How to Find an Affordable Neighborhood

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Trulia Maps offers a wealth of information on low-cost areas across the country. Find out all you need to know.

There’s more to consider when buying a house than the house itself. The neighborhood can be equally, if not more, important. You might already have must-haves in mind for the type of property you’ll buy — at least two bathrooms to stay sane, for example. Now you need to focus on finding the best neighborhood that fits your budget. Read on for some tips, techniques, and practices to help you find affordable neighborhoods.Top of Form

 

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1. Use the Affordability layer in Trulia Maps

The most important factor when looking for an affordable home is price. No surprise there. But the listing price doesn’t tell you the full story. The seller could have simply picked a number because that’s what they’d like to get, a price that might have nothing to do with reality.  Use the Affordability layer in Trulia Maps to compare listing prices with recent sales prices. Just scroll over your neighborhood of interest to see the median listing price, change your filter, and then scroll over the same area to see the median sales price. There may be a huge price difference between the two, which besides a too-optimistic seller could also reflect a softening market. A once-unaffordable neighborhood, based on listing prices alone, might now be in reach once you see what homes are actually selling for.  Also look at the sales price per square foot, a real eye-opener. You can see exactly how much location affects a home’s price. If using a price-per-square-foot comparison, the homebuyer must be sure to compare similar-sized properties or allow for the different results based upon the differences in size.

 

2. Explore other neighborhoods

If you already have a neighborhood in mind, take some time to look at the bordering neighborhoods as well. You might find more affordable options that have the same benefits. As home prices increase within desirable areas, generally speaking, locations on the periphery become in demand.  Pick your neighborhood of interest and note the listing and sales prices. Then pick a bordering neighborhood that costs less to buy into. Compare amenities in Trulia Maps, and you can see where the restaurants, grocery stores, nightclubs, cafes, stores, arts and entertainment areas, spas, and active-life spaces are located.  Don’t rule out up-and-coming neighborhoods. Yes, you’re taking a risk here. “Up-and-coming,” as a description, might turn out to be a tad too hopeful if the neighborhood is really going nowhere. How do you minimize the risk? Look for warning signs. Distressed areas generally are identified by low sales volumes, elevated value decreases, and poor access to amenities.

 

3. Look for fixer-uppers

If your heart is set on a neighborhood that lets you bike to work and raise urban chickens, you might not be able to get a dreamy, move-in-ready abode with all new upgrades. Instead, target fixer-uppers, or remodels, or teardowns. You might wish to consider a house with “good bones,” as they say, meaning there’s potential in there somewhere. If the house doesn’t even have that, a teardown might be in order. You can often find fixer-uppers in the foreclosure arena. But beware. Purchasing an REO/short sale or auction property when the asset is sold ‘as is’ necessitates a network of professionals to understand the condition and to project rehab costs.  Contractors, electricians, plumbers, even structural engineers may be required in order to adequately analyze a property.  You’ll also need to devote some time, or sweat equity, to save money when you buy a fixer-upper. It is important to have a sense of how much work would be needed to get the house in the shape you would want it to be. You would need to get estimates for the work — the final cost will probably be higher than the estimates — and try to determine how long it will take to get permits approved and contractors in the door … [and] it will probably take longer than everyone tells you. But when you are pulling your hair out because you are cooking dinner in a half-finished kitchen, remember all of the money that you saved when you bought.

4. Factor in the cost of your commute

Trulia Maps has you covered when it comes to figuring out commute time. Once you determine yours, figure your expenses. Although the house might be cheaper farther out, the cost in gas and car maintenance will be higher. Living an hour from work could potentially cost you a bundle in gas and car maintenance costs — no wonder commute times are a top factor for those looking to move.  Determine if the lower-cost home purchase in the suburbs offsets the time spent commuting and the commuting costs involved outweigh the higher-priced properties more proximate to employment centers and urban areas.

 

5. Consider a house that’s not a house

When is a house not a house? When it’s a condo. If you just cannot afford a single-family house in the neighborhood of your choice, look at other options. Condos and townhouses are often less expensive than single-family homes. But wait, there’s more. The advantage of a condo or townhouse is the reduction in exterior maintenance, which is typically taken care of by the property management.

