Saturday, August 20, 2016
Preparing Renters to Become Home Owners
Recently, The National Association of REALTORS® wrote an article titled "5 Things Renters Should Know About Owning," which met with a few critical comments suggesting renters would be discouraged to pursue home ownership as a result of reading it.
As a REALTOR, I feel it's important people who have never owned a home before enter into their search with eyes wide open. Perhaps taxes, regular maintenance, and the impact of neighbors on home value haven't occurred to them.
Let's discuss each point brought up in the article.
Renters need to understand how their financial investment is changing.
This is why it's so important to sit down with a lender prior to looking at homes.Talking to a lender to discuss your financial situation avoids disappointment later on. Taxes, association fees, insurance, and other fees must be taken into consideration prior to putting an offer in on a home. I've also actually had some clients who discovered they could afford more of a home than they originally thought. That flexibility allowed them to find a home they truly loved.
Renters need to be happy with their location for the long-term.
This is so true. As a former renter, the greater ease of moving to a city or town with a higher ranking school district or better crime stats was appealing. Once you have a mortgage, it's not so simple. Homeowners are living at the same place an average of seven years. That's a long time if you're not happy with where you live.
Renters may need to abide by new rules.
All of the associations I work with for rentals require tenants to abide by the same rules as owners. What could happen, however, is that the owner's association fees increase--a cost they may or may not pass along to the tenant. When renters become home buyers, they will need to budget for those potential increases and keep abreast of changes in the rules and regulations governing the association.
Renters need to get into the mindset of an owner.
This mostly comes down to learning how to budget your money. It's a discussion for future homeowners to have privately, but I think the lender and, in some ways, the REALTOR can focus attention on that in the beginning when they start talking about the home search and some of the fees involved in purchasing a home. A REALTOR will also have a list of contractors to share when repairs do arise.
Renters should know their neighbors can affect their value.
This is actually a point current homeowners need to be aware of too or they become aware of when there are issues. Price is not the only factor to consider; though it is a very important one. This is one of the reasons we encourage buyers to drive by a neighborhood before requesting to see a property.
Honest, it's not because we're lazy.
Driving by will allow you to see what the rest of the homes in the neighborhood look like. You'll see if the outside of the property is being kept in good condition--a requirement if you finance your home, as it protects the banks' investment.
This truly saves everyone time during your home search. I've been to more than one property that my clients immediately knew they weren't interested in because of the house next door or across the street.
Keeping these points in mind will help renters as they transition into home ownership.