Buying your first home can be one of the most exciting milestones one can reach in life. But unfortunately, many people who believe that they are ready to
be home owners find themselves faced with the challenges of being able to afford it and not having enough cash saved up for the down payment.
Mentally, we all know we shouldn’t spend more than we earn. It’s one of the common sense “rules” that we try to live by, but maybe let slip a little too often. These slip ups may have caused
us to fall in a pit of debt that we can’t seem to find a way out of. It’s time to move forward and take the necessary steps to reduce your debt.
We’re going to first change how you manage your money, making it easier to save money for a down payment on a home
Here are some tips and advice that can put you in the best
position to be a home owner.
Where Does Your Money Go?
Have you ever heard of the “Debt Snowball”? Create a list of all the places your money goes every month; including rent, credit cards, utilities, food, car
payments, gas, insurance, charity, Starbucks, etc.
Then, split the list into two, separate lists.
The first list includes items that you’ll always have to pay (e.g. utilities). The second list includes debts you can pay off like your Sears credit card.
That goes on the second list.
For the second list, reorganize the order of the items by largest account balance (Debt Snowball).
The Snowball method will help you to rapidly reduce the number of debts you owe.
First, make the minimum payment for every bill.
Then, make an extra payment for the one item that is on the top of your list.
Repeat monthly until the item on the top of your list is paid in full.
After you’ve paid off the first item, take the money you were using to pay if off and now apply it to the second item on the list. Knock off each #1 item
every month until all balances are paid off in full.
Image the encouragement you’ll receive once you start knocking off those payments each month!
Cut Your Expenses
So, if you are already in debt, how can you expect to pay anything extra to the bill at the top or your list? Just like a well-crafted movie: clever editing.
If you spend $100 a week on groceries, try to spend $5 fewer dollars.
Other Ways To Cut Your Expenses:
Get Rid Of Unused Subscriptions! We all have good intentions to fully use that gym membership but if you aren’t using the gym, there is no reason to keep
paying for it. Take up running or walking (free) or buy some used free weights on Craigslist (cheap).
You get the idea. Whatever you can cut out of your weekly spending, you can add to the payment to the top item on your Snowball or Avalanche list.
Create An Emergency Fund
Set aside some money you save from cutting your expenses and stash it into a special savings
account that is created just for this purpose. That way when tough times arrive, you’ll be ready. The emergency fund can be used instead of pulling out your credit card.
Set Incremental Goals (And Reward Yourself For Reaching Them)
Give yourself incremental milestones ($500, $1000, $1500, etc.) and reward yourself with something fun. If this reward costs money, then set aside a little
cash each month to save for this very purpose. There is no sense adding to your debt due to your celebration of reducing it. Keep the reward under $100.
Being prepared financially to purchase a home isn’t something we hear about often but can be the best advice you’ve heard in a long time. Buying your first
home does not have to be a fairy tale, but a dream worth dreaming. It just may take dedication and self-control to make it happen.
Find an appraiser in your area:
When determining the square footage of a home many clients find that resources such as Zillow and public records could have pretty inaccurate information. Zillow for
example can be fairly inaccurate because it collects information from unverified resources such as home owners, public records, and realtors. Almost anyone can change a home’s square footage on sites such as this without any proof of measurements.
One would think that measuring the square footage of a home would be pretty straight-forward. Just break out the trusty measuring tape right? Not quite. Some say, coming up with a square footage is kind of like the old joke about the accountant who aces the
interview question of how much is 1+ 1 by answering "What would you like it to be?" And, unfortunately, the square footage that is calculated very much depends upon who is doing the measuring and for what purpose.
Real estate appraisers measure the shell of the home to get what they call Gross living area or GLA. Depending
in the home type different procedures are used. For a condo they have no choice but to start with the internal measurements - from the inside of the walls - but they might add an additional 6 inches for the wall thickness. For a single family home they usually
use the outside dimensions, so the thickness of the exterior walls would be included. No matter the home type, they only count the space that you can actually live in.
Here’s a quick list of the most commonly mistaken areas of the home included in the GLA:
The most honest and logical measurement is the one that appraisers use. Appraisers will usually have the most unbiased opinion in both property value and square footage. Thus, they would be your best resort.
Appraisals By Michael is committed to providing a service of excellence. As Georgia
Real Estate Appraisers (AGREA) members are committed to adhering to strict industry standards and a professional code of ethics, you can be confident that an appraisal done with us is done with integrity and accuracy.
Call us today for more information or to schedule your home's appraisal.
To get in touch with an appraiser in your area or for more information click on one of the areas below closest to you:
Word on the street is that there’s a common misconception between realtors and real estate agents. We’re thinking that one would automatically assume that the two entities seem closely related based off of the name itself. But contrary to popular belief, the
two are slightly different.
A licensed real estate agent takes 30 to 90 hours of classroom instruction in real estate fundamentals then passes an exam that covers standards, practices and laws that affect the particular state the agent is pursuing a license in.
Not far on the other end of the spectrum is where the Realtor lies. To be considered a Realtor, an agent must be an active member of the National Association of Realtors (NAR). NAR’s membership entails taking an online course on the strict ethics
code and passing an exam. Once that’s out the way, every 4 years members have to take a refresher course that reassesses the core value to “treat all parties honestly.”
Here’s where the two differentiate: not all realtors are real estate agents. Property managers, home appraisers, and real estate brokers and counselors can also be members of the NAR; thus earning them the title of a Realtor. Realtors promise to
never mislead or withhold information from anyone party involved in the transaction in its entirety. In addition, they have access to a large number of homes through the Multiple Listing Service.
If you are looking to buy or sell a home for the very first time, seeking assistance from a realtor will be a relationship worth thoroughly developing. Face it, you’ll probably be spending a few weeks and countless hours with this individual to
get results in your favor; so it’s important to develop an alliance that’s formulated down to the nitty-gritty. Real Estate experts suggest that it’s best to uncover all sorts of details about your prospective realtor prior to hiring them to be your right-hand
man. After all, you don’t have to choose the first realtor you meet.
So in order to ensure a positive experience your first go round, here are 15 questions you should consider asking your realtor:
Whether you’re moving off your friend’s couch or finally leaving the apartment you left your mark on throughout college, buying your first property is a
huge step. Kudos to you! Almost identical to the first day of school, it’s extremely important to prepare, educate yourself, and be patient.
Because it can be difficult to know what to expect, we're here to help you with your homework.
Here are 5 tips every first time home buyer should know: