Renting vs Buying: Which is better for you?

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Deciding whether to rent or buy can be a difficult decision, but with the right analysis, you can determine which is best for you. Knowing whether it’s the right time to rent or buy depends on your buying power, what you’re looking for in a home, your local market conditions, your plans for you and your household, and the responsibilities you’re prepared to take on at your residence.

Renting vs. Buying: Which is Better for You?

Renting gives you greater flexibility to relocate, fewer home maintenance responsibilities, and can often be more the more affordable option, depending on where you live. The extra costs associated with owning a home—interest payments, taxes, repairs—may be too much for some renters to handle. Becoming a homeowner has its respective advantages. You’ll have stable monthly payments and greater freedom to customize your living space. Advocates of buying will contend that purchasing a home is an investment in equity, which can increase in value every year you live in the home, whereas if you rent a property, you’re essentially paying for someone else’s mortgage. 

Ultimately, the right decision depends on your situation. If you don’t plan to be living in the same place for at least five years, renting might be more logical, as it allows you more flexibility when it comes time to move again. If you’re looking to settle down for the better part of a decade or longer and can afford to buy a home, becoming a homeowner may be the better option. Here are a few additional considerations to guide your renting-versus-buying decision making process.

What are the local real estate market conditions?

Investigate the local sales and rental markets. Industry groups put out reports every quarter stating the average national sales price for a home and the average monthly payment for a rental. These reports are typically based on an average of all the cities in the U.S. But what really matters is what the numbers show when you dig into them on a local level. When looking at these reports, you’ll see there are some cities that fall below that average, while others rise above it. When comparing housing costs, be sure to base your evaluation on what’s happening in your city and neighborhood, not the nationwide averages.

For a quarterly breakdown of local market conditions, explore our Market Updates page. With data analyzed by our Chief Economist Matthew Gardner, each report breaks down the latest figures in home sales, home prices, and days on market for regions throughout Windermere’s footprint. Gardner also provides his estimation of where each market sits on the buyer’s-market-to-seller’s-market spectrum.

What can you afford?

Making the jump from renter to homeowner is often a question of affordability. Your mortgage rate will depend on your financial strength, your credit score, and other factors, so make sure to talk to a loan officer before you start looking for a home. Getting pre-approved for a mortgage will identify what you’re able to afford and helps strengthen your offer when the time comes.

To get an idea of what you can afford, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price. By using the Home Monthly Payment Calculator, you can make a well-informed estimation of whether it’s the right time to buy.

 

Will you need to make repairs to your new home?

Buying a fixer-upper may seem like a great way to get a deal on a house, but if the money you spend on the repairs is too great, your profit could be diminished when it comes time to sell. The same is true for remodeling and improvement projects. There are various renovation financing loans available to you that can help with the costs of home repairs, though extra consultations, inspections, and appraisals are often required in the process of securing these loans. Ultimately, if you can only afford a home that demands major improvements, and you don’t have the skills to do much of the work yourself, you may be better off renting.

Can you rent part of the house you’re buying?

If you buy a house with rental-capable space (extra bedroom, mother-in-law unit, etc.), you could use the rental income to pay off your mortgage faster and contribute more to your savings. But, of course, you need to be willing to share your home with a tenant and take on the responsibilities of being a landlord or working with a professional property manager to help you with those duties. Renting out a space in your home will also require you to purchase landlord insurance on top of your existing homeowners insurance policy.

Making Your Decision to Rent or Buy

At the end of the day, the decision is up to you. Based on the conditions laid out above, it simply may not be the right time for you to buy. Fortunately, when it comes to being a homeowner, it’s not now or never. A real estate agent will be your ultimate resource in gauging whether it’s the right time to buy and guiding you through the process toward homeownership.

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Buy Before 5

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30-year mortgage rates just exceeded 4% for the first time in three years according to Freddie Mac.

We have new advice for anyone considering a home purchase in the next couple of years.

Buy before 5.  This means buy before rates go to 5%.

