5 Mortgage Questions Home Buyers Always Ask—Answered

Good info from Realtor.com. You’re likely to have more questions after reading this article, so feel free to call (206-334-8348) or email me (RealSaviya@gmail.com) and we can discuss. I also have an amazing lender for the deeper dive questions…I can pass on her contact info if you’d like to see what’s involved in getting pre-approved!

If you’ve got mortgage questions, you’ve come to the right place. Not exactly sure how a mortgage works? Don’t feel bad—the average home buyer doesn’t either.

The whole home buying process is filled with head-scratching questions, from how to find the right agent to figuring out which home is “the one.” But things tend to get even more complicated when it’s time to choose a home loan. You’re now faced with everything from how big a down payment has to be to why your interest rate isn’t as great as you’d hoped.

To help clear up some of your confusion, here are some of the most common mortgage questions home buyers ask, as well as some expert answers.

Q: Do I really need a 20% down payment?

A: The gold standard for a down payment is 20%, but if you don’t have the cash, there are plenty of ways to put down less and still get a house. Topping the list: A Federal Housing Administration loan lets borrowers put down as little as 3.5%, but you’ll need to meet certain qualifications, including a minimum credit score of 500 and steady employment for at least two years.

And if you’re active or retired military (or a surviving spouse of a veteran), a Veteran Affairs loan allows you to put 0% down, says Todd Sheinin, mortgage lender and chief operating officer at New America Financial in Gaithersburg, MD. And those aren’t the only workarounds; some counties and states offer loan programs that enable borrowers with low income to receive a down payment subsidy.

Q: Why is my mortgage’s interest rate offer higher than the one I saw advertised?

A: If you see an ad for a remarkably low rate, take a closer look and you’ll notice a disclaimer (typically an asterisk) saying this is the best possible rate. To nab it, you’ll need a high credit score (750 or above) and a low loan-to-value ratio, which essentially means you’re making a sizable down payment of at least 40% of the home’s price, says Richard Redmond, a mortgage broker at All California Mortgage in Larkspur and author of “Mortgages: The Insider’s Guide.”

But if your borrowing scenario is not that spectacular, you’re considered more of a risk—and your interest rate will rise to reflect that. In addition to your credit score and loan-to-value ratio, it will depend on your loan size, the type of property you’re buying (e.g., condo versus single-family house). Bottom line: Read the fine print when evaluating your loan options.

Q: Is a 30-year fixed-rate loan the best option?

A: While the 30-year loan with a fixed interest rate may be the first mortgage most home buyers think of getting, “there’s no one-size-fits-all loan option,” says Redmond. For instance, although adjustable-rate mortgages have a bad rap, ARMs do make sense in certain circumstances—like if you plan to move soon, before the rates adjust. They may also make sense if you can’t afford a home with a fixed-rate mortgage, since those interest rates are slightly higher.

Meanwhile, a 15-year loan might make more sense than one for 30 years if you have enough cash to cover the bigger monthly bills. Why? Because you’ll end up paying far less in interest. For instance, if you get a 30-year mortgage on a $250,000 loan at 7.0% (the current interest rate), you’ll pay $1,696 per month and $479,018 in interest by the time those 30 years are up. Buy that same home with a 15-year loan at today’s 5.75% (the shorter time you borrow the money, the lower the rate), and your monthly payments balloon to $2,026—but you’ll pay only $299,025 in interest by the time you’re done. (Use our mortgage calculator to get a rough idea of the numbers before meeting with a lender.)

Q: What is private mortgage insurance, and why do I need it?

A: If you’re using conventional nongovernment financing and can’t afford to make a 20% down payment, you’ll have to pay private mortgage insurance. PMI kicks in if you end up unable to pay your mortgage. Since your lender loses money in this scenario, PMI pays it benefits to offset that loss. You can expect to pay about 0.3% to 1.15% of your home loan in PMI. This can be a sizable sum, but it may make sense if you want to buy a home now rather than wait until you can amass a bigger down payment.

“PMI has a negative connotation, but it’s not the worst thing in the world,” says Sheinin. Another option? Have your lender cover the mortgage insurance. You’ll pay a higher interest rate, but “it’s often cheaper than paying PMI yourself each month,” says Sheinin.

Q: What happens if I can’t pay my mortgage?

