October 2017
The pros and cons of trying to time the
market
4 Techniques to fine-tune
your mortgage practice
Jon Lamkin
Top 10 Things
also featured:
should know
Lisa Alley
every first-time home buyer
contents
professionals FeaturedAgentMagazine Phone888.437.5707 Fax888.849.3663
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Secrets of using social media to meet your sales goals
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4 Techniques to fine-tune your mortgage practice
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Copyright Featured Agent Magazine
Copyright Featured Agent Magazine
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Jon Lamkin
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Lisa Alley
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buyers&sellers 4
Who’s who in a real estate transaction
15 Top 10 Things every first-time home buyer should know 16 Weighing your options — The pros and cons of trying to time the market 18 Should you rent or buy? Ask yourself these 5 questions Copyright Featured Agent Magazine
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Who’s who in
a real estate transaction
If it’s your first time buying a home, or even if you’re experienced but haven’t bought or sold in a while, you might not be familiar with (or remember) all the people who are involved in a real estate transaction. There are more than you might think! Remember the classic Sesame Street segment “These Are the People in Your Neighborhood?” It’s kind of like that! With that tune in mind, these are the people in your real estate transaction:
REALTOR® or Real Estate Agent — These terms are often used interchangeably, but they mean different things. A licensed real estate agent is a professional licensed by the state to represent parties in the transfer of property. A REALTOR® is a licensed real estate agent who has taken the extra step of becoming a member of the National Association of REALTORS® (NAR), and also belongs to their state and local associations. Just remember that not all real estate agents are REALTORS.® 4
Listing Agent — If you’re selling your home, you may work with a listing agent. A listing agent is a REALTOR® (or real estate agent) who specializes in selling property, and does so under a contractual agreement known as a listing agreement. Home Stager — Your listing agent may choose to use a professional home stager to get your home market-ready. A stager is someone with a background in design who is skilled at making the inside of the home look its best to encourage a quick sale.
Buyer’s Agent — If you’re purchasing a home, you will probably work with a buyer’s agent. A buyer’s agent is a real estate agent who specializes in helping house hunters find the right property and negotiating the terms of purchase.
Transaction Coordinator — If you’re working with a high-volume agent, they may have a transaction Copyright Featured Agent Magazine
The terms REALTOR® and Real Estate Agent are often used interchangeably, but they mean different things. a real estate attorney. In some states, an attorney is required to conduct real estate closings. But even if it’s not a requirement in your state, you may want to retain a real estate attorney’s services for difficult or complex transactions. It’s always helpful to have another set of expert eyes to draw up and review contracts.
Insurance Agent — Homeowner’s insurance is a requirement of homeownership. The insurance agent will help you determine the coverage you need and help you find a policy to fit those needs.
coordinator as part of their team. A transaction coordinator’s job is to process listings and transactions under contract.
Loan Officer — Loan officers work for banks, credit unions, or other financial institutions. They help home buyers figure out the types of mortgages available to them and are responsible for educating consumers on the terms of their loan.
Appraiser — An appraiser works on behalf of the lender to determine how much a property is worth. The decision is based on the condition of the property as well as data regarding other similar sold properties in the same neighborhood. The appraiser’s findings are subjective; two appraisers may come up with two different values on the same property.
Real Estate Attorney — Depending on where you live, you may or may not require the services of Copyright Featured Agent Magazine
Escrow or Closing Officer — It’s a good day when you get to meet the escrow or closing offer, because that means your transaction is almost complete! This non-biased third party works with all sides to facilitate the successful closing of a real estate transaction. The closing officer collects the purchase money funds from the buyer and lender, along with the settlement costs from each party. They then disburse the funds according to the HUD-1 Settlement Statement and record all necessary documents to transfer ownership of the property.
Title Agent — The title agent paves the way for a title insurance policy to be issued by conducting a title search on a given property to ensure it has a clean title. In some states title agents are also able to manage the transfer of real estate.
