Buying A Brand New House? Keep these 7 Tips in Mind

Many homebuyers prefer to buy a newly built home over a pre-existing home. This is because newly built homes are typically built using more eco-friendly materials and energy-efficient systems, and are equipped with more up-to-date features. It’s perfectly reasonable to want a newly built home for these reasons; just be sure to use these seven tips to avoid making costly mistakes:

1. Avoid developments that haven’t been completed Many newly built homes are being sold in developments that aren’t finished yet. Buying a newly built home in a half-finished development is a gamble. What happens if the rest of the development is never completed? Then you’ll be stuck in an unfinished community with a house that may be unsellable. You may be able to obtain a better deal by buying a newly built house in a half-finished development, but be aware that you are taking a risk.

2. Don’t assume that your house will look like the model

If you are thinking about buying a newly built home, then you’ll typically be shown a model instead of the actual house you would be buying. Be aware that the model is decorated in a way to make it look more appealing. Model homes are also presented in a way to make them seem bigger than they are, often by removing the doors to make the house feel more spacious as well as using smaller-sized furniture to make the rooms look bigger.

3. Don’t go overboard with the upgrades You’ll be able to choose different upgrades for your home. One of the benefits of purchasing a newly built house is that it’s often customizable. For example, you may be able to upgrade the kitchen with higher-end appliances. It can be easy to lose sight of your budget when considering the upgrades that are available, so be careful.

4. Get a completion clause in your contract If the contract doesn’t have a completion clause, then you could end up waiting months or even years for the house to be finished — and you would still be contractually obligated to buy the house once it is completed. Have a completion clause inserted into your contract stating when the house will be finished, so that you can make sure it coincides with your schedule and your needs. In addition to having a completion clause, have a refund-of-deposit clause or a cancellation clause added so that you can walk away without losing a cent if the house isn’t completed on time.

5. Check out the neighborhood carefully If you are buying a newly built home, you may be able to choose the lot and location of the house before construction begins. Consider important factors like the views that your house will have. Will the house be built right next to another house, reducing the privacy and eliminating some of your view?

6. Speak with other homeowners If there are other newly built homes in the neighborhood that are already occupied, go speak to the owners. Ask them if they are happy with their home and their neighborhood. Ask about any drawbacks they may have experienced and whether they have any advice for you. They have nothing to gain by not being honest, which means you can get valuable information about the homes and the neighborhood by speaking to current owners.

7. Get a home inspection When it comes to existing homes, waiving a home inspection is practically unheard of. Nobody wants to risk buying a house that could potentially be in need of costly repairs. However, with newly built homes, many buyers make the mistake of thinking a home inspection isn’t necessary. If it’s new, then how could there be anything wrong with it? This line of thinking is a huge mistake and not worth the couple hundred dollars you would save from waiving a home inspection. In fact, you might even want to hire someone to inspect the house as it’s being built. This will allow you to identify poor construction as well as other potential problems that you might have to deal with when the house is completed. There are a lot of benefits to buying a newly built house instead of a pre-existing house. However, there are a number of pitfalls that you’ll want to avoid if you decide that a new house is what you want. Use these tips to make sure you don’t end up making a costly mistake.

Source: Ballen Network 04282016

One More Time… You Do Not Need 20% Down To Buy NOW

 

A survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less. Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO Scores

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower. The average conventional loan closed in March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The chart below shows the distribution of FICO Scores for loans approved in March.

 Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, sit down with a professional who can help you understand your true options.

Source: Keeping Current Matters / The KCM Crew / 04262016

If You Are Thinking of Selling, Now Is The Time

If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market. Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:

“Would-be buyers face a dilemma: There will be more homes on the market over each week of the next three to four months, but there will also be even more prospective buyers. We are entering the busiest season of home buying with the lowest amount of inventory in three years. To be competitive, buyers should get pre-approved for a mortgage and be ready to act quickly if they find a home that meets their needs.”

