6 Questions Every First Time Home Buyer

6 Questions Every First Time Home Buyer Must Answer

You’ve been dreaming of a home of your own for a long time. You’ve stalked the online listing sites. You might have even popped into an open house or two to kill some time on a lazy Saturday afternoon. And now you think you are ready to join the first time home buyer ranks. Well, it’s time to roll up your sleeves and get to work. Answer these six first time home buyer questions to make sure you are prepared.

 1. How much can we afford?

This is most important of the questions every first time home buyer should ask. I wish money weren’t an issue, and we all had everything we needed and maybe even wanted. But we don’t. Everyone comes to the table with a unique set of financial circumstances, so you have to figure out what you can realistically afford before you sign a representation agreement with a buyer’s agent. 

Don’t rely on online calculators. Meet with an experienced, ethical lender as soon as you think you might want to consider purchasing in the near future, even a year or more out. They will help you understand the expectations for credit scores, income requirements, and down payments. 

There is also more to buying a house than considering the mortgage payment. A good lender or financial advisor should guide you towards making a sound financial decision when it comes to making your first foray into real estate.

Don’t shop for a home until you’ve taken this step.

2. Do we qualify for VA, USDA, or FHA loan programs?

Often the down payment is the biggest hurdle to home ownership for a first time buyer. 

The same lender that you meet with to discuss your budget should also be able to explain the various types of loans available to you. In a nutshell, VA, USDA, and FHA loan programs are designed to make home ownership more accessible, generally through reduced down payments, for buyers in very specific situations. Each program has restrictions around income, credit scores, and even property location, so consulting a good lender is necessary to help you weed through them to see what options might be right for you if you are ready to buy but coming up short on the down payment. 

3. Do we have enough savings in case something goes wrong?

I know, I sound like a broken record, but truly, considering the financial aspects of home buying is really Step Zero on the path to home ownership. They have to be thought through, or you may find yourself in a bad situation down the road.

Look at your assets. After you hand over the down payment, will you have enough money in the bank to cover the expected and unexpected maintenance and repairs that come with home ownership? What about if you lose your job or someone in your family is diagnosed with a serious illness a few months after closing? Do you have the funds in savings to get through an emergency and stay current on your bills?

I have seen all of these situations, and more. Prepare for them before you buy. 

4. What are our priorities in a new home? 

So you have your financial ducks in a row. You know what you can afford to spend, what type of loan programs are best for you—and ideally have been pre-approved for a loan—and you know you will still have a cushion for emergencies. Now you can start shopping, right?

Nope, not so fast.

Before you set up viewing appointments with your agent, determine your needs and wants for a home. Prioritize them, and determine what you can compromise about and what is a deal breaker for you. No one else can tell you what’s best, so take some time to determine these before you start the hunt.

I’ve created a pretty printable for you to download. Use it to record your needs and wants in order of priority, and carry with you as you look at properties to keep your focus on what matters to you! 

5. Have the renovation expenses been well thought out?

Yep, I’m coming back to the money. Unless you are purchasing new construction, chances are you will want to make some changes to the property. Before you make an offer, you have to consider the expenses of renovating an older home, and if they work into your finances. Even if you plan to do the bulk of the work yourself, material costs may surprise you, and it is a rare project that doesn’t go over budget in some areas.

Don’t get yourself into a money-pit situation. Get an inspection (even on a brand new house!), talk to your agent and a reputable contractor about realistic budgets for the types of repairs and renovations the property may need, and don’t take on more than you can handle.

6. Do the terms of the purchase and sales agreement work for us?

The purchase and sales agreement (PSA)  is your contract with the seller. It specifies things like closing date, contingency timelines, and earnest money. The PSA can be written up a lot of ways, so you'll want to make sure your on the same page as the agent and lender. Go over this contract very carefully with your agent, and do not agree to anything that does not work for you or that you do not understand.

 

I hope this list of first time home buying questions helps you know what to think about before you step into the home buying process. If you have any questions about these topics, or anything else real estate related, contact me! I'm here to help.

