Six Things New Homeowners Waste Money On

OK, we’ve said it time and again, but it bears repeating: Buying a home is a very big expense—and once you’ve kicked off all that spending, it’s easy to find yourself caught up in rampant lifestyle inflation. After all, you’ve got an enormous, shiny new house just waiting to be filled with all sorts of nice stuff, right?

Well, take some quick advice: Don’t keep spending.

Homeownership comes with its fair share of unique costs—property taxes and urgent repairs and energy bills, oh my. There’s no need to add to their cost by shelling out for unnecessary expenses. Here are six major cash outlays that buyers can avoid.

Too much house

This one requires some thought before you actually nail the deal: How much house do you really need? Just because you’re pre-approved for a hefty purchase price doesn’t mean you should go as big as you can.

“The house that you can afford with the money you’re lent can make the budget go out of whack,” says Andrew Gipner, a financial adviser at Longview Financial Advisors inHuntsville, AL.

Not sure where to trim? Consider having less closet space, buying fewer bedrooms, or—especially—eliminating a formal dining room.

“You don’t use the dining room nearly as often as you think,” says Noelle Hans-Daniels, a Sotheby’s Realtor® in Indianapolis. “It’s kind of a wasted space.”

Fixing up your outdoor space ASAP

Once you close on your home and move in, you might be itching to host your first late-season barbecue. Or maybe you’ve been dreaming about a koi pond, like, forever. But hold on: Updating your outdoor space shouldn’t be your first priority, especially if you’re tight on cash. Unlike couches and beds, which are essential to a functioning house, landscaping and decor can be put on pause.

That goes double if you’re building new: According to Hans-Daniels, building your backyard at the same time as your home can cost “a lot more than if you did it after the fact.”

So exercise some caution before committing: Try pricing out your plans with a landscape contractor, and consider rolling them out in phases.

Old, outdated insurance

Still using the same company that offered you renters insurance seven years ago? It might be time for a change. Shop around.

“You may stay with the same company, but you may find something that’s a little better price for the same thing,” Gipner says. “Sometimes, people may not want to shop around or may be married to a particular company.”

Just because the same company had a good deal on auto or renters insurance doesn’t mean it’s the best fit to protect your home. Go through all your options with a fine-toothed comb, looking for a deal that won’t crush you financially but also leaves your house and its belongings secure.

After all, now it’s not just your stuff—it’s your roof, yard, and foundation you have to protect, too.

Space-filling stuff

If you’re moving from an apartment, chances are good you’re astounded by how much space you have. There’s another bedroom and a dining room and … yet anotherbedroom!

Don’t feel like you have to fill it all at once. Give yourself—and your home—time for personality to emerge.

“A lot of people will go out and say, ‘Oh my gosh, I’ve got to fill this space and buy stuff,’” Gipner says. “I’m not against possessions, but the way some people do it can be seriously detrimental to their finances.”

Instead of immediately stuffing the TV room with a generic, new couch and coffee table, wait it out. See what you really need and what you really like. In the meantime, stick the money you save into a renovation fund.

Extended warranties

Many homes don’t come with appliances installed, so first-time homeowners might find themselves making large purchases (like a dishwasher or refrigerator).

Here’s a tip: You don’t need the extended warranty.

“I’m against them,” Gipner says. “What are the chances everything you own is going to break or not work anymore?”

Yes, something might break within the relatively slim service window—but the money you’ll spend fixing one thing will be far less than the extended warranties on all the things. Your average warranty costs about $123 for major appliances, according to Consumer Reports, and a single repair costs not much more (and might not even be covered). Just risk it—you’ll come out ahead in the long run.

Yard maintenance

Having your own yard is definitely exciting, and while it’s important to keep it healthy and watered, you don’t need to go overboard. Resist the pressure to hire additional help for your yard—even if you’ve lucked into an HOA that covers it.

“You can still be part of an HOA and cut your own grass,” Gipner says. “You don’t have to pay someone an exorbitant amount of money to come out and cut your grass.”

Don’t be tempted by the sales pitches you’ll inevitably receive after your purchase goes through. A gorgeous lawn is achievable—and it can be done all on your own. Really.

Shared from:  http://www.realtor.com/advice/buy/six-things-new-homeowners-waste-money-on/

Protect Yourself—and Your Finances—With These Creative Contingency Clauses!

