Buying a Home: Assessing Your Wants VS. Your Needs
Buying a home is a big commitment and an exciting adventure. It is also an opportunity to evaluate your current situation and think about the future you envision. Are you newlyweds and looking for your first home together? Are you nearing retirement and all the kids have long since fled the nest? Or hopefully, nearing retirement with kids that refuse to flee the nest?
This is the time to balance your wants against your needs. Where this line is eventually drawn in the sand usually boils down to economics. If you are very well off and there is not much chance of a personal economic downturn, then you can lean towards your wants. On the other hand, if you are just starting out in your career and family life, or your income ebbs and flows, consider focusing predominantly on your needs.
It is easy and tempting to overbuy in times when interest rates are favorable and the market favors the buyer over the seller. Even if it is truly a great deal, keep in mind that the economy and the market fluctuate over time. Try to avoid the temptation of overbuying.
Let’s consider some things that definitely fall into the “needs” camp. If you are a young couple just starting out, this is a good time to sit down with your spouse and discuss how many children you would like to have. Children need a good stable environment. You don’t want to buy a bigger house every few years because there is another kid on the way. Do you run a business out of your home? Then shop for a home that will accommodate your office, storage space, or a processing area.
Now let’s take a minute to talk about things in the “wants” camp. Consider your lifestyle. If you entertain a lot then you might want to focus on a house with a large formal dining room and kitchen or a backyard deck and a pool. If you don’t envision this playing a large part in your regular activities, then focus on other interests. A game room? An area for a wood shop?
As you can see the division between wants and needs may vary widely between people depending on income, future plans, how much maintenance you are willing to do, just to name a few factors. This is a good time to sit down with pencil and paper and discuss with your spouse just what you WANT versus what you NEED. With these concepts firmly in mind, it’s time to go shopping!
This article was provided by Boulder real estate experts at Benchmark Realty.
Why Your New Home's School District Is Important --
Even if You Don't Have Kids
A very important factor in determining the market value of a piece of residential real estate is the quality of the school district that it is located in. Homes that are located in prestigious school districts can be listed for and sold for significantly more than similar homes in less desirable school districts. Before purchasing a home in a new neighborhood, it is very important to investigate the school district that the home is located in, even if you do not have children.
School District Affects Home Prices
Real estate agents claim that the school district that the properties are located in is the driving force behind the rising prices of homes in certain areas or neighborhoods. Homes in the better school districts selling for much higher prices than similar homes in other areas has become the rule in recent years, where it may have been the exception before.
Homes that are located in better school districts can sell for 20-30% more than homes in other areas. When considering an average price for a single family home at around $200,000, the price difference is significant.
In previous years, home buyers were more concerned with the property's proximity to their jobs, city centers, entertainment, and conveniences. Now, home buyers are concerned about their homes being located in school districts that are less desirable, where the per capita spending is dismal and the test scores are low. Homes located in these districts may be difficult to sell if the homeowner chooses to move and the property values of these homes tend to be lower and do not appreciate as quickly.
In some areas, buyers are willing to bid against each other for homes in the best school districts. This often results in the price of the home being inflated, which affects the listed price of any home in the area available for sale after that transaction has closed. Savvy buyers acquire school reports and related information early into the search for new properties because they know that this is an important factor in the purchase price of the home and an indication of what the home may be sold for in the future. In many cases, school reports are given greater weight than neighborhood data.
School District Uncertainty
In a volatile housing market, any reason that could compel an individual to purchase a home in a particular area increases the value of the homes in that area. Real estate investors and home buyers must remember that the boundaries of a school district are subject to change at any given time, which can increase or reduce the value of the property by a significant amount. In the real estate market very little is certain and almost everything is subject to change, even the school district in which the property is located.
Content contributed by Colorado's Boulder real estate company -- Automated Homefinder.
Top 6 Mistakes of Real Estate Investors
Real estate investors are people who buy real estate with the intention of re-selling it at a higher price or renting it.
A booming real estate market attracts real estate investors like honey attracts flies. But not all real estate investment stories end in success. Some investors make mistakes and get themselves into deep financial trouble.
If you’re going to play the real estate game, be sure to avoid these six deadly mistakes.
#1. Buying a Home on Emotion.
Never buy a home because you like the color, or because it reminds you of the house you grew up in, or because you feel sorry for the sellers. Always take time to do your research and make sure the investment is sound.
#2. Buying a Home on Deadline.
If you've painted yourself into a corner so that you have to purchase a property by a certain date, you're likely to do shoddy research and make poor choices. When it comes to real estate investing, take your time and buy smart, not fast.
#3. Not Doing Your Homework.
According to MSN-Money, most real estate investors get trapped when they fail to thoroughly research the properties they are considering purchasing. Thus, you may not realize the property you're buying is in a declining neighborhood, or that the stellar tenants that the last landlord bragged about are getting ready to pack up and leave.
#4. Not Knowing What You Want.
It's a good idea to know exactly what kind of property you want in advance. For instance, you should decide which neighborhood you want to buy in; whether you want a single dwelling home, townhome or condo; how many rooms and bathrooms you will accept at minimum; and how much you're willing to pay.
Otherwise, you may find yourself planning and improvising as you go along, never a good way to start a business.
#5. Not Having the Property Inspected.
Even if a piece of real estate looks great, it may conceal some serious problems. Don't skip getting a home inspected because you're in a hurry to close the deal or because you're on a deadline, or you may find yourself stuck with expensive repairs. This could mean bad news for your bottom line.
#6. Trying to Get Rich Quick.
According to Bankrate.com, there is money to be made in the real estate market, but turning a profit takes time, planning, and -- like all legitimate money-making ventures -- real work.
Don't expect to become a millionaire the first, second, or even third time you purchase a piece of real estate. The expectation of a quick gain clouds judgment and leads investors to take chances that work against success.
The best real estate investors are savvy businesspeople who know what sells and rents well, shop until they find exactly what they want, don't skip due diligence, and know that they'll have to do some hard work to turn a profit. If you can follow their lead and avoid the most common real estate mistakes, chances are that you, too, will become a successful real estate investor.
This information was provided by Colorado'sFort Collins real estate specialists at Automated Homefinder.
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