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Homes for Sale in Minnesota

Tips On Building A House

Sometimes the idea of buying something used is just not appealing. People feel that way about clothes, movies, cars and people can feel that way about homes too. Whether it’s because you don’t like the idea of putting your bare feet on the carpet that’s been walked on all over by strangers or just because you simply want a smell of a brand new house, there’s always the option available of building a house. If you chose to build a house instead, you can custom build it exactly the way you want it that will work perfect for you and your family.

The process of building a house isn’t too much more complicated than buying a “used” home, but there are a few things to consider before making the commitment. If you follow these suggestions, your time spent building a house will be smooth sailing.

Before Building A House – Hire a Real Estate Agent

First off, not all of us a re real estate experts and you should take some time to cover your bases with a real estate agent prior to building a house. Remember that builders will represent their interests first before yours so have someone there for you to make sure things go as planned. When it comes to purchase agreements, a real estate agent can help you check to make sure that there’s adequate coverage included that gives you some protection from any contingencies or unexpected developments in the transaction. You’ll want to know everything about what you’re signing, including the responsibilities for which you’ll be liable. Also, be sure to look at your rights if you should want to cancel the deal provided something does not meet your wishes or goes completely out of scope.

Hiring your own agent can save you from a lot of unnecessary hassle and can help prevent the builder from squeezing a few extra dimes out of you when building a house. When builders suggest using their own sales agents, the bottom line is that they’re wanting you to have an agent who is ultimately there to look after the builder, not you. Their top priority is to get top dollar for the builder. They may employ high-pressure tactics to try to get a pen in your hand and a contract for you to sign. Having your own agent means that they’ll give you the good news with the bad. Anything wrong or even possibly wrong with the house or the transaction has to be disclosed to the buyer. If you go with the builder’s agent, the downsides to the home in all likelihood won’t be brought to your immediate attention, causing you headaches down the line.

Looking For Land For Sale

Looking for the right lot can be difficult and can get old very quick which can make you decide not to build a house, after all why build if you can’t find perfect spot? Building a house in the cities will be more expensive because there are less lots available and prime locations have a high price tag attached to them. Decide on the location, and start looking for land for sale that will work with your home floor plans.

Do Your Homework and Research Your Builder

Builders come in all different shapes and sizes. Be sure to do your homework about a builder that you are going to work with before building a house not after. When someone had bad luck with a particular builder, it’s very easy for people to spread the word out, especially today with social media and power of internet. A lot of buyers fail to even do a simple Google search to see if there are any reviews out there. If a builder has done multiple homes in a particular area, take some time to investigate. Before you build a house, you can knock on a few doors, or make a few phone calls, to try and find out the most you can about how well the homes that were built are holding up. Do people have any complaints? Look for yourself at the homes and see if you notice anything that stands out that might concern you.

Beware of Upgrades and Allowances

Building a house can get costly if you don’t plan ahead of time. Think about any optional upgrades you’d like to have for your house. It’s important to remember that builders do make a great deal of profit from the upgrades you choose, so make sure you know market price for appliances, tile, and granite. Sometimes going with a basic construction house can save you a good deal of money. If there are after-construction additions or changes you can make on your own or through a cheaper third-party, then you may want to consider using them to save you some money. Also, be sure to check whether all of the upgrades you choose are covered by your lender. If they’re not, those will have to come from out-of-pocket cash. Also, be sure to submit your requests in time. Some builder contracts give them the authority to select upgrades for you if your requests are not returned in time. You want to make sure you get the brand new home you want not the one that builder decided to build!

Consider Sweat Equity

Are you handy? If so, see what you can do yourself. Go through the list of all the allowances and how much each allowance is and see if there is any work that you would be willing to do yourself like painting for example. You can pay yourself to paint your house instead of the builder. It might take you a weekend of painting and might save you thousands depending on the size of the house.