Think of a contingency clause as insurance. Once you find a home and make an offer, you hope everything will go smoothly; but in case it doesn’t, you have a contingency clause in place that allows you to back out of the contract without losing money.

Most agreements already have a few key contingency clauses in place to protect against the bigger things—such as a lower-than-anticipated home appraisal—but there are contingencies that go beyond the norm. If you’re about to make an offer, consider all of your options.

Standard contingencies

Some contingency clauses are commonly used when making an offer. Some examples:

• Home inspection: This gives the buyer the right to order a professional home inspection and back out of the sale if major unreported damage is found.
• Appraisal: The buyer won’t be obligated to buy the home if the appraisal value is lower than the asking price.
• Mortgage availability: This gives the buyer time to find financing for the home. If the buyer can’t find financing, either party can cancel the deal.

Atypical contingencies

You don’t have to stick with the standard contingency clauses. Depending on your situation, it may make sense to add additional clauses to the agreement. Some examples:

• HOA rules: If you’re considering an area with a homeowners association, it may be prudent to require a copy of the HOA guidelines before you buy. HOA fees vary and if the dues are high, your annual homeownership costs will go up. Many HOAs also have rules on parking, landscaping, paint colors, and even holiday decorations. If you aren’t happy with the HOA, you’ll want the option to back out of the deal.
• Selling your current home: If you’re trying to sell your home before you buy another one, you may want to put a selling contingency in place. If you’re unable to sell your current home within a certain time frame, this contingency allows you to cancel your offer.
• Moving furniture early: With this contingency, you and the seller agree to allow you to move personal property in (or move in entirely) earlier than the seller anticipated. You may have to agree to pay the seller rent if you move in before closing, but it will spare you from putting your belongings in storage and finding temporary lodging.

Adding contingency clauses

A basic offer won’t automatically contain any contingency clauses. While many Realtors® include some standard clauses in every offer, you should work with your agent to make sure you’re including contingencies for everything you can anticipate before you submit your offer.

Once you’ve submitted the offer, keep in mind that the seller may submit a counteroffer with his or her own contingency clauses as well.

Reposted from:  http://www.realtor.com/advice/protect-yourself-with-creative-contingency-clauses/

Tools Every New Homeowner Should Have

A new house brings so much possibility—and so much responsibility.

There’s no landlord complaining about picture-hanging holes in the wall. But there’s also no super to call when the toilet breaks. That’s all on you now.

You likely got by in a rental just fine with a hammer and a screwdriver. Maybe you added a level or stashed away some pliers.

But if you’re buying a house, you’re going to face eventual repairs. Be ready for them by beefing up your old toolbox.

Here are a few items to consider adding:

Good drill. It doesn’t need to be expensive. “Contractors swear by [a $100 drill], but they’re using it every day,” says Sammy Tayeh, a manager at the Tarzian Hardware store in New York. A $40 model that you plug in to a wall (so you don’t go through batteries) is sufficient.

Selection of tape. Duct tape, electrical tape, packing tape—you never know when you might need to fix a wire you accidentally vacuumed over or rig a broken window until it can be replaced.

Picture hangers. Get ones that are appropriate for your walls. Your needs will likely change from what worked in your rental, depending on whether you have drywall or plaster, use historic picture rails or want to decorate a brick accent wall.

Variety of hardware. Nuts, bolts and nails in a range of sizes will always come in handy.

Screwdriver with interchangeable heads. Or better yet, a power screwdriver. It’s not fancy, but it makes everything from assembling furniture to tightening door hinges so much easier.

Tape measure. “I carry a tape measure in my purse, so when I’m out and about I can measure for the house,” says homeowner Susan Davoli of Syracuse, NY.

Pliers. A basic set can run about $20. You’ll find them handy for everything from pulling out old nails to installing a light fixture.

Utility knife. Save your kitchen knives (and your fingers) from potential damage.

Voltage tester. This handy gizmo will tell you whether a wire is live. Save yourself from a burn (or worse) for less than $20, especially if you want to do things like install dimmer switches or change out light fixtures or a doorbell.

Depending on the home, its age and how much work you plan to do, you might want to add a caulking gun, a pry bar and a putty knife to your list.

Collectively, these items might set you back $100 to $200. That’s far cheaper than constantly calling a handyman, and a lot easier than realizing you've got nothing around the house to deal with a middle-of-the-night emergency.

Reposted from:  http://www.realtor.com/advice/tools-every-new-homeowner/