The Compound Effect: Building Your Household’s Wealth

Wealth is within reach for many people; however, according to a recent study, 63 percent of Americans said it’s not likely they’ll become rich.¹ While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice and good financial sense. Here are a few ways to build your household’s wealth.

 

Let Compound Interest Work for You

Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.

 

Tap into Your Home Appreciation

Experts expect home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.²  If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.³ If you’re curious about the value of your home, give us a call!

 

Build Equity in Your Home

One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one study, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.⁴ Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one here.

 

Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.

 

Build Equity Faster in Your Home

Mortgage Term	30 Years	15 Years
Loan amount	$118,000	$118,00
Months to pay	360	180
Annual percentage rate	4.0%	3.0%
Monthly payment	$563	$815
Total interest	$84,806	$28,680
Interest savings	–	$56,126

Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future

 

Pay Down Your Mortgage…or Not

Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.

 

If you decide to pay off your mortgage sooner, here are a few ways to do so:

 

1. Pay more money at the beginning of your amortization period and apply it to your principal.
2. If you receive a tax refund or other windfall, apply it toward your principal.
3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.
4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.
5. If you locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.

 

Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.

 

Purchase Investment Property

Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.⁵ While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.

 

The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.

 

There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest and more. If you’re thinking of purchasing investment property, talk to your tax professional to get the details.

 

Achieve More Wealth by Creating Financial Goals

Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.

 

1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years and in 20 years?

 

2. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.

 

3. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.

 

Your Budget

Income
Earned	$
Investments	+ $
Total Income	= $
Daily Expenses	–       $
Monthly Bills	–       $
Total Available for Investment	=

 

To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer that savings into your accounts.

 

Get the PDF here.
“5 Ways To Build Your Household’s Wealth” PDF

 

It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home or are thinking of renovating, we have you covered. We would love to hear from you give us a call 408.422.300 or email us at [email protected] and we’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.

 

Sources: 1. BankRate.com

2. Pulsenomics, Home Price Expectation Survey Q4 2016
3. Statistic Brain, August 1, 2016
4. National Association of REALTORS, Economists’ Outlook, September 8, 2014
5. The Motley Fool, July 30, 2016

5 Reasons to Sell Before the Selling Season Picks Up

A common thought in real estate is never list your home in the winter offseason. Perpetuated by industry experts, agents and repeat sellers alike, this saying encourages many would-be sellers to wait until the spring peak to list their homes. However, studies show that homes listed in the winter offseason not only sell faster than those in the spring, but sellers also net more above their asking price at this time.¹ Don’t wait until spring to sell. If you’ve been thinking of selling your home, here are five compelling reasons to list now.

1. Take advantage of low inventory. Since most sellers are waiting until spring to list, local inventory falls during the offseason. However, there are still motivated buyers who are ready to move now and don’t want to wait that long to purchase a home. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time they did because “it was just the right time.”² These eager buyers may flock to your home. You may not need to try as hard to make your home stand out in the sea of other similar homes. With less competition, more buyers, some of whom may have otherwise overlooked your home if you listed during the peak, will express an interest to buy. While you’ll likely have fewer showings in the offseason, buyers who do visit will be more serious about writing an offer. Your home will likely sell faster than it would have during the peak season.

2. Set a higher listing price. Homes sold during the offseason sell at a higher price, on average, than those sold during the spring and summer peak. There are many reasons for this. First, motivated buyers are willing to pay closer to the asking price for a home. Second, homes are more likely to be priced right and reflect the economics of not only the local market, but the neighborhood as well. Often, homes listed during the peak may be priced to compete with other homes in the area and neighborhood. Sellers may be pressured to sell for less than the list price in order to encourage buyers to choose their home out of the others on the market.

3. You’ll receive more attention. While our team always strives to give you the personal attention you deserve, when you list during the offseason, we’re able to work more closely with you to ensure your home is prepared for its debut on the market. We can also take more time to answer your questions, address your concerns and prepare you and your home for the sale.

 Additionally, if you’d like to hire a tradesperson to handle routine maintenance or undertake a minor home renovation before you list, you may be able to take advantage of flexible scheduling and cheaper rates. Many of these professionals experience a winter offseason as well, and will be able to focus their time and attention on you and your project.