Even though rates have been ticking up over the last several weeks, we believe that in a few years we will look back on this time and realize what a tremendous opportunity it was to have a mortgage under 5%.

So, don’t be discouraged by recent uptick in rates.  Instead, feel great that you were able to buy before rates hit 5%.

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New Construction: Why Work with a Buyer’s Agent?

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If you’re a buyer, you may have considered purchasing a new construction home. After touring the model home and talking to the builder’s sales representatives, you begin to wonder if it’s necessary to work with a buyer’s agent. Although it’s possible to move forward with the purchase of a new construction home without a buyer’s agent, you may be missing out on the benefits of having a representative at your side. Take a look at how a buyer’s agent can provide value in the purchase of a new construction home. 

 

Buyer Agent vs. Builder’s Agent
Who Works for Who?
A sales representative is the builder’s representation in the sale of a new construction home. They can assist buyers by providing insight into the construction process, available upgrades, and answer questions related to what the builder is able to offer. That said, they represent the builder and will always advocate in favor of the builder. Think of it this way: in new construction, the builder is the seller and the sales representative is the listing agent. 

 

An Expert on Your Side
Knowledge is Power 
Working with a buyer’s agent gives you an advantage. Not only do they have experience with new-construction home purchases, but they are also familiar with major builders in the area and can speak to their quality of work. Moreover, buyer’s agents bring a working knowledge of the housing market to the table and can provide insight into current home prices. Tapping into a buyer agent’s knowledge and experience could save you time, money, and stress as you navigate the purchase of your new home!

 

An Agent is Your Advocate
Your Best Interest Comes First
A buyer’s agent will:
  • Negotiate on your behalf
  • Clarify what is included in the base price
  • Help you navigate the purchase amidst rising building costs
  • Help you obtain the best financing available
  • Provide guidance with regard to builder’s warranties and home inspections 

 

Agent Commission
What’s the Cost to Me?

Traditionally, sellers are responsible for paying real estate agent fees. In the case of new construction homes, the builder will likely cover all or most of the agent’s commission. You may be able to work with a  real estate professional at no cost to you. 

For additional inquiries, please contact our office or your Windermere real estate agent directly. 

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Simple Tips to Make Your Move Easier

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Your needs as a homeowner change over time, and you need the right home to fit those needs. Accordingly, it’s highly likely that at some point in your future you will experience another moving day. While moving can be challenging, there are resources to make it easier. If you are remaining in your current area, your Windermere agent can continue to be a valuable resource on communities, schools, utilities, transportation, recreational opportunities, and more.

If you are moving out of the area, your agent can help you with a referral to another reputable agent in your new community. Many agents also have relationships with real estate-related service companies in their area whom they can call upon for information regarding title, escrow, mortgages, temporary housing, and moving services. They can also help guide you in your search as you learn more about new communities and relocation services.

You’ve decided to move. Now what?

Once you have reached your decision, it’s time to gather information, start making decisions and get organized. Begin by creating a “move” file to keep track of your estimates, receipts, and other information. If you’re moving for a job, some expenses may be deductible, so you’ll want the paperwork when tax time comes.

If you are moving out of the area, start researching your new community and ask your agent for help in finding a referral agent in your new area. You’ll also want to determine whether you want to rent first or buy immediately. Your new agent should be able to help you with your decision. Once you know where you’re going, you’re also ready to get estimates from moving companies.

Closing one door, opening another

After you have chosen a moving date and either hired a moving company or reserved a rental truck, it’s time to wrap things up in your old neighborhood and start establishing relationships where your new home is located. This is particularly important if you are moving to a new town/city. You may want to ask your current doctors, dentists, etc. if they have any referrals on care providers in your new location. Be sure to check their recommendations on your insurance company’s online provider search list. Once you arrive, you may also want to ask new coworkers, friends or the school nurse for their recommendations.