A: Depending on the lender, you may have a grace period of a week or more to make the payment, says Craig Jaffe, a financial planner at United Capital in Boca Raton, FL. Miss the deadline and your account becomes “delinquent,” which can immediately hurt your credit score. Know you’re going to miss a payment? Notify the lender in advance to find out your options. “You might be able to qualify for a forbearance, which provides a period of relief from making the full payment,”  says Jaffe.

Amazon pledges $40 million to boost homeownership

Published on: October 5, 2023

Amazon pledged $40 million last month to help moderate-income residents become homeowners in three areas where the online retailer and tech company has a major presence. The pilot initiative aims to help up to 800 individuals and families from underserved communities in Nashville, Tennessee; Arlington, Virginia; and the Puget Sound region.

The funds include a $19 million grant and $20 million loan to the National Housing Trust (NHT) and is part of Amazon’s ongoing $2 billion Amazon Housing Equity Fund (HEF) that launched in 2021. It marks Amazon’s first foray into homeownership projects. Previous pledges supported rentals.

“As a leader in affordable homeownership lending, we are excited to partner with the Amazon Housing Equity Fund,” said Priya Jayachandran, CEO of the National Housing Trust. “This partnership is unique because Amazon’s support will enable us to create new, innovative pathways to ownership that will transform people’s lives.” Earlier this year, NHT received a $10 million grant from MacKenzie Scott’s Yield Giving for its affordable housing work.

The latest initiative will support several innovative homeownership models, including community land trusts where residents will own their physical homes but the land will be owned and stewarded by nonprofits and community-based organizations.

In the Seattle area, Amazon and NHT will partner with three organizations initially. Working with Habitat for Humanity Seattle-King & Kittitas Counties, the partners will support construction of over 240 homes and provide downpayment assistance to enable 50 families to become homeowners. The second recipient, African Community Housing & Development (ACHD) will use funds for operating support and technical assistance to strengthen its housing development capacity. Homestead Community Land Trust, the third partner, will use the financial support to develop land and housing with community partners.

“By creating homeownership opportunities for the community, we are opening doors to generational stability for families,” said Hamdi Abdulle, co-founder and executive director at ACHD. Led by women of color, ACHD serves African immigrant and refugee populations in King County.

“Historically, those who are able to own homes are more likely to experience long-term economic stability, while those who can’t are more likely to struggle financially,” said Senthil Sankaran, managing principal at the Amazon Housing Equity Fund. “This new initiative will allow us to explore ways to help more moderate-income residents realize their dreams of homeownership and, in turn, help build wealth that they can pass on to the next generation.”

Since 2021, Amazon’s Housing Equity Fund has committed $525 million to help preserve or build more than 5,300 units of affordable housing in the Puget Sound region.

Since HEF was started, more than $1.7 billion of funds have helped create or preserve more than 14,000 homes with guaranteed affordable rents across the three focus communities. HEF is in addition to $100 million in cash and in-kind donations to Mary’s Place, its nonprofit partner that has a family shelter inside an Amazon building in downtown Seattle.

Nearly 75% of today’s would-be homeowners cite affordability as a barrier to buying a home. NHT notes this dynamic is exacerbated for families of color, “where the U.S.’s legacy of segregation, redlining, and racialized policies has led to a racial homeownership gap.”

Nationwide, the rate of homeownership among Black Americans, at 44%, is nearly 29 percentage points below that of white Americans (72.7%). Within Washington state, 68% of white people own their home. That compares to 35% of Black people and 47% of Hispanic people, according to data analyzed by the National Association of REALTORS®.

Better Late Than Never - Winter Checklist 2022

While winter 2022 isn’t until December 21st, winter weather is coming, ready or not! If you’ve been basking in the beauty of fall in the PNW, know that you can still get ready! While not a comprehensive list, it’s a good start!

More things to check: fire and carbon monoxide detectors, clear walkways, clean and/or service fireplace, switch ceiling fan direction, test the sump pump, winterize the sprinkler system, and there’s always more…but this is a good start.

End of Summer Things To Do

The end of August is one of those times when it’s still warm enough to keep you firmly in summer, but with school looming, and pumpkin spice popping up all around, you can’t help but start to think about autumn. While we still have a few weeks until school starts, here’s a list of things to do during the fleeting days of summer…enjoy!

