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Homeowners

By on February 24, 2012

In two weeks, I will officially be a homeowner.

Hooray!

We ended up making an offer on House #1 – on Super Bowl Sunday actually.  After a week of negotiations, the seller’s finally agreed to our final offer which just happened to be $23,000 below their original listing price!

They also agreed to pay $2,000 in closing costs, which is the reason why the entire process took a week to nail down.  Both sides had agreed on the sale price, but we wanted $2,000 in closing and they didn’t want to agree to that.  Finally, after our real estate agent informed them that we were starting to look at other houses, they caved.

Our closing date is coming fast, too.  Just two weeks away.  That was one of the reasons the sellers negotiated with us – we don’t have a house to sell so we could close ASAP.  The time from our contract to our closing date is less than 30 days!  It worked our perfectly because our first mortgage payment will be due in May and our last rent payment is due in April, so we don’t have to pay double at all, which is something I had kind of expected that we’d have to do.

I feel like we got a great deal.  The house is new and updated and is a “blank slate”.  Truly.  Every single wall in the house is that stock tan/beige color.  All the fixtures are updated, the appliance are all updated (well, the fridge will be once we go out and buy one since the house doesn’t come with one).  The range is even one of those separate drop-in ranges which is something I really wanted.  So cool!  And it’s flat (not sure of the technical term) so no more food-nasties stuck under the burners!  I’m a messy cook, so this is perfect for me.

The deck is stained in a beautiful dark color and has a brand-new pergola with a built-in ceiling fan!  So fancy.  The house sits on a 3rd of an acre and has a new fence and a lot of fancy landscaping that I have no idea what to do with.  I guess I’ll be learning!  The new fence is key because that means we can finally add a new member to our family ASAP – a big dog!  Can’t wait!

The kitchen has the big flat island that I really wanted and has something like 35 cabinets, which is quite a step up from the 8 or so in our apartment.  It’s all open concept so the kitchen flows through the eating area to the living room.

It has a 3-car garage and an unfinished basement.  The cracks in the basement floor are nothing to worry about, says our inspector.  He kept saying, “They used to have dirt floors for basements.  The only thing this basement floor does is serve as a place to put a floor if you finish it.  These cracks are normal.”  If water was coming through the floor or if was hugely buckling or shifting, that would be a problem, but it’s not.  We’ll finish the basement over time (my husband says it will be his man cave and when I ask where my girl cave will be, he claims it is the whole house), but we’re in no rush.

The master suite is sweet.  ;)   See what I did there?  Huge closet, fancy shower that’s like it’s own separate fully-tiled room with two, yes TWO, showerheads.  Double vanities, sitting room, huge windows.  All good things.

Quite a change from our cramped little apartment that we’ve been enjoying for the past 3 years while we threw every spare penny we had towards our savings.  I can’t believe that after so many years of renting, I will own a house AND a good chunk of land.

We are so excited!

***

I feel like this is a huge change in our life.  And because of that, I think it’s the perfect time to sign off from Blonde & Balanced.

Blonde & Balanced isn’t going away.  I’ll still be accepting and posting guest posts.  Other writers will talk about striking a balance in life, health, and money.  All will be the same, I just won’t be the face of the site anymore.

I want to focus my attention on some other projects I’ve been brewing.  People still want to see personal finance related articles here and I’m just not a personal finance blogger anymore.  Of course, I’ll continue with my freelance writing about personal finance.  I’ll still be around on twitter.  You can always e-mail me directly at amber dot gilstrap1 at gmail dot com and I hope you do so we can stay connected!

Thanks for being such awesome readers!

Categories: Announcements, House12 Comments

How To Make A Lowball Offer On A House

By on February 8, 2012

It’s a buyer’s market. We all know that. And only in a buyer’s market are lowball offers even considered.

Because the market is on our side and we are in no hurry to rush into just any house, we’re planning to make a lowball offer on whatever house we do decide to make an offer on (be it House #1 or another house we find).

I’ve been researching how to make a lowball offer so I go into it prepared instead of over-emotional like I was when we first started our home search.

Here are some big things I’ve been seeing:

  • Keep it clean. Make a clean offer, meaning not a whole list of contingencies and other “ifs, ands, or buts”. Go in strong and firm.
  • Keep yourself out of it. Don’t base it on your situation (your income, amount you can borrow, etc.). No one cares that you want to buy a $400,000 house, but were only approved for a $250,000 house.
  • Don’t walk away after the first counter. Don’t walk away when they counter. This is basically known in the real-estate world as just an invitation for the buyer to make another counter offer.
  • But know when to walk away after that. Go into the situation knowing what your max price is and be prepared to walk away from the deal even if your heart is broken.
  • Explain your offer. Sellers will probably feel shocked, and maybe angry, when you offer $275,000 on their home that’s priced at $350,000. But, explain you’re reasoning. Don’t just say “it’s a buyer’s market”. Say “this house doesn’t have a finished basement or granite countertops and the house across the street that sold for $40k less does.”
  • Be financially ready. Make sure you’re pre-approved for the right amount and have the amount you plan to put down for earnest money, closing costs, and down payment ready to go.
  • Don’t delay closing. Set a quick closing date (especially helpful for those motivated sellers).
  • Don’t stray below 85% of the asking price. This varies among different articles, but I think this is a good percentage. I think anything lower than that could just result in a rejection.

Here’s more reading on the topic:

How To Make a Lowball Offer [WSJ]

The Art of the Aggressive Offer [MarketWatch]

How Low Can You Possibly Go On A Real Estate Bid? [MSN Real Estate]

Have you ever made or received a lowball offer on a house? What other tips would you add?

Categories: House16 Comments

Pros and Cons of Taking Out a Loan

By on February 5, 2012

This is a guest post by Daniel Kidd.

If you buy a house or a car, chances are you are going to take out a loan to do it. People take out loans for many other purposes as well: to go to school, to take a vacation or to start their own business. Taking out a loan has both pros and cons, and you should study those carefully before making a decision.

Probably the biggest con of taking out a loan is the finance charge. Banks and other lenders make money off of loans by requiring the borrower to pay back more than he borrows.This makes it extremely important to make sure you get the lowest interest rate possible for your loan.

Price comparison sites are a good way to help you do this. You can compare unsecured loans — those that require no collateral — and secured loans to find the one with the best interest rate. For example, a 1-point difference in the interest rate on a $100,000 30-year mortgage can save you more than $20,000 over the life of the loan. When you compare unsecured loans, you won’t save as much money, but you could still save hundreds of dollars.

Loans also carry fees, which is another con of taking out a loan. For a mortgage, the fees can run into the thousands of dollars for things such as an appraisal, title search and an inspection. Most other loans require at least a credit check, for which the lender will charge you.

Another con of taking out a loan is the legal commitment you are making. You are agreeing to make regular payments over a certain amount of time until the loan is paid off. If you fail to meet those commitments, the lender can repossess your car or home, in the case of a secured loan, or file a lawsuit against you, in the case of an unsecured loan. In either case, failure to repay will hurt your credit score and make it harder to get credit in the future.

On the other hand, if you make your payments on time and fulfill the terms of the loan contract, it will help you build a solid history and a good credit score. This is one definite pro of taking out a loan.

Another pro of taking out a loan is that it allows you to buy something or pursue a dream that you might not otherwise have been able to do. For the average person, it would take many, many years to save up enough money to buy a decent house with cash. Also, many people wouldn’t be able to afford to go to college without a student loan. And if you want to start your own business, a loan may be the only way you can get enough money to cover start-up costs to get it off the ground.

This is a guest post by Daniel Kidd.

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