4. Easier to maintain curb appeal. Curb appeal is intended to attract the buyers who are just driving by as well as those who saw your home online and wanted to see it in-person. It sets the stage for what interested buyers can expect when they step foot in the home during a showing or open house. If you list your home during the peak of the selling season, you may exhaust your time your energy maintaining curb appeal. You’ll likely spend most of your free time mowing the lawn, weeding, trimming shrubs and hedges, planting flowers in pots and in flowerbeds, pulling spent blooms and watering it all to ensure it looks lush and healthy on a daily basis. After all, a lush landscape will attract potential buyers and set your home apart from other similar homes in the area.

The offseason eliminates the pressure to maintain a picture-perfect front landscape. Since most grass, shrubs and plants go dormant at this time of year, you’ll have less to maintain. If you live in an area that experiences a traditional winter, your landscape will be covered with snow. Even if you live in a milder climate, you may not have to mow as often, if at all. It’s still important to ensure your exterior appears well-tended, so make sure your walkway and front porch remains free of snow, ice and debris.

5. Tap into the life changes of buyers. Many buyers receive employee raises and bonuses at the end of the year. If they’ve been saving to buy a home, this extra money may allow them to reach their goal for a down payment and put them on the path to becoming a homeowner. Additionally, companies often hire new employees and relocate current ones during the first quarter of the year, creating a strong demand for housing. If you live in an area that’s home to a large company or has a strong corporate presence, this may be the perfect time to list.

Thinking of Listing in the Offseason? 3 Things to Do Before You List

Get your home ready to list by following these tips.

1. Schedule maintenance. Buyers, especially first-time buyers, want a home they can move into right away; they don’t want to repair the roof or the furnace or replace windows with blown thermal seals before they move in. Do the scheduled maintenance and make repairs before you list your home for sale.

 In some cases, it may help to have an inspector do a pre-inspection of your home. A pre-inspection will make you aware of any major, potentially deal-killing, issues that will have to be addressed before you list. It also gives you an idea of minor issues that a potential seller may want repaired. Overall, it helps you to accurately price your home and may protect you from claims a buyer might make later.³

2. Create light. Balance out the lack of natural light outdoors by turning the lights on inside. Since people naturally tend to buy emotionally, turning on the lights helps create a sense of warmth and coziness. Light a fire in the fireplace, if you have one, fill your home with the scents of the season, such as vanilla or fresh baked cookies, and put a throw blanket on your sofa.

 If you plan to paint the interior of your home before you list, consider an off-white shade to create consistency throughout your home and make the space feel larger and brighter. If you have photos of your garden or the home’s exterior in the spring or summer, display them so interested buyers can get a glimpse of what the home looks like in other seasons..

3. Give your home a thorough cleaning. Cleaning puts your home in its best light. Clean and polish all the horizontal surfaces of your home, including countertops, window sills and baseboards; have the curtains dry cleaned or otherwise laundered; wash windows, glass doors and their tracks; vacuum carpeting and polish all wood surfaces, including the floor.

Additionally, this is a great time to pack any personal items and family photos as well as sort through your belongings and donate items you no longer use. This not only eliminates any clutter, but it also gives you less to pack and move when you sell.

If you’re thinking of selling, give us a call! We’d love to help you position your home to sell in our market.

 

Sources: 1. Time, October 30, 2015

2. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers
3. Forbes, August, 27, 2013

5 Reasons to Sell Before the Selling Season Picks Up “FREE Guide”
 

Real Estate 2017: What to Expect ….. And the Three Things You Should Do…

One of the most common questions we get at this time of year is, “What’s going on in the market?” It’s not just potential buyers and sellers who are curious; homeowners always want reassurance their home’s value is going up. The good news is the American real estate market is strong and healthy: home values are up, prices and sales are strong, and millennial first-time buyers are eager to become homeowners.

We often use national real estate numbers to give us a clearer view of our local market. However, real estate is local, and while statistics and predictions help us understand the overall real estate market, our local market may be different. If you’re thinking of buying or selling, or just want to know how much your home is worth, give us a call!

What to Expect in the Real Estate Market in 2017

The American housing market is stronger than ever! Home values, prices and sales had their strongest numbers in 2016, a sure sign the market is healthy and strong. According to the Home Price Index from the Federal Housing Finance Agency (FHFA), property values have increased in 58 of the last 62 months and have increased more than 35 percent nationally. Homeowners continue to build equity in their largest investment—their homes.

First-time buyers are back.