Now that you know who all the players in a real estate transaction are, you’ll encounter fewer surprises as you go through the home buying or selling process. You may not encounter every one of these people, but it’s good to know who they are. Remember, they are all in business to help you. So if you have questions or concerns at any time while you’re buying or selling your home, be sure to speak up. These real estate professionals want to help you have a smooth, pleasant and worry-free transaction.
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featuredagent Lisa Alley magazine
Lisa Alley, Founder of Summit Lending in Huntington Beach, California, has been fascinated with finance for as long as she can remember. “Even as a child, I always had to be the banker when playing board games with my friends and family, because I loved math and numbers,” she says. Thus, in the late 1990’s when the opportunity arose for Lisa to get a foot in the door with a large mortgage company, she took it without reservation, and began working in the mail and fax room.
Despite her humble beginnings in the mortgage industry, Lisa had a natural aptitude for numbers, and a tireless work ethic. Over the next several years, she climbed through the ranks, learning the ins and outs of mortgage lending from the ground up. However, it took a market crash to inspire her to tap into her entrepreneurial nature and venture out on her own.
“At the time, second mortgages, specifically 125s were very popular, but that whole market collapsed in one day. About 90% of my company’s loan officers were laid off. I wasn’t, but I knew there were a lot of borrowers who needed help, and I felt like I could be more effective in helping them on my own, rather than with the large lender.” Lisa went on to earn her broker’s license, and launched her originating business before her 25th birthday.
The move proved to be a turning point in her career. With her newfound autonomy, Lisa relished the opportunity to take on even the most complicated loans. “I love problem solving, and I love complex loans. They keep me challenged and excited about my work, even after 20+ years,” says Lisa. However, she’s not one to jump aboard fads or too-good-to-be-true trends in mortgage lending, which is one of the reasons she believes she’s been so successful, through so many market changes.
“I was raised to abide by the Golden Rule. I know it
sounds cheesy, but I treat my clients the way I would treat my dad, or my brother. I want them to feel like they are my only client, and I want them to know that their
“I want my clients to know that their best interest is my only interest.”
best interest is my only interest.” For example, even when Option ARM loans were popular prior to the Great Recession, Lisa chose not to put her clients into those loans. “I may have lost some clients in the short term, but I know I made some lifelong clients by steering them away from loans that were destined to be a disaster.”
Other demonstrations of her dedication to treating her clients like family include her nearly around-the-clock responsiveness, and her decision to become a direct lender, so she can provide incredibly quick approvals. Moreover, thanks to her years of experience in all aspects of mortgage lending, her REALTOR® partners know that their clients’ loans will close if Lisa says they will. “Because I’ve worked in every stage of the mortgage process, I know what underwriters are going to be looking at, and what will cause problems,” she says. “I know which tax line to review, and I can often tell a client within an hour, if their loan will be approved.”
Of course, these days, Lisa doesn’t have to play every role as she’s built an experienced team of originators and fellow brokers, including her brother Scott Alley. Her team also includes assistants, a marketing director, and processors, all who share her devotion to providing excellent customer service.
Lisa has certainly come a long way, but she has no plans to slow down. On the contrary, Summit Lending continues to grow in volume and team members, and Lisa is looking forward to continuing to provide exceptional, ethical, and experienced assistance to her clients for years to come. “Many people who have been in the business as long as I have, slow down on their personal production and focus on managing a team. I enjoy working with clients too much to give that up,” she says. “The feeling I get when I can tell a single mom that she can move into her first house because her loan funded, is priceless. It really is rewarding.”
Lisa Alley
Broker | Summit Lending | Huntington Beach, CA NMLS #339255 | BRE #01864758
714.536.9500 | LAlley@SummitLR.com | www.SummitLR.com 6
Copyright Featured Agent Magazine
Secrets of using social media to meet your sales goals Social media affords REALTORS® and mortgage professionals alike an unprecedented opportunity to stay in contact with past clients, all the while reaching out to potential clients. That is, if you know how to use social media effectively. While it might be fun to share silly memes, or even articles about subjects you find interesting; as a professional, you’re also taking a gamble in doing so, as you run the risk of alienating past, present, or potential future clients.
