Buying a Home: A Guide for Each Step
Buying a home is exciting, but it can also be intimidating. There’s a lot to know—and do—before you have the keys to your new place in hand. This guide (presented by Becker Realty Services, Inc.) explains each step of buying a home, including the facts you need to know about finances—and more.
Budget for More Than Just a Down Payment
Most prospective homebuyers know that they need funds for a down payment. Other items you should plan for include closing costs and escrow funds—but that comes later. First, you should have money set aside for a home inspection on any property you’re considering. It’s rare to find a seller who is willing to pay for an inspection, so having cash on hand is a smart idea.
According to Spectora, the average price for a home inspection is around $358, but there’s no set standard for pricing. Because of this, it’s important to ask the inspector ahead of time what their fee structure is—and compare prices to ensure you get an affordable price.
You Have Options When It Comes to Mortgage Types
While there are many mortgage options for qualified buyers, conventional mortgages often have a bad reputation. But the truth is that a conventional loan can be a great low-cost option—there aren’t extra fees hidden in your payment—and they come in a range of down payment options.
Plus, if you use a conventional loan and make a down payment of 20 percent or more, you won’t need to pay private mortgage insurance, an added monthly expense. With a conventional loan, you can also choose from an adjustable-rate or fixed-rate loan option, which may suit your finances better than alternative options.
Other loan types include government-insured options with criteria you must meet. For instance, VA loans are for former service members, and HUD loans are for higher-risk applicants. FHA loans are another government-backed option for those at higher risk. Your lender can help steer you in the right direction.
Knowing What You Can Afford is Important
Once you understand a bit about the up-front fees of home buying—and your loan options—it’s vital that you look at how much you can afford. Happily, the web is full of help. A mortgage calculator gives you an idea of your monthly mortgage payment at different price points. An online tool will also help you decide if it’s in your best interest to pay points on your loan, which can help lower your monthly mortgage payment (this is great if you intend to own your home for a while). You can also use a calculator to determine how much home you can afford based on the loan type and your income level.
However, keep in mind there are homeownership costs beyond the basic mortgage. As Consumer Financial Protection Bureau cautions, many mortgage calculators don’t factor in mortgage insurance, HOA dues, property taxes, or homeowner’s insurance. What’s more, you should pad your budget with funds for hidden homeownership expenses like repairs, maintenance, and improvements.
Decide What Home Features Are Must-Haves
With a prequalification in hand and a price range to work with, you can start viewing properties. The Spruce suggests zeroing in on crucial factors like location, the lot size and layout, the floorplan and square footage, and potential upgrade costs if, for example, the kitchen or bathroom aren’t designed to your liking. Knowing what limits the city imposes on additions is another vital consideration if you plan to add on later. A great real estate agent can help you navigate many of these ins and outs.
As you prepare to buy a home, knowing what to expect is half the battle. To that end, reading up on the mortgage process is a must. And lean on professionals, such as your lender and your real estate agent when you need help getting through the complex portions of the process.
Becker Realty Services, Inc. is Long Island’s most trusted name in real estate, and we can help you find the perfect home for you. Stop by our website or call us at (516) 887-0677.
Photo via Rawpixel
Starting A Business And Making Space For Success
When you’ve worked hard and possibly had a bit of luck on your side, it may be time to make room for your growing business needs. Starting a company is full of variables, including your rate of success. Progress often comes at a price, and that could include purchasing a new home with additional space for tools, inventory, and other essentials.
Shifting locations when your business is in the midst of a boom may sound intimidating. However, the quicker you get this out of the way, the more space you’ll have to grow. A tree cannot grow in a small pot — you’ve got to give it room to lay roots and breathe. Here are some steps to take to foster your company’s prosperity.
Numerous wealthy investors and laypeople credit investment properties as essential factors to their financial success. A new home could help with professional needs, as well as monetary security.
When spending a large chunk of money, it’s crucial to plan so that you don’t overspend or become overly stressed and make a poor decision as a result. Look at your finances and be practical about what you can afford to be confident in your choices.
