The Scottsdale real estate market has probably changed quite a bit since the last time you were part of a home sale closing, if ever. Not only has the housing market changed dramatically in recent years, but so have mortgage lending requirements. In addition, as a homeowner your needs and desires for your next home have probably changed, too. So, if you’re looking to move up or move out of your present home you’re likely in the middle of a well-known dilemma: Should you sell your current home first or buy your new one? Let’s take a closer look at that situation and consider a few ideas.
Scottsdale Real Estate – Making the Right Move
A logical place to start to analyze the problem of whether to sell first or buy first is to examine just how much risk you’re willing to take. If you fancy yourself a veritable Las Vegas gambler that goes “all-in” every chance he gets, you may decide to assume a greater risk than some people. So, if you elected to buy your new home before you sold your existing home, the possibility of having two house payments at the same time may be less stressful for you than for others. Conversely, if you felt that situation would lead to sleepless nights you’d probably be more comfortable – and well rested – by taking a more conservative approach. That will entail selling your current home first before you started your new home search.
In addition to your risk tolerance, there are some other factors that could potentially sway your decision. Because Scottsdale real estate prices have risen while housing inventory from which to choose continues to be thin, it’s possible you could sell your existing home but not be lucky enough to find a new home immediately. What could make matters worse is, if the added stress and pressure to rush to find a new house led you to settle for something less desirable than you wanted.
Scottsdale real estate experts suggest you ask yourself these important questions to more fully understand the timing of your current home’s sale and your next purchase.
Can you afford two mortgage loans at the same time?
Carefully examine your income and obligations to determine, are you able to comfortably afford two mortgage payments at the same time? If the honest answer is “no,” then do yourself a favor and sell your current home first. A mortgage lender will ask the same question and perform the same financial analysis. Remember, just because you can afford it, doesn’t mean you should.
Some lending institutions offer bridge loans – short-term loans designed to allow flexibility between selling one home and buying another. The normal term is six months to a year.
Another consideration is where your down payment will come from. Do you have enough money in a savings or investment account you plan to liquidate? If not, are you planning to use the equity in your existing home? While some lenders may be willing to provide you with a 100% conventional loan – enabling you to buy the new home without first selling your current one – some lenders may not.
How soon do you want or need to move?
Often the biggest deciding factor of what to do first in the selling-then-buying versus the buying-then-selling conundrum is how quickly they want or need to make the move. If you’ve taken a new job that requires you to relocate out of state, it may be best to put your home on the market first. That way, as you make plans to move and begin your new home search if your home sells it will make your relocation easier and less stressful. However, if you're simply shopping for a larger home or want to move into a nicer neighborhood it could be better to not sell your home immediately. Wait until you find a new one that best fits your needs. This is where the advice of an experienced Scottsdale real estate agent can be invaluable.
Are you aware of the newest regulations?
If it’s been awhile since you’ve bought a new home with a mortgage, you’ll need to be aware of some new federal regulations that took affect late last year. The TILA-RESPA Integrated Disclosure rules now require mortgage lenders to give new borrowers two forms – one at the beginning of the loan application process, and one upon loan approval. The importance of these forms is this: The Closing Disclosure form must be given to the borrower no less than three days before the loan closing. You can no longer expect to close on the sale of your existing home one day and close on the new home purchase the next.
The Closing Disclosure requires the lender to have all the integral parts of the mortgage loan finalized and approved prior to the three-day period. The result often means selling one home and buying the next can be a little “iffy.” Closing delays are a likely possibility. Know what to expect and rely on the advice of your mortgage lender and Scottsdale real estate agent. It can help make the process flow smoother, without snags or delays.
Do you need a negotiating advantage?
Some experts say that purchasing your next home before selling your existing one has distinct benefits. Make an offer to purchase a home without the often-used contingency on the sale of your current home. It will likely be considered more favorably by most sellers. So, if you can swing both loan payments or can get a bridge loan or other financing, go for it!
Do you have somewhere to move while you wait to buy a new house?
As we’ve discussed, a tight housing market with low inventory gives you little from which to choose. As a result, you could find yourself without a home if you sell prior to buying something else. Before making a move requiring you to find a new home quickly or renting a place, think it through. Don’t panic or rush into buying a home you don’t really want. Take your time and make a plan. Remember, too, that it’s okay to rent while you’re looking to buy something new. Be aware that most rentals require at least a six-month lease – and many require a year.
You can find more articles pertaining to Scottsdale real estate in several categories below Scottsdale Real Estate Categories in the column to your right.
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Scottsdale insurance experts report many first time homeowners find buying home insurance more than a little intimidating. Insurance professionals recommend prospective buyers consider a few common questions before they begin shopping for coverage. Doing so may give first time buyers a better understanding of Scottsdale insurance and a greater comfort level as they discuss their insurance needs.
