumulate wealth is through putting that monthly payment in your own pocket by building equity through home ownership.

Depending on the current market, you may be able to purchase a home with a monthly payment that is less than or only slightly more than your current monthly rent payment. A mortgage professional can crunch the numbers for you to find out.

Feel free to reach out to us with any questions.

 

How to sell your home fast: 3 tips

For whatever reason, many homeowners need to sell their homes as quickly as possible. If that describes you and you don’t want to hand over a huge chunk of your equity to an iBuyer or investor, read on.

1. Pre-sale home inspection

When we looked at the common obstacles along the way to closing a home sale, several steps loomed large. But, none larger than the home inspection.

Soon after you accept an offer to purchase your home, the buyer will send a home inspector to your house to inspect its condition. Soon thereafter, he or she will issue an inspection report to the buyer and I’ve yet to see one that didn’t have at least a few, even minor, problems.

Some problems, such as those that can impact health and safety, will need to be repaired. Even if the buyer doesn’t request it, the lender may, especially if the buyer is using an FHA-backed loan to purchase the home.

Depending on the scope of the work, this can significantly slow down the sale of the home.

Fixing items before putting the home on the market is a smart move if you need to sell quickly. It also shows potential buyers that you’re dealing in good faith.

Your buyer will likely order his or her own inspection so keep in mind that all issues in your report will need to be disclosed to potential buyers.

Ridding the sale process of the biggest stumbling block is the best way to ensure your home sells quickly.

2. Ensure you have clear title

Shortly after you’ve accepted the offer to purchase, the buyer will obtain title insurance. First, however, the title company will want to find out if you truly are the rightful owner to the home, that nobody else has a claim to it and that there are no liens against the property.

A problem discovered in a title search is known as a “cloud” on the home’s title. Home sellers are often surprised to learn that there’s a cloud, but it’s a common occurrence.

The most common cloud is a lien against the property and many homeowners aren’t even aware of it. Either it was placed so long ago that the homeowner forgot or it may be so new that he or she isn’t yet aware of it.

Be proactive if you suspect that there may be a cloud on the home’s title. A trip to the county recorder’s office (where you can search public records by address) is often all it takes. Otherwise, you can order an official title search from a title company. While the fee varies, it typically starts at around $200.

If a lien shows up on the title report, you’ll be responsible for clearing it. You can dispute it, but this is a court procedure that takes time. Paying the amount owed is the quickest way to clean up the property’s title.

But liens aren’t the only problem that may show up on a title report. Some of the more common title defects include:

  • Clerical errors
  • Disputes over property boundaries
  • Encroachments and easements
  • Marital status falsely reported
  • Fraud
  • Forgery
  • Improperly probated wills
  • Unknown heirs
  • Unreleased deeds of trust

Some of these are quick fixes. Others, such as clerical errors take substantially longer.

In fact, “depending on the nature and extent of the error, it can take anywhere from days to months to correct these types of issues,” according to the experts at LinearTitleandEscrow.com.

Avoid this source of major slowdowns in the sale process by checking your title before putting the home on the market.

3. Don’t play games with your home’s price

“More than half of all closing problems are related to mortgages,” according to Peter Miller at MyMortgageInsider.com.

Slightly more than 20 percent of these problems are caused by appraisal issues.

Unless the buyer is paying in cash, he or she will be using a lender for financing. The lender will send a property appraiser to the home to determine the value.

Much of the time, the appraiser’s evaluation meets the price agreed upon. Sometimes, however, it doesn’t and negotiations reopen.

There are several ways to work around an appraisal problem but most of them take time.

Avoid appraisal problems by understanding how market value for a home is determined, hire a listing agent experienced in determining fair market value and avoid the temptation to overprice the home.

We are happy to answer any questions you may have on how to sell your home quickly and still get top dollar.

3 Easy improvements that help sell homes

As the real estate market changes, home sellers may need to take some extra steps to get their homes sold quickly and for top dollar. The right improvement projects may be one of the steps you’ll need to consider.

If so, it’s important that you don’t select projects based on your tastes or on suggestions from others (unless it’s your real estate agent).

