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Improve your home buying experience. There are home buying advantages and disadvantages. Searching for a home is a process. There are advantages and pitfalls in the process. Learn home buyer benefits and avoid disadvantages. Buyers have a mental picture of what they are looking for in a new home. Maybe first time or seasoned home buyers. Reason vary: renter ready to purchase a home, growing family want a larger home, kids are grown downsizing, want a better neighborhood and school district, changing from condominium to home, changing from home to condominium and etc. Purchasing a home is a large investment and should not be taken lightly. Home buyer's guide 15 checklist tips.
As a Realtor, I meet prospective buyers inquiring about purchasing a home. You will ask the prospective buyer if they have a PRE-APPROVAL from a direct lender? Unfortunately, the answer is NO. BUT they know they can qualify for this home at this asking price. THE ADVANTAGE: FIRST THING a buyer should do is get a PRE-APPROVAL. Obtain from a direct lender. Have lender give rates and terms on both conventional and FHA financing. Once you have Pre-Approval will have a reality about what you can afford. Know your home purchasing power. Areas are dictated by price ranges. The home price ranges vary per area. Culver City price ranges are different from Cheviot Hills. Disadvantage not being pre-approved.
Suggest not making large purchases three to six months before buying a new home. A large purchase before purchasing a new home will affect your credit rating. It may lower mortgage loan amount and FICA score. Home Buyers Dealing With Finance.
There’s a general rule of thumb when it comes to buying a home. There are also a number of tools and calculators online that can help you understand how your income, debt, and expenses affect what you can afford. Don’t forget, that there are lots of considerations beyond the home’s selling price. Include in monthly housing expenses property taxes, home insurance, energy costs, etc. Note: Property taxes in California are 1.25% sales price. In California adjust accordingly.
The housing market has improved and sellers are planning to purchase a new home after they have sold their existing property. Contact a local Realtor get a Comparative Market Analysis of your existing home. Home Buyers Guide Home Buyers Advantages Disadvantages Is there enough equity in the existing property to purchase a new home? Or will the new purchase require selling your current home? The process when selling requires time. Current property has to be listed and receive an accepted offer from a qualified buyer. After an offer has been accepted home enters escrow. The escrow period can be about 30 to 60 days. If your home is currently on the market the total selling process can take a few months. Prospective buyers allow time to sell your current home.
Now you know the estimated equity in your home. Head off to a direct lender see your purchasing power for a new home. Will you be able to purchase a new home in the desired area? If not consider homes in surrounding areas. Home Buyer's Guide 15 Checklist Tips.
The 3 L’s may not be everything but close to it. Best locations are higher priced neighborhoods for good reasons. It is to a home buyers advantage purchasing home in the best affordable location.
Verify if the residential street is a busy commuter street with heavy traffic. Does the home provide privacy? Does the master bedroom look into the neighborhood’s bathroom? That may be a location problem. Condominiums with the highest value tend to be top-floor and end units. End units have one common wall. Does condo view brick wall or greenbelt? Things to consider when searching for a home or condominium. Resell values base on home or condominium location. Financial advantage good location and disadvantage poor location.
Home Buyers Guide Home Buyers Advantages Disadvantages. Great Schools (rating)
Parents want their children in the best public schools. Even if you do not have children school districts are good indicators of property values. Checking school districts in areas of interest. The advantage of a good school district. Disadvantage poor school district.
This is a big one. Check crime rates in the area of interest. Get an idea of the crime rating over time. Searching for a home check community crime rates. Areas with the high crime rate and heavy police presences have lower home values than communities with low crime rates. Home Buyers Guide Home Buyers Advantages Disadvantages. Advantage neighborhood with the low crime rate. Home buyer's disadvantage neighborhood with the high crime rate.
Homeowners want the ability to walk to shopping centers, parks, beaches. Want to walk or bike to work? What is driving time to kid’s school? What is the driving time to work? Where is the local Medical Center? Where is the closest freeway? In West Los Angeles what is the driving time to downtown Los Angeles and LAX? 21st-century trends have mixed-use communities. Complex with commercial use on the ground level and living spaces on upper floors. Or community where commercial, residential, entertainment is inter-mixed. The example would be Playa Vista Silicon Beach. Residents are able to work, live and play. Check community Walk Score.
