Buying With Friends Isn’t Like Renting

You’ve been living with your best friend since freshman year of college, and it’s been a blast. So why not pool your money and go in on a house together? After all, it’s easier to buy when you have two incomes.

It’s true that co-buying a home with friends or family can make it easier to own a home. And it can reduce your upfront costs.

But there are a few unique differences to co-buying. Here are three you should consider and discuss before you jump into the process.

1. What type of ownership will you have?
Don’t assume that splitting the mortgage determines the ownership.

If one person will be paying a larger portion, you might want to be tenants in common. This also allows you to transfer or sell your share of the property at any time. But if you want to divide the ownership equally, you can choose to be joint tenants.

2. How are your credit scores looking?
When two buyers are on a mortgage app, lenders use the lowest credit score to determine the interest rate.

Do you both have excellent credit? If not, you could have only one person on the mortgage loan, but you’ll only be able to count one income to determine the loan size.

3. How will you pay your bills each month?
This sounds like a minor detail, but it’s important to be on the same page about finances before the bills come in.

Will you pay bills out of a joint household account? Or will one person pay the full bill and have the other pay them back?

Once you’ve discussed your plans for the finances and ownership, your best bet is to have a legal agreement prepared ahead of time.

Have more questions about co-buying a home? Reach out today to discuss your needs and get the process started.

Get in touch with Matt now to get started!

Best practices for kicking off your home-buying journey

Open houses are the gold standard in real estate. They’ve been around for decades and will be ingrained in the buying and selling of homes for years to come.

The average buyer attends three open houses, according to the Zillow Group Consumer Housing Trends Report, a survey of more than 13,000 homeowners, sellers, buyers, and renters. Seventy-one percent of all buyers attend at least open house, and first-time buyers are even more likely to go (77 percent attend one open house or more).

But as a buyer, are you making the most of your open house visits?

Here are some best practices and helpful questions for buyers at all ends of the home-buying spectrum.

Use the open house to learn the market without committing

For the most part, open houses are just that — open. They make it possible for anyone to see a property in a certain time period, without an appointment or even being a very serious buyer.

New buyers should leverage the open house opportunity to get a feel for the market. In today’s world, using online search tools, mobile apps and the open house, a buyer can start to get a feel for pricing and the market before committing to an agent. Most importantly, open houses are some of the best ways for buyer and agent relationships to start.

You don’t have to sign in (but don’t be rude)

The biggest fear of some newer buyers is that a real estate agent at an open house will be all over them, ask for their contact information and then start harassing them for the next three weeks. It does happen, but it’s also common courtesy to at least recognize and say hello to the agent at the open house. Don’t forget, in addition to trying to sell the home for her client, for safety reasons, the agent is keeping a look out for who is coming and going. It’s polite to say hello and introduce yourself to the agent, but you can also politely decline to sign in.

If you’re an active buyer, you should make yourself known to the agent. Let the seller’s agent know who your agent is and don’t be afraid to express interest. When it comes time to review an offer with a seller, listing agents like to put a face to a name.

Watch the other buyers

You can tell a lot about the activity and marketability of a home by watching the other buyers. If you observe a lot of people walking in and out quickly, the home probably has some issues. Are the buyers hanging around, asking questions of the listing agent and huddling in the corner talking to their spouses or partners? If so, it could be a sign this is a well-priced and “hot” listing. If you’re interested, too, observing other buyers at the open house could help you learn about the competition.

Ask the agent questions

The real estate agent is there for a reason. It’s his job. If he is the listing agent, ask him questions. He is a direct line to the seller. He should know more than anyone about the property and the seller. Your agent can funnel your questions to the listing agent. But if you’re there, ask away. Watch the agent’s facial expression and reaction to your questions. If it’s a competitive market, ask questions such as: “Why is the seller selling?” “Is there a certain day to review offers or have you had a lot of showings?” In a slow market, ask how long the property has been on the market and what the seller’s motivations are. A good agent will engage you because it’s good for his seller.

Be open to meeting your future agent

When considering a new doctor, lawyer or CPA, you don’t get the chance to see them in their element until you’ve decided to work with them. Not true for real estate agents. Some of the best buyer/seller/real estate relationships begin at open houses.

A good agent is wearing two hats at the open house. In addition to watching the serious buyers and getting feedback for the seller, an active agent is also looking to interact with future clients.