 

All the best,

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5 Things No One Told You About Owning a Home

5 Things No One Told You About Owning a Home

 

Owning a home comes with a lot of responsibilities. Some are fun, while others...not so much. If you want to go from being a window shopper to being a homeowner, it’s time you get the real story about owning real estate. 

Down Payment or Disneyland?

Life is all about choices. Have you ever budgeted to go to Disneyland? It’s sometimes called The Happiest Place on Earth, and I absolutely agree. But the costs of tickets, flights, food, and hotels add up quickly. You could be faced with choosing between saving for a trip to Disneyland or saving for a down payment to invest in your own home. 

This isn’t to say that choosing Disneyland is a bad option. My own family has chosen the trip multiple times. But in order to afford the home you want, may have to choose which you want more. 

And it’s not just Disney. Really, this has to do with being intentional with spending, and setting priorities for your money. It may not be the Land of Mouse that pulls you away from your savings goals. Perhaps it’s cutting back on eating out, retail therapy, or driving a less expensive car. Whatever it is, saving for that down payment is rarely easy, and can happen only through intentional choices with your money.

The Crawl Space and Attic are Scary

It is a rare breed of human—a hero, really—that doesn’t mind crawling in tight and dark spaces. These heroes are typically skilled plumbers, electricians, and inspectors, although I’ve met plenty of people in those trades who don’t enjoy shimmying into those dark access holes, either!

Hopefully, this expedition will be a rare occurrence for you. But if you’re going to own a home, you should gather your courage, secure a headlamp, and check out the dark areas of your property at least a couple of times each year. 

The main things you want to look out for are cracked or blocked air vents, and signs of moisture. If you have any cracks in your attic or crawl space vents, you’ll want to seal those up ASAP so critters don’t move in. If vents are blocked on the outside by debris, clear it. Find the source of any debris on the inside and address it. Often this is from a critter or perhaps a faulty dryer vent. 

If you have an older roof you’ll probably want to climb into the attic and make sure you don't have any moisture spots on your sheathing (the layer of material attached to the structural frame of the roof).

If you do see any of these things, get a pro out immediately to take a closer look. 

Choosing a Paint Color is Stressful

For real! Have you ever chosen paint colors? Turns out paint isn’t cheap! And getting that just-right color is a challenge. If your property needs some paint protection, I highly suggest buying sample-sized containers. Use them to paint 24 x 24 inch squares on each side of your house. This can also be done for interior walls by painting some swatches on different walls in the rooms you want to repaint. 

Lighting can make all the difference in how a color appears.  Let the sample patches sit for a few days, or even weeks, to see how you like them in various lighting conditions at different times of the day. Then you’ll be much more prepared to dive into the big paint purchase with the peace of mind that you won’t be repeating the painting process—and the expense—for a while. 

Curb Appeal Fades

Some of us love new construction: the on-trend designer color for the front door, the fresh and perfectly placed plantings in the front flower beds, and even the allure of brand new toilets are really important to some. 

(Funny enough, I have heard some version of “I need to know that no one else’s butts have been on the toilets” from various clients multiple times now. By the way, you can replace toilet seats pretty easily…). 

Others want to build their homes themselves to completely customize it for their wants and needs. 

Regardless of whether you're buying new or existing construction, keep in mind that those once-new items will eventually age, and curb appeal typically needs to be refreshed or replaced. What? You mean I’m telling you that owning a home takes work and upkeep?!

Yes. That is exactly what I want you to remember.

It isn’t all a big chore, though. To keep my front porch fresh, for instance, I opted to make a statement with some big black metal planters. About twice a year I replace the fading annuals or past-their-prime perennials with new plantings. This simple change refreshes the entire porch. Other simple ways to freshen up your curb appeal might be to add some seating & accent pillows. 

Everything Costs At Least $1,000

Have you ever heard anyone complain about the expense of owning a boat? One boat-owning friend told me that the word boat is actually not just a simple word— it’s an acronym for Break Out Another Thousand. 

The same seems to be true for owning a home.