Instead, when it comes to using social media to brand your business, share your skillset, and build relationships, it’s best to have a strategy in place. Here’s a Copyright Featured Agent Magazine
look at how REALTORS,® originators, and brokers can utilize social media to increase sales. Repurpose Other Marketing Initiatives and Share on Social Media — Because social media is incredibly cost-effective, if not altogether free, you have a golden opportunity to repurpose all of your past and current marketing initiatives, thus getting even more mileage out of your efforts. For example, you can supplement your email marketing campaigns through posting your newsletter, weekly, monthly or quarterly on social media sites. You can also use advertisements as new cover photos, profile pictures, tweets, or status 7
Any way you look at it, having a strong social media presence should be a part of any real estate professional’s marketing strategy. It is the fastest, cheapest, and easiest way to keep your name, your business, or your brand in front of people you already know, and those you’ve yet to meet.
updates. Videos you create for your website can easily be uploaded to a YouTube channel, Facebook, Twitter, and even Instagram. In short, social media expands your reach exponentially.
Inquire and Engage with Clients — Social media enables real estate and affiliated industry professionals a terrific opportunity to engage with past, present or prospective clients through opening dialogue. From taking surveys, to asking for feedback on various articles, images, and even new restaurants in your community, you can interact with people you may otherwise never engage in conversations with. Position Yourself as an Expert and Educator Using social media to share valuable information including market updates or mortgage rate news, secures you a position as a professional who is eager to educate others. Moreover, sharing interesting home value pricing statistics or changes to mortgage interest rates will likely invite questions from your audience, further providing opportunities for client engagement. Share Rave Reviews About Your Service Got a great testimonial from a client? Share it on social media as another way to brand yourself or your business as one which prioritizes client services. This is a great way to reinforce your dedication without having to boast about yourself, as you’re letting someone else do the talking for you.
Keep an Eye on the Competition — Social media also enables REALTORS® and mortgage originators the opportunity to see what other top-producing agents or professionals are doing to keep their name top of mind. By looking to what some of the top-producing real estate agents and originators are doing, both in 8
your market, or in other markets, you’ll likely get ideas for additional marketing opportunities that you could also implement.
Promote Your Partners — Social media also gives real estate and mortgage professionals the opportunity to support one another, further solidifying referral partnerships through the acknowledgment of milestones, such as a sale or getting a loan closed quickly. For example, mortgage brokers can help REALTORS® gain added exposure for their listings through sharing listings on their own sites.
Showcase Your Products — Sharing your listings on social media is a smart move for REALTORS.® The potential for others to see and share with a friend who is looking for a home is significant. Likewise, for mortgage professionals, sharing any new loan products or updates to existing products on social media is a smart move toward driving website traffic or calls.
Champion Your Community — As a real estate professional, social media should be used to highlight the perks of the various communities in which you live, work and play. This has the power to attract an audience who may not be sure which neighborhood or community they want to live in.
Any way you look at it, having a strong social media presence should be a part of any real estate professional’s marketing strategy. It is the fastest, cheapest, and easiest way to keep your name, your business, or your brand in front of people you already know, and those you’ve yet to meet. Just be sure to stay away from topics which might upset or otherwise alienate others. Instead, load up your feeds with useful, helpful, and positive information, and you’re likely to see your referrals start to multiply. Copyright Featured Agent Magazine
4 Techniques to
fine-tune your mortgage practice
To stand apart from the pack, a mortgage professional must rise above the status quo. After all, it’s often the little things that separate average loan officers from truly great ones, the kind that clients can’t help but rave about. Plus, fine-tuning your professional approach keeps you and your business fresh and ahead of the curve. With that in mind, here are a few easy-to-apply yet incisive ways to leave a memorable impression on your sphere of influence.