Most people aren’t able to pay for a new home in cash. It’s a significant purchase, and this is entirely normal. Due to this reality, speaking with lenders and getting pre-approved for a mortgage or loan is essential to help you prepare for the big purchase.
Find Real Estate Agent
When purchasing a home, working with a sharp real estate agent to assist in your quest could be tremendously helpful to boost confidence in your decisions. Professional advice goes beyond property knowledge. An agent can even help with browsing for the best business or personal loans. Research the best real estate brokerage and choose an agent that understands your needs.
House Hunting Online
House hunting online is an effective strategy in addition to hiring a real estate agent. Searching online for homes allows you to view multiple properties in one evening and research the neighborhoods, schools, and other features. You can view the area’s walk score, current standings of the school system, and give you an idea of where you’ll be working and living.
Specific tasks must be completed before your business takes off to get it a solid foundation to thrive. For example, knowing and registering your business classifications can help you move forward.
Further, it’s wise to consider registering your business as an LLC. What’s excellent about forming an LLC is that the “limited liability” aspect means that your personal assets are shielded in the event your company goes bankrupt. Additionally, you can make purchases through your LLC, including a house that is tax-deductible.
Each state and region has slightly different statutes, so it’s essential to research the guidelines in your state of residence before moving ahead. LLCs typically require considerably less paperwork and boast greater flexibility, allowing for more freedom to modify your business as your needs evolve. You can classify yourself as a New York LLC and avoid lawyer fees, saving you time and money.
Branching out into the small business world isn’t easy, and you should be proud of your bravery. Starting a new company is full of surprises and excitement — albeit not without frequent obstacles and roadblocks to keep you on your toes. With numerous resources to help you on your way and people to help guide you in your search, we’re confident that your trajectory will lead to success by keeping this advice in mind. Contact Becker Realty Services to get started in the right direction. (516) 887-0677
Downsizing Decisions Seniors Face (And How to Make the Right Ones)
Seniors face many decisions as they age, including where and how to live. If you’re contemplating a downsize and plan to work with a professional from Becker Realty Services, Inc., here are some of the decisions you will face, plus advice on how to select the best options for you.
Why Do You Want to Downsize?
This is the first question you should ask yourself before making any decisions. Consider the reasons you might downsize, what it would cost, and how long it would take. If the decision to downsize is motivated by having more space than you need or the desire to live in a warmer climate, moving may be your only option. However, if you feel comfortable in your home and can keep up with the maintenance, it might not be worth selling, especially if it’s accessible for you now and into the future.
If lowering your mortgage payment is the driving factor, a simple refinancing could be the easiest option. And with rates so low right now, it’s definitely worth scoping out. You can opt for a regular refinance to lower your monthly payment, or if you’re a veteran, you could be eligible for a VA streamline refinance through an IRRRL (Interest Rate Reduction Refinance Loan). Refinancing can be a great choice since you can typically close in just a few weeks and with minimal paperwork.
What Does the Future Hold?
Another important factor to consider is where you will move and how you will pay for housing, as well as how your housing and health-related needs may change in the future. For example, if you will be moving to a nursing home or other senior housing facility, you may need the cash from the sale of your home to cover the higher monthly costs of lodging and care. In fact, how much cash you receive from your home can play a role in the facility you choose. Therefore, it’s important to research pricing for these facilities in advance of placing your home on the market. In nearby Brooklyn, for example, you can find pricing information online for local nursing homes, along with reviews from residents and their family members.
If you would like to manage your own home and care for now but think you may move again later, either to a senior housing facility or into a home with relatives, renting may be your best option. Depending on where you live, renting can be more affordable than buying in the short term, and seniors on a fixed income can also pursue help from government HUD programs. However, rental homes may not offer the accessibility options you need as you age, and you may not be able to make those modifications yourself.
If you are looking for a lower monthly payment and plan to age in place, it may make more sense to buy. This is especially true if you are able to make a large, cash down payment with savings or cash from the sale of your home. However, you’ll still need to consider how your needs will change as you age. While you would be able to update your property to accommodate aging in place, these updates could be costly, and they could affect the value of the home if you decide to sell it later on.
