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The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:
In a recent article by The Mortgage Reports, they report that “buying and owning a home is the essence of ‘The American Dream.’ Each month, your housing payments go toward owning your home instead of renting it; building your personal wealth and assets instead of someone else’s.
History has shown that homeownership is a clear path to wealth-building, with homeowners boasting a net worth [that is] multiples higher than the net worth of renters.”
Does owning your home really create a more stable environment for your family?
A survey of property managers conducted by rent.com disclosed two reasons tenants should feel less stable with their housing situation:
We can see from these survey results that renting will provide anything but a stable environment in the near future.
Homeowners enjoy a more stable environment, and at the same time are given the opportunity to build their family’s net worth.
Love It or List it is a home design TV show currently on HGTV. If you have ever watched it you would know the show is designed to help homeowners choose between keeping their newly renovated home or to buy a different home. Have you ever considered such a challenge?
Reconsider your home and what you love and what you wish you could change. You can draw a simple two column chart labeled, “Love it” or “List it”. First of all, do you love your location? Do you wish you could live in a different area of town, nearer to your child’s school, or your work? Obviously changing the location of your current home is very impractical. If living in a different neighborhood is important to you, make a check in the “List it” Column. Otherwise, if you love your location, check in the “Love it” Column.
Is your home big enough? Or too big? Adding an addition to a home is often a good way to improve your home for your needs. But practicality is depending on lot size, floor plan, budget, and vision. If you need more room for a growing family you can reinvent spaces too. For example, finishing the basement with egress windows for an extra bedroom. If there is no room to reinvent or you simply have too big of a house, consider checking in the “List it” column.
What current need isn’t being met in your house? Do you need main floor laundry? Or a place for coats and boots so they don’t litter the living room, possibly a garage? Explore ideas for how this could be added. Sometimes closets you have in your home already could be set up for laundry for a couple hundred dollars. But what about a mud room? Depending on your home and the space you have, this might mean an addition, or not possible at all. Reconsider how valuable it would be, whatever your need, and the difficulty/expense of implementing it in your own home. If you feel it isn’t a possibly to add to your home, put a check in the “List it” Column.
What about that layout? Do you dream of a open concept floor plan? Or a master bath? Sometimes a wall knock out can open up an entire home. Figure out what can be done to accomplish your dreams. And decide whether you feel it is feasible or not. Don’t forget to check the column that applies to your decision.
How do you like the style of your home? Floors, cabinets, doors? If you love your home but just wish it was more modern, go for the upgrades! If cabinets scream 90’s with golden blonde wood, you can ditch them all together, paint or stain them. Sometimes just new counter top, cabinet hardware and new flooring can modernize your kitchen while keeping your blonde cabinets. Install new paneled doors and replace your golden door knobs with oil rubbed bronze. These upgrades don’t have to break the bank and can be done over time as your budget allows. If these type of upgrades are all you need to Love It, then put a check in the “Love it” column.
Continue to do this for all of your needs/wants. You might find that your home just needs a few upgrades or that your home doesn’t work for you anymore and it is time to List It.
If you think it is time to List your home and find one that better fits your needs, Give me a call! Angie Uttecht 605-350-2553
The title of this post has been borrowed from Dale Carnegie’s book of the same name and all of these quotes are from his books.
Many many people live their entire life without ever owning a home because fear got the best of them. The intentions here are not to push you into doing something you don’t want to do, but to nudge you to actually do the things you have always wanted to do. Read these quotes and apply them to your life in anyway that helps.
One of the worst features about worrying is that it destroys our ability to concentrate. When we worry, our minds jump here and there and everywhere, and we lose all power of decision. However, when we force ourselves to face the worst and accept it mentally, we then eliminate all those vague imaginings and put ourselves in a position in which we are able to concentrate on our problem.
Take a chance! All life is a chance. The man who goes farthest is generally the one who is willing to do and dare.
One of the most tragic things I know about human nature is that all of us tend to put off living. We are all dreaming of some magical rose garden over the horizon instead of enjoying the roses that are blooming outside our windows today.
If you are not in the process of becoming the person you want to be, you are automatically engaged in becoming the person you don’t want to be.
