Q: I pay $1,000 a month for a three-bedroom rental. What is my mortgage payment for the same size house ?
A: Let’s use a $150,000 sale price and a 4 percent fixed rate with property taxes of $1,200 per year. The monthly payment is less than $900. It would make sense to buy your first home. Do check with a local loan officer for a home loan.
Q: My husband is a very handy person. He can fix just about everything. Is a fixer-upper house the best deal for us?
A: Here are the fixer-upper house do’s and don’ts.
Everything that you need to repair/replace in a fixer costs money, whether you need to replace worn carpet, a furnace, hot water heater, roof, etc. Do make sure you have the money available for the repairs/replacement. Don’t consider buying a fixer-upper if you do not have the available funds to repair/replace the property. For a homebuyer who is on a tight budget, a cosmetic fixer that might require more than a coat of paint can be a bad idea.
Q: How do I know the house that I like is the best deal for me?
A: A first-time homebuyer should do the following: Do consider a home in a good location that is on a quiet side street. Do consider a home that is in good, move-in condition. Do consider a home that is priced right for that neighborhood. Do tell your real estate agent what your monthly budget is for a mortgage payment. Do tell your agent if you have money to do minor or major repairs. The more information your agent knows, the sooner you will find that best deal that is right for you.
Q: How much improvement should I add to my first home, and will I be able to get the money back when I sell?
A: Do consult with a local real estate agent who can show you comparable sales for the same size home in your neighborhood. Do not over-improve for your neighborhood. Some neighborhoods are increasing in value while some older neighborhoods are still declining in value.
Q: I really like this $150,000 house, but want to offer $100,000. Will I get if for $100,000?
A: Buying a house is similar to buying a car; that is, both require appraisal values. The value of cars is determined by Kelly Blue Book, accounting for various conditions such as poor, fair and excellent. Home values are determined by a licensed appraiser using comparable sales for similar conditions in the same neighborhood. Do consult with your real estate agent and review the comparable sales for your dream house. Do go over the location, condition and price factors. Do consider that if your dream house is priced right, you do not have to spend an additional $25,000 for carpet, appliances, paint and landscaping. Do consider the fact that if it is priced right, the seller has priced it right for today’s market. You most likely will not get this house for $100,000. Do consider making a decent offer closer to $150,000.
Q: Should I make an offer when there are multiple offers on the same house?
A: That is a tough situation even for the experienced buyers. I can only imagine how difficult it is for a first-time buyer to understand. Some move-in-ready homes that are priced right can receive multiple offers. Some fixer-uppers that are priced right can also received multiple offers.
Do consult with your real estate agent regarding how strong your offer is. Do check the comparable sales in the neighborhood carefully. Do consider if your offer is countered for more money — and whether are you willing to add more money to your offer. Is this property worth more and more money? Do consider if this neighborhood offers most of what you are looking for, such as a short commute to your work, great schools, shopping, etc. Do consider other houses in the same neighborhood that might fit your needs.
Annie Christian is a real estate broker and owner of The Annie Christian Real Estate Group. She helps with everything from buying and selling to foreclosure and short sale. To submit a question, call 351-5117. Her website is www.anniechristian.com.