Check Cost of Materials

Nobody wants to overpay for materials. Your are paying builder a fee for building a house, not a spread on the tile or carpet. Its the worst feeling ever when you find out that a builder went to a local Menards or Home Depot, bought the materials and re-sold them to you for a hire price. Ask the builder where the materials are coming from and do some price checking. Don’t be naive, investigate to make sure you are not over paying and keep your builder accountable.

Find Out What Builders Fee Is

Be curious and negotiate. Don’t just take a bid from a builder and sign the paperwork. Find out what his fee is for building a house and see if you can negotiate it. A good real estate agent can help you with that.

Chose a Good Lender

In choosing a lender, you should make an informed decision about who you’d like giving you the money for your new home. It might seem convenient that a builder has a lender lined up to help you out, but blindly going down that route can get you a less-than-ideal arrangement in your financing. You might be able to find a better deal somewhere else, which, if the builder has an arrangement with the lender or even owns them, they probably won’t give you. Make sure to check with your agent, local banks or credit unions to see if they offer competitive lending rates for home buyers.

Hire a Home Inspector

When your brand new home is finished, be sure to get an accredited home inspector to take a tour of the house and ensure that everything is up to local codes and meets all the requirements. Be present when they do it, and ask questions about anything you’re unsure about. Builders are entirely capable of making mistakes, and your home inspection is the best time to discover anything that needs addressing it so that you don’t have to deal with it when you’re moved in.

Mistakes You Should Avoid When Selling a House

When thinking of selling a house, it can be tempting to start dreaming of the massive pile of cash a real estate agent will bring to you at closing. It’s going to be simple, fast, and you’re going to make a killing. Unfortunately, a lot of people fall into this trap and make the wrong choices when it comes to putting your home for sale.

Ignoring What Buyer is Willing to Pay

Whatever you think your home is worth, whether your house is a one or two bedroom bungalow or a 7 bedroom luxury home, the most honest thing anyone can say about your home’s value is that what you think and want to get for it almost doesn’t matter. Often times, the value you assign to the house that’s been your home for any length of time is going to be higher than it actually is worth. Anybody would have trouble separating the emotional attachment they have to their home from the reality of how a constantly fluctuating real estate market would value it. As harsh as it sounds – it doesn’t matter what you think your home is worth and it doesn’t even matter what your real estate agent thinks its worth.

If there’s one opinion that counts the most, it’s that of one individual – the Buyer. After all, buyers drive real estate market. If there is no potential buyer, then who will buy your home and how would selling a house be possible?

What List Price Will Help Selling a House?

When it comes to deciding what listing price of your home should be at, the tricky part is finding the right balance between what the seller wants to get and the buyer is willing to spend. Sometimes it can be a very difficult task to accomplish especially in the neighborhood that doesn’t have frequent real estate sales activity. And sometimes even the most experienced Realtor selling a house for you might struggle coming up with a good list price.

Listing High Because You Feel Like It

There’s no set formula that determines the best possible list price. Things like your neighborhood home values, recent home sales of the comps, and local real estate market dynamics all have an impact upon the varying prices your house could be sold at. One appraisal is not going to be exactly the same as another, no matter how many appraisers you hire. Two different Realtors might have different price opinions.

The biggest mistake you can make is to overestimate the value of your house and to forget about the wants and needs of the buyer in the current market. Meeting up with a real estate agent can help find a starting point. The more educated you are about current real estate market conditions – the better decision you will make when selling a house. It can be very easy to get side tracked by emotions that you have developed over the years of living there. It is also easy to start spending the money that you could have after selling your house. You start to think about how much bigger your next house might be. Maybe you could afford a down payment on a shiny new car…or it might be possible to take that trip to Italy you’ve always wanted. Who wouldn’t want more to spend on something fun, or have more in a savings account?

Listing High Because Real Estate Agent Said So

Don’t fall into that trap. Oftentimes, inexperienced sellers will go with Realtors that will give them the highest suggested asking price. And if you’re looking at mistakes to avoid, that’s could be the worst one and you might end up dropping the price week after week.

