3 Biggest Mistakes First-Time Home Buyers Make

All home owners were first-time buyers at one point. And you can learn from their mistakes. These are the most common mistakes we see first-time buyers make:

• Buying more home than they can afford.  
• Not getting pre-approved for a loan.
• Not using a real estate professional.

We have several homes listed that would be great for
 first-time buyers, like this one at 844 S. Kickapoo near MSU
and the one below at 310 N. Marie in Nixa.

The first two mistakes go hand-in-hand. Actually, all of these go together. When you are ready to buy a home, a good real estate agent will help you figure out how much home you can afford and encourage you to get pre-approved for a loan. Avoiding all three of these mistakes will save you time, money, and mental anguish.

Several factors determine how much home you can afford, mainly the down payment, closing costs, and monthly mortgage payments. See our previous blog for more about determining how much is realistic and manageable for you. 

Getting pre-approved for a loan forces you to go through the process of how much home you can afford if you haven’t already done that. Most lenders require that your home mortgage payment fall between 28% and 34% of your gross monthly income. The mortgage payment and all your other monthly debt payments should range between 36% and 50% of your gross monthly income. The lender will take into account your income, your assets, and your credit report when determining whether and how much you qualify for. (A good real estate agent can steer you to reputable lenders.)

Going through the pre-approval process helps you start looking in the correct price range. You don’t want to look at 30 houses and then find out all are out of your reach. When you have been looking at $200,000 homes, it’s hard for homes in the $150,000-range not to be disappointing.

Of course, as realtors, we think real estate professionals can help buyers. But if you talk to your friends and neighbors who have bought homes, they are likely to agree. Like getting a loan pre-approval, a good agent can also save you time and money and mental anguish.

You are likely to look at lots of homes on the Internet before you even contact an agent. But an agent can put that home into context for you. You benefit from the agent’s knowledge of the area and neighborhoods.  She can turn you onto areas you may not have considered—or even get authorization to show you homes you love but are not even on the market.

A good real estate agent can also take you to look at many houses at one time—much more efficient than waiting on open houses or making arrangements on your own. She will quickly know your likes and dislikes, helping to filter out the homes that would be a waste of your time for you to visit.

One more reason to use a real estate agent: A realtor is free representation for the buyer. She is your advocate in the process and serves as your personal expert in one of the major purchases of your life.

As always, we would be happy to walk you through the home-buying process. We want to help you avoid the pitfalls many first-timers make.

First Impressions Part 2: Tips to Improve Your Home’s Appeal Inside

At the seller's request, Holly rearranged a few pieces of furniture
at 932 S. Caliburn in Nixa to make sure buyers experienced
 the home's great light and floor plan
.

In the previous post, we talked about making a good first impression as soon as buyers see your home. The goal is to create such an appealing picture, buyers want to see the inside. We want them to stop and come in.

Tidiness reigns supreme inside as well as outside. Here is what we tell our sellers:

Declutter…everywhere. Pick up shoes, hide stacks of paper and mail, put away coffee table detritus, clean off bathroom counters, and hide nightstand clutter. Take a critical assessment of your home and address those places things tend to gather.

Go easy on aromatherapy. We usually tell people not to burn lots of scented candles. That often makes buyers wonder what smell the seller is trying to hide. A subtle, fresh scent is fine, just don’t overpower the buyer.   

Clean. Devote some time to a thorough and deep cleaning of your house. Clean baseboards, dust ceiling fans and blinds, and wash walls and doorways—all of the tasks that don’t make your weekly to-do list.

If you need help seeing your home objectively, ask your agent to help. Our sellers often turn to Holly to stage their homes. She has a great eye and can help you present your home in the best light possible. We consider this just a part of our service to sell your home successfully. 

First Impressions Part 1: Tips to Improve Your Home’s Appeal Outside

When it comes to blind dates and homes, first impressions matter. Before you list your home, you want to step back and take a look at how your home will come across to a buyer.

