Working With a Design-Build Team to Create Your Dream Home

What do the experts say you need to do and know for a smooth build out?

Building your dream home from scratch is a daunting task, especially if you’ve never worked with an architect, builder, and design team before.

To make the project a little easier to wrap your head around, here’s some advice from construction professionals.

Do your research

The building process isn’t short, so make sure you are happy with your team — you’re stuck with them for a long time.

This requires doing a little homework.

To start the building process right, you’ll want to do the following:

  • Conduct extensive online research to make sure you’re using a reputable builder
  • Get referrals from friends and family
  • Look at examples of the builder’s current work

Nikki James, studio manager at Ashton Woods, a builder and design studio constructing homes in the South and Southwest, recommends visiting a builder’s model homes and those under construction.

It’s fine to even be a little sneaky, says Jesse Fowler, president of Southern California-based Tellus Design + Build. Pop in at a construction site unannounced to see what the job site looks like. Workers not wearing hard hats or lots of garbage on the ground are red flags.

Ask questions (and more questions)

You need to understand the parameters of what the builder is doing for you, advises Roger Kane of Kane Built Homes in Massachusetts. And you get that information by asking questions. Make sure the builder can execute what you want, because not all builders can accommodate custom designs.

One of the first things you should do before meeting with your team for the first time is to identify what you don’t know, and then eliminate that doubt.

If this is your first time building, there are probably going to be a lot of things you don’t know, and that’s fine, Fowler says. There are no dumb questions.

Here are a few starter questions:

  • What exactly are you paying for?
  • Do you need full architecture/design/build services, or do you just want a blueprint?
  • How much time should you allow?

Know what you want

“Design inspiration can come from anywhere,” says James. She asks her clients to bring in plenty of pictures, scraps of fabric, or anything that speaks to their aesthetic.

The first thing to do, Fowler says, is to figure out the look and feel that a customer likes, and weed out what they don’t like.

It’s also important to know your limitations, though. James warns that you must make the structural selections for your floor plan before picking design elements so you know what you can and can’t have. For example, if you want a freestanding tub, you will first need to know if you have the right plumbing for it.

An architect wants to know how you’re going to use your home, advises Kim Nigro, the architect at Chicago-based Studio Nigro Architecture. Tell your architect what you don’t like about your current home, and what your day-to-day needs are.

This can be as simple as letting them know you shop at Costco a lot, so you want a big pantry, James says.

The details matter

You probably never thought about what kind of grout you want between your tiles. But these are the kinds of decisions you will be making.

Ashton Woods gives its customers a checklist for details like this, and there are a lot of specific items on it, from what kind of edge you want on your counters to how many outlets and phone jacks you’ll need.

This sounds overwhelming, but Kane’s advice is to just take it room by room. Start out with the basics. Determine how many bedrooms and bathrooms you need, then go inside each room and think about what should be in it.

“Make a list,” he says. “’We want hardwood flooring; we need his-and-her closets.’ Make your own little notebook and just address every room. That’s a great way to start.“

Know your budget

The harsh reality is that you can’t buy something you can’t afford. So, do your math and be upfront about your budget.

“Not communicating a clear budget to a designer is a mistake,” Fowler advises. “Designers need something tangible. If you let them go wild, 99 times out of 100 they are going to do something you can’t afford.”

There are good reasons not to pinch too many pennies, though.

As the saying goes, “If it seems too good to be true, it probably is.” You probably shouldn’t go with the cheapest guy out there, Fowler suggests. A lot of builders, he says, cut corners by doing things illegally.

Don’t get roped into a mess like that. Saving a few bucks now might end up costing you more later.

James recommends doing things exactly the way you want them from the beginning, because remodeling later will cost you more money and more stress.

“We see a lot of buyers getting nervous about spending too much. As people get closer [to finishing], they wish they had spent that extra money,” she reports.

Spending more for quality products is another big consideration. Kane uses sustainable products for the exterior of his houses that last “pretty much a family’s life in a home — 30 to 40 years.”

That’s good for the environment and your wallet, because regular maintenance like repainting the outside of a house can cost $15,000.

Be decisive

The biggest mistake Kane, a veteran homebuilder, has seen homeowners make is being wishy-washy with their decisions.

Once a home is under construction, it’s important to have made all your major design selections.

“Paint color’s not a big deal,” Kane says. “But you should have things like all your tile and granite picked out.”

Why? Because at this point in the process, your selections could be backordered, and waiting on them is costly to the builder and to you.

If you do tend to change your mind a lot, make sure you pick a builder with a good warranty program.

