Chances of a March rate hike are on the rise, along with inflation and home prices. Check it out. It will only take a minute!
Six easy steps to find out.
1. Calculate your gross monthly income (the amount you make before deductions). Add your spouse’s gross monthly income, if any.
2. Multiply the income amount by 36% (.36). This is called the debt ratio.
3. Then subtract long-term monthly debts (more than 10 months), such as car loan payments, personal loans, alimony, child support, or regular payments toward a credit card balance. This is the generally-accepted standard lenders use to determine what borrowers can afford, after a down payment of 10%. Some lenders and mortgage plans apply more or less strict factors, such as 33% with a 5% down payment or 38% with a 20% down payment.
4. Also, many lenders calculate a housing ratio of 28% times gross monthly income. The result does not take into account long-term monthly debts. To qualify for a mortgage, lenders may require ratios of, say 28/36. The first number means the maximum mortgage payment you qualify for could be up to 28% of gross income (.28); the second number means the maximum mortgage payment plus monthly debts could be up to 36% of gross income (.36).
5. Take a “guesstimate” of average annual real estate taxes in your area, plus the annual cost of homeowner’s insurance. Divide by 12 to obtain a monthly figure. (On average, the monthly cost of these two items might be about one-tenth of 1% of the home purchase price. Ask us about your specific situation.)
6. Deduct the monthly taxes and insurance cost from both figures you arrived at in Steps 3 and 4. The result is the ballpark monthly payment on principal and interest you can afford to pay on a mortgage.
Eight Cool Tips for Buying Your Dream Home Today
So you’ve finally decided to buy your next home. The problem is that while you were making your decisions, others jumped into the real estate market, too. Now you may be facing some competition for the best properties.
Just because there are other buyers in the market doesn’t mean you can’t secure your dream home. To be a successful buyer in today’s real estate market, though, you will need some help.
Your should first acquaint yourself with a few insider tips. As experienced real estate professionals, we Bizzy Blondes have many ways to help you secure the perfect place to call home. The following proven tips will increase your market savvy and sharpen your competitive position. Then you’ll be ready to act quickly the when you see your dream home.
1. Get Pre-Approved.
· Get pre-approved for a mortgage loan right away. This entails a mini-application process (paperwork, credit check, etc.). Note that pre-approval is more effective than pre-qualification, which only gives you a rough idea of the amount a lender will lend you – assuming no issues in the credit and income-checking process. When you are pre-approved, your finances are certain, which is desirable to any seller. You have a significant advantage over another buyer whose financing is uncertain.
2. Beat The Competition To New Listings.
· Once we know your specific price range and tastes, we can keep you abreast of new listings. We’ll contact you about properties that meet your criteria as they become available. When possible, we’ll put you ahead of other buyers and on the inside track before the new listings are advertised or held open. Timing can be everything.
3. Do Your Research.
· Make yourself a value expert by researching local properties for price points, listing-to-sales price ratios, hottest areas, and best places for a bargain. Once you know what your money will buy, our Buyer Specialists will add the latest data on what comparable properties sell for in specific neighborhoods and what features influence price. Together we’ll guarantee you the best price and terms.
4. We Can Present Your Offer In Person.
· Nobody wants their offer to languish in the listing agent’s office while other buyers are submitting offers. When the situation calls for that personal touch, you’ll gain an advantage by having us present your offer in person. Plus, we may pick up critical information on possible competing offers.
5. Prove You Mean Business.
· There are few better ways to show you are serious about buying a property than including a good faith deposit along with your offer. A competitive deposit could be as much as 5% of your bid price, which will be sure to gets the seller’s attention.
6. Keep It Simple and Clean.
○ Make sure your contract isn’t messy or overly cluttered with unnecessary contingencies, especially repairs. Keep contingencies to a minimum. Better yet, offer to be helpful. Simple examples include ordering an inspection in 48 hours or being willing to take care of any required local certificates such as smoke detectors or water safety. Be flexible. A buyer who will accommodate a seller’s needs is a smart buyer.
