Getting Ready to Buy your First Home: A True Story

Getting Ready to Buy a First Home: A True Story

Last year a young couple called me about a rental listing I had on the market. I got together with them and showed my listing which turned out to be a little bit more than they could comfortably afford. We got to talking, and I learned that they were both recent architecture school graduates and planning on getting married in the spring. They hoped to buy their first home sometime soon but were not too sure how to begin the process. I wound up helping them lease a teeny, (and to honest, pretty rotten,) storefront property that was not entirely converted to a living space for one person, let alone two. They agreed to lease the "apartment" and follow my plan for a year to get ready to buy their first home.

This past September, I had a listing appointment with a client/developer for whom I regularly list properties.  He had a great three bedroom/2 bath that was perfect for my young couple, and in their price range.  I immediately called them to see it.  They were able to make an offer at once (because they were completely ready,) and they wound up buying their first home!  I am so proud of them!

You can do it too!

This past September, I had a listing appointment with a client/developer for whom I regularly list properties.  He had a great three bedroom/2 bath that was perfect for my young couple, and in their price range.  I immediately called them to see it.  They were able to make an offer at once (because they were completely ready,) and they wound up buying their first home!  I am so proud of them!

You can do it too!

 Here is what I told them to do:

1.                            Rat Hole Your Money.

The idea was that by renting a cheap apartment and being very frugal for the year, my clients would be able to start “rat holing” their savings.  Unfortunately some time after I made this comment, they spied a huge rat just outside their apartment.  Every time they thought of the rat, they thought of me – probably not a good thing, but it did help to remind them what their goals were!  They also decided to have a modest wedding and even received a few monetary wedding gifts that they were able to save and add to the pot.

Just so you know; to qualify for a conventional mortgage, ideally you should have 20 percent of the purchase price saved as a down payment. There are other loan options for first time home buyers and any mortgage banker or broker can help steer you in the right direction.  Also, factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

2.                           What can you afford?

While generally, you can afford a home equal in value to between two and three times your gross income,  it is always a benefit to get pre-qualified to see where you stand and gain a realistic understanding of what you can be comfortable with in the long-run.  A good dose of financial realism will help guide you in your search so that you don’t start looking at properties that you won’t be able to afford in the long run.

3.              Wish upon a star.

Start investigating neighborhoods.  Drive around and get a feel for them when you have time.  Study the architectural styles, types of homes, proximity to things you use and need and your comfort level with the neighborhood’s safety and amenities.  Then make a wish list.  What are the most important things a home must have?  I think the neighborhood search is important to do first so that you don’t get hung up on something like a screened-in porch when the architecture in the neighborhood you’ve chosen doesn’t support that style.

My couple smartly chose an edgy neighborhood that had recent high-end commercial business development, restaurant and shops close by.  On their wish list, they added bicycle parking, architectural details, proximity to public transportation, and enough space for a home office.

4.             Get your credit in order.

Actually I was recently at a continuing education class and was reminded of the importance of checking your credit.  It is extremely important to obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.  Really, this is something everyone should be doing annually, especially if you have a very common name like mine.  It is possible that someone else’s bad decision could wind up on your credit report!  I am always wary of some other Chris Smith out there who hasn’t paid his Home Depot credit card bill!  It is fairly easy to fix this kind of problem, but only if you know about it!

5.             Calculate the costs of homeownership.

This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.  A lot of first time home buyers are not aware of these details and they are important added expenses.  Be sure you are prepared for all of the aspects of home ownership expenses and you won’t be surprised down the road.

6.             Call Chris Smith (504) 231-2004!

Let’s get started!  There is no need to rent a teeny apartment to prepare!   I can help get you on track for a future purchase and help find just the right home for you when the time comes.  Give me a call!  I am happy to help!

