Home ownership, particularly on the east coast of the United States, is expensive. Property taxes alone can reach the five figures annually, and are subject to change (which usually means they will go up rather than down). This also doesn’t include maintenance or utilities, so while real estate agents may be tempted to conceal the costs of owning a home in order to close a sale, you shouldn’t. Below are some reasons why.
Determine Your Client’s Budget And Help Them Stick To It
Everyone dreams of having a big, luxurious house, preferably with an ocean or lakefront view, but this isn’t realistic for many. People tend to get emotional when it comes to buying their first home, and some unethical realtors play on these emotions in order to talk them into buying a home they can’t really afford. A wiser and more ethical course of action is to have a frank discussion with your client regarding their budget and what they can spend, and then steer them towards a home that falls within it.
Show Your Client What Costs Can & Cannot Be Avoided
Property expenses can be broken down into two categories, and these are expenses which can be avoided and expenses that are mandatory. Avoidable expenses consist of things such as paying a contractor to do cleaning, repairs or landscaping, while expenses which are mandatory include utilities or property taxes. Your goal as a realtor should be to help your client keep their mandatory expenses as low as possible. You can do this by helping them find a home in an area with lower property taxes, or to look for properties that have quality construction and siding so energy costs are minimized.
Help Your Client Understand How Utilities Influence Affordability
Utility costs throughout the United States can vary significantly, and is a factor that any person planning to buy a home should consider. The northeast tends to have the highest costs due to the cold winters, while the Southern United has lower utility costs overall. Realtors are recommended to help their clients find properties in areas which have lower utility costs, even if this means a smaller house with reduced square footage and amenities. Clients can also make use of solar panels and energy efficient appliances to lower their costs further.
Evaluate Your Client’s Income
Having enough money to buy a home is great, and in the U.S. the term “buy a home” typically means making a 20 percent down payment with monthly payments continuing for thirty years until the mortgage is paid off. However, with the economy being the way it is, there is a high likelihood that some homeowners will face income fluctuations and even disruptions over a thirty year period. Therefore, before buying a house they should have enough income to where realistically the property can be paid off within five to ten years, and or the client should have enough savings to cover their mortgage for at least six months in case they are laid off and need to find another job.