Investing

What First-Time Home Buyers Learn By Themselves

Statistics show that people are waiting until later in life to get married, and that puts marriage and home buying right alongside each other. Most people tend to find stable careers later in life, and thirties seem to be the new norm for starting a family. The flip side is that there is a lot of growing up to do in a very short time span.

There are things first-time home-buyers easily get misled by, for instance, like the prevalence of pre-payment penalties (they exist, but brokers disclose this and you can ask about it). Another thing first timers learn on the fly is that cash buyers can quickly ruin the home of one’s dreams with a single phone call.

There are a ton of first-time home buying blues you can get if you let yourself get bogged down. It’s a process, and not always a pretty one. The important thing to keep in mind is that you will eventually find a beautiful home to improve and love as your own.

Foreclosures Are Not Always Deals

The media conditions us to associate foreclosures with deals, and that’s not always the case. In fact, most of the time a foreclosure means “trash heap.” There are certainly foreclosures offered far below market value, that happen to have the benefit of being in a good area. However, you have to be aware of all potential variables that could raise flags. Inspections are a must when purchasing a foreclosure, and not every deal allows for that, or grants enough time for something thorough and convenient. Investors purchase foreclosures on hard data, but individuals have little more than their personal experience and their eyes to judge. If the property is up to your standards, it’s worth considering. Just be aware that there a host of issues that could go wrong that you and your inspector may not notice. Things like electrical or plumbing issues might crop up only after the house is lived in.

By all means, look at foreclosures and be aware of the potential for the market. Just be open to the idea that not everything is a positive. You may find that saving for a higher down payment and moving to a nicer area are better ideas.

Pre-Approval is a Must

One of the best things you can do for your prospects is to pre-qualify for a loan by talking a broker and submitting some paperwork. Real estate transactions are all about speed. The faster you are prepared to move on a deal, the more likely that deal is to happen for you. Pre-approval is especially useful when you need to relocate, as your broker’s approval will extend to just about anywhere you move. In some cases, agents will advise you not to hunt for properties until you have pre-approval, just because it makes the process harder.

However, pre-approval comes with a few bullet points you need to be aware of. It’s not a guarantee of a loan at a certain rate, it’s just the bank saying that your documents seem to be ok at a cursory glance. Pre-qualifying may also mean that you don’t pre-qualify for the loan you thought you did. Typically, pre-qualifications are done before a credit check occurs.

Talk to your bank about getting pre-qualified and pre-approved for a loan. Starting the process now will be better for you in the long run.

Negotiate over Fixing Costs

Any home that you move into is going to have something that you’ll want to change to meet your tastes as the home owner. DIY is a great option for most projects around the house, but that doesn’t count fixes that need to be done prior to moving in. When your inspection is performed, the inspector will present a list of items he believes are in need of repair. Some common examples are things like electrical outlets or air ducts in a central air system. Most of these fixes are relatively inexpensive, but you should not have to pay for these as the new owner because they were not caused by you. When it comes time to negotiate on things like cost of the house, or costs to close, you can get a bit of wiggle room if you make a few phone calls to contractors and ask about pricing.

Also, don’t forget to check every outlet and every sink. Six months after your move-in date is the wrong time to discover you have a leaky faucet or pipe in the wall.

Acquire a Trustworthy Agent

A good real estate agent is someone who guides you through the process, and helps you to understand more about the investment you’re making. They will do their best to review your property suggestions, and make a few of their own. They should be knowledgeable in loans, but don’t expect too many specifics from them on that regard. What they will know is the area. They will help you find resources related to schools in the area, as well as fun things to do and a bit of history about the region. Behind the scenes, they also handle your negotiating for you. You give the agent an idea of what you want, and they help to communicate that between you and the seller. A trustworthy agent is someone advocating for you throughout the sales process. It’s not about commission, it’s about service.

The agent is paid at closing, so you shouldn’t have to pay upfront to see a home. Sellers will sometimes pay agents to market their home in other ways, but most of the money they make comes from the sale of the home itself.

Conclusions

A first time home buyer has a lot to worry about. It can be difficult to deal with the financial reality of buying a home while you’re trying to browse for something that meets what you want out of life. The two sometimes cloud each other, and can obfuscate what you really want. The important thing is to go with your gut, read documents carefully, and communicate openly with your agent and your spouse.

 

Bio: Realty ONE Group is owned and operated by Kuba Jewgieniew, a former stock broker with experience in data-driven sales. Realty ONE Group is a lifestyle brand that manages Realty ONE Group Cares, a charity foundation that strives to better the communities served by Realty ONE Group and its agents.

How to Choose the Ideal Stock for Your Portfolio

There are thousands of publicly traded companies to choose from; so how do you know which stocks are ideal for your portfolio? The short answer: The majority of your stock should be financially healthy businesses with healthy earning growths, according to CnnMoney.com. The good news is that this criteria narrows down your choice from more than 6,000 companies to only about 200.

When creating a stock portfolio, the key is to create a well-balanced collection that you will be holding on to for a long time. After all, it’s important to meet your long-term financial goals and earn serious money. How many businesses should you invest in? When choosing stocks, CnnMoney suggests selecting about 15 to 20 companies. In addition to owning the right number of stocks, make sure they are spread out among more than five to seven different industries. But don’t worry; you don’t have to purchase all 20 stocks at once.

Most people want to invest in stocks to save money for retirement. As a long-term financial goal, your well-balanced stock portfolio should provide you with a total return more than 10 percent, which is the historical market average. If your portfolio averages 10 percent to 14 percent return over the next 15 to 20 years, you can enough money to reach your financial goals, including a nice retirement fund.

In addition to selecting the right number of stocks and making sure they are across various industries, it’s also important to select stocks with better than average growth rates and modest valuations. Avoid high-growth stocks because they are usually super expensive.

Guest blog post published by Plan B International, an experienced real estate firm located in Florida. To get more information about investing in the Miami and Florida market, please visit Planbinternational.com.