Many people have a fantasy of buying a house with cash. It really does sound like a great idea. You will get out of spending tens-of-thousands of dollars in interest, private mortgage insurance, loan origination fees, etc. Many people say the word “debt” as if it was a disgusting word.
And, yes, sometimes debt can be a very negative thing when used wrong. However, so much more needs to be calculated into this decision to strike out the idea.
Where are you living while you save up? If you are paying rent, none of that money is working to build you equity.
If you pay $700 in rent and are able to save an additional $300 a month to put into your house savings, it would take you 22 years to save up enough to buy an $80,000 house. Even worse, look how much better an $80,000 house was 22 years ago! We don’t know what the future holds, however house prices don’t tend to fall.
Instead, if you took out a loan for $80,000 in 1993 (22 years ago) and applied your $700 you had been paying in rent and your $300 extra, you would have paid off the loan in 2002. If you saved that $1000 you were paying from 2002 until 2015 you would have $156,000 and your new home value would be probably around $160,000.
Paying in cash: $80,000
Getting the loan: $316,000
Difference: $236,000 of equity
These numbers are fairly rough, not including property taxes, or changes in income, however they represent the advantages of taking out a loan over waiting and saving.
MARCH STATS (HURON RESIDENTIAL)
• Sold 7 Huron Residential Sales compared to 12 in 2014
• 13 pending sales compared to 17 in 2014
• 32 new listings compared to 21 last year
• 87 current Huron Res listings compared to 65 in 2014
• Average days on the market was 133 days compared to 102
YEAR TO DATE STATS THROUGH MARCH
• 12 sold compared to 38 last year
• 32 pending sales compared to 39 in 2014
• 63 new listings compared to 46 last year
• 157 average days on the market compared to 128
If you are planning on buying a house soon, you have realized that there are more decisions to make than just “What house?”.
You will need to decide how you plan on financing the loan. The two main options that are usually presented to you are a 15-year mortgage and the 30-year mortgage. A 15-year mortgage has many benefits; APR rates are lower, you pay substantially less interest, and payments stop 15 years early! This is all off-set by paying more monthly.
Here is the questions you need to ask yourself:
Can you easily afford the payments of the 15 year mortgage?
If you take out a 15 year mortgage, would you have enough cash on hand to keep up with your lifestyle without building debt at higher interest rates on credit cards, student loans, car loans, etc?
Do you feel like your financial situation won’t change in the next 15 years?
Examples: Are you planning on having children? Will a 2-income household become a 1-income household if you do have children?
Many people take out a 30-year mortgage and plan on making extra principal payments every month so that it will be paid off in 15-years or so. This gives them the historically low fixed rate for a longer time and is easier to pay in months of financial crisis. However studies show that the average household doesn’t have the perseverance to continuously pay off extra each month.
Are you retiring soon?
The average age of a person taking out a 15-year mortgage is 40 years old according to USAToday.com. These people are closer to retiring and don’t want to be paying a mortgage into retirement.
Are you an investor, or want to be?
Some still choose a 30-year mortgage even if they can easily afford a 15-year mortgage. This is because it is “cheap money”. Today’s mortgage rates are low enough that many choose to invest their extra income into stocks, bonds, mutual funds, etc., because the average annual return on their investment is higher than what they are paying in interest. This is a perfectly legitimate strategy, however, it is not without risk! Especially after the recent recession, many feel having the deed to their house framed on their wall is priceless!
DECEMBER STATS for HURON RESIDENTIAL
• 2014 average sales price of $78,590 compared to $124,167 in 2013
• Sold 10 Huron Residential Sales compared to a record 32 in 2013
• 4 Pending sales compared to 16 in 2013
• 6 new listings compared to 17 last year
• 87 current Huron Res listings compared to 78 in 2013
• Average days on the market was 152 days compared to 118
2014 YEAR IN REVIEW STATS
• 2014 average sales price $116,175 compared to $118,418 in 2013
• 156 sold compared to 195 last year, -$4,786,850 in volume
• 134 pending listings compared to 192 in 2013
• took in 237 new listings in 2014 compared to 285 last year
• 152 average days on the market compared to 118