Housing forecasts from the National Association of REALTORS (NAR), the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae all predict existing-home sales will surpass 6 million in 2017, higher than anticipated sales for 2016. Who’s driving the surge? According to NAR, millennials who have put off buying a home are ready to buy. While they may have avoided buying a home due to student debt and limited employment, many are entering their 30s, a time when their attention turns to marriage, family and setting roots with homeownership. They’re predicted to be the driving force behind home and condominium sales from now until into 2020. (Source: MarketWatch)

What does this mean to you? If you’re a millennial who’s been on the fence about buying, now is the time to act. Give us a call to answer your questions about the market and the buying process.

Renters are embracing homeownership

Additionally, many renters who’ve resisted buying are starting home searches due to the economic weight of rising rents. This year’s home buyers seek to take advantage of comparatively low interest rates and, in most cases, static payments each month—an advantage of home ownership. Rental costs will only continue to rise; if you’re thinking of buying, now is an ideal time to do so.

What does this mean to you? Every month you pay rent, you lose the opportunity to build equity in a home of your own. Break free from the limits of renting and invest in your financial future. Come in the office and we’ll discuss your options.

Home prices are on the rise.

According to NAR, the median existing-home price not only increased 6.0 percent year-over-year in October, it’s also the 56th consecutive month of year-over-year increases. Prices are approaching the pre-recession peak.

What does this mean to you? Home prices, and subsequently home values, are increasing. If you’ve been waiting to list your home until you know you can sell it for what you think it’s worth, now is a great time to do so. We’ll be happy to give you a comparative market assessment of your home and help you get your home in list-ready shape.

If you’re in the market to buy, be prepared to act.

Homes were on the market for the shortest amount of time recorded since 2009: 52 days. The increase of qualified buyers in the market along with the increasing efficiency of the real estate process means homes are selling faster than ever, and in many cases buyers are engaging in bidding wars and paying over the list price to get the home of their dreams.

What does this mean to you? The home you have your eye on one day may be gone the next. In competitive markets, be prepared to come to the table with a competitive bid.

Looking for a new home?

New-home construction will increase to an average of 1.5 million per year to 2024, according to a report from NAR. However, experts anticipate housing starts will only increase to 1.22 million in 2017, which is less than the 1.5 million new homes required to keep up with growing demand. This inventory shortage of new entry-level homes—typically purchased by first-time buyers—may drive up prices in some areas. Home builders have been focusing on multi-family construction for the last few years, but this type of construction has begun to level off providing hope that builders will once again focus on single-family home construction. However, stricter proposed immigration policies may impact new home construction and tighten inventory.

What does this mean to you? First-time and repeat home buyers agree—there are plenty of advantages of buying a new home. Whether you want a home customized to your family’s needs or you don’t want to bother with age-related maintenance, a new home has much to offer. Give us a call to discuss your options.

Affordability pressures are increasing in many markets

Housing affordability in many of the nation’s largest cities has declined over the past few years, a trend that is expected to continue in 2017. However, there is hope. NAR created the Affordability Index to measure the affordability of homes across the United States. The Affordability Index assesses whether the typical family earning the median family income can qualify for a mortgage on a typical home based on the prevailing mortgage interest rate on loans closed on existing homes from the Federal Housing Finance Board.

The NAR Affordability Index is 170.2 (composite) and 169.8 (fixed), meaning a family earning the median family income has 170.2 percent of the income necessary to buy a median-priced, single-family home. Nationally, the qualifying income is $41,616, but it varies by region. In the Northeast, the qualifying income is $45,024. In the Midwest, it’s $32,640. In the South, it’s $36,960. In the West, it’s $61,824.

What does this mean to you? If you’ve had your eye on a new home, but weren’t sure if you could afford it, you may be pleasantly surprised. We may have homes in our area that meet your needs and budget. Give us a call today to discuss your home search.

3 Things to Do Now if You Plan to Buy This Year

1. Get pre-approved for a mortgage. If you’re like most buyers who plan to finance part of the home purchase, getting pre-approved for a mortgage will allow you to put in an offer on a home and may give you an advantage over other buyers. The added bonus: you can see how much home you can afford and budget accordingly.

2. Start looking. While most buyers start their searches online, be sure to look at homes in neighborhoods you’d like to live in as well. Keep a notebook to write down what you like and dislike about each home you view in person or online. This will help you narrow down where to look and what to look for in your next home.

3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget. Give us a call to make an appointment today!