Always focus on items that need repair first. Then, when it comes to improving the home, consider only those projects that will add value or cosmetically appeal to home buyers.

We’re happy to share our knowledge of what’s popular with homebuyers, so feel free to ask.

In the meantime, let’s take a look at three home improvement projects that are often DIY jobs and will help your home sell quickly.

1. You had me at the curb

That first impression is critical when it comes to getting people out of their cars, up the walkway and through the front door of your home. So, let’s get the curb appeal taken care of first.

Start with cleaning and de-cluttering – the same way you will start on the interior. Rake the beds, remove debris, toys and anything else that isn’t part of the landscaping.

Get the lawn in shape, prune trees and shrubs, yank and replace dying ones. A layer of fresh mulch in the planting beds adds the perfect final touch.

How is the rest of the front of the house looking? Clean the gutters, paint the trim, railings and door if they need it. By the way, a Zillow study finds that a black front door increases sale price by 2.9 percent.

Finally, add a pop or two of color with potted plants on the front porch, near the door.

2. Paint is the wonder drug

New paint on the home’s interior walls can transform the appeal. Fresh paint makes the home appear well-cared for and in move-in condition.

To be safe, you may want to choose neutral colors, such as white, off-white or gray. But, you don’t have to, and the Zillow Paint Color Analysis proves that.

Avoid brick or barn red in the kitchen, as homes with this color scheme in the kitchen sold for more than $2300 less than list price. Brown dining room? Paint it another color, or get nearly $1700 less than you hope for the home.

Learn about the money-making paint colors at Forbes.com and ApartmentTherapy.com.

3. Concentrate on the kitchens and bathrooms when upgrading

We aren’t recommending major renovations here. But, if either or both of these rooms require basic updates, performing them is critical.

Paint is the first step. Then, check the sinks and faucets. Replacing them isn’t expensive and will give the rooms a contemporary look. Here are a few other little jobs that can update the look of the kitchen and bathroom:

  • Refinish the cabinets
  • Add new knobs and pulls on the cabinets and drawers
  • If you have the budget, consider replacing countertops, if they need it
  • Re-caulk the tub and toilet
  • Ensure that the lighting isn’t outdated
  • Purchase new linens, such as shower curtain, coordinating towels and rug
  • Choose a few stunning accessory pieces
  • Avoid cluttering the countertops

Most of these upgrades are DIY jobs. The savings offered by doing it yourself helps increase your return on investment when the home sells.

 

Should I buy first or sell first?

More than 71 percent of home sellers look at homes for sale while their current home is on the market, according to a 2017 Zillow report. Looking back, 24 percent of them said they wished they would have started the selling process earlier.

Most of these home sellers ran up against a common problem: Should I buy first or sell first?

Let’s take a look at just some of what you should consider and a couple of solutions.

Current market conditions

In a seller’s market (when there are lots of buyers looking for homes but few homes available) you’ll most likely not have to worry about the home selling. But, once it does, you’ll be joining the ranks of all the other buyers, competing against one another for the few homes on the market.

For this reason, many home sellers choose to rent for a time after selling, until the market changes in their favor.

Others can’t stand the thought of having to pack up and move yet again. Determine your tolerance for this scenario.

Finances

If you don’t have a large cash reserve, you’ll need the equity in your current home to purchase your new one. This means you’ll have to either sell your current home before buying or choose from among the other options we outline below.

The two-house payments conundrum

Another major concern we hear from our listing clients is that they’re afraid that if one side of the deal concludes before the other, they’ll be faced with having to make two house payments.

If your budget can tolerate this eventuality, then you’ve nothing to worry about. If not, read on.

Solutions to consider

Luckily, you have several remedies to choose from when faced with the “should I sell first or buy first” question.

Bridge Loan

A bridge loan is a short-term loan that provides instant cash flow. They’re typically only provided to borrowers with high credit scores and low debt-to-income ratios.

Learn more about bridge loans at Investopedia.com.

HELOC

The Home Equity Line of Credit, or HELOC for short, offers a way for you to get at all that equity you’ve built up in your current home. This is money you can use to buy the new home and then you will pay off the HELOC with the proceeds from the sale of the current home.