Communication is key

One core piece of advice from construction professionals: Keep the lines of communication open. The biggest mistake you can make, says Fowler, is leaving gray areas in your building and design plan.

“I’ve heard horror stories, and most are because one party’s expectations were different from the other’s,” Nigro states. “The more developed drawings can be, the fewer assumptions the contractor will have to make.”

And it’s not only important for you to communicate to your design team. The members of your team need to be on the same page with each other as well.

“They need to really create a collaborative team,” Nigro says. “There are a lot of decisions to be made.”

Fowler recommends getting the whole team together to meet each other and start working collaboratively from the start. Most times, he says, architects, designers, and builders who work in a community have met and done projects with each other before.

Consider the trends

More homes across the country are being built “healthy” or “green.” These are homes built with non-toxic, natural products and materials.

Nigro says she used to recommend healthy building to her clients, and now people are coming to her asking for it.

Another trend sweeping the nation is “mother-in-law suites” or homes that accommodate multi-generational families.

Over the past five years, a lot of Nigro’s clients have started looking down the road to when older relatives might move in with them, or maybe their adult children will move back home after college.

This could mean a separate apartment over a garage, or maybe a guest bedroom on the main floor.

Why are trends an important factor to consider? It could help you sell your home in the future.

Have fun

“It’s important for us to personalize your home and make it yours and something that you’re proud of,” James remarks.

If this means having a full basketball court right on the main floor next to the dining room, like one of Nigro’s customers wanted, then that’s what you should have!

Custom features can range from practical to fantastical: Fowler has had clients ask for water pipes over their nightstand so they wouldn’t have to get up for water in the middle of the night; “living walls” (walls with plants or grass growing right on them); hidden cameras; and even an unexplained hole in the closet floor.

Hey, it’s your dream house, after all.

Wondering if new construction is right for you? Search new construction listings, and get more home-buying tips and resources to help you decide.

Related:

Originally published October 21, 2016.

Source: zillow.com

Preparing Your Information for Disaster

When COVID first hit, like a lot of people, I began to think about my own mortality in a new light. Here was this unknown illness that was striking people down. What if it were to happen to me?

What I felt wasn’t so much a fear of my own mortality, but worries about what would happen to my family if I were no longer here. I have a good term life insurance policy, but that was just one piece of the equation.

What about our accounts? Does my wife Sarah know where everything is? What if we were to both pass on? Would our children’s guardians know where everything is? Could they access all of those accounts?

Worries stick in your mind until you take action to fix them.

In this article

The basics of life documentation

Life documentation is simply the recording of all of your key financial and personal account information in one very secure place to make things easier for your loved ones in the event of your untimely passing. Often, putting together such documentation shows you lots of little maintenance things that should be done, such as adding a new family member to an account.

What about security?

The first question to ask about something like this is security. How can a document like this be secure?
The best approach is to divide the information you want to pass on into “secure” and “non-secure” piles. Which pieces of information do you want to keep secure? Passwords are definitely in the “secure” pile, especially for financial information. Other pieces of information likely need less security. For example, knowing that you have an account at say, Fidelity, is something that someone observing your mail could figure out.

For information that you want to keep safe, you’ll want to devise a very secure method for storing that information and protecting your accounts. One method is to use secure password management software such as 1Password, paired with a very long master passcode. Within that software, you can store and organize passwords for all of the relevant accounts, along with relevant notes on each account. Then, focus on storing the master password for your password manager securely by giving that code to a lawyer or storing it in a known secure place.

The less secure information can be stored in a more easily accessible document, such as a printed document or an easy-to-access digital document.

Physical or digital storage — or both?

Physical and digital storage each have advantages and disadvantages.

Physical documents are the easiest to access and use later. On the other hand, they’re much harder to keep updated, meaning that you often have to reprint or rewrite sections of the document. For security, the best strategy with physical documents is to keep the most sensitive information in a small document in a highly secure place, with the less-sensitive information in an easier-to-access place.

Digital documents are much easier to update as you go along, but may be difficult to access and use later. You might choose to digitally store a document on a memory stick, for example, and update it regularly by just plugging in the stick and copying over a fresh document. With security, a good strategy is to have the most secure elements under some form of passcode protection as described above with a password management tool.

Who should know about it?

For less secure information (like a reminder to close a Netflix account, for example), a document stored with other core belongings that several people in your life know about is fine.