Contact your children’s school and/or day care and arrange for their records to be sent to their new school district or day care. Call your insurance agent about coverage en route to your new home and also arrange for insurance in your new home. Remember to contact utility companies to disconnect, transfer or end service in your current home and turn on service in your new home.

You’ll want to file a change of address form with the U.S. Postal Service, either online or at your local office. If you don’t know your new address, have them hold your mail at the post office in your new locale. Don’t forget to cancel or transfer magazine and newspaper subscriptions as well.

If you belong to a health club or other association, contact them about ending or transferring your membership. Some clubs require written notice before cancellation. Finally, contact your bank or credit union to transfer or close accounts; if you have a safe-deposit box, don’t forget to clean it out before you leave.

Starting the countdown

With moving day in sight, it’s time to get organized. Here are a few items to check off your list before you start packing:

  • Tie up loose ends. Be sure to send out an email or change of address cards with your new contact information to family, friends, and associates. Return library books and any other borrowed items you may still have.
  • Triage your possessions. Determine what you are taking with you; what you are giving away to friends, family, or a favorite charity; and what is going to the dump or recycling center.  If you have time, you can hold a garage sale or post items on craigslist.org or ebay.com.
  • Clean up. Drain all gas and oil from your mower, other machinery, gas grills, kerosene stoves and lamps, etc., before loading them onto a moving truck. Empty, defrost, and clean your refrigerator at least 24 hours before your move, and prepare other appliances for moving as well.
  • Have your car serviced. This is especially important if you are driving to your new home.

Packing strategies

If you are doing your own packing, start collecting boxes and/or buy them from your movers. It may take a few days to do your packing, so be sure to pack non-essential items first and label them carefully. If you have any valuables, it’s recommended that you take them with you as opposed to packing them. You risk the chance of losing those items if they’re packed away in boxes. It’s also smart to take along a box of essentials, including items such as toilet paper, paper towels, tape, soap, scissors, pens, paper, and your toiletries. That way you won’t have to track these items down once you’ve arrived in your new home.

For more information on how to make your move easier, visit our Moving Tips page here: How can I make moving easier? 

The post Simple Tips to Make Your Move Easier appeared first on Windermere Colorado REALTORS.

7 Signs You’re Ready to Buy a Home

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Making the leap from renter to homeowner doesn’t happen overnight; it requires steady planning to put yourself in a good position to buy your first home. Prospective first-time home buyers can often feel like they’re waiting for a sign to indicate they’re ready to start making offers, when really, it’s a combination of factors. Here are seven signs that you’re ready to buy a home.

7 Signs You’re Ready to Buy a Home

1. You Know Which Homes You Can Afford

To know whether you’re ready to buy, you need to identify your price range. If you’re unhappy with your pre-approval, or need more money for your desired location, there are ways you can increase your buying power. Once you know which homes you can afford, you can work with your agent to find the right home and prepare an offer.

2. You Understand Your Local Market Conditions

The dynamics of the market in which you’re buying will play a role in determining whether you’re ready to buy. The local market conditions will dictate what kinds of offers you can expect to compete against, what tactics other buyers may employ, and whether the buyer or seller will have the leverage during negotiations. Therefore, it’s important to understand the difference between a buyer’s market and a seller’s market so you and your agent can strategize accordingly.

3. You’re Comfortable with the Responsibilities of Being a Homeowner

Having a mortgage instead of paying rent isn’t the only difference between owning a home and renting. You’ll be responsible for maintaining the property, making repairs, and completing remodeling projects. That doesn’t always mean you can’t predict a future need. The best way to prepare for unexpected projects on any home is to get a home inspection before you buy so that you know every inch of the property and can start to save for larger expenses that might come down the road.

4. You Have Funds Available for Home Buying Costs

The costs of buying a home are more than just your down payment and monthly mortgage. Before you move into your new home, you’ll have to pay closing costs, moving expenses, and appraisal and inspection fees, to name a few. Property taxes can sometimes be part of the mortgage and depending on the time of year may need to be paid before you move in. Once you’re settled, homeowners insurance will enter the fold. If you can afford these costs, it’s a sign that you are ready to buy.

