First Time Home Buyers – Ask Yourself These Questions

When I first meet people to discuss buying their first home, I have five questions that I like to ask. If the answers are the right ones, then it is the right time to buy a home:

1. Do you plan to be in this area/location for at least 5 years?

If you don’t plan to be in the same place for at least that length of time, I recommend that you rent. It is difficult to own a home in less than that time and have any appreciation in the event you have to sell.

2. Do you have a reasonable expectation that your job will continue?

None of us are guaranteed a job this day and time but take a serious look at the company you are working for to see how stable things are going.

3. Have you been able to save some money for your down payment and /or closing costs?

You can get down payments from parents, grants etc. but when I see a couple/person who has not saved, I have a serious question about them buying a home. The discipline and ability to manage money is key to successfully buying a home.

4. Have you maintained and guarded you credit score?

These days, your credit determines your loan limits and the interest rate you will pay. Often I, or the lenders I recommend, can work with a buyer to increase their score in as little as 4 to 6 months. This is great preparation for better home buying and a lower payment.

5.What is your current rental payment and do you have any difficulty paying that plus utilities?

If you current rent is $800-1,200 a month then it is very possible to find a home with a house payment in that same range. Right now you can buy a home cheaper than you can rent because of the lower prices and low interest rates.

The answers to these 5 questions determine whether it is the right time to buy a home.

-Sharon J. Coleman

March 19, 2012 at 4:12 pm Leave a comment

Preferred Part of My Team: Rebecca Cline and Darcy Inge-Caring Transitions of Richmond

One of the hardest situations I encounter is older clients that are scaling down and moving. Usually, there are years worth of “wonderful stuff” collected and stored by the family and real often they have tons of furniture and collections from living in a home and following hobbies and interests of a life time.

It is extremely hard to move and fit all of this into a smaller space. It is difficult in the beginning to know what to take and what to leave. Families are often overwhelmed with moving their parents or relatives and don’t know where to start. This is where Rebecca and Darcy and the service they offer comes in to play.

Since they are estate sale experts, they can tell you the market value of your furniture or collectables so you can make a good decision about what to sell and what to keep. Doing an estate sale in the beginning of the moving process cuts way down on the cost and time of packing and moving.

Secondly, if you know where you are moving they can make a plan of exactly which furniture will fit in the new place. With their move management, moving day is a breeze. They move the furniture you want most and design a plan to fit everything perfectly into the new place.

Moving is always stressful, but move downs are especially hard. With their expertise and guidance, they have helped my clients be pleased with the transition that is normally very exhausting and emotional. Using their service is a way to make this transition a “Caring Transition!”

March 19, 2012 at 4:10 pm Leave a comment

Investing in Real Estate

With home prices and values being at an all time low and interest rates being where they are, it makes for a great time to consider buying a investment property or rental home.

Most rental homes are the houses in the lower price range which are affordable to more buyers. Right now you can get a nice 3 or 4 bedroom home for under $180,000. When you calculate the down payment and house payment you can easily get a renter to cover the amount that you will be paying each month. As some investor’s say: the rent buys the house for you!

A few years from now, it will be these homes that will appreciate the most. You can enjoy rental income for a time and then sell down the road at a profit.

You would want to buy in the best schools districts and where there are few apartments as possible. Low maintenance exteriors and general good over all condition are other considerations when you are choosing the property to buy. Experts agree that the rental market will be extremely good for the next 5-7 years as there are a lot of people who have lost homes recently that will only be able to rent until they restore their credit.

-Sharon J. Coleman

March 19, 2012 at 4:09 pm Leave a comment

Why a Short Sale Can be a Win for Everyone Involved

I have a past client’s home that I have had listed for over a year. It is a wonderful townhome in a great neighborhood, but because of the economy the home’s value has been declining. She now owns more on her house than it’s worth. Needless to say the only where to go from here was to a short sale.

On top of the drop in value, my client had to change jobs. Her new job was paying her less than her old job. The reduction in pay coupled with the drop in value of the home put her in a no-win situation. She could not refinance and did qualify for retooling her loan for a lower payment. She was living off credit cards and going through her savings and IRA’s – something had to give.

I suggested to her to do what is called a short sale; this is when you agree to sell the house for a lesser price than what’s owed to the lender. It requires that you put together a package of required documents for review by the mortgage company to prove that you have a true hardship situation and there is a valid reason you can’t repay the loan.