There are several disadvantages to using a HELOC to come up with the money for your next home. Speak with your lender and financial advisor about this option.

Borrow against your 401(k)

Ask financial experts if borrowing money from your 401(k) to come up with the cash for your new home is a good idea and you’ll get one of two answers: “Sure” or “No way!”

The latter camp includes pros who remind you about the fact that you’ll be losing the compounding benefits of your invested money. The former group will tell you to go for it because real estate is an amazing investment and, besides, you can pay yourself back.

Again, please speak with your financial planner before deciding on this option.

Negotiate with the buyer

It’s always worth it to attempt negotiating certain contract terms with the buyer of your current home.

Ask the buyer for a longer escrow, such as 90 days, to give you time to house hunt for the next home. You might also ask the buyer to consider renting your home back to you after the sale closes. Offer a healthy security deposit and agree to pay above-market rent to cover their mortgage payments, if necessary.

There are disadvantages to the rent-back scenario, so run this idea by your attorney.

Simultaneous close

Although it is often challenging, a simultaneous close is a common way of dealing with buying/selling. This type of transaction times the close of both transactions (the sale of your current home and the purchase of the next home) to occur simultaneously.

Yes, there are dangers in this option, especially in the hands of an inexperienced real estate agent.

Whether to buy or sell first is a common dilemma and both have their pluses and minuses. We’re happy to discuss this with you in more detail; feel free to contact us.

The “20% down payment” myth

Money management guru Dave Ramsey advises that “The ideal way to buy a house is the 100 percent down plan—pay cash for the whole house.” Wouldn’t it be nice if all of us could participate in that plan?

The fact is, in February of this year, 77 percent of American home buyers used a mortgage to purchase their homes, according to RealtyTrac.com.

With a mortgage, however, comes the need for closing costs and cash upfront for a down payment. Many would-be homeowners hesitate applying for a mortgage, thinking they need 20 percent of a home’s purchase price as a down payment on the loan.

If you’re among them, we have good news for you: you can buy a home with zero down payment (if you qualify) or with a very-low down payment–3.5 percent in many cases.

Let’s take a look at some of the alternatives to the 20 percent down payment.

There are several ways to buy a home with NO down payment

Did you or your spouse serve our country in the military? If so, you may qualify for a loan guarantee from the U.S. Department of Veterans Affairs (the VA).

Because the VA guarantees to repay a portion of the mortgage should the borrower default, lenders offer attractive rates and terms and a zero down payment loan.

The VA-backed loan is available to qualifying veterans, those currently serving and surviving spouses. Learn all the details at VA.gov.

USDA

The United States Department of Agriculture (USDA) offers several home loan options for low- or moderate-income borrowers. Neither require a down payment and the “catch” is that the home you purchase must be in a qualifying region, typically rural.

The home must also be “modest” for the area and generally excludes homes with swimming pools and other high-end features.

But, it’s an ideal way to become a homeowner, if you qualify. Learn more about these programs online at USDA.gov.

 

Use down payment assistance programs

If you don’t qualify for the zero down programs, you may want to look into some of the many down payment assistance programs available.

You’ll find many are offered by federal and state government entities as well as local municipalities.

Federal programs include help for teachers, fire fighters, medical personnel and police officers. There are programs for Native Americans, Alaskans and Hawaiians as well.

We’re happy to give you information on regional programs – reach out for more information.

Consider programs with a low-down payment requirement

If you don’t qualify for one of the zero down payment programs, pursue a mortgage through one of the programs with low down payments.

FHA

Lenders are far more amenable to loan money to borrowers with less-than stellar credit when the government guarantees the repayment.

The Federal Housing Administration (FHA), a department within the U.S. Department of Housing and Urban Development (HUD), a loan program you’ll want to pursue if this sounds attractive to you.

Although the program has experienced several changes over the years, it’s still the most widely used mortgage program by first-time home buyers.

The down payment requirement for an FHA loan varies, from 3.5 percent to 10 percent of the loan amount. Which you’ll pay, depends on your financial situation and, naturally, each lender’s requirements.

