your goals and desires concerning property in Santa Fe.
The Romance of Home
Whether your home-buying decision is based on emotion or logic, it is an emotionally-charged experience. “Home” invokes much more than walls/roof/floors and amenities. It speaks to our very basic senses of security, comfort, self-image, self-worth, lifestyle choices, sense of place and personal values.
Because there is so much at stake -- emotionally as well as financially -- buying a home can bring to the fore differences between partners and family members, raising challenges to relationships. It is important to see this as a learning experience, an opportunity to improve our listening, communication and negotiation skills.
If you are purchasing as a single person, there are also many considerations, including the opportunity to take stock of what you truly want to create in a home.
As a buyer, it is prudent and practical to work with a licensed Realtor® as your Buyer’s Agent, especially since our services generally cost you nothing extra! You want someone who knows the area, property values, construction methods, and so on. And, as in every profession, there is a broad scope of individual personalities and styles so the challenge is to find a professional with whom you feel comfortable and trust their knowledge and integrity.
We are honored that our clients trust us to provide honest feedback, recommend reputable service providers, negotiate in their best interest, and walk them through the entire process to closing.
Money Matters
Beyond personal and relational issues is the matter of money. Everyone has his or her own relationship to it, which seems to have little to do with one’s net worth, and much to do with one’s comfort level about it. The price of housing in Santa Fe – like other desirable places to live – runs higher than the national average. Where you’re moving from will greatly inform your perception of what you can buy here in a particular price range.
For example, if you’re moving from major metropolitan areas, you will probably find the prices comparable or even reasonable; but if you’re coming from other parts of the country, you may find your dollars do not go as far, and your expectations must be down-scaled to the reality of the marketplace.
If you’re wondering why homes are priced the way they are here, consider these reasons: 1. Demand, 2. Lack of land on which to expand the city, 3. Zoning & permitting requirements, and 4. Construction methods and finishes used in “Santa Fe Style” (e.g., in-floor radiant heat, plaster walls, kiva fireplaces, ceiling treatments).
The Importance of Pre-qualifying
Before you begin actively looking to buy, the first thing is to know how much you can afford and are willing to spend. Unless you have the cash available for the full price, you will need to qualify for a loan. To find out how much money you qualify to borrow, you must speak with a mortgage broker or banker and provide them with the documentation they require. They will tell you how much you qualify to spend on the purchase of a home and your estimated closing and mortgage costs.
Because they want your business, this pre-qualifying service is usually free or at a small fee for your credit report. This information is essential to have PRIOR to serious home-searching, or you run the risk of finding the house you love only to discover it is not within your budget. It is also critical information to have prior to submitting an offer to buy. In order for sellers to take your offer seriously, they need to be assured that you can indeed consummate the deal.
The amount you qualify for is based on certain factors of income, assets and credit. Your credit rating is measured as a FICO score provided from each of the three major credit reporting agencies. These three scores are then averaged and you are assigned a FICO score, between 400 and 900. While it is a mystery as to precisely how FICO scores are derived, the most important characteristic in higher scores is a history of NO late payments on credit cards, loans or - especially - mortgages. The FICO scores determine your eligibility for a particular interest rate. For example, someone with a FICO score above 720 is considered “A” rated and may be eligible for the best rates the lending institution is quoting. Conversely, someone with a lower FICO score will likely pay higher interest on same the loan amount.
It is important to know that there are numerous loan programs to suit almost any and all circumstances. A savvy Realtor® can help you find a loan officer who is well suited to your situation.
Even More Important: Pre-approval
Any loan officer/mortgage broker can look at your numbers (FICO scores, debt ratios, loan-to-value of your assets, etc.) and give you a ballpark figure of how much mortgage you can afford at the interest rate they may be able to obtain for you. But, to be certain, it’s extremely important to be matched to a particular loan program which fits with your criteria.
Are you self-employed? Do you have X-number of years work history? Do you want to do a “no-doc” or “stated income” loan? Do you want to put down less than 20%? Less than 10%? There are so many different mortgage products on the market that merely knowing you are “pre-qualified” does nothing to assure you are, indeed “pre-approved.”
Know the difference, get pre-approval, and you are well on your way to closing on the house you choose.
Knowing What You’re Looking For & Looking At
Santa Fe’s real estate market is unique due to the historical/cultural influences which have created a vibrant tourist-destination economy, a world-renowned arts community and a distinguished style of architecture. Tradition and our sun-drenched landscape play a large part in the formation and evolution of “Santa Fe Style.”
Architectural styles, details, finishes and construction methods evolved naturally. Originally, vigas (ceiling beams made of logs) were structural members which supported the roof. The length of these logs dictated the span of the roof and size of the room. Traditional use of vigas, latillas, bancos, nichos, hand-troweled plaster, adobe, stucco, tile, stone are labor-intensive and require a high-level of skilled craftsmanship. Coupled with modern innovations like low-E glass dual pane windows, in-floor radiant heat, improved insulation and roofing materials, etc., the price of homes is naturally higher than in the past.
We help you decipher and interpret all aspects of buying real estate in Santa Fe. Please don’t hesitate to pick up the phone and call us to learn more. (505) 995-0195, or email us.
© Aysha Griffin 2008
