40 Essential Tips for Selling, Buying, and Owning a Home
Buying or selling a home is one of life's most important financial decisions. While it's often intensely personal, some essential advice often applies no matter what the circumstances. These 40 tips can help homebuyers and sellers get the most out of the transaction, work with real estate agents, and find tax deductions in their new digs.
Related: 10 Home-Buying Myths Debunked
A realistic budget can help narrow the search for a home to what's truly affordable. A comprehensive budget includes the monthly cost of mortgage payments, taxes, homeowners insurance, and home association dues (as well as premiums on private mortgage insurance, which protects the lender if the homeowner cannot or does not make payments, when applicable). There are online calculators to help buyers pin down a number.
When selling a home, create a good first impression. Touch up the paint, mow the lawn, trim the bushes, and clean the entire front yard thoroughly. Small investments such as a new mailbox, a few plants, or a bench for a front patio could also attract buyers.
Is it better to rent or buy? It's an endless debate with no clear answer, as personal circumstances and geography change the equation. Consider the pros and cons carefully. The New York Times has created a calculator to help crunch the numbers.
Related: Your First House: 13 Tips for Saving and Buying
The longer a listing stays unsold, the less attractive it may appear to potential buyers. They may think something is wrong with the home or stick to lowball offers. To prevent this, prepare the home for sale, determine a realistic opening price, and be ready to move quickly once the home is listed.
Pictures may be worth a thousand words, but words still matter. Real estate site Zillow analyzed the text of ads and found that using terms such as "luxurious," "captivating," and "impeccable" (if they describe the home accurately, anyway) can increase the selling price.
Before an open house, homeowners should clean out or spend time organizing storage areas. Try to keep things as tidy as possible, and consider buying new shelving or storage units if they will help make a good impression. To emphasize the possibilities to buyers, consider renting a storage unit and emptying closets or the pantry while showing a home.
When showing a home, emphasize the natural light. Move plants away from the windows, clean the glass regularly, and consider upgrading the curtains to draw buyers' attention.
Homeowners whose homes lose value because of a sudden, unexpected, or unusual event may be able to write off the loss. Earthquakes, fires, floods, volcanic eruptions, and tornados are a few examples. For the deduction, homeowners must subtract $100 from the value lost during each event and the remaining value must exceed 10 percent of the homeowner's adjusted gross income.
Windows might not provide enough light on their own during the winter. Turn lights on and ask real estate agents for tips on adding lighting to a room. Agents may be able to pinpoint where adding a lamp will make a big difference.
A good credit score can lead to lower mortgage rates and save buyers a lot of money over the life of a loan. Avoid applying for credit accounts such as an auto loan or credit card when shopping for a home. The act of opening the account can lower the applicant's credit score for six months to a year.
Related: 15 Things That Do Not Affect Your Credit Score
Losses from a home burglary could be tax-deductible. As with damage to the home, the deduction is equal to $100 less than the value of the lost property, and only the portion that exceeds 10 percent of the owner's adjusted gross income is deductible.
After living in a home for two of the previous five years, sellers can deduct up to $250,000 in profits when selling, or $500,000 for married couples filing jointly. The deduction can be taken multiple times but applies only to primary residences owned and occupied for at least two years.
During the period between the acceptance of an offer and the closing, the buyer can pay for a home inspection. Look for an independent inspector who is licensed and insured; look over the report closely; and don't be afraid to ask questions.