How To Find Your Right Home (A Quick Guide To Making That Big Decision)

For first-time homebuyers, acquiring your dream home may not be as simple as saying that you want a “two-story house with a garage in a quiet neighborhood.” Clearly, there’s so much more to a home than that. You should not be restricted to the price either since it is only part of the bigger process.

You must closely think of what you really desire in your home. Perhaps it will help to prepare a list of features that you prefer. Here’s a quick list of the parameters, home features and amenities that could guide you in finding that dream home of yours.

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Location and Neighborhood

  • Suburbs or Country - The houses here are generally more expensive but often newer. These are also farther away from the cities.

  • Urban - Closer to many employers, entertainment districts, restaurants and schools, but also often noisier.

  • Busy Streets - Often, these are homes on streets with more traffic.

  • Cul de sac - A French word meaning “deadlock,” cul de sac is a short road which is closed off at one end. It is a common choice for buyers with children.

  • Corner lots - These are often larger lots with fewer neighbors.

  • School Districts

 

Number of Stories

  • Single Story - A single story house is easier to clean and gives easy access for individuals with certain medical conditions.

  • More than One Story - These houses provide more living space. There is also less noise if members of the family have their bedrooms upstairs.

  • Split Levels - A house style in which floor levels are staggered. It typically has a square footage on same size lots as ranch homes.
     

Interior Specifications

  • Number of Bedrooms - The common minimum requirement is three bedrooms. However, two bedrooms appeal mostly to first-time homebuyers and seniors.

  • Number of Bathrooms - A house with more than one bathroom is preferred by most people.

  • Additional rooms - Extra space for children’s playroom, media/art rooms, hobbies and others.

  • Square footage - Larger spaces offer more room. But in the end, it is still the layout of the room that is the most important.
     

Home Style and Home Exterior

  • Garage - You can choose from an attached or detached garage.

  • Home Construction - Specify your preferred roof, flooring, yard and primary material of the house.

  • Special Amenities - Include fireplaces, pools, among others.

 

Specific Home Features

  • Condition of plumbing, electrical, heating & cooling units.

  • Available utilities such as DSL, cable, satellite and others.


Bottom Line

If you’ve decided to buy your dream home, hire an experienced real estate agent who will help you through the whole home buying process. He/She will guide you through your house-hunting, whether it is through the local MLS, or through his/her property listings.

Sell Your House Fast: 10 Cheap Home Improvement Tips

You might be dreading the idea of improving your home because it might cause you a fortune. Don’t fret! This list will enlighten you that simple and easy measures which you can do yourself will make a big (and positive!) difference in your home. You can ask your agent how to stage your home best, but it won’t hurt to get a headstart on making your home as presentable as it may be – without having to spend thousands of dollars.

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  1. De-clutter – Making your place organized and free from clutter will give your potential buyers a good impression of you and your home, and what’s great about it is that it won’t cost you a cent. Start by clearing unnecessary items not just from easily visible spaces in the house but also in closets so that your clients can have a good idea of how much storage they could have.
  2. Hide signs of pets – Your client may be a dog or cat lover like you, but thick animal stench can still be off-putting for them when they’re trying to purchase their new home. If possible, ask someone to babysit your pets while potential buyers view your house. Make sure to stow away litter boxes, remove pet-related stains, and fix damages on furniture or any part of the house that have been caused by your pets.
  3. Arrange your furniture – Don’t overlook the small details! Even the simple act of reducing chairs on your porch will make your space look bigger and more presentable. Another thing you could do is to move furniture that obstructs entryways. Stage your house in a way that makes it more welcoming for potential buyers.
  4. Depersonalize your home – Make your house as base as possible, save for a few wall clocks and tasteful art. You want to make sure that your clients have plenty of room to visualize how they could make the space their own, and it’ll be hard for them to do that if you have too many photos of you and your family hanging on the walls.
  5. Upgrade your curb appeal – Again, small details can make or break your chances of selling your house. And when it comes to marketing property, it’s crucial that you make potential buyers fall in love with it at first sight. And, the first thing your client sees when they go to your house is your curb – so a swept walkway, nicely mowed lawn, and well-placed shrubs will make a really great impression.
  6. Add visible storage – A place for storage will always be a useful feature for your house. Hidden storage also helps, but visible ones will assist your clients’ visualization of where they could keep their stuff in place.
  7. Paint your walls and ceilings – This will surely brighten up your home and make it look clean. Take note that it’s always better to have your paint in neutral colors than in bold ones. Make your space look spacious and elegant by going with light colors such as white and beige.
  8. Change bulbs – In line with painting your walls, better lighting also makes for a brighter space which makes your house instantly appealing and inviting.
  9. Buff up your kitchen – The kitchen can often make or break your chances of selling your home, and the best way to upgrade it is to make sure that things in it work properly. You can start out by adding new cabinet handles, updating lighting fixtures, and replacing faucet sets.
  10. Boost your bathroom - Next to the kitchen, the bathroom is what most buyers tend to be meticulous about. Spruce it up by cleaning your tiles and replacing your toilet seat.

