Biggest mistake homebuyers make in trying to get a good deal

The process of buying a house requires an investment of time as well as money. So, if you want to get a good deal, doing your homework is crucial.
The fallacy is that ‘getting a good deal’ is all locked in at the initial transaction, on the purchase price or the initial loan.
In reality, that assumption is not always true. When you become a homeowner, the money you had been putting toward rent not only goes toward a mortgage, but to insurance, repairs, maintenance and upgrades.
You have to think of homeownership not just as a one-time event, but as a process over the life of you owning this asset that you’ll be able to manage it wisely and make smart choices with it.
Say you negotiate the purchase price down 5 percent from what the seller is asking and are able to get the loan you want at a quarter point below market rate. Sounds like a great deal, right? Well, not so much if the reason the seller is willing to decrease the price is because the home needs repairs or renovations.
If you’re saving $10,000 on the purchase price but you have to spend $30,000 gutting the kitchen, the home might not be much of a deal.
Don’t be fooled by the sticker price. It’s only the beginning.
For buyers who have saved up and worked toward buying a home for years, it can be overwhelming to think about all the abstract costs associated with homeownership. Think of it like buying a car: You might be able to afford a $300 a month payment on its own, but how much does it cost once you add the price of gas, insurance, oil changes and other maintenance?
It’s a misconception as a car owner to think that it’s the down payment on the car and the monthly cost, and that’s it. Ditto for homeowners. You should not think, ‘Oh I got an interest rate of 3 percent, I got a good deal!’ or ‘The home is being offered for $950,000 and I got it for $930,000. I got a great deal!’
In the context of owning your home, if you plan to live there for the next seven to 10 years — or for the rest of your life — knowing whether or not you got a good deal depends on how well you managed the overall homeownership process.
Homeowners can expect to pay around 3 percent of the of the closing price per year on hidden costs, such as repairs and utilities, although your expenses will vary depending on your location and the size and quality of your home.
I also recommend researching home warranties, which can provide another layer of financial protection.
If you’re trying to get the best possible deal on a home, you need to think long-term. In addition to the initial price of each home, consider the investments you’d need to make years down the line. Being aware of the big picture now could help you save big now — as well as later.

 

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

UPCOMING POCKET LISTING – Welcome to Hawaii in Hope Ranch / Resort Style Living in Paradise!

001 46_en Welcome to Hawaii in Hope Ranch / Resort Style Living in Paradise

Fabulously updated in 2012 with a $600,000 custom renovation, this Hope Ranch Home boasts +/- 3900 square feet with 4 Bedrooms, and 4 bathrooms all surrounded by sweeping views of the Mountains, Lake & Golf Course. This house screams ‘designer’ and reflects the personality and taste of those accustomed to the best in quality finishes and lifestyle.

The Open floor plan boasts high beamed ceilings, Hardwood floors, a beautiful living room with high coved ceilings, Media Room, and 2 fireplaces. The Gourmet kitchen with Custom Cabinetry, is adjacent to both formal and informal dining areas and designed with top of the line finishes.

There are 2 Master Suites, both bright and airy. The Upstairs Master is complete with a fireplace & access to the pristine views & the downstairs master has both His & Her walk in closets.

The layout of the property is perfect for both indoor and outdoor entertaining. The 1.96 acre grounds are fully gated and complimented by a luxurious pool & spa, covered & uncovered patio, beautifully manicured landscaping and picturesque oak & palm trees. The untouched one acre lower parcel is a perfect canvas for your personal touches.

Amenities within Hope Ranch include tennis courts, a private beach, 24 hour security, 26 miles of horse trails and located in a friendly community with an award-winning school system.

The property is a short distance from La Cumbre Country Club, a competitive 18 Hole Golf Course and Tennis Facility. The Club recently underwent the addition of a new state of the art fitness center and has an aquatics area and several dining areas. All of this within just minutes of downtown Santa Barbara.

Come experience turnkey living while taking advantage of the Quintessential Santa Barbara lifestyle! This home is reminiscent of a tropical getaway and ideally positioned in close proximity to beaches, cafes, restaurants, & shopping. Welcome to Hawaii in Hope Ranch!

Offered at $3,595,000

Please Go to www.LuxuryInHopeRanch.com for Full Property Details

 

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Santa Barbara Real Estate Market Trends – March 2015

Santa Barbara Real Estate Market Trends - March 2015 —————————————————-

Looking to buy or sell a luxury estate, home, condominium or investment property?

Let me help you find everything you need to know about buying or selling a home. Call or email me today!

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

5 Serious Tips to Attract the Serious Fall Home Buyer

santa-barbara-homes-for-sale-2014 Home sales typically cool down along with the weather in the fall and winter months – but realtors say that some savvy sellers can quickly sell a property for a decent price this time of year.