 

Now that you have a keen sense on how to search for an affordable neighborhood. Let’s find that property! Call me today ~

 

Lynn Kronk ~ Realtor

 

Spring Listing – Prep NOW

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Even though it’s the middle of the winter season, before you know it, spring will be here. Historically in most real estate markets, the spring is the busiest season. The spring real estate market generally yields the highest prices for those selling their home. This is only possible though if the proper preparations are taken prior to when spring is upon us!

If you’re thinking of selling your home in the spring, you should be aware that even though you may receive top dollar for your home, there will also be a lot of competition. Therefore it’s absolutely critical that you’re prepared for the spring real estate market. These tips below will help you prepare your home for listing.

Begin Interviewing Prospective Realtors

It doesn’t matter what time of year you decide to sell your home; it’s critical that when selling a home, you know what questions to ask when interviewing realtors. Make sure you start reaching out to the agents you think would be a great representative to sell your home sooner rather than later.

Know What Your Plan Is

A common mistake sellers make is not knowing what their plans are once their home sells. Are you planning on purchasing another home? Do you have the option to move in with family? Could you rent, if need be? Do you need to sell your current property to purchase another? These are things you should think about and know the answers to before the spring real estate market hits. It’s a great idea to discuss your financing options with a local lender before you list your home for sale. If you can get pre-approved to purchase a home non-contingent on the sale of your home, it will give you a huge advantage.

Consider Having a Pre-List Inspection

One of the biggest reasons a home sale gets derailed is due to the home inspection. Almost all buyers will have their offer contingent on a home inspection. The smallest home inspection finding could turn off some buyers. It can be easy to avoid this possibility and have your home inspected by a professional before listing it. This way you can remedy issues that may arise prior to listing.

Clean & Organize

It’s imperative to give your home a thorough “spring cleaning.” This doesn’t mean wait until spring though. Be proactive and start cleaning now; you’ll be glad you didn’t wait. Huge turnoffs for prospective buyers are foul odors. Things such as pet and smoke odors will hurt your chances of offers.

Here are a few items to make sure you clean before listing your home: wash your windows, dust your blinds, dust baseboard trims, clean appliances, clean showers, sinks & toilets and clean inside cabinets. It is also important to de-clutter and organize your home. A great way to achieve this is by packing, you will need to pack at some point anyways, so why not do it now! Clean out closets and pack away items that you do not currently need. It is incredible how much better a home will show and how much quicker it will sell if it’s organized and de-cluttered.

 

Lynn Kronk ~ Realtor

What is your home really worth?

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If you are thinking of selling, refinancing, or just want to get an idea of what your home is worth, you have many options. Most people these days like to do things themselves, since there is so much information available at our fingertips online. There are also some great real estate sites and many local brokerage sites, so there are multiple ways to access the information. But you need to be careful, as what you get on some of those sites may be inaccurate, especially in today’s market.

Sites like Zillow and Trulia provide easy access to recent sales, and even provide estimates for the value of your home. Some things they may not take into consideration are:

  1. The condition of your home and comparable sold properties
  2. Upgrades
  3. Additions – sometimes these take a long time to show up in the public records, which could alter the valuation of your home
  4. Very recent sales (closed in the last few days)
  5. Pending sales that are about to close escrow (as they will have an effect on your sales price should you decide to sell)
  6. Whether or not your property is distressed or other recent sales were distressed
  7. inside knowledge about other homes that may have just gone into escrow or appraised
  8. Other factors. There may be other factors that can affect your sales price, such as information displayed in the confidential remarks on sold properties (that only licensed agents can see) that provide details – for example, commissions may have been reduced, sellers may have reduced the sales price due to expensive necessary repairs, or other factors could have affected the sales price. Also, there may be information about construction in the surrounding area that can affect sales prices in the future (freeway extensions, plans for new shopping centers, Or there could be issues with the condition of the home that sold.

