Buying a home is a big decision and you don’t want to get it wrong. Even if you have purchased a house before, there are a few things you should know when you start the process over again. The good news is that there are plenty of ways you can pave the way toward a good purchase and avoid most common problems. Follow these 10 tips before you buy a home, and you’ll have a better buying experience.
1. Don’t Wait for the Perfect Market
There are a lot of guides telling buyers that they should wait to buy a home until the summer, watch for mortgage interest rates to drop beforehand or try to buy during an economic downturn. The problem is that even experts can’t exactly predict when is the best time to buy a home. If you follow all these instructions, you might never buy a house because they may never be in sync. Instead, choose a time that works for you, when there are houses you want and you can afford them.
2. Base Your Decision on Long-Term Satisfaction, Not Emotion
When you only get to look at a house for about a half hour before making a decision, it’s easy to get stuck on emotion. Instead, focus on what you need, what you’ll be happy to have and which properties provide the best return on your investment. The tiny starter home with the perfect backyard is always going to seem cramped, and you might regret it within the year. Remember that staging is designed to make you fall in love with the house, but love isn’t always logical. Make sure that the property meets your needs before bidding on it.
3. Buy the Right House for You
You might hear friends and family saying to buy the biggest house you can afford. While a growing family may need extra space over time, there are some disadvantages to buying a larger home than you need. You’ll end up with more maintenance and higher property taxes. If the home is significantly larger than the average house in the area, you could have trouble reselling it. Buying a home that’s much bigger than the rest of the neighborhood can also hurt your long-term resale value. Instead, aim for a home that looks like it fits in with the rest of the street.
4. Apply for Pre-Approval Before You Start Looking
Applying for mortgage pre-approval is an excellent idea. It shows the seller that you’re serious about buying a home and that you have the ability to get a loan to pay for it. If you think you can afford more, feel free to apply with more than one lender. In hot markets, sellers might require buyers to show pre-approval if they aren’t paying cash, to avoid accepting an unserious offer. Keep in mind that pre-approval isn’t a guarantee you’ll get the loan. It just gives you a reasonable limit on your buying power.
5. Don’t Make Other Big Financial Decisions
Since buying a home is one of the biggest financial decisions you’ll make, you should try to avoid making others at the same time. Lenders look at your credit and bank account history. They will ask about changes in income, sudden windfalls of money and recent purchases. Now’s not the time to buy a car or open new credit accounts. Avoid spending a lot of money on any purchase, even if you’re planning to pay cash. You should wait on these until you close on the loan, because any changes can affect your chances of approval.
6. Keep All Expenses in Mind as You Shop
Even if you get pre-approval for a certain amount, you shouldn’t necessarily seek to spend that much. Affordability is a subjective term, and what you can handle isn’t always in line with what you can buy. As you look at homes, pay attention to costs that you might not anticipate. Properties in exclusive communities might have an expensive HOA and maintenance rules that also cost money. Older homes tend to need more updates on a regular basis. Even buying a home with a pool can add thousands to your annual expenses.
7. Check Out the Neighborhood, Not Just the Property
When you buy a home, you’re usually buying into some kind of neighborhood. It’s a good idea to make sure that the neighborhood also meets your needs. Visit the area several times throughout the day and evening. Find the answers to these questions:
- What is the traffic like during rush hour?
- How long will it take to get home from work?
- Is there a lot of road or other noise at certain times of the day?
- Where are the closest amenities?
You may love the home, but you’ll also need to tolerate the neighborhood.
8. Make a Reasonable Bid
Once you find the home that’s right for you, you will need to make a reasonable purchase offer. Sellers will often receive more than one offer, and busy markets might give sellers dozens to choose from. Your goal is to make your bid as enticing as possible, without promising anything you can’t deliver. Avoid bidding too low unless you think the list price is too high, and be prepared to show your work. Be sure to balance out requests for concessions like a remodeling allowance or help with closing costs, with something like a larger earnest money deposit or a higher offer.
9. Get a Home Inspection
When you go to see a home, it’s important to remember that a visit to the home can only show you so much. To get more information about the property and its condition, you need a home inspection. Home inspections are a useful tool because they can identify problems with the property that even the seller didn’t know about. These inspections have limits, and you might have to request additional testing if you suspect mold or other issues. Otherwise, a general inspection might give you the confidence to continue with the sale, or a practical bargaining chip.
10. Find the Property Lines
Once you have a property in mind, consider investigating the property lines or scheduling an official survey. You might be surprised by the number of people who buy a home, only to realize that the actual property lines add to their responsibility or take away some of their decision-making power. It’s a good idea to know precisely where your property meets your neighbors’. That way, you have clear information and you know what is yours in the event of a dispute.
Although millions of people buy a home every year, they need to make the right decisions in order to be happy with the choice in the future. At Marketplace Homes, we assist people like you in finding the perfect home for your needs. Contact us to learn more about how we can help you buy or sell a home.