“Everything costs $1,000!” is a joke my husband, Josh, and I have going. Since we opted for a fixer upper we have found out why real estate is classified as an investment! Okay, so maybe some projects are less than $1k, but you can bet that most projects will cost more than you anticipated and will take longer than you wanted. 

To help keep projects and spending on track and prioritized, Josh and I have a “Honey Do” list that we share electronically with each other. We use it to track our upcoming tasks and wish list items for the house. Every time we learn the cost of something we’re considering we update the list. This helps us to budget appropriately and makes the process way more fun. 

Even if we had purchased brand new or built custom, eventually we would have projects or updates to do. Understanding up front at the time of purchase that home ownership costs more than just the down payment, monthly mortgage, and property taxes is super important. 

A good rule of thumb is to annually budget 1%-4% of the purchase price of your home for routine maintenance. On top of that, you need to consider the costs of any extra projects to update or upgrade items on your wish list. And the older the home is when you purchase it, the higher the amount you need to budget to spend.

But Fear Not...

I certainly hope none of this scares you away from owning a home. One of my values it keeping it real. I want to help people fulfill their home ownership dreams, but I also want to make sure they’re as prepared as possible.

Are you ready to dive in a little more deeply into seeing how ready you are, or explore the next steps to home ownership after Step Zero: Daydream? Download my helpful guide 6 Steps To Becoming A Homeowner and let’s get you on the path to home ownership!

All the best,

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Renovate or Move

A boy and his grandfather renovate a home

Renovate or Move

"Should we renovate or move?" It's a common question. This time of year can get us all thinking about if our current space fits our current needs. I’m going to guide you through some myths and best practices of the elusive “renovate or move” question, and help you nail down your next steps. 

Have you ever considered adding a room? Dreamed about changing your floor plan? Maybe think you have too much house for your season of life? No matter your current circumstances the real question you should be asking is: 

“Does this property fit my current needs?”

A renovation might fix the problem, but finding a property that already suits your needs could be more financially responsible. Truth be told, renovations can sometimes cost more (in money and sanity) than finding a new place that already has your Top 5 Needs and Wants.

On the other hand, you may want to stay exactly where you are with some updates for a variety of reasons. Your decision will affect more than just your pocketbook. It will affect your commute, relationships with neighbors, and school district selection, just to name a few, so take the time to think it through before you make a choice!

Common Myths

Renovation Myth: Sticking to the budget will keep the project cost effective.

Fact: The problems happen when you allocate $10 per square foot for tile, but fall in love with tile that's $25 per square. Oh, don’t think it can’t happen to you! Or you budget $10,000 for new kitchen appliances, but then Costco has the higher end appliances on sale, and you think, “Well, I can’t walk away from that deal, so I’ll stretch the budget just a little…”. Or your contractor opens up a wall to make a more open living space only to find the support beam is rotten, and the scope and expense of the project gets a whole lot bigger.

The fact is that a renovation that doesn’t have some unforeseen expenses and stays 100% under-budget is pretty much a unicorn. Set a budget, but plan to go over it by at least 10-15%. 

Selling Myth: I can list my house and just see what happens

Fact: Signing a listing agreement means that you have decided to sell your property. Properly marketing a listing costs anywhere from $200-$800, so being wishy-washy about your plan could cost money, plus hours of frustration and discouragement.

In the current real estate environment it is pretty much a given that a properly marketed property will get at least one reasonable, competitive offer. Once you accept an offer, it is a huge ordeal to back out if you change your mind. So unless you are certain you are ready to sign an acceptance and hand over the keys at escrow, don’t "just see what happens" to your property.

Best Practices

The choice to renovate or move is very personal. No one knows your needs better than you do, so ask yourself the hard questions.  Put pen to paper to clarify what really matters to you.

  • Write down your top 5 needs and wants of a property, in order of priority.
  • Create a detailed list of what would need to be done to make your existing place fit those top 5.
  • Speak with a professional real estate agent about your plans so you have an idea what the return on investment would be for each project. 
  • Get at least 3 bids per renovation project from licensed contractors.
  • Compare monetary and emotional expenses for selling versus renovating.

Now What?