How Much Does It Cost To Sell A Home?

You may get the idea that selling your house would mean reaping lots of cash, but it is good to be reminded of the costs that you still have to settle as a seller before you start making plans on what to do with your estimated profit. Several factors can affect the cost of selling your home. It would be wise to factor in these costs beforehand so that you can have a precise estimate of your profit come settlement.

As a seller, you should also clarify with both your agent and the buyer’s agent which fees are customary and which are not. Here are the standard fees associated with selling a house:

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1. Realtor’s commission – While this fee is negotiable and varies within markets and property values, it usually takes a big chunk off the selling price, generally amounting to 5-6% of the sale cost. Some arrangements may require you to pay a flat fee, where you and the agent will agree on a fixed price for the sale of the house no matter how much the property sells for. Take note that this fee is split between your agent and the buyer’s agent.

You may opt not to hire an agent to sell your house, but keep in mind that the realtor’s responsibilities would cost you money and much of your time, too. Professional agents would also have better access to information on your market and contacts to prospective buyers.

2. Closing costs – This string of fees [could link into the previous article on closing costs] could be split between the buyer and the seller based on agreements from both parties, but you can expect to pay 6-10% of the house’s sales price upon settlement. Closing costs for sellers vary according to where you live but what the seller usually shoulders are the title transfer fees, notary fees, and escrow expenses. The closing costs could also include outstanding balances from property taxes and mortgage fees. You may also need to pay for a prorated share of the water and sewage bills. It is worth to take note that – unless you are selling with very low equity --  payment for closing costs will not be coming directly from your pocket but would instead be deducted from the profit of selling your home.

3. Home repairs – For your house to have a high market value and to look appealing to buyers, you may want to present your home for sale in its best condition possible. Do not skimp on repainting and having a second look on the functional spaces of the house (such as the kitchen and bathrooms) if ever something needs repairing.

4. Inspection fixes – If the buyer’s home inspection detects major faults in your house such as sewage leakage and roof issues, you have to be ready to cover these costs.

5. Marketing – Your agent may recommend a marketing campaign that includes online listing and physical posters. You will have to pay for these costs which include professional photography, the creation of a floor plan, and press advertising.

7 Savvy Tips For Selling your Luxury Home

Selling your luxury home means selling one of your most important investments. The task may be more difficult and daunting than selling a mid-priced home, especially since luxury home buyers have a specific taste for high-end homes that will greatly suit their lifestyle. That’s why it is important to take the proper steps to ensure your luxury home is sold in a timely fashion and at its best market value.

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1. Price your home right

In whatever market you’re in, pricing a home correctly is extremely important. However, pricing a luxury home is even more challenging. Custom features, upgrades, high-tech automation systems, amenities and even the outdoor view vary from one home to the next. Consider the dangers of overpricing, or even underpricing it. The luxury price range of homes also vary per region. Pricing your luxury home competitively from the very beginning will attract more buyers and won’t let it sit on the market for too long.