Because fewer people are on the market in the fall means you have less competition. Plus, people on the prowl for houses at this time of year tend to be more serious shoppers, compared to the browsers and neighborhood nosy bodies who might make a day of hitting open houses just for fun in the spring.

People who are house hunting now are the real buyers. They wouldn’t be out there if they didn’t need to be.

Some other forces are bringing buyers out now: While it’s still tough to get a mortgage, lending standards are starting to loosen up. The average FICO credit score on conventional loans used to purchase homes in August was 727, down from 738 a year ago, according to Ellie Mae. That, combined with the exit of big investors, should bring more buyers to the market. At about 4.2 percent, mortgage rates are still relatively low.

This market is also a boon to trade-up buyers, many of whom were sidelined when the housing bust left them without enough equity to sell without bringing cash to the table. About 950,000 homeowners regained equity in the second quarter of this year, according to CoreLogic. The National Association of Realtors actually expects home sales to be stronger in the second half of this year.

For a quick sale, try these steps:

1. Take photos ASAP.
Get a few shots of the exterior now. That way, when you’re ready to list, you won’t be stuck with photos of bare trees and a lawn.

In general, it’s better to list your property earlier in the fall anyway. Thanksgiving is a dead week, and things are slower during the holidays. Not only are buyers home celebrating with their families but realtors are, too.

2. Price your home correctly.
Yes, it’s a seller’s market right now but the pace of price increases is slowing. Bidding wars are becoming less frequent and tend to occur when homes are underpriced, realtors say. The best way to sell a home quickly is to price it correctly at listing. Otherwise it may sit on the market until you cut the price, which could push you into the competitive spring selling season with a stale listing.

3. Keep it warm.
Have all the curtains drawn back to provide as much light into the home as possible. That, combined with a constantly open front door that lets in potential buyers, can make for a chilly house. Be sure to keep an eye on the thermostat so that the temperature remains comfortable. Even better than turning up the heat: Start a fire in your fireplace, to show off that feature.

4. Go easy on the holiday decorations.
You may want to put your holiday cheer on hold this year, at least when it comes to sprucing up the homestead. Holiday decorations add clutter and religious-themed décor could turn off some buyers. A simple understated wreath or a basket of acorns and gourds is plenty. Nobody wants to see ten inflatable ghosts on your lawn for Halloween.

Clear out non-holiday related clutter, too. Start now; the process can take longer than you think. Remove as many personal items as possible to make it easier for potential buyers to see themselves living there. Aim to clear away about 50 percent of your belongings. Get rid of anything you haven’t used in a year, and put extra furniture or other large items in storage.

5. Refocus on curb appeal.

Make sure your home is well-lit from the outside, too. Buyers often drive by potential homes after work; since it gets dark earlier in the winter, you want them to see your house easily.

Also, consider a few minor upgrades on the inside, like new cabinet hardware or light fixtures. Small projects can freshen things up and help set your home apart. Consider getting a home inspection to make sure there are no surprises that could derail a sale.

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Looking to buy or sell a luxury estate, home, condominium or investment property?

Let me help you find everything you need to know about buying or selling a home. Call or email me today!

—————————————————-

Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

The Evolution of the Dining Room

Elegant-Wooden-Dining-Room-Sets-Jon-Mahoney-Santa-Barbara

Some builders, architects, and real estate pros have said dining rooms are a thing of the past — a relic of older homes, like avocado green kitchens and shag carpeting.

Not so fast! Maybe dining rooms aren’t as passé as thought in recent years.

While eliminating the concept of a room devoted only to traditional dining may appeal to more home owners, many still want to purchase a house with a separate dining space. The reason? It can work in a multitude of ways, depending on a family’s interests.

You should understand all the possibilities, along with the risks, if you want to make permanent changes to a home’s layouts.

Think open-style or great room.
New home construction, which often indicates current buying trends, reveals that the living room could either disappear or merge with other rooms, according to a survey from the National Association of Home Builders about the 2015 new home. This is hardly surprising given that informal living and dining continues to gain fans, even among home owners residing in existing traditional houses, condominiums, and townhouses.

Many will take down walls for an interflowing, all-in-one kitchen-dining-living room. Keeping all areas open to one another offers another advantage: The space tends to look larger.

Know the niche.
The open layout may not appeal to some buyers. The size and price range of houses often determine whether a traditional or more modern layout is preferred. In smaller homes, under $600,000, dining rooms are being combined with breakfast nooks as the main dining space, though a kitchen countertop may include bar seating where people can also dine. However, in more expensive homes that are 2,500 square feet or larger, a separate dining room still is the trend.

As the size and price of the home increase, buyers have to make fewer compromises. What’s important is that a home owner make their house work for them, not future buyers. Few know when they might move again, who will purchase their home down the road, or what design trends may surface in the meantime.

