A realistic timeline

Your client decides to build their own home and, understandably, they want to get the process started as soon as possible. It is important to have realistic expectations on the timeline. On average, a single-family home in Massachusetts could take nine to ten months to build. Then factor in locating and buying land (including financing the purchase and construction), determining permits and zoning regulations, hiring contractors, engineers and architects and obtaining legal representation – they may be looking at an even longer period of time before they can move in.

There are also additional factors that can affect the timeline. One of the major bottlenecks is supply chain delays in materials. Since the builder cannot control supply issues, they tend to factor potential delivery delays into their schedule or only use in-stock materials. Your client may have to forego that marble tile from Italy to stay on schedule, but only they can decide if it’s worth holding up the project for specialty materials.

Incorrect or missing information in the permit application and other paperwork necessary can also cause delays and prevent the project starting on time. It behooves buyers to review all paperwork carefully to ensure there are no errors that could cause unexpected delays.

Establishing the budget

The first step in the home building process is to set a budget and determine how much your client can afford and wants to spend. Although this may seem obvious, many first-time homebuilders underestimate the importance of this step – or overlook it entirely. A lack of good budgeting can easily lead to cost overages and delays. When considering a budget, your client needs to also determine the type of loan they will need, which most often is a construction loan. The best course of action is to seek expert advice from their banker, accountant, and/or financial advisor on the type of loan to apply for, what amount they qualify for, and the application process.

Generally, when your client is assessing their financial situation, it is important to consider the following factors:

• Cost of land. The amount generally spent on purchasing the land that the new home will be built on can be estimated at approximately 20-25% of the overall cost of the project.
• Hidden expenses. Don’t overlook hidden expenses. These include extra site work needed for the land, the purchase of new furniture and fixtures, appliances, landscaping, and more. Comprehending financial limits allows your client to modify building plans to meet their needs.
• Market prices. Look into market prices for materials, labor, land in the desired location. The cost to build can vary significantly by state and region.
• Ask for advice. The builder or general contractor can advise your client on details in their budget as they relate to local market prices, as well as any state and local regulations they should be aware of that may have extra fees associated with them.

Finding and buying land

Choosing a plot of land is one of the most critical aspects of home building. You can always design a home to suit a landscape, but you may not be able to alter a landscape to accommodate a home. The configuration of rooms, the placement of windows, the location of the driveway and garage, and many other design elements will be affected by the land your client purchases. The cost of a plot of land should also be considered. Land prices in Massachusetts are some of the highest in the country, averaging roughly $102,214 per acre. However, the average cost of land for residential use in the Boston metropolitan area is significantly higher.

Paperwork, permits, and zoning

Building permits are required for all new construction and renovations in Massachusetts. Permits ensure that the house is built according to local building codes and rules and regulations to protect your client’s safety. There are penalties and potential fines for homeowners and contractors who begin projects without approved building permits. Additionally, if your client decides to sell their home in the future, it will be difficult to sell if the proper permits were never obtained.

If your client is using a general contractor to build the house, the contractor is typically responsible for obtaining and managing all the necessary building permits and inspections. Most permits can be obtained either in person or online with local municipalities. For new buildings, most cities/towns in Massachusetts require a long-form building permit application. To obtain the building permit, homeowners or general contractors need to complete the form and submit with the construction drawings to the local municipality. The cost of the building permit varies by municipality, so your client will need to check with the contractor or do their own research and factor this cost into their budget. They should also keep an eye out for additional permits that may be required along with the long-form building permit such as fire/smoke, plumbing, electrical, and so on.

Site prep, labor, and construction

This is where the fun part begins! Now that your client has found the perfect plot of land, and the financial paperwork and initial building permits are addressed, it’s now time to focus on the construction of their home.

If the land has many trees or uneven terrain, it can be costly to clear and prepare the property in order for construction to begin. Taking the time to consider the site and determine whether any alterations need to be made before developing construction plans are critical to both your client’s building plans and their budget. It is beneficial to hire a land surveyor or engineer before even purchasing the land to determine the viability of the land and to ensure success.

In Massachusetts, homebuilders are not required to have a license to build. Technically, anyone can build a house – although it is risky to do so alone. Much time, research, and dedication are required to manage the many aspects of homebuilding and ensure the house passes all safety and other inspections at the end of its construction. Not using a licensed builder may save on labor costs, but it will most likely cost your client in the long run. Homebuilding is not something people can learn as they go. A safer approach is to hire a licensed contractor to oversee the homebuilding process. A general contractor typically charges anywhere from 15% to 25% of the total project cost.