SUNSET SUPPER IS COMING ON FRIDAY, AUGUST 19TH, 2022!

Join the Pike Place Market Foundation for THE party of the summer in the heart of Pike Place Market! Guests will sip and savor their way through our region’s best food, wine, spirits and beer, dance under the stars on the MarketFront and win fabulous prizes in the Golden Raffle and our famous prize wheel! All proceeds help support our mission at the Pike Place Market Foundation to nurture a thriving Market community. pikeplacemarketfoundation.org/events/sunset-supper

bellevuedowntown.com/events/bellevue-beats

Experience FREE movies outdoors at Seattle Center each summer. Picnic on the gently sloping Mural Amphitheatre lawn, in front of a state-of-the-art 40-foot screen, with the Space Needle looming above. The series features popular movies, both classic and contemporary, appropriate for all-ages. Movies at the Mural is an outdoor cinema experience like no other!

Movies begin at dusk (about 9pm) Saturdays in August. Each feature is preceded by a short film by students at Cornish College for the Arts. Find schedule here.

Stroll the gardens and woodlands of the Bellevue Botanical Garden and discover 25 artists creating beautiful 3-D garden art. Event entry and parking are free. Art is available for purchase. Prices vary.

Bellevue Botanical Garden Arts in the Park

Summer Thunder in the Garden

Sunday, August 21, 2022
1:00 p.m. to 3:30 p.m.
Note time change

Four different groups, four different styles of taiko. Stroll through Kubota Garden, while the sounds of taiko drums reverberate throughout, or bring a picnic, blanket, or lawn chair to sit at the Terrace Overlook and watch performances by local taiko groups:

• Northwest Taiko

• Seattle Kokon Taiko

• Dekoboko Taiko

• Inochi Taiko

​​Each group will perform for about 30 minutes with short breaks in between.

​Performances are free. No reservations are required.

kubotagarden.org

SAM REMIX

In the Air Tonight
SAM Remix is back at the Olympic Sculpture Park! Since 2008, SAM has invited the best and brightest of Seattle’s creative community to produce one-of-a-kind art experiences at this signature late-night program. Celebrate the beauty, freedom, and joy of being outside with an evening inspired by sculptures in the park that interact with the air and sky. Visitors will encounter art installations, art making, music, performances, and other creative encounters that will send their spirits aloft.

SAM REMIX

AUG 26 2022
8 PM – MIDNIGHT
OLYMPIC SCULPTURE PARK
AGES 21+

Buying A Manufactured Home - Small Price Doesn't Always Mean Easy

Just because the price is small, doesn’t mean that amount of work and time is small. 

Recently, I helped my clients relocate from California (see My Recent Activity below). They had a limited budget but wanted to feel safe and secure with their housing costs into retirement. 

My buyers were buying sight unseen, which is one of my worst fears! I want to make sure buyers love their home, and without seeing it in person, you just never know. After researching areas they were interested in and looking for availability, we narrowed it down to a few properties. We did video calls and luckily, their son-in-law was able to meet me at the one they ended up buying, phew! The home needed a lot of maintenance, so we needed to do an inspection.  In the end, we closed this purchase but it wasn't without hiccups. 

Things you need to keep in mind when buying a manufactured home:

• Did you know that when buying a senior manufactured home in a park, there is a lease for the land? You have to fill out a rental application and qualify for the land rent to be considered for the purchase of the home.

• Every park will have its own set of rules. In most cases, you will need to have an income of at least 3x your land rent. Some parks allow pets, motorhome parking, gardening, and fenced-in yards, while others might be a bit more strict.

• There are limited escrow companies that know how to transfer ownership of manufactured homes. They are transferred more like a car or motorhome.

• Lending is also a bit more challenging. The longest you can get a loan for is 20 years and rates are higher than traditional purchases.

Other things you need to know:

• Is the home on leased land? Who owns the park? Is it an individual or a corporation? Do they plan on selling the park anytime soon? Will they be raising the land rent dramatically?

• Can I have a pet?

• Can I have a roommate?

• How old do I have to be?

• Can children live with me?

• How do I maintain a manufactured home? Who pays for maintenance?

• Can I get a loan on this property?

