The City of Flagstaff has implemented a new program for its employees to help them to purchase a home. The City of Flagstaff will offer up to $10,000 for eligible city employees to be used for down payment and/or closing costs on the purchase of a home. These funds are matching funds, so The City will match dollar for dollar what the employee contributes up to $10,000. There are some eligibility requirements that the employee needs to meet, and there are eligibility requirements for the homes as well. There are many other details about the program that we would love to share with you.
If you work for the city or know someone who does, please contact us and we can give you all of the details. We also recommend calling a great local lender, Erin Moore at Prime Lending who also knows a lot about this program. Erin and her team can be reached at (928) 864-5846.
Check out this article for some pretty good reasons to buy that dream house now. Call us at 928-714-0001 or email us at firstname.lastname@example.org and we can explain the process in more detail and guide you through with as little stress as possible.
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Call Eric, Jessica or Sara at 928-714-0001 or email us.
Amy Hoak almost always has something worthwhile to say about real estate in her MarketWatch.com column, and the latest is no exception. She starts by noting that the market has gotten more competitive, and more expensive, for home buyers over the last year. But she urges home buyers to “keep a sense of perspective.”
Hoak offers same assessment for the national market that I’ve had for the Flagstaff real estate market: Prices will go up in 2014, but not as fast as they did in 2013. Although I did a double-take today when I heard that a Flagstaff home that sold for $660,000 14 months ago is under contract $50,000 higher. But, it’s an exceptional Flagstaff neighborhood. (And that’s still a lower percentage increase than the median increase for 2013.)
So, Amy Hoak offers six points of advice for buying a home in 2014:
1. Buy early this year rather than later.
2. Hire an expert — an experienced Realtor.® (That’s where we come in — give us a call at 928-714-0001, or start by visiting our Flagstaff real estate website.)
3. Know the market. Your Realtor® will help with that.
4. Know what you can afford. That’s different from what you qualify for — you need to be comfortable with the payment your mortgage banker says you qualify for.
5. Be an attractive buyer. Have all your ducks in a row with a Flagstaff mortgage banker before you start shopping for a home. Also, your offer won’t be competitive if it’s contingent on selling a house that you haven’t listed, and probably not if your listed home is not yet under contract itself. (But don’t give up all conditions — you definitely want to inspect the home you are buying.)
6. Consider other neighborhoods. Be willing to expand your horizons because Flagstaff home inventory is low — remember, it’s only 20 minutes from one end of town to the other!
When buying a Flagstaff home, consider these points
Anyone who has ever bought a home—or rented one, for that matter—has likely heard this standard piece of advice: Don’t commit to more than you can afford.
But there are other questions you should be pondering before and during your home search to find a place that’s best for your needs. Housing designer Marianne Cusato wrote a whole book, The Just Right Home, about how people can search their souls to find a home that’s a perfect fit.
“Right now, it’s a great time to purchase,” she said, especially given low mortgage-interest rates. “But you’ll lose more money by jumping into the wrong house” than paying higher interest rates later. So take a breath. It pays to critically consider your housing options.
For example, unexpected repairs can catch homeowners off guard. Or, if you decide after a couple of years that you need to move again, you’ll be spending money on another round of closing costs.
Even if a bad choice doesn’t cost you money, it could mean the difference between loving and tolerating where you live. A recent survey by Trulia, a real-estate website, found that 56% of renters and 50% of homeowners have regrets about their current home or the process of choosing it. Homeowners most commonly wished they had bought a larger home, according to the survey of 2,000 consumers. Renters most commonly wished they had bought instead of rented.
As the adage has it, the three most important considerations when buying real estate are location, location and location. After all, you can change much about how a home functions and looks after you purchase it, but you can’t change the location of the lot on which it is built.
“Proximity,” according to Cusato, is where the home is in relation to what you do every day. She urges that you “Think about where you have to go to take the kids to school, where you go to work, where you get groceries. What do you want your lifestyle to be in your free time?”
Buying at a distance from a city center may give you a less expensive home price, but some who did this during the housing boom ended up spending 30% of their incomes on transportation alone. Your time is valuable. Do you want to spend it commuting?
2. What hidden costs are in store?
Perhaps your list of must-haves includes a large yard for the kids to play in. But before buying all that land, Cusato said she advises considering whether it’s worth the expense of keeping it up. Think about how you want to engage with your outdoor. If all you want is a pretty scene through a window, maybe a smaller yard with a view makes more sense for you—that way someone else is on the hook for the upkeep.
Also consider what it will take to heat and cool the home before buying it. Cusato suggests asking for utility bills, but I always advise that you be cautious in looking at what someone else spent to heat or cool a home – their comfort level and occupancy use may not be the same as yours. Look at the structural components and think about the space. Use consultants.
