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Home » Business And Finance Articles » Before Viewing Homes For Sale Know What You Can Afford To Pay

Before Viewing Homes for Sale, Know What You Can Afford to Pay

Before contacting a realtor and begin looking at homes for sale, there are a few things you need to do. Your realtor will assist you in discovering how much home price you can afford, but he/she needs information from you to do it. So, go prepared with your financial data to your first appointment with your realtor in order to begin looking at homes for sale immediately.

To determine a homes for sale price that you can afford, you need to review your financial situation to determine how much down payment you can afford and how large of a monthly payment you can comfortably handle.

Net Worth

So, before looking at homes for sale, put together a statement of your net worth. Begin by doing an inventory of all your assets (what you own that may be sold for cash). This includes all investments, savings accounts, household furnishings, your current home and any other real estate, vehicles, recreational vehicles and equipment, furs and jewelry, guns, electronic equipment, loans owed to you, any vested equity you own, cash and surrender values of insurance policies, collectibles, and precious metals and gems.

Now, list the value of each item. This is the amount you believe you could sell the item for cash within a reasonable timeframe. Deduct any money owed on the item from the sell price. For example, you might be able to sell your current home for $150,000, but you owe the mortgage company $75,000 (pay-off amount) and another $3,000 in property taxes that would come due before it could be sold.

Now, list all of your liabilities. They are anyone to whom you owe money for whatever reason. They include mortgages, loans and credit lines of any types (including credit cards), and even your Uncle Bob that loaned you $2,000 last summer.

Total your assets and liabilities. Then, subtract the liabilities from your assets to determine your net worth.

Down Payment

To determine your possible down payment for a homes for sale, take your net worth and subtract out the following: Savings for emergencies, education and retirement; settlement and moving costs of buying the homes for sale; and cash you will need to improve, decorate and furnish the new homes for sale. The remaining is your possible down payment.

Monthly Payment

Next, calculate the possible monthly payment you can afford for your homes for sale. List all of your actual and projected monthly expenses. Include all the monthly costs of your liabilities listed above, adding the following items: Insurance premiums, all household expenses (including cell phones and DSL costs), any taxes owed but not already withheld by your employer, all transportation costs (include maintenance, fuel, and licensing), clothing costs (new and maintenance), pocket money for family members, groceries, personal care, recreation and entertainment, medical and dental costs, charity, special expenses (such as tuition), and miscellaneous costs. Divide into monthly costs any expenses paid quarterly or annually.

Now, total your monthly expenses. Subtract out your monthly mortgage or rent. Subtract the remaining expenses from your total monthly household income. This is the amount you can comfortably pay for a monthly mortgage payment on a homes for sale.

If the monthly payment for a homes for sale seems a bit low, review all of your monthly expenses. Where can you decrease or eliminate expenditures? For example, paying off your high-interest credit cards to eliminate the high monthly payments.

Once you have this information in hand, your realtor can determine just what you can afford to pay for a homes for sale.

And here is another random article you might be interested in...

Win By A Nose, Lose By A Nose

Have you ever focused on something so intensely that your senses seem to shut off? Imagine being a jockey at the helm of a Belmont Stakes contender. Your horse is breathing hard, but you barely notice it. Your body is rocking in tune with the flow of the horse's gait, but you hardly feel it. The resounding cheers of 120,000 screaming spectators are muffled at best, if not completely blotted out altogether. Your focus is on the white finish line, and making sure that your horse's nose cuts over it before anyone else's. A new "challenge" approaches...a stately competitor has inched its way to your shoulder. Now you can see its whole head. The white line looms closer and larger. Can your horse hold out its lead to the finish? Both cross the line. The winner will have to be determined by photo finish. A difference of less than one centimeter separates you and the other guy from the $1 million prize. Did you win or lose by a nose?

Real life isn't always that exciting or dramatic, but real life mimics this "win by a nose, lose by a nose" competition all the time. Consider this. If you're firm is attempting to secure a sale and you lose, what do you lose? EVERTHING. If you win, you win several times over. First you win the order and you get to benefit from the time trying to secure the sale and then you win the added benefit of profits. Your competitors lose not only the sale, but they lose profits and opportunity costs associated with the efforts. Profits have to pay for the lost efforts used to secure the sale.

Let's say your firm generates 300 quotes a year and you win about one third or 100 projects a year. Closer evaluation might show you lost 14% due to late submissions, 17% due to plus or minus 1% of the asking price, and 11% due to not having a 24-hour hot line. Contemplate what your business would look like if you jumped from 100 orders a year to 146 orders just by fixing these small issues and winning by a nose. Perhaps the jump would go from $32 million to $47 million just by evaluating win-by-a-nose strategies. Our clients say they most likely would have to turn away business. Would you?