All of these details are important in analyzing your home and making sure you get the correct information. Thus it is very important that you consult a local area real estate broker or agent to provide you with a specific and detailed market analysis.

There are many things we can do ourselves these days online, but if you are considering selling make sure you get the right information so that you can make an informed decision. Real estate agents are there to help you, and I do not know of any who charge for a detailed market analysis. So find a skilled agent to assist you, and make sure you have all the pertinent information before making any major decisions.

 

Lynn Kronk ~ Realtor

 

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5 Tips for Buying a Home If You Have Student Loans

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Credit to: Teddy Nykiel is a staff writer at NerdWallet.

When Kristin and Sean Couch were ready to buy their first home, they feared that one thing would hold them back: Kristin’s student loans. Her broadcast journalism master’s degree from Syracuse University had left her more than $80,000 in debt.

The Couches are part of a generation that’s delaying major life decisions, like whether to buy a home, because of student loan debt. More than half of student loan borrowers say their debt affects their ability or decision to become a homeowner, according to a 2015 survey of 1,934 student loan borrowers by American Student Assistance, a Boston-based nonprofit. But becoming a homeowner is possible even if you have student loans. The Couches bought their 2,900-square-foot Craftsman home in Gainesville, Georgia, last spring. Here’s how you can do it, too.

Shop for a home you can afford

Home shopping can be tempting. Three-car garages! Granite countertops! Stainless-steel appliances! Before you get carried away, research the type of home you actually can afford. If you’re a first-time homebuyer, you may have to settle for a starter home instead of your dream abode. But there are good reasons to buy a home sooner rather than later, namely tax incentives and the opportunity to build equity, says Brian Koss, executive vice president of Mortgage Network, a Massachusetts-based independent lender.

Minimize debt from credit cards and car loans

When lenders evaluate you for a mortgage, they typically look at four things:

  1. Your income.
  2. Your savings.
  3. Your credit score.
  4. Your monthly debt-to-income ratio.

Your debt-to-income ratio shows the lender your total financial obligations — including car payments, credit card debt and student loans — compared with your income. Lenders are looking for borrowers with a debt-to-income ratio of 36% or less, including the monthly mortgage payment. To keep yours low, pay off as much debt as possible before applying for a mortgage.

The Couches focused on paying off Sean’s truck and their credit cards, which they’d relied on when Kristin was “making less than peanuts” in her first few jobs. When they got their mortgage, their only remaining debt was from Kristin’s student loans.

Lower your monthly student loan payments

Even without other types of debt, having a lot of student loans could give you a high debt-to-income ratio. To lower that ratio and show your mortgage lender you have enough extra cash to make your monthly mortgage payments, consider refinancing your student loans or switching to an income-driven repayment plan to lower your monthly student loan payment.

There are tradeoffs involved with both refinancing and income-driven repayment plans. When you refinance federal student loans, they become private loans and you lose federal protections, including access to income-driven plans and federal forgiveness programs. Income-driven plans, which cap your monthly payment at a percentage of your income, increase the amount of interest you’ll pay over time because they extend your term length.

Most mortgage lenders won’t mind if your overall student loan debt will increase; they’re primarily concerned with your monthly payment, says Kevin Hanson, director of lending at Gate City Bank in Fargo, North Dakota. But you’ll save the most money on your student loans if you minimize the amount of interest you’ll pay over the life of the loan.

Make your student loan payments on time

When mortgage lenders look at your credit history, they’ll want to see that you’ve paid off other debts on time, including your student loans, car payments and credit cards. If you’ve proved you can handle debt responsibly and you have a good credit score to show for it, mortgage lenders will be more likely to approve you — even if you still have outstanding student loans.

“A student loan is never negative,” Koss says. “It’s just a question of whether you pay it on time.”

Save for a down payment and closing costs

Buying a home doesn’t just involve taking on a mortgage — you’ll also have to pay upfront for closing costs and the down payment. Closing-related costs include the home inspection, mortgage loan origination fee, mortgage insurance, home owner’s insurance premium and title fees. In total, closing fees cost the average homebuyer about 2% to 5% of the home’s price, according to Zillow.