The benefits of buying a Manufactured Home in a Park:

• Affordability

• Maintenance

• Smaller yards to maintain

• Living among your peers

• Community activities

• Personal privacy in your home

At a certain age, many people (I have a lot of clients that have bought manufactured homes in parks) want to downscale from a family home to a smaller footprint. These communities are a wonderful solution and there are many communities to pick from in the Puget Sound area.

As you can see, there are a lot of questions about buying a manufactured home on leased land. You need an agent who knows the questions to ask. As mentioned above, I’ve helped many clients buy and sell manufactured homes, please contact me if you have questions about the process or where to begin looking.

April Home Prices Skyrocketed in These 9 Seattle Suburbs - Seattle Met

APRIL’S HOUSING DATA, recently released by the Northwest Multiple Listing Service, shows the first glimmer of a real estate market leveling off—at least in Seattle. But how are higher interest rates, worn-out buyers, pinched inventory, and too-high prices affecting the suburbs? Not very much at all. 

Back in March, the top suburbs showed evidence of the continually brisk market with year-over-year sales price increases from 25 to 32 percent. Buckle up, because April’s stats blow those numbers out of the water.

Newcastle, the land of million-dollar homes.

9. Auburn

In February, we marveled at Auburn’s median sale price below $600,000. Alas, no more. While it may still seem “affordable” to higher earners seeking space, consider that this time last year, the median sale price was just $499,000.
April 2022 median sale price: $650,000
Price growth year-over-year: 30.26 percent

8. Mercer Island

From relatively affordable Auburn to one of the most persistently expensive suburbs around. Mercer Island has always been a pricey place, but its recent year-over-year growth still has the ability to shock as that median sale price edges close to $3 million.
April 2022 median sale price: $2,720,000
Price growth year-over-year: 32.52 percent

7. Renton (Benson Hill)

What a difference a month makes. In March, Renton’s 32 percent price growth was enough to land it at the top of this list. One month later, and an even higher price growth takes it only to the seventh spot. Renton did end April with more sales closed than the same month in 2021, suggesting its higher prices aren’t necessarily spurred by inventory scarcity. 
April 2022 median sale price: $799,950
Price growth year-over-year: 35.01 percent

6. Eastside (South of I-90)

Just how hot are the real estate markets in Newcastle, Newport, and Factoria? In January, the year-over-year price growth jumped a whopping 63.87 percent. In April, that number looks a tad more modest—until you realize the median sale price is up $415,000 in just one year.
April 2022 median sale price: $1,550,000
Price growth year-over-year: 36.56 percent

5. Redmond and Carnation

Maybe it’s Microsofties heeding the call to return to work en masse. Maybe it’s Eastsiders tired of paying for increasingly expensive rents. Whatever the reason for the demand, April home buyers launched Redmond into the top five, with a $370,000 increase in the median sale price compared to the same month last year.
April 2022 median sale price: $1,365,000
Price growth year-over-year: 37.19 percent

4. Juanita and Woodinville

Woodinville has consistently topped our list of most expensive Seattle-area cities to rent an apartment. In April, the home-buying market matched that demand with a hefty year-over-year price growth and a median sale price that climbed $418,500 in the same amount of time. 
April 2022 median sale price: $1,325,000
Price growth year-over-year: 46.17 percent

3. Kirkland and Bridle Trails

That is not a transcription error. Yes, the median—repeat median—sale price of a home in Kirland was above $2 million in April. Perhaps it’s all those Googlers trying to find a home closer to its new campus? 
April 2022 median sale price: $2,040,500
Price growth year-over-year: 50.45 percent

2. Bellevue (East of I-405)

The scarce inventory in this part of Bellevue has improved slightly, up to nearly three-quarters of a month, but that apparently hasn’t cooled the white-hot demand in the slightest. Still, if you’re looking on the Eastside, this appears to be par for the course.
April 2022 median sale price: $1,585,000
Price growth year-over-year: 57.24 percent

1. Bellevue (West of I-405)

If you bought a home in the Lake Washington side of Bellevue last April, congratulations. You saved yourself $1 million. That’s how much the median sale price has grown year over year, causing a truly eye-popping 80 percent price growth. Hey, at least the schools are good.
April 2022 median sale price: $2,373,350
Price growth year-over-year: 80.76 percent

SeattleMet.com

Pandemic Led Many to New Home Dreams

Consumers continue to believe that homeownership is the American dream, and the pandemic may have provided consumers with more time to ponder what that dream would look like for them.

