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Find a New Home in Four Steps
Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).
The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.
Step 1: Talk to your agent
Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more.
Step 2: Decide how much home you can afford
It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.
Step 3: Envision your future
Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.
Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.
Step 4: Document your ideal home
When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”
How to Get Started in Real Estate Investing
Investing in real estate is one of the world’s most venerable pathways to building wealth. When properly managed, income from renting or real estate investment trusts can provide you with the financial security to plan out the rest of your life. The conclusion is easy to envision, but knowing where to begin can be overwhelming, particularly for anyone who has never previously owned a home.
At Windermere our goal is always to improve and support our communities, so we’ve put together a few key things to keep in mind as you enter the world of real estate investment.
Know the right type of investment for you
Investing in real estate needn’t commit you to being a landlord. A Real Estate Investment Trust (REIT) is a low-maintenance way to get involved in real estate with next to none of the day-to-day monitoring required of direct property management. REITs are trusts that typically own multiple properties, and investors may purchase shares within the REIT. Typically, as the value of the property rises, so too do the values of your shares. If you’d like to dip a toe into real estate investing before diving in fully, a REIT is a great place to start.
Start with your own home
Owning the roof over your head is a basic step towards investing success. Even better, when you plan to live in the home you’re buying (rather than renting it out), you will likely benefit from lower mortgage rates and a cheaper down payment. The reasoning is straightforward – lenders see a loan to people purchasing the home they live in as an investment in people highly committed to the property.
Once you’ve owned your own house for a few years, you can look to purchase a new home to move into. By purchasing the new home with the intent to move in, you’ll be eligible to receive more favorable financing once again. After you’ve secured your new home, your first home is primed to be transformed into a rental property, and you can continue to see a return on your investment. If you’re seeking further support with buying a first, second, or third home, our website and our agents are full of information.
Cast a wide net
The best investment opportunity isn’t always going to be right underneath your nose. While there are logistical benefits to focusing locally with your investment, you may miss more profitable opportunities in another burgeoning market. Real estate is a long game, and patience tends to be rewarded. There’s no cause to rush a decision of this magnitude, so investigating other states and regions to find the property that best fits your situation is a process worth considering.
Home Warranties Provide Buyers and Sellers With A Peace Of Mind
If you are a homeowner, you probably know all-too-well how costly home repairs can be. And, thanks to Murphy’s Law, appliance break-downs seem to happen at the worst possible time—like when you are selling your home. For this reason, it is in the best interest of all home sellers to consider purchasing a home warranty.
A home warranty offers many advantages to the home seller, the least of which is a peace of mind that your major home appliances are covered in the event of a break down. Most home warranties cover both parts and labor of your home’s most vital systems and major appliances. This protects the home seller from potentially large, unexpected repair bills and also allows the buyer to purchase the home with more confidence. Additionally, a home warranty is usually for the term of at least one year, so any unforeseen repairs/replacements are also covered well after the home has been sold. A home warranty also provides a competitive edge over those homes without warranties because it communicates confidence to buyers. This can add up to a faster selling period, resulting in a more convenient process for all involved.
A home is probably the single largest investment you’ll ever make, so the last thing you want as a home seller or buyer, are unexpected home repairs/replacements. Major appliance replacement can cost you several thousand dollars, and during the process of a home sale/purchase, your budget doesn’t often allow for costly expenses. A home warranty is designed to protect you from these types of expenditures. Furthermore, it is convenient for home sellers because a home warranty offers after-sale liability. While an inspection may find many faults that are covered by a home warranty, it cannot account for latent problems that are beyond an inspection’s scope, or problems that occur down the road. In most cases, a home warranty will cover these expenses, alleviating potential financial burdens for the seller once they have sold the home.
When considering a home warranty, it’s important to ask the right questions. Warranties vary from one company to the next and there are also many different types of coverage available. Your Realtor should be able to help you with this process. First and foremost, you should identify which components of the home will be covered by the warranty. It’s also important to attain annual costs and the charge for service calls. You will want to ask what the total dollar limit is on the warranty and what the limits are for the individual items that are covered. Many home sellers purchase home warranties, which are then passed along to the homebuyer when they move into the home. As a homebuyer, you may want to look into whether or not the coverage can be renewed once the warranty has expired.
