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Before You Buy Budget Like a Homeowner

Tuesday, August 25, 2020
by Scott Darling


If you are a renter, you know that rent costs are on the rise, and it may be getting more difficult for you to stop thinking that a home purchase cannot be easier on your wallet. Starting on buying a home can come a year in advance of your first house hunt and creating a homeowner budget is the first step.   

 

  • Write a list of needs and wants for your future home, beginning with size, the number of rooms, type of neighborhood, size of the yard, garage, or no garage, etc. Be realistic, as there is only so much house you can afford. Set a price range, and stick to it. 
     

  • Create an income/expenses list, or use this handy budget calculator so you may see exactly where your money is going.  If there is little left of your paycheck at the end of the equation, it is time to begin eliminating unnecessary purchases so you can start saving. 
     

  • Start paying off any debt you currently have credit cards, car loans, or personal loans. Eliminating these balances will reduce your debt-to-income ratio, and will show lenders you’re serious about paying for a home. 
     

  • Once you start paying off debt, start depositing the amount of those payments into a savings account. Not only do you need to save towards the payment, but you’ll also have other costs for buying a home: appraisal, home inspections, and other fees may or may not be added to the closing costs. 
     

  • Some people that live on low incomes may feel like homeownership is a pipe dream, but that is not true. Many government-backed agencies will assist those with limited incomes buy a home: 

  • - Federal Housing Administration offers loans with low down payments (3.5%). 

  • - USDA  helps low-income families in rural areas with purchasing a home with no down payment. 

  • - VA loans assist veterans with home-buying, as well as home repair. 
     

No matter your income, homeownership is within reach if your credit report and score is within an acceptable range and may differ according to the lender.  Learning how to budget your income, paying your bills on time, and saving money are all possible, and it may take discipline on your part. The result, however--a home of your own--is worth all the time and effort it took to prepare for it! 
 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: ggwash.org

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Who's Who When Buying a Home

Friday, June 5, 2020
by Scott Darling



 

Unless you’re paying cash for a new home, there will be more than just you, your real estate agent, the seller and their agent involved in the process. Appraisers, lenders, inspectors are just a few of the professionals you’ll come across, and it will relieve some stress on your part if you know ahead of time who they are and what part they’ll play during your house hunt. 

  • Mortgage lenders in order to be adequately prepared to begin looking for a new house, you should be pre-approved. It’s best if you look at a few different lenders in order to find the best loan, so before you go, see what the balance recommends for finding the right mortgage for you. 
     

  • Real Estate Agents The agent you choose to assist you on your new home search is extremely important, as they will be your resource and constant contact throughout the home-buying process. In most transactions, there will be a listing agent representing the sellers, but it’s unlikely you’ll be meeting them. 
     

  • Appraiser Your lender wants to be certain that the house you want to buy is worth what the seller is asking and will have a home appraisal done by a qualified person.  Learn more about what’s involved with the appraisal from realtor.com®. 
     

  • Home Inspector Once your offer has been accepted, it’s in your best interest to hire an inspector to go over your prospective new home.  You don’t want any surprises with structural issues or mold or insect infestation after you have the keys in hand. Call a few before you decide who to hire, and ask these important questions when you contact them. 
     

  • Homeowners Insurance Agent This agent should be familiar to you, as you already have auto or even renter’s insurance. Most insurance companies offer a discount for having more than one policy with them, and it may be an easy fit to go with your current company. Don’t let that stop you from shopping around for better rates, however. 
     

  • Real Estate Attorney Many states require you to hire an attorney, as they will go over all the documents, handle funds, and perform the title search, to name a few of their jobs during the home sale process. Find out why it’s always a good idea to have a real estate attorney, whether it’s the law or an option. 
     

  • Title Insurer  In case there are any questions about the sale of the home being legitimate (no liens, family feuds, etc.), you’ll need title insurance, and in most cases, the lender or attorney will already have that lined up. 
     

  • Mortgage Servicer Sometimes, a lender will sell your loan to a mortgage servicer, and you will be notified if that happens. Learn the difference between a lender and a servicer at Investopedia.  

