First-Time Homeowner

first-time homeowner

First-Time Homeowner

first-time homeowner

The older I get, the faster time seems to go, am I right?

With housing being one of the most basic human needs it stands to reason that you’re going to be paying for housing one way or another. You can either give your hard-earned money to a landlord or you can become a first-time homeowner. Becoming a first-time homeowner is easier than you think and here are the essentials to becoming a first-time homeowner. Here are the essentials for first time home buyers broken down. 

Stop wasting money and start investing in your future

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Essential Real Estate Terms You Should Know

Essential Real Estate Terms You Should Know

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Every industry has its own acronym and real estate is no different. Real estate is full of jargon that can add confusion to an already elusive process. Whether you're selling or buying here are the essential real estate terms you should know.

Asking questions should not be intimidating. Would it help you to know that you’re not alone? Real estate is intimidating and overwhelming for most people. My goal is to make it as simple for you to navigate as possible. Let's dive in:

1) Pending

Once a residential buyer and seller have reached a mutual agreement on the terms of a sale, the property will then be moved from “Active” to “Pending” or “Pending Inspection”. The contract timelines are very important. 

2) Earnest Money (EM)

Once a buyer and seller have reached a mutual agreement on a contract, the buyer will then deposit a set amount into an escrow account. This earnest money (EM) shows the seller that the potential buyer is EARNEST about buying the property. When the property closes, the EM is then put towards the buyer’s down payment or returned.

3) Escrow

Escrow is a term that refers to a third party that is hired to handle the transaction, the exchange of money and any related documents. Placing Earnest Money, for example, into escrow means to place it in the hands of a third party until certain conditions are met; once the transaction has closed the escrow company will disburse the funds appropriately. 

4) Appraisal

An appraisal is an assessment done by a certified appraiser to determine the value of the property. The appraisal is usually based on an analysis of comparable sales of similar homes nearby. 

5) Dual Agency

Dual Agency is when one agent represents both the buyer and the seller, instead of just one or the other. Depending on state laws, real estate agents are able to represent both the buyer and the seller in the same transaction. There are some states that do not allow dual agency.

6) Bank Owned & Short Sale

When a property owner defaults on their mortgage, the lender will sometimes allow the seller to sell as a short sale. That means that the bank has agreed to let the home be sold for less than the balance on the current owner’s loan. A bank-owned property is when a  lender won’t agree to sell the property for less than what is currently owed on it, so the property has been foreclosed on and is now “Bank Owned.”

7) Comparative Market Analysis (CMA)

A CMA is an analytic report to help real estate agents strategize what the hyper-local market is doing in order to determine your property value. The analysis is conducted based on the active, pending, and sold values of similar properties in the same area within a specific time frame. The CMA report should help you in understanding what a realistic listing price is, and whether or not you’re buying a property for the right price.

8) Commission

Real Estate agents are paid on commission. This is an agreed-upon % of the sale price which is then divided between the selling and listing agent, it is typically 6%. Once a transaction closes, the seller will pay the originally agreed-upon percentage of the purchase price from the net proceeds of the sale. In Washington State, the seller pays 100% of the real estate commissions.

9) Equity

A property owner’s Equity is the difference between the fair market value of the property and the amount still owed on its mortgage or other liens. It is common for people to borrow against their equity to do property improvements. 

10) Encumbrance

An encumbrance is a claim against, limitation on, or liability against real property. Encumbrances can restrict the owner’s ability to transfer title to the property or lessen its value. Having an awkward conversation is worth it, guys.

Helping you understand real estate lingo is one of my favorite topics because it is SO important. If you have any Real Estate questions or pain points in your Real Estate journey, I would love to break it down into bite-sized pieces and serve you up a hot plate of awesome.

Leave a comment with any other terms or resources that you would find helpful!

All the best,

Carmen Neal Signature

 

 

 

P.S. Be sure to follow me on Facebook and Instagram if you don't already. Don't miss out on the tips, tricks, and sometimes just plain funny items I share on social media!

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Home Buying for Beginners

Home Buying for Beginners

Home Buying for Beginners

Are you familiar with the cooking concept of "mise en place"? Literally translated, it means to set in place. It means that before they start to cook, a good chef does all the prep work. They check their ingredients and cooking tools, and they know they have everything needed in the recipe. They take the time to properly thaw the meat, wash the produce, measure the seasonings, and dice the onions—all before the pan is ever put over the heat. A good chef understands that mise en place, or proper preparation, is key to getting the results they desire, and they don't skip ahead. They assess and prepare, and then they cook. Home buying for beginners should follow the same concept.

Preparation is the key to success when making your first investment in real estate. And one of the biggest ways to prepare is to educate yourself on the home buying process itself. Know the steps involved to purchase real estate before you start to shop.