Face to face, informal and relevant, the interaction with an agent at an open house is important. You can get a feel for a person just from a brief meeting. If you sense the agent could be someone you could work with, ask some open-ended questions, such as “How’s the market?” and “What areas do you cover?”

Why open houses have been around for decades

At any open house, there are people at every stage of the home-buying game, from just testing the waters to looking at homes daily, making offers and working closely with an agent. For someone new to the market, it’s helpful to know the best practices for visiting open houses and interacting with the real estate agent. For more experienced buyers, the open house is an opportunity to make a second or third visit, getting a closer look at the details and uncovering things you may have missed earlier. There are lots of reasons why open houses have been around for decades — and why you should take full advantage of them.

Take full advantage of the open house by asking questions to learn all you can about the home and listing.

Don’t Get Blindsided by Closing Costs

Have you ever decided to buy something, only to find out about additional costs at the end? The last thing you want is to be surprised by unexpected fees – especially at your closing.

You’ve made your financial calculations. Extra charges at the eleventh hour could make all your plans go bust.

But you can’t just skip the closing – that’s when the legal ownership is transferred.

Want to avoid being blindsided at your closing? Here’s how to plan ahead for closing fees:

What’s the deal with closing costs?
Closing costs typically run about 2% to 5% of the purchase price and are paid to lenders, attorneys and other third parties. Buyers often have more closing costs than sellers because most fees are related to the new mortgage loan.

Common closing costs for buyers:

  • Loan processing fees
  • Home appraisal and inspection fees
  • Property taxes

Common closing costs for sellers:

  • Mortgage payoff fees
  • Title transfer fees
  • Attorney fees for handling the closing

How can you lower the costs?
After applying for a mortgage, you’ll receive a Loan Estimate from the lender. It summarizes the loan terms, such as the loan amount, interest rate and all closing costs. Comparing Loan Estimates from different lenders is important.

Page 2 of the Loan Estimate also details the services you can shop around for, such as surveys, appraisals and title searches.

Are closing costs ever negotiable?
Yes. A seller or buyer sometimes agrees to pay part or all of the other party’s closing costs. This is something we can negotiate into the purchase agreement.

As for paying the closing costs? Some lenders will allow you to roll the cost into your mortgage. However, you’ll pay interest on it for the life of the loan. Paying cash upfront is a smarter option if you have the funds available.

Have more questions about closing on a home? Or are you ready to get your home search started? Reach out today.

7 home maintenance tasks sellers must do before listing

Proactive is the buzzword when addressing both cosmetic and mechanical components of a listing

It’s that time of year again, the 2019 selling season is upon us. If you have clients getting ready to put their home on the market, the task list to prep for the market can seem endless.

To make it easy, we walk you through the seven things sellers should do before putting that for sale sign in the ground.

Spruce up the exterior

Let’s face it, the exterior of the property is the first thing a buyer will see whether online or driving by. Now is the time to make sure it looks its best.

Walk around the entire exterior of the home, and conduct an assessment.

Consider pressure washing, painting, having the windows cleaned, cleaning out gutters, trimming back any overgrown or dead landscaping, cleaning the front door and changing out any worn door hardware that may look old and corroded. And make sure the front doorbell actually works!

Service the heating/cooling system

A home inspector is going to check this anyway, so beat ’em to the punch by having the system serviced and cleaned. When was the last time it was serviced anyway?

It’s better to take care of any repairs that may need addressing now versus waiting until a buyer decides to make an offer.

Do a light bulb check

Make sure all of the lightbulbs are working and free of dirt and debris. Yes, these need cleaning too — just make sure they are off. Don’t forget to check the outdoor lights as well.

Check the smoke detectors

Maybe sellers took the batteries out the last time they were playing Top Chef in the kitchen.

Now is the time to make sure that all smoke detectors are working and have new batteries. Replace any old ones as an inspector is likely to flag those during a home inspection and recommend that they be replaced.

Blue tape it

Conduct a thorough walk through of the interior of the home. If there are any nicks, dents or scratches on the walls and moldings, blue tape them so sellers can go through and have each area repaired.

The more wear and tear a home appears to have, the more the buyer is going to chip away at the asking price.

Deep clean, and declutter

Now is the time to give the home that deep clean it needs. Consider hiring a cleaning crew to tackle this; the more hands, the better.

Deep cleaning means wiping down all of the baseboards and moldings and cleaning cabinets, appliances (including the oven) and every corner from top to bottom including light fixtures and ceiling fans.

