“Budget Like Its 1999″ and Other Tips for First Time Homebuyers

Terry Belt and Chris Melnick

Your son or daughter graduates from college. And they move back home. It’s all good for a while. They were away at school for 4 years (5 in our case!) and it’s really nice to have them around.

Then, all of a sudden, you both start thinking about the day when they move out again.

That’s what happened to us last year. Our daughter Melissa graduated from college, moved home and got her first job (as a teacher at a Catholic school). She made it through her first fall of teaching and as the new year arrived, she started thinking about moving out. While teaching is very rewarding, the rewards are not financial in nature. So she began looking into apartments and rentals.

Since I have been in real estate for almost 30 years, this just killed me. I just couldn’t imagine her throwing away money at rent. But I also knew her finances were tight. Less than a year later, she bought her own condo and became a first time homeowner. Here’s how we made it happen.

3 Tips For Prospective First Time Homebuyers (And Their Parents)

1. BUDGET LIKE ITS 1999

As a young married couple, we wanted to move from our small condo to a single family home. The best advice our parents gave us was to create the budget we would need after we moved into the house and live on it for a year BEFORE we bought the house. That way we would know whether it was realistic and where we could cut corners. So we did the same thing with Melissa. She created a budget on the Mint.com app and lived on it for almost a year before she moved. She included things like a mortgage payment, utilities, home repairs & insurance. Since these were not “real” expenses yet, she took that money each month and banked it in her savings account.

Here are examples of what to include in your budget:

  • Mortgage
  • Taxes
  • Insurance
  • HOA/Condo Fee
  • Utilities (Electricity, Water, Gas, Internet, Cell, Cable)
  • Tithing
  • Saving
  • Home repair/Maintenance
  • Car Payment
  • Groceries
  • Eating Out
  • Pets
  • Clothing
  • Gas
  • Car Repair/Maintenance
  • Medical (Checkups, Prescriptions, Ilnesses)
  • Personal (Haircuts, gifts, vacations, subscriptions)
  • Entertainment/recreation
  • Student Loans

2. WIN-WIN INVESTING

Like many first-time homebuyers, Melissa’s biggest challenge was the down payment and closing costs. Today’s young people are used to a certain standard of living (think Starbuck’s & sushi). It’s really not their fault. They were raised by the generation who wanted their kids to have “more than we had”. We, on the other hand, were raised by post-Depression era parents – and we learned to be frugal, save money and not to buy things on credit. To incent Melissa and encourage her to save – we set up a matching plan. We matched her dollar for dollar over a certain time period up to a set amount of money. This got her into the “Saving Habit” as she was able to see substantial accumulation of her funds. And she continued that habit as a permanent life change. (This not only set her in good stead for saving towards a down payment, it set her up for success going forward.)

That still wasn’t enough though. So we came to an agreement. We would be 50/50 owners. We contributed 50% of the downpayment & closing costs. And we would each make 50% of the monthly payments. (Melissa found a roommate to cover our half of the payments.) When the condo is sold, Melissa will reimburse our 50%. And we will split the profits in half. Win-win. A nice investment for us. And home ownership, equity and a tax write off for Melissa. (Contact your CPA for details regarding how to set this up.)

If you want to buy your first place and don’t have enough cash, don’t give up – you might find that if you present a win-win situation, there are people in your life who would be excited to help you: parents, grandparents, siblings.

3. GET REAL

After living on a budget for a year, Melissa had a “real” number of what she could afford in terms of a monthly payment. The number was $800 net. (So $1,600/mo for the mortgage, taxes, insurance & condo fee – with a roommate to pay half).  She talked with a Loan Officer, got pre-approved for a loan. And only then did she start looking. (Side note: Even though Melissa had no outstanding debt, because she is a teacher with such little income, she still needed co-signers for her loan. Many first-time homebuyers can qualify income/debt-wise, but if not – make sure you talk to your Loan Officer in depth about this because FNMA & FHLMC have different guidelines as to what is required.)

Melissa initially had a LONG wish list for her first place. This was another area in which she had to “get real”. She made a list of “must haves”, “wants” and “dreams”. We started out online. Melissa first started out using our competitor’s “apps” – Zillow, Red Fin, etc. But each time she showed me a listing, it turned out the place was already sold. So she went to our state-of-the-art site and set up a search. (Our site is updated faster than others and this solved the problem of not having current info,)

Next up was open houses. This was a great way to see neighborhoods, check commuting times and narrow down the options. (It also was interesting to experience the less than professional behavior of many Realtors – some who pressured Melissa to act quickly because they had “multiple contracts coming in”. Funny thing is – we’re still getting emails from one agent who has reduced the price three times on the unit with “multiple offers”.)