So with that in mind, I'd like to walk you through the six basic steps of the home buying process.

1. Review your budget.

In the cooking analogy, reviewing your budget is sort of like checking the freezer and the pantry to see what you have to work with, before finalizing what you will cook. For instance, you can't make prime rib without a rib roast. So if all you find in the freezer is chicken, you will either need to head to the store for more supplies, or you will have to change your recipe.

Such is the budget in the home buying process. You need to review what is realistic for your real estate purchase based on your income, savings, and goals. I recommend you speak to a lender early in the process to see what you have to work with, and then move on to step 2.

2. Narrow down your list. 

Sit down and identify your top 5 needs and wants. Only you know what is a must-have for you in a property, and every situation is different. This step is a good time to talk with a trusted agent who specializes in properties in the neighborhood (as I do for the Fife-Milton-Edgewood area). They can guide you as you whittle down your list, based on your budget and specific situations. Once they know what you're looking for, your agent can begin to show you properties.

3. Submit and negotiate the offer.

After you've picked a property that you want, it's time to make an offer. The terms of the offer will vary, and your agent or attorney should walk you through all of the details. Don't be afraid to ask questions! It's also not uncommon for sellers to make a counter-offer, so some back and forth may occur. Once the buyer and seller agree on the terms, it's called "going mutual," and it means that you, my friend, are well on your way to buying a house. But wait, there's more!

4. Inspection day.

I recommended that buyers get an inspection on any property they are looking to purchase. Your agent can connect you with a local home inspector, so that you have a detailed report of the condition of the property. Your offer may or may not be contingent upon the inspection. Talk to your agent or attorney about how to proceed and utilize the inspection report, based upon the terms of your specific purchase and sale agreement.

5. Finalize contingencies.

Contingencies are the details in your agreement, like an inspection or selling another house to free up funds for a down payment, that may impact the terms of the agreement. Again, your agent or attorney should walk you through your specific contract, and again, ask questions! Once all contingencies are dealt with, the next step is to...

6. Close and get those keys!

Closing is when all of the i's are dotted and t's are crossed. Once everything is signed, you'll be handed the keys. Congratulations! You've just purchased your first real estate investment.

 

Real estate and housing choices shape our daily lives and future, and wise real estate purchases have the power to improve your future. Our team members are passionate about helping you leverage real estate to fulfill your current needs, in addition to building financial security for your future. Home buying for beginners can be overwhelming, so give us a call to help you cut through the confusion and meet your goals. And be sure to sign up to receive my FREE Buyers Guide below!

 

CARMEN WILL HELP YOU:

1. Analyze your goals  2. Create a custom strategy  3. Execute the strategy so that you see results!

All the best,

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How to Buy Real Estate without Losing Your Mind

My husband and I know how to buy real estate without losing our minds, and you can, too!

How to Buy Real Estate without Losing Your Mind

My husband and I know how to buy real estate without losing our minds, and you can, too!
After decades of experience, including as home buyers ourselves with my husband Josh, I know exactly what it takes to stay sane when buying real estate!

Listen, buying real estate can come with a lot of liability and risk. We all know that. But wise real estate purchases also have the power to positively shape your future! Real estate is my passion, and even more so it is my goal to make real estate as simple as possible. So here is my bullet-proof list of steps to take to buy real estate without losing your mind!

1. Analyze your goals

No one knows your circumstances better than you. What is it that you want from your real estate purchase, and what features do you need in a property? What is your budget? What are your communication expectations for and with your real estate agent, and what is your ideal timeline to complete your transaction? Honestly assess your answers to these questions, and use your answers to create a clear path forward in Step 2.

2. Create a custom strategy

Once you know what your overall goals are, how will you get there? What is your next action item? First and foremost, find a real estate professional you can trust to guide you through with transparency and strong ethics. They should be able to help you design the rest of your house-hunting strategy to give you the leverage to get what you want, where you want, for the price you want. “Hire a good agent!” is the absolute biggest tip I can give you to be able to buy real estate without losing your mind.Some points you will want to discuss with your agent before shopping are:

      • Your budget and how much room, if any, you have to wiggle on price
      • Your status in the mortgage approval process
      • Your target neighborhoods
      • Your target home style & specific features on which you will not compromise
      • Your timeline for purchasing

3. Execute and see results

After you have your strategy, this is where it gets real. Your agent will use the road map you designed in Step 2 to start curating properties to present to you. Once you have chosen a property on which to make an offer, your agent should go to bat for you to get you the home. Once an offer is accepted, they will coach you through the negotiations, inspections, and additional paperwork that may be required by your lender. 

Throughout the entire process, they should be available to consult with you at any point when (not if…) you have any questions about the buying process. Consider your agent to be your Real Estate Coach & Advocate.

