Don't Raid the Couch Cushions and the Cookie Jar

Don't Raid the Couch Cushions and the Cookie Jar

By Karin Beuerlein, FrontDoor.com | Published: 11/01/2007

Keep more than a few pennies of savings for the unexpected costs of buying a home.

When you're deciding how large a down payment you can afford, remember to leave yourself some padding. The home-buying process, moving and the first months of home ownership are fraught with unexpected expenses.
Examples:

• Appraisal fee. You often have to pay this fee out of pocket as part of the loan approval process. Depending on your location, the fee can run anywhere from $200 to $1,000.
• Professional home inspection. Costs range from $300 to $800 for typical homes, but they can go higher depending on the age and type of structure. More specific inspections, such as those for structural engineering, mold and termites are additional costs.
• Extra closing costs. Although the good faith estimate from your lender should be reasonably accurate, you won't know the actual amount you have to bring to closing until a day or two beforehand. Don't play it too close. You don't want to hold up closing because you're $100 short.
• Homeowner's association fees. If you're buying in a subdivision, you may pay an annual or even monthly fee for upkeep of common areas.
• Repairs, upgrades, renovations. Depending on the condition of the home you buy, remember to budget for the work it will take to make it move-in ready.
• Moving van rental fees and boxes.
• Termination fees for current services. Carefully check your Internet and cell phone contracts.
• Appliances. Whether you'll have appliances included depends on the deal you strike with the seller. Be aware that brand-new houses usually do not include refrigerators, washers or dryers. If the other kitchen appliances are stainless steel, you'll need to spend some serious dough to buy a matching fridge or else live with the "eclectic" look.
• Household items. As a renter, it's easy to forget that the move to a bigger space means you'll need more mundane stuff like trash cans, lamps and shower rods. New houses, again, usually don't include hardware like drawer pulls, bathroom mirrors or towel bars; you may think you can live without them for a while, but trust us, you'll crack after a week and pull out the credit card.
• Lawn-care equipment. Buying a yard? Your new neighbors will prefer that you mow, rake and edge it.
• Warm milk. Just for the first week of wigging out in the middle of the night, wondering if they still have debtors' prison. (They don't.)

How Much "Home" Can You Afford?

When purchasing a home, or beginning to THINK about purchasing a home, many home buyers will base their home searches on how much their monthly payment will be. 

I found, and want to share, a very cool tool on the Internet that allows home buyers to calculate how much they can spend on a home, based on factors such as down payment amount and desired monthly payment.

Click the link below to find out home much "house" fits your budget!

Interactive calculator

1 BIG Myth and 4 Good Reasons Why You Need a Realtor When Purchasing a New Home

Do you need a Realtor to purchase a new home from a builder?  Technically, you don't but it is within your best interest to have one represent you.  Here is why.... 

DR Horton...Pulte....Plantation...Lennar...KB...Fieldstone...the list goes on and on.  Each of these builders have something different to offer buyers: size and price value, neighborhood amenities, luxury features, floor plan variety, purchasing incentives, and optional upgrades.  Each builder is different, but all new home purchases have ONE thing in common:  Buyers NEED a Realtor to represent them. 

There is 1 BIG myth and 4 good reasons why you need a Realtor when purchasing a new home:

MYTH:  A buyer can save money on the purchase of their home by NOT using a Realtor.

TRUTH:  The builder will NOT negotiate a lower sales price, or offer additional incentives, if you choose to not have a Realtor represent you when purchasing a new home.  Realtors' commissions are not paid from your transaction, they are paid from an account separate from the sale of your home.  You have everything to lose and nothing to gain by choosing NOT to have a Realtor represent you.

Why you need a Realtor:

1.  A local Realtor knows the area, market, and community. They can advise you on these items based on your needs, goals, and future plans for the property.

As a home buyer, you have probably done your research on things such as school districts, area, features wanted in a home and community, your targeted price range, and desired monthly payment.

What about the other things your need to consider? Community size, current market conditions, resale trends, and area growth are a few of the things that most buyers do not think about.

As a Realtor, my job is to provide you with as much information as possible, bring concerns to your attention, inform you on market trends, and help you make a purchasing decision based on your short-term and long-term plans.