Cultivate a Track Record — While devising a loan, you’re handling a client’s sensitive financial information, while acting as a guide through what’s often a complex and stressful process. How can you set your client’s mind at ease? For starters, provide proof that you’ve successfully guided others through Copyright Featured Agent Magazine
the lending process and can be trusted to do it again. Testimonials from past clients, stats that indicate your turnaround time and closing rates, and even displayed certifications can meaningfully convey your expertise to potential clients and referral partners.
Accessibility is Everything — While it may seem obvious that accessibility is a key factor in client satisfaction, lack of availability and responsiveness are among the most-cited issues that borrowers have with lenders. It’s easy to see why: borrowers are in the midst of the biggest transaction of their lives. If a lender lags on returning emails and phone calls, it inspires insecurity in the client. To combat this issue, consider sending out weekly update emails or text messages to soothe anxieties and reinforce the lines 9
of communication. This preemptive approach not only serves your clients well, but can limit the worried phone calls or emails you might receive otherwise.
Be Ready to Counsel Clearly — As a lender, you’re the expert. Borrowers not only rely on you to source the appropriate loan, but also to explain any fine print and fees. This amounts to more than simply outlining the terms of a contract or loan product. You’ll need to be ready to translate industry terminology into information easily understood by the average homebuyer. In addition to explaining the function of a certain fee or provision, you’ll need to explain why it is included and how it compares to offerings made by other lenders. In this day and age, transparency is extremely important to consumers, and laying all the details out on the table in clear terms can go a long way in building lasting trust. Harness the Power of Technology — Mindfully integrating technology into your practice can
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save time and positively impact your bottom line, as well. From social media and online marketing to database management systems, there are digital tools out there that can streamline your business for the better. What’s more, these tools can help you track and quantify your progress, spending, and goals. The fact is, technology isn’t going away. If you want to build a business that can evolve with the times and the market, you’ll need to use it to your advantage. If you don’t want to incorporate these systems on your own, you may consider hiring a team member — even parttime — who can bring their brand of tech savvy to your enterprise.
There are plenty of ways to elevate your professional position, from taking ongoing education courses to hiring a coach. But when it comes down to it, professional growth begins with you and the decisions you make to better your practice. Start with a few of these practical applications and over time, you and your business will be better for it. Copyright Featured Agent Magazine
Jon Lamkin
Jon Lamkin Long before launching his storied career in the mortgage industry, Jon Lamkin spent more than a decade sharpening his skill set in the telecommunications field. Once he decided to pursue new horizons, he set his sights on the world of lending. After learning more about the skills required, Jon knew a transition to lending would make for an ideal fit. He relished the opportunity for an activity-based role, where his entrepreneurial spirit and problemsolving ability would allow him to shine as he served others. Today, he has carved out a masterful 12
career and now serves as Senior Vice President of Mortgage Lending at Guaranteed Rate’s Parsippany, New Jersey office. There, Jon has built a commanding reputation on the tenets of integrity, straight-shooting communication, and proven follow-through.
Jon’s company is licensed in all 50 states, but he primarily serves New Jersey, New York, and Connecticut — with occasional business endeavors in Florida and other popular second-home destinations. He leads an accomplished team that includes Copyright Featured Agent Magazine
“Ethics and integrity are the most important things in my world. I always tell the truth and am upfront with my clients, even if it means losing a deal.” a production manager, sales assistant, closing coordinator, operations assistant, and two processors to manage clients’ files as they move swiftly through the pipeline. Together, Jon’s team is a welloiled machine, with each professional given a clearly delineated role and set of tasks. This makes for an efficient and communicative approval Copyright Featured Agent Magazine
process that clients rely upon for its dependability and speed. In fact, Jon and his team closed a record $103 million in loan volume in 2016 alone. “I have an incredible support team behind me,” Jon says. “If we have to close a loan in ten days, we can do it. Our infrastructure is so robust that I can take an application on a Monday, get a commitment on a 13
“What I really love about this business is that if you work hard, you have unlimited potential. I’m always striving to reach new heights.” Wednesday, and get the documents closed the following Friday.” Likewise, Jon cites honesty and accessibility as leading drivers of his success. “Ethics and integrity are the most important things in my world,” he explains. “I always tell the truth and am upfront with my clients, even if it means losing a deal. That way, when I take an application or issue a pre-approval letter, the deal is going to go through without a doubt.”