Melissa’s initial list encompassed condos in Reston, Fairfax, Herndon, Vienna & Oakton. She soon determined she wanted to sacrifice space for time. While the condos in Reston may have been larger, a condo in Oakton meant being 20 minutes closer to work – priceless to someone who who arrives at 7:45 AM and leaves around 6 PM.

Then it was time to get serious. Melissa called Uncle Terry. (Terry Belt, CEO of The Belt Team). Terry’s Realtor perspective was invaluable. At each showing he asked questions, shared knowledge and educated not only Melissa, but us. Despite being in the business on the marketing side for almost 30 years – I learned a lot about what things to consider when buying. Terry pointed out potential costs, resale pluses and minuses, and other issues that never would have crossed our minds. And he negotiated an amazing deal for Melissa when she found her dream place. On the market for $264,000 – Melissa paid $255,794.

Contact Terry Belt & The Belt Team at (703) 242-3975 for more tips for first-time homebuyers. Our mission is “Changing Lives For The Better” and it would be a pleasure for OUR family to help YOUR family make the RIGHT move!

Thank you also to Chris Melnick with Double Eagle Title. And to Keith Kelly with Churchill Mortgage. Your expertise and personal commitment were stellar. And it’s why we are thrilled when our clients choose you.

 

 

116 Tapawingo Rd SE Vienna VA 22180 – New Home Just Listed by The Belt Team

Wait until you see inside this new custom home at 116 Tapawingo Rd SW Vienna. Proudly built by Somerville homes and just listed by The Belt Team! You’ve driven by a million times. Now you can see inside!

Price, info and LOTS of photos of 116 Tapawingo Rd SE Vienna VA 22180

Call Kevin Kleifges & The Belt Team at (703) 242-3975 to schedule a showing.

606 Yeonas Dr SW Vienna VA 22180 – Listed by The Belt Team

606 Yeonas Dr SW Vienna VA 22180  – has just been listed by The Belt Team! Here’s a sneak peek!

Price and LOTS more photos of 606 Yeonas Dr SW Vienna VA 22180 Call Kevin Kleifges & The Belt Team at (703) 242-3975 to schedule a showing!

Call The Belt Team at (703) 242-3975 if you would like to buy or sell in Vienna this year. The Belt Team is Vienna’s #1 Real Estate Team. (Sellers –  you’ll be interested to know that Belt Team Sellers sell FASTER and for MORE money than average! Special info for Vienna Home Sellers.)

Open Houses in Vienna April 19 (Plus Opens All Around Northern Virginia)

Real Estate

If you’re thinking of buying or selling a home in Vienna this year (or anywhere in Northern VA) – open houses are a great way to get educated to the market. Here’s a list of what homes are open on April 19 2015:

Call The Belt Team at (703) 242-3975 if you find a house you’d like to see, but cannot attend the Open House – OR if you’d like to schedule a FREE Buyer or Seller Consultation.

Thinking of Downsizing? 4 Tips To Simplify Your Life!

The Belt Team works with many clients who are downsizing. (And we like to call it “right sizing.”) So why do people think about moving “down” and how can you simplify the process?

Downsizing Your Home Northern VA Real Estate  Halstead at The Metro II

Here are the most common reasons our clients “right size” to a smaller home:

Travel – A smaller home is easier to maintain. And that means they can travel more – visit grandchildren – or take those trips they’ve always dreamed of. This is not uncommon with empty nesters.

Health – Sometimes their current home is just too much to take care of on top of whatever health concerns they are dealing with.

Financial Freedom – Some people bite off more than they can chew. Or their priorities change (or their job situation) and they don’t want to be tied down to a big mortgage payment.

Commuting Time – Buying a condo or townhouse closer to the city might be enticing after commuting an hour each way in order to have that single family home.

Age – Perhaps it’s time to move into a community where you can get the extra assistance you need and/or have more opportunity for recreation and cultural activities. And maybe it’s time for a place without stairs.

Here are 4 Tips To Simplify Downsizing:

1. Plan Ahead

Schedule appointments with your financial advisor, your Realtor and your lender. Each one will walk you through a variety of things you’ll need to either do or think about: cash flow, market conditions, important amenities, lifestyle changes, tax considerations & more.

And don’t wait until you HAVE to move. As soon as the thought crosses your mind – start gathering information. This will make it SO much less stressful when the time comes. My parents moved several years ago. After 30+ years in the same town, the move was emotional. They didn’t “have to” move at the time, but they were starting to think about things like stairs and maintenance of such a large home. Not long after they moved, Dad fell & became very ill. If they had still been living in the big house, his road back to “normalcy” would have been long extended. But since they were in their condo by that time, he was able to come home so much sooner. Looking back now, they are so happy they moved when they did.

2. Start Educating Yourself To The Market

Online searches are a great way to see what your money will buy AND see what range your current home might sell for. You may find you have to compromise some of your wish list or you might find your money buys more than you think.