How to Handle the Holidays When Your Home is on the Market

For most people simply living in your home can be a challenge while you are showing it; keeping things neat and tidy clean and inviting is not something everyone can achieve with ease. Entertaining and decorating for the holidays might seem impossible particularly if you plan on having out-of-town guests or adult children home for a visit.  While the task of decorating and hosting when you are actively listed on the market seems daunting, it actually can work in your favor if you follow a few simple tips and tricks to ensure your success.

1. Celebrate the holidays by hosting a festive party and share the joy of the season by inviting a few new guests. The plus side to entertaining or hosting events in a home you are selling is the increased exposure.  Perhaps your guests will know someone looking for a home and will mention it to them after enjoying a lovely party that you’ve hosted. 

2. The splendor of the holidays, regardless of your customs or heritage, can bring a lot of clutter into a home, making rooms feel smaller and more crowded. Be aware of the scale of the décor items you choose, and consider taking other items out. Choose decorations to showcase great features of the home – if you have a high ceiling with crown molding, following the lines of a holiday tree can illuminate this asset. However, if the room is small, ensure that the tree you choose does not overpower the space; consider a tasteful table-top tree with smaller ornaments instead. Home-made decorations may be beautiful, but consider the over-all look before unpacking everything. Be strategic as well as nostalgic this year. The fine features of your home can really shine with some well-placed seasonal decor to artfully accent your great dining area, fireplace hearth, or garden patio.  Use this to your advantage to create a memorable showplace for prospective buyers.

3. Hosting events in your home, especially around the holiday season, creates a natural time for good smells. People won’t laugh that you are luring them in with cookies, because many people really do a lot of baking during the season. However, watch out for overpowering smells of other food and scented candles that can make it seem like you are masking odors.

4. During the winter months, live greens are wonderful smelling, but present issues if your home is dry and warm – the browning needles may drop from trees and garlands, so ensure you have a broom or vacuum handy and keep that live tree watered well.

 5. Out-of-town Guests – making some simple changes in advance to reduce the impact of their stay and encouraging them to be co-conspirators in your efforts to keep things tidy will keep things flowing smoothly. Provide small covered hampers for soiled clothing, baskets for sundry items on dressers, empty drawers and closets so they can stow items easily will aid your efforts. When guests have to sleep on couches or hide-away beds, plan to help them tidy the room in the morning and set up accommodations again each night. Explain in advance that you might be doing this, if your guests are used to being able to spread out without a care; an honest word of your desire to host, while stressing the importance of selling your home can make a lot of difference.

Holiday events that are well-planned, decorated, and successfully executed might be just the thing to do and actually help you to gain exposure and interest in your home around the holidays!

Investing in Rental Property

Investing in Rental Property

Have you ever considered purchasing a rental property? Rental properties can be great investments, done right. In addition to realizing gains from property value appreciation, rental income can provide a monthly cash flow. Once the mortgage is paid off, much of your rental income will be profit.
Unlike your home, this investment isn’t something that you will be personally using day-to-day, so the benefits of ownership differ. Rental property is a tangible asset you can visit, use, and personally impact the worth of your investment. With sound judgment, and by following some basic steps, you can own property and realize gains; both short and long term.

Purchase with a Plan

Investing in real estate differs depending on the type and location of the property you are buying. Will you want to use the property part of the year? Vacation rentals are enticing on many levels, though considering how you will use them during less desirable periods may affect your potential rental income. Purchasing a residence has different implications than a property that will be rented commercially. Some investors buy properties with multiple units so they can have rental income from one or more units while fixing up and/or living in remaining units. Properties with multiple units have more to consider and maintain than properties that will be rented by a single person or entity. Knowing the type of landlord you intend to be will provide some focus as you consider properties. It will also provide valuable knowledge for your realtor helping with your search.
Being pre-approved for an investment loan and ensuring that your own finances are in order is not only wise, but will make it clear if you have enough capital to proceed. When taking on another mortgage, remember – you will want to have a healthy reserve fund in the event that the property produces less income than expected. Before you look at properties, sit down with a mortgage broker or lender to see how you qualify for a loan.
Research the local rental market so you know what you can realistically expect to charge and better understand the potential cash-flow of potential rental property.

