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Rochester Minnesota Real Estate Pitfalls And Missteps
Ok, so you're ready to start your search for the families dream home, well don't be tripped up by the "7 Deadly Sins of Real Estate misadventure". It is truly a great time to take advantage of great interest rates, qualified buyers should be excited about entering the market wether it be to create an investment portfolio or to get into that upgrade of a home you've been dreaming of for years now. But before you head off to claim your prize, be advised of 7 areas that are often times over looked by the anxious buyer.
1. Stay awhile------ Ease into the new set of circumstances that will define your budget for the next so many years. Quite often new buyers get caught up in how the old family car looks terrible in the driveway of their new home or how the old living room set doesn't fit in the new space quite right. Incurring new debt can often be counter active to the positive experience that new home ownership should deliver. Plus, settling into the new environment can offer the chance to properly decide the direction the new owner wants to travel.
2. Big Britches----- Be careful not to bite off more than you are able to chew with regard to a piece of property that is TOO expensive or TOO much house. When deciding on a property keep in mind the expenses associated with owning a large house. Expect at least 1% of the purchase price in yearly maintenance expenses. Be clear on how much utility and tax expense to expect. Don't get in over your head before you even begin.
3. $ down------ Putting down 20% of the sale price is usually a great indicator of whether or not this is the property for you or not. Having a decent amount of equity right at the onset is a sure way to ensure being able to escape unscather if things were to go awry. Carrying the majority of the purchase price in a mortgage can create a scenario wherein it is virtually impossible to sell and generate a positive outcome. Being able to create an equitous situation will allow lenders to fill mortgage requests that do not need to carry "Private Mortgage Insurance", this will save thousands during the time the borrowers is fulfilling the requirements of the terms.
4. get it in writing---- Know that the old adage of " you know what happens when you assume, ASS out of U and ME" holds true in regard to real estate also. If it isn't in writing there is no guarantee. If it isn't clearly spelled out , there is no way of ensuring that all parties are on the same "sheet of music" . if it isn't in writing the refrigerator may not be included, do not assume it is, get it in writing..
5. Yes, you need an inspection---- inspectors look for flaws, appraisers look for value. It is easy to confuse the tasks of appraisers and inspectors both are looking at the property with a fine tooth comb but certainly for different reasons. Even new construction can be found to have problems and every problem is not only a chance to negotiate but an opportunity to purchase a more solid property.
6.extras--- The avg. closing cost for a $200,000 property is about $3754. Asking about utility costs, specialized maintenance expenses, property taxes and insurance premiums is the only way to properly include in the budget the "extras" the new owner can expect.
7.Settle in--- it takes time to find the right home, be patient in trying to leave it. If you think that there is a possibility of relocation, maybe reconsider home ownership. Being aware of the current rental market may provide some idea of how solid your chance of covering the mortgage cost if you need to leave your new home. Also, knowing what the current absorption rate or how quickly houses are selling in your area will give an idea of how long you might have to carry a mortgage until it sells. Try to avoid assuming you will have an easy time with a quick sale or quick and agreeable rental situation.
Avoiding these pitfalls can be quite a difficult endeavor but keeping them in mind and being patient should lead the anxious buyer down a rosey street to successful home ownership.
Kyle is the broker/co-owner at the Realty Edge Team. He founded the Realty Edge Team in 2011 along with Dan Kingsley. At age 26 he received the prestigious “30 under 30” award from the National As....