It’s important to remember that selling a house will never be determined by how much a seller wants to pocket. Instead, the key to sealing the deal is figuring out how much the Buyer is willing to spend in current market. Of course, that’s not to say that you should take the very first offer that comes on the table. It’s a negotiation that happens between the two parties that will ultimately end up satisfying both you and the buyer.

Overpricing

Homes listed too high will seldom attract much attention other than those people who are curious to have a look inside, but whose checkbooks are still safely at home and probably not going anywhere. So, it’s important to find the right partner in getting your home sold. It can be dangerous when overpricing the house. Before you know it, the listing will have expired, you’ll have had your home listed for months, if not a year or more, and you’ll have watched the listing price plummet if you’re not lucky enough to catch a lucky break in the market.

High Days On The Market

People who’ve made those kinds of mistakes often end up taking significant losses on properties that have sat for long periods at unreasonable prices. Listings that have gone stale after so long can put off buyers, meaning that the value buyers see when they look at your home may go down as they start to ask themselves, “Why hasn’t anyone bought this house yet?”

Listing Low Might Get You More!

Don’t let that happen to you! Starting the process of selling a house with lower listing price will attract more genuinely interested buyers, and more than likely the competition between them will help to drive up the price to something more in line with what you want to get.

Not Knowing How To Present Your Home

Every buyer is different; therefore you will never be able to meet everybody’s wants and needs. Some buyers will look at your home and will focus on all the positive features and others will focus on the negatives that will make it a tough sale to them. Some buyers will consider the things that you love about your house a turn off and won’t buy your home just for that reason.

Having a swimming pool is a good example. A swimming pool is a big plus in some states, but in Minnesota it can make it very difficult when it comes to selling a house. Some buyers love it – others hate it. Swimming pool adds more maintenance and adds to expenses. Also, it serves only seasonally in MN so you can’t enjoy it all year round. When selling a house, you need to know what buyers are looking for so you can present your home in the best way possible and turn a potential weakness into strength.

Real estate is often a game of careful planning and patience, so keep with it!

First Time Home Buyer Tips

For a first time home buyer the process of buying a home can seem a little overwhelming. For some, it can be very stressful and nerve-racking. After all, buying a house is one of the largest purchases of the lifetime for most people. Showings, inspections, multiple offer situations, home prices higher than you expected, loan approval, etc. can all add up and seem like a lot to deal with. But don’t sweat, if you prepare and make a solid plan, buying your first home is not all that bad. If you are a first-time home buyer, then these tips might be helpful.

Get Pre-Approved

Almost every first time home buyer automatically assumes that applying for a home loan is one of the last steps in the process. Although you can certainly wait until you find that perfect house but good luck finding a real estate agent willing to spend his or her weekends with you looking at homes when you are not pre-approved. What if you find that perfect house and then when times comes to make an offer someone else buys it while you are working on your pre-approval, or even worse, you don’t get per-approved and all the time spend on your home search goes to waste. Getting pre-approved is one of the most important steps and one of the first steps you should make before shopping for a home. Why? Because you need to know how much you qualify for which will help you determine a price range.

Get Pre-Approved Before You Find Your Dream House

The most devastating thing is to find a house of your dreams and then find out that you don’t qualify for a loan. You are not only wasting your time but your real estate agent’s time as well. After all, real estate agents work on commissions and get paid only at closing, they don’t get paid by the hour and don’t get paid when they show you homes, so be aware and respectful of that.

Know Your Budget

By being pre-approved ahead of time, you’ll know exactly how much you have to spend on a home. As a first time home buyer, do some research and see what kinds of mortgages would work best for you, and shop around. There’s nothing wrong with making lenders compete to give you the best rate and terms possible. Your real estate agent will most likely have a loan officer that they like working with, so make sure you talk to a few of them.

Hire a Real Estate Agent in MN

One of the most important things that will make all the difference in helping you buy a home is to hire a real estate agent that has experience and will be there for you every step if the way. A good real estate agent can make the most complex and confusing transaction go so smooth that you won’t even notice. Not all real estate agents are the same.