Understand Your Investment

It is important to understand the condition of the building and surrounding property you intend to buy. Unless you are particularly knowledgeable about construction, always make offers for purchase contingent upon professional inspections.
Knowing the exact condition of the roof and foundation, plumbing and electrical, floors, appliances and other aspects of the property provides a much better sense of what you will need to repair, maintain, or upgrade for your tenants. In turn, this allows you to better understand the “bottom line” of your investment. After all, you are not likely to be present on a day-to-day basis to take note of any issues that arise. As the owner you have a vested interest in ensuring that the investment stays in good condition. You should have a budget for repairs and maintenance, and ensure that the purchase price enables you to make any necessary upgrades you might need to make prior to renting it to a tenant.
Additionally, you will want to know about locale, including parking and security issues and the zoning regulations that govern the property, including any multiple occupancy limitations and any restrictions on specific business activities. Your understanding of specific property, how it might be used, and the limitations you face when renting it out make you a better investor.

Evaluate Your Options

As you look at properties, consider your options – you have many. From location and style of building to type of rental and the number of units, each decision you consider will open new doors. Is this a long or a short-term investment? If the property is one that you think you will hold for a while, do you have a sense of what the future holds and how the neighborhood is changing? Buying properties in good locations is one of the best ways to ensure the steady flow of rental income.
And remember: properties don’t always have to stay the same. Consider things you could conceivably do to the property that might affect your income or investment. For example, can you add on to the home easily? Can you build a garage or change parking? Is it possible to convert a garage to an extra room? Are there regulations regarding subdividing or renovating the home? Can you add a bathroom?
Some communities limit the number of rental properties, while others have height or size limitations when building. If something you desire is not an option, know that going in. Even if you are not planning to change the property in any way in the beginning, understanding what you can and cannot do is a good idea.

Get Insurance and Assurance

Legal documents, including rental agreements between you and your tenants, and service agreements between you and concerned parties are essential. And don’t forget more mundane issues that can arise when renting out a property: If a community has fees for water, sewer, community clubs or other amenities, clarify responsibilities -- will these be the responsibility of the owner or renter? Getting the right information out of the gate and spelling it out for your tenants will aid you in the end. These agreements will give you peace of mind and provide legal recourse should you need it.
A real estate lawyer is an invaluable asset when you purchase a rental property. Not only can a real estate lawyer look over your purchase and rental agreements, they can advise you in other aspects of your investment, including interpreting local regulations. Your realtor will undoubtedly be another great asset, as they are full of more general information regarding local issues and market trends and can likely provide referrals to local property management services should you be interested. The more resources you have on your side, the more assurance you will have that your investment will run smoothly.
Proper insurance includes insurance on the structure itself as well as liability insurance, in case someone is injured while on the premises. In some locations additional flood, earthquake, and storm related coverage is a further way to protect your investment. Since you are responsible for the mortgage, you will want to have the right types of insurance with sufficient coverage to protect your investment.

Remember: You’re In Business

Buying a rental property is essentially going into business. When the monthly income from tenants exceeds the amount you pay in mortgage, maintenance, taxes and other fees, you realize a positive cash flow in the short-term. Additionally, if all goes well, you will also realize a profit when selling the property. Doing your research as you look at properties and make your choices enables you to be as prepared as you can be for the ups and downs that you will face in managing your business. In fact, what you learn can make you much more successful in the end.
Like all businesses where significant money will be changing hands, an accountant who is versed in real estate investing and tax implications will be valuable. You will be collecting rents and incurring expenses for repairs and services. Tax issues become more complex, and a professional will aid you in maximizing your returns on your purchase. Service providers like this can pay for themselves in the money that they save you. Once you know the bottom line with regard to your investment, you will be better equipped to determine a budget for projects related to the property.
Whether this is your first rental property, or you are a seasoned veteran of this sort of investment, your realtor is among your business contacts. Having a straightforward relationship where you present your needs and expectations up front enables you to get the help you need in making that critical step of executing the purchase. Additionally, realtors often have a wealth of knowledge and resources that they are willing share from handymen to potential tenants.
Success in business is not accomplished alone – developing a team of professionals from purchase through ultimate sale of the property is one key to achieving your goals.
Please visit my website at www.ChrisSmithHomes.com to view my many multi-family investment property listings. Or call me at (504) 231-2004,  or email at RealtorChrisSmith@gmail.com.  I am sure that I can help you find the right investment for you!