7. Enlist the Help of a Team.
· When you work with the Bizzy Blondes, you have our whole team behind you, as opposed to just one single agent. What you need most in today’s market is experienced professional guidance. As your seasoned real estate specialists, we can help you get pre-approved, find the ideal property, and negotiate the best deal on your next home no matter what the competition. Call us today.
TIRED OF PAYING FOR YOUR LANDLORD’S MORTGAGE?
The only one who benefits financially from a rent check is the landlord. Renters never see their monthly payments again, and they can’t use any of that money as a tax deduction. Home buyers, on the other hand, spend part of their monthly payments buying an asset they can eventually sell. The remainder of their monthly outlay pays interest to their lender, which is fully tax deductible in most cases.
If you are currently renting—or you’re moving and debating whether to rent or buy—take a look at how your housing payment could be put to better use purchasing a home. The real question may be whether you can afford not to buy your own home.
Stabilize Housing Costs
As a renter, you may be subject to a rent increase each time your lease period expires. You can end up paying more every year for a place to live with no limit and no financial return.
Homeowners who secure a fixed-rate mortgage, however, can expect the same monthly principal and interest (P&I) payments as long as they own their home. Even with an adjustable-rate mortgage, payments could increase if interest rates rise, but the increases would be capped to a maximum amount for each adjustment and over the life of the loan. (Will your landlord limit rent increases?)
Whether buying with a fixed-rate or an adjustable-rate mortgage, when the loan is paid off, homeowners enjoy a place to live with no required housing payment except, perhaps, for real estate taxes.
Add Up Tax Savings
While holding housing costs constant, most homeowners can also take an annual tax deduction for mortgage-interest expenses. The tax savings alone make the purchase of a home a wise financial decision for most people.
Since your payment schedule is amortized, you pay the same amount every month in the early years of your loan. Most of each payment during this period will go toward paying interest, with only a small portion paying off principal (the loan amount). Still, every month you will pay less than the previous month toward interest and more toward principal. As your interest expenses decrease over time, so will your annual tax savings, and your equity (owned value) in the home will increase.
Most homeowners eventually sell their homes. When they do, they can take advantage of a terrific tax break—a capital gains tax exclusion—that renters can’t reap on other types of investments. If you sell a primary residence you have owned and live in for two of the previous five years, you can keep profits up to $500,000 (filing jointly) or $250,000 (filing single) tax free. (Some exceptions apply. Ask your tax professional.) That makes owning a home an even better investment.
The biggest impediment to homeownership for many renters is the down payment. Remember, however, when you rent a place to live, you normally have to pay a security deposit and both the first and last month’s rent in advance (most likely). If you have pets, you may have to pay an additional deposit for them as well. Instead, you can be put that money toward a down payment on your own home, combining it with other cash assets—savings, liquidated investments, gifts from parents, a loan from your retirement plan, or other sources.
Borrowers with good credit are often surprised at how little cash it takes to buy a home today thanks to a competitive mortgage industry and local/state sponsored programs that encourage homeownership. Call us to find out more.
Of course, homeowners do have some expenses that renters don’t: real estate taxes, home maintenance and repairs, homeowner’s insurance, buying and selling costs, and perhaps homeowner association dues. These expenses can vary considerably depending on where the home is located, what type of property it is (single-family, townhouse, condo), the age and condition of the property when purchased, and how long the owner keeps it.
The benefits of owning a home can vary just as costs do, depending on the type of loan you select, current interest rates, your tax bracket, local property appreciation rates, and how long you retain ownership of the home. Those are just the financial considerations. Homeowners also experience many less tangible but very real benefits compared to renters. Examples may include more freedom of lifestyle, pride of ownership, a greater sense of stability and security, closer neighborhood friendships, and more community involvement, just to name a few.
