Why Now May Be the Right Time to Downsize Your Home

For many people, their house may be their biggest asset. But it also can be their biggest expense. That’s true whether they’re planning for retirement or even if they already are in retirement. So it’s no wonder that many homeowners begin to think about selling their home and moving into a smaller one as they approach their golden years.

Downsizing your home doesn’t have to mean downsizing your lifestyle. Homes have steadily expanded over the years with the average home now more than 2,600 square feet in the U.S. according to Census data – 60% larger than it was 40 years ago when families were bigger! So there is plenty of room to downsize without cramping your style.

But downsizing doesn’t necessarily mean moving to a smaller home. It can also mean moving to a less expensive residence that’s the same size. Something as simple as moving from a top, reputable school district to a district that is not highly rated may lower the cost of a house. And if you do not have school age children, the quality of the school district may not be that important to you.

If you’ve been kicking around the idea of cashing in on your home’s equity and moving into a smaller property, there are a number of reasons why it may be the best move you can make right now:

• The housing market in our area has rebounded quite nicely from the recession with the value of many homes climbing in recent years. Cashing in on some of that equity appreciation may help provide retirement income and extend the life of your nest egg. For more information on the propriety of such a move, please first consult with your financial advisor.

• A smaller home may mean a smaller mortgage payment each month if you are still paying off an existing loan. Or it might mean paying off your mortgage entirely and being debt free on your new home. Additionally, downsizing may lower your property taxes, energy costs, property insurance and ongoing maintenance and repair expenses depending upon the choices you make.

• According to the Center for Retirement Research at Boston College (CRR), housing costs (including utilities, taxes and upkeep), represent one of the biggest expenses for a retired couple – 30 percent of expenses for a couple aged 65-74. That’s money that can be spent on other things in retirement.

• For example, CRR estimates that a couple downsizing from a $375,000 home to a $250,000 home may be able to cut their annual expenses and increase their annual income from savings by a combined $7,260. CRR provides a calculator that may enable you to determine your own savings here. As always, it’s a good idea to consult with your financial advisor before making any decisions.

• Some homeowners are reluctant to trade a house for a condominium or town house because of concerns regarding the financial impact of homeowners’ association fees. While such fees can change one’s monthly budget, keep in mind that you may be paying similar expenses as a homeowner in the form of maintenance and upkeep costs.

• While a smaller home may mean less space, it could also mean less time and aggravation spent on keeping up a big house. Without all the work that goes into keeping up a bigger home, you may actually find a lot more time to enjoy traveling, hanging out with friends, picking up new hobbies and, generally, having more fun!

• Moving from a suburban home to an apartment or condo building in a downtown area with amenities on site may open up a whole new world for retirees. Those who have made the switch often find that they now can enjoy more trips to the theater, nightclubs, restaurants, shopping, as well as taking advantage of fitness centers and other on-sight activities.

According to the Wall Street Journal, it can pay to downsize sooner rather than later for those approaching retirement or already retired. The financial benefits can add up over time. Additionally, as we get older, moving gets harder thus it may make a lot of sense to move now rather than waiting.

If I can help answer any of your questions about downsizing, please give me a call or e-mail me today. I’d be happy to discuss the pros and cons of making a move and help you decide if downsizing is right for you.

How to Know if a Neighborhood is Right for You

Before you buy a home and make what’s likely to be one of the biggest investments of your life, you owe it to yourself to receive quality information on your new neighborhood. Getting a deal on your dream home can quickly turn sour if the neighborhood doesn’t meet your expectations. Here’s how to research a neighborhood before you buy a home.

LOOK INTO THE CRIME RATES

In addition to the U.S. Census Bureau’s city profiles that list crime statistics, you can try sites like CrimeReports. com, which offers local maps where you can access crime data in near-real time (the site has partnerships with more than 1,000 law enforcement agencies). You might also visit the local police department to ask about crime statistics and what neighborhood watches or alerts are in operation.

CHECK SCHOOL REPORT CARDS

Even if you don’t have children, you should spend some time investigating the area schools (school districts are typically the largest beneficiaries of your property taxes). The reason for this is simple: good schools tend to attract a higher demand for homes, which can affect the value of surrounding properties. One way to research schools in your new neighborhood is to visit the GreatSchools website, a non-profit national organization, where you can find valuable information from local preschools to colleges.

REVIEW MUNICIPALITY AND PUBLIC SERVICES

It can be easy to focus on the condition of your prospective home, but you should also consider the general condition of the streets, sidewalks and parks in your new neighborhood. Take some time to research your new municipality (start with the official website) and the services offered. Don’t be afraid to call your local clerk’s office and ask questions if you can’t find answers on the website. Things like trash collection, street cleaning and general public maintenance can affect your property’s value over time, especially if these services suffer a sharp decline due to budget cuts.

WALK THE NEIGHBORHOOD

Visit the neighborhood at various times of day and on different days. The nature of a neighborhood changes from day to night and from weekday to weekend. Make sure the activity and noise levels are to your liking. If you see residents out doing yard work or walking their dog, ask how they like the neighborhood and tell them you’re considering buying in the area. Sometimes “insider” feedback can give you the real sense of a neighborhood.