 

Not all of these will be involved in your situation, and you may come across another professional or service during your experience.  Every one of them, however, is important for a smooth transaction, protecting you and your largest investment. 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: seacoastsolutions

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Virtual Home Buying

Thursday, May 7, 2020
by Scott Darling


For obvious reasons, you won’t be seeing any Open House ads or signs at new homes for sale nearby, and it’s highly unlikely you’ll be going to any showings with your buyer agent. Remote home-buying is nothing new, however, and for this time of staying safe at home, we can learn a few tricks of this type of home purchase, so you don’t have to put that on hold!

  • Get pre-approved now! Current interest rates are just one incentive for buying a new home.
  • With social distancing being the norm, for now, be prepared for a lot of phone conversations, emails, and texts between yourself and your real estate agent.
  • Call a few agents and request an over-the-phone interview to find the one that’s right for you. Be sure they are comfortable and knowledgeable about a virtual house-hunt.
  • You are probably already house-hunting online and saving your favorites. Don’t forget to look at those that may not catch your interest quickly--there are sometimes diamonds in the rough!
  • Type up a list of what you’ll need for a home, as well as extras you’d like to see, and have it ready to email to your agent so they can get to work on looking for houses you might be interested in. Share your online wish list of homes with them as well.
  • Once your Realtor® has a list of homes for you to see, take a 3D or video tour or each, comb through the photos, and ask questions. Ask your agent if they can do a live video tour of the houses that you like the most so you can get a better feel of what the house is actually like.
  • With the exception of places where going to a property for a showing is barred, your agent will be certain that they take proper measures to protect you as well as themselves. Follow all CDC guidelines for slowing the spread of COVID-19.
  • On that note, be sure to understand if a homeowner refuses to show their home if they are still living there.  In case they’re allowing showings, don’t be offended by personal questions about your health. We all have to have some extra understanding and patience these days.

Don’t allow this period of flattening the curve discourage you from buying a new home. In some cases, it may take a little longer, and if there’s an urgent situation that you need to move quickly, share your concerns with your agent, and they’ll be with you every step of that way, even if the home-buying venture is a virtual one.

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: zillow

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Why Your Mortgage Payments Change

Wednesday, March 11, 2020
by Scott Darling

Your mortgage payment is probably the largest one in your monthly budget, and you assume it will be the same amount for the next 30 years. That may not always be the case, however, and that depends on a few factors. Be prepared for changes, and understand those changes: 

  • - If you paid less than a 20% down payment, you are required to have Mortgage Insurance with FHA and USDA loans, while Private Mortgage Insurance is required with other lenders. In some cases, these can be removed, and your mortgage payment will reflect the change. 
     

  • - An Adjustable Rate Mortgage (ARM) has a set interest rate for a certain amount of time, and after that time is up, the interest rate will vary. When the rates change, your payments will, too. Learn more about ARMs from Investopedia. 
     

  • - Changes in escrow are almost unavoidable. What is escrow? The Consumer Financial Protection Bureau’s definition: “An escrow account...is set up by your mortgage lender to pay certain property-related expenses.”  When property taxes or insurance premiums increase, your current payments won’t reflect that change, and that results in an escrow shortage. The shorted amount will be added to your loan payment, plus the new amount for adjusted increases. To avoid paying extra every month for the shortage, pay the amount in full as soon as you receive your annual escrow statement. 
     

  • - What if you don’t have an escrow account on your mortgage, and you don’t pay your property taxes?  Lenders don’t want to foreclose on a home because of delinquent property taxes. To protect their money, they can add the amount to your current loan payment or open an escrow account for your loan. 
     

  • - Homeowners insurance is a requirement when you have a loan on the home. If yours lapses, or you don’t have enough insurance on the house, lenders have the right to purchase a policy, called “forced-place insurance.” They will send you the bill for the premium, which is probably more expensive than your current payment.  

 

While escrow accounts aren’t always a requirement, it would benefit your budget to request one when you are applying for the mortgage. Keep an eye on your insurance information as well as your property taxes so you won’t be surprised when your monthly payment increases. Having an emergency savings account can help ease any of these burdens.   