Talk With the Pros
As real estate professionals, we at the Bizzy Blondes can supply you with the most current local market data and information you will need to make a sound decision about buying versus renting. We can help you determine how much home you can afford and what type of loan would best meet your needs. We would also be happy to show you available properties that match your preferences and budget. Even if you’re not quite ready to buy right now, we can alert you when homes that fit your criteria become available in the future.
Nine Buyer Traps and How to Avoid Them
No matter which way you look at it, buying a home is a major investment. For many home buyers, it can be an even more expensive process than it needs to be. Common mistakes can cause buyers to:
● Pay too much for the home they want,
● Lose their dream home to another buyer, or
● Buy the wrong home for their needs
A systemized approach to the home buying process can help you avoid common mistakes, allowing you to cut costs and secure the home that’s best for you. This important report discusses the nine most common and costly homebuyer traps and how to avoid them.
SEVEN BUYER TRAPS
1 - Bidding Blind: What price should you offer when you bid on a home? Is the seller’s asking price too high or does it represent a great deal? If you fail to research the market in order to understand what comparable homes are selling for, making an offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much or fail to make a competitive offer. Our Bizzy Blondes Buyer Specialists will research all the facts and figures so you can make the best decision as to what to pay for the property.
2 - Buying the Wrong Home: What are you looking for in a home? This is a simple enough question, but the answer can be quite complex. Buyers can get so caught up in the emotion and excitement of the buying process that they sometimes find they own a home that is too big, too small, or not quite right. Maybe they’re stuck with a longer-than-desired commute to work or more repairs than they really wanted to manage. Our Buyer Specialists will take the time upfront to clearly define your requirements.
3 - Proper Terms in Your Offer: The purchase contract is a long and laborious document. Our Buyer Specialists will navigate you through the offer process and explain all the clauses to make sure you are protected and have every advantage.
4 - Undisclosed Repairs: Don’t expect the seller to make every last repair. Both you and the seller are trying to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Hire an independent inspector to objectively view the home inside and out, and then review this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed and the approximate costs. Unless you are buying a brand new house, the seller is not legally obligated to make any repairs. Major structural concerns can be fairly negotiated. Don’t let minor repairs scare you away from a good property.
5 - Not Getting Mortgage Pre-Approval: Pre-approval is fast, easy, and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams. At Bizzy Blondes we can recommend several trustworthy mortgage sources.
6 - Contract Misses: If a seller fails to comply with the contract by neglecting to attend to some repair issues or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Agree ahead of time on a dollar amount to cover any items that the seller agreed to fix and fails to attend to. Prepare a list of agreed-upon issues, go through them, and check them off one by one.
7 - Hidden Costs: Make sure you identify and uncover all costs (large and small) far enough ahead of time. When a transaction closes, you will sometimes find fees sneaking through after the subtotal - fees such as loan disbursement charges, underwriting fees, etc. Understand these in advance by having your lender and escrow company project total charges for you in writing.
1. Know your local market: Nothing will affect the outcome of your home sale more directly than its price. In order to determine an appropriate price, you've got to familiarize yourself with the local real estate market. Sellers should do everything they can to understand the pulse of their local market. Working with Bizzy Blondes, we will give you a proper understanding of market conditions. How much are homes in your area selling for? How long are they staying on the market? This is where a real estate agent with experience in your local market can be of enormous help.
2. Price aggressively: Once you've got a handle on local market conditions, it's time to price the property. In so doing, be aware that today's buyers are seeking value. By pricing the house properly, you will get offers quickly and sell for an optimal price.
3. Be prepared to pay a reasonable commission: It’s not how much you pay. It’s how much you keep. The best buyers are usually working with the best agents, and the best agents will be reluctant to show a home with a discounted commission. Be sure every broker in town wants to bring buyers to your listing. Don’t be penny wise and pound foolish.
4. Take care of major repairs ahead of time: If your home needs plumbing, heating or roof repairs, get them done prior to putting it on the market. When your buyers hire a home inspector and hear about a plumbing leak under the house, they may imagine thousands of dollars in costs when you can possibly do the repair for a few hundred dollars. You can lose a sale over the simplest things after a home inspection.