3 Things to Do Now if You Plan to Sell This Year

1. Make repairs. Most buyers want a home they can move into right away, without having to make extensive repairs. While the repairs may or may not add value, making them will give your home a competitive advantage over other similar homes on the market.

2. Get a Comparative Market Analysis (CMA). A CMA not only gives you the current market value of your home, it’ll also show how your home compares to others in the area. This will help us price your home to sell in our market. Call us for your free CMA!

3. Start packing. Help your buyers see themselves in your home by packing up items you don’t use regularly and storing them in an attic or a storage space. This will make your home easier to stage as well as make it easier to move later on. Are you thinking of buying or selling? Whether you’d like to buy or sell a home this year, want to know how much your home is worth, or have general questions about our local market, give us a call! We’d love to discuss the market with you.

8 Smart Home Technology Trends that Can Save You Money

The ‘smart home’ is the new ‘internet of things’, or objects that can serve you better by communicating with each other or directly with you through apps on your smart phone. In the ideal version of the wired future, all of our appliances and gadgets talk to each other seamlessly.

 

What could living in a smart home look like? Picture something like this:

The lights in your bedroom slowly illuminate to quietly awaken you in the morning, replacing the typical blaring alarm. The aroma of fresh brewing coffee drifts in and stirs your senses. Once the lights are all the way up, the heating system kicks on, just in time to warm up your room so you’re not shocked once you crawl out from underneath the duvet.

When you step into the shower, it turns on automatically and remembers your preferred temperature and water pressure. And it will shut off right when you’re finished as it knows how long you take to bathe.

Once you’ve driven out of your garage, your home alarm system arms itself. And it will only unlock automatically when it “sees” and recognizes someone else from your family approaching through programmed in biometrics.

Do smart homes really work this way right now? Not exactly…while you may find some of these smart features in certain homes, we haven’t reached the point where every feature intuitively knows what you want and when you wanted. However, each year we’re getting closer and closer toward that shiny, idealized ‘Jetson’ future.

Here are some trends that we see for smart homes, many of which may also help you save money:

 

Smart Thermostats

Programmable thermostats that are synchronized with the clock have been around for decades. However, they’re often difficult to set and aren’t necessarily efficient; they simply turn on or off as programmed, whether or not you are there.

With the newer models, smart thermostats can be programmed to adjust the temperature when they sense you are present. And once you leave, they can kick back to standby mode so that you’re saving energy and money. Nest does all of this, and it also allows you to check your usage from your cell phone so that you can adjust the temperature remotely and save even more.

 

Smart Smoke Detectors

Having a working, effective smoke detector saves lives. But unfortunately, many of us still have those battery-run smoke detectors that make that annoying, piercing beep when their batteries are running low on power. And instead of replacing batteries right away, it’s often easier to pull them out and disable the detector (while risking our lives).

Many of the new smart smoke detectors, like the Birdi, monitor smoke, carbon dioxide, as well as air quality. With this new sensor technology, they know the difference between a real fire and burnt toast.

 

Smart Sprinkler Control

Weather in our area is predictably unpredictable. Often, especially during the summer months, we fall into a severe drought. But then we might have one season that brings extreme amounts of rain, like we did this past spring.

A smart sprinkler controller like Rachio Iro can not only help save you lots of money on your water bill but also help protect our precious resources.

Programmable by computer or smart phone, it can automatically adjust how often you water your lawn based on the season and the weather forecasts. You can also remotely adjust the settings through a mobile app.

 

Smart Solar Panels

You can put the sun to work for you by using solar technology to power your home. It’s green and renewable, and can save you money over the long term. A recent study conducted by the NC Clean Energy Technology Center determined that Austin customers who invested in a solar system saved an average of $66 per month during the first year that they owned the system.

With smart solar panels, you can program the technology to monitor their performance and even turn them off in case of a weather emergency or fire.

 

Smart Home Security Systems

Home monitoring has become much more sophisticated in recent years. With the old-style security systems, you had to call in contractors to wire your home with monitoring sensors.

With new smart technology, you can simply place a few smart devices in your home to monitor movement and sense whether doors and windows are closed or opened. Some systems include audio and video monitoring, as well as sirens to scare off intruders. You get real-time feedback on security breaches through an app. And, because you’re alerted as soon as the system senses an intruder, it’s more likely that they will be caught.

Canary is one popular all-in-one audio-video security system, complete with sirens and night vision.

