Buyers Archives - Page 15 of 15 - Fort Collins Homes

The Hidden Costs of Homeownership

If you’ve never owned your own property before, there are some costs of homeownership you should prepare yourself for ahead of time. Should you take out a mortgage, you’ll have your monthly mortgage payment, but often there are additional costs and fees added that a new homeowner will not expect. Listed below are items you should expect to pay once you become a homeowner.

Property Taxes

Costs of Homeownership

When you rent, you are not responsible for the property taxes on the property. But when you become a homeowner, you’re expected to pay yearly property taxes, of which go to public works, wages for government workers or public school boards. Based on the current value of your home, property taxes are assessed every year and will likely change to reflect an increase (or decrease) in your home’s value. Property taxes can be paid at one time, or they can be divided into 12 payments over the course of a year and added to your mortgage payment. When you’re trying to determine what your mortgage payment will be each month, don’t forget to factor in property taxes.

Home Maintenance

When you live in a rental property, most maintenance is performed by the landlord or Costs of Homeownership a property manager. When you become a homeowner, those maintenance costs fall upon you. When you purchase a home, all maintenance items should be considered when it comes to your overall budget. Will you want to replace all the appliances? Will the property need new windows or a new roof? Does the home need basic upgrades? Most people in the industry suggest you allocate 1% of your home’s worth for maintenance costs every year, but the reality is that 1% is likely the minimum – you should plan on more than 1% maintenance costs each year as a homeowner, and if you plan on any larger renovations, bet on the costs to be even higher.

Mortgage Insurance

Most people, when they buy a home or property, are able to do so by taking out a mortgage loan. If you put less than 20% of the cost of your property down, you’re required to have Private Mortgage Insurance (PMI). PMI protects lenders if the borrower defaults on their loan. PMI is charged annually, and it will typically cost 0.5% to 1% of the entire loan amount. The payments are generally paid each month rather than in a large one-time payment. If you plan on taking out a mortgage loan, and you don’t have 20% to put down, expect to add private mortgage insurance payments to your other monthly bills.

Supplemental Insurance

Supplemental Insurance_Costs of Homeownership Do you live in an area prone to natural disaster? As a homeowner you’ll need to have regular home insurance to protect your home or property from typical things (plumbing issues, roof leaks, etc.) that homeowners encounter. Should you live in an area that’s prone to weather-related issues (floods, tornadoes, earthquakes, hurricanes) you will want to purchase supplemental insurance to make sure your home is covered should nature decide to show herself.

Landscaping and Lawn Care

When you rent a condo or an apartment, it’s highly likely you are not spending a lot of time outside Landscaping and Lawn Care_Costs of Homeownership in a yard. When you buy your own property (should it have a yard or some kind of outdoor area), expect some hidden costs to come in the form of lawn care. Does the yard need some major landscaping? Are you going to mow it yourself, or will you hire a company to do it? Do you have a lawn mower, rakes, snow or leaf blower, yard tools, shed, and any other items needed to keep your yard looking great year-round? A yard comes with extra costs, so be sure to know how much you want to spend on upkeep per year.

HOA Fees

If you’ve been renting your previous residence, it’s likely you haven’t had to pay Homeowners Association (HOA) fees for your apartment or rental. Should you buy a house, condo or townhouse in a neighborhood with common areas, a clubhouse, pool, or any other kind of community meeting places, it’s likely you’ll move into a neighborhood with an HOA. HOA fees can vary in terms of what the HOA covers within the community, but unless you know through your Realtor or through the homeowner the monthly fee, you can expect to spend anywhere from $10 to hundreds of dollars per month on HOA fees.

Buying your first home or property is a huge step in anyone’s life. Before you start your property search, make sure you consider all of the items above when you’re thinking of buying a home or property and during your property search.

Why Use A Real Estate Agent?

Buying or selling a home seems to be a way of life for a lot of people in today’s world. When you buy, you definitely want to get the most for your money. Many people think they can go it alone when it comes to buying or selling a house, and it’s definitely true that some people are able to handle all the details of buying and selling a home or property, but in reality the real estate process is intricate and requires a lot of knowledge about the local real estate market, contracts, escrow, appraisals and referrals. While some home owners and buyers are in a position to go it alone, for those intimidated by the market or those who don’t have the time or energy to sell or buy a home on their own, here are some reasons why it’s a smart move to use a real estate agent during your next real estate transaction.

Local Expertise

You’ve lived in an area for some time – but while you may know about local amenities and activities, do you have a lot of knowledge on the local real estate market? Real estate agents know their markets: they know how much homes are selling for, they know what areas are highly desirable and they know which ones are up-and-coming. You can trust an agent to know the local inventory and know how to get the best price for a home or property.