5. Dress the outside: Would-be buyers won't want to see the inside of your home if the outside isn't appealing. Sellers need to make sure their property projects a warm and inviting feeling. Buyers may make an instant decision to purchase a home based on its perceived condition when they first walk up to the house. Repaint the front door, trim the hedges, and mow the lawn to make a great first impression.
6. Let it shine: Sellers need to be mindful of keeping their home clean and neat throughout the selling process. You only get one chance to make a first impression.
7. Make it bigger inside: Sellers need to make sure the home's interior is immaculately clean and uncluttered whenever it's being shown to potential buyers. Sellers should also remove all family photos from the walls in order to make it easier for buyers to envision themselves living there. At the same time, sellers can make their home appear larger by removing certain pieces of furniture. We at the Bizzy Blondes are experienced in home staging, and we also work with several professional staging experts.
8. Be flexible: In understanding the current market dynamics, sellers should be prepared to entertain all bids—even those they consider too low— as many buyers might start low in the offering process. Remember, it’s not about where the offer starts. It’s about where it ends. Respond to all offers.
9. Be professional: Although it can be difficult to do, property owners should remember that above all, selling one's home is a business transaction. Some sellers will tell us, "I know your analysis is lower, but this is my house, and my house is special.” Unfortunately, every seller has that feeling. Sellers need to do their best to emotionally detach themselves from the property.
How to Prepare Your House for Sale
Disassociate Yourself with Your Home.
● Say to yourself: "This is not my home; it is just a house. It is a product to be sold.”
● Make the decision to let go of your emotions and focus on the fact that soon this house will no longer be yours.
● Picture yourself handing the keys to the new owners.
● Say goodbye to every room.
● Don't look back. Look toward the future.
Pack up those personal photographs and family heirlooms. Buyers can't see past your personal possessions, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there. You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."
It’s easy to accumulate possessions. Consider this: if you haven't used it in over a year, you probably don't need it.
● If you don't need it, why not donate it, throw it away, or find a new home for it?
● Remove almost all but a few books from bookcases.
● Pack up those knickknacks.
● Clean off everything on kitchen counters.
● Put essential items used daily in a small box that can be stored in a closet when not in use.
● Think of this process as a head-start on the packing you will eventually need to do anyway.
Rearrange Bedroom Closets and Kitchen Cabinets.
Buyers love to snoop and will open closet and cabinet doors. Think of the positive message it sends if everything in your home is organized. Buyers will think you take good care of the house.
● Neatly stack dishes.
● Turn coffee cup handles facing the same way.
● Hang shirts together, buttoned, and facing the same direction.
● Line up shoes.
● Tidy, organize, and clear-out medicine cabinets.
Rent a Storage Unit.
Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways. Put them in storage. Since your bookcases are now empty, we suggest you store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose with plenty of room to move around.
Remove/Replace Favorite Items.
If you want to take with you window coverings, built-in appliances, or fixtures, remove them now. If the chandelier in the dining room once belonged to your great grandmother and you wish to keep it, take it down now, and replace it with another light fixture. If buyers never see these items, they won't want them. Once you tell buyers they can't have an item, it can potentially put a halt to your sale. Pack these items and replace them if necessary.
Make Minor Repairs.
● Replace cracked floor or counter tiles.
● Patch holes in walls.
● Fix leaky faucets.
● Fix doors that don't close properly and kitchen drawers that jam.
● Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls. (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
● Replace burned-out light bulbs.
● If you've considered replacing a worn bedspread, do so now!
Make the House Sparkle!
● Wash windows inside and out.
● Rent a pressure washer and spray down sidewalks and exterior.
● Clean out cobwebs.
● Re-caulk tubs, showers and sinks.
● Polish chrome faucets and mirrors.
● Clean out the refrigerator.
● Vacuum daily.
● Wax floors.
● Dust furniture, ceiling fan blades and light fixtures.
● Bleach dingy grout.
● Replace worn rugs.
