home buying tips Archives - Lori Dee Doerfler

Your Guide to a Lake Havasu Home Appraisal

You’ve found your dream Lake Havasu home. Now it’s time to cross all your “T”‘s and dot all your “I”‘s before it’s all your own. One of the first items on your closing checklist is the home appraisal. So, what exactly is that?

If you need to borrow money to pay for your Havasu home purchase, your lender requires that a home appraisal be performed as part of the loan process.

Your Guide to a Lake Havasu Home Appraisal

The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party. It is used to determine whether the home is priced appropriately. If you must borrow money to pay for your home purchase, your lender requires that an appraisal be performed.

How Does an Appraisal Work?

During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the property includes a deck, a view, or a large yard. The appraiser will also compare the home to several similar properties that were sold recently in the area (typically within the last 30 to 60 days).

The final report must include a street map showing the property and the ones they compared it to. This also incorporates photographs of the interior and exterior, an explanation of how the square footage was calculated, market sales data, public land records, and more.

What Happens With the Report?

After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safeguard for the lender, as the Havasu home in question acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.

What if My Appraisal Falls Short?

Sometimes, an appraisal falls a little shy of the agreed upon sale price. When that happens, you have four options: try to negotiate a reduction in price, pay the difference in cash, dispute the appraisal, or walk away. In a highly competitive seller’s market, sellers rarely reduce their price. If you really love the house and/or you cannot come up with more money, you might want to consider disputing the appraised value. Talk to your real estate agent to see if this is a viable option for you.

Lori Dee Doerfler, Helping you negotiate through all the real estate noise

Important Questions to Ask When Buying a Home

When buying a home, some people may focus more on whatever bells and whistles it possesses. However, smart Havasu home buyers dig a little deeper. They want all the data possible on a property in order to make an informed decision. After all, this tends to be the biggest financial decision a person makes in their lifetime. Therefore, here are a few important questions you should ask before buying a home.

There are a few important questions you should ask when buying a home to help you determine whether or not you can actually afford to live there.

Important Questions to Ask When Buying a Home

How Much Does it Cost to Run and Maintain the Home Per Year?

Buying a home costs a good chunk of change. But running and maintaining it after you move in also costs money. It helps you budget wisely by finding out how much utilities cost the current owner per month on average. Also, knowing how much the current owner pays for routine maintenance tasks can assist you in determining whether or not you can afford to live there. Both are important factors in whether or not you can actually afford the Havasu home in question.

How Much Are the Property Taxes?

We all know that property taxes are determined in large part by the value of the home. So, that may change when you occupy the property. However, knowing how much the current owner pays could aid your decision of whether or not you want to buy the home.

Did Any Owner (Past or Present) Make Any Renovations or Additions to the Property?

Another important question to ask when buying a home is whether or not anyone (past or present) added onto the property or made any renovations to it at any time during its history. If so, ask what contractors performed the work and if any permits were pulled. Unpermitted work might cost you down the road when you wish to make changes of your own or even if you plan on selling it in the future.

Are There Any Warranties Included With the Home?

Oftentimes, the seller includes a one-year warranty with the sale of the property. But if the homeowner did any additional work to the property or added new appliances recently, warranties may exist for them that pass on to the new homeowner. This could save you thousands of dollars if something happens after you move in.

Have There Been Any Past Pest Infestations?

Mice. Roaches. Termites. Ants. They all present a problem. Some are more difficult to get rid of than others. So, make sure to ask about any pest infestations that any homeowners dealt with either currently or in the past before buying a home. In Arizona, existing homes do not require a termite inspection as part of the home buying process. However, it is always smart to have one done anyway. Termites can cause significant damage to a property before you even realize they are there. Then, it costs thousands of dollars to get rid of them and fix the damage they created. It is better to know what you are up against before you make a decision to buy your Havasu home.

When Was the Roof Last Repaired or Replaced?