Jon focuses on pairing the right product with borrowers, from $100,00 FHA loans to $3 million construction loans. One particular loan product of note is the construction to permanent loan program that allows homebuyers with significant renovations ahead to borrow with a one-time close — a rare loan option in today’s market. Regardless of the size of the transaction, Jon’s abiding focus is on transparency and building professional relationships that last. With almost the entirety of his business based on referrals and repeat clientele, Jon’s delivery is tried-and-true. “What I really love about this business is that if you work hard, you have unlimited potential,” he says. “I’m always striving to reach new heights.”
Spearheading loans on behalf of real estate agents, CPAs, and attorneys, Jon’s lengthy industry tenure equips him with a veteran’s expert insight. He uses this knowledge to act as wise counsel and a capable steward for his clients. “Our company has invested so much to make our jobs as transparent as possible, so a client can fill out our digital mortgage application and upload their data and it only takes about half an hour to issue a pre-approval letter.” In today’s
fast-moving market, Jon and his team’s ability to act with efficiency and precision is exactly the edge that real estate agents need to successfully close a deal. For his part, Jon recognizes the value of the “Givers Gain” philosophy and goes out of his way to cultivate strong, beneficial relationships with his referral partners, so that all parties can grow their business and serve their clients well.
To give back to his community, Jon participates in a variety of civic and charitable causes. In addition to giving annually to the Ronald McDonald Foundation, he also contributes a portion of every deal closed to the non-profit Guaranteed Rate Foundation, a company program that supports employees and their loved ones during times of need. In his free hours, Jon enjoys spending quality time with his family. As parents to three daughters, he and his wife make it a point to get away as a family each winter, then take a trip together as a couple during the summer. Jon also enjoys playing golf and taking the occasional trip to the shore.
As for the future, Jon has plans to continue his personal productivity, building on the relationships well-cultivated over the course of his 16-year career. Likewise, his overarching goal is to generate $1 billion in a year, for the New Jersey office of his company — an ambitious feat. All in all, Jon has built a fruitful enterprise, staffed it with talented professionals, and has left a positive mark on the lending landscape of the Garden State. With an eye toward the future and abiding dedication in place, the best is still to come for Jon Lamkin and his team.
Jon Lamkin Guaranteed Rate | Parsippany, NJ 973.939.8661 | jon.lamkin@rate.com | www.rate.com/jonlamkin 14
Copyright Featured Agent Magazine
Top 10 Things every first-time home buyer should know Buying your first home is exciting, stressful and life-changing. You’re going to be faced with a lot of important decisions along the way, and you’ll often have to make them quickly, so the more information you have going into the process, the better. Here are the Top 10 things every first-time home buyer should know.
Mortgage Pre-Approval Isn’t a Guarantee — Getting pre-approved for a mortgage is an important step, but just because you’re pre-approved, doesn’t mean you’ll actually get the mortgage. Financial missteps following pre-approval could derail your chances.
Decide Location Versus Space — Figure out what’s most important to you. Is it the neighborhood you’ll live in, or the amount of square footage you’ll have? Once you decide that, you’ll be less likely to compromise one for the other and avoid being talked into something you don’t really want.
Understand the Total Cost — You’ve saved for a down payment, you can afford the mortgage payment, so that means you’re good to go, right? Not necessarily. You have to take into account the total cost of home ownership, which includes insurance, HOA fees, property taxes, home maintenance & repairs and more.