Should You Sell, Rent, or Pass Down Your Home?
Once you’ve made the decision to move to assisted living or to rent or purchase a new home, the next step will be to decide what to do with your current home. When deciding whether you should sell it, rent it, or pass it down, start by asking yourself the following questions:
- What is your home worth?
- Is the market currently in your favor?
- Will you make a profit on the sale?
- Could you use rental income?
- What are the average rental rates in your area?
- Does the home need repairs in order to sell or rent?
- How will selling affect you and your family emotionally?
In many cases, selling makes the most financial sense. If your home is worth significantly more than you paid for it and you are close to paying off your mortgage, selling your property can provide you with the funds you need to purchase a new home outright or save to put towards monthly housing costs moving forward.
On the other hand, renting is a great way to hold onto a home you feel emotionally attached to while offsetting the costs of owning it. Of course, you’ll need to keep in mind the challenges of renting out a home, including screening tenants, handling maintenance requests (which you’ll need to budget for—it costs $250-$400 to repair an appliance, for example), and making sure your property remains occupied to prevent lost income.
Another option, especially if you have children or relatives who are interested in owning the home, would be to find a way to keep the house in the family. For example, you could sell it to a family member or leave it to your estate in your will when you pass. Keep in mind there are significant tax barriers to simply signing over a home to your family. You also risk alienating certain family members if you single out one individual to take ownership.
If you’ve decided downsizing is for you, it’s crucial that you investigate each option when it comes to moving on from your current home. And in the end, downsizing earns you benefits like more free time, less stress, and more positivity about your future.
Photo via Unsplash
Retire Big: A Home to Grow Into
Photo credit: Pixabay.com
Let’s talk about the proverbial elephant in the room when it comes to where you live in retirement. When people are preparing to retire and think about moving, the typical assumption is that they will transition into a smaller home.
But why is a smaller home considered a better option for retirees? If anything, people who have finally retired from the daily grind need room to expand. With more time available for pursuing passions and interests, retirees may require more space than ever.
Retirees with an interest in homesteading may find that a larger home better meets their needs, particularly when kids and grandkids come to visit. The wholesome and enriching lifestyle of homesteading as a hobby appeals to many retirees, and that requires space to roam at home.
Finding the Right Home
As people begin the home-shopping process, it is imperative to explore the deal-breakers and must-haves of your real estate options. Before you put together your list of must-haves, connect with an expert agent at Becker Realty Services so you can count on the help of a pro throughout this entire process.
Once you’ve got your agent lined up, there are many factors to consider when exploring retirement real estate, and it is worth it to research options that will best serve your needs.
- Location: Retirees interested in homesteading may find that housing in rural areas offers plenty of green space and options for expansion with nurseries, areas for fences to be built, garden space, composting and chicken coops.
- Budgetary considerations: For many people, retirement means a less robust income than in working years, so finding a suitable home that meets the budgetary needs is practical. The right kind of real estate investment could offer financial gains in the long run.
- Perfect size: Finding a home that is just the right size for your needs can be challenging. Consider a home in which you can have adequate space for creative outlets, enough bedrooms for visitors and rooms for personal space and meditation or exercise.
Taking Action to Make It Yours
Real estate can be fast-moving and stressful, so when you find your dream home sometimes it requires quick, decisive action to prevent losing out on an opportunity. You may need to act quickly to get the home you desire; it may even mean buying your new home before selling your current property.
Your Becker Realty Services agent can prevent you from missing out on a great property and may help you avoid disaster in some instances. It can be risky to buy before selling, but in many cases it is safe and even advisable, and your agent will explain the risks and benefits in your specific situation.
If you have found your ideal home and are nearly complete on selling your current one, you may be able to request an extension on your closing time frames. Requesting an extension can give you extra time for sale of your current home and to make other preparations.
Tip for a Safe Move
Aside from the general safety advice for lifting and moving objects, retirees who plan to move after retirement may consider some additional tips for ensuring a safe move:
- Hire helpers: There are many reputable moving agencies who are vetted and bonded for this sort of assistance. Let them do the heavy lifting.