Smoke goes on to say:

“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster. So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

Source: Keeping Current Matters / The KCM Crew 04182016

HOW TO CHANGE A ZESTIMATE

Location is the key factor in how Zillow determines a Zestimate. Changing a Zestimate requires editing your home facts. Often a cul-de-sac or a large plot goes undervalued because of the school district, zip code, or city the property is located in. Understand that a Zestimate is a changing estimate of a home’s value.

Farms in the Philadelphia suburbs are a rarity. This makes Zillow’s Zestimate a challenging thing to do. Every home owner should value their property according to their own wishes. You can make a lot of money when selling your house.

The algorithm that Zillow uses to determine a houses Zestimate doesn’t always narrow down a specific properties exact location. Zestimates rather perceive a home’s value according to Zillow’s proven algorithm.

So, how accurate is a Zestimate?

Nationally, the Zestimate has a median error rate of 7.9% according to Zillow.com. If a home was for sale for $500,000 the Zestimate range would be $539,500 – $460,500. If a home was for sale for $100,000 the Zestimate range would be $107,900 – $92,100. A Zestimate could value a property at $921,000 and the house could be worth 1 million dollars.

Talk to a real estate agent or an appraiser to get another estimate for a houses value. Zestimate’s aren’t always accurate.

 

Source: Realty Times | Nathaniel Wenger 04132016

COOL HOUSES THAT USED TO BE OTHER THINGS

A traditional home just not doing it for you? The loft frenzy -- especially when those lofts were being converted from old factories and warehouses connected with homebuyers in part because they offered the opportunity to do things a little bit differently. Namely, without walls and, in some case, real ceilings. But these structures go well beyond converted lofts. "Warehouses, factories, barns, and churches are commonly repurposed into residences, but for the adventurous buyer with a budget for renovation, no structure is off limits as a potential home," said CNBC. Indeed. If the idea of living in something that never had any intention of being an abode, of bending its will to become shelter while still keeping its unique characteristics, check out these cool homes. There's nothing new about factories that have been converted to lofts. But we love how this one still has the industrial structure in place.

BUZZBUZZHOME Ever look around the bank while waiting in line to speak to the teller and think, "This would make an amazing home!"? Cathy Calhoun did. After the Spring City, Pennsylvania bank she once worked in closed, "She bought the vacant building in 1989 for $52,000 with plans to renovate it and live there," said HGTV.

HGTV "The once-grungy basement vault -- where she admits she once feared to go -- has been transformed into a luxurious sauna -- keeping the original vault door intact, of course."

HGTV If you're looking for some height and don't mind climbing stairs and living in a narrow space, perhaps an old water tower, like this one in the Netherlands, is for you. "This 1931 water tower was converted in 2002 into a nine-level modern private home using steel, concrete and glass, including a three-story window," said CNBC. Living in an old lighthouse offers a similar feel, with the added advantages of being right on the coast and offering one of the more spectacular ocean views around.
CNBC "The Morgan Point Lighthouse has stood on Connecticut's Fishers Island Sound since 1868," said This Old House. "An advertisement in a 1995 Wall Street Journal led its current owner to the empty, neglected structure. Nearly $1 million was spent on its reconstruction, which included a new lantern and various nautical details designed by the architect - a former Coast Guard engineering officer."

This Old House Call it the original tiny home. This 1945 red caboose railroad car sitting on more than four acres on Mercer Island, Washington has been home to the Davidsons for 30 years, said CNBC.
CNBC Looking for something with a little more space? How about a church. This collection of townhouses that "resemble a hip Tribeca loft" in Holland used to be a 19th century church, said Fast Company. "Gone are the pulpits and the altars and the endless pews and the little old Dutch ladies worrying their Rosaries. In their stead, you've got bleached white walls and aggressively cool contemporary art -- all arranged under a 46-foot-tall nave, the original 1911 stained glass windows throwing light just yonder."

Fast Company A fire station, like this one built in the 1930s in East Providence, RI, may just be the ultimate space to turn into a home. Many already have large gathering areas, plus the fire pole makes for a great conversation piece.
Small House Swoon Source: Realty Times, Jaymi Naciri 04032016