A traditional down payment is 20% of the cost of the home, but there are other options for borrowers today, such as putting less down and paying for private mortgage insurance each month until you build 20% equity in your home (though the less you put down, the more you’ll pay in interest).

Despite Kristin’s student loans, the Couches were able to buy their home with just 3% down through a local bank. But that doesn’t mean her student loan payment isn’t still a burden. “It’s as much as a second mortgage,” she says.

Still, to her, owning a home is worth the extra responsibility. “It’s yours,” she says. “You bought it. It’s something tangible that you can see.”

Lynn Kronk ~ Realtor

 

 

New Construction – get the FACTS

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It’s not often that home buyers find a house that embodies everything on their wish list.  If compromising on your wish list isn’t an option, building a custom home is the path that makes the most sense.  It sounds exciting.  You find a buildable lot in your price range, hire a contractor and in a few months’ time, you’re moving into your brand new dream home.

If only it worked out that way.  For most people, building a custom home requires many steps, an infinite amount of due diligence on the buyer’s part, and a ton of research.  Time is also a key factor.  It’s rare that construction ends on time and the entire building process from the property search to move-in can be well over a year.

Here is a list of 8 key questions and points of interest that buyers should research.

1.Cost

Cost of land is only a piece of the budgeting for building a custom home.  It’s important that you first price out what you can afford overall and then work backwards from there.  If you’re paying cash you know the cold hard number.  If you’re paying for this through a mortgage, you’ll have to consider what your down payment will need to be, how much you can afford per month and, if the land price will come from the mortgage, you’ll have to deduct that price from your overall number to determine what you have left to spend on the construction.

With that being said, there’s more to pay for than what it costs to build the house.  You have to consider the price for demolition if you’re buying a lot with an existing structure, permitting, potential excavating, establishing a connection from the property to nearby utilities, water, energy, and sewer, among other items.  It’s recommended that you work with a buyer’s agent that has experience working with clients who’ve purchased land for which to build.

2. Financing the Project

Finding a spare plot of land in the area you desire may be hard to come by.  What is more likely to happen is that a property will become available on the market that has a structure on it which needs to either be completely demolished, or significantly renovated.   Cash is king- if you can pay cash for the entire job (property purchase to demo to move in) then this doesn’t apply to you.  For a bank to finance the project, the appraisal of the plans (which will assess the future value of the newly constructed home) must show that you’ll have at least 20% equity.

3. Location, location, location!

Your next step is to find a lot that’s zoned for residential construction, but more than likely in this area, you’re buying a “tear down” -an existing home to knock down.  You determined your area of the world; you know which state, town, and neighborhood you’d like to establish your foundation.  Now you’ve narrowed this area down to a few lot options if you’re lucky.  Don’t fall in love just yet.  You must first determine if the lot is zoned for the type and size of house you’re planning.

You also have to determine if the neighborhood has Covenants, Codes and Restrictions, which essentially are the neighborhood rules.  Some guidelines may end up restricting the style or size of house you’d like to build.  They can also have rules that prohibit fences, paint colors, and other decorative items, so look into this before you make an offer.

4.  Don’t be set back by “setbacks”

Buildable plots of land have predetermined borders called ‘setbacks’ which determine how close to the border of your property a house can be built.  Depending on the lot size, that may reduce how much surface area your home or garage can consume.  Hire a licensed property surveyor to determine the property lines so you know what you’re working with.

5.  Utility installation costs

You’re going to need a water pipe connection from your house to the nearest water main, you’re going to need gas or oil for energy, power lines, a septic tank or a hook up to the town sewer.  You’ll need permits for each, installation and inspections.  Price this out!  You may find this property has zero utility connections and that you’re going to have to start from scratch.  Some undeveloped land does have these connections already which could save you a lot of money.  A tear down will likely have these utilities installed which can be a huge money saver, but they may be in disrepair and need maintenance, so get them checked.