When you’re in the market for a new home, it can be easy to get distracted by what lies within the walls. By following these home buying tips, you’ll be much better prepared to make an informed decision about your new neighborhood. That way, a sweet deal is less likely to turn sour. Please call me if you’d like help in further exploring a new neighborhood.

To Buy A Home or to Rent: Questions to consider

“To buy or to rent?” That seems to be the million-dollar question these days. Recent graduates, young couples, relocating professionals and even current homeowners have likely considered both scenarios recently. While each option has its benefits, the decision to purchase a home as opposed to renting is complex. According to a recent survey from the National Association of Realtors®, nearly eight out of 10 respondents believe buying a home today is a good financial decision. But the question that remains is whether or not now is the right time for you to buy.

For most people, deciding to buy a home is the largest financial decision of their lifetime. Before making the jump into homeownership, potential homebuyers should consider the “soft” lifestyle issues as well as the “hard” financial ones. That’s why it’s important to consider four key financial and lifestyle questions when determining if buying a home is the right decision for you.

• Do you have a steady income? At or near the top of every potential homebuyer’s mind is whether or not they can afford to buy a home right now. Buying a home remains a sound financial decision for thhttps://realestatebynicole.wordpress.com/wp-admin/post-new.phpose with documented income and a good credit history. A steady income can provide a strong backbone for the initial down payment and future mortgage payments. Buy-versus-rent calculators available on websites such as ColdwellBanker.com offer a good start, but there are numerous factors beyond straight economics that also need to be considered. Don’t hesitate to speak with a real estate professional even before you are ready to buy a home. Along with a financial planner, a real estate professional can help you answer and uncover questions about the cost of homeownership.

• Do you plan to stay in a home for an extended period of time? With proper planning, a home purchase has historically proven to be one of the safest investments one can make. Along those lines, it is imperative to understand that investing in a home is much different than investing in a stock portfolio. Homes typically appreciate in value over time while the owner builds his or her equity through monthly mortgage payments. If you anticipate staying in a home for only one or two years, it doesn’t necessarily mean buying is not for you, but you are less likely to see a significant financial return on your investment.

Do you plan to sell a house in order to buy a house? A local real estate professional can help you understand current local market conditions and will help you make smart decisions when listing a home on the market. If you do not currently own a home that needs to be sold prior to purchasing a new one, now is a particularly smart time to buy. Even with lenders becoming increasingly more thorough in their approval process, mortgage financing is still widely available for those with a steady income and solid credit. High inventories and low interest rates give first-time homebuyers a tremendous amount of opportunity and flexibility in markets across the U.S.

• How do your other options compare? For renters, calculating month-to-month housing expenses is as easy as inquiring about the monthly rent and average utilities. The calculation gets a bit more complicated when considering the monthly cost of owning a home. A real estate professional can help you understand a range of financial considerations from annual property taxes to the tax incentives for owning a home.

There is a lot to consider when looking at the pros and cons of buying a home and you’ll likely have a lot of questions run through your mind. The best thing you can do for yourself before making a decision is to do your homework and become better educated on your options. Remember, for every question there is an answer – you just need to find the right one for you.

If you’d like to talk about your personal real estate scenario, please don’t hesitate to contact me. As a real estate professional that specializes in your neighborhood, I can provide you with valuable insight into the benefits of today’s market.

Housing Outlook for 2014: Steady Sales and Higher Prices

Want to get an idea where the real estate market is headed in 2014? Check out this recent article (Housing Outlook for 2014: Steady Sales and Higher Prices) which discusses the speculations of NAR®’s Chief Economist Lawrence Yun who forecasts existing home sales to hold fairly even in 2014 and the median sale price of homes to increase nearly 6% with inventory shortages being felt again this year.

Meanwhile, the Kiplinger Letter, in its annual economic forecast issue, calls for a 4% increase in existing home sales. The publication says new home sales are likely to jump about 16% next year after soaring 36% in 2013 and 20% in 2012.

That’s great news for sellers again this year and means that buyers may breathe a little easier in the search for a home with a slight increase in inventory.

If you have questions about the market and are considering a move in the new year, give me a call today to discuss your options!

 

Bay Area home sales, prices drop in September

Bay Area home sales, prices drop in September

Check out this recent Mercury News article with updates on today’s real estate market in the Bay Area. Higher inventory has led to a drop in sales prices making this a great time for buyers to jump back into the market. The real estate market seems to have shifted in the past few months – I had 25 offers on one of my listings back in March of this year and now buyers are often only competing with a few others for homes. If you were considering making a move in the real estate market, now is definitely the time! Give me a call today at (408) 410-2060 to discuss your options! 

7 Things You Should NOT do when Applying for a Home Loan

1) Don’t buy or lease an auto – Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2) Don’t move assets from one bank account to another –  These transfers show up as new deposits and complicate the application process as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if necessary.

3) Don’t change jobs – A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4) Don’t buy new furniture or major appliances with a credit card – If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is a possibility this may disqualify you from getting the loan or even cut down the amount of available funds for closing costs.

5) Be aware of who runs your credit report – This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6) Don’t attempt to consolidate bills before speaking with your lender – The loan officer can advise you if this needs to be done.

7) Don’t pack of ship information needed for the loan application – Important paperwork such as W-2 forms, divorce decrees and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

If you need help finding a reliable & reputable lender, give me a call! I have some fantastic lenders I can refer you to to qualify you for buying a new home.