Whether you’re a first-time buyer or a seasoned home buyer, shopping for a new home can feel daunting. Buying a home is a big commitment of both time and money. Plus a home purchase has the power to improve your quality of life and your future financial security, so the stakes are high.
Follow these five steps to assess your priorities, streamline your search and choose your next Mammoth Lakes home with confidence.
Step 1: Set your goals and priorities.
The first step in finding your ideal home is knowing why you want to move. Do you want more space? Is this a second home? Would you rather live in a house than a condo (or vice versa)? Are you looking for something with less maintenance or a single-level floor plan? Figuring out why you want to move will help you nail down your priorities.
Don’t forget to think about how your life circumstances might change over the next few years. Do you plan to change jobs? Have more children? See your children off to college? A good rule of thumb is to look for a home that will meet your family’s needs for the next 5-7 years.
Step 2: Determine your budget.
Financial professionals often recommend following the 28/36 rule to figure out how much you can afford to spend on a home. This rule says you should spend no more than 28% of your gross monthly income on housing expenses (mortgage, taxes, insurance, etc.) and a maximum of 36% of your gross monthly income on your total debt obligations (housing expenses PLUS any other debt obligations like car loans, student loans, credit card debt, etc.)
The 28/36 rule only provides a rough guideline. Of course it you are purchasing as a second home and/or investment, the guidelines change especially if you plan on renting to generate cash flow from the property. Getting pre-qualified or pre-approved for a mortgage before you start home shopping will give you a more accurate idea of how much you can borrow. Add your pre-approved mortgage amount to your down payment to figure out your maximum purchasing potential.
Step 3: Choose a location.
When house hunting in an urban area, this step often takes into consideration commute times, school districts, etc. But in Mammoth Lakes, the location factors you’ll want to consider are things like how close the property is to the ski mountain, the gondola, The Village, bus lines, schools, restaurants, etc. Luckily in our 4-square-mile town, nothing is too far away.
Since Mammoth Lakes is a resort town, you might also want to consider the re-sell or renting potential. Different neighborhoods have different zoning regulations, so if you think you might want to rent out your home on a nightly basis down the line, be sure your real estate agent can find appropriate properties for you.
Step 4: Decide what you need (and want) in a home.
Start with the basics like number of bedrooms, number of bathrooms, and square footage. Do you want a one-story or two-story layout? Do you want other amenities like a hot tub/spa, a garage, etc.?
You might not find a Mammoth Lakes home with all of your “wants” or even all of your “needs” at a price you can afford. Most of us have to make a few compromises when buying a home. If you’re facing a tough choice about how or what to compromise in your home search, go back to Step 1 and consider your original goals and motivations for moving. Reminding yourself of your priorities can often provide helpful clarity.
Step 5: Meet with a real estate agent.
A good real estate agent can lessen the stress and uncertainty of buying a new home. From setting goals to securing a loan to selecting the best neighborhood, my job is to assist you every step of the way. It’s never too early (or too late) to get in touch with an agent about buying a home.
This is a unique opportunity to own a brand new three- or four-bedroom home in Mammoth Lakes. The Villas at Obsidian feature new construction with a completion date of April/May 2020. These luxury, full ownership townhomes are on the 10th Fairway of Sierra Star Golf Course.
Surrounded by the natural splendor of Mammoth Lakes, The Villas are located within a private gated community right in the heart of year-round activities, just minutes from The Village at Mammoth and ski lift/gondola access.
Exclusive to other homes built in Mammoth Lakes is the contemporary mountain design of these townhomes. Interiors include wood accents, flagstone with hydronic flooring, natural stone finishes with an open floor plan for entertaining friends and family. Each villa also has a large outdoor covered deck with BBQ and an optional jacuzzi. Each unit has a private two-car garage. Prices start at $1,250,000.
Contact me to learn more.
Everyone has a crazy story about their first time buying a home, but some of those stories are riddled with common real estate myths. With so much information to sift through during the process, it can be hard to distinguish fact from fiction. Here are the most common home buyer myths I hear:
Myth #1: You need a 20% down payment.
Sure, a 20% down payment is great, but that doesn’t work for everyone. You can buy a home today with 3-5% down. A good lender can walk you through the options to have a lower down payment. With less money down, you’re a higher risk to a lender, so you may need to buy mortgage insurance as part of your monthly payment.
Note that some properties in Mammoth Lakes have very specific lending requirements. Some condo complexes will require 20-30% down, so be sure to discuss your down payment plans with your real estate agent early on and most importantly, get pre-approved for a mortgage so you are ready to make an offer when you find the perfect place.
Myth #2: Real estate agents are expensive.