6. Is the land construction ready?

It’s probable that the land itself will need care before the home can be built.  It’s important for you to research what needs to be done prior to construction and what the fees will be.  You’ll have to know if there are problem soils, tree clearing costs, grade issues that may require filling with soil, gravel or stone, potential blasting requirements for the foundation or utility installation, site drainage installation and as well retaining walls that may need to be constructed.  Just because the land looks flat doesn’t mean its ready- so do your homework!

If your first step is knocking down a home prior to construction you should see what the towns rule are and how they compare between complete demolitions and partial renovations.  It may be easier to obtain permitting if you knock down the existing structure but build on the same foundation or keep a few of the original walls up.

7. Bring in the professionals

It’s highly recommended that you hire an engineer and an architect who work together.  It streamlines the process and can save you money in the long run.  As well, when you determine which builder you want to hire, it makes sense to work with a professional who is familiar with the neighborhood.  This will make it easier for you and your team to identify what needs to be done more efficiently.  They’ll likely be knowledgeable about required permits, costs, and town regulations.  Timeline should be determined with your building team as well.  You should have a solid idea of when your move-in date will be so you can plan accordingly.

Make sure that you learn about which permits are required to build and what they each cost, as this is a significant expense and can cause hold-ups if you don’t have what you need on time.  A team specializing in tear downs- if that’s your path- is highly recommended.

8. What will the neighbors think?

Will your neighbor be residential, commercial or conservation land?  If there’s already a person or business next door, you might need to notify them of your building plans.  If there’s no one there, it is suggested that you determine who owns the land or what it’s zoned for.  It may be a lovely wooded area now with a great view, but if the land behind your property is zoned for commercial construction, you may be looking at a gas station in two years instead of fall foliage- not an easy home to sell if your dining room faces loading docks.  Buyer beware!

Research, research and research more, make sure if you build that it’s done right.

Lynn Kronk ~ Realtor

 

Planning to sell in the New Year?

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Get a head start by listing early. Being early has its benefits: “The early bird catches the worm” or “Early to bed and early to rise makes a man healthy, wealthy, and wise.” You get the idea. So if you’re thinking about listing your home for sale in Alabama or Tennessee, in 2017 — or if you already know you will — why not do so early, as in January or February? By getting in on the real estate market at the beginning of the year, you could benefit in some unexpected ways. Here are six of them.

  1. There’s low inventory. When inventory’s low, it’s usually a great time to put your house on the market. Your new listing could cause buyers to pounce when there’s little competition, especially if your home is in a desirable neighborhood. Research conducted by Trulia revealed that 2016 was the year of low inventory.
  2. There’s more urgency. There are plenty of reasons people need to get in a home fast. Many companies transfer employees at the start of a year, for one. Whatever the reason, if you encounter a homebuyer in the dead of winter, they probably need to buy sooner rather than later. And unless you’re in a hot climate, January and February are not the months most people want to be out hitting the streets to browse. Winter buyers often have a sense of urgency — when they find what they’re looking for, they’ll make an offer.
  3. Spring starts early in warm markets. If your home is in a southern climate, you could really benefit by listing your home for sale early. Real estate websites receive at least double the number of visitors starting the day after Christmas. While homebuyers may not be personally visiting houses as quickly, they will be looking online. I advise that listing a home earlier helps a home stand out in the market. Also, when the weather outside is frightful, Retirees and people in the market for a second home seek a more temperate climate.
  4. There’s early movement for lower price points. The lower-price-point markets move a little earlier. If you’re a first-time homebuyer and are currently saving in preparation to buy, you might have earmarked that tax refund coming to you for the purpose. When these potential buyers get a refund on their taxes, they’ll sometimes use that as a down payment to roll into a purchase. The sooner you turn in your tax return, the sooner you’ll get your refund, usually in fewer than 21 days.
  5. There’s a new administration. Speculation and uncertainty abound whenever a new administration takes the helm. If you think the Trump administration will make it tougher for people to buy a home, you might want to sell early in the year. Many people worry that some of the reforms laid out in the Republican platform could potentially force buyers to fork over larger down payments. This could be a problem for many home sellers as the pool of eligible homebuyers begins to shrink. Of course, speculation is just that. But if you believe this to be true, it makes sense to sell a home now.
  6. There’s a potential interest rate hike coming. Some people are concerned about rising interest rates this year. If homebuyers think rates will rise, they might buy sooner rather than later. The interest rates have been very low for a very long time, as they begin to tick up, you will start to see consumers’ buying power drop because of the cost to cover mortgage payments. It is all an unknown, but there is some thought that rates could continue to rise in 2017 like they have been doing slightly at the end of 2016.