 

2. Hire a realtor who has extensive knowledge of the luxury home market

Hiring a real estate agent who is also a local luxury home expert could be for the best if you are selling one of your most prized investments. Your chosen realtor should have a comprehensive marketing plan/system that they can use in promoting your home. Ask whether they have a team of other agents who also work in the luxury market and can help him/her promote your property to potential and qualified luxury buyers.

Know whether the agent has other listings in your specific neighborhood, as proof of his/her expertise. It may also help if the realtor and his team have a custom website where they can also feature property listings.  

 

3. Decide whether to put your home in a “pocket listing”

“Pocket listing” means listing your home exclusively with an agent, without putting it in the MLS. In other words, your home won’t be listed publicly. The listing agent can only promote your property through word of mouth to their buyers and to other luxury home agents. Only serious and qualified buyers who can show proof of financial capacity may view the home.

However, listing your luxury home in the MLS is still the most effective way if you want it to be sold at its best price in the shortest possible time. A pocket listing may provide some privacy for you as a seller, but it may hinder some of your marketing efforts.

 

4. Use professional photos/videos and utilize effective marketing

Using amateur photos in promoting your luxury home is a big no-no, especially if you decide to promote it publicly.

In the NAR Real Estate in A Digital Age Report (2016), 44% of homebuyers in this digital age looked for properties online first, so it’s a no-brainer to use quality photos and videos when presenting your home online. In taking photos of your luxury home, greatly consider the lighting, photograph your home’s best amenities and custom features, and highlight its exquisite location and the panoramic view surrounding it.

Most local MLSs also have a limit on the number of photos you can showcase online, so a professionally-created video or a virtual tour could be an advantage in selling your property. A virtual tour could give potential buyers a “walkthrough” of your luxury home.

 

5. Present your home’s location and lifestyle correctly

Luxury homes are all about lifestyle and location. Utilizing a video or virtual tour is also a great marketing tool as it can accurately portray the location and lifestyle your home provides to its future owner. Prospective buyers would want to know if the home not only suits their preferences, but also the lifestyle it portrays. It is important for them to also know who else is living in the vicinity.

 

6. Consider the right timing when selling your home

Timing plays a large role in selling your luxury home and showcasing its feature amenities. It’s important to select the correct time of the year to sell, and to consider the current luxury housing market. For example, selling a home with a luxury waterfront and resort-style infinity pool in the middle of a cold and stormy winter may not seem to be the best idea. The same goes for listing in areas with weather events that may not complement the house’s features.

 

7. Clean, declutter and stage your home

Staging any home before selling could definitely help, especially in million-dollar luxury homes. Some luxury homeowners enlist help in keeping their home clean, so staging could be the only thing that’s needed. The luxurious amenities in a home should be showcased to help potential buyers envision themselves in it. For an instance, a magnificent formal dining room should be staged with elegant dinnerware to help buyers visualize having their fine dining and memorable parties.

Top 5 Things A Great Real Estate Agent Will Do For Home Buyers

According to NAR, 87% of homebuyers still choose to hire realtors. You might think that not hiring an agent will save you money, but being your own agent can actually cost you more in the long run. Also keep in mind that time is a resource, too. Hiring an agent can save you lots of time and spare you the hassle of juggling all your personal and home buying tasks.

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1.    Provide you with excellent options  It could be a tiring and overwhelming experience when you’re house hunting, and as a buyer, there would be a good deal of emotions involved when choosing the home that you like and fits you and your family’s needs. On top of that, you also have to get a good deal that would fit your budget. An agent who is knowledgeable in the market and duly takes note of your preferences will make the buying process more comfortable for you. Given that, they could give you a list of homes to visit and provide you with advice on the neighborhood, surrounding schools in the area, spaces for recreation, weather/season hazards, and other valuable information that you need to know.