CARMEN WILL HELP YOU:

1. Analyze your goals  2. Create a custom strategy  3. Execute the strategy so that you see results!

As you can tell, most of these steps boil down to one thing: hiring a great agent. With the right person on your side, you will be well on your way to buying real estate without losing your mind.

To learn more and start your real estate journey off on the right foot, request your free Buyer's Guide today!

All the best,

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3 Steps to Stay on Budget

My husband and me, seen here during a family photo shoot a few years back, have found that one of the keys to a strong marriage is our mutual commitment to stay on budget!

Stay on Budget with These 3 Steps!

My husband and me, seen here during a family photo shoot a few years back, have found that one of the keys to a strong marriage is our mutual commitment to stay on budget!

Ever wonder how some people seem to be able to stay on budget and make money multiply, while others can’t seem to save a dime? No matter your income or economic status, money is an important tool and resource. Just like any other tool or resource, it has to be used and managed properly for it to serve its purpose. 

If you have a goal to buy your first home, take a vacation, or learn to live within your means and get out of debt, your first step must be to live on a budget. I know, it’s hard! But here are my three steps to stay on budget and meet your personal finance goals.  

1. Track

Tracking your spending is the biggest piece of the budget puzzle. You have to know where your money is going, or you don’t have a budget. If you aren’t doing it already, track every single penny you spend for a month. 

The point of this exercise is to identify areas for improvement in your spending habits. Everyone has an area that seems to make their money evaporate more quickly than others. I have a friend that once had to ban herself from shopping at Target for a long while, because it became very clear to her after tracking her spending that she did not have the willpower to walk through the store and not overspend.

Once you have tracked for a full month, you should have a better idea of where your money is going. To stay on budget, you should continue to track and categorize your spending. However, instead of doing it to identify money drains, you will be doing it to be sure the right categories are being funded and maintained according to your goals.

2. Automate

The second step to stay on budget is to automate as much as you can. Put recurring bills on auto-pay. That way you don’t have to take the time to think about whether or not you forgot to pay something.

In addition to setting up bills on auto-pay, automate your savings, too. The classic advice to “pay yourself first” is a lot easier to follow if you set it up to happen automatically. If you are paid via direct deposit, most employers allow you to split your paycheck deposit between two accounts, so have some money going straight to savings. If you don’t have direct deposit, you should still be able to set up automatic transfers with your bank.

3. Optimize

The whole point of tracking and automating is to optimize your money. Basically, that’s just a fancy way of saying make it work for YOU! How do you do that?

Well, there are the obvious (and smart!) answers, like funding investment accounts. If you are lucky enough to have a retirement savings program at work with an employer match, that should be a no-brainer for you. Don’t leave free money on the table!

Real estate investing is, of course, another way to optimize your money. In the long run, real estate is a great way to build wealth, even if you never have any interest in being a landlord and just purchase your own home and position is to maximize appreciation. 

But to invest in mutual funds, stocks, real estate—even just buy your own home—all of that takes money up front and on a regular basis, right? So it all goes back to budgeting…

There are some great tools out there that help you stay on budget. I am not going to cover them all here, except to say to pick a tool/system and work it! This article has a great round up of current online programs and apps. When it comes to the logistics of managing money, what works for one person may not work for someone else. 

But what always works? Track. Automate. Optimize. Don’t work for money--make your money work for you!

Are you thinking about how to put your money to work by jumping into real estate by buying your first home or investment property? Download my Buyer’s Guide below, and contact me today to discuss how I can help you reach your goals!

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All the best,

The 5 W’s of Buying a Home, and How!

Buying a home can be overwhelming

The 5 W's of Buying a Home, and How!

Buying a home can be overwhelmingLast week I shared some information and resources about why now is the time for homeowners to prepare to sell this spring. But today we’re going to talk about the flip-side: the who, what, when, where, why and how of BUYING a home.

Who?

Anyone with a stable income should be making a plan to buy a home. It doesn’t necessarily mean that you will buy this year, or even next, but it should be in your plans for the future. While renting definitely serves a purpose for various reasons and stages of life, eventually home ownership is almost always the best choice (see “Why?” below for more).

What?

Before house-hunting, determine your Top 5 Needs & Wants based on your goals and future plans. Also, anyone who has ever talked to me knows that I always recommend my clients consider how purchasing a duplex for a long term investment might meet their needs. It is definitely one of the smartest financial choices I have seen my clients make. 

When?

This one is tricky. The old adage that “the best time to buy a house is when it is the best time for you” is certainly true. However, there are a few points to consider when timing your home buying process.

For instance, spring and summer have the highest inventory. This means that you are more likely to find a place that meets more of your wants and needs. The weather is also more conducive to thorough inspections and related repairs or upgrades. Finally, moving during the summer break is ideal for families with school-aged children. 

