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Home Selling

Top Ten Obvious – and the not so Obvious – Things to Consider When Buying a Home

More people are buying homes than ever before. A contributing factor to the uptick in the market might be that the cost of rent has gone up 66%, on average, nationally, according to realtor.com.

More people are buying homes than ever before. A contributing factor to the uptick in the market might be that the cost of rent has gone up 66%, on average, nationally, according to realtor.com. And of the home purchases, only 8% of people ever regret buying over renting. After all, a home is where you solidify your roots and historically has proven to be a good way to accumulate wealth. These are ten of the most critical, yet sometimes overlooked, conditions that you should cover before you sign on the dotted line, pick up the keys, and start your new life in the perfect home for you!

Location, Location, Location

So cliche…yet so true! Nothing is more critical when it comes to living than where you live. The house can be amended, but the neighborhood and its proximity to what you want, can not. So keep that in mind. A cheaper house in a location that is less desirable is always going to end up costing you more than you think in terms of convenience, in what you want, and in resale.

According to NAR’s Profile of Buyers’ Home Feature Preferences….When surveyed, 78% of homebuyers stated that the quality of the neighborhood far outweighs the size of the home. And more importantly, 57% would forego a larger yard to live closer to the action. But that is just one aspect of the home-buying decision to consider!

Your Home is one of Your Greatest Investments

US home values have gone up 7.12% since 2018. But anyone who remembers 2008 knows that considering real estate investments as a long term investment is best given potential short term volatility in the housing market. A home is also not a passive investment like stock and bonds in that your investment in your home is one that you do have to upkeep and maintain to hold onto your equity and value. Updating and renovating will be a part of maintaining your equity for sure. But if you look at it in terms of a long term money gainer, then you can feel pretty confident that you are helping your financial situation. It might not be your ticket to getting rich quick, but it will be your slow and steady earner.

Even if you Don’t Have Kids, School Districts Matter

Buying a home that turns out to be a good financial decision means taking all things into consideration, which includes factors that might not be relative to you at the time of purchase. Make sure to understand the quality of the school district in the neighborhood you decide to buy. Having good schools will help to retain your resale value and will make it more likely that you buy into a sought-after area! The percentage of Americans who want to live in a great school district is about 35%, so even if you don’t have kids right now, a large number of homebuyers do, or will. For the best resale value, invest in a good quality school district. These homes tend to sell faster overall, and during rougher economic times, they tend to hold their value more than those in lesser esteemed school zones.

You Don’t Have An Endless Amount of Time

“The best time to buy a home is always five years ago.” – Paul Clitheroe

It takes an average of 73 days to close on a property after the initial visit. And even before that, it takes the average homebuyer ten weeks to search for their home. So if you add that to the nearly three months it takes to close, you might be a day late and a dollar short. So although a couple of days or weeks might seem insignificant, it is very much significant. Understand that the timing needs to be impacted by seasonality of the housing market and your own time constraints and requirements, like when the kids go back to school or when your new job starts.

Leave no Stone Unturned During Inspection

I recently had a house look absolutely pristine from a buyer’s perspective. When we had the inspector come in, it was like taking off the rose-colored glasses that jaded our perspective. The minor issues that we thought we were dealing with turned into financially disastrous findings! A good sale is only as good as the inspection that you have to protect your interests! It is amazing how quickly critical flaws can start to add up. And then your buying price doesn’t look like such a good deal after all!

Continue to Negotiate Post Inspection

There are rarely times when no issues are uncovered during the inspection of a home. But the key feature that an inspection affords a potential buyer is to renegotiate your offer. Once we realized all of the flaws and how much they were going to cost to fix, it gave us leverage to ensure that we weren’t overpaying. Just a roof issue alone can run upwards of ten thousand dollars or more. So, after the inspection, go back to the drawing board and make sure that you offer as much as you would have, had you known what you know now.

Don’t Allow Your Budget to Grow to Your Loan Amount

Twelve million Americans spend more than 50% of their earnings on their home purchase. But the general rule of thumb is that you shouldn’t spend more than 28%, according to PWC Emerging Trends In Real Estate 2013. It is an excellent feeling to know you can borrow more than you thought you could. But that does not change your financial situation or how much you want to put yourself in debt! Take the offer for a large loan as a pat on the back, not as a “look what I have to spend.” Stick with what you can afford monthly, not what a bank is willing to lend you.

Find the Right Real Estate “Confidante”

“I am basically a full-time psychologist who shows houses every now and then.” – Dori Warner

Even if it is your first time around the block, it isn’t your real estate agents. And just like every other type of professional who is there to help, the more information you provide them, the better. Try to be as honest, precise, and clear about what it is that you want, and what you don’t. The first meeting should be all about your agent listening to what you need. But make sure that you have really sat down and thought about what that is before you begin the home buying process. It is important for you to discuss everything with your realtor. They will serve as your sounding board and greatest ally. Your realtor is the neighborhood expert and can advise you on the appropriate purchase price for buying a new home, so the more information you give them, the better they can do their job.

Know who did the Renovations

Knowing who did the renovations is about as important as the inspection. After all, even an inspector can’t tell what is lurking behind the walls, or the quality of the craftsmanship. If you are going to buy a remodel, ask the pertinent questions about who did them and how qualified they were too. And, when possible, examine the quality of the materials used. You don’t want to end up with a house held together by rubber bands and gum!

Reserve Some Cash for Post-Purchase Issues

According to Zillow, 36% of homeowners listed not anticipating post-purchase home repairs as their biggest mistake. There will always be unforeseen expenses when buying a home, and especially when planning moving into one. Try to reserve a little bit of emergency money so that you aren’t stressed out and stretched to the maximum. You don’t want to feel the sting of buyer’s remorse because you don’t have the cash flow if something unexpected should happen; it always does! Buying a home is a major life-altering decision and one that takes a lot of forethought and planning. The key is to find someone in your corner who knows the ins and outs of home buying. Because even if you don’t anticipate for all the little bumps along the road, a professional agent will. Unfortunately, things don’t always go as smoothly as you, or I, would like. Just like any other financial decision that you make, it is important to do the research, know exactly who you are and what your needs are, and to find a trusted set of professionals to eliminate most of the hiccups along the way.

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