It’s also a good time to gather all those unwanted closet items together to donate as well as any unused furniture and decor. The less stuff in the house, the less there is to organize and keep clean.

Clear out the garage

Often overlooked when preparing a home for sale, don’t forget this space. Make sure the garage is clean, in good repair, organized and that you can actually walk through it.

Consider painting the floor or having an epoxy finish put down. And that ceiling? Buyers also look up when touring this space, so make sure any drywall cracks or loose seams are repaired.

Buyers recognize and appreciate homes that have been taken care of. Taking some time to invest in home maintenance before selling will likely yield a big payoff when it becomes offer time.

It’s not TV. It’s your bottom line.

TV shows make finding a profitable fixer-upper seem easy. But in the real world, there are real challenges and decisions to be made.  

Whether you’re buying an investment property or a starter home for your family, there are dozens of factors to consider. How much will it cost to renovate? Are home values rising or falling in the neighborhood? How in-demand is the area? 

Want to make sure your purchase isn’t a money pit? Ask yourself these four questions:

1. Does it have good bones?
We want to avoid expensive repairs that would eat into your bottom line. It’s vital to have structural elements like the roof, foundation, plumbing, electrical and HVAC system inspected. 

2. Is the price comparable to the area? 
The property may come at a fixer-upper price, but how does it compare to others in the area? Let’s also take a look at new developments or zoning laws that could influence future home values.

3. Does it need special inspections?
Fixer-uppers need to go beyond standard inspections. Things like sewer lines, septic systems and pools age with the property, so it’s important to have each evaluated. 

4. What does your contractor think?
Bringing a contractor on board early is essential when creating your renovation budget. We need to estimate the cost of any aesthetic changes or upgrades to avoid overimproving the home.

Remember, it’s not just the sticker price you want to consider when buying a fixer-upper, but the cost of the entire project. 

Do you need help finding the fixer-upper of your dreams? 
Together, we can evaluate the purchase price, factor in repair costs and determine the future resale value of the home. 

If you’ve already got your eye on a fixer-upper, or want help finding a contractor in our area, get in touch today.

Time for Heating Systems 101

If your current heating system yields cold hands and frozen toes — it might be time to upgrade.

Heating your home accounts for an inordinate portion of your utility bill, so it pays to choose the most efficient heating system possible. This doesn’t necessarily mean you should upgrade to a different type of system, however.

Generally speaking, it’s a bad idea to convert from forced air to central heating, or vice versa, since the benefits rarely justify the cost. Instead, upgrade to a more efficient version of your existing furnace or boiler when it’s too expensive to repair — but weigh your options carefully.

Here’s a rundown of the most commonly used heating systems, along with their advantages and disadvantages, to help you make the most appropriate choice for your home, climate and wallet.

Furnaces

Also known as forced air, furnaces are the most commonly used heating systems in the U.S. because they’re reliable and relatively inexpensive. Gas furnaces are rated for efficiency by their annual fuel utilization efficiency (AFUE) rating. This shows how much energy is successfully converted to usable heat.

If your furnace needs to be replaced, the silver lining is that modern furnaces are more efficient than ever, and some premium models even reach an AFUE rating of 97 percent. When purchasing a furnace, choose one that’s appropriately sized for your home so that it doesn’t put undue wear and tear on your system or waste energy.

ProsCons
Inexpensive to installReliable and low-maintenanceHave a long life span, especially electric modelsCan be retrofitted to filter and clean your home’s airAlready installed in most homes, thus easier to replaceCan produce and kick up more allergensWarm air is easily lost through ducts and within the houseGas furnaces can be dangerous, creating a risk of fire or carbon monoxide poisoningFurnaces powered by electricity are safer, but cost more to run

Boilers

Boilers use water to generate and distribute heat through pipes and radiators, heating the air, floors, wall and baseboards as it travels in a loop. They can be powered via natural gas, electricity or propane, and they use the following systems to distribute heat:

  • Steam radiators are the old-fashioned metal things you’ve seen along the walls in older buildings.
  • Hot water radiators are the newer reincarnation and allow more control and versatility.
  • Hydronic radiant floor heating treats the entire floor of a room like a giant radiator, using tubing under the flooring to distribute heat to toasty toes. While efficient, hydronic radiant floor heating is expensive to install and replace.

Like furnaces, boilers are rated by AFUE score.

