Words to the Wise

Before You Buy A New Home

Obvious advice, maybe. But you'll want a real estate professional on your side to help negotiate, investigate the ins and outs of local areas, ask about local schools, help navigate the maze of closing requirements, answer questions about your financial options ....This is one time "doing it yourself" could be a very costly mistake.

Get mortgage pre-approval.
A pre-approval is an ideal way to get a close-up look at "how much home" you will realistically be able to afford. It will also give you leverage later on when the time comes to make an offer on the perfect home! Ask your Realtor whom they might recommend if you do not already have a relationship with a lender in the area.

Shopping is the fun part!
There are an overwhelming number of homes on the market. This is a good time to consult with your Realtor to narrow the field a little. You may want to ask about home values and trends in communities that interest you. But, on the other hand, no one can predict what will happen in the real estate market. So, our best advice would be to give priority first to homes that meet your own personal needs.

Shop for your financing, too.
It may not be as much fun as shopping for homes, but knowing the types of financing out there and being able to compare fees, interest rates and closing costs between multiple lenders could potentially save you thousands of dollars.

Make an offer.
Use the counsel of your Realtor to come up with an offer on the home you want. You don't want to start out with an unreasonable offer, but remember, it's not always just about the price. Terms can have a role to play in what you are prepared to pay and can be worth significant money—in your favor or the seller's.

Prepare for closing.
Closing is generally the most confusing part of the process. It's called "settlement" or "escrow" in different parts of the country. Your Realtor will help with all the documentation that you'll need. As well as coordinate the different parties—title company, homeowner's insurance, legal representation, etc.—that have a part to play in your real estate transaction.


Before You Sell Your Home

Price it right.
Sellers are often tempted to start out pricing their home on the high side, to give themselves room when a potential buyer offers a price far below their asking price. But start too high and sellers are likely to conclude you are not serious or motivated about selling and that negotiations are likely to be difficult. Again, this is where the wise input from a real estate professional can help protect both your investment and your ability to make the sale.

Spruce it up.
This is so obvious it shouldn't even need mentioning. How much you need to do to get your home in "sell shape" will depend on its current condition, of course. Think like a buyer seeing your home for the first time. How will they feel walking up to the front door? Will it be a welcoming experience or will it generate a "to do list" before you even open the front door?

Much as your dog or cat may be a beloved part of your family, they will not help you sell your home. Depending on how a potential buyer may feel about dogs or cats, they mat even hurt your chances. Hide the food and water dishes. Stash the doggie toys. Get rid of all evidence of a cat box—all evidence. Have your pets sequestered in a back room or the backyard. Or best of all, especially if you're having an "open house," take them to a pet spa for the day.

Lighten up.
"Light" and "airy" are the two most popular descriptions buyers use nowadays when describing their dream homes. It's up to you to deliver. That means changing out curtains if necessary, to let in more sunlight. Clean the windows. Trim shrubs around your home that may be blocking light. Increase the brightness in ceiling fixtures and the wattage of the bulbs in your lamps if necessary. And when a buyer arrives—lighten up.

Paint if necessary.
You know where your home could benefit from a fresh coat of paint—outside and inside if necessary. If you don't, your Realtor will drop a few hints. Nothing cleans and brightens up a home like new paint. Use neutral tones that will allow a buyer to easily picture their style and their furniture in your home.

Take yourself out.
The goal is to de-personalize your home as much as you can—make it a house, not a home—to give a buyer room to imagine themselves living there. That means pack up the family photos, all the knickknacks, clean the shelves, and take the pictures off the walls. If possible, store about a third of your furniture to open up your floor plan. Clean your closets and pack away half your clothes—people will open your closet doors and you want those closets to look huge.

Be ready.
You never know when a buyer may want to see your home, so you need to be ready. Kitchen and bathrooms need to shine. Beds need to be made. A good strategy for many is to clean out as much stuff as they can, hire a cleaning service to really do a deep clean—then keep it clean. Have a plan—a place you can go—on short notice so a buyer and agent can look at your home without feeling like intruders.


Financing Your New Home

Be more credit-worthy.
Your credit will impact almost everything about your potential new home—from the size of it, the likelihood you'll qualify to purchase it, the terms you'll be able to get from a lender, the size of the down payment you'll need....Find out what your credit profile looks like. If it could use some sprucing up, start yesterday. Pay your bills on time. Go beyond mere minimum payments to get balances lower. Chip away at your debts to get your debt to income ratio around 36%—or less.

Save for the down payment.
The size of your down payment will vary from lender to lender. Some may require the standard 20%. Some may take less—the FHA will accept 3.5% for instance. If necessary, you can look into what down payment assistance programs may be in your area. The larger the down payment you bring to closing, the more equity you'll have in your new home from the very first day.

Get pre-approved.
Not only will this be a big help with financing, contract negotiation and the closing in your future. As a practical matter, it lets you know right away what your budget will be and will help focus your house hunting only on homes that fall within your price range.

Know the different loan types.
A classic 30-year fixed rate loan may be your first inclination. But there are many other loan vehicles on the market that may suit you better. If you don't plan to live in your new home beyond ten years, an Adjustable Rate Mortgage (ARM) may be a better choice. If you have your eye on a luxury home on the beach or in a golf course community, you may need to look into a jumbo loan.

Shop lenders.
Compare interest rates, of course. But don't forget the fees and terms you'll be asked to pay. No two lenders are alike and it will literally pay you to find out as much as you can when comparing financial institutions.

The "B" word (Budget).
Your house payment will not be your only monthly expense. Take a moment to factor in all the bills you'll face, from homeowner association dues and property taxes to utilities and maintenance costs, food and gas. Be sure you can be comfortable and truly live in your new home.



Will your employer help with expenses?
If you are relocating because of a job transfer, or even if you are accepting a new job with a new employer in another town, ask if they have a policy about providing moving expenses. It can't hurt, right? And it may provide a bit of a cushion to help take some of the sting out of the cost of relocating.

List your home with a Realtor.
If you plan on selling your present home prior to relocating, a Realtor is your ticket to a faster, easier sale. Ask for referrals from neighbors who've sold in your neighborhood or look for a Realtor familiar with your area. Ask for their suggestions on what you can do to get the price you need, in the time you have available.

New Realtor—new home.
You will want a Realtor who knows your new home town for all the reasons mentioned earlier—from where the "best places to live" are, to what home values are locally, to what area will best fit your lifestyle, to finally, where the home you have in mind can actually be found. You do not want to go into a new hometown "blind."

Moving Companies.
Choosing a reputable moving company does not have to be a harrowing experience. Start by asking for the names of moving companies your Realtor may be familiar with. Try to settle on three companies, in your local area, who have been in business at least ten years. Set up appointments for them to visit your home and give you an estimate. If they won't come to your home, move on to the next company. Ask for references from each company—and call them. Ask about their insurance. And when you're done asking what questions you can think of, use the Internet to find out more.