 

Smart Locks

Go beyond the standard key locks, which can often be compromised by burglars. The new smart lock systems give you more control over those who can gain access to your home.

Some systems, like the Kwikset Kevo, include encrypted virtual keys that you can program for access for a limited amount of time—for example, allowing guests over for a weekend, or cleaning service in during a specific window of time.

Other door locking systems include biometric technology. The Ola smart lock allows you to program your lock to recognize your family member’s fingerprints. Other systems use facial recognition to greet you and unlock your door.

The new August smart lock integrates with Apple’s technology so you can ask Siri to open your door for you.

 

Smart lighting systems and light bulbs

A well-lit home feels warm and welcoming, and good lighting can instantly increase the value of your home.

However, annual lighting costs can account for up to 12% of your overall electric bill, or over $200 per year according to Energy Star. You can easily reduce this expense simply by using smart lighting technology to add efficiency.

The Philips Hue wifi-enabled lights make it easy to add to your home without installing specialized equipment. Smart lighting dimmers and sensors can give you more control over how much energy you use and allow you to turn them on and off through your smart phone.

New smart light bulbs can give you control over the warmth or coolness levels of your lighting. With the Lifx LED light bulbs, for example, you can program your light bulbs to turn on or off when you want, to slowly wake you up with increasing illumination, or to change from daytime work lighting to entertainment-friendly shades for parties.

 

Smart Appliances

Programmable slow cookers and coffee makers are the quaint, old-fashioned versions of these home conveniences. Newer, smart appliances give you more control over how your food is kept and prepared, and make it easier for you to complete pesky household chores.

• Newer coffee makers, like the Smarter coffee machine, let you ‘order’ your coffee exactly to your liking, adjusting everything from bean grind to temperature to strength to time that it’s ready to drink.
• Smart refrigeration technology can help you store your food at just the right temperature, adjusting the thermostat during peak usage times. For example, the LG THINQ fridgecan alert you via smart phone app if a door is accidentally left open.
• Smart ovens can ensure that your food is cooked to the right level of done-ness, and alert you when your meal is ready to eat. June, a new counter oven invented by former Google, Apple, Go-Pro and Path employees will give you even more control—it will contain cameras, thermometers, and other technology to ‘learn’ what you like to eat and make menu suggestions.
• Smart washers and dryers have customizable controls so that you can safely wash any type of fabric. Some units include controls to increase drying time to save energy. And soon, connected appliances from GE, Oster, Samsung, and other makers, will be able to re-order soap and fabric softener directly from Amazon, so you won’t even have to think about running to the store at the last minute.

These kinds of new smart appliances can improve your quality of life at home as well as save you some cash each month, so I encourage you to check out the attached report: Cut Utility Bills by $2000 or More with Smart Home Tech.

Click Here For The PDF Guide

 

Have you tested any of these technologies in your home? Did we miss any of your favorite home technologies? Let us know in the comments!

Maybe your dream home has the intricate details that you usually find only in older construction – wainscoting and crown molding in the interior, the front porch with a swing, an older tree shading the back yard, and the white picket fence.

Or maybe your dream home has all the conveniences of modern living – open floor plan in the living and dining spaces, large windows, connected, “smart” appliances and security systems, and minimalist design elements.

Whether you go for a brand new construction or an existing home, both types of properties have their pros and cons when it comes to purchasing. What type of home is right for you will depend on which factors are most important for your lifestyle.

 

Build your dream home with new construction

If you’re making a home purchase that’s still in the pre-construction phase, you may be able to customize many of the details. Many home builders will give you the option to add design elements that will give you the exact dream home you desire. If it’s a new subdivision, you may even be able to pick which lot you like best.

Very early in the building process, you may have more room to customize. For example, if the walls aren’t complete, you may be able to add extra outlets in each of the rooms or custom wiring for surround sound in the media room. Perhaps you could move the laundry room to the top floor instead of the basement. You might be able to get a separate mudroom entrance.

Later in the building process, you may be able to add marble countertops, an island, and custom cabinets in the kitchen. Your master bathroom could be upgraded with a steam shower, spa tub, and European fixtures. You will want to check with the builder to understand which features are included, and which ones are extra.

 

New homes save money with fewer repairs and more efficiency

Once your home is complete, all you’ll need to do is move in. New appliances will be under warranty for a few years if they need repairs, and will likely work well for several years without needing fixes. Often, new construction is under a builder’s warranty, so any repairs needed in the first year should be covered.