 

Even a seemingly simple thing can make a lasting bad impression (think bad breath). Take a minute to reduce the factors that might cause buyers to drive on by:

 

The yard: Keep the grass short. Trim bushes and weeds. Bag leaves. Clean up after your dogs. A well-tended lawn sends a message that the owner takes pride in keeping the home tidy. Remove any items from the yard, even things you consider ornamental. Less is more when it comes to the front yard.

 

The driveway: If possible, keep your driveway clear of cars, boats, and any other equipment. Park in the garage or down the street. Temporarily relocate any broken vehicles. Make your home seem approachable. Put trash cans and other equipment in the garage or out of sight…or move those items offsite until your home sells. You don’t want a junky first impression.

 

The porch: Create a tidy, welcoming stoop. Sweep the porch, brush away cobwebs, wash light fixtures and the front door, and remove trinkets that crowd the space. A potted flower is a nice touch. But if you choose to have potted plants, tend to them. A dead plant detracts from the pleasant appearance you’re trying to create. 

Here's a photo of the front of one of our current listings at 4008 E. Wilshire. Doesn’t it make you want to step in and see the rest of the home?

 

And this garage area of 5331 S. Virginia is clean and elegant. The landscaping makes it feel part of the whole house, adding to the homes overall appeal.

Just a little effort and attention to the outside of your home can create a good impression—one we hope buyers take with them when they see the inside.

What Will Your House Sell For?

Figuring out at what price to list your home is crucial in selling it successfully. Obviously, you want to get as much money as you can for your home. But often, sellers want to price their homes according to how much they want or need to get out of the sale—prices that have nothing to do with the home’s market value.

A few things to keep in mind:

• Realistic pricing will achieve the maximum price in a reasonable time.
• Your cost or profit is irrelevant; the market determines the price.
•  The cost of improvements is almost always more than the added value those       improvements confer.
•  Houses that remain on the market for a long time do not get shown.
•  A house that is priced right from the beginning achieves the highest value. 

What does affect your home’s value? Buyers. Specifically, what the buyer is willing to pay in today’s market based on comparisons to sold properties in your area.

To find the value of your home, we’ll do a comparative market analysis, assessing the location and characteristics of your home and comparing those to similar homes that have sold in your area. The market analysis takes into account the amount received from recent sales of comparable properties and the quality of comparable properties currently on the market.

The goal, of course, is to find a price that will attract a willing and able buyer in a reasonable time.

                        

Once the value of your home has been determined, we can decide on the listing price. Generally, the price should not exceed the home’s value by more than 5% or potential buyers may not even make offers. Naturally, if you want to sell quickly, your asking price should be very near the value.

What Features Help Sell Homes: Part II

In our previous blog post, we talked about the features that are becoming less common in new homes according to Realtor.com. Let’s turn our attention to the features you are most likely to find in new homes. (Again, our comments about what we find in the Springfield market are in parentheses.) If you are getting ready to sell your home, this list may give you some ideas of how to improve your home’s appeal.

1.      Walk-in closet (Although walk-in closets are not expected in every room, storage is always a concern.)

2.      Laundry room (Laundry rooms seem to be getting bigger to accommodate front-loading machines. People love having sinks in their laundry rooms. And an area where families can dump backpacks and shoes like mud rooms is a popular feature, too.)

3.      Low-emissivity windows 

4.      Great room (Open floor plans with great rooms and hearth rooms remain appealing to Springfieldians.) 

5.      Energy Star appliances (We haven’t had many buyers commenting or requesting energy-saving features. But usually, the greener the home is the more attractive it is to buyers.)

6.      Energy Star windows

7.      9-foot ceiling on the first floor (Higher ceilings do give a home a more open, upscale feeling.)

8.      2-car garage (Most Springfield buyers want three. Again, storage is always a concern. The more the better.) 