ProsCons
Usually runs more quietly than forced air systemsDoesn’t kick up dust, which makes for much better air qualityCan be retrofitted to heat waterCan be more efficient than forced air systemsBoilers are often more expensive to purchase and install than forced air systemsWater can leak when the system is damaged or nears the end of its lifeMost boilers are powered by natural gas, which isn’t available in all areasAren’t necessary in areas with mild winters

Heat pumps

These extremely efficient systems take advantage of existing temperatures (either outdoors, underwater or underground) to heat, cool and humidify your home.

There are three types of heat pumps:

  • Air-source heat pumps are the most common and circulate refrigerant between the outdoor heat pump and indoor air handler.
  • Split ductless systems use one to four indoor air handlers, which are mounted high up on walls and controlled by a remote.
  • Geothermal systems are incredibly efficient because they take advantage of temperatures in the ground, pond or a well, but they aren’t practical or affordable for most homeowners.

When selecting a heat pump system, consider the size, noise output and efficiency rating. The heating efficiency is measured by heating seasonal performance factor (HSPF), and the cooling efficiency is measured by seasonal energy efficiency ratio (SEER).

ProsCons
Very efficient, saving lots of money in the long runCan be used all year for both heating and coolingCan be modified with a desuperheater, which assists in heating your waterNewer models are appropriate for colder climatesNaturally dehumidifies the home in summer, making it ideal for the SoutheastMore expensive than forced air or central heatingInappropriate for small lotsFans can be noisyRequires more maintenance than other systemsIn cold climates, you may require an auxiliary heating system that kicks in when temperatures become too low

Best Time to List a Home for Sale?

For home buyers, it may feel like the best time to beat the competition to home shopping season has gotten earlier and earlier. But for sellers, the best time to list has remained remarkably consistent: Once again, U.S. homes listed for sale on Zillow in the first half of May sold faster and for more money than the average listing throughout the year.

Nationwide, homes listed for sale between May 1 and May 15 tended to sell for about 0.7 percent more (or roughly $1,600 on the typical U.S. home) and about six days faster than usual. And while the exact best time to list a home varies from market-to-market, in most cases the magic window falls squarely in spring.

More money, faster sale

The best time to list varies by metro area, but not by much. In 29 of the 35 large markets analyzed, the magic two-week window fell between the second half of March and first half of June. In the remaining six markets – Charlotte, Dallas, Houston, Las Vegas, Miami and Tampa – it’s the first half of July.

The largest price boost in any particular half-month period came in Minneapolis-St. Paul, where early May is optimal. Homes listed during that time frame in the Twin Cities area sell for about 1.8 percent more ($4,900 on the median local home). San Jose, Calif., and Chicago also saw their biggest boosts in early May, of about 1.5 percent in each metro area ($18,900 and $3,300, respectively). The sweet spot for listing comes a bit later in Seattle and Columbus, Ohio, where early June listings typically experience a 1.5 percent premium ($7,500 and $2,900 respectively).

The two-week magic window doesn’t just mean more money – it also can mean a faster sale. And when time is money, the benefits of listing at the right time are even greater. In Cleveland, homes listed for sale in the area’s early-May magic window sell almost two weeks faster (13 days) than an average listing throughout the year, the most time savings of any of the markets analyzed.

The magic of Saturdays

If you want to get even more strategic about when to list, it can pay to consider what day of the week will get your home seen by the most house hunters.

Saturday listings get the largest number of views by Zillow users in the first week of listing nationally and in 12 of the largest 35 metros. Friday is a great day to list as well, with homes listed that day getting the most views within a week in 10 of the top 35 markets. At the other extreme, Monday is worst time to list, nationally. Saturday listings end up with about 20 percent more page views in their first seven days on the market than Monday listings.

6 DIY Myths You Need to Stop Believing Immediately

If hours upon hours of HGTV binge-watching has taught us anything, it’s that pretty much anything can be DIY’d. New deck? Go for it. Updated bathroom? You could have the walk-in shower of your dreams in a weekend’s time.

What’s more, those TV pros make it look so easy. So if you have a big renovation on the horizon, we can understand the temptation to ditch the general contractor and tackle the job yourself.

And on the one hand, we don’t want to squash your ambition. Believe in yourself and anything’s possible, right? But on the other hand, overblown ambition—fueled by more than a few myths about what it really takes to DIY a home renovation—can lead to an expensive disaster.

Have you caught yourself making these assumptions about your DIY project? Set yourself straight before you start swinging the sledgehammer.