New homes often contain energy efficient and green appliances, like high-efficiency stoves, refrigerators, washing machines, heaters, or air conditioning units. These energy-saving appliances, along with good insulation and energy-efficient windows, will help you save money on monthly utility bills.

New homes also often use new building materials that require less maintenance — for example, using composite siding instead of wood, which doesn’t need annual repainting. You won’t need to spend as much to maintain your new home.

If you customized it during pre-construction, you won’t need to spend any money on renovations or upgrades for several more years. You can just enjoy it and not worry about saving for major home repairs.

 

What you need to do to make a good new home purchase

Before you put in your offer, do some research on the builder. Do they have a good reputation? What else have they built? Did their other new properties have issues such as poor construction or unfinished details?

You like the model home, but will you like where it’s situated? After you look at the home itself, come back to the neighborhood to see what it’s like at different times of the day. Walk around during the day and in the evening, and see how you like the area.

Brand new communities usually attract similar types of buyers—urban professionals, couples, or young families, for example. These will be your neighbors, so you’ll want to make sure that you want to be part of this new, homogeneous community.

You may also need to be flexible with your move-in date. Builders will only be able to let you move in if they can meet their construction schedule. If the wiring is delayed, the walls can’t be finished. And because there are so many construction tasks that are dependent on the completion of prior tasks, schedules tend to slip.

 

Get more variety and established neighborhoods with an existing home

Existing homes are those that have generally been built and lived in between the 1920’s and 1970’s. With existing homes, you will get more variety in home styles, as different types of construction have gone in and out of style throughout the decades. Within one neighborhood, you may be able to find a mix of different styles like Victorian, modern Tudor cottages, tract style, ranch or split-ranch, or contemporary homes.

Existing homes are situated in established neighborhoods, which may have more amenities nearby that a new home in a brand new subdivision may not have. Your new neighborhood may have restaurants, cafes, and boutiques within walking distance.

You might also have access to more supermarkets, dry cleaners, discount stores, and gas stations nearby. An established neighborhood might have a nice park, running path, or playground for the kids to enjoy. You might also be closer to a library or the post office.

 

Resale homes can be a less expensive purchase

If you’re considering a resale home, you may be able to get into a beautiful, unique property at a lower purchase price than a new home.

There are many more resale homes available than there are new homes — according to the National Association of Homebuilders, about 10 times as many. With such a large pool to buy from, the market for resales can be more competitive. You may have more room to negotiate the  selling price of the home. With a brand-new construction, you won’t likely be able to have the same kind of negotiating power.

Before putting a home on the market, sellers often make home renovations or remodel parts of their homes to make them more attractive to buyers and to be able to potentially increase the list price. If the resale home has a brand new, modern kitchen, an updated bathroom, or even a new roof or upgraded windows, you could end up getting a home that’s comparable to new construction without having to pay the potential more expensive new-home list price.

Existing homes have already been inspected at least once on the last sale, so you will know about any potential structural problems or repairs that have been made on the home. Knowing the track record on your potential home will help you avoid purchase mistakes—you’re much less likely to end up with a property that has a rotting roof, dangerous electrical wiring, or a crumbling foundation. With a new home, you could end up with incomplete construction or major issues that you didn’t know about because they weren’t yet documented.

 

What you need to do to make a good resale purchase

Before you go too far down the road to a purchase, you can protect your purchase by first having the home inspected. A good home inspector will document all flaws, no matter how small they appear. If the inspector finds any major problems, like foundation cracks or leaky roofs, you may be able to counter offer and get the seller to either fix it or reduce the selling price.

Even if the inspection doesn’t uncover any major issues, you will need to expect the unexpected. Older homes will eventually need replacement appliances, a new air conditioning unit, or a plumbing repair. As long as you know that before you buy a resale home, you can plan for surprise repairs.

With an older home, you may want to eventually remodel parts of it. Will you be happy living in your house while you’re doing major work on the living room or the kitchen? If you know that it would disrupt your lifestyle too much, you may want to consider whether you really want to buy an older property.

Whether you choose to buy a new home or an existing home, the best way to get started is to speak with your trusted real estate professional. We will have access to both new properties and resale homes that may fit your goals, and will know which neighborhoods will serve your needs.

 

Click Here For The PDF Guide

 

Okay, you made one of the most important decisions in your life: you’re buying a home! You found your ideal home. It’s in your desired neighborhood, close to everything you love, you dig its design and feel, and you’re ready to finalize the deal.