The biggest drawback of the FHA mortgage program is that you’ll pay for being what lenders call “high risk” or “sub-prime” borrowers. This payment is in the form of a mortgage insurance premium (MIP) – an extra payment tacked onto your mortgage payment each month.

In the past, it was possible to get rid of the MIP when you reached a certain amount of equity. That changed in recent years and now the insurance remains for the life of the loan, if you pay less than 10 percent down when you purchase.

If you pay more than 10 percent down, MIP is cancellable in 11 years.

With a conventional loan, on the other hand, you can dump the MIP when you reach 20 percent equity in the home.

Fannie Mae and Freddy Mac

Fannie Mae and Freddie Mac started backing loans with a 3 percent down payment back in 2014 and 2015.

To snag one of these loans, you’ll need to purchase private mortgage insurance, your credit score will need to be at least 620 and you’ll need to agree to participate in home ownership counseling classes.

Questions? Feel free to reach out to us. We’re happy to help.

7 tips when selling your parents’ home

One of the hardest things in life for us to come to grips with is that our parents have advanced into old age.

At some point in the not-too distant future, they will leave the home, whether through death or hospitalization. Then, it’s up to you to dispose of their belongings and the home.

Depending on family dynamics, selling a parent’s home can very easily be a situation fraught with potential problems.

Let’s look at some tips to make it easier.

Get it on the market as quickly as possible

There are several reasons this is easier said than done, and we’ll get into some of those below, but the longer the house sits unoccupied, the more carrying charges you’ll incur, such as property taxes, utility bills and vacant home insurance.

Get a head start

You won’t be able to obtain clear title on the property until a personal representative is appointed and is given the documents required to dispose of real property. While you wait, however, you can save time by making repairs and interviewing real estate agents.

Check out the home’s mechanicals

Elderly homeowners often can’t keep up with routine home maintenance, and the last thing you need during the sale process is a costly surprise, such as faulty heating or plumbing.

Be ready to dispose of stuff

Your parents likely will have accumulated many things over the years. Hopefully, they won’t have been hoarders, but even so, you’ll have plenty of things that neither you nor your siblings want.

It could be outdated furniture or your dad’s dragon collection. Every member of the family with an interest in the home should be involved in the sorting and disposal process.

It can be very sad to toss out things that meant so much to our parents and some family members may take it harder than others.

If you grew up in the home, bring tissues

Nothing we say will prepare you for the emotions you’ll feel when all is said and done and you close and lock the door to the family home for the last time.

Feel free to ask your listing agent for copies of the listing photos to keep as mementos. You may also want to take some of your own to remember special parts of the property that mean a lot to you.

Trust your real estate agent to list the home at its market value

Heirs often have dollar signs in their eyes and want to set the asking price too high, which can lead to the house staying on the market much longer, increasing those carrying costs.

Ensure that everyone is on the same page when it comes to the asking price and how far everyone is willing to negotiate on price. This will save time during the process.

Don’t DIY it

As tempted as you might be to make money from the sale, especially if you have several siblings to divide it up amongst, let professionals help you. Surround yourself with experts, especially if you hope to make any money from the situation.

If you’re the estate’s personal representative, hire a probate lawyer to help with the many filings the court will require, and hire an experienced real estate agent. An agent is especially essential if you and your siblings live out of town and can’t be there to hire people to clean out the home and fix it up.

Give the home a nip and tuck

Although your parents’s home may be dated, place limits on the money you spend to fix it up. Giving the kitchen a total makeover, for instance, probably isn’t worth the cost involved.

But it will pay off to clean thoroughly, paint the walls and remove old carpeting throughout the house, especially if there are hardwood floors underneath.

We’re happy to help in any way we can. Feel free to contact us if you need suggestions on how to ready the home for the market and for a free determination of its current market value.

What Happens After My Offer is Accepted?

After all the back-and-forth on price and haggling over concessions and repairs, it’s finally over and your offer to purchase the home was accepted.

Now, the real work begins.

Granted, you and the seller are no longer front and center on the home purchase stage; there are some details you’ll need to attend to after the offer is accepted.