May have found the perfect house that has everything you want. Pause just a moment. Check out the surrounding area. Los Angeles, CA is funny. Maybe a FAB area but just two blocks away from an area of lesser value with the higher crime rate. Just be aware of your surrounding area. Check local schools, crime rate, parks and shopping centers. Visit areas shopping centers and coffee shops. Home Buyer's Guide 15 Checklist Tips.
I have conflicting views about the best house on the block. Some may suggest buying the best house on the block does not leave any room appreciation. I do not agree because if the real estate market appreciates that home should appreciate based on the average rate in the area. On the other hand, if home appraises for much less than your offered amount proceed with caution. Do not let emotions dictate paying to much for an overpriced home. If the home is over improved/overpriced for the area it will be tough recouping your money. Buyers choice just be aware of purchasing a home over the appraised value. Home Buyers Guide Home Buyer's Guide 15 Checklist Tips.
If you buy a fixer-upper know the cost to get the home up to your standards. What are the repairs cosmetic or major repair/replacements? The home may be in the most desirable area, with great schools and a low crime rate. Have a professional inspection of the roof, plumbing, electrical, chimney and etc. Shop contractors for estimated costs for replacement items including labor. Request referral from all contractors. What appears to be a simple cosmetic job in the kitchen may end up being a home renovation. How to determine the value of fixer-upper? One of the best ways is to get your hands on a comparable market analysis. See what price similar properties have sold for in the past and find out the listing price of others currently on the market. It is important to examine the fixer-upper carefully and figure out how much it will cost to fix any defects or repairs. What are the costs involved to get the home up to snuff? Cosmetic repairs/replacements maybe $15,000.00 to $30,000.00. On the other hand, major replacements like roof, plumbing or foundation can run in the tens of thousand dollars. Do your homework. Add home’s purchase price plus repair/replacement costs. Calculate the total purchase price with repair/replacement costs if the value is the current market or over market values? Cosmetics repairs and renovation takes money, time and energy. Compare fixer home price plus repairs to homes in standard condition. Compare to renovated homes. The fixer maybe a great deal. On the other hand, the total price may be discouraging. Get out your calculator.
The “Great Recession” saw a decrease in property values of approximately 20% to 40%. Mid 2012 some areas had seen a stabilization of values. Short sales and foreclosed properties diminished. In 2013-2014 the real estate market rebounded. The market may be depressed or strong. Ask yourself, what will happen to the values if the market changes tomorrow? The real estate market is up and down. Purchasing real estate is a long-term investment. The average time frame is 7 to 10 years. Have your Realtor give you a snapshot of property values in the last seven to ten years. A good real estate agent familiar with your neighborhood can supply statistical information needed. As a homeowner find ways to add value to the property. As time goes by homeowners may have to replace items (roof, plumbing, electrical and etc). Remodeled kitchens and bathrooms translate to higher values.
Purchasing a Plan Unit Development (condominiums, townhouses, and homes) have monthly homeowner association dues. West L.A. newest PUD Playa Vista. Playa Vista has Mello Roos fees as well. Generally, these fees are due monthly. Verify the homeowner's associations month dues and reserves. Verify if there are any special assessments or law sues against the association. Verify what is included in HOAs gardening, landscaping, pool spa and or tennis maintenance, insurance, earthquake, etc. Another big item is the homeowner association’s reserves. Reserves used for emergencies and major repairs. Buyers want a project with large reserves. Have written verification.
You have found the perfect home. You have entered escrow. There is a home inspection contingency in the purchase agreement. Buyer has about 5-15 days to perform a physical inspection of the home. ALWAYS hire a professional home inspector. They will inspect all elements of the home. Never rely on Sellers or Realtor® opinion. The home buyers can visually see elements of a home. But what about the roof, electrical, plumbing, foundation, etc. It is to a home buyers disadvantage not to hire a professional home inspector. It could be a costly mistake. Hire A Professional Home Inspector.
Home Buyer's Guide 15 Checklist Tips. The home buyers process takes time and planning. The first step is getting a mortgage pre-approval. Once, you know your purchasing power narrow down neighborhoods. What are the neighborhood’s characteristics? Research the school district and crime rate. The Realtor will give statistical market data. Walk and drive around the neighborhood and surrounding areas. Visit shopping center, parks and etc. Decide if you want fixer, standard, remodeled or renovated home. Home Buyer's Guide 15 Checklist Tips.