Myth No. 1: Home improvement shows are adequate DIY tutorials

Watch Jonathan and Drew Scott rip out a kitchen wall, and you’d be forgiven for thinking you can DIY an open-plan layout, too. All you need to do is Hulk-smash your drywall! You might even picture getting the kids involved (with proper safety gear, of course).

It’ll take more than watching these guys for 22 minutes to master DIY remodeling.

HGTV

But take it from us: Set down the sledgehammer. Step away from the wall.

“Remodeling has become so ubiquitous through various media like television shows that many homeowners view it too casually, sometimes treating it more like a hobby than an expertise,” says Jason Biddle, who runs aging-in-place home resource The Helping Home and has managed multiple major renovations in his own home.

“It’s increasingly common to naively jump into a renovation, lacking the necessary level of respect for the task at hand,” adds Biddle

To give your project the respect it deserves, take the time to thoroughly research it in advance. Biddle recommends reading construction resources like “The Visual Handbook of Building and Remodeling,” to familiarize yourself with all the crucial details you’ll need to know.

And when in doubt, call for help.

“Know your experience level and have the wisdom to know when you can handle a project yourself and when you should seek the help of an expert,” says Tonya Bruin, CEO of To Do-Done Renovations.

Myth No. 2: Buying materials online saves time

Assembling the materials for your DIY renovation from the couch can seem fun and easy, but think twice before you click “add to cart.” Whenever possible, it’s better to buy materials in person. At a store, you can check quality (is that tile prone to cracking?) and make sure you’re getting what you pay for.

When you buy online, “you take on all the risk and can’t verify details for things,” says Matthew Breyer, the president and lead designer at Breyer Construction & Landscape.

Imagine that enormous cabinetry order you placed finally arriving—only to realize the hardware wasn’t included, the shelves are the wrong size, or the construction is poor.

If you’re set on purchasing online, check your order thoroughly to ensure every piece you need is included—and build in time for returns or exchanges.

Myth No. 3: Painter’s tape is for rookies

The tape is your friend

BanksPhotos/iStock

We’ll admit painting is one of the simplest DIY jobs. But that doesn’t give you license to skip the painter’s tape.

Many DIYers paint without tape “because it takes time and effort to apply, or they feel like they’re painting experts and don’t need it,” Bruin says. “However, it’s one of the biggest mistakes you can make. The only way, as a DIYer, to get sharp, clean lines is to use tape around your edges.”

Myth No. 4: DIY projects are cheap

Sure, when you do projects yourself, your labor costs will be less—but materials still cost money (and there’s also the value of your time).

“The costs will still most likely cause some sticker shock,” Biddle says.

Once again, we’ve got television to blame. Just because Chip and Joanna Gaines knock out a whole-house renovation for $70,000 doesn’t mean you’ll do the same.

“The unrealistically low budgets on HGTV shows mislead viewers into thinking that their own remodeling efforts won’t be very expensive,” Biddle says.

And don’t forget to budget for the inevitable screw-up.

“Some renovation projects are simple enough in theory, but they can quickly turn into a headache and end up costing you a lot of money having to fix mistakes,” Bruin says.

Myth No. 5: You can knock out your DIY project in a weekend

“The term ‘DIY’ has a connotation of brevity,” Biddle says. “Watching a four-minute online tutorial or reading a one-page magazine article can lead homeowners to believe that the project will be a breeze. If there are only five steps involved, then surely it can’t take too long, right?”

But even small projects can be a big deal. Shatter a box of tiles? That’s a trip to the hardware store. Take a break to watch a few episodes of “The Chilling Adventures of Sabrina”? Before you know it, that’s a weekend lost.

“Even relatively simple endeavors can easily turn into a time suck,” Biddle says. “Add in that many DIYers are weekend warriors with full-time jobs, and it becomes obvious why the ‘little’ project takes three months to finish.”

Myth No. 6: All your mistakes can be covered with paint

No one’s expecting your work to be perfect. Installing cabinetry is hard; hanging shelves requires masterful precision; and getting all the decking boards aligned … well, good luck with that.

But don’t think no one will be the wiser if you cover up your inexperience with a thick coat of paint. Paint can’t hide that the cabinets are uneven. And when it comes to your deck, paint can actually make the problem worse. (Make sure to choose a type of paint designed for decking, otherwise there’s disaster ahead.)

“We look at dozens of decks that were just painted with a product that did not adhere to the wood,” Breyer says. “Now the entire deck is peeling and unusable.”

