Why New Construction Might Make Sense Right Now

It's tough out there for Cincinnati area buyers: weeks and months of looking without finding the home the right home at the right price. Inventory is steadily dropping, and all the "good ones" seem to go pending before everyone has scheduled a showing. But what if you could customize your next home from the foundation up? There's a definite advantage to working with a builder to choose all the features and finishes you want in a new home, and while it does take time, it also provides you the opportunity to budget appropriately for your new home ownership costs -- and if you have a home to sell, you'll have plenty of time to decide what improvements your current home needs to sell for the highest price possible.

So, why work with a Realtor when you are buying new construction? Because every buyer deserves representation to make sure their interests are being protected. Plus, only a Realtor can give you up to date information on the market to help you decide whether any of those cool upgrades will be worth the money when it comes to selling your home down the line.

For more information on buying a new construction home, check out these articles from Redfin, Forbes, and Huffington Post. And remember, the best local builders are members of the Home Builders Association of Greater Cincinnati.

Do I need a home warranty?

There is a lot of information in your average residential purchase contract, but one item that trips people up pretty frequently is the home warranty. You're already getting homeowner's insurance, so why on earth would you need a warranty, and why would the seller be willing to pay for it?

Your homeowner's insurance policy covers damage to your home and some things on your property, such as the tree falling on the car in the driveway scenario (which hopefully only happens in commercials). However, it probably doesn't cover your furnace, hot water heater, or appliances. That's where the home warranty comes in! Home warranties are becoming more common, with many sellers offering to pay one year of coverage for a prospective buyer, especially since many warranty companies will cover the home during the listing period for free if the home warranty is purchased at closing. The price for a year is usually between $400 and $500 in the Cincinnati area, with additional premiums for multiple HVAC systems, septic tanks, and other less common features. An added bonus: You can apply for a home warranty at any time, not just when you're buying or selling your home. 

Not all home warranties are created equal. Comey & Shepherd works with HMS Home Warranty because they have a solid reputation for good service, but there are a lot of options out there so be sure to talk to your agent for advice. And if you have a little extra income, the best alternative to a home warranty is setting aside money each month for a home emergency fund. There a several ways to calculate this, but several sources suggest saving 1% of your home's value a year, or 1/12% each month.

Is it time to refinance?

Picture this: you'd like to sell your home and move to a new one, but you haven't built up enough equity in your home for that to make financial sense. This is the case for many homeowners who may at one point have been underwater, but have watched home values slowly rise (or not so slowly, depending on what part of the country you're in).

There may be a solution -- not an instant fix, but nonetheless a smart step on that path to owning the new home you have in mind. Mortgage rates are still nice and low and qualifying should be easier than anytime in the past several years. However, rates are expected to rise this year which would once again make refinancing impractical for millions of homeowners. 

Refinancing helps you, when it's done intelligently, by helping you capture more of the equity in your home and locking in a lower monthly payment. For example, I purchased a home in 2009 with an FHA loan and refinanced in 2011 when I saw property values rising dramatically -- meaning that I already had more equity in my home just due to market activity. And since I was pretty sure I was moving within the next 3 years (I was right), I chose a 5/1 ARM at 2% interest, which cut my payment dramatically. I did have to pay closing costs out of pocket, which I was able to do, but I no longer had to pay mortgage insurance. Plus, I was able to pay bi-weekly which meant an extra payment a year...so when I sold my home in 2013 I was able to walk away with a good amount of cash.

For more information on refinancing, check out this article from TheTruthAboutMortgage.com or talk to your favorite lender -- and if you're looking for a lender in the Cincinnati area, check out my Helpful Information page for some referrals!

5 Spring Home Buying Strategies | Realtor Magazine→

Spring has sprung and both buyers and sellers are experiencing a fast-moving market! Inventory is still low, so getting out and seeing homes as soon as they come on the market has become increasingly important for buyers. To be truly prepared, make sure you have chosen a lender who can provide you a pre-approval letter on demand. You'll also want to know which home inspection company you'll use and whether you need a real estate attorney to assist you in understanding any potential legal issues.

A great way to start this process is talking to your favorite Realtor for referrals to all of these professionals and more -- general contractor? local lawn service? -- so you're ready to jump on the right house when you find it. Even if you enter a bidding war, which is pretty common at the moment, you can be more confident knowing you have the support of a knowledgeable team.

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