5. You’re Making Progress on Your Debt

Having zero debt is not a realistic expectation for every first-time home buyer. But, if you have a plan in place for paying off your outstanding debt and can show evidence of the progress you’re making, it will strengthen your buying credibility. Lenders will factor this into their assessment of your financial health during the pre-approval process.

6. You Have a Strategy for the Down Payment

It is true that lenders view a twenty percent down payment as favorable and won’t require you to purchase private mortgage insurance (PMI), but it’s not game over if you can’t make a lump sum payment of that size. With a lower-than-twenty percent down payment, you may incur higher interest and fees over the life of the loan, which could put a greater strain on your finances long-term than waiting until you can pay more principal down. Whichever route you choose, make sure you have a solid plan in place to repay your loan.

7. Your Life Aligns with Buying a Home

Buying a home means you’ll be putting down roots, so it’s important that you and your household are ready to establish yourselves in one area before you buy. There’s financial logic behind this line of thinking, as well; in general, the longer you stay in one home, the more equity you’ll build. Career and income stability also play a role in determining whether you’re ready to buy. Landing a job with long-term prospects may be just the thing you need to green-light your decision to buy your first home.

 

To learn more about buying your first home, connect with an experienced Windermere Real Estate agent today by clicking on the button below.

 

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Lumber Back Up

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The price of lumber has jumped back up again and is adding to the cost of new home construction.

Over the past four months, lumber prices have nearly tripled, causing the price of an average new single-family home to increase by more than $18,600.

According to Random Lengths, as of the end of December, the price of framing lumber topped $1,000 per thousand board feet — a 167% increase since late August.

This most recent lumber price upsurge is due to a number of factors, including:

  • Ongoing supply chain disruptions
  • A doubling of tariffs on Canadian lumber imports into the U.S. market that increased price volatility
  • An unusually strong summer wildfire season in the western United States and British Columbia

Predictions on what lumber prices will do during 2022 are mostly pointing to even higher costs for home builders and ultimately, new home buyers.

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Do You Need a Realtor to Buy a Home?

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Buying a home is a major investment, and it comes with a lot of variables. From finding the right neighborhood to determining how much home your budget allows, it is a complicated task. Because of the difficulties involved, many prospective homebuyers decide to work with a full-service realtor. However, if you decide to go on this venture by yourself, here are the top things you’ll want to know before you buy a home without a realtor. 

 

Consider These 5 Things Before Buying a Home Without a Realtor:

Forbes shared 5 times to consider buying a home without a realtor:

1. You’re Related to the Seller

You might be able to avoid hiring a real estate agent if you’re selling a home within your family. In that case, as long as you’ve agreed on a price and other important transaction details, you’ll probably be able to handle it without the seller paying thousands of dollars in commission. Regardless, consult a lawyer to conduct a title search on the property and ensure that all paperwork is properly filled out, reviewed, and filed.

 

2. You Know the Area

When you’re buying a home in a neighborhood you know well, you might not think it’s necessary to hire a buyer’s agent. However, a real estate agent can provide more information than just market knowledge, such as assisting you in finding the right home and negotiating with the seller’s agent.

 

3. You Can Save Money

In rare circumstances, a buyer may be required to pay all or part of a buyer’s agent’s commission. Someone selling a home on their own, for example, might state in their listing that they will not negotiate fees with a buyer’s agent. In this case, instead of hiring an agent, you might decide it’s worthwhile to try to work directly with the seller.

 

4. You Get to Work Alone

Even though they are legally required to represent your interests, you may be wary of dealing with a buyer’s agent. If you believe an agent would rush you into a deal or match you with the wrong house, you might feel more at ease handling it yourself.

When dealing with the seller’s agent, you’ll want to make sure you’re not overmatched. Think of it like negotiating a divorce settlement with just the counsel and expertise of the other party’s lawyer—it might not go well for you.

