10 Things to Consider Before Buying a New Home
10 Things to Consider Before Buying a New Home
Home ownership can be a bittersweet experience. All at once you enter into the sweet, exhilarating adult world of independence— you finally own your own home to do with what you please, but then the bitter side of bills and unexpected repairs arrive at your newly decorated doorstep.
Whether you are a first-time home buyer or a veteran in the world of homeownership, either way, there are plenty of unexpected surprises. What does everyone need to know before taking the big leap into buying a new home?
Here are 10 key factors to consider before signing on the dotted line
Do You Have Enough Money?
This one seems obvious, but still bears mentioning. Getting pre-approved for a mortgage is really the first step in the home buying process. Why waste your time looking at homes only to find out that you cannot afford them?
Realtors have a funny way of taking you to every home in your price range and then lastly taking you to the most amazing home that is slightly above your price range.
It can be very easy to fall in love with that last, most expensive home, but be cautious that you do not get trapped into a house that tightens your pocketbook to the point of breaking. Consider all the factors such as property taxes, utility bills, maintenance, homeowner association dues etc…
Your realtor should be able to provide you with all the current fees that come with the property. Assess all the financial burdens before buying. After all, it’s no fun to own a palace while living like a pauper.
Hire a Professional
In our DIY world, it can be tempting to buy and sell a home with little help from a professional. Professionals cost money so why waste it if you can do it yourself?
Even so, it still may be in your best interest to hire a successful realtor and lawyer when buying a home. There are just too many risks involved when going at this type of purchase alone.
A smart realtor can give you the scoop on neighborhoods, schools, housing markets, and most importantly guide you in the bidding process to get you the best price possible. Be sure to hire a realtor who is exclusively your buying agent—one who has your interests in mind and not the sellers.
Yes, it will cost extra in realtor fees, but it is all worth it in the end when there are no surprises that could have been forewarned.
Is it Located in a Good Neighborhood?
It’s easy to fall in love with your dream home. You can spend day’s house hunting and then finally find ‘the one’. It has everything you desire – a massive eat-in kitchen, a huge garage, and a palatial pool.
Of course, you want to sign the papers immediately and make this home yours, but stop a moment and take a good look at the surrounding neighborhood and neighbors. What do you see?
Do you see an immaculate locale that will only go up in value? Do you see neighbors who take pride in their lawns and home upkeep? Do you see land that may be developed into a noisy ball field or park? Do you see areas of poor drainage that may cause water problems in your basement?
Before getting caught up in your dream home, use a keen outsiders eye and regard your vicinity carefully. It can be wise to visit the area at different times of day and night to see activity levels. Ask the realtor about planned developments in the area. By law, the realtor has to disclose proposed roads and other intrusive developments. Ensure outdoor amenities of the neighborhood are what you enjoy.
Return on Investment
It can be hard to sink all your hard-earned money into a home. However, equity in a home can be a wonderful asset and home ownership also can be a smart and lucrative investment when done properly.
Before buying a new home you should really do a cost-benefit analysis. Think about how much money you plan to put into this home.
Do you plan on some lofty renovations? Will these renovations increase the value of your investment? . Is the home located in an area that seems likely to go up in value and has been going up in value since inception? Are you planning on staying in the home long enough to allow your investment to grow and gain profit?
Return on investment is not usually instantaneous; it takes time for a home’s value to increase. Consider this investment carefully and when in doubt consult a realtor and/or a financial guru for guidance.
Is This Your Forever Home?
As mentioned above in Return on Investment, your home’s value is likely to increase exponentially with the years you own it. Buying your forever home can be a daunting purchase — anything with the word ‘forever’ in it is scary.
A home you plan to own for a lifetime is likely a successful financial move, but there are still plenty of factors to consider before buying.
Cumulatively, you need to look at a lifetime worth of factors. You need to consider all your future needs, even into your retirement years. Is this the home you want to retire in? Is it your dream home?
Forever is a long time, so be sure this home meets every want, need and dream you ever had before buying.
How to Bid
You have found your castle in the sky and are ready to begin bidding. Now what? You know what you want to pay, but how do you convince the seller to agree?
Bidding is a careful dance that involves some pretty elaborate steps. This is where your dance instructor, also known as your realtor, will come in handy.
Obviously, your opening bid should not be what you actually want to pay. Rather, a general rule of thumb is that your initial bid should be 5-10 % lower than what you really want the outcome to be, and around 8-10% lower then what the seller is asking. Clear as mud?
Yes, bidding can be a complicated game. Consult your agent and take a close look at sale prices of similar homes in the area. Over all, be willing to negotiate and settle for middle ground.
Home Inspection is a Must
Now you have won your bid! The papers are signed and the home feels like it’s yours. However, there is still one more step before wiring money and moving in — Home inspection.
There are plenty of home inspectors to be found, but you will want to hire a real pro with an engineering and building background; someone who has been in the business for years and comes with plenty of good references.
A home inspector is meant to catch all those areas that are not up to code, all the potential drainage nightmares, and essentially ALL the problems with the homes structure. The home inspector is in place to protect you from costly repairs and surprises. Home inspections of plumbing issues is a must, Again, it’s initially more money out of your pocket but so worthwhile for your peace of mind.
The home inspection went flawlessly and now it’s time to hire a moving crew. You are almost there; ready to dance across the threshold of your new dream home, but let’s get your furnishings there in one piece.
Hiring a moving company requires some research. Who can you trust with all of your valuables and antiques? Your best bet is to ask for references. A well-established moving company should have plenty of outstanding references of prior moves that they would happily share with you.
Make sure the movers you hire have availability on the moving dates you want; Make sure they have a cancellation policy that you can agree with; and most importantly, make sure they have a replacement policy for broken goods. Your furniture can be some of the most prized possessions so trust them with well-researched movers.
Relax and Enjoy!
The day has come! You are officially living in your new home. It’s an exciting time that should be celebrated with a nice bottle of champagne.
It is easy to jump the gun and want to get everything put away and decorated right away, but it’s best to relax and live in your home first. The only way to know what colors you want and what furnishings to buy is to live in your home and see how you use it.
Take your time when decorating and you will end up with a look you love.