3 For Buyers

Humboldt County CA First Time Home Buyers – Not Financially Ready to Buy? Here’s Some Tips on Getting There.

Posted on October 25, 2008. Filed under: 3 For Buyers, First Time Home Buyers | Tags: , |

It breaks my heart when a low income buyer walks into my office, because they so badly want to own a piece of the “American Dream,” as so many of us in our profession have promoted to the buying public over the years.  But let’s be realistic.  Not everyone is capable of owning his or her own home.

Months ago I was watching Oprah and she had Suzie Orman on the show soon after the lending world went into a tizzy and the number of foreclosures nationally increased dramatically.

The thing I like about Suzie is her ability to give real life common sense advice.
I remember one woman stand up and ask Suzie what she should do, because she no longer could afford to own her home.  Do you know how Suzie responded?

She told this woman not to be ashamed of having to sell her home.  That just because she didn’t own her own home doesn’t mean she no longer has a home.  “Home is in here (Suzie pointed to her heart).  Home is your friends and family, pets and loved ones.  Just because you no longer live in your physical home that you own, doesn’t me you should think less of yourself.  Home is what you make it.”

DollarsSo for those first time homebuyers and the agents who represent them, here’s what I have been advising my clients:

1)    Get into the habit of saving a certain percentage of your take home every month.

  • Why? Because most loans out there require a minimum of 5% cash down payment of the purchase price of the home.  Not to mention closing costs, which can be as much as $6000 extra.
  • By saving your money you’re showing the lending world that you are a financially responsible person.  Because you’re thinking ahead.  You’re more likely to have an emergency fund to pay your mortgage, g-d for bid you lose your job tomorrow.
  • One way to do this is to figure out what your monthly mortgage payment might be.  Now subtract your rent from the estimated mortgage payment.  And put the remaining amount into your savings account each month.  This accomplishes two things:  1)You get to see if your comfortable with your monthly payment.  Plus you get into the habit of saving, and 2) You’ll be saving towards the down payment once you’re ready to buy.

2)    Pay off your bills on time, every time.  This also leads towards building good credit.

  • Again this shows a lender that you are a financially responsible person. If you have a history (credit reports reveal this) of paying off your bills and paying on time, you are more likely to pay your mortgage on time, every time and not miss a payment.

3)    You need to be making enough money to qualify for a loan.

  • The lender will only allow you to spend approximately 1/3 of what your gross monthly income is to be used towards a mortgage payment.
  • Lenders look at the PITI (principle, interest, taxes and insurance) to calculate what your monthly mortgage payment will be and what you can realistically afford to pay every month.

Let’s say for example you want to purchase a $225,000 home:

  • You have cash to put 5% down and the lowest interest rate you can get for your loan is 6%. Your monthly payment will end up being approximately $1600 per month, including taxes and insurance.   If you only bring in a gross of $2500 per month, you can’t afford this home.
  • Remember, you still have to eat, pay your bills, etc.  Oh and yes, the lender looks at this too.  It’s called your debt to income ratio.  Even if you make enough money per month to pay for that $1600 monthly mortgage payment (that is you make over $4800 per month) if you have too many bills to pay, like your car payment, bill for that big screen TV you had to have, etc., then the lender will not be able to give you that loan.

Does this mean you will never be able to own your own home?  For some of you that dream may not be attainable unless your income increases.  But for those of you out there who can afford a home, but don’t have enough for a down payment plus what you’ll need for your closing costs, sit down with a lender and figure out a good financial plan so that you can be in a position to buy in the future.  Maybe even the near future.

Copyright 2008 Jessica Bigger.  All Rights Reserved.  *Humboldt County CA First Time Home Buyers – Not Financially Ready to Buy? Here’s Some Tips on Getting There.*

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Visit www.GoHumboldtHomes.com for information about the Humboldt County Real Estate market, to learn more about how we can help you whether you’re ready to sell your current home or buying your first home.  Or just learn more about what our community has to offer if you’re considering moving to Humboldt County California.

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I’m Not Here to Sell You a House in Eureka CA…

Posted on October 25, 2008. Filed under: 3 For Buyers | Tags: , , |

I get the impression that many of the buyers out there considering buying their first or next home in Eureka, Arcata or anywhere in Humboldt County, California for that matter, believe that a Realtor only “sells houses”.