Don’t Expect Perfection — Very rarely does your dream home look like your dream home the moment you step through the door. You have to be able to envision the possibilities and be ready to transform it into your ideal space. Be sure you’re looking at homes with an open mind. The School District Matters — Even if you don’t have kids or aren’t planning to, the school district in which your home is located affects the property value. Don’t Make Rushed Decisions — While it’s true that you may have to make some quick decisions during the bidding process, don’t commit to anything you feel you’re being forced into or aren’t ready for.
Understand the Time Commitment — As a renter, you come and go as you please, and if something breaks or needs to be repaired, you make a phone call and that’s that. As a homeowner, you’re responsible for maintenance and upkeep, both inside and out, which will likely take a bite out of your free time.
Research the HOA — If you’re looking at a home in a community with an HOA be sure you read and understand the covenants, conditions, and restrictions (CC&Rs) and talk with your potential new neighbors to get a feel for how the HOA performs.
Don’t Be Afraid to Ask Questions — You’re about to make a huge decision. It’s perfectly normal to have lots of questions for your lender, your REALTOR®, the home inspector and anyone else involved in the transaction. Most real estate pros enjoy working with and educating first-time buyers, so ask away. It Should Be Fun! — The home buying process can definitely be stressful, but it should also be fun, too. After all, you’re about to realize the American Dream of home ownership. Enjoy the ride! Copyright Featured Agent Magazine
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Weighing your options —
The pros and cons of trying to time the market
In many circles, when conversations about buying and selling homes arise, the concept of “timing the market” invariably emerges. Some people will swear by the practice, citing example after example of instances where buying low and selling high has worked for them, or for people they know. Others will say that timing the market is not only impossible, but that the best time to buy or sell is when you’re ready to buy or sell. Period.
So, what is fact and what is fiction? Can the market be accurately timed, so as to mitigate spending and maximize profit? Or are those who seem to have an uncanny knack for buying when homes are at their lowest price, and selling them at the highest points, just incredibly lucky? Unfortunately, despite entire books being devoted to the practice of learning how to time the market, it’s most certainly not an exact science. But like most things in life, there are definite 16
pros and cons to trying to time the market. Here’s a look at some of them.
The pros of trying to time the market
Ensures Education — If you’re attempting to time the market, you’re going to have to do your homework. You’ll need to monitor home values, interest rates, FED rates, neighborhood appreciation/ depreciation, inventory levels, and more. Overall, this works to your benefit, as you’ll be learning something new nearly every day, which can only help you to become an even savvier buyer or seller in the future. Knowledge is indeed, power.
Protects Your Pocketbook — Being mindful of what the real estate market is doing certainly increases your likelihood that you’ll get a better deal than if you completely omit market conditions from your Copyright Featured Agent Magazine
Can the market be accurately timed, so as to mitigate spending and maximize profit? Or are those who seem to have an uncanny knack for buying when homes are at their lowest price, and selling them at the highest points, just incredibly lucky? mortgage interest rates drop to their lowest, can lead to missed opportunities to invest, or to become a homeowner. Holding out for just one more price reduction or decrease in interest rates may cause you to lose out on an incredible deal. Missed Opportunities to Make Memories Waiting too long to buy or sell, in effort to time the market can ultimately cost you valuable time. Instead of taking the profits from a home sale and purchasing a new home when conditions are favorable, you ultimately may miss out on awesome opportunities to make new memories in your home. Consider that buyers who attempt to time the market perfectly may miss the chance to celebrate special occasions and milestones in a new home.
investment strategy. Generally speaking, making an effort to time the market, although not failsafe, will make you a more informed buyer or seller, thereby increasing your likelihood of securing better pricing, terms, concessions, or conditions.
Puts You in a Position of Power — Whether you’re a potential buyer in a down market, or a seller in an up market, you have a lot more bargaining power during decidedly lopsided markets. Subsequently, as a buyer or seller, you will have far more leverage in an unbalanced market than during periods of relative equilibrium/neutrality in the real estate market.