On the other hand, prices are higher in the peak season, so you get more bang for your buck in the “off” seasons of fall and winter. Although, moving in the rain, sleet, and snow--or during the holidays--can make the entire ordeal feel like just that, an ordeal. And with lower inventory, it might take a little longer or require some extra compromise to find the right place for you.

Where? 

This one is a no-brainer to me. Fife-Milton-Edgewood is a great area to live. I should know! FME is where my family and I have put down roots, and I love this community. With easy access to all of the main south and central Puget Sound cities and mass transit centers, commuting for work or pleasure (I am told some people like to drive places...weird, I know) is about as easy as it comes in the gridlocked PNW. Highly rated schools, beautiful parks and trails in the vicinity--need I go on? Buying a home in FME is a fantastic decision.

Why?

Why not? Haha. Not really. Look, I am in the real estate industry, so of course I want to tell you all of the amazing, wonderful ways that buying a home will improve your life. However, I also pride myself on authenticity and transparency, so I am going to get the bad news out of the way: home ownership isn’t always the right choice. If your income is unstable, you anticipate a major life change in the near future, or you simply aren’t ready to take on all of the nitty gritty truths of owning a home, then rest easy in knowing that renting is a completely legitimate and appropriate choice for you. For now.

But if you are fairly stable, then why continue to pay someone else’s mortgage and fund someone else’s retirement indefinitely? Because that is what you are doing when you rent.

According to the US Census Bureau, home ownership and retirement savings are the biggest factors in determining household wealth. For many, their home equity is ultimately a large part of their retirement plan as well. When you rent, you don’t build equity in your home. Make no mistake, the value of that house is appreciating--it’s just not in your favor.

Besides the finances, there are other, less measurable “whys” in favor of buying. Want to paint a room without the hassle of getting permission? What if you want to rip out a section of the yard to plant a garden or build a playhouse for your kids?  Fall in love with a shelter pup but your landlord says no pets? There is a big psychological component to having a home not just a house, and buying is often the best way to address that desire for something to call your own.

How?

Oh, boy! Now we’re to my favorite part! This is literally what I do--all day, every day. I’ve got this!

First, you need to fill out the form below to download my Buyer’s Guide, filled with all of the ins and outs of the buying process. Go ahead and send that form now.  I’ll wait.

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Done? Great! Now, before you run over to your email for the guide, bookmark these recent posts from my blog for more reading. They have a lot more tips for you to make the buying process that much easier.

Buying real estate comes with a lot of liability. 

Most people struggle with knowing where to begin and what to prioritize. 

You're not alone.

If you haven’t already, check your email for your Buyer’s Guide. Read through it, make some notes, and then reach out to me to set up a time to talk about your goals and how I can help you!

All the best,

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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Why Fall & Winter are the Best Time to Buy a Home

Fall and winter can be the best time to buy a home to realize substantial savings.

Why Fall & Winter are the Best Time to Buy a Home

Fall and winter can be the best time to buy a home to realize substantial savings.I am often asked, “When is the best time to buy a home?”

First and foremost, I want to be clear that the best time to buy is when you can afford it. With that being said, I consider fall and winter to be the best time to buy for one big reason: Money! 

Read on to find out why the fall and winter are great times to capture some savings.  

Sellers are more motivated

The sellers that listed their property too high in the summer are now creeping into the fall season with new inventory nipping at their heels. This can often make them more motivated to sell.

Find a house that has been on the market for 90+ days and you may reap huge savings. Some buyers think there must be something wrong with a property that has been sitting on the market for that long. The fact is it was probably listed it too high to begin with! This type of listing is a perfect candidate for a strategic offer.

You can see the issues

When the rain is here, and the snow is knocking on the door, you will be able to see issues that may not have appeared during the drier seasons.

During the spring and summer, it can be easy to get distracted by the beautiful landscaping and look over some of the structural issues. Things like broken window sills, issues with mold, water damage, and any sort of roof problems will be much easier to spot during the fall and winter, which can save you a lot of headaches and money later on.

Home decor is on sale

More likely than not, there will be some improvements or amenities you’ll want to add to your new home.

Appliances, TV’s, security systems, and all sorts of other discounts are easily found during the Thanksgiving and Christmas seasons. September is the best time to get a great value on new carpet. Outdoor equipment, such as lawn mowers, is typically on sale in October. The best time to buy appliances is in November. January brings fantastic sales on home organization supplies.

Regardless of when and if you decide to buy a home, it’s important to do plenty of research before you make a purchase. Check out my free Buyer’s Guide below to see all the information you need to take the next step. 

Did you buy a home in the fall or winter? If so, let us know what your experience was in the comments below.

All the best!

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