Tell Your Real Estate Agent That You Are a First Time Home Buyer

Some specialize in working with sellers, others with short sales and foreclosures, and other prefer working with a first time home buyer clients like you. Regardless of what your real estate agent specializes in, make sure to let him or her know that you are a first time home buyer and might need a little bit more “home buyer education” and need better understanding of the home buying process. There is no shame in asking questions and being better educated to help you make a good decision. Make sure you have some personal time with an agent, whether it’s a visit to their office or a telephone call, just to make sure that the two of you click. After all, you’ll be interacting with your real estate agent quite a bit and often times it might turn into a long-term relationship.

Agents Save You Time

The right type of an agent will bring you a lot of benefits. Mostly, agents are excellent for getting the legwork done in finding and finalizing a home purchase. For a first time home buyer this can be especially helpful. Whether it’s filtering out overpriced listings or having knowledge of homes for sale that are not yet listed on the market, real estate agents can help save you a lot of time. They can help sort through the many available listings in the location of your choice and send you the ones that meet your criteria. Some agents will even take a look at homes for you so that you don’t have to.

Looking at Homes For Sale

This is probably one of the most exciting and tiring steps – looking at homes for sale. Showing after showing, it can get very exhausting and frustrating. Keep to a maximum of six or seven homes in a day so that you’re not overwhelmed by options, it can get very confusing. Rank the homes that you see and take notes to help you remember them when you get back home. Expect to spend a fair amount of time looking and mulling over your options. Jumping into any random home just because you are sick of looking at them isn’t something that you want to do. You might spend anywhere from one to two months looking at homes for sale and considering the houses that appeal to you. For a first time home buyer, that may seem exhausting. But once you narrow it down to one or two places, it becomes much easier to focus on picking the one.

Don’t Forget About a Home Inspection

One of the big mistakes that buyers make is failing to do a home inspection. Some seasoned home buyers order a home inspection prior to making an offer. Home inspection is considered a contract contingency, which means that you, the buyer, have the option to cancel the deal if there’s something major wrong with the house and the seller isn’t willing to correct the problem. Instances of bad wiring, plumbing, bad windows, siding or roof can cause major expenses and a night mare for any first time home buyer that decides to skip on the inspection. Remember that every house has issues and it is good to know about them because you can use it as a negotiating tool to help you get a better home.

List Price isn’t a Sold Price

It’s important to remember that the list price doesn’t always mean that its the price that seller will get. Don’t feel like you have no room to negotiate. As a first time home buyer, it is important to understand that list price is simply a price that a seller thinks the house is worth but a lot of times it could be over or under priced and a good real estate agents will be able to help you determine that. Always ask your agent to do some research on the comps in the area so you have an idea of how much homes sell for in the neighborhood. Looking at comps and neighborhood data can also help you make a more educated and accurate offer.

Multiple Offers Are Not Always Bad

Depending upon market conditions, sometimes you should be prepared to pay a little above what the seller is asking. The housing market fluctuates all the time. If you find that you’re looking to purchase during a flood of buyers, the competition for a particular home or area can mean that, in order to seal the deal, you’ve got to pay a little extra. Conversely, in a buyer’s market, where there’s a surplus of homes, it may be easier to get a seller to come down a little ways for the sake of getting their home off their hands.

Check If There Are Any First Time Home Buyer Incentives

Don’t be shy, be sure to look into any special tax breaks or incentives for a first time home buyer so that you can get all the help available to you! Ask your real estate agent or research online to look and see what assistance you might qualify for, it’s never a bad thing!

How To Sell A House Fast

Only in a perfect world you could put a house on the market, attract a buyer and then sell it for top dollar in less than a day. Everyone wants to sell a house fast! But especially today, that’s not always so easy. First, it is hard to determine if it is a buyer’s or sellers market. It is kind of a mix and it all depends on the property. In a buyers market, you will have to make sure that your house is in its best condition and has nothing that would ale buyer upset. In the seller market, you can slack a little because there would be more than one buyer for the house willing to pay more.