For more secure information (like the passwords for your key accounts), you should consider storing that information in a secure place. A good approach is to discuss this with a family lawyer or to use a safe deposit box. If you’re using a password manager for much of your documentation, the key thing to be stored is simply the passcode for that password manager.

Who should know about this information? A family lawyer is a good choice, as is your partner. Your executor and other core family members should know to contact your lawyer in the event of your passing to access those documents. For physical items (like documents or a memory stick), you can store them in a home safe or a safe deposit box at a bank, as long as your partner and your lawyer know the location.

How to get started

The first step in creating a life document is to simply list all of your accounts from which financial transactions occur, as well as all significant assets you own. For some, this may be a long list. You can do it on a computer or with pen and paper, as you prefer.

If you need help figuring out what to include on this list, Charles Schwab offers a great template for making a list of your assets. For your financial accounts, start by listing your bank accounts, investment accounts, and credit card accounts, then use those statements to generate a list of other accounts as your statements will show you where money is coming from and going to.

It’s important to recognize that this is a living list. Over time, you’ll open new accounts and close old ones. Those changes should be reflected in this list, so you’ll want to establish a habit of updating this document regularly.

What should you store?

There’s a simple rule to follow when making a list like this: If you’re not sure whether to include it, include it. Put everything in this list, so that your survivors don’t have to look for anything when cleaning up the accounts and assets you left behind.

Here’s a checklist to help you get started. For each of these, be sure to include account numbers and online login information.

  • All of your bank accounts
  • All of your credit card accounts
  • All of your investment accounts
  • All of your other debts, such as mortgages and car loans
  • All of your insurance policies (life insurance in particular, but other insurance that’s in your name)
  • All monthly services that you pay for, such as your cable bill, your Netflix account, your utilities, and so on.
  • All assets you own that have more than nominal value (real estate, vehicles, collectibles, art, and so on) and where to find them
  • All debts owed to you and points of contact
  • All outstanding business interests and points of contact

As you are doing this, consider whether each of these accounts and assets are currently up to date with proper beneficiaries and other details. Do you still need this account? Is there a good password on the account? Are there any changes that need to be made? Ask this for each account and asset you add to the list. You may also decide during this process that having a better overall plan is a good idea, in which case contacting a certified financial planner might be a good move.

Scheduling an annual appointment on your calendar to update this list is a good idea.

My own life documentation

My life documentation is stored in a few ways. My less private documents are stored in a folder in a safe in our home. It does not include sensitive information, such as passwords. With that documentation, I also have estate documents as well as a letter to my executor.

For account information, I have logins, passwords and some other relevant information for each account stored in a password manager. The master code to get into that password manager is very complex and is written down in two secure locations. The instructions for how to use it are in with the less secure documentation, but the password itself is stored very securely.

I also keep a slip of paper in my wallet that identifies people to contact in the event of serious injury or death. The people on that paper know enough to get the ball rolling on these matters.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Bodnar of MMG: What Does Continued Volatility Mean for Clients?

Bill Bodnar of The Mortgage Market Guide (MMG) discussed how volatility continues in the bond market.

Friday morning’s “gap down” open is a negative sign. Key resistance levels in the 10-year Note yield are still holding at the moment.

Inflation will be sharply higher over the next three months due to the year-over-year baseline effect. However, Bodnar says he doesn’t see inflation being a big problem longer-term.

[embedded content]

Source: themortgageleader.com

5 Ways to Show Your Home Some Love

Don’t leave your home out of the Valentine’s Day fun — send it a love note or two with these quick tips.

When February rolls around, we’re often thinking of little ways to show our loved ones how special they are to us. Why not take the opportunity to do the same for your home?

While you can’t send your home a box of chocolates or a card, there are plenty of things you can do to show it a little love this Valentine’s Day.

Make easy DIY updates

Even if you’re not planning on selling your home anytime soon, it’s always good to make small improvements to increase your home’s value. Plan a quick weekend project, like one of the following:

  • Install a no-touch faucet on the kitchen sink
  • Swap those brass drawer pulls from the ’90s with a more modern design
  • Replace the old fluorescent light fixtures in the bathroom
  • Upgrade the frameless builder-grade mirror to a more stylish one
  • Paint the front door and shutters a vibrant color you love

These simple changes can make a huge difference in how you see and enjoy your home — and make it easier to sell when the time comes.

Buy it something pretty

Just like buying a new ensemble usually lifts your spirits, purchasing something you love for your home will instantly put you in a great mood.

Buy that gorgeous vintage door you’ve been eyeing online (after carefully measuring, of course). Upgrade the curtains the previous owner left behind, buy something colorful and cheery to change the room’s look, or take the plunge and finally purchase that department store rug.

