How Not To Get Priced Out

A home is more than a zip-code; more than granite countertops. A Home is not about the physical location of where you stay. A home is where a family comes to life. It is stability, it is safety and it is the place where moments become memories. A home is where life happens. But for so many Americans owning a home is becoming an achievement that on the surface seems impossible to achieve.

According to the U.S Census in 2015 home ownership rates fell to 63.4%, the lowest percentage since 1967 (Hispanic 46.7, Blacks 41.9%).

There are various reasons for the decline.

Millennials are waiting longer to buy homes
People are having harder times transitioning from renters to owners
Limited inventory of affordable homes
Difficulties qualifying for a mortgage; contributed by having more debt than income
Saving for a down payment due to high rents and poor income growth

With home prices rising faster than incomes, even more families are being priced out of the housing market. According to David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones, “Home Prices are increasing about twice as fast as inflation or wages," Landlords know this and use the limited inventory of affordable homes on the market to drive up rents.

The US Census also reported that in 2013 one in three Central Virginia households have more than 30% of their income tied to housing cost (Richmond City 48%, Henrico County 40%, Chesterfield 35%). All of these factors make it difficult for families to leave renting and enter into home ownership.

So what do you do if you are one of the millions of families that actually want a home?

Whether your dream home is a colonial on the West End of Henrico or a condo in Shockoe Bottom, if you are ready to buy a home you need to have a realistic plan and solid strategy to make your dream of home ownership a reality.

STEP 1: HAVE A REALISTIC PLAN

Be realistic- Have a home price in mind that meets your current income. With rents being so high, the chances of you finding a home with a comparative mortgage are good.

Meet with a lender- This won’t cost you a thing. Think of it as a free consultation. A lender will tell you where you are currently with your finances, credit and give you insights on what you need to do to qualify for a mortgage. They may even be able to connect you to additional resources.

Cut out the extra and save- Leave the Starbucks alone, brown bag lunches and cut any non-essential purchases. You will be amazed how much can be saved by cutting out $5 here and $5 there. Start thinking for tomorrow and refrain from any large purchases.

Increase Income-Easier said than done, but your goals are to have money for the down payment, get qualified for a mortgage and to ensure that you pay all your bills on time. So pick up a part time job or turn that hobby into a small business. Every little bit counts.

Time table- Once you meet with a lender and understand your financial situation, you will be able to determine a when you should begin your home search. This will keep you focused and create accountability within yourself.

Research Programs- Visit the United States Department of Housing and Urban Development website www.hud.gov for information on home buying programs and Virginia Housing Development Authority at www.vhda.org for a list of home buying classes and down payment assistance services.

We have free classes that will show you how to afford a home

STEP 2: BUY WITH A SOLID STRATEGY

Focus on needs over wants- Go into your home shopping thinking value. When viewing a house think of the important things like space, lay out, work commute, bedrooms and bathrooms first. Then think granite, steel appliances, hard wood floors and other features later. You can always make improvements down the road.

Think about shopping in the winter. In the real estate industry this is the slow time. This means more inventory and homes that are sitting on the market longer. Buying power will be in your control and could save you money.

Look for the worst house in the best neighborhood- A home in a great neighborhood will usually come with a big price tag, but that doesn’t mean there aren’t deals to be found. Look for a home that may need a bit of TLC and make an offer

Check out foreclosures, short sales, and auction properties-These properties may have bigger hurdles for you to jump through and could take longer to own, but you can save money.

Find a good REALTOR® to help you locate opportunities- A good realtor will know where to look to find you the best homes for your money and family needs.

Negotiate- Don’t just give the seller what they are asking. Work with your realtor to submit an offer that can save you money and even get some of your cost paid for.

Learn the areas- Have you ever thought of Chesterfield, Varina, Hopewell or Glen Allen? There is a difference in home prices on a street by street basis and definitely county to county. Determine what your family needs and consider expanding your search area.

Buying a home may not be for everyone. But if you want a home and don’t think you can afford one, think again. There are more options available than you think. Happy house hunting.

How Not To Get Priced Out

According to the U.S Census in 2015 home ownership rates fell to 63.4%, the lowest percentage since 1967 (Hispanic 46.7, Blacks 41.9%).

There are various reasons for the decline.

The US Census also reported that in 2013 one in three Central Virginia households have more than 30% of their income tied to housing cost (Richmond City 48%, Henrico County 40%, Chesterfield 35%). All of these factors make it difficult for families to leave renting and enter into home ownership.

So what do you do if you are one of the millions of families that actually want a home?

Whether your dream home is a colonial on the West End of Henrico or a condo in Shockoe Bottom, if you are ready to buy a home you need to have a realistic plan and solid strategy to make your dream of home ownership a reality.

STEP 1: HAVE A REALISTIC PLAN

Be realistic- Have a home price in mind that meets your current income. With rents being so high, the chances of you finding a home with a comparative mortgage are good.

Meet with a lender- This won’t cost you a thing. Think of it as a free consultation. A lender will tell you where you are currently with your finances, credit and give you insights on what you need to do to qualify for a mortgage. They may even be able to connect you to additional resources.

Cut out the extra and save- Leave the Starbucks alone, brown bag lunches and cut any non-essential purchases. You will be amazed how much can be saved by cutting out $5 here and $5 there. Start thinking for tomorrow and refrain from any large purchases.

Increase Income-Easier said than done, but your goals are to have money for the down payment, get qualified for a mortgage and to ensure that you pay all your bills on time. So pick up a part time job or turn that hobby into a small business. Every little bit counts.

Time table- Once you meet with a lender and understand your financial situation, you will be able to determine a when you should begin your home search. This will keep you focused and create accountability within yourself.

Research Programs- Visit the United States Department of Housing and Urban Development website www.hud.gov for information on home buying programs and Virginia Housing Development Authority at www.vhda.org for a list of home buying classes and down payment assistance services.

We have free classes that will show you how to afford a home

STEP 2: BUY WITH A SOLID STRATEGY

Think about shopping in the winter. In the real estate industry this is the slow time. This means more inventory and homes that are sitting on the market longer. Buying power will be in your control and could save you money.

Look for the worst house in the best neighborhood- A home in a great neighborhood will usually come with a big price tag, but that doesn’t mean there aren’t deals to be found. Look for a home that may need a bit of TLC and make an offer

Check out foreclosures, short sales, and auction properties-These properties may have bigger hurdles for you to jump through and could take longer to own, but you can save money.

Find a good REALTOR® to help you locate opportunities- A good realtor will know where to look to find you the best homes for your money and family needs.

Negotiate- Don’t just give the seller what they are asking. Work with your realtor to submit an offer that can save you money and even get some of your cost paid for.

Learn the areas- Have you ever thought of Chesterfield, Varina, Hopewell or Glen Allen? There is a difference in home prices on a street by street basis and definitely county to county. Determine what your family needs and consider expanding your search area.

Buying a home may not be for everyone. But if you want a home and don’t think you can afford one, think again. There are more options available than you think. Happy house hunting.

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