The road to homeownership has been a challenge for many Americans—stubborn mortgage rates and inflation keep this dream out of reach for many. And for those who can afford a home, not ending up “house poor” is also key.
Headlines are saying home prices are starting to dip in some markets. And if you’re beginning to second guess your plans based on what you’re hearing in the media, here’s what you need to know.
Final walk-throughs can uncover problems that could delay closing. Most walk-throughs go smoothly, but it’s useful to know what to watch for and how to resolve issues quickly.
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Waiting for perfect market conditions often means missing out. Because what you may not realize is, if you’re ready and able to buy, this time of year could actually give you an edge. Here’s why. As the weather cools down, the housing market can too – and that works in your favor.
Buying an outdated, or even dilapidated, property can be exciting for those with a DIY mindset and creative vision. For many, it provides a chance to own a home that has more square footage, is situated on a bigger lot, or has a sought-after location. Plus, with properties like these, the purchase price is often lower than market comps, which can mean lower monthly mortgage payments.
An early 2024 survey from RE/MAX found that of consumers looking to buy a home this year, 56% were interested in considering a fixer-upper as a creative way to achieve homeownership amid changing (and sometimes challenging) market conditions. Of those who were open to the option, more than half were willing to do so based on location.
Don’t be fooled, however, by reality TV shows that gloss over the details in what can be a complex process – projects like these often require abundant time and resources, with costs adding up along the way.
Here are five fixer-upper questions to consider:
Cost will lay the groundwork for all plans pertaining to the renovation process – and setting a budget ahead of time will help you prioritize what to fix. It’s generally better to overestimate the potential costs to account for unexpected situations that might pop up along the way. Ultimately, the budget depends on your personal financial situation, as well as location, property type, renovation goals, and more.
Some people work with a lender on financing solutions, like home improvement loans, if they meet qualifying criteria.
A home inspection is an essential step when buying any property – and it’s extra important with a fixer-upper. A professional inspector focuses their examination to the home’s physical structure and major systems. They’ll look closely at the foundation, as well as the structural integrity of floors, walls, ceilings, and the roof. They’ll also check the functionality of windows, doors, HVAC system, electrical, and more.
With fixer-uppers, there’s a higher likelihood of some of these features being compromised. Costs for repair and restructuring can vary depending on the issue and the severity of damage or wear.
You may hear people saying a house has “good bones.” Essentially, if a house is structurally sound and just needs some cosmetic upgrades, it’s a very different process than if it requires larger-scale demolition. Before you take on a fixer-upper, consider the scale of the necessary renovations to determine the feasibility of your plans.
It’s important to also think about who would be doing the work. Hiring contractors can be much more costly than going true DIY. It’s also critical to identify health hazards that may be present, like asbestos, mold, lead paint, and more – and always hire professionals to remove toxins like these in a safe manner.
Each city and town has regulations and restrictions on residential construction. Some places, for example, allow grandfathered property rights or adhere to strict rules that limit the current-day building potential of structures and footprint additions. Many larger-scale home repairs require permits and inspections during the process.
As you determine what fixes need to be made, check with the local government to make sure your plans are legally compliant before starting any form of demolition.
Priorities will likely take shape based on the condition of the home. Some people buy a fully functioning house that simply has outdated style, prompting them to make cosmetic upgrades. In cases like these, many choose to space out renovations over time and slowly update the place room-by-room while living there.
For those who go with a more dilapidated structure, the fixing of essential features – like foundation, roof, HVAC, etc. – will likely take priority over aesthetic changes, and need more urgent attention before the space becomes habitable.
Whether you’re looking for a fixer-upper or move-in-ready home, contact me! I’ll be happy to help you get the process started!
Buying a home is the largest transaction most people will make in their lifetime. It’s an exciting milestone, but the process can be complex.
In honor of National Homeownership Month this June, people getting ready to dive in can heed these helpful tips – the ABCs of achieving homeownership.
Working with a real estate agent you trust can make a world of difference when buying a home – especially if you’re a first-timer. A trusted advisor will go through the process with your best interests in mind, explain essential industry terms, help determine your priorities, negotiate on your behalf, and do so much more.
Experience is a top quality to consider when you’re choosing which agent to work with. (And look for a full-time professional, too. Your purchase is too important for a part-timer.) Experience can be quantified in a few different ways – like years in the industry, real estate specialties, and neighborhoods they conduct business in. What’s helpful: Not only do RE/MAX agents have the experience to get the job done in today’s market, but they also average more sales than other real estate agents.
Another important component of the trusted professional you choose to work with is their communication style. It’s smart to align with someone who is communicative and easily accessible, and who also outlines their preferred methods of contact during the homebuying process upfront.