Cultivating great style in your home doesn’t usually happen overnight, but occasionally purchasing items that that make you happy will eventually result in a space you love.

Make happy memories in it

When you first looked at your home, you might have said something like, “This would be a great space for entertaining.” Since moving in, however, have you actually entertained in your home?

If you haven’t (or if it’s been awhile), consider hosting a potluck or a casual dinner with friends and family.

But don’t think you have to scrub the floors for three days and prepare a feast. There’s no need to get too fancy when you host — all you really need is great friends, lively conversation, and good food. Make a menu, choose the music, and hang some string lights or light some candles to create a festive atmosphere.

Save money on it

If mortgage rates are down and you’re interested in lowering your monthly payments, you might want to consider refinancing your home.

Though saving money on your mortgage is the most obvious reason to refinance, many homeowners choose to refinance so they can change from an adjustable rate mortgage (ARM) to a fixed-rate mortgage. This can make payments more predictable and less dependent on how the market is doing.

Knowing that you are making the best financial decisions when it comes to your home will ultimately make you happier to be there.

Make sure it’s protected

Reviewing your home insurance policy may not be the most exciting way to spend an evening, but it’s a good way to make sure there aren’t any obvious gaps in your coverage.

Read your policy carefully. Are you overly insured? Or are you overpaying for the amount of coverage you’re getting? Remember that standard coverage often doesn’t often pay for flood or earthquake damage, so check your policy and understand what’s covered in the rare case of a disaster.

If you find areas for improvement, shop around for a new insurance company or work with your existing provider to create a plan that makes you feel more prepared and secure. Understanding the ins and outs of your insurance policy is the best way to look after your pocketbook — and it will likely help you sleep better at night, too.

A home is more than just a roof over your head — it’s a place that’s meant to be loved and enjoyed. Try some of these quick tips this weekend, and you’re sure to fall in love with your home even more.

Related:

Source: zillow.com

Forbearances Down 5% Over Past Month: Black Knight

Active forbearance plans fell again this week, dropping by another 19,000 (-0.7%) from last Tuesday. In total, this puts the number of active plans down by 135,000 over the last month, a 5% reduction.

That 5% monthly decline represents the strongest rate of improvement since late November 2020 and is a direct result of servicers working through the 1.2 million plans that entered this month with scheduled March month-end expirations for extension and/or removal.

It is important to note that even with such strong monthly improvement, there are still more than 46,000 active plans with March month-end expirations, which provides the potential for additional improvement in coming weeks.

As of March 23, 2.57 million homeowners remain in forbearance, representing 4.9% of all homeowners with mortgages.

This week’s improvement was driven by improvements among both GSE (-21,000) and FHA/VA plans (-10,000), while active plan volumes rose among portfolio/PLS mortgages (+12,000).

Early extension activity suggests servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June.

Plan extensions have accounted for 75% of all extension/removal activity in recent weeks, but removals are up simply as a result of the volume of expirations that were scheduled for this month.

Early extension activity suggests servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June.

Black Knight’s McDash Flash Payment Tracker shows that 90.7% of observed borrowers had made their payment through March 22, up from 89.8% at the same time in February.

Source: themortgageleader.com

Dealing With a Seller Who Is ‘Just Not That Into You’

You’ve got your heart set on their home. Should you try to win them over, or just walk away?

As Valentine’s Day approaches, many single folks swipe left and right searching for the “one” love of their life. Looking for the right match is not much different in real estate: trying to find the perfect home, in a prime location, that checks all the boxes on your wish list.

Given the ups and downs of a home search and the love affair many buyers have with potential matches, many real estate agents feel their job becomes part therapist and part matchmaker.

Buyers tour dozens of homes and sift through dozens of properties, maybe even going on “second dates” — or in real estate terms, “private showings.”

Sometimes they feel it in their gut when the right house comes along. They know the comps, and are prepared to make an offer at fair market value. In their minds, they’ve already moved in.

Unfortunately, sometimes love is unrequited — even in real estate.

The seller has every right to reject a buyer for any reason whatsoever. They may stand firm on their price or wait for better terms. It could be they don’t like the buyer’s contingencies, or they’re holding out for a cash deal.

Either way, the seller has no obligation to sell to you, even if you offer what seems like a fair price.

Here are five tips for dealing with a seller who is “just not that into you.”

Go to your max

After submitting an offer and even going through a series of counter offers, you realize you’re probably too far apart on price.