 

5. You’re Buying a New Home

If you’re only interested in buying a newly constructed home, you might be able to work out a deal with the builder directly. According to the NAR survey, about 6% of buyers worked with a builder or builder’s agent to purchase a home in 2020.

 

real estate agent helping someone with paperwork

 

The Benefits of Working With a Realtor

The best tip for buying a home is not to do it alone. Realtors can assist you with every aspect of shopping for a home. From researching the market to representing you throughout sale negotiations, a realtor’s ultimate job is to provide you with peace of mind. When working with a realtor, they can help you find the home that meets your budget and your lifestyle. Additionally, real estate agents speed up the process of buying a home because their knowledge and experience help them be more efficient throughout the entire process. This means you will save both time and money and have the peace of mind in knowing all the details are being handled by a professional.

Are you interested in learning more benefits of working with a realtor? 

Connect with a Local Expert

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Must-Haves and Nice-To-Haves Lists

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Finding your dream home may not be easy, but there are things you can do to make it easier, like creating a “Must-Haves” list and a “Nice-To-Haves” list. These lists allow serious home buyers to save time, energy, and ultimately, money as they prepare to buy a home.

A Must-Have List is exactly what it sounds like, a checklist of the details that are non-negotiable for your new home. It’s essential to sit down and think about the things you need in order to feel comfortable there for the next 7-13 years.

Your “Nice-To-Haves” list is a checklist of details that you’d like to have, but you can live without. This list is great for those things that you’ve always dreamed of but may be out of reach for reasons such as your budget or location. This list may include things like fireplaces or gas appliances, a pool, or other non-essential items.

Your “Must-Haves” list focuses your search and helps your agent narrow down which homes are worth your time. Your “Nice-to-Haves” list will help you determine what you’re willing to sacrifice, which will ultimately solidify your must-haves.

These lists can also help manage your expectations regarding price. Take your lists to your real estate agent, along with your pre-approval from a lender, and you’ll be able to work together to determine what is a reasonable ask within your budget and your desired location.

Creating Your “Must-Haves” List

The first step is to think about the essentials. If things like location and number of bedrooms and bathrooms are a priority, then you’ll want to include them in your must-haves. Consider where you live now and use that as a starting point; what do you love and what are you missing? You may need more storage space, or an extra room to work remote, or a larger backyard for the newest member of the family.

Here are some questions to ask yourself as you build your “Must-Haves” list:

  • Where do you want to live? (Be as specific as you can.)
  • What do you have now that you can’t live without?
  • What are you missing now that you may need for the next several years?

If you’re struggling to determine what it is you need to have, you can start working on your “Nice-To-Haves” list. This can also help you determine what is essential. For example, it may be nice to have five bedrooms when in reality, a three-bedroom house with a flex space that works for an office or guest room would do the trick.

Creating your “Nice-To-Haves” List

While you’re working on your “Nice-To-Haves” list, you’ll be thinking about the parts of a home that would be great to have but aren’t as important for you. You might also want to take into consideration what is reasonable in your area and if it’s a common amenity.

Here are some questions to ask yourself as you build your “Nice-To-Haves” list:

  • What home upgrades are you willing to make?
  • What is something you’d like to do in your house more often?
  • What do you have in your current home that you love, but don’t need?

Searching for Your Next Home

These lists will help guide you and your real estate agent as you search for your next home. During this process you might realize some aspects aren’t as important to you as you thought, and vice versa. Keep your agent in the loop as you update your lists so they can continue to search for the perfect home for you.

Looking for a real estate agent who can help guide you through the home buying process? Connect with an Agent:

 

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Simple Tips to Make Your Move Easier

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Your needs as a homeowner change over time, and you need the right home to fit those needs. Accordingly, it’s highly likely that at some point in your future you will experience another moving day. While moving can be challenging, there are resources to make it easier. If you are remaining in your current area, your Windermere agent can continue to be a valuable resource on communities, schools, utilities, transportation, recreational opportunities, and more.

