When Katie Cody bought her first home, she thought she knew everything there was about taking care of one. As a spokesperson for Lowe's, the national home and hardware chain, she was steeped in the ins and outs of home maintenance.
But even she wasn't prepared for everything that comes along with a first home--the work or the hidden costs. "I had no idea how much is involved in yard work, especially during the summer months," she said from her office in Mooresville, N.C. "Besides cutting the lawn every week, you have to mulch, and plant, and trim. There are just so many things I never thought of."
Most first-time homebuyers are focused on saving for a down payment and qualifying for a mortgage, and once they get past those financial hurdles, they think they are home free. But, say experts, as the owner of a first home -- whether it is a newly built home or a charming 1930s bungalow -- you need to think beyond that first mortgage payment when determining how much money you need to have available.
"Most financial experts say to have three to six months worth of mortgage payments in an emergency fund," says Michele Lerner, a real estate expert and author of "Homebuying: Tough Times, First Time, Any Time."
Lerner said that the best way for a first-time homebuyer to become aware of the peripheral costs of owning a home -- expenses beyond the mortgage, taxes and insurance -- is to talk to a few key people before you buy your first home. Your real estate agent, home inspector and the sellers of the home that you are purchasing all have critical information that will help you determine the real cost of owning a home.
"Real estate agents know what goes on in a community in terms of town or housing association fees," Lerner explains. "They can tell you if garbage pickup is provided by the town, and is paid as part of your taxes, or if you will pay a private company. Is the house on a private road? What's the snow-removal policy? These are expenses you need to be aware of."
What else should prospective first home owners know? Lerner suggests that buyers ask the following questions before taking ownership, to understand the true cost of owning a first home.
When were appliances and major systems last repaired or replaced?
Bigger expenses, such as structural repairs and replacement of big-ticket items such as hot water heaters and appliances, are harder to predict. "When you are touring a home, ask the owner how old the appliances are, when the roof was last repaired, how the furnace has been maintained," said Lerner. "If work was recently done, there might be warranties. They are the best source for information like this."
What are the average monthly utility bills?
Ask your real estate agent or the home seller for the average cost of utility bills: that includes gas, electric, water, even cable and Internet. There are many apartment dwellers who have never seen a gas or electric bill. And even for those who have, the costs of heating and cooling your first home might come as a shock.
Who are your repair people?
The seller is also a good source for a list of repair people for you to have. Because when the sink backs up as you are preparing Thanksgiving dinner, you need to know the name of a local, reliable plumber. As a first-time homeowner, it's also helpful to have the names of service people -- think plumber, electrician, landscaper, handyman, appliance repairman -- who are familiar with your home. They can be a good source when you can't find the water shut-off valve, or to tell you how to turn on the furnace that first cold day in October.
Get a home inspection
Not exactly a question, but another source for answers. When you do decide on that first home, be sure to have a home inspection. "These people can tell a lot about the condition of things, such as the heating and air conditioning system, the plumbing, and structural issues of the home," says Lerner. "They can tell you that you will need a new hot water heater and how much it will cost. Attend the home inspection and take notes."
That goes for both new homes and older homes, she said. "With a newly built home, you think you won't have any problems, but you don't know if someone made a mistake. It's better to be prepared, and at least get familiar with the house."
For Cody, buying her first home was "exciting, but overwhelming. There is always something to deal with. You have to become an expert pretty quickly." And the best way to become an expert is to ask the right questions before you buy.
*courtesy of AOL Real Estate
Friday, January 31, 2014
Tuesday, January 21, 2014
FIRST TIME HOME BUYER MAINTENANCE TIPS
First-time buyer Anna Daugherty learned the hard way that home maintenance is a new owner's responsibility. "One thing we completely forgot about was actually very simple. We forgot to get a shovel," says the Lansing, MI, resident. "This weekend, we had seven inches of snow fall in a short amount of time, burying us in snow--and no shovel!"
While going from being a renter to a first-time buyer is a transformative experience, it also brings a whole new set of home maintenance responsibilities. With no more 1-800-Landlord number to call when things go wrong or need repair, you're now fully in charge of maintaining this most important asset.