Go back to the basics and ask yourself: “Does this house and property fit my current needs?” If the answer is no (you probably wouldn't have read this far if the answer was clear to you), then what are you doing about it? Will you renovate or move? I challenge you to honestly answer these questions, and fill out the Top 5 worksheet—because after all, you have to live here every day! And it should be servicing your needs.

Check this page out to learn more about what it takes to get your house sold.

All the best,

FREE SELLER'S CHECKLIST

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Love the Place You Live

My green-on-green house before we started updating it.

Love the Place You Live

My green-on-green house before we started updating it.

Do you love the place you live? I have learned to love my current house, one project at a time, but it wasn’t always this way. I've not shared my home ownership journey with many people, but lets just say it has not all been smooth sailing. My hope is that no matter what your current circumstances are that my story might help you learn to love the place you live, too.

Our First Home

Call me crazy, but I felt driven to own real estate instead of rent when I was in my early 20s. 

Sure, it could have been from the fact that I grew up in the back of a real estate school but honestly, I never really wanted to be an agent when I was growing up. I really just wanted to own real estate because I knew the financial benefits, and I am naturally a driven person. So when I was a 19-year-old newlywed, and found out we were expecting our first baby, things got real! 

We hunted for what felt like forever and finally settled on a great little condo in Milton, WA. We were officially homeowners!

Back to Renters

That 2-bedroom townhouse condo felt so right at the beginning. That is, until baby #2 and the 2008 recession surprised us. Our perfect 2-bedroom turned into a too-small, drowning investment. We moved into a slightly larger rental home. and rented out our condo for quite a while. We hoped that the market would turn and that we would be able to sell for at least what we owed.

But when the identical  property next to to ours sold for $180,000 less than we owed, we knew we were in too deep. We reluctantly let our condo go back to the bank. We were officially no longer homeowners...

As hard as it was to allow that to happen, the empowering truth settled into my heart during that difficult season of life was that IT’S NOT A SIN TO BE A RENTER! 

After a few years the internal chatter about owning v. renting finally silenced, and I was in a really peaceful place. We were in a perfect location for us. The rental house was big enough for our needs, but still small enough to clean quickly. The landlord handled the yard maintenance, and the rent was so reasonable we were able to start saving some money again.  

Buyer's Itch

Even with all of that chaos behind us, about two years into our lease Josh started to get the buyer’s itch, and started window shopping for a house. I, however, was not ready to go down that path again. I had seen and learned so much since our 2008 experiences, and I was content where we were.

For the first time in my life I was happy with where I was physically positioned in the world. I had learned to be okay with the uncertainty of renting. My two babies were growing by the day, and the Trace Adkins song “You're Gonna Miss This” was constantly playing in my head. I knew we were in a precious season of life, and I just did not want to do anything to upset it, including moving! 

One morning I got a text message from Josh with a picture of a green-on-green house down the street from our rental. Even though Josh couldn’t make it to the showing, he insisted that I go check it out with my mom.

I did NOT love this green-on-green house, nicknamed "Minty House," at first sight!

While we went through the house I gave him a call. I let him know that it needed a lot of work. Although it had four of our five needs and wants, I did not think this was the place for us. 

Let’s just say that I was less than thrilled, but according to Josh’s numbers he knew exactly what we were willing to pay. And because of my housing background I knew exactly what our family needed. We ended up buying the place, dubbed “Minty House,” and we have been working on it ever since. Some projects have been more enjoyable than others, but all in all I am learning how to love this place, too.

Minty house not so green anymore, with my children playing on the expanded front porch.
Minty house is no longer green!

Lessons Learned

Here are some of the limiting beliefs I’ve wrestled with over the years--and learned to turn into empowering truths--while both renting and settling into a house I didn’t think I wanted:

  • Limiting belief #1: I don't deserve to be successful.
  • Empowering truth: Success is in the eye of the beholder and I am grateful for the opportunities I have.

 

  • Limiting belief #2: I’m stuck in a rut and can’t get out.
  • Empowering truth: My current circumstances do not define me.

