Buying
Your
Katy
Cinco Ranch Richmond Area Home
For
The Best
Price!
Fred,
Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond, Westpark
Tollway, Fulshear. www.RichmondKatyHomes.com
Chapter
5
How
much can I afford to pay each month?
Without
question, the most important question on most people's minds when they think
about buying is "how much will it cost" and "how much can I realistically afford
to pay on a monthly basis".
Start by making a personal
budget specific to your needs and assets. No two families live the same way and
no two people budget the same way either. Two families with identical incomes
will not necessarily want to spend the same amount of money for a home, just as
they wouldn't necessarily choose the same house. Personal priorities and
individual needs differ. You need to examine how much you are currently paying
for housing, then decide if you are willing and able to pay for the same amount
or more for something that you will own.
It
is important to be honest with yourself.
If you want a
home that is a little higher priced, it may put a strain on your budget and you
may have to change your lifestyle to adapt. An average family should not spend
more than 30% to 40% of its gross income on housing. A typical guideline is 32%
(gross debt service is the annual mortgage principal, interest and taxes divided
by your annual gross income).
And there are
other house related expenses as well: utilities-water, sewer, electricity,
natural gas, and insurance. These expenses may be between $200 and $450 per
month. Maintenance and remodeling are expenses also. If you are purchasing a
condominium, the monthly maintenance fee must be added as well. These expenses
may run higher for larger square footages and older homes and lower for smaller,
newer ones. If you are married consider what will happen if you lose one
income. Do you have disability insurance?
The
No Down Payment Option Is Gone
You
need some money for earnest money, inspections, appraisals up front and you may
need some money for down payment and closing costs. There are ways around a lot
of the expense if you have even moderately good credit. If you want a house and
do not have bad credit there is no reason that you should not own a house.
Seller
can pay for 3% to 6% more of your closing
costs. This is legal and must be cleared with the lender because certain loans
have certain limits. It depends upon individual loan programs. It is best
right now to ask your lender.
Lenders
seem to be fascinated with the FICO score. If you have good credit, then they
are more lienient in other ways. If you have good credit you do not have to
have a lot of money at closing.
Grant's
Programs
What
Does A Grant Program Do?
It
allows a buyer to obtain money for down payment and closing costs as a gift. The
grant funds DO NOT have to be repaid by the buyer, but there are conditions.
Usually the buyer must find a house that will appraise for the purchase amount
plus the grant amount. Frequently the buyer must fit into a certain lower income
bracket, or be a first time home buyer, or be a school teacher, or the house
must be in a certain geographical area, or other conditions.
What
are the Negatives?
1.
You must satisfy the granting institution, as well as, the primary lender. This
requires double paperwork and processing which may delay the closing date. (Some
lenders, sellers and realtors will not participate.)
2.
Frequently the buyer must stay in the house for a period of years before all of
the "grant debt" is forgiven. With these factors in mind, you may want to try
for a grant. These programs come and go, that is, sometimes money is available
and sometimes not. Contact us if you are interested and I will see if one is
available to you in the geographical area where you would like to
live.
Thoughts
on Choosing a Neighbohood
Drive
or walk slowly through the streets. That's the only successful way to canvass a
neighborhood, preferably after work or on Saturday morning or Saturday or Sunday
afternoon. More people are home at these times. You can see their cars, they
will be tending their lawns, the children will be playing.
What,
exactly, defines "a neighborhood"? It may be a grouping of houses around a
physical landmark, such as a park, marina, valley, or hill. It can be as small
as one block or large enough to surround a fashionable shopping area.
When
you start looking for a neighborhood, think about what you want in terms of
proximity to people and goods and services. Do you want to be close enough to
stores so that you can get there on foot or bicycle? Do you want a closely knit
community where everybody knows everybody else, or a more impersonal place? A
huge apartment house can be a neighborhood all by itself, where you nod to
people in the elevators for years without ever knowing their names.
Drive
around and investigate neighborhoods in the car, then get out and walk around
those that really interest you. You learn a lot on foot! Ideally, you shouldn't
tackle more than three neighborhoods in one day, because no matter how good an
observer you are, communities will start to blend together in your
mind.
If
you see a "For Sale by Owner" sign as you walk, look at the house on the inside
if possible. If you see a place under renovation, stop and speak to the
contractor. Or if you notice an ad about a neighborhood block association
meeting or a house tour, take advantage of it. You want to educate yourself as
much as possible about the community before you even begin to think of buying
there. It's like marriage - you've got to know the man before you make the big
decision.
What
are you looking for as you scout around an area?
•Are
yards well landscaped? Or are they filled with weeds? Are there broken-down cars
and bikes in the yard? That's a sign of sloppy homeowners and lack of community
concern.
•Are
there vacant lots? Boarded-up stores? How long have they been that way? The
neighborhood may be in a state of deterioration.
