5 Ways to Save for a Down Payment on Your New Home

Are you trying to save money for a down payment on a house? I have five simple tips to help you do just that.

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I recently ran across an infographic from the National Association of Realtors about simple ways to save money for a down payment on your next home. 

Roughly 60% of homebuyers financed their home with less than 6% down in 2017. Since the current median sales price is $258,300, a 6% down payment is about $15,498. Here are five simple ways to save up that money: 

1. Give up your morning latte. The average cost of a latte is $3.78, or more depending on where you go. That’s $1,300 a year you could save. 

Skip your morning latte and you could save at least $1,300 a year.

2. Cut out cable. The average cable package costs $100 a month. That’s $1,200 a year right there. 

3. Bring your own lunch. Brown-bagging it will save you some money. The average American spends $11 a meal when they go out to eat. Here in Fairbanks, that’s probably a little more. You can save $1,000 a year right there.

4. Stop going out to eat. The average American spends about $232 per month eating out. Staying in and making your meals will save you nearly $2,800 per year. 

5. Go car-free. The average American spends around $713 a month on their car. Taking the bus, riding your bike, or carpooling will save you more than $8,500 a year. 

That’s how you save for your down payment (or to cover those closing costs) and get into a home. 

If you have any other questions about buying a home or about real estate in general, just give me a call or send me an email. I would be happy to help you.

The 10 Most Expensive Mistakes Alaskan Homeowners Make

Are you making any of these top 10 homeowner mistakes? I’ll go over the full list and how to avoid them today.

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Today, I want to go over the 10 most expensive mistakes you are making in your home. I’ll also share how to avoid them and save your money.  

1. Using traditional light bulbs. If you haven’t made this switch yet, you are missing out. We cut our electric bill in half just by replacing all those incandescent lights with LED lights. It may cost a bit up front to make the switch, but in the end, you will save a lot of money on your electric bills. 

2. Ignoring a leaky faucet. If you’re on a well, you might not think that’s a big deal. However, I recommend that you check your bill if you are in the city on city water. If you have a running toilet or leaky faucet, that is probably why your water bill is twice as much as it was. 

3. Not getting your boiler tuned and cleaned by a professional. This is something you should do annually so that your boiler runs at peak efficiency. 

4. Not customizing your temperatures. If you don’t have some sort of boiler control, outdoor reset, or programmable thermostat, you are costing yourself extra money. Make sure that you are fluctuating the heat for when you’re not in the home in order to save on your heating bill. 

Updating your light bulbs could cut your electric bill in half.

5. Not adjusting your HRV correctly. It’s not uncommon that I go to a house and the HRV is pumping out air all the time, which means you are heating the outside air and bringing in cold air. 

6. Not cleaning your gutters. 

7. Your water temperature is set too high. If you have an electric water heater, check that. The same goes for an oil-fired furnace—it might be set too high.  

8. Leaky windows and doors. Check the seals on the bottom of the doors. If seals get torn up, replace them. Small drafts add up and cost you money. 

9. Paying a handyman. Sometimes if you do some of these things yourself, you’ll come out ahead. Having a handyman can be expensive, but if you don’t know what you’re doing, hire a handyman. 

10. Not using a timer for your car head bolt heaters. If you plug your car into a straight outlet and don’t put that on a timer, then you are adding a lot of money to your electric bill.

I hope you found this list helpful. What other things should homeowners know about? Give us a call or send us an email with any questions or suggestions you might have. I look forward to hearing from you!

On Your Mark? Get Set….List!

The market is getting ready to spring forward soon. Are you ready?

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Just like our clocks recently, the majority of the housing market is soon going to spring forward.

Right now, the lack of inventory available for sale is holding the market back, and the Fairbanks-North Pole market is no different.

Currently, we’re at three months of inventory or less, yet the demand is still extremely strong. A lot of potential sellers believe that waiting until spring is in their best interest, and traditionally, they’ve been right. Buyer demand is somewhat seasonal, but not to the extent that most Fairbanks and North Pole homeowners believe. It does usually fall off in the winter months, especially in areas of the country that are impacted by Arctic conditions, like we are. However, it doesn’t stop completely.

The NAR recently reported that the top 10 dates that sellers typically listed their homes in 2017 included April, May, and June.

The demand has remained strong because housing rates are increasing, which motivates a lot of buyers, causing them to get off the fence and enter the market. The National Association of Realtors recently reported that the top 10 dates that sellers typically listed their homes in 2017 included April, May, and June.