 

  • Limiting belief #3: I can't share my excitement because others will think I’m boastful.
  • Empowering truth: The people that care about me will rejoice alongside me.

 

  • Limiting belief #4: There are just not enough hours in the day.
  • Empowering truth: Being intentional with my time and resources will help me achieve my goals.

 

  • Limiting belief #5: We’ll never be in our dream home.
  • Empowering truth: There are areas of joy in our home, and I am going to replicate them.

 

Looking for some inspiration on where to start making your home uniquely yours? Learning to love the place I live, even with it’s imperfections, will be a lifelong journey for me, but I created this fun fill-in-the-blank to help us narrow down what brings us joy. I encourage you to give it a try!

 

All the best,

6 Common First Time Home Buyer Mistakes — Part 2

A grumpy baby looks as if he might have commited one of these six first time home buyer mistakes!

6 Common First Time Home Buyer Mistakes— Part 2

Welcome back! To refresh your memory, last week I started a two-part blog post addressing the first three of six common first time home buyer mistakes that I see way too often. Those first three mistakes were:

1. Not knowing your budget
2. Not researching down payment programs
3. Working with a lender or agent who want to upsell

Now, let’s dive right back in to finish out the list, and get you one step closer to making the best home buying decision possible.

4. Becoming emotionally invested too soon

Any experienced home buyer understands it, that feeling when you walk into a house and your spidey-senses start to tingle: this is THE ONE. You love nearly everything about it, and your imagination starts to run away. 

You see that spot in the backyard that’s perfect for a playset for your growing family. The dining room that can hold a huge table just asks for you to have visions of hosting years and years of Thanksgiving meals. The kitchen with the dual ovens you’ve always dreamed of having... 

You know at that moment that you are Home with a capital H, and you’ll go to any lengths to make it yours.

But not so fast. 

I hate to be the bearer of bad news, but there are a number of reasons that a specific property may end up not being right for you despite that love-at-first-sight feeling. There might be expensive structural issues not visible that are uncovered during the inspection process. There might be other buyers with deeper pockets. The house may excite your emotions but not actually have something that you previously stated was a priority for you, like an upstairs laundry room, or ample parking for your camper.

And if you put your heart before your head, you may end up making some poor decisions that are not to your benefit. 

A good real estate agent should help you manage those “but I want it!” emotions, but do your best to keep yourself in check, and you’ll thank yourself later.

5. Waiving the inspection

This first time home buyer mistake is often related to Mistake #4. Keep your feelings in check and pay for a thorough professional inspection to uncover any issues that you may not have seen at first glance. No matter how much you think you love a particular property, trust me, you do not want to be stuck with a bunch of unexpected structural issues and expenses!

You also may be tempted to waive the inspection if there are others competing with you for the property. Do not be tempted to forego the inspection just to get the sellers to move you to the top of the pile of offers. Even if the home looks to be in excellent condition with a cursory walk-through, it’s not worth the risk.

6. Messing with credit during the mortgage approval process

Oh, the heartache I’ve seen this cause. 

I’ll keep this short and simple.  From the moment you submit your mortgage application until you have signed all of your closing documents do not do any of the following:

  • Open a new credit card
  • Increase your credit card debt
  • Miss a payment due date
  • Take out a car loan
  • Co-sign a loan for someone else
  • Substantially decrease or pay off any debt without first talking to your lender (This seems counter-intuitive, I know, but credit usage plays a factor in your credit score, so check first. Always make your scheduled payments, of course.)

Basically, if something involves you borrowing money or will impact your credit score in any way, DO. NOT. DO. IT. If you do, your loan approval may be rescinded, and you may have to start the whole process over again from step one.

That’s it for now. I hope that highlighting these 6 first time home buyer mistakes helps you to steer clear of some serious potential pitfalls as you venture down your real estate journey. 

If you’re feeling hesitant about where to start on your first home buying journey, be sure to get your free Buyer’s Guide. It will help walk you through the process from beginning to end. 

Have you made any of these common mistakes? Or have you made mistakes that I should add to this list? I’d love to hear.

 

All the best,

FREE BUYER'S GUIDE

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