Over the next several months Andy and Rebecca painted the interior, upgraded the kitchen, changed the floor coverings, and replaced the furnace, as well as changed the unsafe aluminum wiring to copper. After three years they saved enough money to be able to replace the vinyl siding with sea foam green FiberCement textured planks and white trim. The ugly duckling became a swan. Continue reading →
Home-Buying Hints for Finding Your Dream Home: Make Location Your First Consideration (2)
- Look for areas where prices have steadily increased over the past few years and where homes for sale may be hard to find.
- Visit new subdivisions and growing areas, because values tend to go up over the long term.
- Identify areas that may not be the best now, but where changes already in the works will make them more desirable. Examples include redevelopment areas, neighborhoods with new medical centers, college expansions, and other projects that add to a area’s desirability as a place to live.
Small bungalows and cottages in older neighborhoods dotted throughout nearly every city can be good investments if they are near a university, downtown, or other desirable attractions. However, these same homes built near an airport or business park will go for many thousands of dollars less and be difficult to sell. It’s all a matter of location.
In one instance, Andy and Rebecca found a 1960s split-level home near a small private college and close to an upscale shopping area. The owner had died and the two heirs, wanting a fast, trouble-free sale, were willing to discount if the buyers would buy ‘‘as is,’’ with no concessions.
Looking at similar houses in the neighborhood, Andy and Rebecca noticed that many owners had remodeled or upgraded them. By comparison, the home they were considering stood out as the neighborhood ugly duckling. This spelled opportunity, and they arranged for a fast closing.
Home-Buying Hints for Finding Your Dream Home: Make Location Your First Consideration
It’s important to remember that location comes first, because better areas hold their value more than do less desirable areas. Continue reading →
Home-Buying Hints for Finding Your Dream Home: Buy Smart Not Cheap (3)
Other buyers select a small home and, when they outgrow it, they add on or remodel it so it becomes bigger and better than other homes in the neighborhood. When they decide to sell, they find that their home won’t appraise for as much as they value it, and they won’t be able to recover the money they have put into it. In real estate lingo, that’s called a white elephant.
As a prospective home buyer, it’s tempting to sink your money into one of these white elephant deals. It appears you’re getting a bigger home or one with more amenities for a good price. However, when you decide to sell, you may find it takes longer and requires deep discounts to move it.
On the whole, it’s better to sell a home you’ve outgrown and buy a larger one in a neighborhood that will support the square footage you need. It’s interesting to note that, when asked why they overimproved for the neighborhood, owners often say that they intended to live in the home forever, so it didn’t matter.
Then, however, a job loss, relocation, divorce, or similar problem forced them to sell—and ‘‘forever’’ suddenly became the present. Americans are a mobile society, and according to the National Association of Realtors, the average length of time people stay in a home is slightly over six years although that will probably change as the current home buying and selling economy plays out and owners stay put longer.
Home-Buying Hints for Finding Your Dream Home: Buy Smart Not Cheap (2)Home-Buying Hints for Finding Your Dream Home: Buy Smart Not Cheap (2)
- Be wary of fixer-uppers. Make a list of necessary repairs and needed upgrades, and get bids from contractors on the costs of bringing the house up to local codes or your standards. If the cost of rehabilitation plus the sale price is more than the cost of similar homes already upgraded, look elsewhere.
- If there are a lot of for sale signs on the lawns of other homes in the area, that’s a red flag. Find out why.
- Have your Realtor check the multiple listing services for records for the average listing prices and actual selling prices in the area; this ratio of list price to sales price indicates value; for example, a ratio of 90 percent means that homes are selling on average 10 percent below what they are listed for. Find out also how many days the homes stay on the market before selling.
- Good schools in the neighborhood add to a home’s value. If the area schools have a bad reputation, consider looking elsewhere.
A trap that first-time home buyers commonly fall into is the dream that they can buy on the cheap, fix the place up, and sell it for a profit. Fixing up a home for profit can work if you know what you’re buying. Unfortunately, many would-be homeowners attend seminars or read books on getting rich quick in real estate and look for a cheap home they can fix up, without regard to the caveats listed above.