2.    Guide you through the whole process – It’s useful to educate yourself on the buying process, but there might be real estate jargon and some skills that only professional real estate agents would know and could play out well. It’s not a walk in the park to buy a home, and one of the most important things that you have to work through is examining a contract from the seller (and in some cases, making one of your own with the help of a lawyer) to protect you and would enable you to back out from the deal if certain conditions are not met. Contracts and conditions are what experienced agents work with on a regular basis, so you could trust them to know what you should and shouldn’t agree to, and what important conditions you have to lay out as a buyer. A good agent will also willingly suggest to you that you have the property be inspected by professional home inspectors so that you can know if there are any repairs to be made.

3.    Negotiate on behalf of you – Negotiating between a buyer and a seller is always tricky. An agent will act as a messenger for both sides and can properly communicate your preferences and apprehensions about the property that you’re buying – without offending the seller and putting the deal at stake.

4.    Monitor your loan commitments – One of the most important things to ensure when home buying is financing your home through a mortgage. According to The US Federal Reserve Survey of Consumer Finances, home-secured debt remains the most common type of debt held by families in the US. A good agent will have a huge network of lenders and other professionals that could make even the loaning process – from being pre-approved to being pre-qualified – safe and secure for you. If you’re a first-time buyer, it’s common to get yourself into mortgage mistakes, but an excellent agent would monitor your loan status and advise you on how to protect your approval. A good agent will remind you to put significant purchases on hold and to avoid taking new loans before you close the deal on buying a home.

5.    Get you through the closing – There is still is a pile of things involved in closing a home purchase deal, such as dealing with closing costs that include lender fees, insurance fees, and title fees. A diligent agent will walk you through everything that needs to be done upon closing and will tie loose ends for a smooth transaction. Want to know more about the fees

 

5 Most Common Home Buyer Fears And How To Overcome Them

A home is possibly the largest purchase you’ll ever make, and it’s normal to overthink even the smallest details in the process – especially if it’s your first time to invest in real estate. A lot of cash is at stake, and you want to make sure that you’re getting the best deal for every penny.

While buying real estate entails a lot of careful planning and extensive research, you won’t be going through it alone. Your agent will be there to help you every step of the way. Even so, we understand that peace of mind can still seem elusive and that your fears can bubble up to the surface even when you least expect it. To help you with this, we have listed down the top 5 fears homebuyers have, and a guide on how to overcome them:

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1. Dealing with a less-than-perfect credit score

The thought of securing a loan when you have a less-than-perfect credit score can be quite stressful, and the fear of not getting approved may hold you back from working on a significant purchase such as buying a home.

If you’re convinced that you’re ready to buy a home, first get a copy of your credit report and make sure that there are no errors. According to a report done by the Federal Trade Commission, 1 in 5 Americans is being overcharged for his/her financial obligations due to a mistake in his/her credit report. If you’re familiar with loans, you know that the lower your credit score, the higher your interest rates will be. The accuracy of your credit report is crucial in ensuring that you won’t be unrightfully burdened with higher interest rates.

Still, if your credit is less than perfect, you have no reason to feel embarrassed and helpless. Many homebuyers are dealing with the same thing. The most practical thing you could do is to gradually pay off your delinquent accounts, improve your debt-to-income ratio, and try not to incur any new debt. Be proactive about your credit and start improving it until you’re confident enough to apply for a loan.

 

2. Biting off more mortgage than you can chew

A sizeable monthly payment can be overwhelming to think about, but you can combat your fears by having a firm understanding of your financial situation. To achieve this, you will have to prepare a budget that factors in all your current and ongoing bills. List down all your monthly payables, including credit cards, student loans, car amortizations, etc.

When you have an accurate account of your monthly cash flow, you’ll find it easier to determine how much you can afford to comfortably spend on a house. And, if you’re serious about purchasing a home in the very near future, the financial boundaries you’ve set for yourself will help you create sound decisions.

 

3. Sudden or gradual decline in property value

A decline in property value may occur for any home, regardless of size and location, and even without any form of disaster. While it is impossible to completely predict what will happen to home prices, you can still do your part in taking wise precautions to reduce your risks.