Over a quarter of Americans—29%—say they have been more likely to think about pursuing their dreams since the pandemic began, whether that is making a housing move, pursuing a passion project, making a career change, or expanding their family, according to a new survey commissioned by Coldwell Banker Real Estate LLC of 2,000 U.S. adults.

When it comes to finding a home, location and lifestyle tended to be top-of-mind. Eighty-seven percent of respondents said it’s important to them that the location of their home—whether rural, suburban, or urban—aligns with their lifestyle.

Not all Americans’ dream homes look alike. The top dream home locations, according to survey respondents, were split among:

• Locations with warm weather: 33%

• Suburban areas with ample space: 28%

• Remote and off the beaten path with a large plot of land: 25%

Is a Dream Home Practical?

Forty-six percent of homeowners surveyed say they are unsure of the current value of their homes. They may not know if the dream home is obtainable. Some are relying on real estate websites with a home value estimate calculator as a first step before contacting a real estate agent.

In fact, survey respondents say that if they were looking to sell, they would seek a real estate website with a home price estimate calculator as their initial step in the process, according to the survey. Still, 60% of respondents said they would trust a licensed real estate agent to accurately estimate the value of a home over an online valuation tool.

For those who do want to press ahead in their homebuying dreams, they are face a limited selection. Two-thirds of potential home buyers say they haven’t found their dream home; the percentage is highest among Gen Z and millennials.

Why Moving Dreams Remain High

Compared with a similar survey conducted last fall, respondents showed more willingness to take a pay cut or accept a new job with a lower salary if it meant they could move to a more affordable location, according to the Coldwell Banker survey. The “Great Resignation” could be a wild card for the real estate market, and housing affordability and cost of living are factors weighing on more Americans, the survey found.

Forty-four percent of American homeowners who plan to sell their homes in the future want to move to a different city or state. But they aren’t moving on a whim, the survey says. They’re prioritizing the following factors:

• Quality of life (lifestyle and environmental elements): 94%

• Housing affordability: 93%

• Cost-of-living affordability: 93%

• Job market strength: 70%

-reposted from Magazine.Realtor

March Home Prices Were Way Up in These 6 Seattle Enclaves

IT’S GOING TO BE a busy home-buying season—or so indicates the latest housing market data from the Northwest Multiple Listing Service. While we saw slight slowing in price growth in February due to rising interest rates, traditional winter cooling, and tight inventory, year-over-year median sale prices were up significantly in Seattle in March. (Rents were too.)

The only exceptions? Belltown and Downtown, and Central Seattle, which saw more modest rises of 6.5 percent and 1.79 percent, respectively. Elsewhere in the city, as evidenced by this list, the numbers showed double-digit growth.

Read the rest of the article at SeattleMet.com

February 2022 - Seattle Resale Market Recap

Not much new here, the story continues to stay the same…hot, even in February!

Pros and Cons of Buying a New Construction Home

There are many pros and cons to buying a new construction home and it's important to understand the whole picture before proceeding

Pros of Buying New Construction Homes

Everything is Brand-New
There can be a lot of charm to older houses, but they can also come with a long list of things to repair or things that will need to be repaired soon. When you buy a new construction home, absolutely everything is brand new. This means that you likely don't have to worry about making surprise repairs anytime soon.

In your new home, all of the surfaces will be in perfect condition, the fixtures and appliances will be brand new, and all of the materials are modern. Since you're the first person to have lived in the home, you know that no one in the past has jerry-rigged weird solutions to problems.

Your Home Will Be Built to the Standards of Today
Older homes can have incredible craftsmanship, but older methods of building and installing electrical and plumbing systems can lead to costly episodes of maintenance and repairs.

When you're buying an older house, you're also always running the risk that previous owners have done unpermitted work or that things haven't been brought up to code. This can create a lot of delays and frustrations during the home-buying process. On the other hand, when you buy a new construction house, you know that the builders have followed all of the modern-day code and energy-efficiency requirements.

You'll Be Able to Customize the House
It's pretty much impossible to find an existing home that has absolutely everything you need. Sure, you can make renovations and additions to existing homes, but there are practical and financial limitations to doing so.