Those who act quickly in listing their home could greatly benefit from the exposure to this large pool of buyers who don't have a lot of inventory to look at. 

If you’re looking to sell your home in 2018, you need to meet with one of my real estate agents so we can assess your situation. Feel free to reach out to us. We’d be happy to be your real estate resource.

Is Buying a Home Like Buying a New Car?

How does buying a new home compare to buying a car? Today, I’ll break down the key differences.

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I’d like to thank Brendon DeSimone from Zillow for the question of the day: “Is buying a home like buying a new car?”

When you drive a new car off the lot, it immediately loses some of its value. Does the same apply to real estate and, if so, should you care?

The main thing to know is that real estate appreciates. It doesn’t depreciate unless you’ve really bought the wrong property. However, in real estate, time is on your side. 

If you close on a home, the day after you close, you’ll be in what’s called a negative equity position. That doesn’t mean that you lost value; it just means that you’ve spent money and it hasn’t yet appreciated to make it worth your while to sell it at that time.

If you could stay in the home for three or more years, generally speaking (and especially in the interior of Alaska), you’ll be in a positive equity position.

This is opposed to buying a new car, which only continues to depreciate over time. You can look at economic trend graphs and see that, over the years, the real estate market is one of the best markets that we have in the country.

New cars only depreciate in value over time.

Another question is: “Does the new car theory apply?”

There are definitely pros to buying a new house versus an existing house, but you want to realize that, though your home may not be worth as much as a brand-new comparable home, it has appreciated from the time when you bought it. We don’t compare an old home to a new home when we’re doing price valuations.

The maintenance of a new home versus an existing home is also worth considering. You may believe that buying a new home will entail fewer maintenance tasks. In Alaska, there are preventative maintenance items that are necessary for any home. But a new home comes with warranties. The builder matters as well. If you’re buying from a reputable builder, you have product warranties on the appliances, a one-year builder warranty, and a 10-year structural warranty.

If you’re buying an existing home, one of the things to think about is buying a third-party warranty. That way, you can compete with the peace of mind that new homes bring.

Lastly, I want to make sure that you understand that it is a home first and an investment second. Even though buying a car that depreciates as soon as you drive it off the lot doesn’t seem to make sense, people see cars as a necessity. They want something comfortable to drive to work every day or something safe for their family. It’s the same thing with homes, so don’t get too wrapped up in the investment aspect of it. Just enjoy the home the same way you would with a car.

If you have any questions regarding real estate, feel free to reach out and contact me. I may use your question to make another video for the blog.

3 Areas of Impact That Will Make or Break Your Listing

If you’re struggling to move your listing off the market, there are three major impact areas you need to examine.

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Today, we’ll be looking at the answer to an age-old question: “What should I do when my home isn’t selling?”

If you find yourself in this predicament, there are usually three major impact areas you should look at: 
  1. Price. The first thing your Realtor should do when your listing isn’t moving is to conduct a price analysis. This will show you how your property compares to the rest of the market. You and your Realtor will look at listings that are active, pending, and closed to see how your own listing stacks up. Now, there is a difference between getting no showings and no offers, getting showings but no offers, and getting both showings and offers. Where your listing falls within those three options will indicate its potential for success. 
  2. Condition. Certain issues pertaining to your home’s condition may be a matter of functional obsolescence. Some things, like floor plan and location, cannot be changed. These fixed attributes will typically be compensated for by a change in price. However, other aspects of a home’s condition can be altered. To get an idea of how your home’s condition comes across to buyers, think first about the feedback you’ve been getting from showings. Using this feedback, you can make informed decisions about how to upgrade your home’s condition. First impressions are important, so your listing needs to be in good shape. Also, never offer a credit to compensate for a conditional shortcoming. If the carpet needs to be replaced, just replace it. Don’t offer a credit for the buyer to do it themselves. 
  3. Marketing. The right agent will have a proven marketing plan with consistent results. They will be able to tell you how much online traffic your listing has received, for example. If this isn’t the experience your current agent is providing for you, it’s time to make a switch. Over 90% of all buyers start their search online, so your listing’s online presence must be second to none. 

Over 90% of all buyers start their search online, so your listing’s online presence must be second to none.

So, what happens if your listing misses the mark on all three of these areas? If that is the case, you need to utilize a rebranding strategy. If you’re curious about what a rebranding strategy is, give us a call or visit www.maddenrealestate.com. We would be happy to explain more about this strategy to you. 

As always, if you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Disclaimer: If your property is currently listed by another brokerage, this video is not intended to solicit your listing.