You’re wasting time by holding back and playing the seller’s game. If you want the home, it’s time to go to your max.

By putting your best offer forward, you’ll have done all you can. Sometimes a few weeks pass, and they will come back to you.

Move on

Moving on is easier said than done, of course. But if the seller isn’t interested in working with you, move on.

Hanging around wishing the seller will come to their senses and accept your offer is a waste of time and emotional energy. By pining away in your love affair with that house, you risk missing out on other great properties that are available and whose owners may be more “into” you.

And who knows? Sometimes, when you move on, the seller may suddenly show interest.

Learn from the experience

The sheer desire to own a home and the assumption that an available home should be yours doesn’t always translate into homeownership. If things don’t work out for you, analyze what went wrong.

What mistakes could you have avoided? Did you spend too much time negotiating with that seller? Did you get too emotionally involved?

If you can walk away with some lessons learned, your next try at homeownership should be easier — and more likely to succeed.

Don’t try to figure out the seller

You’ve got no idea what’s going on in a seller’s head. For all you know, the seller is emotionally attached to the home and not ready to sell. Or maybe they’re simply are firm on their price, and that’s it — no matter how high it seems relative to the market.

It’s certainly tempting to play armchair analyst when a seller isn’t selling to you for mysterious reasons. It’s also, in most cases, a waste of time and energy.

Accept the fact that the seller just isn’t that into you for whatever reason, and move on to the next home.

Do try to figure yourself out

Is there a pattern developing? Are you only going after the ones you can’t have? If so, are you sure you’re ready to commit?

Like finding a mate, buying a home is a huge decision and financial commitment. If you find that you keep going after sellers that aren’t co-operating, the issue may be you — not them.

Identify the motivated and serious seller, and make a play for their home.

And don’t spare too much thought for the one that got away. You’d be surprised how many times buyers, at the closing table, admit that the home they had previously pinned for wasn’t the one for them, anyhow.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

Biden Housing Secretary Seeks $100B Funding Boost

Marcia Fudge, the Biden administration’s recently confirmed Housing and Urban Development Secretary, has urged lawmakers to top off the department’s budget by as much as $100 billion. So reports Politico.

Fudge also called for Congress to make permanent the majority of housing-related pandemic legislation.

HUD’s annual budget, holding near $55 billion of late, is inadequate to meet the needs of more than 500,000 homeless, fix up deteriorating public housing and remove lead from subsidized housing, Fudge said in a press briefing.

Read the full article from Politico. 

Source: themortgageleader.com

The Hidden Benefits of Frugal Living

When my wife and I first committed to living more frugally, we did it for the reason that many people do: We were in financial trouble. The biggest initial benefit of frugality is that it reduces your expenses, making it easier to keep the bills paid, get rid of debts, and eventually start saving for our future. Over time, we achieved those things. We got out of our debt crisis, bought a home and paid it off, and began to save for retirement.

Of course, the challenge of frugality became apparent as well. Modern life offers lots of expensive temptations and treats, and there can be social pressure to enjoy them as well. There’s also a fear of being “cheap,” where our desire to be more frugal negatively impacts our friends and family.

At first, we persisted with frugal living solely because of our immediate financial goals, but over time we began to appreciate the many hidden benefits of frugal living. Here, I go into seven hidden benefits of frugal living.

In this article

No. 1: Frugal living is good for the environment

One aspect of spending less money is that you’re accumulating less stuff and using fewer services. Frugality is not minimalism, though they have similar practices and they often result in the same outcome: fewer possessions. Less stuff means fewer fossil fuels are used in the manufacture of goods that you use and in bringing them to your local store or to your home.

The EPA estimates that in 2018, the most recent year for which they have statistics, the average American generated 4.9 pounds of solid waste per person per day, of which approximately a third is recycled or composted. The remaining waste goes into landfills and other waste storage areas. For a family of five like ours, that adds up to 8,900 pounds of waste per year, of which approximately 5,800 pounds went to landfills.

What about fossil fuels? In 2019, the EPA estimates the average American consumed 305 million BTUs of energy, and more than half of that was wasted.

There are countless simple frugality steps that save money, reduce energy use or waste production, and they have minimal negative or even a net positive impact on our lives.

For example, it’s actually quite simple to save money on home energy use using these year-round energy saving tips, most of which have zero impact on daily living once you make the initial steps. They just save money by reducing energy consumption, which helps your wallet and the environment.

