You’ve thumbed through listing photos online, compiled a list of favorite properties and are ready to start your home tours. While a picture is worth a thousand words, here are some non-aesthetic, very important items to factor in to your purchase considerations.
Image courtesy of ddpavumba at FreeDigitalPhotos.net
Price vs. Budget
Even if that home price is just a bit out of your budget range, you need to ask yourself whether putting that extra $100, $200, $300, etc. toward your mortgage payment will require a sacrifice on other items.
Your mortgage lender will pre-approve you for a certain amount, but that doesn’t mean you should extend out of your own comfort zone. No one wants to be house poor.
Even if you don’t have kids yet or are an empty-nester, schools are an important component in future resale value. A 2013 Redfin study found that on average, homebuyers pay $50 more per square foot for homes in high-rated school districts than homes in average-rate school districts.
Room for Improvement
Finding a home that meets your budget and hits all the items on your wish list is as rare as winning the lottery. Be on the look out for a house that hits some of your home must-haves and theorize what you could do to make that home better.
Is there room for an addition? Where does the lot line end? Is that wall load-bearing? Does the backyard have room for a garden, stone patio, etc.? Look for overall good condition and potential rather than marking off every single item on your home checklist.
A neighborhood and/or neighbors can make or break a home purchase. Even though home privacy seems unobtainable in city or suburb living, the proximity of neighboring homes is a big factor for some homebuyers.
Drive by a potential neighborhood to scout out the day-to-day activity. If you have school-age kids, you’ll likely be on the lookout for a tight-knit neighborhood of families with same-age children over a neighborhood full of empty nesters.
Just because a home is aesthetically pleasing and won’t require a full facelift to meet your personal style doesn’t mean you should ignore the basics. Home inspections are used as a contingency to a home purchase agreement for good reason. The fact that a prospective home has a gorgeous shiplap wall will become trivial when your air conditioner gives out a couple months after moving in.
If you do have a home inspection, pay special attention to what your home inspector finds. A plumbing or electrical issue could cost you thousands down the road.
Consider the Floor Plan & Size
Buying a home requires practicality, and although homeownership is viewed as a forced savings plan, you need to account for the needs you have right now versus the needs you may have 10 years from now.
An NAR study showed that first-time homebuyers plan to stay in their home for 10 years on average, but typically, they sell and buy again in a shorter timeframe. Repeat homebuyers plan to stay in their homes for 15 years on average.
Weigh what your floor plan and home size needs right now versus where you see yourself in five years. If you’re child-less but plan to start a family in the near future, is that four bedroom home necessary?
Floor plan is just as important. Visualize how many steps it’s going to take you to switch out loads of laundry, carry groceries in from the car, etc. Is a main floor laundry room a necessity? Does a split-level home make you tired just thinking about it? Will you feel comfortable with a main-level master when all your children are sleeping on a different floor?
Even if your current housing situation is a small one-bedroom apartment with a single closet, you never know how much stuff you own until you have to move it.
Older homes are notorious for not having ample storage space, so pay attention to the amount and size of closets and factor in all of the necessities you’ll need to maintain your home.
Finding the perfect home is an exciting journey, which is why having a real estate professional on your side is essential. Ask your family, friends, mortgage banker, etc. for a real estate agent referral who has experience in your purchase area and budget range.
For more information about buying and financing your first home, download our free Mortgage 101 Handbook for everything you need to know about the mortgage process.