If you are moving out of the area, your agent can help you with a referral to another reputable agent in your new community. Many agents also have relationships with real estate-related service companies in their area whom they can call upon for information regarding title, escrow, mortgages, temporary housing, and moving services. They can also help guide you in your search as you learn more about new communities and relocation services.

You’ve decided to move. Now what?

Once you have reached your decision, it’s time to gather information, start making decisions and get organized. Begin by creating a “move” file to keep track of your estimates, receipts, and other information. If you’re moving for a job, some expenses may be deductible, so you’ll want the paperwork when tax time comes.

If you are moving out of the area, start researching your new community and ask your agent for help in finding a referral agent in your new area. You’ll also want to determine whether you want to rent first or buy immediately. Your new agent should be able to help you with your decision. Once you know where you’re going, you’re also ready to get estimates from moving companies.

Closing one door, opening another

After you have chosen a moving date and either hired a moving company or reserved a rental truck, it’s time to wrap things up in your old neighborhood and start establishing relationships where your new home is located. This is particularly important if you are moving to a new town/city. You may want to ask your current doctors, dentists, etc. if they have any referrals on care providers in your new location. Be sure to check their recommendations on your insurance company’s online provider search list. Once you arrive, you may also want to ask new coworkers, friends or the school nurse for their recommendations.

Contact your children’s school and/or day care and arrange for their records to be sent to their new school district or day care. Call your insurance agent about coverage en route to your new home and also arrange for insurance in your new home. Remember to contact utility companies to disconnect, transfer or end service in your current home and turn on service in your new home.

You’ll want to file a change of address form with the U.S. Postal Service, either online or at your local office. If you don’t know your new address, have them hold your mail at the post office in your new locale. Don’t forget to cancel or transfer magazine and newspaper subscriptions as well.

If you belong to a health club or other association, contact them about ending or transferring your membership. Some clubs require written notice before cancellation. Finally, contact your bank or credit union to transfer or close accounts; if you have a safe-deposit box, don’t forget to clean it out before you leave.

Starting the countdown

With moving day in sight, it’s time to get organized. Here are a few items to check off your list before you start packing:

  • Tie up loose ends. Be sure to send out an email or change of address cards with your new contact information to family, friends, and associates. Return library books and any other borrowed items you may still have.
  • Triage your possessions. Determine what you are taking with you; what you are giving away to friends, family, or a favorite charity; and what is going to the dump or recycling center.  If you have time, you can hold a garage sale or post items on craigslist.org or ebay.com.
  • Clean up. Drain all gas and oil from your mower, other machinery, gas grills, kerosene stoves and lamps, etc., before loading them onto a moving truck. Empty, defrost, and clean your refrigerator at least 24 hours before your move, and prepare other appliances for moving as well.
  • Have your car serviced. This is especially important if you are driving to your new home.

Packing strategies

If you are doing your own packing, start collecting boxes and/or buy them from your movers. It may take a few days to do your packing, so be sure to pack non-essential items first and label them carefully. If you have any valuables, it’s recommended that you take them with you as opposed to packing them. You risk the chance of losing those items if they’re packed away in boxes. It’s also smart to take along a box of essentials, including items such as toilet paper, paper towels, tape, soap, scissors, pens, paper, and your toiletries. That way you won’t have to track these items down once you’ve arrived in your new home.

For more information on how to make your move easier, visit our Moving Tips page here: How can I make moving easier? 

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No Inventory?

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One misconception about today’s market is that there is ‘no inventory.’

Actually, there are numerous new listings that hit the market each month. It just so happens that they tend to sell quickly.

The numbers show the number of new listings that came on the market in September closely equate to the number of sales that occurred.

  •  In Larimer County, 693 new residential listings hit the market last month and there were 688 sales.
  •  In Weld County, there were 681 new listings and 733 sales.
  •  In Metro Denver, there were 6125 new listings and 5233 sales.

So, while homes tend to sell quickly today, there is still a significant amount of new inventory hitting the market each month for buyers to consider.

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