Everyday coutnless number of people are looking for rentals without any information as to what the benefits of renting a home are or aren’t . According to the National Associated of Realtors, the share of first time home buyers in the market has been steadily inscreasing over the years. We first saw a recovery after the crash in 2013 at 29% of the market to 2017 first time home buyers were 43% of the market. This is known to be directly related to the fact that for the first time after the resession, mortgage rates are low, homeowners are trying to upsize so they are actually selling for a reasonable price, and there is an insane amount of programs to help first time buyers with down payment and closing costs! Yet, buying still isn’t for everyone. This article will help you go over the pros and cons of getting into home ownership!
Rental Home Owner
Lets start off with the basic meaning of what a rental truly is. When you agree to rent a home you are agreeing to make a payment for the temporary use of a property owned by another. In addition to the rent and council tax when you are in a rental agreement, you typically are responsible for paying the utilities and any other bills you acrue to live. You can expect to for gas, electric, city water/ well use, cable, internet and phone. There is many different ways your rent payment can be set up depending on the landlord such as bi- weekly, monthly, quarterly or even yearly.
Another cost involved with renting is getting a security deposit. A security deposit is a one time fee paid when you rent a home or apartment. This fee is typically due at time of reserving the home and is usually equal to one months rent. The security depoist can be refundable or non refundable, depending on the landlord. The landlord the owner of the home or a property managment company hired to run it on behalf of the owner.
What is Buying?
To buy a home means simply to obtain property for a price. In a very quick conversation with a loan officer, they will be able to go over your income, assets, and down payment which will all lead to them giving your agent a pre-qualification. This is the first step in the loan process and actually kicks off your home search!
Just as renting, you do still have costs you are responsible for. Instead of paying the owners mortgage loan, you would now be paying your own. Most lenders/ loans require the taxes already be looped into the loan already to minimize the chance of an owner forgetting to pay taxes so that is not as near of a problem anymore. You are also still responsible for the utilitys as well as things like tv and internet BUT alot of companys actually give great discounts to homeowners! Also unlike renting, you don’t have a security deposit.
In a quick conversation with you about your income, assets and down payment, a lender can prequalify you to buy a house
Renting Vs Buying
Pros To Renting
You have a garanteed payment/ home every month for that determined contract length
Cons To Renting
You can’t break your lease without penalty
You are restricted on what you can do in the home
Typically you can’t paint or change the home at all
You are paying more than the owner is paying to buy the home
Check out this great little buy vs rent calculator
Your monthly payment is an investment in your future
Great deductions on things such as taxes
Cons To Buying
You have to move in?
So What Are You Waiting For?
With all of this information, it is amazing that people are still getting rich off renting houses out! Even more amazing that people are renting and helping their landlords get rich! But everyone does have their own reasons. So I am curious, whats yours?
Go ahead and let us know below whats keep you from home ownership!
Welcome! You are about to set sail on a journey of finding your perfect home! Whether it is your first home or your tenth we are here to answer any and all of your questions and get you help buying real estate! Purchasing a home is a very big decision! Most people only buy a few homes through their lifetime but we want to make sure you are well-equipped with the up-to-date information for this decision. This article will walk you through each phase of the home buying process.
For example, did you know the majority of a buyer’s agent compensation comes from the seller and the seller’s agent? That means you get free help buying real estate with an agent!
The Consult- What You Want, What You Need, And How To Get It
Most people would agree that finding THAT PERFECT home is the most important part of buying a home, right? So why let any random agent that just so happens to pick up the phone one day be responsible in one of the largest investments of your life? DON’T! What most people don’t realize is that you have a right to interview as many agents as you want until you find that perfect agent that you are confident understands what you are looking for in your perfect home! This all starts with the Buyers Consultation.
Aah the good old fashion consult… wait what!? A consult?? Doesn’t the agent just meet me at the house and open the doors? Just like a doctor just shows up to surgery and slices you up without ever even talking to you about what’s going on? WRONG! Agents do much more than just open doors. You are literally trusting this person to handle several hundred thousand dollars of your own money like it was their own AND get you the best possible deal. It just might be worth taking the time to sit down and actually get to know who this person is.
If you are having a hard time finding some good questions to ask an agent, check out this little cheat sheet!
During this consultation it is very important to be very honest and as transparent as possible. Everything you say, if the agent is half-way decent, will determine what homes your agent screens before sending to you. If you say you need 3 bedrooms but really wouldn’t take anything less than 4, tell them! If you say you absolutely can’t live without a 3 car garage but in reality would accept a 2 car garage for the right home, tell them! The most important part is to make sure you are communicating any and all of your have to have’s in your next perfect home.
