Building a custom home is hard work that is rewarded when you move into the home of your dreams! The first step is finding the perfect lot to build on. Before you purchase a lot to build on, be aware of these, do’s and don’ts.
Do work with an agent to find the land! Your real estate agent can help research the property and make sure that you are making a safe investment. Buying vacant land is different from buying a home; work with an agent who knows what questions to ask and how to negotiate on your behalf.
Do have your finances in order! You will need to have proof of funds for the purchase amount, so make sure you understand what you can afford to spend on your lot.
Do find out what utilities service the area! If you are looking outside of a developed area, you need to know what utility services are available already or if any infrastructure needs to be added.
Do price the neighborhood! Your agent can help you with a market analysis of the surrounding homes. You don’t want your home and land cost to be vastly higher than the rest of the neighborhood.
Don’t expect to finance your lot. Lenders often don’t lend money for vacant land, and if they do, they may only lend up to half the land value. This is why it’s so important to talk to your financial advisors before you start looking.
Don’t skip the soil tests! You should have the soil tested to make sure there aren’t pollutants or foreign materials buried beneath the surface. If you have a septic sewer system, you will need a percolation test to ensure the property is fit for a septic tank. In areas where sinkholes are common, a soil test can tell you if clay layers deep in the soil make your property more susceptible to foundation issues.
Don’t forget to get a survey done! Before you purchase the lot, ask to see a recent survey or have one done to validate property lines and make sure other neighbors aren’t already encroaching on the lot with access roads, fencing, or structures.
Don’t assume you can have the property rezoned! Make sure you know the property zoning regulations for the property. If you are in a rural area and plan to have chickens or horses, make sure that is permitted. Be wary of sellers who tell you that you can subdivide the land or build two homes on one lot, as this may not be the case.
Don’t rely on a drive-by! You need to walk the property, no matter the size or your plans for its use. If you are buying multiple acres, don’t assume that the topography is consistent throughout with no hidden problems. Things to check for include flood-prone areas, environmentally protected animal dwellings, trash deposits, and neighbors that are involved in activities that may affect your enjoyment of the property, such as dog kennels or shooting ranges.
There is a lot into buying vacant land 🌲 however it is so rewarding building your dream home start to finish 🏡
Home equity…Everybody wants it, but what exactly is it, and how do you get it?
Equity represents the degree of ownership an individual or entity has in an asset after subtracting any debts against the asset. To say someone shares equity in a company means they would share in any assets remaining after all debts are accounted for.
For example, if your business has sold $500,000 worth of product this year, but you have rent, operating expenses, and a business loan payment totaling $400,000 for the year, you have $100,000 of equity in your business. Equity changes as the value of your assets and debts change.
Home equity works the same way! When you take out a mortgage to purchase a home, your home is collateral on the mortgage loan, so the outstanding mortgage principal must be deducted from the value of the home to determine your home equity.
In most cases, you make a down payment when you purchase your home. That down payment is your initial home equity! If you pay a 20% down payment on a $200,000 home, you have $40,000 equity when you close on your purchase.
As time goes on and you continue to pay down your mortgage principal, your equity grows! Usually, the longer your own your home, the more equity you gain because you are paying down your mortgage. However, any debts you take on using your home value as collateral, such as a second mortgage or home equity line of credit (HELOC,) decrease your home equity.
The changing real estate market also influences your equity! If you paid $200,000 for your home, and two years later the homes in your neighborhood start selling in the $400,000 range, your theoretical equity increases. (Theoretical because you don’t realize your home equity until you sell your home and pay off all debts against it.) You can also lose equity if the market takes a dive but be patient, and it should recover in time!
Equity also grows if you make improvements to your home that increase its value. Let’s say you add a swimming pool and all new appliances. You have increased the value of the home. Your equity doesn’t increase by the amount you spent on the improvements, but on the value, you get upon resale. This is an important point when considering making improvements before putting your home on the market and one that is often misunderstood!