To Sell A House Fast, You Have To Keep the emotions out of the picture, it’s strictly business

Many experts agree that the first step to sell a house fast is to detach yourself from the place. Let go of any attachments you might have to your home. Think of it as “this house” instead of “my home,” to help establish it as an object. It can be easy to reminisce and bring up old memories, especially if it is your first home you are looking to sell. The further along you are in the process of selling, the less room emotions should have to influence your decisions. Take a run around the house, spending a few moments in each room, enjoying the memories you have. And then, make a resolution that you are going to look forward and think about the new memories you are going to make in your new home.

Clean, Make It Shine and Stage!

Then, clean up the place! You will want to make sure that the floors are all swept and vacuumed, the windows are washed, and those pesky dust mites are all cleaned out from on top of and under the furniture. Bring down any cobwebs and make sure that your rooms (especially the lesser used ones) are all smelling fresh. Make sure to clean up any spills or stains on the carpets. Replace or get rid of any stained or damaged rugs, and dust any furniture that might need it. In the bathroom, take some time to shine the faucets and fixtures, clean or replace mildewy shower curtains or doors, and throw up some fresh, nicely folded towels so that the place looks inviting. Remember, in order to sell a house fast, you have to present it in the best possible way!

Declutter and Organize

Take this opportunity to reduce some of the stuff cluttering up the house. If you want to sell a house fast, you have got to make sure it sparkles! When you move, you are going to have to go through everything anyway, so you might as well get a jump start. You can reorganize the closets to make them less stuffed, getting rid of old clothes that you dont wear or that doesnt fit any longer. And tidy up that pile of shoes, too! When prospective buyers come inside, they will take a look inside cabinets and closets, and you dont want any negative associations going along with what they see. In the kitchen and bathroom, you can arrange the cabinets so that things look nicer, too, with plates and cups stacked and organized, and pill bottles and lotions all facing the same direction.

Get rid of Personal Stuff

Go ahead and start packing up books and trinkets you might have situated on bookcases and shelves. Take down any personal items like family portraits or pictures so that buyers arent looking at them instead of imagining their own things in this house. Who wants a buyer to be studying photos of your old aunts and uncles when they could be imagining how great it would be to decorate the place with their own things? Also, a good rule of thumb is to remove any personal religious items, it keeps your home for sale neutral and much more appealing to potential buyers of other religions.

Become a Minimalist

Lots of real estate agents agree that houses with fewer pieces of furniture crowding the place sell faster. And you want to sell a house fast! So, one thing you can do is get a storage unit. Take out any furniture that makes moving around the house less easy. That way, your buyer can focus on the house itself and not on what you have in it.

Besides, you will want to take out any pieces of furniture that you might want to take with you. There have been times where sellers have suffered from keeping items around during showings. If you leave items you plan on taking with you, whether it is a light fixture, an appliance, or even a window shade, during a buyer visit that buyer might assume it comes with the house. Then, when you have to say that you are taking it with you, the buyer might still want it, and it could hurt your prospects for selling. Make sure you are clear on what goes and what stays with the house.

Do a Pre-Listing Inspection

Definitely use the time before buyers come to make any repairs or tackle any fixer-upper opportunities that you are aware of. While it might take a little out-of-pocket money and effort to get taken care of, it will ultimately be cheaper than having a buyer ask for money off the asking price if they have to do it themselves. Switch out any down-and-out lightbulbs, and do a little maintenance to faucets and fixtures. Any stuck doors or holes in the wall? Take care of them before rather than pay for them after. Get a pre-listing home inspection done which will help you identify the items that need to be take care of.

Curb Appeal

One last step is to go outside and take a look at the house from the street. First impressions can be fateful, and you certainly want your buyers to have every opportunity to fall in love with your house at first sight. Try to think about what a stranger would think when seeing this place for the first time. Make sure plants and flowers and inviting and well-kept. Cut the grass if it needs it. Sweep the sidewalk. Power wash the exterior is needed.

