Finding a home that won’t lose value

Given the current state of the economy, for all of you home buyers out there, I’m guessing that, when you do find a home you’re going to purchase, that you want to find one that won’t lose value.  You’ll want to look for features that will appeal to a seller when you do go to sell, whether that’s in one year or 20.  Here’s a quick list of features in homes that won’t lose value in a recession.

1. Choose a single-family home.  Sure, you may be starting out and want something small, preferably a condo.  However, in a worse economy, condos and townhomes lose their value more quickly than a single-family home.  So ask your Realtor to help you find a smaller detached home.  I have sold many first-time buyers one- or two-bedroom single-family homes, which was just the right size for their needs.

2. Keep carrying costs low.  When you do go to buy, make sure you find a property that is well-maintained and one that doesn’t require a lot of work over time, especially if you don’t plan to stay long.  New buyers get scared with all the costs of a mortgage, taxes, insurance, and maintenance, so whatever you can do to keep costs low will help you in the long run.  Here’s another tip.  If you see a problem, such as water dripping from the roof, make sure to take care of it BEFORE it turns into a large hole, which will just cost you more money because you waited.

3. Know your market.  Certain markets will never lose much value because they are important to certain segments of the population.  For example, a home within walking distance of the Metra in the Chicago suburbs is a great feature for commuters heading into the city.  A home with a swimming pool is going to sell quicker than one without in Arizona.  

4. Keep your kitchen and bathroom up to date.  As I have mentioned in the past, if you’re going to update or remodel any room in your home, these are the two to focus on.  These are the biggest rooms that “sell” a house.  Try to include appliances if you can.  Many first-time buyers don’t have these at their disposal, and it’s another thing that will help keep their costs down.  If you must take yours with you, consider offering an appliance credit instead.

I hope these tips help both potential buyers and sellers.  And to all my readers, have a very Happy Thanksgiving!  Visit me online.

Couponing coming to real estate

Couponing seems to be the biggest craze now.  Between shows like Extreme Couponing and all the new daily deal sites that pop up, like Groupon and Living Social, everybody is trying to get something for less.  I think these sites can offer some fantastic deals, so I was thrilled when I found out about a new site, HouseTipper.com.

HouseTipper works similar to Groupon sites where you would pay ahead of time to get a discount from a real estate brokerage.  Some deals might include a commission discount, gift cards at closing, or cash back.  According to this MSN article, “In real estate, the deals are often offered for three to seven days rather than for just one day because these are not usually impulse buys,” says Tigue Bonneval, co-founder of HouseTipper.com and a real-estate agent in Baton Rouge, La. “This gives customers time to see the deal, make an inquiry with the real-estate agent and decide if they want to make the purchase.”

Bonneval also says that HouseTipper will refund the cost of the coupon if the consumer doesn’t end up purchasing a house or doesn’t like the particular agent offering the deal.  So it’s really a win-win.  They’re also trying to increase their business, so if you refer someone to the site, you can get a $10 credit to use when the referral purchases their first coupon.

Some states don’t allow real estate agents to give rebates, so you’ll need to do your research before you buy.  

I’d love to hear if you got a deal by using this site or what types of coupons you’ve discovered for your real estate needs.  Please leave me a comment with any info you can share!

 

Fannie Mae raises fees

In an interesting move, Fannie Mae announced they are raising their fees this spring.  What’s even more interesting is that it will affect buyers who have higher credit scores.  This will make mortgages more expensive for a lot of people.

These fees are called “add-on” fees.  They’re basing the cost on your credit score and the amount you’re going to put down for a down payment.  And the cost could be anywhere from a quarter of a percentage of the loan amount to 2.75%.

An example of how this works from this Washington Post article: If you want to buy a $300,000 home and have a great credit score of over 800 with just under 25% down, you’ll be charged .25% or $750.  Previously your cost would have been $0.  Now if you have a credit score of 679 and a down payment of less than 20%, you’ll be charged 2.75% or $8,250.  And it matters what you purchase.  A condo will cost you more than a single-family residence.  You can choose to pay these fees up front or tack them on to your mortgage.  Do know that by adding it to the cost of your mortgage that you’ll be paying interest on it for the length of your loan.  So if you can find a way to pay it up front, you’ll save more money in the long run.

Fannie Mae never specifically stated the exact reason for the rate hikes.  But it’s been speculated that it softens their risks on the loan (hence the lower fees for those with better credit scores and higher down payments) as well as the money they’ve lost because of the current housing market and unpaid mortgages.

So will this prevent some people from purchasing a home?  I doubt it will have any adverse reaction on the already declining mortgage market because you’re stuck paying it no matter what.  And it’s not significant enough to make a difference, especially when buyers can purchase homes for a lot less than they could have years ago.

What’s your take on the fee increase?  Do you think it will affect the housing market?  I’d love to hear your opinions.  Please leave a comment or visit me online.