How to Buy a Home – Part 1 – What Happens First

How to Buy a Home – Part 1 – What Happens First

Rainbow over Boulder ColoradoMoving in to a new home is one of the more exciting things we can do. The process seems simple enough – choose a house, write a big check and then move right in.  Of course there is more to it.  In fact, after selling homes since 1992, I know that no two transactions are the same.  Knowing what to expect and doing it in the right order goes a long way towards archiving your goal.  The following is my home buying 101.

Have a Firm Financial Foundation:

The foundation of a successful home purchase begins long before the home search.  It begins with having a sound financial footprint.  In today’s credit environment, a buyer needs both good credit and a sizable down payment.  At least a few months before the contemplated purchase you should check your credit and make sure that there are not any surprises lurking.  The days of 100% loans are gone, so you will need at a minimum 3.5% (FHA loans) plus closing costs ready to put down.  If you are getting a conventional loan or buying investment property you will need a much larger down payment.

Covered PorchFind a Good Realtor

The internet gives you all of the information you could ever ask for at the click of a button.  But when it comes right down to it, you need the assistance of a professional who has been through the process time and time again.  Most people end up working with a Realtor, so why not engage one early on in the process?  Realtor’s have tools that will save you time and put you on the right track sooner.  I can set up an automatic email search and a password protected website that work together to give you all of the details about all of the houses you may be interested in.  A good Realtor will help you navigate the process, get you the information you need and allow you to concentrate on your family and your job.  Make sure you have found a Realtor who is more interested in helping you find a great house for the long haul rather than a quick sale for them.  It takes patience and persistence to make sure you get the job done right.

Get Pre-Approved

The next step in the process, before you even view a home is to find a good lender and get pre-approved.  Your Realtor should be able to recommend a few local lenders who have proven themselves to be responsive and know how to get the job done.  Using a local lender is important, not only are they accountable but they are there to solve problems at the closing table if anything comes up at the last minute.  Your earnest money is at stake!  If your lender is delayed at the last minute or their money doesn’t make it to the closing table on time and the seller chooses not to give you an extension, you lose your earnest money.  You cannot go back to your lender and recover those lost funds.  Choosing a lender is more than finding the lowest interest rate, it is finding an advisor who will help you make a sound financial decision given your unique circumstances.  The credit rules change often and it is important to use an experienced lender to help you get the job done in a timely manner.

birdhouses and flowersViewing Homes

The next step in the process is setting your criteria and starting to view homes.  At any one time there are hundreds if not thousands of homes available in any given area.  Believe me, you don’t have the time or the patience to see them all.  The broadest categories in which to sort homes are: location, price and size.  Your Realtor can narrow your search by using literally dozens of features but in the beginning it is best to keep it as broad as possible.  A good practice is to look at a good cross-section of homes and then communicate your likes and dislikes with your Realtor.  They will then be able to suggest other homes to see.  When viewing homes it is easy to get overwhelmed by information overload.  If you look at ten houses on a Saturday by the last few it is hard to remember if it was the second one or the fifth one that had the good view.  I like to keep it to six or fewer.  Take notes, ask questions and communicate your likes and dislikes.

Click here to view Part 2 which will take you from offer through closing.  To get started call Neil Kearney at 303-818-4055

Getting Your House Market Ready

Getting Your House Market Ready

In order for a house to sell in today’s market it must have a lot going for it.  The competition is intense and a successful seller is one who competes and wins on many different fronts.  This article will provide the prospective seller tips, ideas and best practices that will help you sell your home, not just list it.

Curb Appeal

No matter how beautiful your home is on the inside, the first impression will always be made by how the house looks from the street.  Many times if the house does not look up-to-snuff on the outside buyers will chose to not go inside.  You don’t get a second chance to make a first impression.  Here are some tips to make the exterior of your house look its best:

  • Cut the grass,
  • Trim the hedges.
  • Rake the leaves.
  • Sweep or shovel the sidewalks.
  • If you have rocks around your house make sure it’s not 1 part rock and 2 parts old leaves and    sticks.
  • Trim and remove any dead flowers, or shrubs.  Dead and dormant are not good buyer thoughts as they wait for their Realtor to open the door.