It’s also easy to simply buy less physical goods, too. A simple choice like simply giving yourself a “waiting period” for every non-essential purchase — if you want something, you just wait a few days before buying it and then reconsider whether you still want it or can borrow it or buy it used elsewhere. That simple step alone, if applied consistently to your life, saves you a lot of money and cuts down on waste while still letting you have everything you genuinely want.

No. 2: Frugal living can reduce stress

Some 73% of Americans identify money as a major cause of stress in their life, according to a recent Capital One CreditWise survey. Money was indicated as a stressor for more people than any other life factor in the survey. Simply put, money causes stress.

Frugality is a great solution to this stressor. Finding simple ways to spend less money doesn’t require you to chase more income, and if you focus on frugal moves that don’t disrupt your way of life, it won’t have an impact on the things you enjoy doing, either.

A practical way of doing this is to make some specific frugal changes in your life, like switching to less expensive auto insurance or cutting your energy spending, and calculating how much you save with that move. Instead of just spending it, intentionally start putting that money aside automatically for a financial goal. So, if you save $40 a month on insurance and find you’re spending $35 less on your energy bill, you now have $75 a month you didn’t have before. Bump up your monthly retirement contributions by $75.

What happens if you do that? You feel less financial stress from retirement and you’re not adversely affecting your day-to-day life in any negative way.

No. 3: Frugal living can improve social relationships

One of the most powerful ways to save money is to share things. Share possessions, share activities, share ideas. Share babysitting duties with the parents of your children’s friends. Share garden tools with your neighbors — they borrow your shovel, and then you borrow their rake a few weeks later. Share meals with friends by having a potluck dinner.

What do these things have in common? They’re all social. They involve interacting with people — your neighbors, your friends, people in community groups, and so on.

One of the most powerful things I discovered during our early frugal days was how much I enjoyed participating in community groups. I started going to lunch presentations at a local library. I started participating in a local chess club and a community board gaming group. I started doing some volunteer work. I just tried things out, simply to see what was interesting. Some of them didn’t click, but quite a few of them did. Not only were they free, they also helped me build some friendships and a lot of acquaintances in the community.

You can also make frugal projects social. Let’s say you’re making “make ahead” meals, so that you have meals stocked away in the freezer to cut on food costs. Instead of a boring afternoon at home alone, do it with a friend. You might invite them over to help, or you could agree to do it with a remote friend where you start a voice chat and talk while you’re both meal-prepping.

No. 4: Frugal living can give you a sense of larger purpose

For many, the initial draw of frugality is that it provides a practical strategy for achieving immediate financial goals. If you’re in a financial pinch, it’s time to look for clever ways to cut back on spending so you can pay the bills.

As you see those steps succeeding and you start developing frugality into a normal habit, it’s easy to think about how those steps could apply to bigger goals. What about paying off all of your debt? What about actually having an emergency fund? What about saving for retirement, or kicking that savings into high gear? What about a house down payment?

Frugality is a tool that you can use to start chipping away at those big life-changing things. When you begin to see the tie between a simple act of frugality, like getting a book from the library instead of from Amazon, and the big goals you have in life, it gives your everyday choices a much deeper purpose. You feel like the choices you make on things like grocery store selections really matter in terms of a broader life purpose, and that’s a powerful feeling.

No. 5: Frugal living can give you more time for the important things

Many people perceive frugality as time consuming, but projects like clipping coupons don’t have to be a part of your frugality. You can simply skip over the time-consuming ones and enjoy the aspects of frugality that save time as well.

For example, if you’re committed to buying less stuff, you’ll simply spend less time shopping. A great example comes from my own work commute. When I was a big overspender, I often stopped at the bookstore on my way home or popped into the electronics store. This meant that I’d often burn an hour or more of extra time during my commute spending money, but spending time as well.

What did that time become? Some days, I spent it reading a good book. Other days, I’d take my kids to the park. The point’s simple: It turned into time that provided more value to me than time spent in a shop looking at things to want and to spend my money on.

No. 6: Frugal living makes it easier to help the causes you care about

Frugality cuts through this like a hot knife through butter. Simply finding ways to spend less gives you the resources you need to donate to whatever causes are important to you.

Simply knowing that you’re furthering a cause you care about is nice, but it turns out that contributing to charity has a whole host of additional life benefits, including health benefits and a lasting sense of joy. That feeling can be evoked simply by being a little frugal and giving some of the fruits of that frugality to a cause you care about.

No. 7: Frugal living can help you retire earlier

Let’s say, for example, that you’re 25 years old, and you find a way to easily cut $100 from your monthly spending without really affecting your life. You decide to contribute that to retirement in an aggressive investment that averages a 9% annual return over the long run. At age 65, you have $468,000 extra in your retirement fund.