One of the biggest draws to buying land and building a house is the ability for buyers to make it into their dream home. Although building a home can be a lengthy and stressful process, an A-team consisting of real estate agents, a financial advisor, architect, general contractor and real estate attorney can ensure your client is set up for success.

To help homeowners make their home handicap accessible, we asked interior designers and senior care providers this question for their best tips. From using lever door handles to planning on a single story home, there are several strategies that may help you create a handicap accessible home. 

Here are seven ways to make a handicap accessible home: 

• Plan on a Single Story Home
• Choose Ergonomic Furniture
• Keep the Floors Clear
• Add Grab Bars to Stay Steady
• Use Lever Door Handles
• Create Ramp Access
• Invest in Smart Technology

Plan on a Single Story Home

When designing a home for accessibility, I keep a few things in mind to design a beautiful home that improves my client’s quality of life. Open, spacious interior design is key. It’s also important to eliminate any unnecessary obstacles in favor of wide-open spaces. I select furniture, decor, and appliances that are low enough to the ground for easier access. These features are not only excellent choices for clients with limited mobility, but they make for gorgeous interiors!

Alisha Taylor, Alisha Taylor Interiors

Choose Ergonomic Furniture 

Without a doubt, a well-designed chair can make all the difference in your home. Our chair is built to make working from home more pleasant as it is composed of high technological components that make the job easier to get done. At the same time, this chair makes a home much more accessible as it can be used by anyone and everyone.

Bing Howenstein, ALL33

Keep the Floors Clear

One of the best ways to make your home more accessible is to add a ramp to your entrance and exit ways to make it more easily wheelchair accessible. Aside from this, it’s important to clear the floor of debris, dog toys, children’s toys, power cords and more to make it easier to navigate for wheelchair bound friends and family. Ergonomic chairs, pillows, and furniture are also a great way to improve the comfort of your home.

Darryl Higgins, Athlete Desk

Add Grab Bars to Stay Steady

While making a home accessible can seem difficult, it ultimately comes down to a few simple principles. My biggest suggestion is to think of grab bars wherever lifting off a wheelchair or letting go of a cane is required, primarily around toilets, sinks, and showers. This will ensure you are always able to hold yourself steady while completing tasks that are meaningful and important for your self-care.

Pricelda Cid, ErgoTherapy

Use Lever Door Handles

Replace the doorknobs in your home with lever-style handles. The ADA approves these because they’re easy to operate, even if you don’t have full use of your hands. People with arthritis, in a wheelchair, or who have general mobility issues will retain their independence to move about the home. Lever door handles can also add a feeling of elegance to your home.

Andra DelMonico, Trendey

Create Ramp Access

Stairs are a hazard for many with disabilities. Consider investing in portable ramps for those who rely on a wheelchair and scooter. A portable ramp easily folds away and can be used when on the go. Install a stairlift, they come in a variety of styles to easily modify your home. Outdoor

stairlifts are available too and are made to withstand the weather elements.

Meg Marrs, Safer Senior Care

Invest in Smart Technology

There are a host of smart home devices that can make life easier for those with disabilities. Smart devices are typically voice-controlled, through Alexa or Siri, which is a major benefit for those with mobility challenges. Smart lighting, particularly on occupancy sensors are important to avoid accidents when navigating the hallways at night.

Daniel Walsh, Smart Home Perfected

Here are the nine biggest risks of not doing a home inspection.

Risk #1: You lose a valuable “out” contingency

A contingency allows a buyer to back out of the purchase contract and have their earnest money returned. In the same way that a financing contingency lets you cancel the transaction if your loan isn’t approved, the home inspection contingency allows you to back out of the deal if there are problems with the house.

Risk #2: Safety issues may be missed

Most of us wouldn’t buy a car without taking it for a test drive and having a mechanic look at it for safety issues. Not doing a home inspection can miss important safety issues such as mold, pests, radon, and carbon monoxide.

Risk #3: Your family is put at risk

This is especially true if you’re buying a foreclosure or fixer-upper property for sale in Nanaimo. Houses like these often haven’t been occupied for a while, creating conditions that could be hazardous to your health. Sometimes people also remove copper plumbing and electrical wiring, replacing it with sub-standard materials that are costly to remedy.

Risk #4: You lose a key negotiating tool

The home inspection contingency allows you to back out of the contract. But it also gives you the opportunity to renegotiate the price or ask the seller to credit you for repairs that need to be done. You could end up leaving money on the table by not conducting a home inspection.

Risk #5: Future costs are more difficult to budget for

A home inspector can tell you the approximate age and remaining lifespan of major items like the furnace, water heater, and air conditioning system. It’s much easier to budget for future replacement and improvements when you’re armed with this knowledge.