Hire a Real Estate Agent

Although you can try and tackle it on your own, having a dedicated real estate agent on your team might save you time and money. Have an agent come look at your house and make a list of suggestions prior to making any repairs and getting it ready for sale. Real estate agents work with buyers all the time and know what they are looking for. Don’t be shy, ask for all the help you can get, after all agents get paid only when they sell it.

Buy vs Rent: 5 Signs Why You Should Keep Renting

Does Renting a Home Make More Sense For You?

A lot of us generally agree that buying a home makes more sense than renting a home but not always. There are a number of a occasions when renting makes more sense.

Cost

Cost is one of the biggest factors. Read this article that was written by chief economist at Trulia, it talks a lot about how buying a home is cheaper than renting and it should help you make a better and more informed decision http://trends.truliablog.com/2012/09/rent-vs-buy-summer-2012/

Job Security

If you’re not certain about your job and/or source of income – don’t buy a house. If your company is in the process of downsizing, you should think about the rather unfortunate possibility of you being laid off. If that were to happen, how difficult would it be to find another job, and one comparable to what you have now? And you can’t just think about job security, either. Sometimes positions with companies will force you to move to different parts of a state, and sometimes even the country. Is there a possibility that you will have to relocate? If so, you might want to hold off on buying a home.

Debt

Having a high debt ratio of 45 percent or more can mean that you might not qualify for a good loan and will have to pay a higher interest rate. If you have a lot of debts (credit cards, student loans, etc.) then it may be wise to check with lenders first to see if you would even be eligible for a loan that you could afford. Waiting a little bit and paying down your debts is always a good idea.

Maintenance

Maybe you don’t like the idea of having to keep up with things like mowing the grass or dealing with leaky pipes. Certainly, with renting these things are much less of a nuisance because of the fact that your landlord is the one who has to deal with them. If you own a home, those responsibilities fall on your shoulders. Not everyone knows how to fix those kinds of things themselves, or have a desire to tend to the upkeep of lawns and washed windows. And it can be costly to have an outside service come in to take care of things for you. Neither lawn nor repair services are cheap. Think about buying a home twice before making a move.

Credit Score

Finally, one of the big determining factors can be your credit score. A FICO score of about 620 and up is what’s needed if you’re going to be getting a decent interest rate for your mortgage. Anything below that and you’re looking at raised rates and high monthly payments, which is not what you want. If you happen to be below that score, you run the risk of having to pay a higher interest rate. Talk to a couple lenders that will advise you on what to do.

Determining whether or not you should buy a home or rent a home instead can be a difficult decision. On the one hand, owning a home may seem like something you want to do. On the other, owning your own place can have some serious drawbacks if you don’t have good enough credit or you’re uneasy with the thought of having to deal with some potentially major maintenance issues yourself. Ultimately, it’s important to take a moment and think about the pros and cons of buying a home. Don’t hesitate to call an experienced Realtor to discuss your options. If you do that, you’ll make a better informed decision that is right for you.

Why Buying A Home Makes Sense

Buying a home can feel overwhelming and stressful. After all, it’s a much larger investment than purchasing a new flat screen TV or an automobile. It is absolutely normal to have reservations and second thoughts when buying a home, especially if you are a first-time homebuyer. It can get even more overwhelming if you have friends and family offering you piece of advice left and right. Buying a home is a huge step in your life and a pretty serious commitment. The more you understand about the benefits of being a homeowner, the less you’ll have to feel intimidated about it. It is important you have a trusted real estate agent to help you buy a home. An experienced Realtor will guide you through home buying process and will offer a sound piece of advice.

Pride Of Homeownership When Buying A Home

One of the biggest reasons people want to buy a home is the feeling of accomplishment and pride that homeownership can bring. Buying a home means that you can decorate it how you’ve always wanted and bring all of your interior design ideas to life. You can literary do anything as long as local building codes permit…choose your own colors, build additions, and remodel a home entirely at your discretion. In your own home, you can enjoy things that you can’t when you rent an apartment. Owning a home also offers a feeling of permanence, stability, and the sense that you’re investing in your family’s future.