According to American Home Shield, one of the largest home warranty companies in the nation, the average home warranty customer uses their warranty plan 2.3 times. Furthermore, the number of home warranties is increasing with every year because homeowners are becoming more informed of their benefits. Eventually home warranties will become commonplace, as buyers and sellers realize the advantages they offer. Ultimately, what it comes down to is that a home warranty is a very simple, cost-effective way to purchase a peace of mind for both homebuyers and sellers alike.
Building Character – Balancing a Home’s Personality and Amenities
It’s sometimes said that the limitations of a house are what help make it a home. For many, however, it is a point of pride to accept only the finest in their new residence. How can you find the balance between cultivating a lived-in home with personality and quirks versus a house with cutting-edge amenities that improve quality of life? To get to the bottom of that, we gathered a list of the six keys to consider when selecting and developing the home of your dreams:
The neighborhood
Surprisingly, one of the biggest factors in choosing a new home isn’t the property itself, but rather the surrounding neighborhood. While new homes occasionally spring up in established communities, most are built in new developments. The settings are quite different, each with their own unique benefits.
Older neighborhoods often feature tree-lined streets; larger property lots; a wide array of architectural styles; easy walking access to mass transportation, restaurants and local shops; and more established relationships among neighbors.
New developments are better known for wider streets and quiet cul-de-sacs; controlled development; fewer aboveground utilities; more parks; and often newer public facilities (schools, libraries, pools, etc.). There are typically more children in newer communities, as well.
Consider your daily work commute, too. While not always true, older neighborhoods tend to be closer to major employment centers, mass transportation and multiple car routes (neighborhood arterials, highways and freeways).
Design and layout
If you like Victorian, Craftsman or Cape Cod style homes, it used to be that you would have to buy an older home from the appropriate era. But with new-home builders now offering modern takes on those classic designs, that’s no longer the case. There are even modern log homes available.
Have you given much thought to your floor plans? If you have your heart set on a family room, an entertainment kitchen, a home office and walk-in closets, you’ll likely want to buy a newer home—or plan to do some heavy remodeling of an older home. Unless they’ve already been remodeled, most older homes feature more basic layouts.
If you have a specific home-décor style in mind, you’ll want to take that into consideration, as well. Professional designers say it’s best if the style and era of your furnishings match the style and era of your house. But if you are willing to adapt, then the options are wide open.
Materials and craftsmanship
Homes built before material and labor costs spiked in the late 1950s have a reputation for higher-grade lumber and old-world craftsmanship (hardwood floors, old-growth timber supports, ornate siding, artistic molding, etc.).
However, newer homes have the benefit of modern materials and more advanced building codes (copper or polyurethane plumbing, better insulation, double-pane windows, modern electrical wiring, earthquake/ windstorm supports, etc.).
Current condition
The condition of a home for sale is always a top consideration for any buyer. However, age is a factor here, as well. For example, if the exterior of a newer home needs repainting, it’s a relatively easy task to determine the cost. But if it’s a home built before the 1970s, you have to also consider the fact that the underlying paint is most likely lead0based, and that the wood siding may have rot or other structural issues that need to be addressed before it can be recoated.
On the flip side, the mechanicals in older homes (lights, heating systems, sump pump, etc.) tend to be better built and last longer.
Outdoor space
One of the great things about older homes is that they usually come with mature trees and bushes already in place. Buyers of new homes may have to wait years for ornamental trees, fruit trees, roses, ferns, cacti and other long-term vegetation to fill in a yard, create shade, provide privacy, and develop into an inviting outdoor space. However, maybe you’re one of the many homeowners who prefer the wide-open, low-maintenance benefits of a lightly planted yard.
Car considerations
Like it or not, most of us are extremely dependent on our cars for daily transportation. And here again, you’ll find a big difference between newer and older homes. Newer homes almost always feature ample off-street parking: usually a two-car garage and a wide driveway. An older home, depending on just how old it is, may not offer a garage—and if it does, there’s often only enough space for one car. For people who don’t feel comfortable leaving their car on the street, this alone can be a determining factor.
Finalizing your decision
While the differences between older and newer homes are striking, there’s certainly no right or wrong answer. It is a matter of personal taste, and what is available in your desired area. To quickly determine which direction your taste trends, use the information above to make a list of your most desired features, then categorize those according to the type of house in which they’re most likely to be found. The results can often be telling.