9.      Programmable thermostat.  (We don’t have people requesting them much, but new homes in Springfield are likely to have them.) 

10.  Granite countertop (Granite remains popular but we are seeing more and more people wanting marble.)

Do you agree with this list? Are these the features you would want in a new home? Let us know.

http://www.realtor.com/news/the-most-and-least-likely-features-youll-find-in-a-new-home-today/?identityID=6188292&MID=2015_0508_WeeklyNL&RID=281119602&cid=eml-2015-0508-WeeklyNL-blog_1_unlikely_features-blogs_sell

What Features Help Sell Homes: Part 1

Realtor.com put together a list of features that are disappearing from new homes—things that are becoming less and less popular nationally. We took a look at it from a Springfield perspective. Here’s what realtor.com posted (and our comments).

1.      Outdoor kitchen (We don't see a lot of these in Springfield, only in some higher-end homes. We do think an outdoor living space is a plus for buyers, but an outdoor kitchen is not expected or necessarily desired. )

2.      Laminate countertop (This really dates a home. Granite is still popular as is marble.) 

3.      Outdoor fireplace (This still seems popular in Springfield. An outdoor fireplace does add to the ambiance of the outdoor living space and is more likely seen in higher-end listings. We see lots of homes with smaller pits, too.)

4.      Sunroom (This remains popular with buyers in Springfield, especially if it has heating and air conditioning. It is a real plus.)

5.      Two-story family room (Ditto in Springfield.)

6.      Media room (We usually only see media rooms in higher-end listings.)

7.       Two-story foyer (With the newer, open floor plans, formal foyers in general are becoming less common in Springfield.)

8.      Walking/jogging trails (We still find being near these nature-related amenities a real asset for sellers.)

9.      Whirlpool tub in master bath (In new home construction in Springfield, we see larger walk-in showers instead of whirlpool tubs. Higher-end homes, however, continue to have both.)

10.  Carpeting on main level (Hardwood floors continue to be the most coveted flooring on the main level. Bedrooms still tend to have carpeting though.)

What once-popular features do you find less appealing or unnecessary? We would love to hear your take.

Source: http://www.realtor.com/news/the-most-and-least-likely-features-youll-find-in-a-new-home-today/?identityID=6188292&MID=2015_0508_WeeklyNL&RID=281119602&cid=eml-2015-0508-WeeklyNL-blog_1_unlikely_features-blogs_sell

How Much House Can You Afford?

Sometimes, what you want and what you can afford are two different things. To figure out how closely they align, you need to assess how much you can actually put towards a new home.

Here are the factors your lender will consider to determine this:

1. The down payment
2. The closing costs associated with your transaction
3. Your monthly mortgage payment

Down payment requirements
Most loans require a minimum down payment of between 3 and 5 percent of the total loan, depending on the type and terms of the loan. If you are able to come up with a 20 to 25 percent for the down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance. There are a variety of loan programs available for buyers and even some that don't require a down payment. We can help you find a qualified lender who can help you figure out which loan is best for your financial situation.

Closing costs

In addition to the down payment, you have to pay fees for loan processing and other closing costs. They can include fees for home inspection fees and title company. These fees must be paid in full at the time of the final settlement, unless you are able to include these in your financing. When you apply for a loan, your lender will provide you with a good faith estimate of all settlement fees and an estimated total house payment based on an anticipated sale price. Of course, these numbers are only estimates.Your lender will let you know an exact figure closer to the closing date.

Your monthly mortgage payment

Most lenders require that your monthly payment be between 28 and 34 percent of your gross monthly income. They also figure in how much your mortgage payment along with all of your other expenses and financial obligations will be each month. In general, they want your total monthly expenses to fall between 36 and 45 percent of your gross monthly income. 

The goal is to figure out how much you can afford realistically. Just knowing this will save you countless hours in your search for the perfect home. We can put you in touch with a competent lender and walk with you through this process. Just give us a call.

Source: Murney Associates, Realtors