Risk #7: May make getting a loan & insurance impossible

Lenders and home insurance companies typically require a home inspection to be done for the same reason that a buyer should. They want to make sure they’re loaning on and insuring a good property, instead of one that will end up being a money pit.

Risk #8: You don’t get the “big picture”

When you’ve finally found a home you love, it’s easy to overlook seemingly little issues that can turn your dream home into a nightmare. Doing a home inspection provides you with a complete picture of the biggest investment you may ever make.

Risk #9: You could lose your home

We all know that money doesn’t grow on trees. Once you buy a home it’s yours to keep. There’s no such thing as taking it back to the store and asking for your money back.

Sometimes buyers who skip doing a home inspection spend a tremendous amount of money fixing things that the seller should have taken care of in the first place. Then, next thing they know, there’s not enough money left over to pay the mortgage. Putting yourself in a situation where you could lose your home is a risk that’s simply not worth taking!

Why take a big risk when you don’t have to?

Smart home buyers get as much information about the house they’re buying during the inspection period.

Home inspections give you valuable information about the pros and cons of the home you’re investing in. With this information in hand, you’ll be armed with the knowledge you need to make the best deal possible when you’re buying a home in Nanaimo.

Signs It’s Time to Move

The signals that indicate a transfer can take many forms, including a variety of social and financial factors. The following are several signs that you should make the major life change of relocating to a new home or city.

Family

It’s not uncommon to feel a desire to move closer to certain family members after an extended amount of time away. Sometimes this is to provide support for aging parents or grandparents, or it’s to have the help of family members when raising children. There are a million reasons why you may feel compelled to move closer to family. It may be time to move if you’re feeling that the current distance is just too far.

Affordability

It’s more costly to reside in certain neighborhoods, cities and parts of the country. You may be living in a city that limits the luxuries you can enjoy. This could be because a majority of your income is used to pay rent or mortgage. It’s likely time to move if the cost of living in the current location is causing an extreme amount of stress and anxiety. Moving to an inexpensive town or into an economical home could provide the financial freedom you need to enjoy life more fully.

Constant Dissatisfaction

Maybe it’s the chilly climate, boredom, traffic or undesirable neighbors that causes you to complain about where you’re living. If this is the case, then it’s likely time for a move. Constant grumbling can put you at risk of becoming angrier and enjoying a lesser quality of life. Remain aware of your protests, and if they’re all rooted in the place you call home, it’s time to plant roots elsewhere.

A Need for Space

A growing family is often a reason to search for a new house, and often, a fresh city or suburb. However, you don’t have to be expecting kids to want more space around the house. You may want a larger outdoor area for gardening or extra room for furry friends. It doesn’t matter what’s calling you to a more spacious property; it’s probably time to make the change.

Deciding Where to Move                           

You’ve been experiencing the telltale signs of a possible relocation for a while, and now it’s time to take the next step. Deciding where to purchase a house can be as difficult as deciding it’s time to go. The following are several factors to consider when choosing the next town or city to call home.

It’s Family-Friendly

Having a family means certain aspects will play a larger role in your decision-making process. Search for an area with quality schools, a variety of parks and outdoor spaces, and plenty of family-friendly activities.

Proximity to Work        

A new job may be taking you to a new residence, and the neighborhood can have a major impact on your happiness. Consider whether you’re interested in living in a suburban, rural or urban area as well as how difficult the commute to work will be. A long drive could impact the time that’s spent at home or in the new city

Community Safety

Always review area crime reports before choosing a town or neighborhood. A little research can unveil a variety of factors that will affect your decision. You may find that a certain part of town is known for being family-friendly and that another is commonly affected by crime.

Areas of Interest

Everybody has different hobbies, and those pastimes could affect where we are happy living. Consider what you like to do most. It could be shopping, running outdoors or spending time at the library. Oftentimes, friends and family may share their advice on where you should move, but be sure to keep your interests at the forefront when making a final choice.

Making a move is a major decision, whether you’re considering relocating from an apartment into a single-family home or are hoping to change your life across the country. It’s important to remain aware of the signs that it’s time to transition and consider all of the factors above when deciding where to go. Moving isn’t a decision that should be taken lightly, but it’s one that could greatly transform your life for the better. For more tips on when to relocate and where to reside, see the accompanying resource.

Now, you will often hear people say: “You do not choose a home. It chooses you.” However, choosing the home of your dreams is not that easy. 

There are numerous factors to consider when purchasing a house that will keep you happy in the long-run.

