Real Estate Rules and Advice for Potential Home Buyers
While the tumultuous real estate market has many people hunkered down hoping it will all blow over, proactive homeowners are looking beyond the uncertainty.
They’re weighing a decision about whether to refinance their mortgage or trade up to a house they couldn’t afford three years ago.
Making a move more alluring, interest rates continue to hover at 4 percent to 5 percent and tax credits of up to $8,000 for first-time home buyers and up to $6,500 for buyers who have been in their homes for at least five of the last eight years consecutively are available.
But before you take the leap, here are some questions to ask yourself:
1. How long do I plan to stay in the new home? The rule of thumb is at least five years to make a new mortgage worthwhile.
2. Do I really need to move or just want to grab a deal?
3. Can I cover the costs to close and relocate? With every winner, there’s usually a loser, and you could be both if you find a great deal on a bigger house but can’t sell your current home.
4. If I stay in my current home, does it make sense to refinance and maybe add that extra bedroom or build a deck to improve the property?
Take a deep breath and analyze what you really need, not what the market seems to be telling you to do.
The decision depends on the individual. Are you looking to move because their family has grown or has your job changed locations, or do you want a shorter commute? But don’t move just for the sake of moving; now is a great time to buy, if it makes economic sense and improves your lifestyle.
There are several good reasons to buy a house now.
Rates are historically low; it’s essentially a buyer’s market. And for people moving up, obviously they won’t get as much for their own home as they would have a few years ago. But if they’re reasonable and set a good price and they find another house at a good price, the two together could be a real benefit especially if you are buying and getting a mortgage rate that is better than what you are paying now.
If you are considering buying a condominium in Florida you should be aware of some recent legislation that is designed to assist buyers in identifying potential problem properties. Florida Statute 720 now requires a State Mandated Reserves Study needs to be performed by the Condo Association and prospective condo buyers should receive full disclosure regarding the outcome of this study. You agent should secure the study for you and it will identify if any major repairs are expected, how much the repairs will cost, when the repairs are budgeted and the proposed completion date and if the condo association has enough money in reserves to cover the cost of the repairs of if the they will need to pass a special assessment onto the existing condo owners. I would recommend not considering any condominium property that has not completed the study.
Also be knowledgeable of the Chinese Drywall situation that may occur with any construction that has occurred since 2000. Any knowledge of Chinese drywall needs to be disclosed and you should hire a certified inspector the test for the presence of Chinese drywall if it was not been disclosed.