It must be expensive for your real estate agent to be there for you and help you every step of the way, right? They spend countless hours working on your behalf. Luckily it’s not — for you, that is. Buyers typically don’t pay a real estate agent’s commission. Your agent’s fee will likely be paid at closing by the seller of the home you’re buying. The seller knows to factor this cost into the property’s total purchase price.
Myth #3: Don’t call a real estate agent until you’re ready to buy.
While you don’t want to waste anyone’s time, it’s smart to call in a real estate agent as soon as you start considering buying. Even if you’re just browsing the internet, a real estate agent can be a huge help. In Mammoth Lakes, having someone who knows the intricacies of the neighborhoods, different condo complexes, etc. can save you a lot of trouble.
A real estate agent can also set up a search for you in the Multiple Listing Service (MLS) so you get notified whenever something hits the market that meets your criteria. The MLS is usually more up-to-date than Zillow and Trulia. Setting up a search early on will help you get an idea of what’s available and what’s in your budget and save you time since you won’t need to scour the internet.
Myth #4: Fixer-uppers are more budget-friendly.
You’ve probably watched shows on HGTV that make fixer-uppers look dreamy. But beware: homes that need a lot of work also require a lot of money. Even big renovations (like a kitchen remodel) take a lot longer and often cost more than it seems on TV.
In Mammoth Lakes, many properties were built in the 1970s and 1980s. While they aren’t really fixer-uppers, many of these will need renovations, so it’s wise to think about before committing to an older property. If you fall in love with an older home that needs a lot of work, get a few quotes from contractors before you buy so you know what you’re getting into.
Myth #5: Your only upfront cost is your down payment.
The down payment is probably the biggest chunk of change you’ll need, but that’s not all. Closing costs usually range from 2-4% of the total purchase price of the home. This includes things like homeowners insurance, title fees and more.
You’ll also need an inspection before closing, which usually costs a few hundred dollars but depends on the size of the property. Your lender will also require an appraisal to determine how much the home is worth. You might pay when the appraisal is done, or it might be added into your closing costs.
Myth #6: You need a high credit score to buy a house.
You don’t have to have perfect credit to buy a home. There are many loans out there that buyers with lower credit scores can qualify for. Some come with additional feels, so talk to a few lenders or mortgage brokers to see which option is best. Bring your real estate agent up to speed early so they can advise you on which properties would be best for your financing situation. Again, it is best to get pre-approved early in the process so you have a better idea of your budget and are ready to make an offer.
Myth #7: You can’t qualify for a mortgage if you’re still paying off student loans.
You might be more comfortable paying off your existing debts before jumping into homeownership, but it’s not required. When applying for a mortgage, your lender will look at your debt to income ratio. You can calculate this on your own by adding your monthly debt payments and dividing those by your monthly income. Your lender calculates this to make sure you can afford your monthly mortgage payments in addition to what you’re already paying. If your income is high enough that you can easily make all the payments, a student loan won’t affect you getting a mortgage.
Myth #8: You should base your budget on what your lender approves.
When you prequalify for a mortgage, your lender looks at your income, debt, assets, credit score and financial history to see how much you can qualify for. Lenders tend to approve you for the highest amount they think you can afford, but that doesn’t mean you should borrow that much.
Instead, use an online mortgage calculator to get an idea of how much you can actually afford. Think about what you’d like your monthly payment to be, and remember to include principal, interest, taxes and insurance. You should also think about ownership expenses that aren’t part of your monthly payment, like HOA dues and maintenance.
Myth #9: It’s all about location.
“Location, location, location” is basically the real estate industry’s motto, but it’s not always the best guide for you when buying. Especially in a ski town like Mammoth Lakes, prices can vary quite a bit depending on what housing community you’re in or how close you are to Mammoth Mountain. While you do want to think about resale values of each location, you should choose what’s right for you and your family rather than focusing on resale above all.
Myth #10: If you look hard enough, you’ll find a home that checks every box on your wishlist.
Unfortunately most buyers will have to make some compromises. The home that meets every item on your wishlist might be out there, but it’s also probably double or triple your budget. And don’t forget that Mammoth Lakes is a tiny town, so the options can be a bit more limited than in a big city.
I recommend narrowing your wishlist down to the top five things that are important to you, then rank them based on priority. You should also note your absolute deal breakers so your real estate agent can avoid properties that just won’t work.
Whether you’re a first-time buyer or a seasoned homeowner, there’s no reason to go through the home buying process without a strong advocate on your side. Learn more about buying a home in Mammoth Lakes in my Ultimate Home Buyer’s Guide, or call me to start looking for your dream home: (760) 914-4664.
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