Quick Tip on Financing

 

As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.

 

Get pre-approved. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

 

Choose your mortgage carefully. Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.

 

Do your homework before bidding. Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.

What could possibly hurt your home value?

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We see tons of articles about how to increase your home value. Did you know there’s some surprising and surprisingly common mistakes that hurt your home value? Here’s some.

Sinkhole damage sucks property values down a staggering 30%

The prevalence of reports of sinkhole damage in the U.S. this year has raised questions about the impact on property values.

It’s not the threat of a sinkhole that damages property value –– there’s insurance coverage specifically for sinkhole damage. In fact, a 2007 study found no statistically significant difference in home values in areas prone to sinkholes. Like earthquakes, it’s only after sinkholes hit your property that problems arise. -Business Insider

Choosing a Crazy Exterior Color
OK, not everything can be iconic as The Painted Ladies. Curb appeal is almost always, everything. Sure you want to stand out but do so in a way that fits your property and its environment.

Single Garage or No Garage

In the U.S., we love our garages almost as much as we love the cars that go in them. Garages have evolved from practical places to park and protect our cars to essential overflow storage for sports equipment, bikes, seasonal decorations, and lawn equipment. Homes with no garage space have limited appeal. And those with only a single garage will restrict a seller’s market to one-car families — typically, retirees and singles. -Wisebread

Neighborhood Conditions

Apart from nearby foreclosures, many other aspects of a neighborhood can detract from how much buyers will be willing to offer. If you live by an airport or train tracks, for example, the resulting noise pollution might devalue your home. Light pollution from a nearby highway or athletic complex could make buyers wary, too. Power plants and landfills are bad news, too. They’ve both been proven to affect home values negatively. Times change and so do neighborhoods, and if yours has gone downhill, the value of your home could suffer.

Maintenance
If your home is outside of a controlled community, either a homeowner’s association or planned unit development, neighbors do not have strict regulations governing how they maintain their property. Your yard may be pristine, but your neighbor’s may be surrounded by a chain link fence corralling barking dogs, with trash, disabled cars, motor homes, boats or other unsightly vehicles haphazardly parked on their front lawns. This will surely bring down the value of your home. -SFGate

Multi-Story Homes

Although multi-story homes pack more square footage into a smaller footprint, they aren’t always an attractive selling feature for homebuyers. For obvious reasons, families with toddlers and older buyers tend to shy away from homes with stairs. Multi-story homes that feature a bedroom and bath on the main level fare better than those without.

Unfortunate Positioning: T-Intersection or End of Cul-de-Sac

While cul-de-sacs are often viewed as safer neighborhood street design, being at the end of one means constantly having cars turn around in front of your house and getting used to headlights sweeping through your windows at all hours of the night. The same effect can devalue houses positioned at the end of T-intersections. Savvy house hunters will immediately see the potential for a not-so-quiet home life with these properties.

Towering Trees Too Close

Large trees planted too close to a house mean complex root systems may eventually pose a threat to the home’s foundation. Additionally, mature trees that tower over the roofline require diligent pruning to avoid damage from falling limbs during storms. A good rule of thumb is to plant smaller breed trees about 15′ from the foundation of a home. Larger varieties should be planted at least 20′ from the foundation. The International Association of Certified Home Inspectors has lots more good advice about tree dangers homeowners and buyers should consider.

Sub-Par Schools

Being in a top-notch school district remains a top priority for many homebuyers for a range of reasons. Living near a low-performing school can drive down home values and limit the market to those buyers without school-aged children or those who can afford the added expense of a private education.