3. Family Is An Easy Way To Simplify

If you have children (or grandchildren) who may benefit from some of the “things” you’re ready to let go of, but you’re not ready for those cherished items to leave the family; make family holidays a “shopping time”. Send each visitor home with a (re)gift! You could also enlist one of the younger generation to help you sell unwanted items on Craig’s List. Offer them a percentage of the sales – and you have a win-win. Less clutter for your home. And you’re helping teach entrepreneurial skills & hard work!

4. Open House Instead of Garage Sale

When my parents moved, they had an open house. It was like a garage sale, except the items were free. They were moving from a huge house where they entertained a lot – to a smaller condominium, and Mom had so many lovely things she just didn’t use any more. She wanted to know that they were going to someone who would enjoy using them the way she did. We set up tables and displayed all the items – silver platters, crystal, percolaters, linens. Mom invited folks over – a number of whom were friends in my generation. They were so excited. I still have a friend who talks about how awesome Mom’s turkey roaster is! (They don’t make them like they used to.) Not only did this help clear her house of clutter and make moving easier – it was also a nice way for Mom to connect with folks before she moved.

The Belt Team has helped hundreds of clients downsize. And some on our team have even downsized themselves! If “rightsizing” is in your future, call Terry Belt & The Belt Team at (703) 242-3975. We are happy to meet with you and walk you through all kinds of helpful ideas to help you make the RIGHT move!

Search Homes For Sale in Northern VA On Our State-of-the-Art Search Site

FREE – How Much Is My Home Worth

The Belt Team’s Mission Statement is “Changing Lives For The Better“. if it’s time to change yours, call (703) 242-3975 today!

Downsizing Your Home

Open Houses in Vienna April 12th (Plus Opens All Around Northern Virginia)

Real Estate

If you’re thinking of buying or selling a home in Vienna this year (or anywhere in Northern VA) – open houses are a great way to get educated to the market. Here’s a list of what homes are open on April 12 2015:

Call The Belt Team at (703) 242-3975 if you find a house you’d like to see, but cannot attend the Open House – OR if you’d like to schedule a FREE Buyer or Seller Consultation.

When Selling Your Home, Do You Need to Stage It?

We are often asked whether or not a home needs to be “staged” when selling. And the answers is “It depends”.

There are different degrees of staging and your Realtor can help you decide which one works best for you.

1. CLEAN & SIMPLE

The most simple staging involves you preparing your home for market by cleaning & streamlining your house to look as appealing as possible. Your Realtor can do a walkthrough with you and give suggestions. This could include quick fixes like cleaning out your closets so they are only 1/3 full (so buyers feel like there is plenty of storage), clearing your kitchen counters (so buyers envision ample counter space) or hanging baskets of flowers on your front porch (for a friendly, welcome pop of color). There is no additional cost for this option.

2. STAGING CONSULT

The next level up might include a consultation with a professional stager. In Northern Virginia, this could cost in the $300+ range – depending on how much time the stager spends with you. The stager meets with you in your home, walks through with you and provides you with tips to implement to make your home more appealing. The stager might suggest things like removing certain pieces of furniture, rearranging others, removing draperies or regrouping wall hangings – to increase appeal, draw buyers’ eyes away from (or toward) certain features of your home and to help them envision how they would live there.

3. PARTIAL & FULL STAGING

Full staging is often used for new and/or vacant homes. The staging company will furnish some or all of your rooms. It’s a lot easier for Buyers to picture themselves in a home when the stager paints the picture for them. Partial staging is also an option and the stager can help you with storing some of your furniture, bringing in better pieces and developing a cohesive and attractive color scheme that appeals. As an example, you may have a HUGE dining room table – which is great for having the whole family for holiday meals. But if it overwhelms your dining room, potential Buyers may rule your home out because the dining room feels small. A stager can store your table and bring in one of her own that is more conducive to the room size.

Here’s an example of what happens when you stage and your competition does not!

Recently, we put a condo on the market. There were a number of other units in the same condominium for sale. None of the others were staged. And they had been on the market for a while.

When we listed our unit, we provided a staging consultation to our Sellers and at our recommendation the Seller went with Option 3. The cost for staging was $1,450.

Here’s what it looked like:

3000 Spout Run Parkway #A504 Arlington VA

When our unit came on the market, the others all reduced their prices.So – what happened? Was it worth it?

Absolutely! Within one weekend, our Seller’s unit was under contract. What about the others? Well – weeks later they are still for sale. And we know that per NAR stats, the longer a home is on the market, the less it will sell for.

Contact Terry Belt & The Belt Team at (703) 242-3975 if you are thinking of selling. We are happy to provide you with our FREE REPORT “90 Tips To Prepare Your Home For Market” .