Myth No. 7: Cleanup is easy

It will hopefully be no surprise that renovations can be messy. A big dumpster can eliminate some of the pain—but not everything can be disposed of that easily.

“Many building materials are actually considered hazardous,” Breyer says. Your old flooring could have asbestos, and the drywall you tore down might be covered with lead paint. Governments have specific regulations about how these materials must be disposed.

Research everything you throw in that dumpster, otherwise you might get slapped with a fine. Hooray—another unexpected expense!

6 Ways to Improve Your Odds of Getting a Home Loan

Buying a home is one of the biggest financial transactions people experience in their lives, so it’s no wonder financing is one of the biggest challenges buyers face when shopping for a new home. Even though the money components of home shopping can be stressful, the good news is there are steps you can take to ensure a smoother process and hopefully improve your odds of getting approved for your home loan.

1. Get Pre-Approved Early

If you want to be ready to make an offer on a home as soon as it hits the market, consider getting pre-approved or pre-qualified early in your home search. Having this pre-approval will help you move fast when you find the perfect home. It’s also typically the first thing an agent will ask you to do before helping you with your house-hunting journey. So getting it done before talking to an agent will show that you’re serious about buying and ready to start touring homes immediately.

According to the Zillow Group Consumer Housing Trends Report 2017, the vast majority of people who financed their home with a mortgage in the last year got pre-approved (92 percent), but it’s when they got approved that is the real differentiator.

A little over a third (35 percent) of buyers got pre-approved before involving an agent, while 50 percent waited until they involved an agent before they got pre-approved. Buyers who use an agent are more likely to obtain pre-approval than those who don’t work with an agent, indicating pre-approval is either a prerequisite to securing an agent or highly recommended by their agent.

2. Get a Fully Underwritten Pre-Approval

If you want to take an extra step and do some work upfront to get your offer to stand out, consider asking your lender for a fully underwritten pre-approval. This will not only help speed up the mortgage process even more, but it will also show that you are a serious buyer who has been vetted.

During this process, a lender will verify the information in your mortgage application, your income, assets and debts, and send your loan through the underwriting process so that you can quickly get final approval for a loan once you’ve found your home and your offer has been accepted. So long as your financial condition and creditworthiness hasn’t changed since you were pre-approved, and the home meets other “closing conditions,” you’ll be approved for the loan.

Doing this work up front will allow you to close quickly, opposed to the sometimes-lengthy time frame of these steps once the offer is accepted.

Even though getting fully underwritten sounds like more work initially, you’ll have to go through this process in the later stages of the process anyways, so getting it out of the way early may save time in the long run and help you stand out.

3. Get Your Credit in Check

One of the most crucial component of getting approved for a home loan is your credit score. Not only does it have a huge financial impact by helping determine your interest rate, but lenders will also use this number to determine if you will be approved for a loan. Getting a firm grasp on how your credit is early in your home search could give you the time you need to improve it, if necessary.

Even if you think your score is good enough, it’s a good idea to get a copy of your credit report and take time to review it for any errors. Sometimes, boosting your credit score can be as simple as disputing errors. But if you catch them late, you may not have enough time to dispute before locking in your mortgage rate.

It’s also a good idea to not open any additional lines of credit to reduce further scrutiny from lenders.

4. Demonstrate Financial Stability

When lenders assess whether you qualify for a loan, they’re looking to make sure you’ll be able to repay the loan and not default. You can improve your chances of qualifying by demonstrating that you’re financially stable.

Limiting your spending is one of the easier ways to make sure your lender doesn’t find any red flags when reviewing your financial history. Lenders generally don’t like to see a number of big purchases recently made. And just as much as they don’t like seeing big purchases, they don’t want to see that you’ve missed payments either, so make sure your payments are on time.

To help ensure that you aren’t likely to miss payments, lenders like to see work consistency. If you’re able to, try not to change jobs during this process as the lender might think you no longer have the same funds to afford the mortgage.

5. Put More Down

Even though coming up with enough money for a down payment is often a buyers’ biggest hurdle during the buying process, if you’re able to make a larger down payment (of 20 percent or more), you might up your odds of getting approved.

A large down payment can show lenders you’re serious about buying and have the money to prove it. Outside of a larger down payment giving off the impression that you’re more trustworthy as a borrower to a lender, it can also reduce the loan-to-value ratio, which can increase your chances of getting approved for your loan.