Let’s say James spends $50,000 on upgrades to his home. He might tell his neighbor, “I have $50,000 in my home,” but when he goes to sell, the current market dictates how much he will actually get in return. If Joe ends up selling for $40,000 more than he originally paid, his $50,000 investment got him $40,000 in home equity!
Some things you can do to increase your home equity include:
1) Make a large down payment when you purchase your home. The more cash you put down, the more equity you begin with.
2) Make increased or extra payments on your mortgage principal. Adding to the principal portion only on your monthly payments, or making extra payments when you are able, helps chip away at your outstanding debt.
3) Be smart when making home improvements! Not all improvements build equity. Some improvements may be personal preferences that don’t necessarily add value for resale. Improvements such as a new HVAC system, new appliances, or a new roof are usually more reliable investments than a fountain in the front yard or surround sound speakers throughout the house.
4) Don’t borrow against your home equity unless you must. Home equity is often a homeowner’s biggest asset, and can help to build your retirement nest egg, but it can also come in handy if life throws you a curveball and you need to borrow against it for an unforeseen emergency. Be careful not to borrow against your equity for frivolous purposes, so it will be there if you really need it.
5) Sell when the market is favorable! If you are counting on your home equity to help finance your next home, pay for your children’s education, or add to your retirement funds, try to sell during a seller’s market when inventory is needed in your area.
If you have any questions about building your home equity to help support your future, reach out, I would be happy to help!
Samantha Haycraft, REALTOR®
I love working with first-time home buyers. Helping you find your first home, learn the home buying process, and guiding you from house-hunting to move-in day gives me the warm fuzzies. Here are three things you should know before you start looking.
We all want people to love our home as much as we do, but especially when you try to sell it! While it’s impossible to please every buyers’ taste, there are several easy things you can do to make your home more appealing without spending a lot of money. Try some of these tricks and see if your showings cause buyers to swoon.
Many of us could not wait to close the door on 2020 and usher in the new year– with cheer, laughter, and a CLEAN start! As you look forward to 2021, you may have spent some time thinking about your intentions for the coming year, whether for personal or professional growth, health, fitness, or family goals. Let’s face it, 2020 was stressful, and while many people look to each new year to freshen up their lives, this year, more than ever, people are looking inward to reexamine what is important to them. But one thing that is just as important as setting intentions for your behaviors or habits is creating a peaceful and joyful place to practice your senses.
If you, like most, spent a record amount of time inside your home last year due to the pandemic, you may have accumulated more stuff than you have in previous years. Many people acquired new hobbies to pass the time at home, started – and maybe even finished – home improvement projects, or simply went a little overboard with boredom-induced online shopping. If this sounds familiar, it may be time for a decluttering session.
Living with too much stuff can cause stress, anxiety, and depression. People with too much clutter in their environment also tend to suffer from relationship issues, sleep problems, and chronic allergies or asthma.
So, before you pack a suitcase and hop on a flight for that vacation that got canceled last year, take some time to clean out your home for the new year.
Here are a few strategies recommended by professional organizers.
1. One category at a time: This method is used by Marie Kondo, author of the bestselling book The Life-Changing Magic of Tidying Up, and TV show, Tidying Up with Marie Kondo. She advocates for decluttering items by category: clothes, books, papers, miscellaneous items, and sentimental items, in that order.
2. One room at a time: Another method is to focus on one area at a time. It could be a room, the garage, or the basement. If that amount of space is still overwhelming to you, break it down to one closet, one cabinet, or one drawer at a time.
3. Arrange, keep, sell, and donate spaces. As you progress through your decluttering, it will save time and energy if you have already designated areas to accumulate items to be kept, sold, or donated. Then you can deal with each group of items once you have everything separated.
Once you have cleaned out your home, you might adopt some of these habits for preventing clutter from piling up again:
1. Set a rule where you don’t purchase a new piece of clothing, toy, book, or gadget without getting rid of something you are no longer using.
2. Get into the habit of always putting everything back in its place. This will keep you from purchasing items you already have but can’t find or forgot about.
3. To prevent clothes from piling up, try choosing your outfits for the coming week every Sunday, and don’t let clean laundry sit unfolded.