Scottsdale Insurance – Some Q&A
Let’s examine some frequently asked questions from first time home buyers.
Am I required to get insurance prior to buying a home?
Some may find this surprising, but the answer is actually, no. While most states require drivers to have auto insurance coverage on a newly-purchased vehicle, that's not the case with a home. The big exception, of course, is if you are taking out a mortgage loan to purchase your home, the lender will almost always require home insurance coverage in at least the amount of the mortgage to protect the collateral.
What type of coverage is included?
Most standard home insurance policies generally cover the structure of the home, its contents (furnishings, appliances and personal items,) other structures on the property, and additional living expenses. Here’s a closer look at each:
The Structure: In the event your home is damaged or totally destroyed by a fire or other covered peril, your insurance policy will cover most of the expenses required to repair or re-construct the house. Keep in mind, the coverage of your structure isn’t necessarily the same as the amount your home cost when you bought it. Most Scottsdale insurance experts recommend having structure coverage in an amount required to completely rebuild your home in the event of a total loss.
The Contents: Contents coverage applies to your personal possessions in the home. This portion of your insurance policy is activated if your belongings are damaged or destroyed by a covered peril, such as a fire. A word of caution, however, if you own items of higher value like expensive jewelry, rare antiques or a valuable art collection, most insurance policies contain a maximum – or cap – on the repair or replacement value of those items. Typically, the cap is $1,000-$2,000. Most Scottsdale insurance companies can add a rider to your existing policy to increase the coverage amount for your higher-valued possessions.
Liability Coverage: Liability coverage is the part of your home insurance that can help pay for medical, rehabilitation, or funeral expenses if a person is injured while on your covered property. In addition, if the injured party sues you that coverage can help pay for the costs associated with the lawsuit – and its consequences.
Although coverage amounts vary, typical liability coverage limits are $100,000. According to Scottsdale insurance professionals you should consider setting coverage limits between $300,000 and $500,000. This is especially true if your home features what lawyers term “attractive nuisances,” such as a swimming pool, a trampoline or a swing set. Because these items are often responsible for home injuries, increasing coverage limits is recommended since today’s medical and legal costs can mount quickly.
Other Structures: Additional structures on your property such as a detached garage, tool shed, workshop or children’s playhouse are covered in the event of damage or loss by a covered peril. This portion of your policy would help pay to repair or reconstruct the structures.
Additional Living Expenses: Should your home be destroyed by a covered peril, this coverage can help pay for living expenses like hotel accommodations and food expenses for the amount of time you’re displaced from your home. It is highly recommended you discuss this with your insurance company to understand the limits of coverage. Most policies limit the amount of time you and your family would be covered.
What are covered perils?
Standard Scottsdale insurance policies cover damage as a result of fire, hail, lightning, windstorms, theft, vandalism, explosions, and riots. In addition, water damage from frozen, burst, or leaking pipes is usually covered. Remember, damage caused by earthquakes or floods is not covered. Those natural disasters require separate policies for each specific coverage.
How much coverage do I need?
The best way to make sure you have enough coverage is to take a complete inventory of your home. Make a list of everything you own and the value of each item. It’s best to have a photo or video file of your possessions and, if possible, include the receipts or other proof showing the amount you paid for them. Make several copies of the inventory list and keep them in various safe locations like a bank safe deposit box, a personal file in your office, or at the home of a relative. Meet with your insurance company and review the list with your agent. They will best determine the amount of coverage you need.
What determines my premium?
The cost of your Scottsdale insurance policy is determined by these factors:
- Your credit score
- Your claims history (both personally and the history for the area in which you live)
- Your home’s location
- Your home’s age
- Costs to rebuild your home
- Your home’s proximity to a fire hydrant or fire department
- Whether you own pets or not. For example, owning a dog – especially certain breeds – may require additional liability coverage
- The types of coverage you choose
How can I save money on my premiums?
Consider these money-saving ideas:
- Discounts. There are discounts available. Having your home and auto insurance with the same company can often earn a discount. Having home safety features such as security systems or smoke alarms can also save money.
- Raise the deductible. Your deductible is the amount of money you have to pay out of pocket on a claim before your insurance begins to pay. Increasing the deductible will save money on your premium. Be careful, however, that you don’t create a financial hardship if you have a claim by having your deductible too high.
- Increase your credit score. Insurance companies use statistics citing your credit score as an indicator of how likely you are to file an insurance claim. Do what you can to improve your credit score. Increasing your score can decrease premium payments.
How do I select a company?