Not only is a larger down payment a plus for lenders, but it can also help make your offer look more attractive to sellers and help them feel more confident that your financing is secure, which could help increase your odds of landing the home over someone else.

6. Move Quickly Once Your Offer Is Accepted

Unfortunately, there are a number of ways mortgages can fall through once your offer is accepted. But if you’re able to speed up the loan, inspection and appraisal periods, you might find yourself coming out ahead.

In some markets, the appraisal can take a particularly long time. So, to speed this process up, ask your lender to order the appraisal the day your offer on the home is accepted. Getting it done quickly may give you time to address any issues that arise.

For example, if the home is appraised for less than the sale price, you can still make concessions with the seller in hopes of getting the loan to go through. Some buyers find luck by paying the difference in cash, getting a second opinion on the appraisal or asking the seller to reduce the price of the home. If the buyer and seller can’t come to an agreement on one of these terms in time, the pending sale can fall apart.

Another step you can take to ensure a smooth, speedy process is to schedule your general home inspection as soon as your offer is accepted. That way if the inspector finds something wrong, you’ll have time to bring in a specialist to take a look. In competitive markets, some buyers even opt to do a pre-inspection to make their offers more competitive, while also removing potential obstacles that could prevent them from getting the house.

New Homes vs. Old Homes: Which Is Right For You?

 

What does your dream home look like? Is it a classic Victorian set far back from the road with stately elm trees shading the formal garden, or a brand-new split level in an up-and-coming housing development with a communal pool, tennis courts, and a playground for the kids?

Old vs. new: It’s an age-old debate. And when it comes to choosing whether to purchase an existing home or opt for new construction, there’s a lot more to factor in than the curb appeal or how it would look dressed up in Christmas lights.

For most of us, a home (new or existing) is the biggest purchase we’ll make in our lifetime, so it’s critical to make the right decision.

Do homes really age like fine wine, or is newer always better? Let’s explore.

The Pros of Buying a New Construction Home

To some, a new home is the ultimate status symbol; others simply enjoy the convenience and peace of mind that comes with new construction. And there’s no denying that brand-new homes have their fair share of benefits. Let’s take a look at the pros of newly-built homes.

  • Builder’s warranties. New homes generally are backed by a builder warranty for the first 10 years or so. Your roof (probably) won’t leak, and if it does, it’s covered, along with most of all the other structural components of your home.
  • Customization options. When you work with a builder, you have more freedom to customize your new home. Go ahead and get the granite countertops you’ve always dreamed of, or the sunken garden tub in the master bath. (Just be aware that these “extras” come at a price.)
  • Less maintenance. New appliances, wiring, and plumbing mean that things are less likely to break down right away. You may have years or even decades before you’ll have to worry about replacing the dishwasher or having a plumber come to work on the bathroom sink.
  • More neighborhood amenities. Since new construction tends to come in the form of subdivisions, you may enjoy things like a neighborhood clubhouse, pool, playground, or other recreational facilities.
  • Energy efficiency. Double-paned windows, HVAC systems, energy efficient appliances, and adequate door and window seals keep energy in, lowering your heating and cooling bills and saving you money over the life of the home. You may even get certain tax rebates or incentives for promoting energy efficiency.
  • “Smart” features. Builders have jumped on the smart home bandwagon, and a new home will more likely feature high-tech amenities like built-in USB adapters, whole home speaker systems, thermostats you can control from your smartphone, and more.
  • Less competition. In a hot market, existing homes can be snatched up quickly, often before the listing ever goes live. Since builders often construct dozens of new houses at a time, it’s easier for you to get the home of your dreams without having to stand in line or engage in a bidding war.

The Cons of New Construction Homes

A new home isn’t all shiny appliances and Alexa-enabled bathrooms. For all the benefits of new construction, there are some drawbacks, too.

  • A higher price tag. According to one source, the average cost of purchasing a new home is $300,000, versus $278,000 for an existing home. Sure, you may recoup that difference eventually, but it’s still good for some sticker shock at the onset.
  • Strict homeowners’ association rules and fees. The amenities that were a pro in the last section could very well become a con eventually. Someone has to pay for that pristine neighborhood pool and state-of-the-art fitness center, and that “someone” is likely you. HOA fees can range from $200-$400 per month—and that’s not to mention the strict rules that come along with the privilege, like having someone tell you what color your house can be painted and when to mow your lawn.
  • Higher property taxes. Generally speaking, the more your home is worth, the more you’ll be shelling out to Uncle Sam for property taxes. And in new neighborhoods with higher than average property values, that can be a pretty penny.
  • Location, location, location. There’s no room for new construction in populated cities, which means that most subdivisions are on the outskirts or beyond. This can lead to an increase in commute time and/or more money you’ll need to shell out for public transportation.
  • Uncertainty. That shiny new subdivision looks good now, but how will it look in 10 years? What if half of the houses go unfilled, or the neighborhood deteriorates considerably? What if that gorgeous field behind your back deck is bought up by a sewage treatment plant? All neighborhoods can change, but it’s particularly difficult to project how a brand-new neighborhood will shake out.

