Ten Things to Know Before You Buy Your First Home in Greater Lansing
Determine a realistic monthly budget. How much can you afford to pay per month for the combined total of a mortgage payment plus property taxes and homeowners insurance? Your dream home can become a nightmare if your house payment is so large you have little left over for other expenses. Don’t leave it up to a lender to determine how much house payment you can afford. Make sure your credit score, which you can find on line, is at least 640.
Make sure you have enough cash in addition to the amount you borrow. When you apply for a loan, the lender will require you to pay around $500 to cover the cost of an appraisal of the value of the home you wish to buy and other fees. Although you can buy a home with as little as 3% of the purchase price as a down payment, if your down payment is less than 20% you will have to buy private mortgage insurance, known as PMI. PMI can easily add $100 or more to your monthly payment. Besides the down payment, you will need another roughly $2,000 in cash for closing costs. As soon as you have your offer accepted on a home, you will also need around $500 for a home inspection.
Shop for a reliable local lender. All lenders are very competitive on interest rates, so you are really shopping for a lender that can quickly provide a pre-approval letter, which you will need to write an offer on a home, and complete the loan process on schedule so you do not end up moving twice. Local lenders will have fewer layers of approval than a national firm, and therefore act more quickly.
Determine the target area for your search. Location really is the most important factor in the price of homes and also on your long-term peace of mind. Over time, you can address almost anything you don’t like about your home except its location.
Find a local Realtor. Referrals from recent home buyers are the best source. All real estate practices and issues vary from area to area. A local Realtor will know, based on analysis of recent sales, how much you should pay for a home in your desired area. A Realtor can also help you refine your target area so you focus only on homes you can afford and areas close to your work and other frequent activities. They will also be able to recommend qualified home inspectors and building contractors.
Work with your Realtor to create two lists; one is a list of features you must have in your first home, such as a minimum number of bedrooms and bathrooms. The second is a list of features you would like to have, but would forego if a home meets all your other needs. Constantly keep these lists in mind as your Realtor shows you potential homes.
Listen to your Realtor concerning price when you write an offer. Greater Lansing is experiencing an extreme shortage of homes for sale. There are many more Buyers than Sellers. If you are looking for a home without any serious repair or maintenance issues in a safe neighborhood, expect to pay close to the listing price or even higher. The only homes on which you can negotiate discounts are those that are hard to sell, either because of obvious expensive repairs, the lack of certain features such as a garage, an undesirable location or all three.
Listen to your Realtor concerning inspections. Most homebuyers in Greater Lansing purchase three types of inspections; a home inspection of the interior and exterior, a pest inspection primarily for wood destroying insects such as termites and radon inspection to test for at the level of an odorless toxic gas known as radon that may be present in the basement. The cost of all three will generally be around $500. It is generally unwise to buy a home without inspections.
Don’t get discouraged if another Buyer outbids you for the home you want. Work with your Realtor to re-examine wish list and your maximum budget. Focus on homes lacking features that are not important to you, but important to most other Buyers such as a two-car garage if you only have one car. A good Realtor will also know of homes about to come on the market and try to arrange a tour for you before they become public knowledge.
Remember your goal is to buy the home you want at a fair price. You are not trying to win the negotiation or outsmart the Seller. A successful first home purchase will be one in which both you and the Seller feel good about the outcome.
Ten Easy Fixes to Add Value When Selling Your Home
Next to location, the next most important determinant of your home’s selling price is its size or square footage. Storing excess furniture is an important part of letting buyers appreciate the space available.
In all full baths, replace the shower curtain with a clear vinyl curtain that will allow the buyers to see all the way to the back of the tub or shower enclosure. A patterned or opaque shower curtain will stop the buyer’s vision and make the bathroom seem much smaller.
Replace all outdated overhead light fixtures. Overhead lights have become very inexpensive. You can buy a larger flush mount ceiling light with an alabaster bowl and brushed nickel rim for $30 to $40. Simply replacing an outdated light fixture will greater increase the appeal of each room.
Remove ceiling fans and replace with flush mount light fixtures. Ceiling fans are great in rooms where they serve a useful function, as a great room with a 20-foot cathedral ceiling. However, in a room with eight or even nine-foot ceilings, the ceiling fan draws the buyer’s eye and makes the room feel much smaller.
Wall should be painted in a neutral solid color. Remove any wall paper, wall paper borders, and painted murals or other designs. You need to hire a professional to remove, repair and re-paint wallpaper-covered walls since the underlying drywall or sheet rock is likely to be damaged in the removal process.
Floor coverings should be neutral in color and without pattern. Wood, laminate, vinyl, tile and other floor coverings make a room feel more spacious if they are solid and neutral in color. Also, replace any carpet in kitchens, baths and dining areas. Many buyers will reject a home simply because there is carpet in one or more of these rooms. There is inexpensive sheet vinyl flooring that closely imitates real tile that can be used to replace carpet.
Deodorize your home completely. If you have pets or are a smoker, you are at a serious disadvantage in selling your home unless you can eliminate all odors. Hire a professional carpet cleaner to deodorize the carpet. You may also need to have drapes and other window treatments dry-cleaned and re-hung. Many buyers will simply walk out of a home if they detect an unpleasant odor.
Curb appeal is very important. Replace worn house numbers, mailboxes, front doors, etc. so the first impression a buyer has upon entry is positive. Trim shrubbery, store children’s toys, replace exterior lights with larger black light fixtures. Make sure the grass is freshly mowed or the walks freshly removed of snow before each showing.
Have decks professionally cleaned and stained. Have any broken boards or rails replaced or repaired. Buyer’s will imagine having to replace an entire deck if yours is in need of repair or even just faded and dirty.
Have concrete driveways and sidewalks professionally leveled and sealed. Many buyers will believe that an entire driveway or sidewalk must be removed and replaced if they see large cracks. However, there are firms specializing in leveling even the oldest concrete and sealing it so that it appears almost new. The cost of this work will usually be $1,000 or less versus ten times as much or more to replace the old concrete entirely.