- Develop a strategy: Organize each room’s contents by level of necessity, 1-5. Number boxes according to importance; number 1 is for objects you will need within the first 24 hours of being in your new home, number 2 is for items you will need within the first few days and so on. This will help you prioritize unpacking and save energy during the transition.
- Give yourself plenty of time: Being in a rush as you move is detrimental to your health, as it adds undue stress and increases the risk of physical injury. Allow yourself extra time for the move.
As you approach retirement and pursue your dream home, let your wildest dreams fly. Now is the time to embrace the joys of life and spend time doing things you love in a home you love. Use the resources available to help you make the best housing decisions so that you can have your happily ever after in retirement.
When you’re ready to begin your house hunt, reach out to Becker Realty Services. We’ve been helping Long Island homebuyers since 1905, and we’re here to serve you! Call today to get started! 516-887-0677
Everything You Need to Know to Become a Landlord
Most of us would like to have extra income each month. If you have the drive and skills to take on the work, investment properties can be a great way to improve your cash flow. It takes good instincts, great people skills, and a heavy dose of business knowledge to run a rental property.
Before you take on this responsibility, contact a local Realtor. A real estate agent will help you find a property that fits your budget as well as recommend the major renovations and minor home improvements that can add value to your property (and allow you to charge renters more to maximize your profits).
Getting to Know the Job
Make sure you understand the responsibilities of becoming a landlord before you dive in.
Types of Investments
From residential to vacation rentals to real estate mutual funds, there are many kinds of investments you can take on — and advantages to each.
Make the wrong money decisions, and you wind up losing on your rental.
Services Property Owners Need
Although landlords wear many hats, you’ll still need outside help and services from time to time.
For the right person, becoming a landlord can be a very lucrative endeavor. Taking the time to be sure you’re fully prepared to make a move is the first step. From there, it’s all about finding the best fit and giving it your all.
Photo Credit: Pixabay
The Best Ways to Pay for Major Home Renovations
As you outgrow your starter home, you’re thinking of renovations that will transform your home into something more suited for this phase of life. Before you start tearing down walls or picking out paint chips, consider how you’ll pay for your home renovations. While home improvements can be a smart investment, they’re also expensive. Here’s what to know before you begin.
Is Renovating the Right Move?
Compared to the hassle of selling a house and moving, renovating sounds easy. But don’t underestimate everything that’s involved in a major remodel. Not only do renovations disrupt everyday life, but a return on your investment isn’t guaranteed. While some home renovations add to the value of your home, others only add to your own enjoyment.
Before undertaking a major home remodel, compare the costs and inconveniences of renovating with the price of a custom home. Custom-built homes let buyers skip the protracted house hunt and get exactly what they want. While you may assume a custom home is out of reach, hiring a pro to build it could be more cost-effective than overhauling your home, especially if your house needs work. Calculate the costs of remodeling along with ancillary costs like storage units and take-out meals, then meet with local builders to explore your options.
Using Your Fix-It Fund for Renovations
Every homeowner should have funds set aside for maintenance and repairs. A general rule of thumb is to put two months’ worth of mortgage payments into a “fix-it fund” every year.
A home repair fund is a must for when the roof springs a leak or your furnace gives out, but think twice before tapping it to remodel. If your home needs major repairs and you don’t have the reserves to pay for it, you could find yourself in a tight spot.
The Best Loans for Home Renovations
Unless you have enough money to pay for home improvements and keep a cushion in your fix-it fund, look to loans to finance renovations instead.
Home equity line of credit (HELOC)
Home equity lines of credit are a flexible way to borrow against the equity in your home because they’re a source of revolving credit. Since HELOCs are secured loans, interest rates are low compared to personal loans. However, it’s important to avoid borrowing more than you can pay off to avoid foreclosure.
Home equity loan
Also known as a second mortgage, a home equity loan is another way to borrow against the equity in your home. Unlike HELOCs, home equity loans are paid as lump sums. While interest rates are fixed, they may be higher than you’d find with a HELOC or cash-out refinance.