For the most part, however, this is the point where real estate agents really earn their money and a good one proves that he or she is worth every penny.

Once you sign the purchase agreement and hand it to your agent, he or she will return to the office, check it over for accuracy and ensure signatures and initials are in the proper places and then get going on all the time-sensitive duties.

Escrow Opens

Quite simply, escrow describes a holding of funds or other items by a neutral third party to a transaction until they are distributed according to the principal parties’ instructions.

In the typical residential real estate transaction, the principals include the seller, buyer and lender.

To open escrow, the agent or her transaction coordinator calls the escrow officer, typically employed by an escrow or title company, to arrange delivery of the purchase agreement and your good faith deposit.

This is the point at which the clock begins ticking toward the closing date specified in the purchase agreement.

By the way, not all states use escrow. In non-escrow states, a real estate attorney handles these duties.

Title Company

Next, a title search will be ordered. This is, in a nutshell, a search of the home’s chain of title (from the present owner back to the original owner).

The title company is looking for any problems with the home’s title, now or in the past. An example would be a lien against the property, or an additional loan against it.

The title company will issue what is known as a Preliminary Title Report and deliver it to the escrow holder.

It’s up to the seller, however, to clear any problems. If he or she can’t or won’t, you can cancel your agreement to purchase the property.

Appraisal and Loan Process

While all of the above is happening, your lender will send out an appraiser to determine the value of the home and begin processing your loan.

It’s important to return your lender’s phone calls as soon as possible.

The Home Inspection

You’ll order a home inspection (or we can do it for you). Take your time when reviewing the inspector’s report and get all of your questions answered. We’ll be with you every step of the way.

Any adverse conditions revealed in this report, which may require repairs, will have to be negotiated with the seller.

Contingency Removal

While all of the above is happening on your behalf, without your involvement (other than to review the Preliminary Title Report and the home inspection and sign off on them), the next step in the process requires your involvement.

It’s time to remove the contingencies in the purchase agreement. Contingencies are events that must occur, according to the date listed in the contract, before the sale can close. Typical contingencies include:

  • Final loan approval – failure to obtain a loan will kill the deal.
  • Inspections – repair issue that arise from the home inspection are typically open to negotiation between the sellers. If the seller refuses to remedy any concerns you have the right to cancel the contract with the full return of your earnest money deposit.
  • The successful sale of your current home.
  • Appraisal – if the home fails to appraise for the amount you are borrowing from the lender you can negotiate with the seller for a lower price, pay a larger down payment or walk away from the sale.

Once the contract contingencies are removed you can still walk away from the deal but you will forfeit your earnest money deposit and possibly be liable for damages if your contract includes such a clause.

Just two more steps and we’ll be at the closing table!

Homeowners Insurance

If you haven’t yet shopped for homeowners insurance, it’s time now to take care of it. Ask friends and family which broker they use, if they’re happy with the price they pay and the service they receive.

Final Walk Through

You have one final chance to walk through the home to ensure that it is in the same condition (or better) as when you agreed to purchase it.

This is when we ascertain that all the agreed-upon repairs were performed and that no damage was done to the home during the seller’s move.

We’ll be there with you.

Closing

At closing you’ll sign a mountain of paperwork, but when all is said and done, you’ll be a homeowner.

Congratulations!

Shopping for a home? 10 tips to help you avoid impulse buying

When we think about the impulse purchase, most of us picture a grocery store. After all, retailers purposefully set up their stores to encourage us to pick up and purchase items on a whim.  

If you, like millions of consumers, like to shop for fun, if you are status conscious or if you find that you spend money without thinking about what you are buying or why you’re buying it, you may be an impulse shopper, according to Ian Zimmerman Ph.D. at psychologytoday.com.

It’s one thing to grab a candy bar at the checkout stand in the grocers, but to grab a new home? Not good.

We see the tendency often in our real estate business. Clients who have a wish list that they swear is set in stone yet fall madly in love with a home that offers few of the items on the list.

Let’s look at ways to avoid giving in to the impulse to buy a home that doesn’t match your wants and needs.

