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Click to view the PDF versionSaturday, October 19, 2013

Homeownership’s Impact on Net Worth

Over the last five years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth. A recent study by the Federal Reserve formally answered this question.
Some of the findings revealed in their report:

  • The average American family has a net worth of $77,300
  • Of that net worth, 61.4% ($47,500) of it is in home equity
  • A homeowner’s net worth is over thirty times greater than that of a renter
  • The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100

Bottom Line
The Fed study found that homeownership is still a great way for a family to build wealth in America.

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Friday, October 4, 2013

Top 4 Questions Homebuyers Need Answered Before They Buy


Buying a house is the biggest investment most people will make in their lifetime, and the complex process can be intimidating to many homebuyers. Knowing the right questions to ask and receiving professional advice will help your clients make a sound investment for their future.
Whether they are buying their first home or moving across country, navigating everything from jargon to home buying basics can be scary and overwhelming.
Before your client begins the purchase process, make sure they have answers to these top homebuyer questions. Each is a critical component to making an educated and informed decision.

Top Homebuyer Questions

1. Where do we want to live?

The first step is to help your buyer narrow down a location and style of home. They have probably already researched online to get a sense of pricing and area.
Help them determine what factors are most important when it comes to choosing a neighborhood such as schools, commute to work, shopping, entertainment and how quiet or peaceful the neighborhood is versus a hustling and bustling urban area.
Knowing the answers to these questions before they get in the car will save everyone time and frustration by eliminating developments and neighborhoods that are of little to no interest. If you are out viewing homes in a specific area, let your clients stop and talk to homeowners. They need to understand why others enjoy living in that area.

2. How much money do we need to have saved?

The mortgage product that your client selects will assist in determining down payment requirements. This is why it is so important that they speak with a licensed mortgage representative to discuss their down payment and mortgage options prior to viewing homes.
However, there are additional costs associated with a purchase that they must be aware of:
  • Make sure they have enough money set aside for closing costs and other related expenses
  • They will need to prepare for the cost of a property assessment, lender appraisal and home inspection
  • Moving costs including the transfer of all utilities and services such as heat, water, TV

3. How much would we like to spend monthly?

Unfortunately, many people bite off more than they can chew when purchasing a home because they look at the total purchase price instead of the monthly payments.
Keep in mind that what they qualify for isn’t always the same as what they can afford. A pre-approval letter is something you should get at the front-end to ensure you are looking within the right price range and your client is comfortable with their mortgage options.
A licensed mortgage loan officer can provide a total monthly payment including principal and interest, property taxes, homeowners insurance and monthly mortgage insurance if applicable.
You may also want to advise them that there may be additional expenses when purchasing a home, townhouse or condo:
  • Heating/Gas/Oil
  • Electric
  • Water
  • Homeowners Association Fee
  • Landscaping
  • Cable/TV
  • Sewer

4. Why should I work with a buyer’s agent?

Choosing a real estate professional is one of the first decisions a buyer will make. It is also a very personal decision depending on the qualities most important to the buyer.
While traits such as honesty, integrity, knowledge and experience are all very important, it is also vital that your clients feel comfortable with the real estate professional they choose. Encourage potential clients to research before making a decision by looking at LinkedIn and other online profiles.
A buyer’s agent works as an advocate, providing guidance as well as open lines of communication. Explaining the purchase process and keeping the buyer informed along the way is a way to work together through the buying process.

Source: Better Homes & Gardens Blog

by Karlton Utter

What questions do you find most important to a homebuyer during the transaction? I would love to hear your thoughts in the comments below!

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