The year 2016 is already a week old, but it’s never too late to adopt a smart set of resolutions to help guide you through the year ahead. Whether you are a homebuyer or a seller — or might become one or the other over the course of the year — take a look at Pacific Union’s roundup of real estate resolutions for the new year.
RESOLUTIONS FOR ALL HOMEOWNERS
Making extra payments can dramatically shorten the time until your mortgage will be paid in full. Consider this: The monthly principal and interest on a $300,000 mortgage with a 30-year term and an interest rate of 4 percent totals $1,432. Paying an extra $300 each month would increase the payment to $1,732, but also shorten the term by eight years and five months and cut the interest expense by $67,393.
Do you have a second mortgage? Do everything you can to pay it off. It may not be easy, but the freedom from that added debt and interest expense can be worth the effort — especially if your second loan has a variable rate. Rates are low today, but if they rise in the future, you could face a painful payment hike.
Are you due a discount on your homeowner insurance? Major repairs or improvements that you made to your home last year may get you a discount or a lower quote on this year’s coverage. A new roof and updated electrical and plumbing systems make your home less likely to suffer damages requiring an insurance claim, which can save you money on your insurance. Talk with your insurance agent or carrier and make sure your file contains the latest information about your home.
RESOLUTIONS FOR SELLERS
What repairs or improvements will make your home more attractive — and valuable — to buyers? The sooner you start work on them, the sooner you can put your home up for sale. And schedule a home inspection to ensure there will be no last-minute surprises.
Talk with a real estate professional who is familiar with your community, and find out what your home is worth and what strategies will help it sell quickly. Become familiar with the home-selling process. Learn the basics of home staging, and if necessary, hire a professional stager.
Plan your exit strategy in advance. It’s hugely stressful to plan a purchase and a sale at the same time. Can you afford to close on your new home before selling? If so, for how long? Do you need to sell the property first? What about short-term housing? Ask your real estate professional about making the sale contingent on your next purchase. At the very least, it can buy you some extra time.
RESOLUTIONS FOR BUYERS
Get your financial house in order. Know your credit score and understand what your financial situation looks like from a lender’s perspective. If you have credit problems, identify the necessary steps to correct them. Sometimes, it can take six months to see your FICO score move up enough to get a better mortgage rate.
Save as much money as you can for a down payment. If your parents or another source can help with the down payment, it’s better to start that conversation early rather than later, so you understand your financial commitment. Similarly, look at your own finances and determine how much you can afford to spend.
Educate yourself on the real estate market where you hope to live. What neighborhoods and homes can you afford? What parks, retail districts, and other amenities are nearby? If you have children, learn as much as you can about the local schools.
Talk with a real estate professional who is familiar with your desired community. Learn the intricacies of buying a home — the paperwork, estimated timelines, making a bid, and closing a sale. You may think you only need to go to open houses once you’re ready to buy, but in reality, a buyer needs several months to understand home values, the prices per neighborhood, and the market in general. The homes you see and your experience feeling out the market will serve as the building blocks toward becoming an informed buyer.