2.  You need a Realtor to review and explain your purchase contract.

Sales people at a builders office work for the builder, they are not there to represent you, the buyer.  This is not saying that they are "evil" people who will try to take advantage of you, or not address your needs.  You are their customer, not their client.  My experience with builder sales representatives have been very positive, but sometimes you need a second, un-bias, opinion of your purchase options.  Is this home REALLY a good, solid, investment for you and your family?  Based on the market, are you paying a fair price for the house?

A Realtor will treat you as a client, not a customer, and can help you work through the pro's and con's of a house, neighborhood, and subdivision.  They can also help you compare incentives between similar builders.


3.  A Realtor can help guide you in the purchase process.

In some ways, purchasing a new home is similar to purchasing a pre-owned home.  There is a purchase contract with deadlines and time frames, you will most likely have a lender, there will be a title company, insurance agent, walk-through, and meetings. 

Realtors know the right questions to ask, how to navigate the purchase process, and the avenues to take if something were to go wrong with your purchase.  Realtors can troubleshoot, provide recommendations, and anticipate/diffuse potential problems. 


4.  A Realtor looks out for your best interests.

Sales people at a builders office work for the builder, and most do not hold a real estate license issued by the Texas Real Estate Commission.  They are familiar with their community, their features, the prices and features of their competition, transaction processes, and their sales contracts.  However, they do not always have general real estate industry knowledge (IE. general financing and insurance options) that is essential to protecting the best interest of a buyer. 

For example:  I had a buyer purchasing a home in a new subdivision that allowed USDA financing.  The buyer, and the subdivision, were both pre-qualified for a USDA loan.  The sales contract language centered around the assumed financing of a VA or HUD loan.  This was a problem because a USDA loan does not fall under the categories of HUD or VA loans.  Her contract did not provide any protection for a USDA loan in the event that she, or the property, did not meet underwriting guidelines and appraisal conditions.  In short, this means that with the way the contract was written, she would lose her $500 earnest money (deposit) if the home did not appraise, or if she/the house did not meet final approval for the loan. 

I called this issue to the attention of the sales representative, who did not know that protection for USDA loans were not covered in the contract, and suggested that proper USDA wording be added to the sales contract in order to protect the buyer's $500 deposit. 

Problem solved and buyer protected!  This would not have happened if I had not been there to review the sales contract before she signed.

...................................................................

Before you visit the office of a new home builder, seek the counsel of a Realtor...or better yet...call ME!  I would love to visit with you about your home purchasing options.  :)

Valerie Tolbirt
Keller Williams Realty
830-609-8877
ValerieTolbirt@yahoo.com

Where Are All The Buyers At??

I decided to jump start my New Braunfels Real Estate blog with answers to the question that most property sellers in New Braunfels are asking...."where are all the buyers at?" 

If you are a seller, in New Braunfels, there is no doubt that you have recently experienced frustration with selling your home....tons of showings and no offers, offers that are way too low, buyers that back out of contracts, and financing that falls apart.  Chances are good...your home has also been on the market for months.  There more properties available than there are good, solid, qualified buyers.  Buyers are taking their time, seeing tons of properties, and choosing the ones that are priced the best, have the best features, in the best locations, with the most updates.  Its a buyers market and buyers are not stretching their budgets; they are being conservative and purchasing below their qualification price range.

Centralized Showings is a company that most real estate offices and Realtors employ to schedule showings for their listings.  This company also collects, and makes available, data on the showings that are set up through their company.  Through their services, we are able to zero in on which price ranges have the most buyer traffic. 

So in what price ranges are these buyers looking?   

This data was collected for showings that occurred between January 1-28, 2011, in the New Braunfels zip codes of 78130 and 78132. 

$30,000 - $250,000 Range:

$250,000 - $500,000 Range:

So what does this mean?  This means that the most active price range for properties priced under $250,000 is $130,000-$150,000 and the most trafficked price range in the upper tier is $280,000 - $300,000. 

Where does your property stand??

I hope you find this information helpful and I look forward to bringing you more information in the future!

Note:  Showing data is collected from Centralized Showings and does not necessarily reflect showings scheduled by Keller Williams, on Keller Williams listings.  This data does not include real estate companies and agents that do not use Centralized Showings, and does not include builder properties and properties for sale by owner.