According to the Home Blue Contractor Network, a roof replacement costs an average of $8000 for a 1500 sq ft home in Lake Havasu City. That’s a lot of money to spend, especially if most of your savings went into the purchase of the property. Tile roofs last about 15 to 25 years. Asphalt shingles last anywhere between 10 and 30 years. Therefore, knowing the type of roof the house has and when it was last replaced or repaired can help you determine when you might need to do work on it.

Have There Been Any Issues with the Sewage or Plumbing on the Property?

Finally, ask about any sewage or plumbing problems encountered by the current or past homeowners. Also, find out if the property uses a septic system or hooks into the city sewer system. Septic systems require their own maintenance by the homeowner. But they also tend to cost less to maintain. Instead of paying a monthly fee to the City, the homeowner pays just a couple hundred dollars to empty it out every three to five years. Homeowners who wish to live a more “off-the-grid” lifestyle tend to prefer septic to City systems. If the property utilizes a septic system, ask how old it is and what type of system it is (steel or concrete). These systems last anywhere from 15 years all the way up to 40, depending on the type of system used.

Lori Dee Doerfler, Helping you negotiate through all the real estate noise

Home Renting vs Home Buying in Lake Havasu

In every adult’s life, there comes a time when they ask themselves if they should stop renting and start owning a home. You need to sit down and honestly discuss whether you are actually ready to go through the home buying process. Do you have enough saved up for a down payment and closing costs? Are you ready for the responsibility? Do you even qualify for a mortgage loan? When is it time to stop renting and start looking for a property of your own?

How do you know when you are ready to stop renting a home in Lake Havasu and when you are ready to start the home buying process instead?

Home Renting vs Home Buying

Home Renting

Renting offers you the flexibility of being able to pick up and move when your lease expires if you want. Also, someone else takes care of the maintenance and upkeep on a property when you rent. If you love to travel or only plan on being in the area for a short amount of time, then renting might make more sense than owning a Lake Havasu home.

Home Buying

When you decide to buy a home, there are several factors to consider. First of all, do you qualify for a loan? Talk to a lender to find out. Second, do you have enough money saved up for the down payment and closing costs? First-time homebuyers with fair credit may qualify for just 3 to 3.5% down. When you pay $300,000 for a property, that means you need $9000 to $10,500 just for the down payment. Closing costs add a few more thousand to that.

Next, how long do you think you will be living in Lake Havasu? One year? Two years? More? If you only plan on sticking around for a year or so, you might want to continue renting. However, if you plan on staying for longer than that, become a homeowner. That allows you enough time to build up some equity in your Lake Havasu home to both recoup the costs of home buying as well as save up what it will cost you to sell it in the future. (Yes, there are costs associated with both.)

Would you like to personalize your property by knocking down walls or changing up flooring? Unless your landlord happens to be an extremely understanding individual, you limit your options when renting. Becoming a homeowner means you make the decisions on how your property looks (within HOA guidelines, if applicable).

Finally, while the Lake Havasu real estate market saw a major increase in home values over the past couple of years, that does not always happen. (Remember the late 2000s/early 2010s?) At any time, the market may start to decline. However, in the long run, real estate tends to be a solid investment.

When you decide you want to start the home buying process in Lake Havasu, contact me. I’d love to help you find your next home.

Lori Dee Doerfler, Helping you negotiate through all the real estate noise

Home Inspection Questions Every Havasu Home Buyer Should Ask

In real estate, timing is (almost) everything. Right now, the Lake Havasu market sits squarely in the seller’s favor. Buying a home during a seller’s market requires a skilled REALTOR, a pre-approval letter from your lender, and the flexibility to look at a listing as soon as you hear about it. Once you enter escrow, you will want to hire a pro to perform a home inspection to check for potential issues hidden below the surface. Here are some questions you need to ask your inspector before, during, and after the inspection.

Be an informed Lake Havasu home buyer. Find out what home inspection questions you should ask and when you should ask them.