Just as the joys of home ownership appear in ways large and small, so do home maintenance needs and expenses. Here are tips to help first-time buyers stay on top of home maintenance tasks.
Gear up for every need: Home maintenance is a year-round job, so invest in the tools you'll need to tackle typical projects.
Avoid problems with snow days and other seasonal challenges by gearing up with a set of basic hand tools and an arsenal of lawn and garden implements. And while you're at it, invest in a storage system for home maintenance equipment that keeps everything neat and within reach, whether in your garage or a stand-alone tool shed.
Get to know the pros: First-time buyers can also be prepared by assembling your very own "home team" of contractors and servicepeople well before you ever need them. Find local home maintenance specialists through the recommendations of family and friends, and by connecting with referral services like ServiceMagic. The Realtor who helped you find your new home can also put you in touch with pros whose work quality and ethics can be trusted.
"Put your resources in your Realtor to obtain a list of favorite painters, plumbers, electricians and handymen because then you know you've got referrals from someone you can trust, and typically, that's the kind of person you want to do business with," says Diann Patton, Coldwell Banker Real Estate's consumer specialist and the sales manager/broker/owner in Grass Valley, CA.
Understand your home's operating systems: Understanding the basics of your home's mechanical systems is a must for first-time buyers, even if you call a pro for major home maintenance and repair issues. Know where your main water line is and how to shut it off in an emergency. Get acquainted with the fuse or breaker box, and label essential and non-essential systems for quick reference and energy-saving shutdowns when you're away for extended periods of time. Set a routine for heating and cooling system maintenance, including annual tune-ups by an HVAC contractor, frequent filter changes, and sealing leaky ductwork.
Maintain the exterior: Your home's "envelope" requires care not only for curb appeal but also to protect its structural elements and energy efficiency. Immediately address such regular home maintenance issues as damaged siding, clogged gutters and insufficient grading that keeps water near the structure. Also do a regular, thorough check of your roof's condition so that you can address trouble spots and stay ahead of repair needs.
Make utility bills manageable: Unlike most rental situations, home ownership puts you in charge of covering all utilities. If you're a first-time buyer with sticker shock when you get your power and water bills, take steps to manage your energy dollars as well as home comfort. Budget for foreseeable seasonal fluctuations in energy needs (like summer cooling and winter heating), and check into plans offered by local utility providers that allow you to distribute costs evenly over a 12-month period rather than paying right-now prices. Also look for ways to trim costs with minor energy-saving improvements, like installing a programmable thermostat or fitting the bath with WaterSense-approved fixtures.
Establish a contingency fund: Even if you're in a brand-new home that's under warranty, it's wise to have a contingency fund for the unexpected home maintenance expenses that invariably crop up.
"You really have no idea what could or might go wrong," advises Patton. "For instance in my community just a couple of weeks ago, we had a horrific snowstorm that actually put trees down through a lot of people's roofs...How do you plan for that? Fortunately as a homeowner, you have insurance to deal with those issues, but you want to have contingency funds to cover your deductible if you have an insurance claim, for plumbing leaks or roof leaks--anything like that."
Maintaining such a financial safety net will come in handy when you least expect it, and also provide backup as you approach longer-term home improvement needs and decisions. Add this critical element to your home maintenance strategy, and you'll be able to relax and enjoy the privileges of home ownership all the more.
While going from being a renter to a first-time buyer is a transformative experience, it also brings a whole new set of home maintenance responsibilities. With no more 1-800-Landlord number to call when things go wrong or need repair, you're now fully in charge of maintaining this most important asset.
Just as the joys of home ownership appear in ways large and small, so do home maintenance needs and expenses. Here are tips to help first-time buyers stay on top of home maintenance tasks.
Gear up for every need: Home maintenance is a year-round job, so invest in the tools you'll need to tackle typical projects.
Avoid problems with snow days and other seasonal challenges by gearing up with a set of basic hand tools and an arsenal of lawn and garden implements. And while you're at it, invest in a storage system for home maintenance equipment that keeps everything neat and within reach, whether in your garage or a stand-alone tool shed.