Ultimately, your home purchase is a financial transaction, so it’s best to analyze your financial situation – and get things in order – before you find a house you want to buy. Unless you’ll be paying cash (and if you are, congratulations!), you’ll be working with a mortgage lender who considers factors like credit score, debt-to-income ratio, and more to determine what kind of financing you qualify for.
These factors will be helpful in the pre-approval process, too, where the lender estimates how much house you can afford. This provides a framework for setting a budget and establishing your price range. In this step, make sure to budget beyond the down payment and monthly mortgage payments for the ongoing expenses of homeownership, like maintenance.
Before shopping for a house, start by making a list of wants and needs. This can help keep priorities straight as you begin looking at prospective properties that fit your lifestyle and income.
Consider what you need when it comes to space, storage, and outdoor functionality – and be realistic about which locations work for you, and which don’t. That way, you can focus your time and energy touring places that have a higher likelihood of being your ideal match.
Housing inventory and home prices will look different in every market. Curious about current housing market conditions around the U.S.? Check out the latest RE/MAX National Housing Report coverage.
Contact me for a complimentary in-person or online consultation!
Many of you may have heard about this over the last week. Sadly there is A LOT of misinformation out there. I’ve given it a lot of thought and think that the NWMLS’s statement summarizes it best for the majority of Washington State:
“NWMLS is owned by its member real estate firms and not affiliated with NAR.
Beginning in 2019, and continuing in 2022, NWMLS made changes to its rules, forms, and processes that address the issues raised by the national litigation and outlined in the proposed settlement agreement. NWMLS’s changes enhanced transparency, consumer choice, and negotiation opportunities related to broker compensation.
NWMLS’s most recent efforts, in cooperation with Washington REALTORS®, culminated in revisions to the Washington state “Agency Law” that were effective January 1, 2024. As a result, Washington law already requires brokers to enter into a services agreement to represent a buyer, which is one of the primary “practice changes” in the proposed settlement agreement.
While NWMLS’s system of rules and forms, together with the revised Agency Law, provide both buyers and sellers with complete transparency, choice, and control of broker compensation, NWMLS and its members will continue to take advantage of every opportunity to enhance the quality of real estate brokerage services in the Northwest.”
Watch this 30 second video that highlights what Washington REALTORS® recently did to advocate for more transparency in real estate.
4/23/24 Update: Judge Bough granted the Plaintiffs’ Motion for Preliminary Approval of this agreement, which means that the settlement agreement is preliminarily approved.
Don’t hesitate to call or contact me with any questions!
If your biggest question right now is “Can I afford to buy a home?” – or “How much home can I actually afford to buy?” – you aren’t alone. As the real estate market continues to shift, many people are wondering how far their money will take them.
From researching your local housing market to exploring home loan options, a few early steps can help you prepare before starting on the homebuying process. Here are five ways to help determine how much house you can afford.
Before you’re ready to start the homebuying process, familiarize yourself with your credit score. If you aren’t satisfied with the number, you’ll want to give yourself time to raise it before you apply for a loan – this will be a key factor a mortgage professional takes into consideration. Many major credit card companies will give you monthly updated credit score reports on their websites and apps.
Seek out a local mortgage professional to help you understand what you qualify for and set a realistic homebuying budget. A mortgage prequalification provides a basic estimate of how much you can borrow based on your stated financial situation. When you’re ready, complete a mortgage application in which a lender confirms your qualifications with more stringent documentation and can then provide a formal pre-approval. Working with a mortgage broker may provide an easy way to explore different lenders and loan products that meet your unique needs.
It’s essential to figure out how much money you’ll be able to put toward a down payment on a home – and this number will impact what your monthly mortgage payments will be, too.
For renters, if your monthly mortgage payment will cost more than your current rent, are you able to afford the difference?
Keep in mind that expenses won’t stop at the down payment and mortgage. Be prepared to cover costs for closing and moving, various fees that may come up in the process, home insurance, private mortgage insurance (if you put less than 20% down), and more. Plus, it’s wise to have a comfortable level of savings for home maintenance and repair.
Meeting with a financial advisor can help you prioritize financial concerns, learn how to manage your money, and plan ahead for the future.
When it comes to home prices, no two markets are the same – and the cost of living (which includes the expense of homeownership) varies depending on location. That’s why it’s helpful to find an experienced real estate agent who you trust to help with your important transaction. They can help demystify local housing market data, prioritize your wants and needs in your purchase, and get the ball rolling in the home search process.