Nearby homes, surrounding facilities, and neighborhood features play a huge role in determining a home’s property value. If you want to ensure that your home wouldn’t suffer from a steadily decreasing value, learn how to spot unhealthy neighborhoods and avoid purchasing a home from those kinds of areas. Choose a well-kept neighborhood with a thriving community – a low crime area in which people feel safe walking down the street at night, especially children and women. Make sure that the area is mainly owner-occupied and with quality schools and hospitals nearby. You can even inquire with the local government about future development plans in the area.

 

4. Keeping up with upkeep costs

Even homes that are in the best shape will require some amount of upkeep, and every homeowner will have to deal with maintenance costs one way or another. Don’t worry, though, because while these expenses are inevitable, there are proven ways to mitigate them:

a)    Choose a well-maintained home that has recent upgrades and replacements, such as new plumbing and a strengthened roof.

b)    Hire a professional inspector to spot home defects that would otherwise go unnoticed.

c)    Repair small problems right away before they become major repairs.

d)    Set aside a substantial emergency fund, and regularly add to it over time.

 

5. Unsatisfactory purchase that leads to buyer’s remorse

It is natural to doubt your decisions before a major purchase, and it’s not uncommon for home buyers to question a lot of things even after closing a deal. However, if you want to lessen the anxiety that comes with buying a home, prepare a detailed list of everything you need AND want in a house. Discuss it thoroughly only with your immediate family, as too many people pitching in their advice will just be confusing and unhelpful.

Being firm with your standards and sticking to your budget will not guarantee that you’ll feel perfect after buying a home, but it will help you properly justify the decisions you’ve made and make you feel better about your purchase.

5 Tips For Finding The Perfect Vacation Home

Life in the city can be too stifling sometimes – there are plenty of spaces for bustling enjoyment but not much for tranquil relaxation, plus there could be too many people and not much community. You know that it would do you and your family so much good if you could escape from the city when the times call for it, without all the hassle of booking hotel rooms, carrying luggage, and constantly needing to plan out itineraries.

A vacation place in the right location with an engaging community that suits you and your family whims and needs should very well be a house that you are always welcome to come home to. Also, you could opt to rent it out whenever you’re not going to visit. This poses your vacation home as a viable investment. But for now, let’s focus on helping you find the perfect vacation home.

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  1. Visualize and list down how you want your vacation home to be – If you’re living in an apartment in the city with just the right amount of space for you and your family, you may want your vacation home to be bigger, where you and your kids can comfortably lounge in and invite some friends over. You could also be dreaming of having it near the sea so you can often hear the calming sound of the waves. Be clear about what you want in your house; list it down or make sketches if you could. When you know what you want, finding the perfect home will be easier for you and your agent since you can narrow down your options and save time, effort, and money.

  2. Top point to consider: location – you might want to consider its proximity to your main residence. According to an article on CNBC, over 80% of second-home buyers choose a house within driving distance. If that’s the case you choose, you and your family can frequently visit and maintain the house. Also take into account its proximity to places such as police and fire stations, and hospitals. If it would require you to fly out every time just to go there, you might want to reconsider. But really, if you long to be near bodies of water such as beaches or lakes and your home is away from all of that, then by all means, buy your vacation home near such areas. Just make sure to check your local airport so that you’d know if they offer regular flights.

  3. Hire an agent with great knowledge on the area – More than just helping you with the whole buying process, hiring a local agent in the area that you’re choosing to buy would be to your advantage. They’d be giving you vital information for you to consider such as weather and environmental hazard issues, property rental rules and local zoning. They could also give you information on local novelty places to hang out or dine in with your family, and could even acquaint you with the local community.

  4. Consider the long-term family appeal – What are your family’s passions and hobbies? Are they lovers of the great outdoors and are always up for a hike or a surf session? Or do they prefer to stay indoors and play board games? Note that this vacation home is a place you will create memories for years, so let your family have their slice on the decision making.

  5. Choose to be in a community that you and your family can engage in –  According to NAR, 78% of home buyers surveyed that neighborhood quality is more important  than the size of the home. We are social animals, and as said in the previous number, the vacation home will be used for years, and one of the best reasons to utilize it and stay there for long is to have you and your family be part of the local community. You guys could get together for common hobbies (or you might find yourself a new one because of them, too!) and even advocacies. Belonging to a community will surely enrich you and your family’s experience in your vacation home.