The wish list

The most important features you want in a home go at the top of your home-shopping wish list. These are the non-negotiables – the extra bedroom, perhaps, or a community amenity you need.

These items should be in big, bold lettering so that when you glance at your list, there’s no way to miss them.

Not all these tips may apply to your situation, so use them as a guide to help you shop intelligently for that new home.

  1. Many homebuyers insist that appliances be included in the purchase of their new home. If you are among them, we’ll need to find out how old they are. Then, be nosy – peek inside the oven and inspect the refrigerator. This will give you an idea of how well the homeowner has cared for them.
  2. After the kitchen, home shoppers tend to spend a lot of time in the bathroom. Check these rooms carefully to ensure they will fit your needs. If you use electrical outlets a lot, check that there are enough and that they’re in the proper place for your needs. A blow dryer plugged into a socket 3 feet from the mirror won’t cut it. Is there adequate bathroom storage and lighting? If not, how challenging would it be to add these features?

  3. Speaking of storage, does the home offer enough of it? Check the closets, pantry and other storage areas to ensure they meet your needs.

  4. Flooring is often a sticking point in a home sale. Whether it’s not the material you’d hoped for (carpet instead of wood, vinyl instead of carpet, etc.) or the flooring is damaged, it’s important to not overlook this inspection. Flooring is pricey.

  5. Don’t be so awed by the kitchen’s staging that you fail to ensure it meets your needs. Picture yourself using it – does it flow the way you need it to? Is there enough storage?

  6. Lighting is another often-replaced item in a new home. Determine if it’s adequate and how much of it will need to be replaced.

  7. The condition and age of the HVAC system and the water heater are important as well. This is another very expensive fix or replacement.

  8. How do the schools in the area stack up against others in the region? Even if you don’t have school-aged children, nearby schools can impact the home’s value.

  9. Check your wish list for items you must have. For instance, if appliances are on the list, find out if they’re included in the sale. Never assume and always ask.

  10. Never allow yourself to become so enamored with a home that you ignore major problems on the home inspection report. These don’t necessarily have to be a deal breaker. With the right agent, negotiations may bring about a solution.

This is a very cursory overview of ways to keep your wits about you when shopping for a home for sale.

You can find a more in-depth checklist at the U.S. Department of Housing and Urban Development’s website. We suggest you print several copies – one for each home you view.

A critical early step toward buying your dream home

Shopping for a new home can be overwhelming. Finding a real estate agent, looking at homes online, and applying for loan approval, there is a lot to do, and it can be difficult to know where to start.

Believe it or not, there is a first step that every home buyer should take–before they start interviewing real estate agents and before they look at even one home online.

Know What You Can’t Live Without

Make a list of everything you want in a home. If you are part of a couple, you should each have your own list.

When you have completed your home purchase wish list, take a look at each item. Ask yourself,

“Is this something that I really need in order to enjoy life in my new home?”

Then, get rid of anything that you know you can do without, and still be perfectly content.

The Tough Decisions

Now it is time to prioritize the wish list. The top two items should be those items on which you will not compromise, as living without them would make you miserable. For some folks that might be a gourmet kitchen or space for a garden.

The bottom two items should be those that you are willing to compromise on.

Now, compare your home purchase wish list with your partner’s. Anything that is on both of your lists is a priority and should probably be moved to the top.

Inevitably, though, there will be items each of you will need to compromise on, thus the little “bargaining chips” at the bottom of the list: sort of a “I’ll give you the garage in exchange for the fireplace” type of thing.

It’s Not Set In Stone

One thing that may surprise you is that this list will change as you begin to actually view homes. You may discover a feature in a home that you didn’t consider when you wrote the original list.

It’s very common that some buyers say they absolutely need to have a certain feature in a home yet the home they finally choose lacks that feature.

Don’t feel as if this list is set in stone, but do inform us if anything changes.

The wish list works well to help cut down your confusion when presented with an array of homes to view. It also helps your agent to keep focused and not waste everyone’s time by showing you homes that don’t fulfill your desires.

You’ve just taken the first step to make sure that your new home is one that fulfills at least most of your wishes. That house is out there. Count on it.