Gail DuBois' Blog
Believe it or not, the costs associated with selling a house can add up quickly. If a home seller fails to budget accordingly, he or she risks costly, time-intensive home repairs following a property inspection. Perhaps worst of all, this scenario may force a home seller to miss out on an opportunity to get the best price for his or her residence.
With a home selling budget in place, you can increase the likelihood of a profitable home selling experience. If you know what it takes to set up a home selling budget, you may be better equipped than ever before to streamline the home selling process.
Now, let's take a look at three tips to help you establish a home selling budget.
1. Assess the Condition of Your House
Before you list your house, it helps to perform a comprehensive home assessment. That way, you can identify potential upgrades both inside and outside your house and evaluate the costs associated with these home improvements.
Typically, a home inspection enables you to learn about your house's strengths and weaknesses. This inspection requires a property expert to assess your house and may take several hours to complete. Then, once the inspection is finished, you'll receive an inspection report that you can use to determine which home improvement projects that you may need to complete sooner rather than later.
2. Establish Home Improvement Priorities
Although you might want to give your residence a complete overhaul, there may be only limited time and resources at your disposal. Thus, you'll want to establish home improvement priorities to ensure you can maximize your time and resources.
Think about which home improvement projects are necessary. These projects should rank at the top of your list of home improvement priorities, as failure to complete them may prevent you from optimizing the value of your house.
As you establish home improvement priorities, don't forget to assess the costs associated with various home upgrades. This will help you achieve the best-possible home improvement results without spending beyond your means.
3. Consult with a Real Estate Agent
A real estate agent understands exactly what it takes to sell a home, regardless of the current housing market's conditions. In fact, this housing market professional can make it easy to map out a successful home selling budget and ensure you can quickly and effortlessly navigate the home selling process.
With a real estate agent at your side, you'll receive expert support throughout the home selling journey. A real estate agent will learn about your home and help you identify ways to enhance your residence. Plus, a real estate agent will offer recommendations to ensure you can upgrade your house on a budget.
If you're getting ready to sell your house, it helps to collaborate with a real estate agent. Reach out to local real estate agents in your area, and you can get the support that you need to establish a home selling budget.
When you’re relocating you search for a property and learn the real estate market in your new area. Are you also looking at what the general cost of living is in your new city? The cost of living can be very different from state to state and city to city. Here are some common daily expenses you may want to research as part of your relocation planning.
The cost of groceries and home goods can vary drastically from place to place. If you’re moving to a new city or state your general cost of goods may increase or decrease depending on where you move. This is a cost many people don’t consider when thinking about the affordability of a new area. The price of milk might be 50% more or even double the cost from where you live now. The same shampoo you purchase in California might be half of the cost in Arizona. A change in sales tax will also make a difference in what you pay for goods. To gather information about how this may impact you, check into a few retail stores in your target area (or online if you can’t be local) and make some price comparisons based on the products you purchase regularly.
Gas prices can make a difference to your monthly costs. On the coasts, prices can be as high as $4.00 or more per gallon, but in the Midwest and South prices can be under $2.00 a gallon. If you’re moving to a location where gas prices increase consider those additional fill-ups when determining what commute you can manage. Is it most cost-effective for you to live further away from your workplace in a less expensive home? Does it make more sense to find a home closer to work allowing for a shorter commute or the use of a public transportation option? Consider also the amount of time you’re willing to spend on your commute each day.
Food and Entertainment
The amount you spend on entertainment and dining each month may change when you move. In some places a higher minimum wage is set for service industry workers, so a lower tip percentage is common. In other locations the service industry wage is quite low, so a higher tip percentage is the norm. Explore the activities you enjoy while you house hunt to get a better idea of what differences you might experience in your new location.
Finally, the cost of general services can affect your bottom line. From your new hairdresser to housekeeping services to home repair companies you could see a change in pricing. If you frequently use these types of services or would like to, consider how the average cost for them fits into your monthly budget.
These cost differences may not seem like a big factor, but they can impact your monthly expenses. If you’re moving to a more affordable place you may save enough on basic goods and services that you can increase your mortgage budget. However, if you’re relocating to a city with a higher cost of living, you may need to revisit your monthly budget to see what you can really afford.
Becoming a home owner for the first time is an exciting milestone for Millennials! Going from renting an apartment to owning your own property represents a big transition from dependency to independence.
For many people, it even symbolizes making the leap from childhood to adulthood. Once you're a homeowner and a property taxpayer, there's often a newfound feeling of being more established and successful.
While home ownership may bestow upon you a boost in status, the added responsibility of paying for your own repairs, maintenance, and upkeep can take an unexpected toll on your budget. With a little extra planning, however, you can avoid many of the pitfalls of home ownership.
Looking at the Big Picture
Here's a misconception that sometimes creates a financial strain for first-time homeowners: "If we can afford to pay $1800 in rent, every month, then we should be able to afford monthly mortgage payments in that same amount!" While that premise may sound logical, there are a few crucial "missing pieces" from that equation -- pieces which could throw your household budget out of kilter!
In addition to the costs associated with purchasing real estate, such as a down payment and closing costs, there's also the matter of home repairs and property maintenance. Depending on where you decide to live, there could be other fees to absorb, too, including garbage collection, yard waste removal, and water usage. Other expenses that first-time homeowners may overlook include the cost of buying a lawnmower, a snow blower, yard maintenance supplies, tools, and furniture. That's why creating a detailed estimated budget, based on your income, debts, and anticipated expenses can help you determine whether you're truly ready to take the plunge into homeownership.
Enlisting Professional Help
A mortgage broker or bank loan officer can provide you with assistance in calculating your financial readiness for purchasing a home. A good real estate agent can also offer insights and guidance into the process of finding, buying, and owning a house you can comfortably afford. They should be able to provide you with vital information about school taxes, property taxes, average utility bills, homeowner association fees (if any), and any issues revealed in the seller's disclosure form.
One way to avoid -- or at least be prepared for -- costs that often accompany home ownership is to have a qualified property inspector take a close look at the condition of everything in the house from the basement and attic to major appliances and structural features. They can generally tell you whether there are any concerns about mechanical systems, water in the basement, foundation damage, issues with property drainage, the electrical system, potential plumbing problems, and dozens of other vital checkpoints
Whether you're a first-time house hunter or a seasoned homeowner, it pays to understand, anticipate, and budget for the many costs of being a property owner. While owning your own home can be a rewarding and satisfying experience, a guiding principle to keep in mind as you consider available homes on the market is "caveat emptor" (Let the buyer beware)!