What about inflation? Using the CPI calculator, over the last 40 years, $150,000 inflates to $450,000, which means that, even after inflation, you still have multiple years of the living expenses of the average American household socked away in that account. A hundred dollars a month in frugality gives you the power to literally retire years earlier than before if you start young.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

What Do You Need and Want in Your Next Home?

In this article:

While everybody knows that buyers shop based on price range, there are many additional considerations to make when looking for a home. And, most buyers end up refining their criteria once they start touring homes. Ultimately, your home criteria should depend on your personal lifestyle and needs. Regardless of what you’re looking for, here are some general rules you should follow to make sure you’ll be happy with the home you buy for the foreseeable future.

What are the top features buyers look for in a home?

Today’s buyers are juggling many different priorities when it comes to buying a home, but according to the Zillow Group Consumer Housing Trends Report 2019, here are the features that rank as very important or extremely important to most buyers.

Neighborhood wants and needs for buyers

  • Safety: 82% say a neighborhood that feels safe is very or extremely important
  • Walkability: 60% say it’s very or extremely important
  • Preferred neighborhood: 56% say it’s very or extremely important
  • Proximity to shopping, services and/or leisure activities: 53% say it’s very or extremely important
  • Optimal commute to work or school: 52% say it’s very or extremely important
  • Offers a sense of community or belonging: 48% say it’s very or extremely important
  • Close to family and friends: 46% say it’s very or extremely important
  • In preferred school district: 43% say it’s very or extremely important

Home features buyers want

  • Within initial budget: 83% say it’s very or extremely important
  • Air conditioning: 78% of buyers say it’s very or extremely important
  • Preferred number of bedrooms: 76% of buyers say it’s very or extremely important
  • Preferred number of bathrooms: 67% of buyers say it’s very or extremely important
  • Private outdoor space: 67% of buyers say it’s very or extremely important
  • Preferred size/square footage: 67% of buyers say it’s very or extremely important
  • Floor plan/layout that fits preferences: 67% of buyers say it’s very or extremely important

28% of buyers look for a home to rent out, 27% looked for smart homes, 58% of buyers looked for assigned parking

1. Search for the right price

Price will ultimately dictate what you can or cannot buy. While looking at homes above your price range can be fun, it’s not a good use of time — and it can lead to heartbreak when you realize it’s not financially feasible. Despite this, Zillow research found that in 2019, just 55% of buyers stayed on budget, while 26% went over their initial budget.

How to set your home buying budget

Use Zillow’s Affordability Calculator: This handy tool gives you an initial budget range based on your income, existing monthly bills, and down payment amount. Once you have that range, you can set up Zillow alerts for homes on the market that fit your price range, along with other criteria.

Get pre-approved: Once you’re ready to really start your home search, you’ll want to get pre-approved by the lender of your choice. They’ll approve you for a loan up to a specific amount, based on your income, debt and credit history.

Forecast your mortgage payment: Even if you are pre-approved for a large loan from your lender, you should make sure you’re comfortable with your estimated monthly housing payment. When you use Zillow’s mortgage calculator to estimate your monthly payments, be sure the taxes, insurance, and HOA fees are accurate — those items can make a big difference in your monthly costs.

2. Prioritize the location

Next to budget, location is one of the most important things to consider when buying a house. The 2019 report uncovered that 24% of buyers found it difficult or extremely difficult to find a home in their desired location. If you can’t find or afford a home in your ideal neighborhood, you’ll want to ask yourself a few questions (and enlist the help of your agent) to find a location that fits your lifestyle, needs and budget. Remember — your home’s location can’t be changed, so take the time to really identify a neighborhood where you’ll be happy live.

Proximity to downtown

Unsurprisingly, homes closer to core downtown areas have better resale value, thanks to their shorter commutes. According to Zillow research, in 29 of the country’s 33 largest metro areas included in the analysis, buyers should expect to pay more per square foot for a home within a 15-minute rush-hour drive to the downtown core. That may be why 15% of buyers who compromise to stay within their budget add time to their commute.

Community attributes

If you like being able to walk to restaurants and shops, try walking the distance to town to see if it’s doable. Spend some time exploring the area, checking out nearby parks and figuring out what kinds of attractions are nearby.

Alternatively, if you’re someone who likes a more solitary life and doesn’t mind driving, you might prioritize a home that offers more privacy, perhaps in a location that’s off the beaten path.

