It's Memorial Day weekend and we are trying to be mindful and reverent of the holiday, BUT DAMN...we need to take some time out and look for a house and after all we have three whole days off.
OK, if you must house shop this weekend or any time in the future let's arm you with a thought out plan, and 'cause you say time is premium. These 4 tips should set you straight:
1) BUY A HOME YOU CAN AFFORD!
What?! Did I hurt your feelings, was that you who said ouch?
No one likes to think about losing a job, falling victim to a major illness or getting so overwhelmed with bills that they miss a mortgage payment, or two or three.
The reluctance to plan ahead or save for tomorrow leads to this nasty statistic: 10 percent of homeowners who have a mortgage insured by the Federal Housing Authority were behind in their payments during the first three months this year. That's one out of every 10 households.
Want to make sure you don't end up as one of these sad statistics? Don't spend every last dime you have to buy a house, especially if you have no additional resources to get out of a financial jam.
2) LOOK AND ASK FOR BUYER INCENTIVES
If you don't ask, you don't get!
Tom Stevens, president of the National Association of Realtors, says home builders started offering incentives in cooling markets such as certain parts of Florida, Las Vegas, California and the Northeast. "Home builders were among the first to react with various incentive programs and promotions to help keep their properties moving and to reduce unsold inventories," he says.
While builder-incentive programs have attracted the most attention, developers aren't the only ones to offer inducements. More home sellers today are also including tempting freebies that go well beyond the usual appliances, fixtures and window treatments. Typical incentives can include assisting a buyer with closing costs, paying points, covering homeowners' association fees for a year or more, or selling the home with a comprehensive warranty.
Call city hall and check your city municipality. Certain cities are still trying to attract home buyers with grants and no cost loans, some up to $40,000. Because they realize you will be paying property tax to them, make that city the center of your buying community.
3) BUY NOW WITH NO MONEY DOWN
Hell yes! It's for real, just like ya' see on TV!
Nearly 30 percent of buyers and 45 percent of first-time buyers no longer make down payments, says the National Association of Realtors.
"Realistically, if a typical house is going for $400,000, just to do a 10 percent payment is $40,000," he says. "How many people are going to scrape together $40,000 in a reasonable amount of time? That's three years of socking away a grand a month and not having anything go wrong. That's just not realistic."
The trend raises questions about whether a looser lending standard will affect the market during a downturn. Some fear owners with none of their own money to lose may have fewer qualms about walking away from homes if they get behind on payments.
"I don't think there's a real significant problem attached to 100 percent financing per se," says Scott Thompson, a partner in Carmichael-based Mortgage Resolution Services. "The problem comes when the borrower with 100 percent financing goes beyond that and adds adjustable-rate features to it."
So there ya' go shop for that 100% financing don't add and other bells or whistles and that down payment money; well you can now put some new furniture in the crib.
4) GET YOUR PROFESSIONAL TEAM BEHIND YA!
Be prepared to fire everybody!
Yep, Realtor, Home Inspector, Mortgage person. Do not hesitate to have back-up people and back up offers offers and fire people and replace them. It's your money and after this deal closes they will not be helping you make a bad house selection a good one. Neither will they be helping you write a check for that mortgage.