No. 1: The Neighborhood

Keep in mind that your desired home does not exist in isolation. It is a part of a larger community. Therefore, before purchasing your dream house, make sure you also like your new neighborhood. 

Remember that every community has its own culture and charm, so choose the one that appeals to you the most. For example, if you prefer living in an energetic city center and experiencing something new around every corner, then move to a metro area. If you want to build a peaceful retreat for your family and, yet, have quick access to various cultural amenities, you would be impressed by new homes for sale in Scottsdale that offer a combination of urban life and desert landscapes. 

To choose the right neighborhood, creating a wish list and sharing it with your agent is an essential step for every homebuyer:

• Do you prefer homes in the bustling city center or a quiet escape from the hustle and bustle of urban life?
• Ask what kind of amenities there are, such as kid’s museums, libraries, family-friendly restaurants, recreation centers, etc. 
• Keep an eye out for anything you may dislike, such as the lack of parking space or overly noisy neighbors. 
• Map out the proximity of your job, kids’ school, friends, family, and local grocery store.
• Talk to your agent about your preferences so they can cherry-pick relevant properties for you.

No. 2: The Age of the House

When it comes to purchasing a property you have been dreaming of for your entire life, its age does make a difference. 

Say you are a fan of the mystic 19-century Gothic Revival architecture style. Such houses are often perceived as highly unique, better-built, and more valuable from a cultural standpoint. However, keep in mind most old houses have not been renovated for quite some time or adapted to modern-day technologies. Therefore, they may require expensive upgrades. 

If the mental picture of yourself wasting time renovating an old house sends shivers down your spine, then consider investing in a newer property that requires minimum improvements. What makes new houses more appealing is the fact that they are often situated in upgraded neighborhoods that already meet your everyday needs. Another benefit is higher energy efficiency, less work, and, logically, lower initial investments.

No. 3: The Style of the Property

With so many different home styles, it is often difficult to choose the right one. No matter if you prefer a luxury loft apartment in a hectic area or a cozy suburban house with a white picket fence, always pick a style of home that reflects your personality and lifestyle.

For example, single houses are a perfect choice for families that want to be independent and tailor their space to their specific preferences. If you are planning to downsize your costs and space, then condo living may be the right option for you. While it is great to share expenses and have access to hotel-style benefits, keep in mind that condo living may impact your life on so many levels. Townhomes are a combo of the two, letting you mix urban city experiences and, yet, be a part of a larger community.

No. 4: The Potential for Future Projects

No matter how gorgeous your dream house is, it will always require a bit of renovation and customization. Whether you want to add a second level or refresh your home’s exterior, always check your new home’s potential for such projects. 

Talk to your agent and determine how much work and money it will take to transform a property and into your dream home. Most importantly, always be honest with yourself. Ask yourself whether you will be able to handle a project.

Over to You

Finding the right house does not have to be tedious. By setting the right goals and paying attention to the right qualities of the property, it will be easier for you to choose a dream home that meets your needs. We hope these tips will help!

Have you already found and purchased your dream home? We are listening!

• Get out of debt, and stay out of debt. If you are unable to pay-off all your revolving or installment debt, try to at least keep your revolving debt balance no more than 35% of your limit.
• Open a savings account and have at least six months of your gross monthly expenses in an emergency fund. Get in the habit of saving!
• Invest 12-15% of your income into retirement accounts — 401(k) and Roth IRAs. Max them out annually if possible.
• As your income increases, resist the impulse to increase your standard of living. The two do not have to go hand-in-hand.

Once you’ve laid the foundation and practiced good financial habits, your personal credit score and income should be good enough to warrant a home purchase (assuming you have steady income). Purchasing real estate is one of the best ways to create generational wealth.

Start with a duplex, triplex, or fourplex

When you are ready to buy your first home, instead of jumping into a traditional single family home, think about purchasing a duplex, triplex, or fourplex with a government insured FHA mortgage (because the minimum required down payment is only 3.5% with a FICO score of 580 or higher). By owner occupying the duplex, triplex, or fourplex, you can then rent out the other units and use that income to pay your mortgage. Think about that for a moment. If someone else was paying your monthly mortgage payment, how much money could you save in 12-24 months?

If someone else was paying your monthly mortgage payment, how much money could you save in 12-24 months?

You will have to occupy that property for at least 1 year before you can move into another home.

Upgrade

After 12 months have passed, if you then wanted to move out of your duplex, Triplex, or fourplex to make room for yet another renter, you could. Then, on your next purchase you could get into a conventional Fannie or Freddie backed conventional mortgage with a minimum of 3% down payment (if you income qualify). In the event you make too much money annually for Fannie Mae’s HomeReady or Freddie Mac’s HomePossible low down payment program, no worries … you can still get into a conventional single family home for as little as 5% down (assuming you have the necessary minimum credit score of 620-640 needed for a conditional approval).