The Pros of Existing Homes

While some love the “new home smell,” others are equally enamored with the homes of yesteryear—whether that means a 5-year-old ranch-style home or a 19th century Craftsman. And there are some definite pluses in the existing home column.

  • Cheaper selling price. An existing home can be 20% less expensive than a new home, allowing you to effectively get more house than you could have otherwise, had you chosen a new construction.
  • Lasting construction. When it comes to purchasing existing homes, the phrase “they just don’t make ’em like they used to” gets thrown around a lot—but for good reason. Where today’s newer homes sometimes seem to feature construction materials made by the cheapest bidder, older homes were built to stand the test of time—and they’re still standing. In many cases, you can expect solid construction through and through.
  • Location, location, location (again). These existing homes were built when the city was less crowded. You might find the perfect home within walking distance to your job, popular restaurants, museums, parks, and other prime destinations.
  • A history. Yes, it might sound cheesy to the “new home” crowd, but an existing home has a character that new tract houses just can’t hope to aspire to—yet. Architecture and history aficionados appreciate old-world charm and the stories an older house has to tell.
  • Established neighborhoods. Where a new neighborhood could transform completely over a decade or so, existing homes have matured along with their neighborhoods, meaning it’s less likely for drastic changes to occur, and often prohibited by zoning laws. What you see is what you get.
  • Bigger yards and mature landscaping. In a new subdivision, space comes at a premium. In some, it’s possible to pass your neighbor a cup of sugar through your open kitchen windows. Older homes tend to have bigger lots, providing more outdoor space for children, pets, and entertaining. And since the trees, bushes, and shrubbery have had years or decades to mature, the landscaping feels much more settled.

The Cons of Buying an Older Home

Old-world charm, bigger yards, and a cheaper asking price are fantastic, but they can come with some serious drawbacks, including:

  • Repairs. Older homes are notorious for needing repairs. Sometimes it’s something relatively simple, such as replacing the water heater. Other times, the fuse box explodes on Monday and the septic tank overflows on Wednesday. When buying an existing home, it’s crucial that you have an emergency fund set up to handle any unexpected home repairs.
  • Trouble obtaining financing. Some homes pass inspection with flying colors, and the loan goes through immediately. For others, the home inspection leads to tons of unforeseen problems and can cause your lender to back out of the deal. Existing homes can be much more difficult to finance due to underlying problems.
  • Competition. There may be 20 new tract homes available, but there’s only one of this home. Competition can be fierce, and you may end up offering more than you wanted for it just so you can call it your own.
  • It may not be up to code. Outdated plumbing, asbestos in floors or ceilings, unsafe electrical wiring—the list goes on. An existing home may cost you thousands of dollars just to get it up to code, and if you’re not planning for the expense, it can be a disaster.
  • Outdated everything. If you’ve ever pined for an avocado-green fridge, stove, and oven, you may be in luck—but you’re also in the minority. Appliances and fixtures in existing homes could be as old as the home itself. You may find yourself purchasing all new appliances, which adds up over time.
  • Increased energy bills. Older homes have a tendency to be drafty, meaning your hard-earned money (literally) goes straight out the window, and updates can be expensive. For example, you’ll spend about $19,000 to reoutfit a 2,450-square-foot home with energy-efficient vinyl windows. Looking to upgrade those baseboard heaters to a full HVAC system? Expect to spend $6,000-$12,000 for a 1,000-square-foot house—and prices only go up from there.

Other Homebuying Considerations

New or old, existing or not, there is plenty of thought that must go into what sort of home you want to buy. It may be advantageous for you to take a tour of houses from both camps to better determine what best fits your needs.

You may be a staunch “new construction” buyer and fall in love with a cute little bungalow in your favorite neighborhood; you might think you want a brick home on a quarter-acre lot only to be wooed by the technology and convenience of a newly-built home.