The Cost of a Realtor

In most Louisiana real estate transactions the Seller is the one that pays the Realtor's commission.  The commission is then split in some way between the Seller's Broker and the Buyer's Broker. The real estate commission is usually a percentage of the sale price of the property being sold.  No matter if you have the most highly rated Realtor in your area, or if you choose your “cousin's high school friend”, as the Seller, you still will likely be paying the same rate.

It is interesting to me that I often meet Sellers who have selected an agent by simply calling a Brokerage firm and contracting with whomever answers the phone.  Sometimes a Seller will know a friend of a friend, who is a Realtor and decide to enlist their services because of their association.  No matter who you choose, you will most likely still be paying the same commission.  So I wonder; why would a Seller not make an effort to research potential agents to learn about their services and sales records? If you were shopping for a new TV and the fancy highly rated flat screen was the exact same price as the basic old box TV, wouldn't you select the flat screen? 

In my experience I have worked with a number of different Realtors.  Some are very good, and others are less than good.  I personally would rather work with a full-service agent who will market my property extensively online, as well as using traditional methods.  I would want my agent to show my home personally, highlighting the most marketable features, SELLING my home; rather than an agent who will simply rely on the automatic MLS feed and then put my property on a lock box for other agents to show.

I would want my agent to be a top-rated professional in his/her field and outstanding in sales in my area. I expect that he/she would be able to provide me with advice and have references for me to use in preparing my home for sale as well as throughout the sale process.  I would anticipate that my home would be presented for sale in the most marketable light with exceptional photos and descriptions, and accessible and well-placed extensively online, over the internet.

I always try to get the very best that I can afford when I am spending my money.  So if I were selling my home and the playing field was level in regards to the cost of selling my home (Realtor commission), I would certainly seek out the very best agent I could find, who would be able to work for me to SELL my home.  Wouldn’t you?

First Time Home Buyer Tips

If you are currently in the market for your first home, you probably have lots of questions. You are about to be making an important decision for your future, a great investment of both money and time. I have a wealth of experience helping first time buyers like you make sound, informed decisions. Here are some tips that can help make your home buying process successful:

• Tip #1: Get PreQualified
  Getting prequalified for a loan normally only requires a short phone conversation with a lender, and can greatly help your home search. Prequalification does not guarantee you a loan, but it does provide you with an estimated monthly payment and a price range to use as a guide when shopping for homes. Being prequalified can also often indicate to sellers that you are a serious, prepared buyer. 
• Tip #2: Look for Value
  When shopping for homes, it’s important to consider potential value. Even if you’re not planning to sell the home some time down the line, it’s a good idea to consider the future value of the home.  You may not think of a new home as a means to make money, but it’s an important investment that requires caution.  Your realtor should help you have confidence that you are getting good value from your purchase. 
• Tip #3: Decide What You’re Looking For
  Settle on the home features that are important to you (covered parking, hardwood floors, architectural style, etc.) and make an ordered list. Having well established guidelines will help narrow down your search and will prevent you from being shown properties that lack your key amenities. It can help you make the decision not to buy an attractive property that doesn’t really fit your needs. My website, www.ChrisSmithHomes, has a search feature that allows you to filter thousands of listings based on attributes that you select. If you know you want a brick house with gas heat and a garage, you can get the results you’re looking for. 
• Tip #4: Relax
  You don’t have to make an offer on the first home you see. A thourough realtor will show you a variety of listings in the area you are interested in to help you get a feel for the marketplace. When you decide to make an offer on a house, your agent should help you to have confidence that you are making a good decision and skillfully guide you through the process.
• Tip #5: Shop Around for Your Mortgage
  Deciding on the financing for your home can be as important as choosing a home itself. The first step is shopping around for a lender that will provide you with the most competitive rates.  He or she can help you decide what kind of loan best fits your needs: a fixed rate mortgage, or an Adjustable Rate Mortgage (ARM). 
• Tip #6: Protect Yourself
• Paying for a quality home inspection is absolutely crucial! You can save yourself thousands in repair costs by being sure of what you’re getting into.