But, whoa … wait a minute! Buying a home isn’t like buying a toaster. If you discover something’s wrong with your new home, you can’t return it for a refund or an even exchange. You’re stuck with your buying decision. Purchasing a home is an important investment and should be treated as such. Therefore, before finalizing anything, your “ideal” home needs an inspection to protect you from throwing your hard-earned money into a money pit.

A home inspection is a professional visual examination of the home’s roof, plumbing, heating and cooling system, electrical systems, and foundation.

There are really two types of home of inspections. There is a general home inspection and a specialized inspection. Most general inspections cost between $267 and $370. The cost of the specialized inspection varies from type to type. If the inspector recommends a specialized inspection, take that advice because buying a home is the single most important investment you’ll make and you want extra assurance that you’re making a wise investment.

By having your prospective new home inspected, you can:

• Negotiate with the home seller and get the home sale-ready at no cost to you
• Prevent your insurance rates from rising
• Opt-out of the purchase before you make a costly mistake
• Save money in the short and long run

How Much Money Can a Home Inspection Save You?

A home inspection helps to find potential expenses beyond the sales price, which puts homebuyers in a powerful position for negotiation. If there are any issues discovered during the home inspection, buyers can stipulate that the sellers either repair them before closing or help cover the costs in some other way. If the sellers do not want to front the money to complete the repairs, buyers could negotiate a drop in the overall sales price of the home!

Perhaps even more importantly, a home inspection buys you peace of mind. Your first days and months in a new home will set the tone for your life there, and you don’t want to taint that time with worries about hidden problems and potential money pits.

To help you understand how much money a home inspection can save you, here are some numbers from HomeAdvisor to drive the point home … so to speak.

Roof – Roofing problems are one of the most common issues found by home inspections. Roof repair can range between $316 and $1046, but to replace a roof entirely can cost between $4,660 and $8,950.

Plumbing – Don’t underestimate the plumbing. Small leaks can cause damage that costs between $1,041 and $3,488 to repair. Your home inspector will look for visible problems with the plumbing such as leaky faucets, water stains around sinks and the shower, and noisy pipes. Stains on walls, ceilings, and warped floors show plumbing problems.

Heating and Cooling – Ensuring the home’s heating and cooling system is working properly is very important. Your home inspector will make you aware of any problems with the existing system and let know you whether the system is past its prime and needs replacing. You don’t want to throw down $3,919 to replace an aged furnace. Nor do you want to spend $5,238 replacing an ill-working air conditioner. Replacing and repairing a water heater gets pricey too. Wouldn’t you rather use your savings for a vacation?

Electrical Systems – When thinking of the electrical system, no problem is better than even a small problem. Electrical problems might seem small, but they can blossom into thousand-dollar catastrophes. Make sure your home inspector examines the electric meter, wires, circuit breaker, switches, and the GCFI outlets and electrical outlets.

Foundation – If your home inspector sees that the house is sinking, that means water is seeping into the foundation; cracks in walls, sticking windows, and sagging floor also indicate foundational problems. The foundation is so important that if the general inspection report shows foundation problems, lenders will not lend money on the home until those issues are solved. Foundation repairs can reach as high as $5,880 to repair.

As you can see, a small investment of a few hundred dollars for a general home inspection can save you tons of money and future headaches. To save even more money, you might consider investing in a specialized home inspection as well. A specialized inspection gets down to the nitty-gritty of all the trouble spots the general home inspection might have located.

How Much Money Can a Specialized Inspection Save You?

A general home inspection can trigger a need for a specialized inspection because the general home inspector spotted something off about the roof, sewer system, the heating and cooling system, and the foundation. If humidity is high where you’re buying your home, a pest inspection is recommended. Usually, a pest inspection will check for mold as well as pests. Most homebuyers have a Radon test done to ensure air quality.

Roof – Roof specialists examine the chimney and the flashing surrounding it. They also look at the level of wear and tear of the roof. They can tell you how long the roof will last before a new one is needed. They’ll inspect the downspouts and gutters. The average cost of a roof inspection is about $223. Most roof inspections will cost between $121 and $324.