•Do
children play in the streets? This could be good or bad. It might be a sign of a
safe community, or it could indicate that there are no playgrounds or parks
available. Cul-de-sacs or dead-end streets are very desirable for kids, since
they mean no speeding traffic.
•Do
you see older people as well as children outside? A sign of good balance in the
population.
•Are
the residential neighborhoods sprinkled with commercial establishments? Many
homeowners like having a convenience store, a few boutiques, and some popular
restaurants nearby. Of course, the encroachment of shopping malls or industry
with large parking lots would be a different story.
•How
close is the nearest highway? Do you hear a lot of traffic as you walk the
streets? Is it safe for kids?
•How's
the public transportation? Is it near enough to be convenient but distant enough
not to be noisy?
•Are
you too close to the airport or a railroad? An all-night disco? Noise could be a
problem.
•Are
there iron bars on all the windows? This sign is self-explanatory--who wants to
live in a prison?
Make
yourself a list of pros and cons. No one neighborhood will be perfect, but there
will be some whose faults you can overlook because their positive qualities
overcome their liabilities.
As
an added precaution, do a double-check of the services available to the property
you are considering. Ask specific questions of the proper authorities and accept
only specified answers.
Day-Care,
Preschool: Where are nearby day-care and preschool facilities ? What types of
programs do they offer? Will there be a place for your child? Which days and
what times are available? What are the costs?
Public
Transportation: Is a bus or some other public transportation available? Where
are bus stops located? How frequent is the service? Obtain a transportation map
so you can determine the routes you may be using.
Recreational
Facilities: Will you be allowed to use recreational facilities in the area? Are
special memberships required? Where are parks located and what facilities do
they have? Are the parks used by recreational organizations on specific days?
Who takes care of park maintenance and security?
Hospital
and Medical Services: Where is the nearest hospital? Are emergency medical
facilities closer?
Police
and Fire Protection: How available are police, fire and emergency services? Is
the protection adequate? Will your home be protected by a neighborhood watch
program?
Telephone
Service: Will telephone service be available as soon as you move in? Will a
private line be available? What other telephone services are
available?
Internet
Service: Do you need high speed internet?
Postal
Service: Will mail be delivered to the front porch, to the front curb or to
community mailboxes at the end of the road? Will mail be delivered daily? Where
is the nearest facility to mail packages, buy stamps, etc.?
Street
Maintenance and Parking: Are the roads properly maintained? Will it be your
responsibility to maintain any part of the roads? What are the parking
restrictions, weekdays, weekends and in emergencies? Can you park directly in
front of your home?
Property
Taxes: What are the property taxes now and what are they expected to be? Is a
general tax increase expected?
New
Construction: Is new construction planned that will change the appearance of the
traffic flow through the neighborhood?
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We try to
operate by referral from clients. We strive to provide such great service that
our clients will recommend us to friends, co-workers, family and
acquaintances--over and over.
How do
you benefit from this philosophy? Our business depends on giving you such
top-notch service that you will sing our praises to anyone you know who is
looking for a Realtor. Most of our business is referred to us by past clients.
If we don't maintain our high standards and ensure that referrals keep coming
our way, most of our business will disappear. The health of our business depends
upon our quality of service! Clients benefit from this because we devote more
time to their needs instead of spending lots of time and money looking for new
customers (the conventional approach).
Most
realtors, unfortunately, do business as though they will never see you or hear
from you again. This mind set can lead to shoddy service because the realtor
just wants to close a deal and move on to the next deal. These realtors don't
build trust with their clients and are afraid of losing them, so they push their
customers into decisions that may not be in their best interest just to get the
deal done. They rely on advertising to constantly bring them a steady stream of
new customers.
We view
our relationship with our clients as a long-term association; we regularly stay
in touch with them. We prefer to get to know the people we work with because it
creates such a rich and personally rewarding work and personal life for
us.
The more
we know our clients the better we can serve them. Many times we have counseled
clients not to buy a particular property because of a too high price, poor
location or condition. We strive to tell the truth, then live with the
consequences. We have found most people prefer us to work this way in the long
run.
Why are we willing to wait
so patiently? We are in this business to stay--good times and bad. Whether you
buy now or in a few months or years from now makes no difference to us. We want
you to proceed at a pace that is comfortable to you. If you can always count on
us for unbiased, professional advice and learn to trust and respect us, then you
are more likely to recommend us to other people who are as nice as you are. Once
again it all comes full circle.
The information contained
in this site is the opinion of Fred Miller and does express any policy or
opinion of Re/Max International, Rd/Max of Texas or Remax
Plantation.
Fred
Miller, Re/Max Plantation, FredMiller9@gmail.com , www.RichmndKatyHomes.com ,
Office receptionist 281/342-2288 Cell 281/924-2531
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