When you first decide that you want to buy a new home you have two options, to buy or to build. There are advantages to both, when you build you can put in all of the customizations that you can afford. However when you buy you can move in as soon as 30 days from now. Both are great options and it will largely depend on your financial situation, along with the area you want to live in.
Pros and Cons of Buying
When you buy a new house the house is completely finished, everything is ready to use and you can move in as soon as the closing is done. You don’t have to make any major decisions about flooring or selecting a new bathtub all of that is already in place. Because you can move in as soon as you take possession of the home you are not stuck paying rent while your house is being built.
However all the things that make buying a home convenient are also drawbacks at the same time. While it is nice that your laundry room is set up for you, what if you prefer to have it on the main floor rather than in the basement, you’re stuck with it and can easily make changes. Minor things like wall paper of the vanity in the bathroom are easily changed but you can’t rearrange the layout of your home.
When you buy an existing home chances are the roof, furnace and hot water tank are at least a couple of years old. At some point they will have to be repaired or replaced and that will cost you some money
Pros and Cons of Building
Building your own home is exciting, you can choose everything from the sizes of the rooms right down to the tiles in the bathroom. You can make the space your own before you ever set foot in your home. Everything in the home will be brand new so you can put in energy efficient appliances, windows, and heating systems. With everything being brand new there is no wear and tear to worry about and you will have a warranty in the event that something goes wrong.
Building a new home is not all sunshine and roses, there are some pretty big drawbacks. The first one being is that is can take up to a year for construction to be completed. A custom built home is going to cost significantly more money than buying an existing home. You are also limited to where you can build. If you are more interested in city living then building will be almost impossible. Finding a reliable builder is also not the easiest thing to find either.
Whether you buy or build will depend on your personal preferences along with your available finances.
When it comes time to buy or sell your house, or if you work in real estate you get entangled in marketing or looking at homes ignoring the bigger economic picture that affects the real estate market. We tend to look at the local economy and what is impacting the prices in our own neck of the woods. But real estate and the economy are more closely intertwined than we think. The factors that affect housing prices can include the global economy, taxes, the job market and of course the interest rates. Let’s have a closer look at how everything ties together.
Mortgage rates in the past couple of years have been at an overall low, their lowest point being about two years ago. While today they could still be considered low, any time the Federal Reserve announce they are planning to hike the interest rate it impacts the average person looking to secure a mortgage. While half a percentage point may not seem like much but it does change the amount of your monthly payment. For some it could mean the difference between getting a mortgage or not. It can also affect the price, the higher the rate the lower the housing price.
Taxes are a part of your monthly carrying charges, lower taxes mean lower monthly payments. Taxes are more of a local issue as the difference in taxes between one municipality and another can be huge. There are some exceptions, last year’s changes to the federal tax codes had a big impact on market where the taxes are higher, states like California, Massachusetts and New York. Capping the federal tax deduction has the potential to drastically impact these markets.
The Job Market
Does the average home buyer feel they have job security? What is the unemployment rate? Is the median income increasing or in decline? The better the job market is the more likely people are to qualify for and purchase homes. The job market can vary from one part of the country to another to a degree but when the US job market is healthy so is the housing market.
The Global Economy
Economies all over the world are connected now, what happens in Beijing can impact what goes on in Kansas. World news can impact the stock market which in turn affects the housing markets. The more confidence people have in the markets the more inclined to make purchases and that includes buying a new house.
While most of us do watch the news and stay current on world events we may not understand how it directly impacts our everyday life.
Finding a good deal on a house in a competitive market is hard but it isn’t impossible. It will take patience and some searching but it can be done, working with a good agent who knows your town can expedite the process. If you are looking on your own then here are 4 rules for finding a good deal on a house.
Be Prepared to Compromise
If you have a laundry list of features that you want in a home then you must be prepared to compromise, especially in a competitive market. You may just find a house that has everything you want only it is priced well above what you can afford. Decide what you can live with and what you can’t live without. For instance having three bedrooms is a must but an island kitchen is a want.
Don’t Get Emotionally Attached
You found a house that you absolutely adore and you have to have it. Chances are good that so did the other prospective buyers, houses are staged to appeal to the broadest range of buyers possible. In a highly competitive market a nice house can trigger a bidding war putting the house out of your price range. Be prepared to walk away and keep looking. While those buyers are fighting over that expensive house you can focus on finding a good deal.
The Listing Price is not the Final Price
Real estate agents use pricing strategies to get their clients the best price possible and one of these strategies is to price the house very low. They want to attract as many buyers as possible and start a bidding war. It’s highly possible for houses to sell for thousands of dollars over the asking price in a competitive market. If you see a listing that seems too good to be true then exercise caution. Here is a look at pricing strategies that realtors use when pricing a house.
Beware of Marketing
If two houses are for sale in the same neighborhood and one of them is getting all of the attention it doesn’t mean it is a better house. Generally it means they have a more savvy real estate agent who is marketing the house aggressively. Look for hidden gems, drive around the neighborhoods that you would like to buy in and look for other houses that are for sale as well. You may find a hidden gem.
Buying a house is a big investment, it isn’t just where you are going to live for the next couple of years it is an investment. Take your time and try and take the emotion out of the process focus on finding a good deal for you and your family.
Your home is the single biggest asset most people will ever own when it comes time for buying it or selling it you need to work with a real estate agent that you can trust. If you’re buying your first home then you want to get the best price possible and if you’re selling then you also want the best price possible. If you know the right qualities to look for in a real estate agent then you will find someone with the right skills to help you accomplish your real estate goals.
Other skills can be learned but integrity is something different. Integrity is based on your behaviour and you either have it or you don’t. With potentially millions of dollars on the line, depending on your market and the transaction, on the line you want someone with a history of honesty. You need your agent to tell you the truth about your home, the market and not just what you want to hear. You need a realtor who represents you honestly and doesn’t lie or make false statements.
When it comes to serving the client a licensed real estate agent is obligated to put your interests first. They have an obligation to protect your interests in regards to any offers and especially when it comes to personal information. What that means in the real world is that they have to advise you on when the offer is good or bad. They cannot reveal information about your situation that would affect the offers you receive on your home. Their job is to market your house so you get the best price possible.
This ties in nicely with the last point as well, real estate transactions are all about negotiations and negotiating is a skill. They need to be able to listen and not just speak. They need to convey to potential buyers the benefits that your house holds. They need to know when and how to counter offer and when to recommend that you accept an offer.
You’re selling your house and marketing is absolutely everything. Your real estate agent needs to know your market and how to get your house in front of potential buyers. Marketing is more than taking a couple of pictures and listing on MLS, there needs to be everything from a pricing strategy to putting together an open house.