10 Things You Need To Know Before Buying A House Remotely

There are several reasons why you are looking at a property outside of your state – you want or need to relocate, you want a vacation home, you’re looking for an investment, or you’re buying for children. As you might know, buying a house isn’t really an easy task, and maybe even more so if it’s not within your local area. The whole process would double your need for time and money resources if you want to be more hands on it. But if that mode can’t fit into your busy schedule and tight budget, here are some tips to help you with buying a house remotely.

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  1. Hire a good agent.

    It’s always important to hire a good agent when you’re buying property because they’re the ones who would communicate in behalf of you to the sellers, would deal with most of the paperwork, have you in the know on some real estate jargon, and optimally, put you up with a good deal on the house of your liking. And if you’re buying outside of your state, they would act as your proxy which means that your agent would have to deal with nearly the entire home-buying process. Do your homework; research and ask for suggestions from trusted friends so that you can make sure that you find an agent that you could communicate well with. You could have a pool of choices and conduct and interview. If you want to know the right questions to ask during an interview, see How To Choose The Right Real Estate Broker.
     

  2. Be clear on what you want, and what you’re buying.

    It’s good that you are clear on what you want on your house so that your agent can find properties that are suitable for you. Make a list and give him or her examples of houses with features that fit your needs and liking. But don’t just settle in giving them details about the aesthetics and layout! Also give your agent details about your preferences in the neighborhood, whether you want it close to schools and hospitals or if you want it to be in a tranquil, secluded area. Also, list down things that you want to be sure of will be included in the sale such as fencing and fencing posts, benches, feeders, shelters and livestock pens, existing farm or hunting leases that give other people the right to be on – farm, graze, hunt, or camp on.
     

  3. Map your time.

    Consider your schedule. If you could squeeze in a day or two for a trip to the property, that would be good so that you could personally look and check the house. But if your busy life doesn’t permit it, still give it ample time in your schedule to have meetings with your agent and your lawyer so that you can be assured that things are doing well and even if you’re not firsthand dealing with the transaction.
     

  4. Do your research.

    Buying a house is a serious task that involves a hefty amount of resources such as time and money, so be sure to be well-informed on what you’re buying. First thing to consider is that you might want to select a property in an area that features healthy housing markets and a strong economy so that your financing doesn’t fall through. Also, if you want to be sure of what you’re buying and will be taxed on, you (or your agent) will need to visit the county assessor’s office. Compare the information on the property from the office with that from what the seller is listing. If you find any discrepancies, talk to the assessor to find out why. Another important matter to consider, especially now that you want to purchase in a rural area is to check their rural resources. Acquaint yourself with the County USDA Farm Service (FSA) office so that you could be familiarized with conservation issues such as erosion control, wildlife habitat, pond construction and other challenges that you may not be ready for as a city dweller. They can tell you about the resources you may need and answer your questions about rural living.
     

  5. Consider renting first before buying.

    Moving from the chaos of the city to the peace and quiet of the rural seems like a good and refreshing idea. But sometimes, ideas just look good in your head. If you have the luxury of time and money to test the waters and rent out the house before you buy it, consider doing so. According to Paula Pant from AffordAnything.com, an expert on buy-and-hold real estate investing, it’s worth a try to rent first since housing is an investment that cannot easily be liquidated. She suggests spending at least 6 months in the place. This could brace you and your family for life away from the city. You could also have the chance to familiarize yourself with the area and the house to see if it suits your lifestyle or if it’s worth making a switch in your lifestyle to.
     

  6. Make sure to check the title search and insurance.

    If you’re buying a rural property, it’s possible that the land has been listed as a dump-site or a hazardous waste site. Have your agent check the title for the specific property or buy the title insurance so that you can be sure that it’s safe for you to stay in. Another issue that could be addressed by checking into the title is for avoiding liens or encumbrances. This will make sure that the property is really owned by the seller, if there are any tax liens or legal actions against the property.
     