Like most large purchases, we suggest you shop around. Most Scottsdale insurance companies offer different coverage terms and costs. Get quotes from several companies and compare what each covers and what it costs.
You can find more articles pertaining to Scottsdale insurance in the Scottsdale Insurance section of our site below Scottsdale Real Estate Categories in the column to your right.
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Scottsdale home selling can often take time and try a homeowner’s patience. To successfully accomplish the goal of selling your home, planning ahead is vitally important. One of the best plans a prospective seller can have is to hire the right real estate agent.
Scottsdale Home Selling – Ask an Agent
It’s important to select a real estate agent who’s able to gain your trust and confidence, inform and educate you as a homeowner, and effectively promote your home for sale. A good agent will be expected to be responsible for all aspects of selling your home – from hosting open houses to working with potential buyers and/or their agents.
Prior to hiring an agent, we suggest asking the following five questions to make sure you make the best choice.
What is your experience and local market expertise?
While experience doesn’t necessarily equate to skill, most real estate agents with years of experience, impressive recommendations and a good education will likely be very qualified. Don’t be bashful in your interview. Ask your prospective agent if they work full time or part time. Find out how many homes they’ve sold in the past year, two years and three years. Ask how many other sellers they are currently representing.
Are you a member of a real estate agent organization?
Agents who are members of a professional organization usually have pledged to conduct themselves according to the organization’s bylaws and code of ethics. In addition, find out what additional training or certifications they may have that could give them an advantage over others in the Scottsdale home selling market. As an example, an agent designated as a "Certified Residential Specialist" has attended a series of training classes in residential real estate. Additionally, many agents in recent years have become certified in short sales, foreclosures, and other specialties.
What is your marketing plan to sell my home?
A knowledgeable agent knows that a combination of effective marketing efforts is necessary in today’s market to successfully sell a home. Because online marketing is so important in the Scottsdale home selling arena, ask your prospective agent how many photos of your home will be taken. Will they be taken by a professional real estate photographer? Because it’s such a popular feature on the Internet and social media channels, will the sales efforts include video? Ask your potential agent about additional marketing materials, other advertising, home staging, open houses and listing your home on various real estate websites such as Trulia, Zillow, Realtor.com and more.
In today’s real estate marketplace, a larger number of home shoppers than ever start their search online. Therefore, professional photography, videography and home staging can give your home the Internet equivalent of “curb appeal” before prospects actually visit it in person.
Discuss your prospective agent’s plans and strategy. Listen for concise, comprehensive and aggressive ideas.
Do you have any recommended service providers we should work with?
Seasoned, experienced Scottsdale home selling experts are usually well known in their community and they have a network of sources within the real estate industry. So, when you conduct an interview with a prospective agent, inquire about other professionals such as mortgage lenders, home inspectors, or contractors. Using the resources your agent may be able to bring to the table will give you an advantage in the long run. It will not only save time, but once you're satisfied with the agent you select, you should have an equally high degree of confidence in the third parties he/she may recommend for various aspects of your home sale.
Can you provide me with three previous client references?
It’s not unusual, of course, for a prospective employer to ask for references as part of a job interview. In much the same way, since you’re considering “hiring” a real estate agent, don’t hesitate to ask them for client references. Contact the references by phone or email and ask them to share their experiences in working with the prospective agent. In addition, ask your potential agent about customer reviews and client testimonials.
After you’ve conducted interviews and asked these questions of your prospective real estate agents, you'll have a pretty good idea about who to select and why. Choose the agent that best meets the criteria you expect from a Scottsdale home selling expert. Remember, the “partnership” you form with your real estate professional is vitally important to its success. Make sure you and your real estate agent are on the same page in every aspect of the sales process – from the listing to the closing table.
Most importantly, make sure you understand the comparable sales in your neighborhood when it comes time to discuss your home’s listing price. If you’re far apart from each other, that’s probably an early sign of potential problems down the road. However, keep in mind – no matter what emotional or personal connection you have to your home – your agent is the expert. They can recommend the best sales price to ask for your home. More importantly, the price will be based on what the current real estate market will bear. A good listing agent wants to sell your home for as much money as the market can support. Anything more and your home may stay on the market longer than you want. Anything less and you may end up leaving money on the proverbial table.
See more articles pertaining to selling a home in Scottsdale in the Scottsdale Home Selling Tips section of our site below Scottsdale Real Estate Categories in the column to your right.
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A Scottsdale home improvement project that’s often overlooked or not given enough attention is landscaping a brand new home. Maybe because you spent so much time, energy and money tending to every little detail finishing a new home requires, when it comes to landscaping many homeowners run out of steam. Ask yourself this question, “How many recently constructed homes have you seen where the landscaping leaves a lot to be desired?” Let’s take a look at a few helpful ideas that will help your new home’s curb appeal – without wrecking your budget.
