Buyer Beware

Buyer Beware

by Michael Haynes,

Supervisor, HomeOwnership Center

Imagine this scenario… You are pre-approved by your lender for a mortgage in the amount of $200,000. You enlist the services of a realtor and together you both hit the ground running in search of your dream home. After several weeks of house shopping, you find the house of your dreams, which happens to be priced under the $200,000 amount for which you were pre-approved. This home has all the bells and whistles that you are looking for, and you are in love with the property’s location. You make an offer to purchase the home and have the details of your offer outlined in the purchase and sale agreement. The seller accepts your offer…

Before you go any further, treat this transaction as a business investment that may come with risks. Your task is to minimize your risks as much as you can. Start by understanding the local market and related activity. You can get information on current and future economic development activity from the town hall where the property is located. Study recent sales of homes in close proximity to the home you are trying to buy. This practice will help you to have a better understanding as to whether the home you want is priced in line with other homes in the same market. Your realtor will be able to help you with this.  

Make sure you attend your home inspection and use it as an opportunity to “look under the hood.” The home inspection will give you an excellent opportunity to see property damage and related issues that should be addressed both internally and externally. You may not have caught these issues when you were initially walking through the home to see if it had enough bedrooms and bathrooms for your needs and yard space big enough to have summer cookouts.  

During your home inspection, look closely at all aspects of the home including the mechanical systems. Ask questions about the wiring, plumbing, roof, and windows. You will want to know whether there are electrical, plumbing, or structural issues. You may not be able to see every finite detail, but do the best you can to take note of the items you can see. Think carefully about how you want to proceed should you come across costly issues that must be repaired. You can use this as leverage to get the seller to give you a better deal, but the seller does not have to comply. Think about the future costs to repair and renovate items in the home and whether the costs are feasible.  

Do not allow yourself to end up with a home that will cost you more to live in than you bargained for… Take the time to understand the local real estate markets and the home maintenance costs expected prior to closing on the home. This can save you money and headaches.

The HomeOwnership Center at NHS of New Haven knows the local real estate markets well and has access to information pertaining to home maintenance expenses. Check us out online at www.nhsofnewhaven.org and give us a call at (203) 777-6925 so that we can help you minimize your home buying risks.

Volunteers: Solar Youth

Volunteers in Action:

Solar Youth at the Ivy Street Community Garden

On October 9, 2014, NHS and the Ivy Street Community Gardeners hosted a volunteer event with Solar Youth.

For this event, our Community Building & Organizing team, the gardeners, and the volunteers cleaned up the garden and assembled new garden beds for future growing seasons.

The kids also learned a bit about gardening and composting, and their favorite activity of all was raking the colorful autumn leaves (and raking them again after jumping in them!).

Thank you to our wonderful volunteers!

Keeping the Keys: Safeguarding Your Finances

Keeping the Keys: Safeguarding Your Finances

By Michael Haynes,

Supervisor, HomeOwnership Center

You have just closed on your property and now have the keys… what next? 

The homeownership process does not end with the closing!  

The buyer’s focus prior to closing on a house is on the management of transactions and documents to ensure that ownership legally passes from seller to buyer.  After the closing and the ceremonial passage of the keys from the seller to the new homeowner, the focus shifts to property management and financial sustainability. 

A strategy for addressing home maintenance issues and personal emergencies while protecting all assets becomes extremely vital to your ongoing financial well-being. Consistently saving the appropriate amount of funds will put you on the right track. However, merely saving a random amount of funds each pay period or per month may not ensure that you are financially capable of covering home maintenance issues or an emergency.  In addition, not paying attention to appropriate protective measures necessary to safeguard your real estate assets can create major financial hardships.  

The concept of home maintenance is extremely important to the homeowner at every stage of the home buying process. When deciding to buy a home, the buyer is trying to assess the current home maintenance needs. In addition, the buyer is also trying to use the home maintenance issues that may already exist as a leveraging tool to see if the seller will cure the issues prior to closing. As a homeowner, you are responsible for the upkeep of the property. You will want to understand the preventive measures necessary to ensuring the optimal functionality of the property. Become familiar with these preventive measures and be aware of potential issues before they happen. Educate yourself on the cost, life expectancy, and age of the property’s roof, windows, and mechanical structures. You will want to use this information to develop a savings plan for addressing repairs and replacements.

Personal emergencies should always be thought of as a separate category despite the urge to lump them in with home maintenance. Home maintenance funds should be used strictly to address property issues. An emergency fund is used to address issues such as a flat tire on your way to work or an unexpected medical expense not covered by your health insurance. Increasing your emergency funds will help to minimize the likelihood that you will be wiped out financially by unexpected life events.

Protecting your real estate asset does not just include obtaining the proper insurance and taking the proper home maintenance precautions.  Make sure that you always keep a copy of all loan documents signed at closing and your homeowners’ insurance policy. You may want to keep these items in a fireproof safe to ensure that they will be properly maintained even in the event of a fire.

Home maintenance, emergency funds, and asset protection are crucial components to the sustainability of your property and your finances. Make sure that you treat them as priorities.

NHS can help you create your homeownership strategy. Give us a call today at (203) 562-0598 ext. 26, or check us out online at www.nhsofnewhaven.org.