With a Short Sale, the seller can get a FHA loan in two years with continued good credit which differs from a foreclosure where you cannot get a loan for up to 10 years. The banker gets the home sold and off their books with out the costly foreclosure process. The new buyer gets a great deal and the home is owned by a new family. This makes it a good outcome for all parties involved even though it is a bad situation.

If you or someone you know is in the situation of owing more on their home than it is worth, tell them to get in touch. I can advise them if this is the best move for them to make.

-Sharon J. Coleman

October 22, 2010 at 6:28 pm Leave a comment

Moving Up in a Down Market

I recently worked with a couple that was just married and now had a much bigger family than before: they now had five kids! They made a great family, but they had quickly out-grown their current home. They were wondering if this was a good time to move up to a larger home to accommodate their larger family.

The problem was they had a home to sell and knew from all the news that home values had dropped. They weren’t going to be able to stay in their present house so the couple was conflicted with what to do. Was this a good time to do this?

It’s important to remember in a down market that you aren’t the only one losing value on your home: everyone is. This makes for some opportunities when you have to sell your home and move up to a more expensive one.

If your current house drops 20% in value (for example: it was originally $200,000 and now is worth $160,000) this does constitute a $40,000 loss. But, let’s say the more expensive house you want to buy has also lost 20% in value (originally $300,000 and now is $240,000 which is a $60,000 loss). You are actually ahead of the curve with $20,000 dollars in value (the losses subtracted: $60,000-$40,000).

This seemed like a great strategy to them so we were able to start looking. We eventually found the larger home for less money. We sold her home for less, but were still ahead of the curve for when the market recovers.

Moving up in a down market most always makes sense because the percentages work in your favor. While it’s easy to focus on the loss of value in the present, gains can be made when you move up to a new home. The only other criterion is to be able stay in that home for a minimum of 5 years.; you never make out selling a home in less time than that.

August 27, 2010 at 9:09 pm Leave a comment

The Trickiest Move

Of all the situations I deal with in real estate, the move down buyer is the hardest – a person who has to move from a larger to smaller home. Most people as they age realize they may not be able to handle all the responsibilities that a bigger home and yard carries. My in-laws are good examples to follow.

My father in law started to have bouts with poor health. As a result, his large lawn and older home became a burden for him and his wife. He was determined to stay in his home regardless. His wife, however, saw what was happening and together we took steps to get them into a maintenance-free home in a community of 55 and up.

Getting into a maintenance-free home with no yard to cut or home to constantly fix was a life saver for my father in-law. The best part was he finally loved it, too. He now tells me that he never realize what a toll all the work had taken on him physically, not to mention financially. He is now a big leader in recruiting his friends to make this difficult change.

From personal experience, trying to help parents or grandparents stay in a home that is too hard for them to upkeep is a heavy burden to levy on family. Try and begin to have conversations with people in their 60s; usually this is the best time to make this sort of move. If you or some one you love is facing this decision, help them see the wisdom of making the move to not only save themselves, but the people that will be caring for them.

-Sharon J. Coleman

August 27, 2010 at 9:07 pm Leave a comment

Locking Rates

There comes a time in the loan process when you have to decide when to lock your interest rate. Most loan companies will lock your interest rate free for 60 days. Some people like to wait to lock in that rate in hopes that they can “time the market” and get the lowest interest rate possible. Instead of fixing a rate that is affordable, they try to score even lower rate.

This is risky because anything can happen that will trigger a rise in interest rates, such as a local or international event. Loan officers are not in the position to call all their clients who have not locked if something suddenly happens. Trying to hit the bottom of interest rates is like trying to time the stock market – it is very hard to do.

I always recommend to my clients to lock the rate once you are within 60 days of closing or less. You want at least a week leeway in case closing is delayed. This is a win-win situation for the borrower. If rates go up, you win by having an affordable mortgage payment. If they go down, you can either negotiate to get a lower rate or refinance later.

Wouldn’t you rather make your decision to lock now rather than risk being forced to accept a higher rate than you are uncomfortable with? Once you lock you no longer have to worry about what your payment will be. In addition, you can not get final loan approval with out your rate locked. Once you have complete loan approval and a rate locked that you want, you are ready to go forward and move to closing.

– Sharon J. Coleman

March 22, 2010 at 1:17 am Leave a comment

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