3. Ask yourself: Is it what you really want?
It’s easy to go with the flow and do what you think most people do: rent after college, then buy a starter house, then a move-up house, then a retirement home in Arizona. Instead, focus on meeting your needs, Cusato said. Personally, I bought five homes from age 26 to 45 and plan to die in this last one – I finally got it right.
Don’t worry too much right now about the resale value of the home. “Worry about the next owner later. When we actually meet our needs, there are a lot of people who have those similar needs, too,” she said.
4. Ask yourself: Is this what you really need?
Take a reality check. Will it be enough space for your family a few years down the line, or will you have to move if your family grows? Will it be too much space in a few years?
Can you afford this home now and in the future? Don’t stretch, figuring you’ll have a bigger income down the line, Cusato said. If you get a raise, it should make your budget that much more comfortable.
It’s really easy to push that limit by mistake. “Maybe you push the limit on the mortgage, but then get ambushed by how much it is to get to and from [the house] or how much it is to maintain it,” she said.
5. Have you mastered the balancing act?
A home isn’t sustainable if you can’t easily live in it or can’t make the payments, or if you simply don’t like living there. But “there’s no such thing as the perfect house at the perfect price in the perfect place,” either, Cusato said.
Compromises will need to be made, especially purchasing in a smaller, expensive market like Flagstaff. Get help thinking through what’s right for you. Contact the Elite Team at RE/MAX Peak Properties.
Down payments, Earnest Money, Upfront Appraisal Fees, Homeowners Insurance, Inspectors’ Fees and the dreaded Closing Costs are all expenses faced by buyers when purchasing a home
The days of zero down payment loans are mostly gone – receded into the days of the go-go housing market. There are still some programs left which offer down payment assistance, but most programs still require a contribution from the buyer. Mortgage brokers provide great knowledge of the special programs including the City of Flagstaff Bond Program. Also, the Veterans Administration does still offer a true zero down payment loan.
Special down payment assistance programs aside, the standard options for down payments are 3.5% for an FHA loan and 5%, 10% or 20% down payment on a Conventional Loan. The calculation of the down payment is straight forward, simply the purchase price multiplied by the percentage you plan to put down.
Closing Costs are a second portion of money needed to buy a house and the calculation of these costs is more elusive.
A very rough rule-of-thumb for Buyer Closing Costs is 3% of the purchase price of your home.
The first 1% is usually your Loan Origination Fee. This fee pays the mortgage company for the work they do setting up your mortgage, the loan officer and processor have a share of this fee.
I refer to the second 1% as government and processing fees. Included in this portion are taxes prorations (which may be in your favor depending on the time of year you close), appraisal fees, title updating fees, title company fees, recording fees and the like.
The final 1% is money the mortgage company collects from you to start and fund your escrow account. The escrow account funding is several months’ worth of property taxes and one full year of homeowner’s insurance.
Now for some good news! It is possible to ask the Sellers of the property you are purchasing to pay for some or all of your closing costs. Mortgages have certain restrictions and limitations about Sellers paying your closing costs, but most allow up to 3% of the purchase price to be paid by the Sellers of the home. In the competitive market we have for lower-priced homes in Flagstaff, many sellers refuse to agree to this without an increase in the purchase price.
When the Seller agrees and you choose to take these seller “concessions,” you are rolling in the closing costs and really self-financing them into your purchase. If a Seller will accept a $200,000 offer and pay 3% ($6000) towards your closing costs, then it’s fair to assume you could have purchased the home for $194,000 if you were to pay for your own closing costs.
If you negotiate the closing costs into the price of the home, the total amount of money needed to buy a home is just 3.5% of the purchase price. Mortgage programs including FHA and VA allow the 3.5% or a portion of it to be Gift Funds. When you receive gift funds it must be from a Parent, Grandparent, or other type of Significant Relationship and the donor must sign a gift letter confirming the funds as a gift.
The third element of a Home Buyer’s costs is the cost of home inspections. I recommend going into the process expecting to pay $1000 and you’ll usually be happy that you pay more like $500 for the whole process. The standard home inspection will cost $400 or less and you should also have a pest inspection for $90-$100. You may choose to do a radon test (I recommend on in most areas of Flagstaff) of varying types and costs and you may need to have a well inspected in some rural areas. Your home inspector may recommend other inspections.
Buying a Flagstaff home is more affordable now than ever before. The affordability is based on still relatively low home prices and record low mortgage interest rates. Home prices are higher than they were last year – at least for homes under $300,000, but they are still lower than in years past and lower than they are likely to be next year.