When you're buying a new construction home, you get to customize the house to suit your needs. You won't worry about having to retrofit an existing house with the amenities that you are looking for. Instead, you can have them built right into the house from the get-go.

Energy-Efficient Features
Older houses are typically less energy-efficient than new homes. If you buy a large PNW Craftsman, it's most likely beautiful and steeped in history, but there's also a high likelihood that it's drafty and more expensive to heat and cool. On top of that, an older house with outdated appliances will end up costing you when it comes time to pay the utility bill.

New build homes are built incorporating the newest technology when it comes to energy efficiency. You'll be able to outfit your home with energy-efficient appliances and technology that helps to keep your monthly bills as low as possible. This will also likely translate into having to do less maintenance in the short term.

New Build Homes Can Be Low-Maintenance
Since everything is brand new in a new build home, from the roof to the HVAC system to the appliances, they require less maintenance. What this means is that you'll be able to more accurately predict how much homeownership is going to cost you on a monthly basis. Your home will also be protected for years with warranties.

Modern Floor Plans & Amenities
If you're more partial to open floor plans in homes, you'll love the style of new construction homes. These houses are typically constructed using a modern layout which gives plenty of space to breathe and incorporates tons of natural light. New home developments are frequently located in areas that have all the amenities a modern person could want. If you're looking for an area that has nice parks and good schools nearby, you'll likely find new construction homes that could suit your needs.

Cons of Buying New Construction Homes

You'll Want to Vet the Builders
Before you buy a new construction home, you'll want to do as much research as possible on the company doing the construction. Building a home can be a lengthy process and you will be in contact with the builders constantly. It's important that they are people you feel comfortable working with and that you trust.

If you don't vet your builders beforehand, buying your dream home could easily become a nightmare. Not all builders are ethical or concerned with producing a high-quality final product. Without doing your research, you could end up with a house that has a long, expensive list of problems.

The Move-In Date Isn't Guaranteed
It typically takes about six months to build a new home from start to finish. However, there are a lot of different factors that could lead to it taking longer than this. Issues with the building crew, bad weather, material shortages, and many other things could hold up production.

If you have a set timeframe for moving, buying a new build home could end up throwing a wrench in your gears. It's important to have a flexible timeline if this is the route you want to go.

It Can Get Expensive to Personalize
While it's great that you can personalize and customize your new home to suit your needs, that doesn't mean it doesn't come at a cost.

If you want your new home to have the best appliances, fixtures, and features, then you're going to pay a pretty penny. When you're dreaming up your new home, it's easy to get carried away with what you think you want and need. If you aren't careful, you could end up running the bill far out of your intended budget.

It Can Be Overwhelming and Exhausting to Make So Many Decisions
It's one thing to decide to repaint a room in your house, but it is an entirely different animal to design a home from scratch. There will be so many different decisions along the way that you can start to develop decision-making fatigue. While you might have already made broad decisions about appliances or your HVAC system, it is easier than you might think to get bogged down in decisions about cabinet hardware and light fixtures.

Getting paralyzed by all of the different options in flooring, paint colors, fixtures, features, and little details can end up slowing down the home-building process. If you have a full-time job, as most people do, you could find that the time investment you're spending on online forums finding the perfect shade of grey for the guest bedroom might start to drive you mad.

You Won't Have Much Negotiating Power
When you buy an existing home, there is an expectation that you can renegotiate the sale price after doing an inspection of the property. It is also normal and expected for there to be some negotiation during the initial back-and-forth.

However, you shouldn't anticipate the same type of wiggle room when it comes to buying new construction homes. Since these homes are usually sold by the builder, they have a set price that they are asking for and they aren't normally interested in budging.

There are Design Limitations
It is true that you will have a lot of customizable options when building a new home. However, that doesn't mean you get to create the whole blueprint from scratch.

Builders are most commonly going to have basic designs that they've found are the most appealing to the most people. If you're thinking about buying a new construction home, don't expect that you'll be able to have free rein when it comes to the layout and the design.

New Home Builds Are Often Built on Smaller Lots
If your dream home has acres of fields and forests, then you probably don't want to buy a house in new home developments. This is because these homes are very commonly built on smaller lots than lots of existing, older homes. If outdoor space is important to you, you might be better off buying an existing property.