Sewer System – Making sure your sewer system has no problems should happen before the closing because what might look like a small problem can turn into a large problem in the future. If any issues pop up, you can negotiate with the seller about needed repairs or replacements before closing. Cost of inspection will vary; on the low side, it might cost you around $95, and on the high side, it might cost you $790. Compare these numbers to repairing a septic tank, which can cost, on average, $1,435 (though it could reach as high as $4,459), and you can see that the cost of an inspection is worth it when you catch the problem before you buy.

Heating and Cooling System – A HVAC specialist will check the ducts for blockage and for consistent maintenance of the unit. The repairs needed might be small or they might be big, but this small investment will save you headaches and lots of money down the road.

Foundation – A foundation specialist will pinpoint the exact problem with the foundation. The specialist will look at the grade or slope of the home. The ground should slope away from the home in all directions a half inch per foot. Most homeowners have spent between $1,763 and $5,880 to repair their foundation. And the average cost to re-slope a lawn is at $1,705. Most homeowners paid between $933 and $2,558 to re-slope their lawn.

Pest Inspection – Termites eat a home’s wood structure from inside out and can cause thousands of dollars worth of damage to your home. Other pests can turn your dream home into a nightmare. Depending on the humidity of where you live, you should a pest/termite inspection every two years or so. You can start with your potential new home. Most inspections are extensive and cost between $109 and $281. The good news is that most pest management company will guarantee the past inspection if bugs show up.

Radon Test – Radon is a naturally occurring invisible odorless gas that is the second leading cause of cancer. A radon test is a good test to have done as a good habit. The cost of radon test is low and its cost varies from state to state. Here’s more information about Radon.

Steps You Can Take to Save Money Using a Home Inspection

To help yourself save with a home inspection, you will need to:

Attend the inspection – Attending the inspection is important because it’s an opportunity for you to ask questions.

Check utilities – Checking utilities let’s know the energy efficiency of your potential home.

Hire a Qualified Home Inspector – We can recommend bona-fide home inspectors to you. You can compare our recommendation with all inspectors who belong to the American Society of Home Inspectors. While the decision of who you work with is always yours, we can educate you so that you make a wise homebuying decision.

Click Here For The PDF Guide

 

 

 

Several years ago my wife and I embarked on the journey of becoming homeowners and during the process we visited many, many, many open houses and I don’t about you but my tolerance is viewing about 5 homes after that I’m mentally drained, tired, hungry, grumpy, and overwhelmed .  Now fast forward… to today as a Realtor that sells homes and has hosted many, many, many open houses I see the face of potential buyers coming through with that drained, tired, hungry, and grumpy look. So to help with giving you a better experience when going to open houses here are some tips that you will find helpful.

Tips for a better open house viewing experience:

1. Eat before going to view open houses and try eating foods that will help to give you energy all day. By having a meal before viewing homes it’ll help to keep your mind alert to help process information faster and ask the right questions. Here in Silicon Valley you’ll easily be spending over $500,000 for a home so you want to make sure your are prepared in any way that will give you an edge when it comes to buying a home.  Here’s some great info on energy foods that can help.
2. Preparing and having a game plan will help. Research the homes you want to see and plan the route so that your’e not going from one end of town to the other end then back again. Believe me i’ve witnessed this many times.
3. Prepare a list of questions to ask the listing agent this will help you stay focused and this will able to get you in and get out quickly, unless you really love the home then you may end up staying longer. If you need help with what questions to ask here’s three easy questions to get you started.
   • Why does the seller need to sell? (Gives you an idea on the seller’s motivation)
   • What is the seller’s time frame to sell? (If the seller has to sell quickly this may give you an advantage when putting in an offer)
   • Are there any offers on-hand? (This will give you an idea if there is stiff competition for the home)
   • Here are 20 proven questions that will guarantee you, to learn more about a home than the average buyer.
4. Make it a point to get your exercise in before. This will help to  boost your energy throughout the day due to the release of endorphins.
5. Pack yourself a snack bag and bring water. This can be used as a grumpy emergency kit if you are still get hungry.
6. Bring a note pad and as you visit a home use it to make notes on what you like and don’t like about the home. What really helps my clients is for them to give the home a rating “1” being the worst and “10” being the “I must get this home”. This will really help you from becoming overwhelmed and will give you a systematic approach to choosing the best home when it comes to putting in an offer.

I do hope that these tips will help prepare you with a better open house viewing experience and this is just one of the many tips that are out there if you happen to have any want to share please do so. Happy house hunting and if you happen to come through to one of the open houses that I’m hosting please say hello.