Some great things to think about and have ready for your consult would be things like:
Let’s Find You That Perfect Home!
Once you find your agent and they have all of your have to haves, your agent will set up a custom home search for you based on the criteria provided in your initial consultation. You both will choose properties based on your criteria and they typically email them to you ahead of time. One fantastic tool we love using is sending a GPS map with all the homes filled out in order along with the home list! This way you know you are going to the right home and don’t have to worry about entering it into your GPS. Most agents have a customized site where you are able to select your favorite homes, as well as request showings. Most showings do require a 24-hour notice in order to schedule and prepare for the appointment. Once the home list is established, your agent will schedule the showing appointments. These appointments are best during daylight hours, with as clear of weather as possible, and with enough time in each home for you to really get to visualize if your family will be able to make it your own.
In a typical day of looking at homes, you should see anywhere from 4-6 homes. Any less and you won’t be seeing what you want and anymore you won’t be able to keep the homes straight. It usually ends up something like I loved the house on main street with the pool but did that have the over sized tub or did the house on 2nd have the tub? Which one had the upgraded appliances again? It turns into a huge mess and at the end of the day it usually turns out to be a waste because you have to start all over.
Once the showings are done, the next plan of action is to:
1. Pick some “favorites”
2. See which homes you want more information on
3. Determine if we need to adjust the search
4. Plan our next steps
From that point you will determine either to keep looking OR make an offer on that perfect home!
You found the perfect home! That’s great! Now its time to get that offer in before someone else beats you to the punch! But first you need to know what a good offer will look like right? In order to get the best possible offer you need to keep in mind 3 major questions:
1. Is the home priced right, what is it really worth to the market and to me?
To determine this, your agent should run a comparable search of other homes in the neighborhood that are similar and have sold in the last 6 months.
Another good determining factor is to look at the average days on market for other homes along with how long this home has been on the market.
It is also very crucial for your agent to find out if they have other offers on the table and if so, what are those terms of the offer/s?
2. What’s the Sellers motive for selling?
This will help you and your agent determine if they are driven by money, time or if they care about who lives in their old home.
Also, they might care more so about some other factors of the sale that you might not realize such as, that wood burning stove, being to busy to make any repairs, or would rather leave that kids play house that your kids already fell in love with to begin with!
and lastly, 3. What do I need from the seller?
Buyers have a lot of costs upfront to purchase a home. One way we have figured out how to help buyers out is to negotiate closing costs such as title/ escrow fees, lender fees, and any other additional fees you truly can’t take on along with your down payment. It is very important to take this into consideration while making an offer.
Once you have thought about all of these factors then your agent will go back and fill out the purchase contract/ offer. Now this document does range from state to state but the most important aspect is to make sure you take the time to fully read it. Although your agent does their very best, they are still only human after all. It is your responsibility to ensure you know exactly what you’re signing and if you don’t, ask your agent to explain it! They are the licensed professional and deal with that document DAILY! They will be more than happy to explain anything to ensure you are happy and confident.
Your Under Contract.. Now What?
After your agent sends over that amazing offer and you finally receive that heart stopping call that your offer was accepted, something amazing happens. YOU ARE NOW UNDER CONTRACT! Yay! Now the REAL fun begins.
First and foremost, if your agent works with a transaction coordinator they will be reaching out to set everything up with you.
Your accepted contract with be sent to anyone and every one needed including title/ escrow and your lender.
Your lender and title/ escrow will request documents needed.
Your earnest money will need to be deposited in the appropriate amount of time. This does vary from state to state and your agent will be the best one to advise you as to when that is.
Inspection period begins which also varies from state to state.
This can be a very stressful time but try not to worry too much! The best practice is to NEVER leave the ball in your court for to long!
Why Is My House Falling Down!
Once you are under contract (yay!) your inspection period begins. Now is the time to get any and all inspections that are important to you done. This time is NOT a time to re-negotiate the offer but rather to determine that the condition of the home is livable. This will vary from not only state to state but also person to person. Let’s say for example, you are severely allergic to mold and pet hair. You will need to be sure to tell your agent/ transaction coordinator that you want a mold/ pet inspection. You can get as many inspections as you possibly want but the basics we recommend for any and all buyer’s would be:
General Home Inspection
HVAC/ AC inspection
Once all inspections are completed you will receive an inspection report anywhere from 5 pages to 60 pages. This report can initially shock some people and have you ready to jump ship! Don’t fear! The house was standing when you saw it and most likely still will be. This is the time to focus on the top 5 big ticket items that you can not, will not, or are unsafe for you to live with. Once those ‘big five’ items are determined, you will formally request and agree on your property repairs which will be completed by closing unless otherwise agreed.
