FoulgerGroup Northern Utah Real Estate Buyer Tips
The following real estate buyer tips should give you enough information so that together with your Realtor and lender you can make informed decisions about buying your home. The result will be perhaps the most rewarding thing you can do……owning your own home.
Selecting the right Realtor
The FoulgerGroup specializes in making the home buying process easier for you. We offer advise to help you to understand the local real estate market, assist in locating the perfect property, advise you in preparation of an offer and expertly negotiate the sale. Negotiating a purchase in today’s real estate market can be very complex, as often it takes multiple offers and counteroffers before a contract is finalized. We ensure that the offer you make is in line with the value of homes in the area you are trying to buy into. We confirm that disclosures are received and reviewed and offer advise on what inspections should be done. We will be with you every step of the transaction, from the initial meeting through recording.
Things to Consider When You Purchase a Home
Location & Neighborhood – see our neighborhood data in local area tab searches on our website.
•Suburbs or Country.
Pros: Generally less expensive. Often newer. Tract homes are conforming. More home for the money.
Cons: More time in traffic if driving to town for work. Further away from entertainment options cities offer.
•Urban.
Pros: Closer to many employers. Walking distance to theaters, restaurants, schools. Many period homes offer more distinctiveness in styles.
Cons: Often noisier. Higher crime rates. More expensive.
•Busy Streets.
Pros: Often homes on streets with more traffic are thousands of dollars cheaper. If noise doesn’t bother you, don’t pass up homes on busy streets. Drive by at different times of the day / week to ascertain noise levels.
Cons: These types of homes will always sell for less than others in the same area. If bedrooms are located near the front of the home, sleep may be disturbed.
•Cul de sac.
Pros: Number one choice of buyers with children.
Cons: Less privacy, neighbors know more about you.
• Corner lots.
Pros: Often larger lots. Fewer neighbors. More visibility.
Cons: More traffic noise. More vulnerable to vehicles jumping the curb. Kids might trespass at the corner. More sidewalk to shovel in winter.
Type of Home
•Single Family.
Pros: Good appreciation. Opportunity for gardens. More privacy. Quieter.
Cons: More expensive than our next category. More maintenance.
•Condos, Townhomes, Cooperatives.
Pros: Less expensive than comparable single-family homes. Generally newer so fewer repairs. Lock-n-go lifestyle. No yard or exterior maintenance.
Cons: Less privacy. Noisier. Common walls and/or floors and ceilings. Sometimes no private yard or balcony.
Number of Stories
•Single Story.
Pros: Easy wheelchair access. Some medical conditions such as bad knees make it hard for certain individuals to climb stairs. Easier to clean.
Cons: Can be noisier if stereos or televisions are located on the same floor as bedrooms. Some people feel safety is compromised if bedrooms are located at ground level. More of the lot is absorbed by living quarters.
•More than One Story.
Pros: More living space on same foundation than a ranch home. Less noise if entertaining on lower level while other family members sleep upstairs.
Cons: More trips up and down the stairs to carry stuff to bedrooms. If laundry rooms are on the second floor, washer leaks are major. Might need dual vacuum cleaners. It is difficult to maintain consistent temperatures on each level without dual heating and cooling units.
•Split Levels.
Pros: Often less expensive if purchased with lower level unfinished. Higher ceilings are appealing. Downstairs family room separates noise levels from upstairs. More square footage on same size lots as ranch homes.
Cons: Less storage space. Hassle to take trash downstairs and carry groceries upstairs or vice versa. Kitchens tend to be smaller.
Interior Specifications
•Number of Bedrooms.
Pros: Common minimum requested configurations are 3 bedrooms. Newer parents prefer bedrooms located on one level.
Cons: 2 bedrooms appeal primarily to first-time home buyers, singles or seniors. However, don’t discount a two bedroom if an extra den will satisfy your space requirements.
•Number of Bathrooms.
Pros: More than one bath is preferred by most people. One bath homes are often less expensive.
Cons: Don’t pass up a one bath home if there is room to add a second bath. Sometimes it costs less to put in an extra bath than it does to buy a two-bath home.
•Square Footage.
Pros: larger spaces offer more room and cost less per square foot than smaller spaces.
Cons: Don’t be misled as lay-out is more important than actual square footage. Sometimes well designed smaller spaces appear larger.
•Bonus Rooms.
Pros: Extra space for media rooms, art studios, children’s playrooms, gyms, den/study.
Cons: More expensive.