For some people, having a home built on a smaller lot is actually a plus. A smaller lot means you have less lawn to mow and less space to maintain. It can also help you save money on your utility bills, and you won't have to spend your hard-earned free time doing endless yard work.

Additionally, if you don't care much about having a big yard, then a small yard can help you out when it comes to your annual property taxes. Since the size of your yard factors into the value that your home is assessed at, you could end up with a smaller tax bill when you're home is on a smaller lot.

They Typically Use Builder-Grade Materials
Typically, new-construction homes utilize builder-grade materials. While this might sound like high-quality stuff, builder-grade materials are actually pretty cheap. This means that even though your home is brand new, you might find that you're not getting as much value as you had anticipated.

You Can't Be Certain How Much You'll Pay in Property Taxes Ahead of Time
You'll be able to get a sense of how much you'll pay in property taxes when you buy a new construction home, but it will only be an estimate based on how much your neighbors pay. This means that if the town comes back with higher property taxes once your home is built and you're moved in, there isn't much you can do. On the other hand, when you buy a pre-existing home, a tax assessor will be able to give a much more accurate number for how much you'll be set back in property taxes every year.

New Building Materials Contain VOCs
Lastly, another thing to consider is the reality that new building materials contain chemicals, known as volatile organic compounds (VOCs), that off-gas for a period of time.

VOCs are present in building materials such as paint, flooring, carpeting, and cabinets. When you buy an existing home, these volatile organic compounds have had many years to off-gas. With new construction, it's important to ventilate the home for a period of time to ensure that you aren't exposing yourself and your family to harmful chemicals.

New Construction Home Buying Process Tips

Learn as Much as You Can About the Process Before Hand
Not doing your research ahead of time can end up costing you tens of thousands of dollars during the purchasing process. It's important to understand how much of a time commitment it will be to make all of the little decisions required for a personalized home build, not to mention dealing with lenders and other parts of the process. Understanding what the process consists of can help you decide whether or not being a new construction home is the right decision for you.

Decide What You Want in Advance
Before you start buying any home, whether new or existing, it's a good idea to sit down and decide what you want ahead of time. How big of a house do you want, and how many bedrooms and bathrooms will you need? How much land are you looking for? You'll also want to think about what you want out of a neighborhood. Are you looking for a quiet neighborhood that is outside of the city or are you looking for more of a suburban spot that has access to more amenities?

Making the types of decisions ahead of time can help you navigate the new construction home buying process. You don't want to only be considering these types of questions once you are in the weeds and making decisions on a deadline.

Select a Builder After Doing Thorough Research
Though it might not sound like much fun, it is well worth your time to research the best new home developments and new home builders in your area.  You'll want to take a look at testimonials, reviews, or even any news reports you can find on the different developments and builders. You might even be able to connect with current residence through social media to learn more about the houses and the developments.

When you are doing your due diligence in selecting a builder you should feel free to ask the builder whatever questions you might have. The selection you make for your builder to determine whether your house building experience is a delight or a nightmare.

Hire an Experienced Real Estate Agent
One thing that many people might not know is that builders pay for the real estate agent commission when you are buying a new construction home. Given that, it seems like an obvious choice to hire a real estate agent to help you get the best possible deal.

You want to find a real estate agent that has experience with new construction homes. Find an agent that you like working with and that can help you understand every aspect of the process.

Make Sure Everything Is in Writing
You will be communicating with the builders of your new construction home frequently. For this reason, it is best to make sure that you get everything in writing. This way, there is less space for miscommunication or mistakes.

This is one of the reasons that you should hire a real estate agent. They will stay on top of making sure that everything important is in writing and that any necessary documents are signed.

Understand That the Model House Will Have All the Upgrades
If you take a look at the model home for development, it's important to understand that they are showing you a house with all of the possible amenities and upgrades. If you buy their standard package, the house that you buy will not look the same as the model house.

For this reason, it's important to understand what you are buying when you sign up for a new construction build. Paying for extras and upgrades can get expensive fast, so you want to run the numbers before you sign any paperwork.

I know this is a lot of information, but it’s good to have a lot of information whether you’re buying an old or new construction home! Having a real estate agent at your side while buying new construction can help you navigate all of the above and more!

reposted from uphomes.com