Following the best practices above, you could end up owning 2-4 rental units with minimal investment dollars down, earning you extra monthly income, as well as an asset that typically increases in value throughout the years!

Pass Down Knowledge

In conclusion, one of the most important things to remember when trying to help multiple generations within your family; pass down the knowledge you’ve learned. And remember, knowledge is NOT power until the knowledge is applied. Teach your children to work, earn, save, invest, and spend wisely. Proper financial literacy is typically not taught in schools. That in my humble opinion is one of the underlining causes pertaining to the homeownership disparity gap.

You don’t know what you don’t know

So it is your job to make sure each generation is armed with the necessary information to grow and preserve your families wealth. Because if you don’t come from a rich family, a rich family must come from you.

← View previous article about sellers.

TOP 5 REAL ESTATE TIPS FOR ACTIVE BUYERS

No. 1: Keep in close contact with your agent and lender to keep tabs on industry reaction to the pandemic. Make sure they (and you) are following recommended COVID-19 protocols. Be understanding if your agent declines your request to visit properties during this pandemic and respect their personal decisions regarding the health and welfare of themselves and their family.

No. 2: Consider the many pros and cons of physically visiting homes in person at this crucial time in our world’s history. Seriously consider screening homes by requesting online tours in lieu of in person appointments. If you find a home you’d like to see that doesn’t have a tour posted, ask your agent to inquire if the listing agent is willing to encourage their sellers to film a tour on their phones to pass along for your initial screening.

No. 3: Talk with your agent about the pros and cons of making offers on properties you’ve seen virtually but not in person. Get familiar with contingencies that could protect you and amendments addressing the ramifications of purchasing during the COVID-19 crisis.

No. 4: Understand that delays in closing timelines may be inevitable. Talk to your lender about any situations you are facing that may impact your purchase (including any temporary layoffs or change in financial situation). Thoughtfully consider the pros and cons moving forward with your purchase plans in light of world economic changes. Look for the silver lining like historically low interest rates and less buyer competition.

TOP 5 REAL ESTATE TIPS FOR SOON-TO-BE HOMEBUYERS

No. 1: Ask for a recommendation for several local agents then explore them online and contact them. Take note of their initial enthusiasm, professionalism and response time. Ask them to send you sales statistics of homes in your price range, in your favorite neighborhoods, or with your physical criteria. It’s important to get a feel for what your money will buy before you start pounding the pavement.

No. 2: Contact at least two lenders to start building relationships and get on their mailing lists about rates and get tips on how to best improve/maintain your credit. I suggest reaching out to at least two lenders so that you can have multiple quotes and loan products to compare. It’s best to choose the lender you feel has been most responsive and helpful (and whom you trust the most) when you find a home and want to lock in a rate – if the other lender(s) beats their rate, ask them to match it and they probably will. Start gathering information the lender will require for loan processing and ask them to pre-approve you so you’ll know what type of loan to expect.

No. 3: Start making a list of MUST HAVES vs. WISH LISTS so that you have criteria to share with your agent. Ask for recommendations and contact an agent even before you want to explore properties in person. They can best advise you about the process and start sending you listings that match your specifications to give you a feel for the market well before you start touring. If you are buying with a spouse or partner, be sure to get on the same page at the onset of your search so you fully understand and agree on each other’s “make or break” features.

No. 4: Refine your budget to get prepared for the expenses of home ownership starting with costs associated with your purchase. Start saving money to cover the earnest money deposit (typically $1,000) and buyer-paid inspections (which can be $1,000 or more). Even though most buyers roll their actual lender closing costs into the loan, there are many upfront expenses to consider. While contemplating costs, be sure to ask your lender contacts for “good faith estimates” and “truth in lending” statements so that you can compare their fees, total monthly payment projections for your price range and annual percentage rates (which are more important than the actual interest rate they quote).

No. 5: Download some good home searching apps on your phone like Homesnap, and do some generic online real estate purchasing research on sites like nar.realtor so you know what to expect when you start the process and can start keeping tabs on the market. Know your rights as a buyer and educate yourself on the pitfalls of dual agency, which is when buyers work with the seller’s listing agent to help you with the purchase. I wholeheartedly believe dual agency should be illegal as buyers and sellers best interests are not able to be fully protected.

Finally, make sure you review my other articles written for sellers, agents and for homeowners for other suggestions you can implement.

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