4. Look through your refrigerator and pantry before shopping and shop with a list of needed items.
5. Live by the rule that if you haven’t used it or worn it in the past year, chances are you don’t need it.
Here’s to a new year with a clean and fresh start! 🧽🧹🧼
Most people cringe at the thought of buying a home in December. Only the Grinch would want to pack up and moving during the holiday season! But hold on Cindy Lou Hoo, there are several reasons December can be a great time to buy.
1. Sellers are highly motivated. People who are listing their homes in December are usually on a timeline. They may be relocating for work, wanting to move over the school break, or need to sell their home before the end of the year.
2. You have less competition. Listings do go down in December, but many buyers also take a break during the holiday season. So while the overall number of homes available might be lower, you also have less competition looking.
3. You can get a better price. Motivated sellers and fewer lookers means you can make a better deal. If your seller needs to make a move before the end of the year, they will be willing to work with you on all other terms besides closing date.
4. Rates are staying low. Mortgage rates are forecast to remain low through the end of this year, and into 2021, so it’s a good time to buy.
5. Take advantage of tax benefits. If you close on your home purchase by December 31st, you can take tax deductions for mortgage interest, loan points, and property taxes.
6. Schedules are more flexible. You might think December is too busy a month for moving, but most people tend to have more flexible schedules in December. Children’s activities are suspended, work schedules are more lax, for both you, your sellers, as well as your lender, home inspector, and moving companies, so scheduling all the parts of your transaction and move may actually become easier.
I’d love to help you find your next home. Let’s make your holiday wishes come true!
Are you thinking about selling your home but unsure if the fall is the right time of year? It’s a great time to put your home on the market! Here are some of the benefits of listing your home in the fall.
There is something about decorating for fall that gives me the warm fuzzies! It may be the promise of cool, crisp evenings with brilliant sunsets or the fact that fall decorating is all about creating a cozy atmosphere in your home. The fun thing about fall decorating is that it’s easy and inexpensive. Here are a few of my favorite fall decorating ideas that are easy to accomplish on a shoestring budget.
Hit your local nursery, grocery store, and fabric store for fall color. Place potted chrysanthemums, pansies, croton, purple fountain grass, or flowering kale on your front porch, in your foyer, or around your fireplace to add color—Tuck some mini pumpkins, Indian corn, or gourds around the base of the plants. Instead of spending money on pots, wrap the plant containers in fall print remnants from the fabric store.
Scavenge your yard for fresh ornamental cuttings. Put on your gardening gloves, grab your cutting shears and a basket, and head outside for some free décor. Fall leaves, small branches, ivy, ornamental grasses, flower blooms, pinecones, and seed pods make great accents. Arrange cuttings on your mantel or dining table with LED flameless candles and small gourds, or place branches and blooms in a large mason jar or vintage pitcher.
Get creative with pumpkins. There are lots of fun things you can do with a pumpkin besides carving a jack-o-lantern. Try painting some pumpkins in fall colors that coordinate with your home’s decor. Or wrap a few large pumpkins in light strands to light up your front porch. Make pumpkin topiaries by stacking three or four on top of a plantar, largest to smallest, and wrap them in garland or light strands.
Go antiquing for cheap accessories. Your local antique market or thrift stores can be a treasure trove for great fall finds. An old wagon, a wooden ladder, woven baskets, ceramic jugs, aluminum tubs, antique picture frames, straw hats, and vintage farm tools all have a rustic fall flavor.
More ideas for fabrics. You don’t need a sewing machine to make use of fall fabrics. Many fabric stores stock fall prints or have remnant pieces for quilting. Fold a couple of yards of plaid fleece like a throw blanket and drape it over a chair. Wrap your throw pillows in a yard of a fall print and secure it with craft ribbon or safety pins. Fold the raw edges under and iron to make a simple table runner. Wind strips of fabric around a grapevine wreath or use them to tie big bows around your pumpkin stems.
Do you have any fall budget tips or questions? Comment below, and let’s talk!