Selling or buying let’s begin 2017 ahead of the game! Call me today and let’s review your options now!

Lynn Kronk ~ Realtor

New Year, new you, new home

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The calendar change always invites all sorts of resolutions, some of them attainable, many of them impractical and stress-inducing. Especially if you just closed on house in the South. But changes needn’t be big or difficult to be life-altering. Here are seven simple real estate–related New Year’s resolutions you can make for 2017 that will pay big dividends with minimal effort.

Start making extra mortgage payments

It’s the financial reality you hate to face: the amount of money you actually end up paying for your house over the length of a 30-year mortgage. So what do the interest savings look like if you make one extra mortgage payment over a 12-month span? In short, pretty good — if you keep it up for the duration of your loan, you’re likely to save tens of thousands of dollars. It’s especially worth considering in the first five years of a mortgage, when the majority of your monthly installment goes to interest payments rather than the principal.

The only thing to keep in mind is that once you start making the extra payment that extra money is locked up in your home equity (and not sitting in your bank account as an emergency fund).

Get new homeowners’ insurance quotes

You probably don’t think about this too often because your insurance automatically renews every year. But as it happens, you may now be eligible for some discounts that weren’t available when you first applied — and your existing insurance company isn’t obligated to check in every year and see if you now qualify. Call your agent and see if you can knock down your yearly installment; if they won’t budge, then start shopping around for a better rate.

Have your home reassessed for tax purposes

Did you know that your house gets reassessed by your county only every few years? Which means your assessed property value might be higher than your current market value, which means you might be paying too much in taxes and not even know it. In most states, you can simply go online and request a reassessment for free. A note of caution: Be wary of outside companies offering to get your home reassessed for you for a small fee — it could be a scam.

Get an energy assessment

Yep, those gas and electric bills can get out of control in the winter months, but they don’t always have to be static. Some states have nonprofits that will come to your home and offer an energy assessment free of charge, but otherwise you can hire a professional energy auditor. That person will then make a series of suggestions both small (LED light bulbs) and large (solar panels) so that you can stretch your energy dollar. Even tiny lifestyle changes, such as unplugging unused devices or programming your thermostat on a schedule, can make a difference.

Plant a vegetable garden

You have some time with this, given that it’s only January, but then again, there’s no time like the present to start a kitchen garden. Growing your own food saves money and, in its own way, helps the environment too. It also benefits your health, as you’re more apt to eat fruits and vegetables that you’ve cultivated yourself. And of course, as head farmer, you get to decide what pesticides and fertilizers you (don’t) use. Start small, only growing veggies and herbs you love to eat.

Start composting

Maybe this has been on your to-do list for years. But somehow it just feels too time-consuming or messy, especially if you live in the city. Keep it simple and buy a composting kit that walks you through the steps. If you don’t have an actual use for your own compost, there are small outfits around the country that will pick it up for a minimal fee; some cities even include compost pickup in their trash services.

Buy a rain barrel

So simple, yet so valuable. Just a few benefits of collecting rainwater and repurposing it later: It cuts down on your water bill, it lessens the moisture around your home’s foundation, it’s healthier for your plants and garden, and it helps reduce runoff pollution.

Rainwater is also great for washing your dog and car, as it’s free of salt and other chemicals. (Poor dog! Poor car!) If you’re in a drought district, the benefits of a rain barrel are obvious. And remember that composting you just started? Adding rainwater to your brand-new pile is a far more sustainable practice than mixing it with tap water. Just be sure to check local laws: some communities have rules against collecting rainwater.

What resolutions are on your list for 2017?

Lynn Kronk ~ Realtor