"Put your resources in your Realtor to obtain a list of favorite painters, plumbers, electricians and handymen because then you know you've got referrals from someone you can trust, and typically, that's the kind of person you want to do business with," says Diann Patton, Coldwell Banker Real Estate's consumer specialist and the sales manager/broker/owner in Grass Valley, CA.
Understand your home's operating systems: Understanding the basics of your home's mechanical systems is a must for first-time buyers, even if you call a pro for major home maintenance and repair issues. Know where your main water line is and how to shut it off in an emergency. Get acquainted with the fuse or breaker box, and label essential and non-essential systems for quick reference and energy-saving shutdowns when you're away for extended periods of time. Set a routine for heating and cooling system maintenance, including annual tune-ups by an HVAC contractor, frequent filter changes, and sealing leaky ductwork.
Maintain the exterior: Your home's "envelope" requires care not only for curb appeal but also to protect its structural elements and energy efficiency. Immediately address such regular home maintenance issues as damaged siding, clogged gutters and insufficient grading that keeps water near the structure. Also do a regular, thorough check of your roof's condition so that you can address trouble spots and stay ahead of repair needs.
Make utility bills manageable: Unlike most rental situations, home ownership puts you in charge of covering all utilities. If you're a first-time buyer with sticker shock when you get your power and water bills, take steps to manage your energy dollars as well as home comfort. Budget for foreseeable seasonal fluctuations in energy needs (like summer cooling and winter heating), and check into plans offered by local utility providers that allow you to distribute costs evenly over a 12-month period rather than paying right-now prices. Also look for ways to trim costs with minor energy-saving improvements, like installing a programmable thermostat or fitting the bath with WaterSense-approved fixtures.
Establish a contingency fund: Even if you're in a brand-new home that's under warranty, it's wise to have a contingency fund for the unexpected home maintenance expenses that invariably crop up.
"You really have no idea what could or might go wrong," advises Patton. "For instance in my community just a couple of weeks ago, we had a horrific snowstorm that actually put trees down through a lot of people's roofs...How do you plan for that? Fortunately as a homeowner, you have insurance to deal with those issues, but you want to have contingency funds to cover your deductible if you have an insurance claim, for plumbing leaks or roof leaks--anything like that."
Maintaining such a financial safety net will come in handy when you least expect it, and also provide backup as you approach longer-term home improvement needs and decisions. Add this critical element to your home maintenance strategy, and you'll be able to relax and enjoy the privileges of home ownership all the more.
Thursday, January 16, 2014
THE PORTLAND HOUSING MARKET IS HOT, HOT, HOT!
In the Portland State University Center for Real Estate single family housing report, RMLS student fellow Evan Abramowitz reports that all major US metropolitan markets have seen appreciation in the last year, and foreclosure activity is at the lowest level since before the recession in 2008. Portland remains one of the hottest markets in the United States, with the year on year appreciation at 14.1% using National Association of Realtor data, 12.4% using the Case-Shiller repeat sales index, and 22.0% using Abramowitz’ analysis of RMLS data for the three-county region. Unlike most US markets, prices in Portland market are higher today than prior to the recession. At the same time, this increase in prices hasn’t led to a robust recovery in construction activity. While building permits have risen in the last year, they remain less than half the level in the boom period of 2003-07.
Outside of the three-county Portland area, Abramowitz finds sharp increases in housing prices in all the major markets in the state and region, with the following median levels: Portland area, $334,350; Bend, $280,000; Vancouver suburbs, $279,900; Benton County, $248,000; Eugene-Springfield, $244,300; City of Vancouver, $231,140; Redmond, $180,900; Salem $177,000, Marion County, $170,000, and Linn County, $155,000. Abramowitz discovered that new home prices in Portland in the last quarter only barely exceeded those of existing homes ($334,350 vs. $327,000), suggesting that developers have focused on constructing smaller homes than previously. Historically, new homes have sold for a premium of approximately $50,000 over existing homes.
In the multi-family housing report, Abramowitz reports the Portland-area apartment vacancy rates have remained low at 3.1%, considerably below the national average of 4.3%. Abramowitz finds that multi-family permit activity is rising quickly and cites the work of Portland apartment specialists, Mark and Patrick Barry, who see an accelerating new apartments being proposed, permitted, built, and opened, particularly in close-in East Portland neighborhoods. They anticipate vacancy rates reaching 5.5% by the end of 2015.
