Can I Buy a Home and Sell My Current One at the Same Time?

Question of the day right. The simple answer to this question is “yes”. You are able to sell your current home and purchase your next one at the same time. One of the main reasons of moving up is the equity that may be in your home. The chart below notes what homeowners think is their equity value compared to what is their equity value. February2016-29

So are you wondering what you need to do to buy your next home and sell your current home? Well I have you covered in this week’s Tuesday Tip.

 

 

Your new avenue awaits you……Let’s Find it!

Find your new home at NewAvenueRealty.com or move-updallas.com.

 

 

Do’s and Don’ts…..Do YOU know?

do and dont

Today I am combining my blog post with my Tuesday tip because these tips needed to be in one place. The topic for today is the “do’s and don’ts” of home buying.

Every one has heard that you can do this and you can do that but before you do something in particular, talk to the lender. There are so many interesting stories that I can tell you about when it comes to real estate and why things happen. Here are a few do’s:

DO pay your bills on time. You are asking a lender to loan you thousands of dollars guaranteeing that you will pay them back. They only thing that is attesting to your payment history is your credit report. 

DO know where you stand financially. Do you know you budget and how much you can really afford? Yes your total income may be $100K but when you include all debts, is it financially reasonably to purchase the home with a $2500 mortgage. Better yet, does your credit help those claims? Home buying is there for you to struggle to make the payment just to have an asset. Lenders look at the overall credit picture and you must look at your whole financial picture too. Do you have bills that you pay that doesn’t show on the credit report like cell phone bill, daycare costs, tithes, charitable contributions, etc? 

Now on to the don’ts.

DON’T QUIT YOUR JOB. I know you really dislike Susie and the rest of the staff. Which one do you want more? The house or a new job? Just put a time limit on how long you can deal with Susie and the rest of the staff until you make your home purchase. 

DON’T DEPOSIT YOUR MATTRESS MONEY. Yes, Grandma Jane still hides her savings under the mattress so you developed that habit. Now you have maybe $1,000 or 2 under the mattress. You need it for your down payment or closing costs. When purchasing a home, you need a paper trail. You won’t be able to be use these funds because there is no paper trail on where it came from. I’ve actually had a client do this. Thankfully we were able to get the seller to pay the closing costs he needed. But that’s an FYI. Start “seasoning” your money into an account months before purchasing your home. Plus, it may be safe to have it in an account instead of your home. That’s just my opinion though. 

One of my trusted lender partners do a great job discussing the do’s and don’ts of buying a home. Check out the video below from Mortgage Express.

 

Now that you know what to do to get started, you can contact the lender to get started and be crowned a homeowner in your new home!

 

 

Your new avenue awaits you….let’s find it here. #CrowningHomeowners

Brand New Home. Marriage Proposal. Birthday Celebration

Crowned Homeowners - Johnson

 

This weekend has been an adventurous one. It started with a closing for my client at 2pm. Now when I met Billy last year, at our consultation he mentioned that when he purchased this house he would propose to his girlfriend. I was like “Oh my gosh. That would be amazing!”. Then the woman in me came out and was like, “are you strictly choosing the house or will she be with us?” He informed me she’d be along the journey. Woman we are very particular and our happily ever after home has to be perfect for us. Yes, the notion of gifting a house as part of the proposal is sweet but it can’t be any house.

So I was determined to help find the happily ever after home. Mind you Chelsie did not know about this part. She just knew they were going to buy a house and she wanted a yard big enough for a pool. I was able to say let’s do a master-planned community that has a pool to keep costs low for you guys.

It was then that we found a community outside of Lancaster, Texas that fit their needs. Building a new home takes so time so I completely forgot about Billy’s gesture. It wasn’t until Friday came and he was like today is my birthday. What a sweet birthday present as you close on your new home! He looks at me again and was like today is the big day. Suddenly I remembered and was equally excited.

He had the place and time down to the science. The place: their new home. The time: Around 6:30 to 7 when all their family members would be present to come view the home. 

I rushed back down to be apart of this experience because it feels good when your clients welcome you into their world outside of buying their home. I always say real estate is so much more than opening doors and collecting a check. There is a bond that is built and my clients really become my extended family after the transaction.

Here are some snippets from that day which included a brand new home, marriage proposal, and a birthday celebration! What a Happy Day!!!

Billy and Chelsie

That’s 1 down and 35 to crown in 2016. Congratulation Billy and Chelsie! Wishing you guys the best to come with your future marriage, family, and now home. 

No Matter Which Groundhog You Listen To, You Should Buy or Sell Before Spring!

Tulip Garden

Is spring closer than we think? Depending on which Groundhog you witnessed a few days ago, you may have less time than you think to get your home on the market before the busy spring season.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.

Here are five reasons to sell now. 

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that buyers are still out in force looking for their dream home. These buyers are ready, willing and able to buy…and are in the market right now!

Take advantage of the strong buyer activity currently in the market. 

2. There Is Less Competition Now

Housing supply just dropped to 3.9 months, which is well under the 6 months’ supply that is needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last three years. Many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A study byHarris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will increase in the spring. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 5.4% over the next 12 months according to CoreLogic. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to rise by three-quarters of a percent by the end of 2016.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

On the other side, here is the top reasons why you should buy before Spring.

  1. Serious Sellers with Serious Deadlines.

There are less people moving out or buying during winter season because of Christmas and  End of the year activities that needs to be done. This means there are a lot of great properties which were listed during winter but was not sold, sometimes that also means price reduction.

2. New year New you

A lot of people believes in starting fresh at the start of the year, some of these individuals have just started looking around and do not have everything they need to get ahead of the home buying process which is why they normally end up buying in Spring. Get ahead of the herd by getting pre-qualified and talking with a lender to know your buying limit and save time.