School district quality

If you have kids (or are planning on having kids in the future), you want them to get the best education possible. Checking out the school district ratings is a starting point, but you should visit the local schools to gather your assessment of the education and programs. Even if you don’t have children, the school district that your home is in can impact your future resale value.

Flood zone status

Homes located in flood zones require additional insurance, and buying a home in a flood-prone area means you need to be prepared if a flood actually happens.

3. Think long term

According to the Zillow Group Report, the typical homeowner stays in their home for 14 years before selling. When shopping for a home, don’t just think of your immediate needs. Make sure the home you select will meet your long-term goals, so you won’t have to move again in the near future.

Bedrooms and bathrooms

If you plan to expand your family in the near future, make sure the new home can accommodate your plans, whether it’s an extra room for a new baby, an in-law suite for parents, or a guest bedroom if you’re moving out of state and anticipate lots of visitors. The same goes if you are planning to downsize or you have grown children who will be moving out soon.

Outdoor space

As mentioned above, most buyers rank outdoor space as important. If you have a dog (or plan to get one), have kids who need a safe place to play or are an avid gardener, you’ll want to make sure the home’s outdoor space meets your needs.

Potential to personalize

Many buyers look for a home that’s move-in ready, so they can avoid costly repairs and updates (especially right after moving in). But at the same time, it’s nice to be able to add some personal flair to make a house feel like home. If you’d like to add some of your own style, be sure to steer clear of homes that you won’t be able to change enough to fit your preferences.

Lifestyle amenities

Ideally, your new home should enhance your current lifestyle — and you’ve probably already envisioned what your life in a new home will look like. As you evaluate houses, consider your hobbies and what makes you happy. For example, if you love spending time outdoors, you probably want a home with a nice yard. If you love to cook, maybe a nice, big kitchen is on your wish list. And, think about your current living situation: What things do you wish were different?

4. Assess property condition

TV makes home renovations look easy, but in reality, they’re anything but. If you’re a first-time buyer who has never undergone a renovation, you may want to steer clear of a home in serious disrepair. The costs can add up quickly, and if the home needs structural work, it could delay your move-in, causing unnecessary stress. Here are the three major categories of property condition.

Move-in ready

A move-in ready home is new, close to new, or has been recently renovated. Zillow-owned homes are move-in ready homes that have been recently renovated by a licensed contractor, and are ready for new owners to start their lives.

Minor updates

A home that needs minor updates might have cosmetic issues you’d like to change, or have some dated mechanical systems that could be updated for energy savings. Learn more about minor cosmetic details below.

Major renovation

A home that needs major repairs is usually priced lower due to the work that needs to be done. One upside to a major renovation is the opportunity to personalize the home to your tastes. Keep in mind that the return on investment for a major renovation isn’t 100%, and you risk a delayed move-in if the repairs are more extensive than anticipated.

Check condition of costly systems

No matter the condition of the home you’re buying, make sure your inspector checks to make sure major systems and mechanicals in the home are functioning properly. If issues are uncovered, you’ll want to ask the seller to either repair them before closing or offer a credit so you can fix them yourself. Look out for the following costly issues:

  • Damaged roof
  • Older furnace or HVAC system
  • Flooding, water damage or mold
  • Old insulation
  • Plumbing issues
  • Exterior cracks
  • Uneven floors

5. Don’t focus on minor cosmetic details

No house is perfect, so try not to get hung up on little imperfections. For example, don’t eliminate a home from your list just because you don’t like the interior paint color. Cosmetic changes are fairly easy and affordable to make. Don’t let the following minor issues keep you from buying a house you would otherwise love:

  • Paint
  • Hardware
  • Furnishings
  • Landscaping

When you attend showings and open houses, or even when you’re just browsing through pictures online, it’s easy to get distracted by clutter. Try not to pay too much attention to the seller’s stuff — it’ll all be removed by the time you move in. Put in the effort to picture the house as a blank canvas for all of your belongings.

6. Stick with your must-haves

There’s a big difference between wants and needs, so create two different lists when searching for a home. For instance, a shorter commute may be a must-have, but smart home features are a nice-to-have. Practicality and functionality should always take priority over the bells and whistles.

Things to consider when buying a house: needs vs. wants

For example, your list of needs might look like this.

  • Need: shorter commute
  • Need: specific number of bedrooms and bathrooms
  • Need: parking

Other items might fall to your list of wants, like these.

  • Want: updated kitchen
  • Want: upstairs washer and dryer
  • Want: smart home features

Source: zillow.com