Another happy homeowner!
Garages
•Attached.
Pros: Cheaper to build. Convenient if raining or snowing.
Cons: Higher noise levels inside the home from cars. Some people feel they are an eye sore. If the garage door to the house self locks, you could get locked out at an inopportune time.
•Detached.
Pros: Can be tucked away from site lines. Quieter.
Cons: More expensive to build. Farther to walk in bad weather.
Additional Considerations
•School districts.
•Special amenities such as fireplaces, pools or spas.
•Condition of plumbing, electrical, heating & cooling units.
•Available utilities such as cable or DSL, satellite.
•Sewer, cesspool or septic connections.
•Fixers. If you’re handy with tools, you might save a lot of money if you consider homes that need minor improvements, fresh paint or new carpeting.
Financing the Home Purchase
Perhaps the most important consideration when buying a home is how to finance the purchase. Buying a home can involve the commitment of a significant amount of your savings. Questions such as how much can I borrow and how much can I afford to pay on a monthly basis are very important as the decisions that are made here can significantly impact your financial situation for years to come.
Let’s start by addressing the issue of the down payment. Lenders have many loans available for home purchases, There is no hard and fast rule on how much to commit to a down payment, but try and anticipate your cash needs as best as you can before determining how much to commit to a down payment. Generally, the less of a down payment you have, the greater the loan you are going to need to close the purchase. The greater the loan you need means your monthly payment will be greater, which means the income you need to qualify for the loan will need to be greater too.
The next important issue is the loan itself. What follows is a very brief discussion of a highly complex subject. The number and types of loans available for home purchase are about as numerous as the number of lenders making loans, so this discussion is designed to give you only a broad brushstroke view of the lending market. Lenders generally make two types of loans available for home purchases, a Variable Interest Rate Loan (sometimes known as an Adjustable Rate Mortgage) and a fixed rate loan. Within those two types of loans, the loans can either be “Conforming”, which means the loan amount is within the Fannie Mae/Freddie Mac loan limits (check with a lender in your State for the current loan limits), or it is “Non-conforming”, which means the loan amount is in excess of Fannie Mae/Freddie Mac loan limits.
Variable Interest Rate Loans generally have a lower interest rate at loan origination, but have the provision for the lender to increase or decrease the interest rate on the loan based upon the movement of whatever index the loan is tied to. Because the interest rate can be adjusted, the lender has the right to increase or decrease your monthly payment accordingly. When and by how much the payment can be changed depends upon the loan terms you agreed to. The one thing you need to be watchful for is that many times a lender will qualify you for your loan at what is called a “teaser rate”. While teaser rates are designed to help you obtain a loan, this is generally accomplished by starting your loan at an artificially low rate. After a specified period of time has elapsed, perhaps three to six months, the interest rate on the loan is then increased to bring it in line with where the true interest rate should be. This can result in a significant increase in the amount of the monthly payment. While Variable Interest Rate Loans have become popular over the past fifteen to twenty years, if you are not comfortable with the idea that your payment can be increased or decreased by your lender, then the more traditional fixed rate loan is probably for you.
Fixed Rate Loans are still the most popular form of financing. With this type of loan, your payment will remain constant for the entire term of the loan. These loans generally have a slightly higher interest rate than the Variable Interest Rate Loans at origination, but unlike the Variable Interest Rate Loans, the interest rate will remain fixed throughout the term of the loan. The traditional fixed rate loan generally fully amortizes over a thirty-year period, with the payment in the first month the same as it is in the 360th month. For those buyers who want to know that their monthly commitment to a home payment will always be the same, this is the loan for you. Also remember that whatever loan you obtain, the lender may require an impound for real property taxes and insurance, which will further increase the monthly payment. These impounds are designed to make sure that the borrower has enough funds available to pay for property taxes and insurance when they become due and payable.
How much home can you afford to purchase? This is a difficult question to answer, as each potential buyer’s situation is different. The very best way to answer this question is to go and talk to lenders and ask them to calculate how much they can qualify you for based upon your income, length of time on your job, and amount of your down payment. Lenders will need to know how much debt you have, such as car loans, credit cards, student loans, etc. Remember, once you actually apply for a loan, all the information you use to qualify for the loan will be verified through the loan qualification process.
Another suggestion would be to talk to more than one lender. Each lender may have a slightly different loan to offer. Find out which lenders are most active in the real estate market in your area.
FoulgerGroup Northern Utah Real Estate Buyer Tips