More information for first time buyers can be found on my website www.ChrisSmithHomes,com or by giving me a call on my direct cell phone at (504) 231-2004, or by email: realtorchrissmith@gmail.com. I’m confident that I can provide the kind of exceptional service that will make this process an exciting one. Don’t hesitate to contact me with any questions you may have, I would love to be of assistance to you.

Making Improvements on Your Home to SELL

Making investments in your home can improve the “bottom line” when the time comes to sell your home.  The trick is knowing what to improve.  Making home improvements prior to listing it is a common practice.  However, improvements should be selected carefully if the primary goal is to increase the profitability of your property.

"Return on Investment" is a phrase that quantifies how much an investment returns compared to what you spent on the investment.
For example, if you remodel your kitchen, and then sell for a higher price, (after covering the remodel costs), then you achieved a positive return on investment.

One way to maximize returns on your home improvements, renovations or other projects is to accomplish them prior to the sale, with the added benefit of enjoying the fruits of your labor. It is important to remember, though, that not all improvements guarantee additional profits.

General guidelines suggest that you should not spend more than 20% of your home’s value on an upgrade of the kitchen. And beware of “trends” – these are the fashionable upgrades that are popular in the moment, but may not be practical in the long-term. Media rooms, spas, and wine-cellars all seem like great features, but they tend to cost more to put in than you may get back in return.

In fact, experts generally agree that you will often see the highest return on investment for projects that simply bring your home up to the standard of those around it. When you keep the budget for projects in line with the overall worth of your home, you are more likely to get the most money back for the amount you put in.

Here are the top five improvements real estate professionals consider the best returns on investment:

1. Kitchen
2. Bathrooms
3. Interior Painting
4. Roof
5. Heating/Cooling systems

Hope you find this helpful!

Why I am a New Orleans Realtor

When I came to New Orleans as a result of a job transfer, I felt confused and overwhelmed while searching for a home. I clearly saw the need for a professional Realtor that would provide unmatched customer service and integrity. Through my strong background in sales, my attention to detail, and extensive knowledge of the market, I am determined to provide my customers with dedicated service and consistent results. Customer satisfaction is a driving force which has also led me to personal success as a Multi Million Dollar producer and many top awards in my field.

As your realtor, I will provide you with the specialized real estate service and information that you deserve. I will assist you in making your expectations become a reality. You will become an informed buyer or seller so that you can make the correct decision for one of the most important decisions of your life. I will keep you informed on trends in the marketplace by using the latest statistics of recent sales and property values in a comparative market analysis. Real Estate is an excellent investment in your future. In the New Orleans Area as well as in the entire country, values of property continue to rise.

After losing my home to Hurricane Katrina, I can empathize with others who are struggling to repair their homes and am committed to the rebuilding of New Orleans. I understand the challenges and difficulties first hand of buying or selling your home. I will assist you personally from the first call to beyond the act of sale. If you are considering buying or selling a home or would just like additional information about the current real estate market, please don´t hesitate to call or e-mail me.  Cell: (504) 231-2004,  Email: RealtorChrisSmith@gmail.com

Please visit my website www.ChrisSmithHomes.com.  Please consider it as your online resource for real estate information and return often for the latest property listing updates or searches.