The cons of trying to time the market Potential for Letting Great Properties or Profits Pass You By — Trying too hard to wait to buy until home prices hit rock bottom, or when Copyright Featured Agent Magazine
Market Stability Is Never Guaranteed — It’s long been said that the only constant in life, is change. That’s undeniably true when it comes to the real estate market. There is no guarantee that interest rates, or home prices won’t change on a dime. The inherent unpredictably of the real estate market means that even the most well-laid plans for buying or selling are not immune from potential and/or substantial market swings.
Although there are benefits and potential pitfalls to consider when deciding whether to try your hand at timing the market, one irrefutable fact remains. An investment in a home is a significant undertaking. For the overwhelming majority of people, it will be one of the biggest financial decisions of our lives. As such, deciding to buy or sell is not something most people will want to go into alone, or haphazardly. With the help of an educated REALTOR,® a skilled mortgage professional, and guidance from other trusted advisors such as your CPA or financial advisor, conducting due diligence before making any decision just makes sense. 17
Should you rent or buy? Ask yourself these 5 questions
Any milestone life event, such as getting married or divorced, having a baby, relocating for a new job, or sending adult children out into the world, can put you in the position of having to choose whether to rent or buy your residence. There was a time when conventional wisdom dictated that buying was always the better choice, but the ’08 housing crash changed that. Now, experts advise that people make the decision to rent or buy based on more than whether or not they can afford a mortgage payment, and take several other factors into account as well. Here are five questions to ask yourself when deciding whether to rent or buy the next place you call home.
How Stable is Your Life? — None of us can
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predict the future, but before choosing to buy a home, you need to have a general idea of where you see yourself in the next five years. Do you have a good job that you enjoy and plan on keeping? Is your relationship status likely to change? Will you be adding to your family — or will it be shrinking when kids move out? Are you making plans to travel extensively? The way you answer all these questions will factor into your decision to buy or rent. Bottom line: If your life is reasonably stable and you foresee it staying that way, buying a home may be the way to go. If not, continue to rent until things settle down. Have You Saved for a Down Payment? While in some cases it’s possible to purchase a home Copyright Featured Agent Magazine
You may find that as your life changes, you end up being both a renter and homeowner at different points along the way.
a larger space and using more water. Making sure you’re financially prepared before buying a house will help ensure you get to enjoy your new home and not struggle with being “house poor.” Are You Prepared to Furnish and Decorate? Furnishing and decorating a home takes vision, time, effort and, of course, money. Even the most committed minimalist doesn’t want to live in a space that’s devoid of personality (or furniture). And really, at least half the fun of owning a home is making it your own with paint, décor and furnishings. When you’re working out your financials, don’t forget to factor in the cost of decorating the home.
without a down payment, most financial experts advise against it for a number of reasons. For one, buying a home without a down payment means a higher mortgage payment and will also require private mortgage insurance. Additionally, sellers are more likely to accept an offer that includes a down payment, especially in competitive markets.
Can You Afford the Monthly Costs? — As a renter, monthly housing costs are generally limited to rent, utilities and perhaps, renter’s insurance. When you buy a home, your monthly costs on top of the mortgage payment can include property taxes, HOA fees, yard maintenance, and higher utility bills than you’re used to because you’re heating or cooling Copyright Featured Agent Magazine
Do You Really Want to Own a Home? This may seem like an obvious question, but it’s worth doing some soul searching to figure out if you’re really ready to be a homeowner. Many people buy a home because they feel it’s the logical “next step,” or because friends and family pressure them into making an investment, only to find it wasn’t what they really wanted. Spend some time really thinking about your needs, your goals, and the life you want to live. If you come out of it feeling energized and excited about the prospect of owning your piece of the American Dream, go for it! If not, keep renting until you feel differently.
Ultimately, there’s no right or wrong answer for whether anyone should rent or buy their home. It’s a decision entirely based on each person’s unique set of circumstances. And remember, nothing is forever. You may find that as your life changes, you end up being both a renter and homeowner at different points along the way.
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