Cut The Clutter

People tend to accumulate things.  The mail arrives and we make a pile.  Grandma gives you a chair and we squeeze it in.  After a few years, what is imperceptible to the owners is a maze of furniture, junk and accessories.  You have to cut the clutter!  Buyers will love to see Sally’s photo montage from kindergarten to marriage but they will remember Sally’s dress and her husbands blue tux and won’t remember that this is the house with the beautiful wood floors.  Remove 7/8ths of the personal photos.  I realize it is still your house but buyers have a hard time picturing themselves in “your” house.  The rooms will look bare and not “homey” to the seller but believe me, this is how buyers like to see a house.  They want to be able to picture their stuff in the house.

Staging

Once you cut the clutter it is time to think about staging each room.  The idea is to make each space pleasing to the eye.  Work from the perspective of a buyer at the entrance to each room.  There should be a balance to the room in terms of weight of the furniture (you don’t want everything piled in one corner) and hardness.  By hardness I mean that there should be a balance of hard and soft surfaces.  If a room has hardwood flooring there should be a rug to soften it up a bit.  If there is a couch, a love seat and a lazy-boy the room is probably too soft and you will need to add a coffee table or replace the lazy-boy with a harder chair (think Windsor).  I am not a staging expert but I know people who are and even if you have plenty of your own furniture it is worth a couple of hundred dollars to have an expert come over to put it in the right place.  Beware, sometimes the right place for some of your stuff is at the curb.  In order to get it right you sometimes have to hear what you don’t want to.

Clean Like You Have Never Cleaned Before

Buyer’s look at your house differently than you do; they are comparing it to all of the others out there.  Not only are they looking for the facts of a house (number of bedrooms, square footage, etc.) they are waiting for an emotional connection with a house.  It is hard to get emotionally attached to a house that has flies in the window tracks, a dusty top of the refrigerator (just because you can’t see it doesn’t mean a buyer can’t see it) or a ring around the toilet.  It takes near constant vigilance to keep a house in pristine showing condition.  The idea is to have the buyer ask if someone actually lives there.  Before you put your house on the market it’s time to wash all of the baseboards, clean the silver in the hutch and wash the windows.  It’s also time to clean the window wells, dust the light fixtures and shine the sink.  Your going to love your house so much you are going to hate to leave.  But then again, it’s hard work selling your house and you will be relieved when that offer gets accepted.

This is not an exhaustive list but it will get you thinking along the right lines.  Time and time again I hear from my clients who get the highest and quickest offers that this happens to them each time they sell.  Why does this happen?  Are these people lucky?  No, these people have the knowledge, planning and persistence to put their house in great showing condition.  Call me whenever you need an extra pair of eyes to check over the progress.

October 2009 Boulder County Real Estate Statistics

http://viewer.docstoc.com/
Boulder County October 2009 Real Estate Statistics

The numbers for October are in and they are positive.  The number of sales thoughout Boulder County increased when compared to the same month last year for the first time since August of 2007.  I see a few causes for this: first remember last October sales were affected by the early stages of the global economic meltdown, second, the first time homebuyer tax credit is definitely helping sales locally, and third, the overall economic and credit environments are much improved.

Sales are still down over 20% for the year but if you look at the first two graphs that show sales by month, you will see that the shape of the sales curve has changed this year.  We are having more consistent sales and there has not been such a drastic drop off from the summer highs.  I’d love see this continue and the continuation of the homebuyer tax credit will definitely help if that gets passed.

Other stats you will find in the above presentation (click on full screen to get the best viewing) are under contract % and inventory.  Overall the under contract % is still above the 15% level which usually means a healthy market.  Inventory continues to stay in check.

There is no substitute for an individual analysis.  So if you are considering selling or buying in the near future give me a call and I can run numbers for your specific area and price range.

Yipee!! Sales Increase for 1st Time Since August 2007

I’m pretty excited!  For the first time since August of 2007, year over year sales of residential real estate increased in Boulder County.  It is still early and final numbers won’t be in for a few days yet but so far residential sales are up 11.1% compared to last October.  When you throw condos into the mix sales are up 6%.  Not earth shaking and just one month but after seeing 25 straight months with fewer sales than the year before it is nice to change that broken record.

The first time homebuyer credit definitely helped and last October we were in the hangover from the first blows of the economic meltdown but a gain is a gain.  I am more bullish for the coming months than I was a year ago, that’s for sure.  Real estate is driven by jobs and I think the job recovery will be slow.  However, for those who already have jobs any signal of hiring will promote consumer confidence.  I for one am looking forward to 2010.