Build Long-Term Wealth

When buying a home, you will find yourself reading a lot more about real estate market than you normally would. The Office of Federal Housing Finance Agency monitors home values. Using its House Price Index, it keeps track of the changes not only on a national level but also by state and metro areas. Everyone knows that the housing market can be a roller coaster ride, especially looking at what we’ve experienced in the past 10 years. It is easy to get side tracked by all the media attention that house market gets but it is important to keep in mind that real estate is cyclical and even if market is down now, it will eventually go up again. Take a look at US House Price Index Report prepared by FHFA.

A lot of the home owners lost up to 40% of equity in some areas of the country when we went through the recent housing market crash in 2008 but in 2012 values started to slowly rise and by 2014 values have bounced to almost the same levels as prior to market crash. Homeowners that panicked and decided to sell their homes when market was down, lost their equity and took a financial hit. But homeowners that waited and ignored temporary market conditions gained their equity back. If you look at real estate prices history over a long period of time, the data suggests that real estate has maintained an upward climb. And with the prospect of inflation, people who buy a home have less of a chance of being affected as much as those that rent. Take a look at this graph showing price index change between 1991 and 2014

Enjoy Tax Benefits

Tax Deductible Interest

Buying a home might mean more tax benefits for you. Interest portion of your mortgage payments is tax deductible. You will get a Form 1098 IRS from your lender at the end of the year with a total amount of interest that you paid throughout the year. Just like any other loan payment, your mortgage payment consists of interest and principal. At the beginning of your loan interest portion is significantly higher than principal, especially if you took out a 30 year loan with minimal down payment so getting some of that money back can be a great relief when tax season comes around.

Tax Deductible Property Taxes

Also, your property taxes paid are also tax deductible which increase your tax return even more. You can look at Publication 530 from the Internal Revenue Service to check out more valuable information for first-time homebuyers.

Avoid Paying Capital Gains Tax

For those people who’ve lived in their homes for three of the previous five years, they can be exempted from up to $250,000 for an individual (or $500,000 for married couples) of profitable income from capital gains (check with IRS as numbers might have changed). No age restrictions apply, nor are there any guidelines stating that you have to be over a certain age. Also, buying a replacement home is not necessary. These exclusions are available to individuals (or couples) every three years. That means that you could sell a home every three years and enjoy capital gains (which can be subject to certain limitations) without having to pay taxes on it. Buy a home again, improve it and sell in a few years if you gained additional equity. There are tons of people doing it and you could be one of them.

Build Equity

As we discussed earlier, when buying a home you make your mortgage payment each month, part of that amount is put towards the principal balance of your loan. This reduces your loan obligation and builds equity. When your payments are amortized, part of those payments are increased each month so that the earliest payments are smallest and then the later payments are larger, increasing bit by bit each month (Check out amortization schedule calculator to see se how it works).

Buying A Home Might Give You More Borrowing Power

Although borrowing against your home is probably not the best idea and should be the last resort but it is a great borrowing tool in case you have an emergency and need cash or maybe need starting capital for a business that you always wanted to open. Equity loans carry deductible interest, which can be a major benefit compared to credit cards, which can often carry 17% to 23% interest rates. Home equity loans have significantly lower interest rates and much better terms. And again, that interest is tax deductible. Some homeowners choose to use their home equity to borrow money for a wide range of things, including (but not limited to) paying off credit card debt, making improvements to their house, or funding additional education. That type of loan you wouldn’t be able to get without owning a home. This is just another great reason why buying a home makes sense!

Buy a Home To Generate Cash Flow

Of course, not everyone wants to be a landlord but after buying a home wouldn’t you think that you would be a subject expert when it comes to home maintenance? You will learn all there is to it about home ownership so why not keep buying property for rental purposes to build more wealth? You don’t have to be an active landlord and don’t have to be a property manager. There are tons of property managers out there that will gladly take over your landlord duties for a very a small and affordable fee. Think about it!

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