There may be some agents out there who just are in it for “the sale.”

But a great Buyer’s Agent isn’t selling you a house.  A great Buyer’s Agent is helping you through the entire buying process which includes:

Yellow Victorian

1) Getting Financing and knowing what you can actually afford.

2) Giving you information about the real estate process and the market so you are able to make well informed decisions.

3) Helping you find that right home that hopefully meets all of your needs and some of your desires (in your price range of course).

4) Writing up the offer and negotiating on your behalf (plus your agent should have a good relationship with other agents in the industry).

5) Helping facilitate the real estate transaction (once you are in contract with the seller) – making sure all the details are taken care of and helping you keep an eye on the prize (moving into your new home).

6) Move in Day – handing you the keys to your new home and offering assistance beyond the sale.

7) Being an objective third party to help you through it all.

Your Realtor is there to provide you a service and yes, they do get paid once they have completed the job for you.  In most cases the seller pays your Buyer’s Agent for a job well done.

Copyright 2008 Jessica Bigger.  All Rights Reserved. *I’m Not Here to Sell You a House in Eureka CA…*

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Visit www.GoHumboldtHomes.com for information about the Humboldt County Real Estate market, to learn more about how we can help you whether you’re ready to sell your current home or buying your first home.  Or just learn more about what our community has to offer if you’re considering moving to Humboldt County California.

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Remodeling an Older Home in Humboldt County? Keep in Mind Who Your Future Buyer Will Be

Posted on October 25, 2008. Filed under: 3 For Buyers, 4 For Sellers | Tags: , , , , |

If you are one of many homeowners out there thinking of doing some serious remodeling project on your charming old home let me give you a few things to keep in mind before you push ahead on your project.

1) Be sensitive to what you update:

  • Keep some of the items that make your old home charming – like older windows (especially those with stain glass in them), old wood siding, interior and exterior window trim, other decorative trim inside and outside your home, high ceilings, older beat up floors and antique hardware, to name a few.

There are many buyers out there who I would call the “This Old House” kind of home buyer.  The person who is looking for that charming old home with some modern ammenities.  When looking for my first home, l fell into this category.  My husband and I quickly realized we wanted to own an older home (preferably a Victorian or Craftsman).  Why?  Because we wanted to live in a home that had some character and wasn’t your standard “cookie cutter” ranch.   Plus we liked the idea of living in a home that had some history and discovered early on that Captain H.H. Buhne’s family owned our house for a few years in the early 1900’s.  Pretty Cool.Pantry in Victorian Home

2) You will most likely sell to a buyer who wants to own a Charming Old Home with character.

  • Remember that if you own an older home (especially a Victorian or Craftsman) your ideal buyer is going to be one who wants to own an older home.  So if you completely remove all the character out of your home and update it to look like any other home built in today’s style, you will most likely have a much harder time selling. When that charming older home buyer sees that your home is modern inside they will move on until they find that charming old home that has character inside and out.
  • A buyer who is looking for a modern home will look for a modern home.  Most modern home owners are not interested in the old home look, therefore they would most likely look for a home that was built more recently than older home that was recently and extensively updated (ie: charm totally removed).

3) Make sure your additions are consistent to the rest of your home.

  • Nothing looks stranger than an addition that stands out like a sore thumb on your house.  Remember your buyer is going to want an older home and if the addition really doesn’t flow with the rest of the home or neighborhood this could affect a buyer’s decision.

You may not be selling today, but you will eventually sell your home at some point in your lifetime.  In today’s market there are plenty of buyers out there looking for older homes with plenty of character and in the future this group will probably grow.  So be careful what changes you make to your home today.  They could affect the value of your home tomorrow.

The Pink Lady

Copyright 2008 Jessica Bigger. All Rights Reserved. *Remodeling an Older Home in Humboldt County?  Keep in Mind Who Your Future Buyer Will Be*

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Visit www.GoHumboldtHomes.com for information about the Humboldt County Real Estate market, to learn more about how we can help you whether you’re ready to sell your current home or buying your first home.  Or just learn more about what our community has to offer if you’re considering moving to Humboldt County California.

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Posted on April 22, 2008. Filed under: 1 Market Conditions, 2 The North Coast, 3 For Buyers, 4 For Sellers, 5 For Investors, 6 For FSBOs, General | Tags: |

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