Home Inspection Questions for Buyers

Before the Inspection

Ask them about their experience (how long have they been doing this) and their qualifications. What will they check and what is not part of the inspection? How much do they charge? (Hint: someone who charges much lower than other inspectors, this should raise a red flag.) Request to join them for the inspection. If they say “no”, move along to another inspector. Find out how long they expect the inspection to take. If you live in an older Havasu home and they say “an hour” for example, that could indicate that their inspection will not be thorough enough. On the other hand, if they quote a half a day for a 1200 square foot home, that could indicate that their level of expertise may be very low. Request a sample report so you have a good idea of what to expect in your own inspection report. Even new construction can come with issues. Avoid panicking by knowing what to expect.

During the Inspection

A confident inspector allows the buyer to attend the home inspection with them. During the inspection itself, they might point out areas that may need repairs or things to keep an eye out for after you move in. Feel free to ask for clarification when necessary. Inquire about what they consider to be a “big deal” and what is more of a “minor issue”. When you see something that causes you concern (water spots, possible mold, cracks in the ceiling, etc.), ask your inspector whether or not it is something to be concerned about. Most likely, they already noted it on their inspection. But you can still pick their brain while they’re at the site. Finally, once they’re done, ask them about what areas of the property concern them the most.

After the Inspection

Once you receive your home inspection report, you may question some of the findings. Don’t panic. Contact your inspector and ask them for clarification where needed. Ask them what areas need attention right away and what it would cost to fix them. This includes things that might need to be done as soon as you move in. Find out which issues require a professional’s follow-up, such as potential electrical, plumbing, roofing, or foundation issues.

Keep this in mind: an inspector will not tell you if you should buy a house or not. However, they can tell you which issues are big and which are minor enough to not be dealbreakers. In turn, that will help you determine if you need to ask the seller for repairs before closing, if the repairs are minor enough for you to deal with after closing, or if you should walk away from the deal completely.

Lori Dee Doerfler, Helping you negotiate through all the real estate noise

Havasu Home Buying During a Seller’s Market

We are currently experiencing a very unique time in history right now. And by that, I mean more than just COVID-19. It appears that the time spent cooped up in our homes made some of us realize that we need more space. Unemployment hit record highs. That made some homeowners question whether now was a good time to sell or not. Even so, low inventory, historically low interest rates, and high buyer demand pushed us even deeper into a seller’s market. So, if you plan on doing some Havasu home buying right now, keep the following tips in mind.

Havasu Home Buying During a Seller’s Market

Be Prepared to Act Quickly

As of July 2020, the average Lake Havasu property spent just 19 days on the market before going into escrow. Some spent far less time. For many people, the weekends provide the opportune time to check out properties. but in a seller’s market like ours, you might miss out by waiting. Be prepared to see it during the week if possible. Talk to your agent about a virtual showing if needed. Sometimes, all it takes to get a house is to be the first one to see it and submit an offer. So, make sure you hire an agent that knows their stuff.

Get Your Financials in Order

Knowing your budget before you start the Havasu home buying process helps keep you focused on realistic goals. To help create a viable budget, contact your lender and start the approval process. If you go so far as to get to the underwriting step of your loan approval, your offer looks much more attractive to a seller than someone who still needs to begin the process. It also helps cut down a large chunk of time in escrow.

Use Contingencies Sparingly (If at All)

Speaking of offers, go easy on the contingencies. Set aside the laundry list of repairs, especially if the seller accepts a lower price instead. Loan approval before you put in an offer allows you to avoid that contingency. Yes, contingencies allow you to back out of a deal if something comes up. However, the more contingencies you place on the sale, the more likely a seller may be to take another offer, even if it comes in at a lower sale price. Talk to your agent about how best to approach contingencies.

Perfect Houses Don’t Exist

Finally, let go of the idea of finding “the perfect house”. It just doesn’t exist. Even if you built a home from the ground up, you most likely need to compromise in one area or another for a myriad of unavoidable reasons. With inventory as low as it is right now in the Lake Havasu real estate market, temper your expectations. That doesn’t mean you should buy a money pit. But, you might have to scale back your list of “wants” in order to find a property you want to buy.

Lori Dee Doerfler, Helping you negotiate through all the real estate noise