Buying a home is a big decision and arguably one of the most significant financial transactions most people make. There are many things to consider before even beginning your home search, let alone buying one. Before choosing the perfect house, here are five questions you will want to ask yourself.
1. How much can I afford?
Before the exciting home search can begin, it is crucial to know how much can you afford? There isn’t much that is more disappointing than finding the home of your dreams, only to have them crushed by your mortgage company.
Now, depending on where you are looking, mortgage pre-approval processes may vary; however, generally speaking, one will meet with a bank or lender and fill out a pre-approval application.
The application will note things such as income, credit score, past credit history and more. The bank or lender will use this to determine whether or not they will lend you the mortgage money required to purchase a home and, if so, how much.
Despite mortgage companies or lenders approving you for a certain amount, it is prudent to also go through your finances and determine how much you feel comfortable paying. Many times the bank will allow a certain amount when in reality, it may leave the buyer strapped or “house poor.” If this is the case, you may want to reconsider the approval amount as an extremely tight budget, with no wiggle room for incidentals, can cause a lot of stress for new homebuyers.
2. What type of home?
With the bank’s or lender’s pre-approval in hand, you are now able to seriously look at housing options. However, before diving too deep into your search, it is essential to determine what type of house you are in the market for.
Many different house styles offer various benefits and advantages for specific buyers, so how does one determine what is right for them? The first step would be to consider your lifestyle. Are you a single, working professional who spends most of their time at the office? If so, a large property that may require a lot of maintenance may not be as ideal as a low-maintenance condo. A family of six with three dogs will most likely not be in the market for a top-floor condo but wanting to find a spacious home with a roomy backyard.
A great way to determine which type of house would work best for your life is to write a list of wants and needs. Ensure you clarify things that are essential in a home and things you are willing to compromise on. Not only will this help narrow down your property search, but it is also a great way to ensure you don’t have buyer’s remorse after your purchase.
3. Where should I live?
With the budget and housing style determined, it would be advisable to consider where you want to look, whether it be a city in general or a particular neighborhood. Many times buyers are drawn to a certain type of neighborhood, i.e., urban and suburban. The housing style you have chosen may also play a part in determining where you will be looking as frequently certain homes are most popular in certain areas. For example, if you are in the market for a remodeled warehouse loft condominium, you will not be looking in the suburbs for your next home. The same would go for a buyer in the market for a spacious ranch on an acre of land or one in the market for a waterfront estate. These factors will play a huge role in determining where you will likely find your next home.
Beyond the availability of housing style, there are a handful of additional factors one may want to consider. For instance, a family with school-aged children will want to do further research on schools in the area, bus routes and access to before and after school care if necessary. Commuters will want to note travel times and routes as traffic can add a substantial amount of time to daily drives. Other noteworthy things include access to public transportation, area amenities and walkability.
4. Should I use a realtor?
Though it is not required by law, the vast majority of homebuyers enlist the service of real estate agents. There are many reasons why it is the best course of action, the most apparent one being; it’s usually free! While it is true in the odd case, buyers have paid commissions that are not typical, and it is laid out beforehand. In nearly all purchase transactions, the vendor or seller is responsible for paying both the selling agents’ and buying agents’ commissions.
A knowledgeable real estate agent is an asset you do not want to be without when beginning your home purchase journey. Not only will they be able to help find the home which best suits your wants and need in the area you desire, but they will also be a vital resource when it comes to negotiating a purchase price, signing documentation and finalizing the transaction.
5. Is this house the one?
Once you’ve found a potential home, you may be nervous about putting in an offer. There are a few things that you can do when viewing the home that will help determine whether this house will work for you.
Consider your future
When looking at a potential house, it is vital to ask yourself a few questions about the future. Are you planning on staying at the property long? 5 years? Ten years? If so, what do you picture your life to look like in that time frame? Are you hoping to be married? Have kids? Or are you on the opposite end of the spectrum? Will your children be moving out? Are you planning on being empty nesters? These things will play a prominent role in whether or not a house will be best suited for you.
Are you looking for a fixer-upper? Or move-in ready?
While a few projects here or there may be easily accomplished, a complete overhaul may not be in your budget. It is crucial to get as much information about the house as possible and thoroughly plan for costs and time when taking on additional renovation projects. Fixer-uppers can be an excellent investment and, for the right buyer, an ideal purchase; however, if you are looking for a move-in ready property, an unfinished home is not your best bet.
Can you see yourself living there?
Take time to slowly walk through the home, visualizing yourself, your family and your belongings at the property. Make a note of spaces, and not just the number of bedrooms and bathrooms, but also storage space, children’s play areas, guest space or office space if needed, etc. Consider your furniture and belongs; will it fit? Also, make a note of your must-haves list - does this property genuinely meet your needs? It is easy to let emotions play into the decision process; however, taking the time to look at the home subjectively can save a lot of frustration and regret in the future.
While the home buying process can be an exciting one, it can also be overwhelming. Having as much information as possible before you begin your search will help your journey be as smooth and stress-free as possible. When it comes to buying a new home, a bit of research and a knowledgeable real estate agent can make the experience an enjoyable one from start to finish.