Listing Courtesy of KELLER WILLIAMS REALTY
You want your approach to finding a new home in North Bethany to be at least somewhat hard-headed and businesslike. The financial stakes are certainly major, and to some extent, much of what your future lifestyle will be like will depend on making a good choice.
This is not to totally discount the emotional component that’s inevitably part of finding your new North Bethany home. You do want your family to feel good about the final choice—you’ll be moving to the dwelling that will become everybody’s center of operations.
So if your repeat visit begins to convince you that this really is the place you’ve been hoping to find, it’s the appropriate time to take a step back to do your most hard-headed, businesslike projection. This is beyond the back-of-the-envelope kind of calculation (the one that originally guided the price range you gave to your Realtor). This is time to take everything into account to see how well this new North Bethany home truly fits—on a number of counts.
A new home’s true affordability begins with the banker’s basic price formula—purchase price, mortgage, insurance and taxes. You should also contemplate the cost of having the property inspected and the closing costs (your Realtor® can give you a close estimate). But that’s not the whole picture—a new home’s true affordability also incorporates the difference between your family’s current expense profile and any factors that will change it.
For instance, if the square footage of the new home greater, you can expect that simple maintenance costs will rise proportionately (unless the new home’s condition is a good deal better than your current one). Utility costs may rise, too, if the living space is greater—unless more efficient systems are in place.
If the location will necessitate a change in driving distance or other transportation expenses, they should be taken into account. Does the new place have a significantly larger lawn or other landscaping features? If you have a green thumb and enjoy getting that kind of outdoor exercise (IOW, mowing), that won’t have much effect. If not, you’d better factor in a gardener’s bill.
There is one other element that’s easy to overlook, but accounting for it can eliminate the possibility that the whole move results in an unexpectedly depleted bank balance. Most people who are moving into a terrific new home forget to fully account for the few changes they’ll need to make before the place is perfectly suited their family. These could be minor, like changing out a light fixture that doesn’t fit the dining room table. Or they could be major, like addressing wholesale décor clashes that call for choosing between repainting the walls—or reupholstering— or even purchasing new furniture!
Helping you make sure your new North Bethany home is a comfortable match for your family’s needs is a large part of the service I provide my buyers. If you are ready to take a look at the latest crop of North Bethany new home offerings, I’ll be standing by for your call! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestate.com.
If you find yourself in a quandary over whether to jump into buying a home now or waiting for a clearer signal that the time is right, there is one method you can use to inject some hard numbers into your decision. It’s called the CTW.
CTW stands for “Cost to Wait.” It attempts to approximate the money saved or lost if buying a home today is postponed until a later date. The most reliable CTW calculations are based on what have proved to be the most accurate projections. For this example, we rely on quasi-governmental mortgage guarantor Freddie Mac for interest rates and CoreLogic for home pricing data projections.
Since projections are most accurate in the nearest term, the best example will be a simple one-year CTW. This one seeks to calculate the difference between buying a home in Delaware right now versus the same time next year.
Freddie Mac projects that from December’s annualized average PMMS (Primary Mortgage Market Survey) rate of 3.99%, a year later that rate is projected to rise to 4.5%. As for typical U.S. home prices, CoreLogic’s most recent projection is a 4.7% annual increase—similar to the past few years.
Let’s take for our Delaware example the Census Bureau’s U.S. new home sale price—December’s median was $335,400. At that price, assuming a 10% down payment, its 30-year mortgage at December’s rate resulted in a monthly payment of $1,439. If the assumptions prove true, by next January, the cash required for the 10% down payment will have increased by over $14,000—and the monthly mortgage payment would now equal $1,601(a monthly Cost To Wait of $162 per month).
Although that CTW may seem manageable, standing back to take the long view is a different story. For instance, by the time the mortgage has been fully paid, the entire CTW comes to more than $72,000—and that’s just for holding off for 12 months. Imagine what the CTW would be for waiting several years…or for a decade!
Although nobody can say for certain what the future will bring, it’s also true that over the long haul it’s likely that residential real estate will continue to do what it’s tended to do since time immemorial: grow more valuable. Especially given today’s still-historically low mortgage interest rates, the upshot is that buying the Delaware home of your dreams could very well be at its most economical right now.
I hope you’ll give me a call to see all the great buys currently available in Delaware. As the CTW measure illustrates so well—why wait until spring? Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.