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HOAs and How They Can Impact Your Purchase
There are a multitude of things house hunters need to consider before choosing a home, such as price, location, schools, distance to work”the list goes on and on.
Most homebuyers may not think about the costs and rules associated with buying a house thats part of a homeowners association; however, it is an issue they may run across.
For those unfamiliar, a homeowner’s association (HOA) is a legal entity that manages a shared housing complex”that doesnt just mean a condo or a series of town homes. In some cases, it includes a suburban housing development with shared space or a specific neighborhood.
If a home is part of an HOA, the information should be available right in the MLS. You can always ask your REALTOR to be sure. The last thing you want is an unexpected fee tied to your home purchase.
Though the costs vary, most HOAs collect monthly dues and the money is earmarked to fund activities or repairs for fellow participants. This could include things like block parties or lawn maintenance.
Keep in mind that you can’t “choose” to be excluded from an HOA. If you buy a home that has one, youre required to be part of it and pay the dues. The structure of an association can vary, depending on the total number of members, but most have a president, treasurer and some elected board members.
When youre part of an HOA, there are rules you must follow. And depending on how strict yours is, it can be a pain. For instance, there may be a rule about what color you can paint your door, or the type of mailbox you can have, or even where you must place your garbage pails. If you consistently break the rules, you can be fined or, worse, make enemies with those in the neighborhood.
While there are benefits to buying a home thats part of an HOA, you should still understand the requirements before deciding to buy.
Published with permission from RISMedia.
How a Master Suite Could Affect Home Values
A master suite can be a private oasis in your new homebut it can also factor into your homes value.
Typical features include a large bedroom area, spacious closets, a luxurious bathroom and other amenities.
But a master suite can be expensive and affect the homes appeal whenever you decide to sell.
Before buying a home, ask how the property compares to others in the area.
You might not mind if your suite is smaller or less elaborate now, but it could leave future buyers underwhelmed.
On the other hand, if your suite ends up too customized or showy, that could also limit the pool of future buyers.
A real estate agent can help you make the best decisions about your master suite keeping your homes resale value.
Published with permission from RISMedia.
Costs of Pool Ownership
A backyard pool can look like a lot of fun when youre house-hunting. Summer days full of swimming and splashing around your pool can be great fun, but sooner or later youre going to have to face the costs that come with a pool.
Here are some of the costs of pool ownership:
Maintenance
Before buying a home, homebuyers should hire a professional pool company to inspect the pool to ensure it was maintained properly and regularly.
Proper maintenance can keep a pool from falling apart before the end of its expected lifetime, usually 40 years or so if made of concrete. Expect to pay about $100 per month for regular maintenance.
Chemicals
Expect to spend about $100 per month on chemicals to balance the water levels and keep the pH level (acidity) at appropriate levels. High acidity can damage the pool liner, pipes, heater and filter system. Chlorine is needed to kill bacteria and algae.
Equipment
A pool pump filters the water to keep it clean and should run 24 hours a day, adding to your electricity costs. A pump can last up to 10 years and costs about $600. Pumps, filters and chlorination systems can require minor repairs from time to time, so count on about $200 per year for equipment parts.
Electricity
Whether heating the pool or running the pump, expect to pay $200 for electricity for every month of use of your pool.
Insurance
Insurers consider a pool an attractive nuisance that may require additional liability insurance. Installing pool gates may be mandated by your insurer or local government, adding an extra cost.
Most homeowners policies include at least $100,000 worth of liability protection, though pool owners may want to consider increasing it to $300,000 or $500,000.
An umbrella policy for $1 million in liability protection above what the home already is protected for can cost an extra $200 to $300 per year. Extra insurance may also be needed to replace the pool if its destroyed by a storm or other disaster.
All of these costs may not dissuade you from buying a home with a pool, but its important information to know before making a real estate investment. At least youll know before you get into the pool how much that daily swim will cost you.
Published with permission from RISMedia.
How to Save Big for a Down Payment on a House
The higher a down payment is on a house, the cheaper the mortgage will be. Its simple math.
The traditional down payment of 20 percent for a house is just that ” traditional. There are all types of loans that can range from zero down to 3, 5 or 10 percent of a homes purchase price required upfront as a down payment.
Saving big ” such as 20 percent ” is a smart way to prepare to buy a house because the more money thats put down, the more favorable the loan terms can be. Whatever amount you want to come up with for a down payment, there are different ways to save for it. Here are a few:
Divide it into increments
Lets say youre planning to save for five years before you buy a house. If you want to save $50,000 for a down payment, youll need to save $10,000 per year. Divide that by 12 and your monthly savings goal is $833.
However you accomplish it, thats your monthly goal ” saving $833 per month. Its a big number, but its a lot smaller than seeing the ultimate goal of $50,000, and is easier to comprehend than an annual $10,000 goal. With that goal in mind, your next step is to figure out how to get there each month.
Save money everywhere you can
Any expenses you can save can add up to monthly savings ” as long as you put that savings aside in a savings account for your down payment fund.
Look at cutting cable TV, cell phone service, gardening and housecleaning bills, and any other expenses that can either be cut back or eliminated. Put the difference in your savings account.
Work extra and sell your extra stuff
Two people can save for a house by working an extra two hours per day. There are all kinds of jobs in the gig economy, from dog walking to house sitting, driving Uber, tutoring and selling a service or product online.
If you have extra stuff that youre not using anymore, sell it online. If your old bike is collecting dust and is in good shape or can be repaired inexpensively, chances are someone will buy it.
Invest
Whatever extra money you make, invest it and let it work for you for the next five years. Compound interest from a mutual fund that you contribute to monthly can grow a lot faster than a savings account can.
Before investing, know that you can lose some or possibly all of your investment. So only invest as much money as youre willing to risk losing. The longer you invest, the more likely you are to ride out market volatility and meet your financial goals.
Published with permission from RISMedia.