Access

Real estate agents have a number of access points that a regular buyer or seller doesn’t. They have access to listings before they are put in the MLS, and they have access to the homes! Many sellers are only willing to grant access to agents, which means that most buyers going it alone can only access homes during open houses. An agent working for the seller is only going to provide information with the seller’s best interest at heart, so when you go it alone you might be only getting partial information from any questions you may have. Working with an agent will help provide private access to homes, and an agent will be able to get more information from the seller’s agent.

Experience

Buying a home is an intimidating experience – you’re making one of the biggest financial decisions of your life. As a buyer, you want to make sure stress and emotions don’t get the better of you, especially when it comes to making important decisions. Real estate agents know what buyers and sellers go through – they’ve been there, as it’s more than likely they too have made a real estate purchase of their own. While they have personal experience, they also have an experienced rational eye when it comes to the business portion of a real estate transaction. They possess clear judgement, and agents are a seller and buyer’s biggest advocate for a successful negotiation. Real estate agents have the experience, knowledge and acumen to make the process as smooth and stress-free as possible.

Connections

The real estate transaction process requires a number of professionals and services. From a lender, home inspector, contractors and handymen for repairs, lawyers, and a number of other professionals and tradesmen, knowing the right people is beyond important when you want to have a smooth and successful transaction. Real estate agents are in the business, and their past experience has provided them with a number of respectable and dependable contacts and referrals than you’ll find asking friends and family. A ready agent will come prepared with connections and people they are willing to refer because they’ve worked with them in the past and they know their track record. When you choose to work without an agent, you sacrifice the networking that naturally comes with being a real estate agent.

No Cost When Buying

If you’re searching for a home or property to buy, having an agent is free. An agent’s commission is paid by the seller, but most buyers don’t realize this and entertain the idea of going without a Realtor during their home search. If a seller pays the commission, there is no loss to a buyer to take full advantage of all the services a real estate agent offers. It’s also important to understand that even if you choose to go it alone when buying a home, you do not receive the commission a buyer’s agent would. Commission rates are negotiated before the final sale and are included in the contract, meaning if you don’t use a buyer’s agent, the entire commission is paid to the listing agent.

Documents and Paperwork

Unless you’re working with a brand new agent, most agents know the ins and outs of all the documents and paperwork required for a home sale or purchase because they’ve been through a number of transactions. From finding the comps of your market and drafting a purchase agreement, to contacting any other agents and the title company, a real estate agent will be able to provide help in the forms of knowledge, time and resources during the real estate transaction process. Agents also know the important parts of an offer or contract, especially when it comes to line items that could cost a lot in the end or things that are negotiable. Having an agent that knows the process, the paperwork and the documentation is a valuable asset when it comes to making one of the biggest decisions of your life.

6 Tips To Buying A New Construction Home

Buying a new construction home is a bit different than purchasing a resale home — one that’s been previously owned by someone else. You’ll need to be familiar with a few tricks of the trade, along with understanding a bit about how the process works.

1. Use your own Broker/Agent.

ALWAYS use your own RE/MAX Advanced Broker/Agent; doing so will help ensure that you get what you want. Understand that the sales reps you meet at new construction communities are likely representatives of the Seller — the builder, corporate owners, developers, whomever — they are there to present their product, answer your questions … and do the best job for the Seller.

2. Don’t expect price reductions.

Yes, it does happen. But overall, remember that builders have established a set of prices that they feel best make their product (the houses) marketable with an expected profit margin. Furthermore, lowering the price on a house drops the comparable value of other houses in the community, thus bringing the entire suite of houses down in price.

3. Look instead for builder concessions in the form of additional upgrades.

Rather than price reductions, you may be able to gain a few upgrades from the builder at no cost, or for less money. Perhaps the builder would be willing to include a fence, landscaping, upgraded carpeting, or appliances as part of your purchase without charging you extra.

4. Builder incentives in the form of interest rates, etc., may not be coming from the builder.

Lots of new communities boast incentive programs that cite things like “3.75% financing for 30 years” or “Zero Closing Costs.” What’s important to know is that the builder may not be the one actually paying those closing costs, or reducing the interest rates. Typically, those types of incentives are coming from the builder’s preferred lender who is counting on a sufficient number of loan transactions in order to recoup the cost of the incentives.

5. Expect to use the builder contract or addendum.

In almost every case, new construction homes require the use of a builder’s contract or at least a lengthy addendum in addition to the typical purchase forms used by a Broker/Agent. Generally builder forms include language specific to the terms of the building process and can be many pages long, full of tightly packed terms. While much of the language is common sense, be sure to read the contract thoroughly yourself (as will your Broker/Agent) and then consult with a qualified real estate attorney if you have questions or concerns. Agents, even those sales reps for the seller, aren’t allowed to (and shouldn’t) attempt to advise you or interpret what those custom forms really say.