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: masonfinance

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Five Reasons You Need a Buyer Agent

Friday, March 6, 2020
by Scott Darling

 

When it’s time to start house-hunting, you know that going to an Open House is one way to get a good look at some homes on your own time. But when you’re ready to search for just what you need, the choices can be overwhelming, not to mention the thoughts of negotiating an offer, inspections, the closing--it’s not as simple as you may think. Do you need a buyer agent? 

  • - You know what you want in a new home because you know what kind of lifestyle your family lives.  A buyer agent will listen and learn about your needs, wants and don’t-wants, take that information, and you don’t have to do another thing but wait for them to find prospects for you to see! How easy is that?! 
     

  • - Hiring a buyer agent opens a whole world of real estate options of which you are likely unaware. REALTORS® not only have a network of other agents, but the tools and expertise that can connect you with the right house sooner than you can find on your own. 
     

  • - The experts a real estate agent has at the click of a mouse or tap on their smartphone will all work together to ensure your home-buying process goes smoothly! Real estate attorneys, tax experts, and inspectors are just a few of the people you may need during the home-buying process. 
     

  • - If problems arise, your buyer agent isn’t always a miracle worker, but they will use all their means to see that the issue is resolved.  They want your transaction to go as smoothly as you do. 
     

  • - In most cases, you will owe a buyer agent nothing when you buy your house. Fees are normally paid by the seller, so you’re getting an exclusive, personalized service free! 

 

 It’s also important that your buyer agent be part of the National Association of REALTORS® or the National Association of Exclusive Buyer Agents. Ask friends and family for referrals, create a list of your needs, and then write down some questions for the agents you plan on meeting.  Interviewing more than two will help you find the best fit, and carefully read over any contracts before you sign. You won’t be sorry you chose to hire a buyer agent! 

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: opendoor

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Tips for Buying a Home in a Hurry

Tuesday, February 25, 2020
by Scott Darling

Sometimes your circumstances change, and you find yourself needing to buy a home ASAP!  In the past, you’ve looked at houses for a month online before you start actively looking, taking your time to find an agent.  Now, however, your new job needs you as soon as you can get there, but how quickly can you buy a new house?  Faster than you think if you follow these tips! 

 

 

     

     - Find a buyers agent that has a reputation for handling sales efficiently. You want someone who understands your need to buy quickly, but who will also make sure you're not making huge mistakes in the process. 

  • - Make sure your credit score is in good standing, and gather all paperwork necessary for the lender:  tax returns from past years, current pay stubs, bank statements, documentation for rent payments if you’re a renter, gift letter if someone is gifting part of the down payment, and proof of any assets you may have. 

  • - Don’t just get pre-qualified for a mortgage--get pre-approved.  This way, you’ll know exactly what you can afford, and when you make an offer, the seller will be certain you are serious about buying the house. 

  • - You might have to forgo the perfect house dreams, but don’t sacrifice your must-haves.  That said, not being extremely picky with what you want in a house will see your success a few steps closer.   

  • - When you talk to your agent, ask them to look for homes that have been on the market for a while.  This may give you some leeway in the offer process because the seller is likely somewhat anxious to sell. 

  • - If you have any equity in the home you will be moving from, and you don’t want to lease or rent it, selling as quickly as you are able will give you a head start on the purchase of a new home.   

  • - Be prepared to put your belongings in storage if you do sell before you buy, and talk to friends or relatives about staying with them temporarily. 

  • - You’ll want a transaction without a lot of contingencies so there isn’t a lot of time-consuming negotiating, but be careful about what you are willing to let go to buy the property.   

  • - Don’t go AWOL during the process--sure you’ll be busy getting packed up and prepping for a move, but you need to be available to your agent so no time is wasted.   

 

The best tip is to get started as soon as you know you have to move--the more time you have to take care of buying a new home, the better the outcome will be, saving you time, money, and future headaches.   

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: barnes and noble

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Townhouse vs. Condo vs. Duplex

Monday, February 10, 2020
by Scott Darling


When you make the decision to buy a new home, and don’t have time or the ability to take care of maintenance for a large house and yard, you can always opt for a condominium, townhouse or duplex.  But what is the difference in these types of homes?  Read on to find out and find which is right for you! 

 

Condominium (Condo) 

  • - As defined by the Business Dictionary, a condominium is a “Single, individually-owned housing unit in a multi-unit building.” In some cases, a condo is in a co-op, which is much different than owning a single unit. 

  • - Architecture of the buildings varies, but the exteriors and common areas are owned by the Homeowners Association (HOA). 

  • - Most condo HOA’s offer community perks, such as a pool, community center, playground, tennis courts, or workout gym. Landscaping is taken care of, and many condo complexes offer gated security. 

  • - Homeowners insurance premiums are normally lower, as the owners only insure the unit’s interior. 

  • - Perks come with a fee, and that will vary from HOA to HOA. House hunters are given this information up front so they can be sure they can handle the added fees in their budget. 

 

Townhouse 

  • - “Two or three storied single-family housing unit, often connected other such units via party walls.” --Business Dictionary 

  • - Unlike condos, townhouse buyers own the exterior of the unit as well as the interior. 

  • - Architecturally-speaking, the exterior of townhouses in a neighborhood are generally the same style.  

  • - Owning the exterior of a townhouse means you have control of its appearance.  While those communities that have an HOA means you may be limited to certain paint colors, etc., owners otherwise have free rein for upgrades. 

  • - Not every townhouse community is part of an HOA, but either way, the owner is responsible for the upkeep of the landscaping. Some non-HOA neighborhoods still have a few perks, but upkeep for these amenities isn’t a given. 

 

Duplex 

  • - Moneycrashers.com defines a duplex as “...a house or building with separate entrances for two families. The units can either be on separate floors (i.e. two-story house) or side by side.” 

  • - Purchasing a duplex usually means you will be purchasing both units--one whole building, though you will find some municipalities that allow half-unit sales. The owner is solely responsible for upkeep of interior, exterior and landscaping. 

  • - For ‘sandwich’ families, a duplex meets important needs: aging parents can live close by their families but have the privacy of their own home. 

  • - Perfect for someone who is interested in a starter investment, renting out the other unit will help with the mortgage, taxes and utilities if the unit shares those meters. 
     

Multi-unit housing is a great choice and many times, the final decision boils down to location and how much a part of the community you care to be involved in, as well as your budget.  Do your research carefully and talk to your REALTOR®, so you can make the best decision about whether you go with multi-unit housing, or a single-family home. 

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: bankrate

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What to Ignore While House Hunting in Chester County PA

Wednesday, February 5, 2020
by Scott Darling


 

You’ve given your agent all the must-haves for your future home, and they’ve combed through listings, and have found some houses for you to tour. You’ve got your hopes up as you walk through every door, but you need to keep in mind that not every house on the list will be move-in ready.  Don’t turn your back on them, though.  Read on to see what’s best ignored while on the hunt for a new home. 

 

  • - Age of the house isn’t a factor if the house is structurally sound.  Just be certain to ask about updates or add-ons, and any other factors that could be problems with an older home. 

  • - Poorly maintained curb appeal can be a turn-off as soon as you drive up, but if the house is great, the landscaping can be taken care of with a little hard work, new front door and mailbox, and a few pots of plants. 

  • - Unattractive Paint/Wallpaper Walking into some can be like walking into a time capsule when you see a mauve living room, or a bathroom with swans adorning the wallpaper. A gallon of paint can take care of the ugly.  Focus on the structure of the walls, and check for cracks or holes.   

  • - Dirty carpets can be a negotiating point when you make an offer on the house.  Sometimes the seller is willing to give credit for replacing the carpet or may change it out themselves.  Do, however, lift the corners of the carpet to see if it’s covering hardwood. 

  • - Smells like cigarette smoke and animal odors can be a turn off but remember that a thorough cleaning and airing-out is what it takes to freshen up a house.  Moldy smells shouldn’t be ignored, however. 

  • - Remember that many people that have an extra bedroom set it up as an office or use what's listed as a dining room for a sitting area.  Don’t let that keep you from imagining a sleek new dining room suite for entertaining, or the much-needed third bedroom for your growing family. 

  • - The current owner’s decor may not be your style at all, but you’re not buying their furniture!  Simply take note of the general layout and size of each room to determine if the house will work for your needs. 

 

You will probably be surprised when you walk into some houses that haven’t been redecorated in thirty years, or that have a guest room functioning as a museum for their snow globe collection!  Have faith in the houses your agent finds, as they understand your needs, and know that some homes only need your touch to make it yours! 

