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| Yes, we sell smaller houses too! |
It has been billed as one of the great American dreams;
owning your own home. We are fortunate
to live in a country were, yes, you can own private land and it’s “improvements”
(your house) without leasing the land
long term from the queen, Lord Grantham…………. ; you get the idea. But is it your best move? Maybe you should just rent? Who hasn’t heard of someone who bought their
first home in 2006 and couldn’t sell it in 2009! Here are a few tips & tests to
see if you’re ready to buy this year.
1.) If
you bought a house today, how long do you plan on staying there?
If you can’t tell me five years,
his may not be the year to buy your house.
The real estate market is very local (a micro market for you econ buff’s)
and is in constant motion. In my
experience, five years has typically been the point when you can sell and not
bring money to the table. It would also
have helped if you bought a home that needed a little work and you are
fortunate to have sweat equity.
2.) Look into your crystal ball and paint a
picture for me of what your life looks like in five years?
One of my favorite questions
because it usually gets a laugh, from the buyer. If you are looking at two
bedroom condo’s in center city and you’re telling me you expect to start a
family in two years, you are looking at the wrong house. More importantly, if you buy that condo and
you call me in two years to sell it, you are probably going to be disappointed with
what you will walk away with from the sale.
I love repeat business but …….
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3.) To quote the Dowager Countess of Grantham,
“Oh good, let’s talk about money.”
How are you going to pay for your
house? Most buyers will need a mortgage, but what type, 20% down, FHA, 10%
down, PMI, appraisal, debt ratios!.........
Quickly, glass of red and a shot of Jamison. Deep breaths, in through the nose, out
through the mouth. It’s actually not
that hard. You will get pre-qualified
with a lender. It’s a simple process,
but there are a few traps to avoid. You
may contact my preferred lender, Bruce Hopkins at Waterstone Mortgage or any
other GOOD
lender.
What’s a good lender? One that does a lot of mortgages, so they
have lots of current experience, knows the area your buying in and is coming to
settlement. It can be very helpful if
your agent KNOWS the lender in question, so you have an advocate that can put a
little “leverage” on the lender should a problem arise. After all, your agent is going to be sending
them more business and they want your agent happy. Many mortgage brokers will tell you they do
their job right the first time and don’t need to come to settlement. @75% of
the time that can be true, but for that other 25% of the time it’s vital to
have them there to fix any problems.
Should you use the “agent’s”
lender, especially if they are in house (meaning the brokerage probably owns
them)? Having sold house for 20 years I
can honestly tell you at this point, I have worked with probably all of the
large brokerages in-house lenders and they mostly are fine. The additional fees are usually what separates
any mortgage company from good or bad.
There are many expected fees involved in buying a house. We want to see that they are in-line. If the lender is promising you an
unbelievable rate, that’s too good to be true, there is probably several fees
that will make it up to the lender.
FAIR WARNING – you will be pre-approved for more of a mortgage than
you will want to or probably should spend.
Keep in mind the cost of utilities, maintenance and a slush fund for
when the hot water heater brakes before that big dinner party. Most importantly know your budget. Ideally your housing should come in about 35%
of your monthly gross income. If your
credit is great and your job stable many lenders may push that to 50%; be very
careful here.
Can we look
at houses yet Carl, this is really boring?
NO!
4.) OK, paint me a picture of your perfect
house? Now toss it out the window and
tell me what your top three priorities are in the new house.
Don’t get me wrong, I do want to know what the perfect house looks
like. I just want to set the
expectations that it probably does not exist and you may need to be more
realistic about what you can afford and what the inventory is like, in the area
you choose to buy in.
5.)
My _____________________ (insert
parent, Uncle Fred, the guy on the subway) said I should only offer 50% of the
asking price, that the seller is desperate, that they’ll work with me, that my
agent is a crook, etc, etc, etc.
If the advice giver hasn’t bought a home in the last 6
months, they are misinformed. If it has
been 30 years their opinion may be outdated.
A good buyer’s agent (that would be my team) will be able to provide you
with the most recent comparable sales and if the average sold to list price
ration is 93% your 80% offer isn’t even going to be noticed. Keep in mind, that in the most popular areas
of the Philadelphia Metro region, homes are selling very quickly and in some
cases full price or more with multiple offers.
6.)
Get educated about the area you want
to live in and know the numbers.
Again, a good agent can help you with this. You should walk the neighborhoods on the
weekends, when the neighbors are out and about.
Go into the local stores, eat at the restaurants, check out the schools. How many homes sold in the last 6
months? How did that compare with last
year? What was the average and median
prices last year, 5 years ago and 10 years ago?
You could also click the link below and get a Market Insider Report for
the zip codes you are interested in –
OK, I’m tired of writing and this is
getting long winded (sorry, I’m Presbyterian).
Click the link below to go to my website and you can search all the
homes currently for sale in the region. Also below that is my mobile app, if
you would rather take it with you.
Last and not least, you are always
welcome to call, email or text me to set up a time to talk about the
process. I have a couple slots open each
week and weekend to just sit and talk about the process and your house. If coming into the office is a scary thought
we do coffee or beer! I also bring you a
copy of Your First Home.