  7. Consider financing matters.

    You know that a real estate purchase can be financed using a mortgage. If you want to purchase through this way, have your credit reports ready. The leveraging offered by financing is a huge advantage to you as a buyer, but there are some caveats to consider if you’re buying the house as an investment. According to Bankrate, mortage insurance doesn’t cover investment properties, which means that you have to pay more than 20% of the total purchase price to gain financing.
     

  8. Request a walk-through contingency.

    If you haven’t had the time to physically see the property, it’s advisable to negotiate in the contract a walk-through contingency so that if the property does not measure up to expectations in person, you will be safeguarded. Do take note though that sellers are not required to agree to it and may ask for a higher purchase price in order to comply.
     

  9. Know about remote closing.

    When you’re about to close the deal, remember that purchase paperwork is full of a lot of lingo that you may not understand as a buyer. Have your agent assist you with those and make some research of your own. Also remember that remote closings hinge on the ability to locate a mobile notary, so you'll need to ask your lender, agent, or title company for recommendations early on in the process.
     

  10. Have an exit plan.

    In case you need to move out for some reason, assess what’s the best option for you to make and consider the time and costs involved. Would it be better to rent the place out or sell it? Have yourself and your trusted agent assess what option could be a better return for your investment.

For Military Members and Their Families: 10 Things to Consider Before Getting Into Home Ownership

For active-duty military members and their families, purchasing a family home is a complex and weighty decision.

Following their Permanent Change of Station (PCS) move, the decision to buy a piece of the American dream they fought to protect could be affected by numerous financial and personal factors. Here are some things military members and their families should consider before deciding to buy their next home:

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Financial Considerations

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#1 Cost and Monthly Payment

Among many active military families, there is a great debate regarding the cost of renting vs buying a home and paying the monthly mortgage. Rental costs and average home prices may vary greatly depending on where you are moving in the US.

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#2 Market Prices

Aside from mortgage and downpayment, military homebuyers must also consider other factors such as the average price within the local area, the rate of foreclosure, and the condition of the local market.

It is best to consult a local military-friendly real estate agent, whom you can discuss with other factors that will increase your monthly cost, including real estate taxes, HOA fees, and the cost of insurance, among others.

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#3 Tax Benefits

When you own a home, you get to deduct the mortgage interest you pay on your loan from your taxes. This tax benefit lowers your monthly home expenses. You should consider calculating your tax benefits vs your actual costs for you to determine your cost of ownership.

Likewise, when it comes to property taxes, you know you’re paying for a home that you really own. Those property taxes are also deductible from taxable income on your federal income tax return and some state income tax returns, and thus offer you additional income tax savings.

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#4 Using Your Basic Allowance for Housing (BAH)

Many military members receive a monthly housing allowance, and what most of them don't know is that they can use this money to qualify for a home loan. Especially in higher-cost areas where the service member wants to move, BAH can help them make that big transition.

BAH is a tool that can help lenders gauge what kind of mortgage payment an eligible veteran can handle. This housing allowance is based on several factors and can change on an annual basis, so it’s important to consider this as well.

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#5 Eligibility for a VA Home Loan

If you've chosen to finance your home using Veterans Affairs (VA) home loans, be aware of the eligibility requirements and how it may impact your future relocation.

VA home loans are flexible loans that come with outstanding benefits like no down payment, no mortgage insurance, and more lenient credit requirements. VA loans are best for the purchase of your family’s primary residence.

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#6 Expected Time in Current Duty Station

Because military members may be called upon to deploy or change duty stations at any moment, there should be a compelling reason to buy a home. You'll want to consider closing costs ahead of time when you buy and sell. It may help to also assess the expected costs of purchasing and subsequently selling your home.

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#7 Potential For Renting Or Selling The Property

There is a need to ensure that a purchased home is one that can be very marketable for the purposes of selling or renting. It's important to know the best type of home that people are buying or renting in a certain area.

