Every year, the "rules" for buying a house change. Whether it's having to do with the market, tax codes, or the crazy competition out there, it's nice to know what you're in for before you start the whole home-buying process. Read these 5 amazing 2018 refreshers that will prepare you for one smooth home-buying ride this year.
- Be aware of the new tax codes and how they affect you. Each year, a new tax code is laid out. Lately, Americans have been afraid that tax reforms will put homeownership out of reach for them but that shouldn't stop them from wanting to buy. In 2018, it has been said that homeowners can deduct their mortgage interest on loans up to $750,000 but according to many different real estate sources, the median price of a home sits at $270,000. This tax code will only be affecting 1.3% of new mortgages and in the more expensive markets of Hawaii, New York, California, etc. But overall, people should not fear buying a house and they should continue to do their research to find out how these tax codes will affect them. It may not be so bad!
- Competition is fierce! According to Bobby Montagne, CEO of Walnut Street Finance, "The days of multiple offers are back in many [areas]." From experience, the biggest competitor you'll ever come across in home-buying competition is cash buyers. Nowadays people are starting to catch on to the competition and have been offering full price or more on houses, with CASH, and they waive appraisals and contingencies. According to studies, 23% of all home purchases made were with cash, and experts are saying that that number will gradually grow this year. Without the financing process, this is typically the most appealing to home sellers. One way to try to beat out cash buyers is to write a letter to the seller that talks about your family and explains why you would be the perfect for their home. You could also ask sellers what their goals are with that house. If they are aiming for a closing at a certain date, you could work with them to help them meet that goal. They might just choose ya.
- Be cautious of what you read online. Many are aware of con artists that try to steal your identity and scam you out of money. Some may not be aware that it also happens in "real estate." If you're ever in a real estate situation where an offer sounds too urgent, the listing asks for personal information, or home sellers/agents are unavailable or "in a different country," do not follow through with it because more than likely you're about to be scammed. Be very cautious of emails!! In 2017, nearly $1 billion attempted to be stolen by scammers. Some even got away with it. This happens when you receive an email that sounds like it could be your real estate agent or title company requesting money and could easily look like them but it is in fact, not. If you feel that they are requesting information that you never agreed on or are asking for a quick change, call the title company or agent to make sure that is what they're truly requesting. We just recently witnessed this happen to an elderly couple that wired money to "the title company" that requested it and it ended up being a scammer that stole ALL of their life savings. 🙁 Very heartbreaking.
- Don't let yourself be sold by amazing home staging. Just because the seller's house looks nicely kept -not cluttered, nice furniture, beautiful art- doesn't mean that there isn't something internally wrong with the house. Apparently, a third of buyers will look over property faults if the home looks well maintained. Don't ignore that fact that there could potentially be plumbing issues, water damage, stains hidden, and maybe an outdated A/C. When it comes down to it, don't be afraid to ask the seller to help cover the cost of the repairs or lower the home's price.
- Fixer-upper homes should be highly considered. Most people like the fact that homes are newly renovated and move-in ready but there is something about those old, outdated looking homes that people like as well, and that is, you guessed it, the price! The prices of the homes that need repairs tend to be much lower than the ones that are renovated and ready for move-in. But, if you buy that old house that has the squeaky floors and ugly paint, in most cases the cost of renovating it will still be cheaper than buying the house already renovated and ready to go. You do have to be aware that some fixer-uppers aren't only cosmetic. If the foundation or structure of the house has issues, that will more than likely be more money out of your pocket trying to fix it. It's always smart to get the house inspected and see if there are bigger issues than the minuscule, cosmetic ones!
Keep these awesome tips in mind when you're searching for that perfect home this year! It could save you a large amount of money 🙂 Cheers.