6. Builder warranties vary.

Not all builder warranties are the same. Some builders warrant their work from top to bottom for several years, some only for one. Many builders will offer a warranty of up to about 10 years for structural-type issues, with other warranty time frames for things like plumbing leaks. In addition, you’ll find that your new home will likely
have individual warranties for appliances, roofs, windows, etc. Be sure to carefully review the warranty offered by the builder of your desired home before signing the final contract for your new home purchase.

Looking For More Information?

Take a look at our Pinterest Board – House Hunting Tips
https://www.pinterest.com/remaxadvanced/house-hunting-tips/

Or check out some other links:

http://www.hgtv.com/design/real-estate/how-to-buy-in-new-construction

https://www.redfin.com/blog/2014/08/10_tips_for_buying_new_construction.html#.VdO3hflVhHw

7 Answers to the Question:
Why Is Housing Inventory So Low?

7 Reasons Why Housing Inventory is Low

There has been a great deal of discussion but little written explanation regarding the low housing inventory level. Many factors are contributing to rising prices and limited inventory
in many markets.

1. Capital gains exclusion on primary residence:

The Taxpayer Relief Act of 1997 allows homeowners to take a $250,000 (for singles) or a $500,000 (for married couples) capital gains/appreciation exclusion. When gains exceed the $250K/$500K maximum, higher priced real estate markets experience an unintended outcome: fewer move-up buyers thereby reducing available home supply to new entrants

2. Step-up in basis:

A surviving spouse can sell a marital residence and possibly owe only federal capital gains
tax on the property’s appreciation, reducing the tax consequence of the sale. Married homeowners in higher-priced homes may wait for one spouse to pass away before a move is made, keeping thousands of properties off the market until some point
down the road.

3. Sustained low-rate environment:

Many homeowners and investors have either purchased or refinanced with historically low interest rates and are unlikely to sell these homes as a result of this favorable financing.

4. Market value discounts:

Between 2007 and 2010, many buyers purchased properties in markets that offered significant price discounts. Institutional investors entered the residential real estate market acquiring large pools of properties. Combined with low interest rates, these properties are not likely to be sold anytime soon.

5. Values not at peak levels across the country:

Home values in some regions across the U.S. are still below the historical highs of the mid-
2000s. Until these prices return to peak levels, these homeowners are unlikely to sell.

6. Move up:

If a homeowner cannot find a property to move up to, they will not sell their current home.
Similarly, retirees finding limited options for retirement communities are not motivated to sell unless they know exactly where they are going.

7. Stunted new development:

Since early 2008, there has been an unparalleled low level of new home development. The start-to-finish build cycle is lengthy, often requiring years to plan, approve, build and market. Until new housing development accelerates, new home inventory will remain limited. Given the factors above, nationwide inventory will likely remain low for an extended period of time and the natural solution remains unknown.

Source: Chris Trapani co-founder Sereno

Questions to Ask Your Home Inspector

When you buy a Fort Collins home, you need to know exactly what you’re buying. Imagine how frustrated you’d be to find out that the hot water heater wasn’t working—in the middle of a shower! This is why you should have a home inspection before you buy your home. A home inspection is an important part of buying your home.

Before you hire a home inspector, ask candidates these questions to make sure you hire a trustworthy inspector.

1. What does your inspection cover? Not all inspections are the same. Ask for copies of previous home inspections so you can see exactly what they will check inside the home. If you are concerned about something specific, like a leaky faucet in the bathroom, mention that to the inspector so they can check it out.

2. Are you licensed or certified? If you live in a state that licenses home inspectors, ask to see their license. At the very least, choose a home inspector who belongs to American Society of Home Inspectors. This shows a level of professionalism and education that you can trust.

3. What kind of report will you give me? You should expect a written report detailing what the inspector found. Most inspectors will give you a typed report within a week of the inspection. Make sure the inspector will be available to explain anything on the report that doesn’t make sense to you.

4. Will I be able to attend the inspection? If the inspector refuses to let you be present during the home inspection, find someone else. This is your chance to know exactly what you are buying and what potential repairs you or the seller will have to make.

Your RE/MAX Advanced real estate agent, will guide you through the home buying process and can refer you to a trustworthy home inspector.

Let us help you find your new Northern Colorado home. Call us today at 970-221-5995 or email us at homes@ftcollinshomes.com if you would like a referral to a reputable home inspector or if you are thinking about buying a home.

LINKS:
American Society of Home Inspectors. – http://www.ashi.org/
5 Easy household repairs. – http://home.howstuffworks.com/home-improvement/repair/5-home-repairs-you-should-do-yourself.htm

By MySmartBlog in Partnership with BreakthroughBroker.com