● Hang up fresh towels.
● Bathroom towels look great fastened with ribbon and bows.
● Clean and air out any musty smelling areas. Odors are a no-no.
● View your house from outside. Do you want to go inside? Does the house welcome you?
● Linger in the doorway of every single room and imagine how your house will look to a buyer.
● Examine carefully how furniture is arranged and move pieces around until optimally placed.
● Make sure window coverings hang level.
● Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
● Does it look like somebody lives in this house?
Check Curb Appeal.
If buyers dislike like the exterior of your home, you'll never get them inside.
● Keep the sidewalks cleared.
● Mow the lawn.
● Paint faded window trim.
● Plant yellow flowers or group flower pots together. (Yellow evokes a buying emotion. Marigolds are inexpensive.)
● Trim your bushes.
● Make sure visitors can clearly read your house number.
Don't Put Your Home on the Market Until You've Read This...
The 10 Common Mistakes that Cost Home Sellers Thousands of Dollars!
The difference between a profitable, smooth transaction and an awful experience is often a fine line. The majority of home-selling nightmares are caused by a lack of knowledge. The following information will make you aware of 10 common mistakes to avoid.
1. IMPROPER PRICING - Pricing is critical. Set the price too high and it will sit unsold. The home can develop the identity of a problem property, with the accompanying stigma of what real estate agents call a "stale listing." The goal is to set the appropriate price, which involves the evaluation of numerous factors your Bizzy Blondes team can help you with today.
2. NOT PROVIDING EASY ACCESS - Accessibility is a major factor in achieving a successful sale. The more accessible your home, the more showings, and the better the odds are of finding a person willing to pay top dollar. In today's competitive market, buyers who can't get a viewing will move on to other homes and purchase elsewhere.
3. BAD HOUSEKEEPING - The prospective home buyer’s first impression is the most important. An incredible number of home sales have been lost to unmowed lawns, cluttered rooms, unsightly stains, dirty kitchens and bathrooms, unpleasant odors, etc. Imagine you are the buyer, and clean your home from top to bottom.
4. FAILURE TO MAKE REPAIRS - Often, even minor improvements will yield as much as three to five times the repair cost at the time of sale. There are thousands of homes for sale, and buyers buy what they see. Seemingly small repairs can make the difference between a closed sale at top dollar and a home that languishes on the market for months on end.
5. POOR SHOWING TECHNIQUES - Your home should be neat and clean, but that's just the beginning. There are lots of details that make a big difference. Knowing exactly what to say and do when buyers come through your home is crucial.
6. RELYING ONLY ON TRADITIONAL SALES METHODS - Sellers who are innovative and willing to offer new strategies of attracting homebuyers will always outperform those who rely on traditional methods. Today’s market demands around-the-clock advertising exposure and response-generating marketing techniques.
7. MAKING SELLING DECISIONS BASED ON EMOTION - Selling your home is a business transaction. Don't let your emotional ties to your home affect your judgment. Remember, purchasers are not buying your home, they are buying a house to make their home.
8. FAILURE TO UNDERSTAND MARKET CONDITIONS - Just like the stock market, there are current real estate market conditions that are determined by supply and demand. Many buyers shop dozens of homes and compare values, so it is very difficult to find a buyer willing to pay more than current market value. No single person, firm, or agent has any control over the market. That being said, our years of experience will provide you with proper strategy to get top dollar.
9. WASTING TIME WITH UNQUALIFIED PROSPECTS - Countless hours of valuable time can be wasted showing and negotiating with prospects who can't buy no matter how much they love your house. Buyers should be pre-approved for a loan before you begin dealing with them.
10. PICKING THE WRONG REAL ESTATE AGENT - The vast majority of all homes are sold by real estate agents, but all agents are not the same. The agent's experience, knowledge, and marketing plan can have an enormous impact on your success. Joining forces with the right agent can make all the difference in the world.
Make wise decisions. Having the right knowledge and guidance is of paramount importance in achieving a successful real estate transaction.