Stockman Farrar Group's Blog
Have you ever visited someone's home and thought to yourself, "Their living room seems really cluttered" or "Those counter tops look like they haven't been updated since the 1960s!"
Many people quickly notice decorating flaws or home maintenance issues in other people's houses, but when it comes to their own homes -- well, that's another story!
Why is that the case? Two reasons: You're emotionally attached to your own home environment and you're also "too close to the trees to see the forest." It's hard to step back and see your home through a fresh set of eyes -- which is exactly the way prospective buyers are going to look it.
Curb appeal -- or a lack, thereof-- will be the first thing they notice, followed by positive or negative first impressions of your home's interior -- if they get that far! So if you're preparing to put your home on the market, you don't want to be like the person who tries to represent themselves in court. As Abraham Lincoln once said, they have "a fool for a client!"
Since first impressions are so vital when selling your house, it makes sense to confer with someone who really knows the ropes when it comes to home staging. Typically, that would be one of the following professionals:
- An experienced real estate agent: Real estate agents are in the business of helping people sell their homes as quickly and profitably as possible -- it's a win/win situation. In all likelihood, they've conducted hundreds of house tours and listened to a massive amount of feedback from prospective buyers. One thing they've invariably noticed is that a lot of people react the same way to the same issues. Based on experience and a trained eye, most real estate agents can quickly spot and point out cost-effective ways to make your home more marketable and visually appealing.
- A professional home stager: Although not all communities have access to professional home stagers, there are talented and knowledgeable experts in that field who can offer valuable advice. If you're working with an experienced real estate agent, however, it probably would not be necessary to pay extra to hire a professional staging consultant.
According to the National Association of Realtors, the median amount of money spent on staging a home is $675, so it doesn't necessarily have to be ultra-expensive. In a survey of its membership, Realtors ranked living rooms and kitchens as the most important rooms to stage. Also considered important are the master bedroom, dining room, and bathrooms.
Thirty seven percent of Realtors® representing sellers believe that buyers most often offer a 1 to 5 percent increase on the value of a staged home. A smaller percentage say the potential increase is in the neighborhood of 6% to 10%. However you look at it, you're tipping the scales in your direction when you make your home look its best prior to putting it up for sale.
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When you get pre-approved for a mortgage, you may be excited to find out that you can afford a lot more house than you thought you could. Don’t be so fast, this is just what you can get a loan for. The bank doesn’t know a lot of factors about your finances. While you most likely had to provide a ton of income verification statements and information in order to get this ballpark figure, relying solely on the pre-approval number can put you in a bind when it comes to your finances. Your lender doesn’t know certain things like how much you spend on groceries or how much your cell phone bill is each month.
What Lenders Consider
Lenders look at the health of your credit history, how much income you have and how much debt you have. These are the big factors that tell your lender about how much house you can afford. Yet, your home lender is not your financial advisor and can’t help you with household expenses and the like. When thinking about what price range of home you really can afford, consider these factors beyond the bank:
Your Monthly Budget
Your spending habits will ultimately affect your ability to pay the monthly mortgage bill. If you’re spending all of your disposable income, then you may not be able to afford much at all beyond what you’re already paying for rent. You don’t want to stretch your finances so thin that you won’t be able to afford food!
Owning A Home Requires Additional Costs
Lenders do factor into their number the cost of homeowner’s insurance and property taxes, but don’t consider other things like utility bills, trash pickup and home repairs. All this can certainly add up when you’re a homeowner!
Your Savings Is Nonexistent
If you’re unable to save any money at all if you’re a homeowner, then you’ll be in trouble. You need money stashed away in case of unemployment or an emergency. You also may be planning for things like retirement and future costs like children’s education. For the initial purchase of a home, you’ll need upfront payments available for the down payment and closing costs. However, you’ll need some more savings beyond that for everything that life brings your way!
You Have Big Plans
Are you thinking of quitting your job and heading out to start your own business? Now may not be the best time to buy a new house. These changes could have a huge impact on your finances and leave you unable to pay your mortgage. Your lender won’t be asking about these plans, so you’ll need to know what the future holds (for the most part ) in order to keep your own finances secure.
The bottom line is that anything that could leave you financially stressed is not a good idea. Considering that buying a home is one of the biggest purchases you'll ever make, you want to be sure that you keep your finances in check during the purchase process.