Moreover, if you’re considering purchasing a home near a military base of operations, chances are you’ll be able to rent or sell the property to other military personnel who wants a home of their own.

Personal and Emotional Considerations

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#8 Personal Concerns

Even before all financial considerations, you should know yourself whether you are ready to buy or not. Are you ready to call yourself a homeowner or a landlord? Are you ready to have another responsibility? Will you be able to handle the necessary repairs and maintenance associated with home ownership? Are you looking at it as part of an investment? These are just some of the questions you need to ask yourself before making that big decision to buy.

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#9 Proximity to Family and Friends

Your family, friends and loved ones are your support system. If you're used to living near them, you probably don't want to be stuck in a place where you're all alone or where it may take a long ride for you to visit them. However, compared to renting, even owning a home in a new neighborhood could give you a sense of belonging and stability.

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#10 Retirement Considerations and Future Plans

This may be connected to your financial concerns and stability, but it can be personal as well. If you are stationed in an area where you may soon want to retire, consider the state tax rates, treatment of military pay and benefits, and whether your potential home is near any military healthcare facilities. Thinking of these things ahead of time is also taking care of your physical and financial health in the future.

An Expert Guide On Buying A House You Can Actually Afford

Purchasing your first home can be one of the most exciting financial milestones of your life, but it will also be the riskiest. While a trusted realtor will offer you invaluable advice, you will still need to do a lot of work to have a good sense of a realistic budget. Only you can determine how much you can really afford, and the biggest mistake you can make will be to overlook some important details of your financial situation. Strive to be very careful, and let this list guide towards making the right decisions.

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1. Prepare a detailed computation of your expenses.
 
Prepare a budget that factors in all your current and ongoing bills, while leaving enough wiggle room for unexpected bills you may need to deal with. An old rule you’ll be unwise to follow still is allowing yourself to buy a home that is priced two to three times your gross income. This computation doesn’t take into account your debts and monthly family expenses. Make a list of everything you pay for on a monthly basis, including credit cards, student loans, car amortizations, savings, and even date nights with your spouse. Allot a fixed budget for each so that you can have a precise idea of exactly how much would be left to spend on homeownership costs.
 
2. Use mortgage calculators only as a guide.
 
It’s great to take advantage of the available mortgage calculators at your disposal, but use these only as a starting point. Take a closer look at the results and make further computations based on the stability of your income and how personal choices in the future may affect your cash flow. Are you planning to have a baby in the next two to three years? Are you thinking of going to graduate school? These kinds of plans will have a major impact on your finances, so make accurate predictions and think as far ahead as you possibly can.
 
Also note that very few calculators will be thorough enough to allow a holistic look at your current financial situation, so be careful with the ones you choose to use as you may end up overestimating your financial capacity. Try slashing a good 20% off the affordability results shown by the typical online calculator, and you’ll see that this figure is a more realistic or practical amount.
 
3. Don’t max out your budget.
 
Getting qualified for a certain amount doesn’t necessarily mean you should spend it all. The costs of homeownership are highly variable since property taxes and insurance costs change every year. However, most lenders will qualify you for a mortgage payment based on your dues for the current year and will leave no room for adjustments should your expenses go up in the following years. This is why it is essential to figure out the most practical way to spend the amount you’ve been approved for.
 
4. Think beyond your actual mortgage.
 
Consider the myriad of expenses that would continue long after your mortgage has been paid off, such as maintenance, utilities, and association fees. Some of these fees are even likely to increase over time, so it’s best to do the math and figure out if you’ll be comfortable handling all these simultaneous expenses.
 
5. Be ready for the possibility of a financial breakup.
 
While the possibility of a breakup between you and your spouse sounds impossible at the moment, it is still advisable to cover all your bases and be comfortable with the idea of paying for the house alone. This doesn’t mean that you’re preparing for an inevitable separation – this can simply help determine whether you’ll be able to shoulder your monthly dues if your spouse suddenly loses his/her job, or if he/she cannot contribute for a particular stretch of time. This will also help you avoid taking such a risky loan.