In the office market report, Oregon Association of Realtors Student Fellow Geoff Falkenberg finds that the office market has experienced a fourth year of positive net absorption with only a 0.2% increase in the stock of space in the last year. As a result, rents are rising by 5% for CBD class A space and 4.5% for Class B. Vacancy rates for the CBD remain lower (8.7%) than suburban markets like the Sunset Corridor (12.5%) and Kruse Way (15.4%). These patterns may change as the Edith Green redevelopment and the Park Avenue West projects are completed.
In his industrial report, Falkenberg reports that vacancy rates have remained at a low level of 6.7% in the Portland market, the lowest level since 2008, and much lower than rates in Seattle, 15.5%; San Francisco, 9.1%; and Los Angeles 16.7%. While rents haven’t moved much, the tight conditions are leading to new construction. Falkenberg reports the groundbreaking by Capstone Partners of the first speculative industrial warehouse in the Portland market since 2007.
In his retail report, Falkenberg finds that vacancy rates for retail space have remained stubbornly high at 6.15%, However, average rents have remained at the $16.00 per square foot rate for the last two years, well below the $18.00 per square foot level they commanded in 2008-09. This suggests that landlords are keeping their space active by cutting rents. In that environment, little new construction activity is anticipated.
The Center for Real Estate Quarterly Report is produced with the assistance of the Oregon Association of Realtors.
*courtesy of Oregon Business Report
Outside of the three-county Portland area, Abramowitz finds sharp increases in housing prices in all the major markets in the state and region, with the following median levels: Portland area, $334,350; Bend, $280,000; Vancouver suburbs, $279,900; Benton County, $248,000; Eugene-Springfield, $244,300; City of Vancouver, $231,140; Redmond, $180,900; Salem $177,000, Marion County, $170,000, and Linn County, $155,000. Abramowitz discovered that new home prices in Portland in the last quarter only barely exceeded those of existing homes ($334,350 vs. $327,000), suggesting that developers have focused on constructing smaller homes than previously. Historically, new homes have sold for a premium of approximately $50,000 over existing homes.
In the multi-family housing report, Abramowitz reports the Portland-area apartment vacancy rates have remained low at 3.1%, considerably below the national average of 4.3%. Abramowitz finds that multi-family permit activity is rising quickly and cites the work of Portland apartment specialists, Mark and Patrick Barry, who see an accelerating new apartments being proposed, permitted, built, and opened, particularly in close-in East Portland neighborhoods. They anticipate vacancy rates reaching 5.5% by the end of 2015.
In the office market report, Oregon Association of Realtors Student Fellow Geoff Falkenberg finds that the office market has experienced a fourth year of positive net absorption with only a 0.2% increase in the stock of space in the last year. As a result, rents are rising by 5% for CBD class A space and 4.5% for Class B. Vacancy rates for the CBD remain lower (8.7%) than suburban markets like the Sunset Corridor (12.5%) and Kruse Way (15.4%). These patterns may change as the Edith Green redevelopment and the Park Avenue West projects are completed.
In his industrial report, Falkenberg reports that vacancy rates have remained at a low level of 6.7% in the Portland market, the lowest level since 2008, and much lower than rates in Seattle, 15.5%; San Francisco, 9.1%; and Los Angeles 16.7%. While rents haven’t moved much, the tight conditions are leading to new construction. Falkenberg reports the groundbreaking by Capstone Partners of the first speculative industrial warehouse in the Portland market since 2007.
In his retail report, Falkenberg finds that vacancy rates for retail space have remained stubbornly high at 6.15%, However, average rents have remained at the $16.00 per square foot rate for the last two years, well below the $18.00 per square foot level they commanded in 2008-09. This suggests that landlords are keeping their space active by cutting rents. In that environment, little new construction activity is anticipated.
The Center for Real Estate Quarterly Report is produced with the assistance of the Oregon Association of Realtors.
*courtesy of Oregon Business Report
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