3.Get a Great Price for Listed Properties from Winter

Like mentioned above, lots of properties are still in the market from winter. This is the time where sellers are usually active and likely to be in negotiating mood for their property. Try to contact a seller immediately if you see a house that suits your needs.

4. Vacation time is over

Tried to contact a seller during Christmas time and did not get a reply? This is the best time to send a follow up as most people are back to business. You are more likely to get a  home if you follow up with a seller to let them know that you were first in line if there are others who are interested in the property as well.

5. Less Competition

Do not get caught in the Spring Trend of the Real Estate market. Prices go up and great properties are being sold by the minute. Get first pick of the best property by getting a headstart!

 

 

For more information about selling your home, contact New Avenue Realty (Keller Williams Realty – Dallas Preston Road) via email or phone at info.newaverealty@gmail.com or 972.813.9788.

9 Ways to Fund Your Down Payment

9 Ways to Fund

 

You’ve come to the realization that you are done renting. You hate driving through the broken gate into your apartment complex and you aren’t feeling the property management anymore? Okay that may have been my own personal struggle but I know plenty of people thinking the same.

Example: You pay $1000 a month in rent. That is yearly amount of $12,000 (yes in reality that is what you are paying). Guess what? When it is tax time, you cannot write any of that off and that is just $12,000 out of your pocket for a place that you don’t own and have to ask permission to paint the wall. How fun is that?

Now you’re at the point of “I want to own my home and live my life on the edge.” The scenario may not play out like that but you’re at the point where you want to own your own home. You want the granite countertops, stones on the outside of the home, inviting entry-way, and my beloved favorite: media room.

You know you can get approved for a mortgage. You know you have excellent credit and a stable job. The fear is the down payment. How do I purchase my home without having the funds to do so? Don’t I need 20%? Well I am here to break down what you need and how to gain those down payment funds.

How much will the downpayment be?

This answer really depends on what type of mortgage loan works best for you. For a FHA loan, you will be required to put down 3.5% of the sales price. For a conventional loan, that amount would be 5%. 

Example: If a home is $250,000, for a FHA loan you will need a downpayment of $8,750. On that same home with a conventional loan, that the downpayment would be $12,500.

Does that make you feel a little better?

I don’t have that amount saved. What do I do now? 

Did you know that there are numerous resources to help with the downpayment. Here are 8 ways to fund your downpayment.

  1. Check Your Savings Account
    • Now you may have checked here first and realized that was the obvious first option for the downpayment but that is mostly the first start and lenders are going to want to see some savings in your account.
  2. Tap your IRA
    • If you’re looking to buy your first home, let the Internal Revenue Service help. Tax laws allow you to use up to $10,000 in IRA funds as a down payment if you’ve never owned a house. If you’re married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment. Even better is the IRS definition of first-time home buyer. Technically, you don’t have to be purchasing your very first abode. You qualify under the tax rules as long as you (or your spouse) did not own a principal residence at any time during the two years prior to the purchase of the new home. In these instances, Uncle Sam waives the penalty for early withdrawal, but you may owe tax on the money depending on the type of IRA. Many cash-strapped home buyers, however, find the long-term return of investing in residential real estate is worth the short-term tax bill. (Bankrate)
  3. Borrow from your 401K
    • Do you have more retirement money in a company savings plan? Consider borrowing against your 401(k) for the down payment. There are downsides to this strategy: Unlike an IRA home-related withdrawal, you’ll have to pay back any money you take out of your company plan. The repayment will cost you a bit more since the account contributions were made with pretax money, but your payback will be made with after-tax dollars. At least the interest payments on this loan will be going back into your 401(k). (Bankrate)
  4. CDs, Stocks, Bonds
    • Do you have money stashed in CDs, stocks, and bonds? These assets would help would it comes to your down payment.
  5. Down Payment Assistance Programs
    • Majority of the major cities in the metroplex have down payment programs. The state of Texas does as well. These programs are based on your household size and income. The amount of money from these programs range from 5% of the loan price to $20,000. The city programs are based for low to moderate income families. The chart below is widely used in the Dallas, Collin, and Denton County areas. FYI – The income cannot exceed the number based on your household size. These are local income limits. The state limits are higher.
    • Income Limits
  6. Ask a Relative
    • Do you have a rich uncle or parents? Aunt Sue and Uncle James love you right? Butter up that loving to ask relatives for a gift fund. Your down-payment can be funded by relatives who are willing to give you funds to purchase your home with no strings attached. It has to feel good to come from such a loving family right? Go ahead and give Uncle James a call right now.
  7. USDA/VA Loan
    • If you have served our country, you are due to a special treat when it comes to homebuying. You will be able to qualify for a 100% financing loan. This means no down payment and low interest rates.
    • You may not be a veteran but you don’t mind living in a rural area to have 100% financing. Then you may be eligible for a USDA loan. This loan has income restrictions too. USDA loans are restricted to rural areas BUT areas such as Little Elm, Aubrey, Cross Roads, Oak Point, Prosper, and Celina are eligible for 100% financing. These areas are quickly growing in the metroplex.
    • Below is the income limit for USDA Loans in the metroplex. The limits are based on household size in each column. Column one is for a one person household and so on until an 8 person household size.
    • USDA Limits
  8. Get A Second Job
    1. You can also get a part time job to help secure your down payment. We could all use some extra income to satisfy our needs so why not apply for a job to help secure those extra funds Uncle James couldn’t give?
  9. Sell Your Assets
    • With new sites and apps, you’re able to sell things quickly and shortly to secure some cash. Sites like OfferUp, Ebay, and Craiglist are all valuable to sell things that you could give up to secure a few more dollars.

These are just the steps to fund your down payment to becoming a homeowner. As always, I’m #CrowningHomeowners and this is my Tuesday Tip.