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: hireahelperblog

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Popular Home Styles Defined

Thursday, January 30, 2020
by Scott Darling

 

When you’re new to house-hunting and begin reading house descriptions, you may not understand the difference in a ranch, Tudor or a Craftsman style.  These eight most common architectural types will help you not feel so overwhelmed while going through your to-see list: 

 

  • Popular in the 1930s was the Arts and Crafts, or Craftsman, house.  Known by their low-pitched roof, front porch with tapered columns, the interiors of this type of home features lots of woodwork and built ins. 
     

  • Cape Cod-style homes are rectangular in shape, usually with the front door in the center of the front of the home, shuttered windows on either side of the front door and gable ends.  Traditional structures are one and a half stories, with living, sleeping and dining rooms all divided with walls.
          

  • Colonial houses are the predecessor of the Cape Cod, and they are similar in shape, style, and interior.  The biggest difference between the two is the Colonial’s second story was a full story, versus the Cape Cod’s half-story.   
     

  • A home that is described as Contemporary should be just that--a house of “now.”  Think of a contemporary home as having Colonial, Ranch or other architectural characteristics, just with an updated look. 
     

  • As times changed during the 1930s-60s, Mid-Century Modern-style houses began to make an impression using sleek straight lines, asymmetrical form and basic materials like glass, concrete, and metal.   
     

  • Ranch-style homes were a popular architectural style in the US during the post-World War II years through the 1970s.  The one-story form was usually low on the ground, with mixed exterior siding and attached garage.   
     

  • Looking like something from a fairy tale, Tudor homes featured curved rooflines and doorways, timbered or half-timbered gables filled with mason work or shingles, decorated windows, and cross-gables on the front exterior.  
     

  • The Victorian era brought romance and frills, and the homes of that period are no different.  A Victorian-style home will normally have a steeped-pitch roof, gabled windows, decorative woodwork, bay windows, and wide front porch.  

 

REALTOR® Magazine offers a guide to many other house styles, complete with images of the basic look of each type and brief description.  Once you’re familiar with these terms and the houses they describe, you’ll feel more confident as you search listings, looking for your new home. 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: southbayrealestate

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Making an Offer is a Process!

Thursday, December 5, 2019
by Scott Darling


While you’re on the house hunt, every property you see just might be “the one.”  It’s a good idea to learn the different aspects of buying a house before you get into them.  Many discover that after they’ve made an offer of purchase, the process isn’t exactly as they’d envisioned! You’ll feel confident when you get to this step by following this guide: 

 

  • - The offer itself isn’t just a price you’re willing to pay for the property; closing date, closing cost contribution, contingencies, or the earnest money deposit are all things that are normally included when the offer is submitted to the seller. 
     

  • - Talk with your agent before you come to your initial price, because you don’t want to insult the seller with a very low offer, nor do you want to pay too much for the house. 
     

  • - Although you won’t always get a complete answer, knowing why the house is on the market can give you some leverage, so ask anyway. Some sellers are in a time crunch and are eager to sell and may take your first offer. 
     

  • - Keep in mind that there are legal aspects to writing a proposal.  Your Realtor will know all the aspects of this part of the process and will take you through each step. 
     

  • - It is very likely that the seller won’t accept your price if it’s less than what they’re asking.  If they want to sell and have no higher offers, they may choose to send a counteroffer.  The counteroffer step is nothing to worry about, if the negotiations are getting you somewhere.   
     

  • - Some sellers will counteroffer with their original asking price.  If this happens, you may have to walk away, as they have shown they’re not interested in moving away from what they want for the property.
     

  • - Don’t forget that you may not be the only buyers interested in the home!  Realtor.com® offers some advice on how sellers might handle multiple offers and some ideas on how to make your offer stand out. 

 

When your offer is accepted, it’s exciting, but there is still work to do!  Hopefully, you have pre-approval for a mortgage, making the buying process a much smoother one.  There are added costs associated with buying a home, so be sure you have your finances in order.  

 

Courtesy of Chester County PA Realtor Scott Darling.

 

Photo credit: michiganfirstmortgage.com

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