If we used the concept, "win by a nose, lose by a nose" to the military, then decisions and actions are much more evident. What happens if you lose by a noseâ€"a split second? You die. Business would be much more productive if the consequences were as severe.

The great thing about this strategy: you don't need to be 10 times better than your competition to win, do you? You just need to be a nose.

Minor adjustments can make the difference between having everything you want and watching other people have it instead. Sometimes being aware of just how close you really are makes a world of difference, too. Other times, doing the same thing, but changing the timing reaps big rewards.

A simple example is how you might pay off a business loan or a mortgage. Say you have $200,000 to pay off on a 30-year loan. You can make one lump payment each month, and in 30 years, you're done. Or, you can cut the amount in half and make two payments a month. In 22 years, you're free and clear. Tack on another $100 per month, and you might get out from under the loan in 18 years. Think of what twelve extra years of retirement savings or $80,000 can do to the quality of your life. In essence you've won by a nose with a simple planning strategy.

If you're in management, there are plenty of ways you can adjust and tweak what you do to win by a nose. You can make your own list of win-by-a-nose strategies. The possibilities are endless, really. Here are 4 things you should consider to get started:

1.Know your ultimate customer: What do your customers look like? Why are they buying? What buying patterns best suit their ways of business? We recently talked with a manager in a $25m hydraulics and fluid company. Years ago, they would sell to OEM manufacturers. Over the course of 20 years, the customer base changed. Some left the area, some relocated to other countries, others went out of business. Order sizes changed. The supplier had to shift its ultimate customer and now has a client base of smaller companies requiring smaller orders. It has had to adjust the way it manufactures and delivers product, as well as the way it services customers. How about your firm? Do you need to provide more service techs in closer proximity to your buyers? Might you need better access to local engineer teams? Are you offering competitive enough financing options to buyers? And as always, do you offer a better product than the next competitor? What are you doing to win by a nose?

2.Know your competition. Who you're REALLY fighting against. Managers in retail often complain that they're competing with "WalMart" or big box stores. Everybody competes against WalMart in some way, it seems. But with 6500 stores in 15 countries and servicing more than 150 million customers a week, is this really the most accurate description of your most threatening competitor? Do some homework, because in the race against WalMart, we doubt you're going to be winning or even losing by a nose.

3.Determine your order winners. Order winners are the distinguishing characteristics that enable you to win. Begin by looking at the things that put you in the running against reasonably defined competitors and see, point for point, what items you can improve upon to be able to win at least by a nose. Last February, our furnace went on the blink. We discovered the problem at 10:30 on a Friday night. The temperature outside hovered around zero. We called a business with offices less than a half a mile down the road. The "sales person" quoted a price, tacked on a "late-night fee," then went on to explain what else we might be up against. When we inquired about a particular part, the culprit of the problem, we were quoted a three times the price we had found on-line during the call. Then we called a North-Syracuse based small business that advertised as a 24-hour service provider. The initial fee from company #2 seemed fair and they had no late-night fees. The reason-- "We advertise 24 hour service so it means we are working anyway." The price for the broken part was within retail markup, 100%. And to top it off, they would weather a blustery snowstorm and be in our basement in less than an hour. It doesn't take a genius to figure out who won that job. Both firms received the call and one accepted a reasonable strategy for servicing customers and the other thought that because they were located in a higher-end suburb, they could charge additional fees.

4.Develop your brand. Oh, what an ambiguous statement! Let us be more specific. Gene Simmons, who masterminded the band, KISS, said that when he built KISS, his goal was NOT to build a bandâ€"but to build a brand. KISS went on to be one of the most recognized rock bands in the world. PEOPLE PAY EXTRA FOR BRANDS. Brands give automatic credibility to your product or service and they can easily help you win by a nose when everything "appears" equal. People feel like they already know you and will often choose the name brand over the a no namer to play it safe. Your brand might be local, regional, state or province-wide, national, or even international. Think you don't have a brand? Think about your company's image. What are you known for besides the product or service you offer? Try naming others who play in your space and then characterize how you may win by a nose on paper. Then ask your customers and prospects the same question. Often those in a firm have a much different perception of their brand than of those that purchase from them.

If you can focus on and make strides in these four areas, you should be able to see some positive changes that you hadn't before. Maybe you'll gain 4 major clients this year, or maybe you'll top your best year's sales figures. Focus on the finish line, always. Whatever the payoff, remember that you don't have to beat out the competitor by a mile...just a nose is all it takes.

© David and Lorrie Goldsmith