Once the inspections are done and repairs are negotiated, it is time for the lender to order the appraisal! “An appraisal is an unbiased estimate of the market value which is determined by what a willing and able buyer would purchase for and what a willing and able seller would sell for. Lenders order an appraisal while working on the loan so that there is an objective person to investigate the true home value and determine that the money requested by the buyer is a fair value for the home and not to be used for anything else. Once the appraisal comes back that you are good to go, your lender will continue processing the loan.
Final Details Before You Get Your Keys!
Once you make it this far, the days either feel like they are dragging on or flying by way to quick! You will have the lender and title/ escrow asking for any remaining documents. Once everyone FINLLY has everything, the loan will be approved and have documents sent to title/ escrow for closing. You’re signing appointment will be scheduled as well as closing disclosures. Some other final details will be
Schedule final walk-through
Schedule key exchange
Utilities to be turned on
Closing and recordation
Some of the most important information I reinforce during this time is DON’T schedule anything to be delivered until you unlock the door for the first time! Anything can happen when buying a home. Documents can get missed, signatures can get missed, funds can be delayed, county offices can be held up, and much more! All of these things can delay you getting the keys to your home. Once you unlock the door for the first time, it is yours and you are in the clear! Congratulations! You just bought your perfect home! Now pop a bottle of some bubbly and unpack that bad boy!
The home process can get very overwhelming, and sometimes down right brutal! There are days it feels like nothing is moving, then you have days that feel like you have more paperwork than seconds in a day. Take a breath, refer back to this article, hey even print it out and check off the steps as you go! This is a fantastic tip I offer to all of my clients to help from getting to overwhelmed by the pace. I also have a handy little check list in my comprehensive Buyers Guide, along with even more information about the process and what to expect! If you want to receive your own copy, go ahead and fill out the form below and we will get that send right over!
Enjoy your new home and check out the next post about have to haves on moving day.
When is to last time you were involved in a real estate process and knew EVERY single thing that went on? Maybe you have never been involved in a transaction and don’t even know where the beginning is? Are you a seasoned pro at the game and just looking to get some insider information? Then this is the place for you. Welcome to Your Real Home Needs. A place created for to public, by real world experts, with education in mind!
We have 3 simple goals here at Your Real Home Needs which is to always remain education based, publicly appreciated, and Realtor approved. How we strive for this?
Education based- This is by far our top priority in creating this system. We strive everyday to educate. Whether that be the curious deamer, the desperate at wits end seller, or the first time home buyer, and everyone in between! We strive to be a resource for you, our readers, to turn to when you need help. That all starts with education, after all, you don’t know what you don’t know.
Publicly appreciated- Your opinion matters! We would not be here if it weren’t for the appreciation of the public, people just like you, trusting us as that resource you know and comet to.
Realtor approved- Along with striving for educating and appreciation of the general public, we also strive to be a resource to agents as well. We have worked very hard to build a place for people and our clients to turn when in ANY real estate process from beginning to end, so we are always mindful of how to help other agents service their clients as well. Although this goal isn’t geared towards the general public, we do want it known that we recommend working with THE RIGHT agent for YOU!
Like many Realtor ran sites, we originally wanted to create a space to educate our own clients. While in the process of this, we quickly realized how many people need help to not only understand to real estate process but how to take control of it!
We set out on a mission to go above and beyond educating anyone and everyone who would listen! We focus on all aspects of the real estate process, both buying and selling. This includes before, during and after! Many things go into preparing to purchase or sell a home. Some things people don’t even think about, can have a major effect. This sparked a need in us to ensure that the knowledge is available to not only Realtors but also to the general public.
This lead us to something much bigger than just helping our own clients..
So Your Real Home Needs was created!
If You Don’t Stand For Something, You Will Fall For Anything
We have one simple end game here at Your Real Home Needs and that is to be the one you turn to when you or your loved ones have questions in any Real Estate process. This stems from to belief of people helping people and genuinely caring for others. We strive to achieve this everyday by guaranteeing our visitors that we will never claim to know all end all BUT we will not stop until we get you an answer!
On that note, if you ever need a hand or have any questions, feel free to leave them below and I will be more than happy to help you out.