If you’re a new owner of Manhattan real estate or are contemplating buying in the near future, you’ll be wise to listen to the local broadcast “10 Things To Do After Buying Your Home.” You’ll enjoy the interview between Dottie Herman, the CEO at Prudential Douglas Elliman, and Eric Tyson, a real estate expert and author. The interview is featured on the “Eye on Real Estate” radio show with Dottie Herman.
The June 2nd broadcast opened up with Dottie stating,
“The first hurdle is obtaining the money to buy while the second hurdle is paying.”
Dottie briefly commented on the various benefits of staging a home for sale and improving your home’s curb appeal for print and Internet advertising. She then introduced Tyson. Tyson begins with talking about his motivation for providing real estate information.
“Some journalists who provide information about real estate have good intentions, but lack hands-on experience.”
Tyson became partners with real estate experts in “Home Buying for Dummies” and “Real Estate Investing for Dummies” in order to give the best advice available.
Prior to Tyson giving the audience tips on what to do after buying a home, he and Dottie talked about the price of homes today and buyer’s remorse. Tyson believes that if a person has the ability to buy a home, then this is what they should do. Confidence in their personal finances and employment status is essential. He broke down his advice into several tips:
Affordability – “You have the responsibility of examining your personal financial situation in order to determine what you can comfortably afford when purchasing a home.”
Personal Financial Circumstances – These are the things only you know such as kids’ tuition, loans you need to repay, etc.
Comfort Level – Tyson states that the decision you make about how much house you can afford should be free of doubt or worry.
An interesting development in the interview happened when Dottie went over the ten points explained in Tyson’s book. A brief summary of these ten points is found below.
Solicitors – These are contractors who target new homebuyers with all types of home products and services. For example, insurance providers try to sell you on a policy that will pay off your mortgage in case of your untimely death, disability or job loss. “Banks will offer you their insurance policy, but that doesn’t mean it’s the best policy to buy.”
*This point is explored further during Tyson’s tenth point.
Hire a Skilled Financial Planner – Tyson’s book goes into great detail.
Hire the Right Real Estate Team – During his interview, Tyson gave informative tips on how the buyer is to perform due diligence before hiring his team of real estate experts: the real estate agent, mortgage broker and insurance agency. “Learn as much as you can about each team member before making a hiring decision.”
Refinance? Interest rates are very low right now so many homeowners are asking if they should consider refinancing.
“Because of all the financing options available today, the question of whether to refinance becomes complicated. In the past, refinancing was about saving money, but it always costs you money. You’ll need to determine how many years it will take you to recover your costs of refinancing and is it worthwhile in the long run.”
Electronic Payments – Tyson shared that at one time he was reluctant to use this method, but he now believes that electronic payments are definitely advantageous. The biggest advantage is they ensure that payments are made on time. Late payments have a negative impact on credit scores and determine future interest rates.
Emergency Funds – Dottie asked Tyson to comment if there’s a standard rule for how much cash to set aside for emergencies.
“How much is enough?” Tyson answers, “For the most part, people should have a minimum of 3 months of living expenses saved in the emergency fund.” He then advises that during volatile times, “Homeowners should have living expenses saved to cover at least 6 months.”
Mortgage Insurance – Tyson prefers buying a life insurance policy to cover the mortgage rather than mortgage insurance. “The main question about life insurance is how many years of income do you want to replace?”
Protest Tax Assessments – Tyson advised listeners to “be aware” of their property taxes. Homeowners whose homes are assessed regularly and whose homes are assessed based on current market values especially need to protest tax assessments.
“Local cities and counties often make mistakes when assessing home values.”
Home Receipts – Tyson urges listeners to keep all documents related to their homes. Tyson says, “These documents are of major importance to reduce your capital gains tax if you later sell your home and make a profit.” In other words, if you’ve owned your home for a long period of time in a high-cost area, with Manhattan being one of those areas, keeping your documents safe is to your advantage. Remember where you’ve stored these important documents.
“Take Time to Smell the Roses” – Tyson refers to this in his book in the section on buyer’s remorse. One of the biggest financial decisions people make is purchasing a home. In order to reduce any remorse in your purchase decision, always buy a home within your comfort zone coupled with self-preservation.
Tyson began his career as a financial adviser for Bain & Company in the early 90′s. He became an author in 2004. He is the author of five national best sellers with the distinction of having four of these books published on Business Week’s best sellers list all at the same time. He is also a recipient of the Benjamin Franklin award.
Author Bio: Erik Braunitzer is a member of the creative writing department at Prudential Douglas Elliman. For more information on manhattan real estate, please visit their website at http://www.elliman.com.