Tips on Preparing to Buy Your First HomeWednesday, July 29, 2009

Often times people stumble upon being a home owner. They go to an open house, or see a For Sale sign by a nice looking house and they slowly began to all in love with the concept of going from a renter to an owner. I think 99% of people fall into this category (which is fine), but far too many people stumble into the financing aspect as well which is not fine. Too many home buyers start the process by looking for a home, falling in love with one, and then begrudgingly meander about searching for a loan to get the house. I cannot stress enough how important it is to review your financial position and goals BEFORE you fall in love with a house.

First time buyers do not typically know all the costs involved in home ownership, or start to look more closely at their savings and retirement goals before taking on a housing payment. Most first time buyers are pretty young and have a lot of working years ahead of them - but it is SO important to start looking at retirement at this phase in your life because you have complete control over where you end up at the end of your working career. By reviewing your current income, expenses and controlling the flow of your funds with a spending plan, you can start to figure out how much you need to invest and save each month and how much you can truly afford in a housing payment. Knowing these figures empowers you to focus on homes that are affordable for you and are in line with your overall financial goals. If you are a first time home buyer and interested in completing this process, feel free to contact me to learn more.

Existing Home Inventory at 22 Month Low (That's good news)Thursday, July 23, 2009

RMLS released this information for the Portland Metro Area. The stats show that housing inventory fell for the fifth consecutive month and is representing increased sales activity. The current inventory level is 8.2 months. This is a great indicator that the real estate market is starting to see some improvements. First time home buyers are a major contributor to this pick-up in sales activity, as the $8,000 first time home buyer tax credit plus very low interest rates are motivating them to take action.

With low down payment options, as well as $0 down loan options for certain areas of town - this is a great time to investigate your buying options.

Importance of a Good RealtorMonday, July 6, 2009

Over the weekend I heard from several new clients interested in buying a home. I was happy to learn that the majority of these people were either already working with a Realtor or wanted a referral to one as they understood the value a Realtor provides. Now, the main reason these future home buyers called me was because the Realtor they are working with stressed the importance of getting their loan options figured out before they fell in love with a house. With mortgage lending as tight as it is these days, it is really important to review your loan options and get approved before you start looking at homes, and good Realtors know this. This is just a small example of the value of a good Realtor.

A Realtor knows the market and what a property 'should' be priced at. Armed with this knowledge, your ability to negotiate a fair market price are much higher than going at it alone. In addition, it is always easier to have someone else negotiate on your behalf, especially when it comes to price.

Realtors also know about properties that are about to come on the market, or homes that were recently taken off the market that will be put back on soon that may be a good buy for you, since they study the local market on a daily basis.

Structuring the purchase is also where the Realtor adds a lot of value. Good Realtors know the down payment options, how to apply seller credits and get the most for you as a buyer.

If you are preparing to purchase a home, second home or investment property and do not have a good Realtor to work with, I suggest you ask your friends/family/co-workers for a trusted Realtor to start helping you right away.

Do You Have a Spending Plan?Wednesday, July 1, 2009

I cannot stress enough how important a spending plan is to your financial well-being. Regardless of how much money you make, it is vital to track where your money goes and how to control it in order to 'pay yourself'.

Whether you earn $30,000 per year or $500,000 per year, knowing where you spend and why is very important. People that make a lot of money also tend to spend a lot of money - with more money comes more options, bigger appetites for toys and lavish trips. Before you know it, you paid everyone but yourself. Here are some basic steps to begin 'paying yourself first':

1. Create a Spending Plan to begin tracking your expenses for 1 month. You can use any spending/budgeting tool you like, but here is one I suggest using: http://strat-e-gy7.com/resources/Spending_Plan.xls
2. Once you have tracked your spending and see where your money is going, start making adjustments to how much you will allocate to each area of spending so that you are saving at least 10% of your income. if you have a 401k or pre-tax saving option through your employer, that % of savings should not be factored into the 10% I am talking about here. Save 10% of what you net.
3. As you progress through your new spending plan, keep all your receipts and track your spending each week. this will give you a gauge so you can see where you are overspending or underspending, and you can adjust your habits to stay within your limits.

One easy way to force the 10% saving plan is to have that money automatically transferred to a savings account that is not tied to your checking account. Put it away before it ever hits your spending account and odds are, you will never even miss it.