Understanding local market conditions will also help establish a realistic expectation of what kind of property you can afford in your desired area. Looking at active and recent listings is one way to get a better feel for what home prices are like.
Ready to start your homebuying journey? Contact me for a complimentary consultation!
The current housing market continues to face adversity, but some real estate experts see promise in the year ahead. For those embarking on their homebuying journey in 2024, here’s where to get started.
For those purchasing a home with financing, it’s important to meet with a mortgage lender as early on in the process as possible.
After evaluating factors like credit score and income, the lender will determine what type of mortgage you qualify for. While many are familiar with the 30-year conventional loan, there are other options that may be up for consideration, like adjustable rate mortgages (ARM), VA loans, FHA loans, among others.
What’s especially helpful is getting pre-approved for a mortgage – this is how you determine your budget and establish a price range to shop in.
A trustworthy real estate professional is the go-to expert on all facets of the homebuying process, from finding potential properties to coordinating inspections to negotiating on your behalf to recommending their preferred local service providers after you’ve moved in (and so much more!).
They’re also oftentimes one step ahead when it comes to navigating specifications of the local market.
“While the results [of the monthly RE/MAX National Housing Report] tell an overall story, the key for homebuyers and sellers is to work with a local real estate agent who can speak to the unique local conditions,” Bailey says.
Identifying wants and needs ahead of touring homes can help ensure you stay on track and consider options that best fit your crucial criteria. If you’re buying a property with a spouse, partner, family member or friend, make sure all stakeholders are in alignment on what elements are deemed essential.
The best way to do this is to make a “wants vs. needs” list and prioritize features you can’t live without. To start getting ideas, consider the good things and gripes about your current living situation.
Ready to get ideas – or find favorite homes to tour? Contact me today!
Buying a home is one of the largest transactions most people make in their lifetime. So, it’s essential for homebuyers to have ongoing support as they find their ideal property and navigate the process through a successful closing.
All prospective homebuyers – including those purchasing for the first time – can benefit from avoiding these five mistakes:
While most people begin the homebuying process online by scrolling through listings and saving favorites, they quickly realize how overwhelming it can be to narrow down options – or to see potential in prospective properties.
According to the 2023 RE/MAX Future of Real Estate Report, U.S. homebuyers have identified needing the most help from a real estate agent with three specific tasks:
• Researching listings
• Identifying wants, needs and priorities
• Making home repairs and renovations
As the expert on their local community, a qualified real estate professional with a track record of success can curate a selection of homes and help the buyer as they narrow down the list of candidates.
The skills of an agent come in handy throughout the process. The same RE/MAX report cites a lack of understanding of real estate terminology as a top barrier for consumers pursuing homeownership. A trusted professional can translate industry lingo and help buyers feel informed every step of the way. Plus, by leveraging their knowledge and local expertise, an agent will use their negotiation skills to help the buyers get the price and/or terms they are looking for.
The pre-approval process entails a mortgage lender assessing a prospective homebuyer’s finances, usually based on their credit, and providing an estimate on how much money they could borrow to buy a home. Once this step is done, buyers can close a home loan faster if they’re trying to lock down a property on a short timeframe.
Plus, getting pre-approved for a mortgage helps buyers determine a realistic budget and shop in their price range.
When searching for a home, it’s natural to want it all – and it can be especially difficult to compromise on certain features. However, when buying a home with a partner, family member, or friend, it’s important to be on the same page in regard to priorities.
Come up with a list of wants vs. needs, and make sure all contributing parties are in alignment. This can save time and help prioritize which properties to pursue. When assessing a home that meets the criteria for needs – like location, accessibility features, or bedroom count – buyers can connect with their agent to assess the renovation potential for other features they desire.
When the housing market leaned heavily in favor of sellers over the past few years, many homebuyers chose to forego a home inspection to gain leverage over competing offers. Now with the market starting to rebalance in many locales, opting out of a home inspection is an unnecessary risk.
During an inspection, the home inspector – who is often recommended by the agent – will check for pre-existing damage on the interior and exterior. This could entail water damage, structural issues, ill-functioning HVAC systems, air quality concerns, and more. If problems arise, the agent and buyer discuss the best next steps to take.
Saving up for the down payment on a home is a huge accomplishment. But it’s critical to prepare for other costs as well.
Other potential expenses include closing costs, moving fees, monthly mortgage payments, regular maintenance, emergency funds in case anything in the home needs repair or replacing, and more.
Ultimately, a little effort can go a long way when it comes to avoiding these mistakes and making the homebuying process as smooth as possible. Best of all, the reward will be that much sweeter once the buyer moves in and can enjoy the many benefits of homeownership.
Ready to start the homebuying process? Contact me today!