Cash-out refinancing is another way to convert home equity into cash, but refinancing only leaves you with one loan to pay back, not two. That may be beneficial or not depending on how mortgage rates have changed since you purchased your home. VA IRRRL refinancing is ideal for armed services veterans as these loans have flexible requirements and often don’t have any extra costs and or additional paperwork.
Subsidized home improvement loans
Some county governments offer low- and no-interest home improvement loans under the Home Improvement Program. While these loans may only be used for rehabilitating aging properties, not luxury improvements, they’re an excellent resource for homeowners who qualify.
How to Save Money on Home Renovations
You don’t want to cut corners when it comes to your home. Instead of looking for ways to cut costs on home renovations, consider how you can get the most for your money. Cheap contractors rarely do the best work. By finding a company with fair prices and a great reputation, you can get more value for your investment. Before choosing a remodeling and renovation company, ask for recommendations, read online reviews, and review past work. And don’t forget to contact an experienced local Realtor to ask about which renovations make the most sense and which will do little more than drain your budget.
Updating your home over the years is a smart way to protect your investment. However, it’s also important to know when to walk away. If you’re not sure if you should renovate your home or move on, talk to a local home builder to weigh your options. With expert guidance, you can make the best decision for your lifestyle and your wallet.
Image via Unsplash
Virtual Staging and the Future Of Real Estate
Staging a home for sale has been a tool used by real estate agents and sellers for years. When a home is beautifully staged, it can be a real lure for potential buyers. The process of home staging involves a lot of heavy lifting, rearranging furniture, and intense attention to details and decorating. Most buyers prefer to purchase a home that looks well-kept and on-trend, which makes staging the property a smart marketing move. However, a lot of physical work, time, and effort comes with the staging process and it doesn’t mean that a quick sale is guaranteed. Virtual staging uses the same principles as regular staging, but with a technological twist. This process can save you a lot of headaches while still providing you with amazing results.
What is Virtual Staging?
When a buyer opts to use virtual staging, the stager takes digital photos of the home. The property could be empty, or it could even be full of mismatched furniture, knick-knacks, and clutter. Once the photos are taken, the virtual stager uses special photo-editing software to “tweak” the way the home looks. This software can remove unwanted clutter, remodeling being done, and furniture with a few commands. It also allows the stager to add anything they want including new matching furniture, décor, and more. Extreme care is taken to ensure that every room of the home appears as if it’s been physically staged. The final photos are then posted on the listing, giving sellers a chance to entice new buyers to make a purchase or schedule a showing. On certain occasions, AR and VR can be used for an even smoother and in-person experience.
How Does Virtual Staging Work?
Today’s modern home buyer tends to look for property online before they even set foot in the door. Most buyers want to get an idea of the home’s size, design, and aesthetics before they take their valuable time to physically go to a showing. With virtual staging, the software is used to create a beautiful home remotely. The seller doesn’t have to lift a finger (in most cases) and the virtual stager simply works their magic once the photos are obtained. This advanced software allows the stager to brighten up a room and add new furniture, rugs, and even artwork. The process requires skill and training in order to ensure that the final product looks polished and realistic. Through the use of shadowing and other techniques, the final photographs of the home offer buyers a beautiful perspective that entices them to learn more. With so much digital marketing being used for real estate sales today, it’s not surprising that this new method of home staging is becoming more popular than ever before.
Virtual vs Traditional Staging
Traditional staging involves a professional stager coming to the home and assessing how it looks in order to make changes that will get the home sold. The stager will measure each room and take photographs to help them determine what items are needed. Once the home is ready to be staged, they’ll bring in furniture, rugs, and accessories. If the home is currently furnished, the stager may ask the seller to remove the furniture and put it in storage. In some cases, they may be able to use a few existing pieces while in others, the stager may ask the seller to take everything out. This process requires a lot of extra work, time, and expense on the seller’s part and it can be especially difficult if they’re still living in the home while it’s staged. An empty home is much easier to stage, which is why most traditional stagers require the property to be emptied out before they bring new items in.