Transform dining room square footage into…
Some home owners are converting a separate dining room to a more needed use — perhaps a homework center for multiple generations to work in or a super-casual family room with big-screen TV and billiards table. Some owners also transform the dining room into a music room for their children who play the piano, drums, and guitar, allowing the family to host recitals. Others are reimaging the dining room as guest quarters for overnight visitors or aging parents, especially if there’s a bathroom nearby.

Go multifunctional.
For those buyers who still favor a traditional dining room for holidays and special events and are reluctant to give up their favorite good china, crystal, and flatware, there’s another alternative. A traditional layout with a table anchored by a chandelier overhead and area rug underfoot can work in a corner with some adjustments. Home owners might forgo chairs all around and opt for a banquette to fill the space fully, or do away with the chandelier and go with sconces or floor lights, so it doesn’t look off-center, even though it is. Then, the leftover space can be devoted to other functions, such as a library with floor-to-ceiling bookshelves and seating, which can look smashing as a backdrop during those occasional dinners.

With computers and tablets shrinking, smaller desks are the trend. Many would prefer that the dining room be converted at times rather than totally giving up a bedroom for an office.

A round rather than rectangular table often functions better in versatile layouts since it’s easier to navigate around and more conducive to a single conversation.

Don’t ignore outdoor space.
Depending on the area of the country you work in, the climate might not always cooperate, but a terrace, deck, or balcony can become a favorite al fresco dining spot. Protect it with an awning or umbrella overhead, or you can partly enclose your outdoor seating so its use can be extended into nippier fall weather.

The bottom line:

Retrofitting and making changes is way more expensive — two to three times or more, depending on the changes and particular geographic market — than building from scratch.

DO NOT rush to make huge layout changes willy-nilly. Sometimes, it’s best to live in a house as it exists, then decide if you should adjust the room layout through remodeling to better meet your needs.

 

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

Santa Barbara Comprehensive Real Estate Market Statistics – June 2014

Santa Barbara Compehensive Real Estate Market Statistics - June 2014Santa Barbara Comprehensive Real Estate Market Statistics – June 2014

51 page PDF Report | 3.2 mb

DOWNLOAD:

June 2014 – Santa Barbara Comprehensive Real Estate Market Statistics.pdf

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

Vacation Home Tip Sheet

Here are 6 factors you need to consider when investing in a second home.

Santa-Barbara-Real-Estate-Vacation-Homes

You should understand the differences in making this type of purchase versus a primary residence. Here are six key criteria to assess vacation choices, whether for personal use or an investment.

1. Keep costs within the budget. Qualify for a loan before looking, unless you pay all cash. Then, figure out how much discretionary income you’ll need. For example, you’ll need at least $30,000 annually to afford a $500,000 home comfortably. Why so much? To cover the monthly mortgage, real estate taxes, assessments, regular maintenance, homeowners’ insurance, flood insurance, furnishings, a caretaker to watch the property if the owners don’t live nearby, an emergency fund for disasters and major repairs, and travel costs. Also critical is that you not use retirement funds to fund the home; there’s never a guarantee you’ll recoup your money by renting out the property to vacationers.

2. Determine the frequency of use. The amount of time you  will spend in your vacation home depends on the individual and family and the investment and rental potential.

Some think they need to go every weekend to justify the expenses, while others are fine just visiting in summer or winter. Distance will play a factor.  Some potential buyers may also hope their grown children and grandkids will visit for multigenerational gatherings.

3. Pick the right location. What makes one vacation locale more appealing to buyers than another largely depends on the buyers’ interests. In some counties, a typical buyer’s wish list includes a departure from the urban life that many commute from, along with mountain or vineyard views and room for guests. While in others, there are multiple attractions of water, beaches, wine trail, and proximity to many large cities.

4. Understand upkeep. A big lawn needs mowing, lots of square footage means more cleaning, a pool requires maintenance — make sure you have a realistic picture of the upkeep a property will require. Some communities are trying to remove some of the burden by offering landscape services through its homeowners’ association and by developing smaller, more efficient homes and condos.

5. Research rental potential and costs. If income is the prime motivation, you should know that demand and dollars fluctuate with the economy, weather, location, number of bedrooms and bathrooms, and amenities. Buyers need to remove emotion from their purchase choice and pick what appeals to the widest target market rather than what they want for themselves. Buyers also need to know whether their homeowners’ association permits renting out a property, what their own comfort level is about having children or pets in tow, and whether they’ll need to split proceeds with a rental service or property manager — sometimes by as much as 50 percent of the take. They’ll also need renter’s insurance.

6. Think about resale and changing needs. Research sales, prices, and trends. Family needs also change. Little kids may willingly head out with parents but teenagers less so, and multigenerational families often require more space.

Having a keen understanding of your second-home market coupled with meeting your individual needs will help you to find your dream vacation property.