Landscaping: Scottsdale Home Improvement Will Grow on You
So you’ve seen the light. You don’t want your brand new home to look like it was built on a desert wasteland. You’re excited to get started on your first Scottsdale home improvement project. Now, where to start?
If your home was custom built you may have slightly different challenges than if you bought a home in an established neighborhood of newly-constructed homes. Either way, your landscaping needs help. Follow these suggestions to either create or improve your new home’s surroundings.
Define Your Planting Beds
Most of your “lawn” is probably just plain, old dirt. Sure, it looks rich and fertile… after all, just take a look at those luscious green weeds growing wild. If you don’t remember anything else from this article, remember this: take our advice and make sure the soil you’re going to be planting your shrubbery, flowers and grass in is actually topsoil from a reputable source. Replacing existing fill dirt with topsoil will ensure that your lawn and planting beds will have a chance to grow and thrive – whether you have a green thumb or not.
After you’ve decided where you’d like the planting beds to be, mark them off using whichever method is easiest for you. Many Scottsdale home improvement experts recommend using a garden hoe to create a small, visible trench 3-4 inches deep around the planting beds. If you plan to sod your lawn, you can use the first few dozen pieces of sod to more closely define the planting bed boundaries. Be creative, don’t make the planting beds square or rectangular, take a page out of the professional landscape designer’s book and make them loose and flowing, serpentine with more rounded borders. You’ll find mowing the grass and edging around the beds will be easier by following that suggestion.
Know the Lay of the Land
Before you move too quickly, take a step back and envision what types of plantings you’d like and where they might look best. This is especially important for seasonal items like certain flowers, flowering shrubs, or even a small vegetable garden. Does the spot you’re considering planting receive lots of direct sunlight? Does it drain well? Anticipating what will grow best in the places you choose will make it easier when it comes time to plant.
Remove Undesirable Builder Plantings
The plants and shrubs your builder may have planted up against your house may appear unimportant now, but they could be a giant headache later. Scottsdale home improvement experts say you should properly identify any existing plants or shrubs to determine if they’re good choices for your landscaping. If you don’t like it or don’t want it where it is, dig it up and either relocate it or get rid of it. Do it while the roots are still young and haven’t taken hold – it will be easier now than later.
Do the same with any undesirable or unattractive trees that may have been planted. A tree with an abundance of leaves, flowers or fruit may create extra yard work, clog gutters and downspouts and stain your home, walkway or driveway.
Some plants and smaller trees may seem perfectly fine for now, but if they grow to be too large for their space or if they were planted too close to the house, they could become problems later. Take special care for some trees that may be planted adjacent to sidewalks, walkways or driveways. As they mature the tree roots may spread under the concrete or paved areas, causing cracks or raised areas that may be difficult and expensive to repair.
Follow the advice of one Scottsdale home improvement professional: “When in doubt, take it out.”
Think and Plan Ahead
If you’re considering doing some backyard landscaping for entertaining family and friends, consider this tip. Write down your biggest priority and what the focal point of the backyard will be. Chances are, if you have a patio or deck most of the entertaining will be focused there. Plan any future entertainment or other backyard additions as you envision your lifestyle changing and growing. Perhaps the makeshift sandbox will be replaced with a sturdy new swing-set as the kids get older. Maybe one day you’ll replace that gas grill you’ve had forever with a built-in version as you expand the deck. Wait… where are you going to put the swimming pool? The possibilities are endless, but chances are your lot lines aren’t – so be smart, plan ahead as best you can. It will save headaches and money in the long run.
Don’t Forget the Water
It could be the most important Scottsdale home improvement landscaping tip of all – be sure everything you’re planning to plant gets enough water. Whether you’re going to seed your lawn or sod it, plant your own shrubs and flowers or hire a professional, it sounds silly but nothing will grow properly without water.
Decide ahead of time if you’ll install an irrigation system. It’s usually a job that’s best done by professional irrigation installers with the proper equipment and tools. However, with some planning, a rented trench digger, proper PVC pipe, glue, sprinkler heads and an ample supply of time and patience, it can be a relatively easy Scottsdale home improvement project to undertake yourself. Another word of advice, leave the actual drilling for the water source from underground wells and the installation of the pump system to the pros. You’ll be much happier afterward.
Now that you have a game plan it’s time to spring into action. Your all-new outdoor landscape will be the perfect complement to your brand new home. Oh, and don’t forget to go buy a lawnmower, edger, rake, weed eater and a dozen other gardening tools you’ll need!
Read more about home improvements in the section of articles on Scottsdale Home Improvements just below Scottsdale Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.