With virtual staging, the seller doesn’t need to move furniture or empty out rooms. All the virtual staging company needs are clear photos of the home including the bedrooms, living room, bathrooms, and kitchen. Most virtual stagers will come to the home to take professional photographs, but as a seller, you may be allowed to submit them yourself. Discuss the options with your virtual stager to find out what they prefer. Clear photographs of the entire room must be taken in order for the virtual staging to be effective. However, this process is much more convenient for the seller since they won’t need to physically move anything or pay for a storage facility. They also won’t have to worry about making sure that everything is perfectly in place since all of the new furniture is virtual and not actually in the home.
Pros and Cons
As with any professional service, there are pros and cons to virtual staging. Let’s take a closer look at the benefits and some of the drawbacks:
- Virtual staging is much easier on the seller since they won’t need to remove or move any furniture or pay for separate storage while they wait for their home to sell.
- Cost-wise, a virtual staging service is usually a lot less expensive than traditional staging services.
- If you’re planning to market your home online, virtual staging is a powerful way to entice buyers and give them a clear vision of what your home might look like if they chose to live there.
- Virtual staging software offers countless options for colors, furniture designs, plants and more which means the stager can make selections tailored to your specific market and the hottest trends in interior décor.
- As a seller, you can enjoy the benefits of staging without having to leave your home, move things around, or be extra careful with furniture that isn’t yours.
- Most professional stagers are experienced in home design and interior design, which means your photos will look polished and beautiful when it’s time to upload them online.
- In most cases, it only takes a few business days to complete a virtual home staging project from start to finish. That means sellers won’t have to wait to be scheduled or deal with the labor involved with traditional staging.
- Some real estate experts say that most buyers prefer to see an empty home. This gives them a better idea of how much space they’ll have or how the home will look when they add their own furniture. Virtual staging fills the room to make it look as if it’s lived in when it goes on the market.
- If the virtual staging isn’t done correctly, the photographs can look “fake” or items may appear more like CGI than actual furniture.
- Not all MLS markets allow for virtually staged homes. If you live in a specific market where it’s not allowed, you’ll have to choose traditional staging instead.
- It’s important that virtual staging only changes the items in the home and not things like paint colors or finishes like crown molding. If those items are changed, it can be misleading to buyers and might result in some issues for the seller when the home is shown.
Selling a home can be expensive. Between real estate agent commission, marketing, and time, it’s important to choose a service that fits within your budget. When it comes to the cost of virtual staging, prices will vary depending on the size of your home and the company you choose. However, this option is still much less expensive than a traditional home staging. The cost of virtual staging can range between $40 and $200 per room, on average. This cost may vary depending on your market, the current demand, and other factors. However, it’s usually a single fee that you only have to pay once, whereas traditional staging typically charges a flat rate for the first month and then can charge several hundred dollars per month thereafter. Think of traditional staging as a type of furniture rental. The longer your home sits on the market, the more you’ll need to pay your stager to keep their items in the home until it sells. Most traditional staging companies charge an upfront fee based on the size of the home or the number of rooms. With virtual staging, you’re usually charged per room, and only charged once for the service.
The Future of Virtual Staging
The COVID-19 pandemic is changing the real estate landscape at a rapid pace. With virtual staging, sellers have the option to showcase beautiful photos of their property without ever having to leave their home, and without anyone else entering it. In addition to concerns about the pandemic, virtual tours of homes and online marketing are becoming the norm. Real estate listing websites and smartphone apps are the first places most buyers look when they’re ready to find a new home. The days of driving around neighborhoods and calling phone numbers on a sign are quickly becoming a thing of the past. This means that virtual staging has a bright future and a great opportunity to outpace traditional staging. The process is easy for the seller, and it provides them with the tools they need to sell their home fast. The staging service will have less overhead and a much better chance to keep more money in their pockets, too. Whether you’re an agent, homeowner, or stager, it’s clear that virtual staging will be front and center moving into the future.