4 things to consider before purchasing a home
Buying a home is a huge decision. It’s one of the few times in life that you spend tens and even hundreds of thousands of dollars on a single purchase. It’s also one of the few events that involve decades of investment and commitment.
Buying a house takes preparation, forethought, self-control, and decisiveness. If you’re thinking about purchasing a home soon, here are a few critical factors to consider before making the leap into homeownership.
1. Start with Finances
Healthy finances are the bedrock of a successful home purchase. If you don’t have solid finances in place, it’s difficult to commit to a mortgage for 15, 20, or even 30 years. The additional costs that come with owning a home only add pressure from there. Here are four critical financial factors that you should review before buying a house:
Your current costs: Make sure that you don’t have any major debts, such as a school loan, that might hamper paying for your new home. That doesn’t mean you have to be debt-free. But consider if any of your current debts would be challenging to manage alongside a mortgage. If this is the case, try to pay these off first. Also, review if you’re currently living within your means. In other words, make sure you already have a handle on your current finances before tossing a house into the mix.
Your home-buying costs: Buying a home comes with a host of different fees, costs, and other payments. You’ll need money for a downpayment. You may need to put additional money toward an escrow account. Even moving from your current dwelling to your new house can add up.
Your recurring homeownership costs: Once you own the home, you will need to pay the monthly fees associated with your residence. Most often this includes the mortgage, home insurance, and taxes.
Your maintenance costs: Keeping up on your home is never a cheap activity. Even if you buy a move-in-ready home, you’ll still have maintenance costs from time to time. Whether you pay for these out of pocket or invest in a good home warranty, it’s going to cost something.
Along with these considerations, make sure you have a good budget in place. Update your budget as you go along, too. This can help you keep track of all of the changing financial elements that you’ll need to keep track of.
2. Consider Time and Place
Both the time and the place that you buy are critical factors. For instance, as far as time is concerned, are you ready to buy a house now? You may need to save up for a down payment or pay off a debt first.
Additionally, ponder if you’ve really thought ahead when it comes to buying your home. You don’t want to buy a house based on your current situation. You always want to look ahead and consider where you want to be in the future. These plans and ambitions should significantly impact the home that you end up purchasing.
On top of that, think about how long you plan on staying at your house once you buy it. It’s recommended that you live in a home for at least three to five years if you want the financial investment to be worthwhile. This is because it takes time to build up enough equity to offset the costs associated with buying the home.
When it comes to the geographical side of things, make sure to break down where you would like to live. Would you prefer to stay on the same block, move to a new town, or even head right out of state?
Wherever you’re considering moving to, always take time to review the state of the real estate market in that area. In addition, research whether or not the location is conducive to the long-term development of your professional career.
Once you have a geographic region to house hunt in, continue to think about the geography aspect on a more detailed level. As you look for individual homes, keep things in mind, such as the condition of local neighborhoods, whether a building is in a floodplain, and other common homeownership concerns.
3. Get a Good Realtor
This next consideration is quick yet essential. If you don’t have a good realtor lined up before you buy, you could end up with a very poor homebuying experience. Take the time to invest in finding the right realtor for you.
Start by finding and interviewing real estate agents in your area. Look for an agent that is aware of the current market. Have them explain to you how they’ll find a home in your price range, and ask them how they’ll help you make a competitive offer and negotiate over the price.
Having a good realtor that you can trust gives you a leg up as you head into the stressful, often overwhelming house buying experience.
4. Sweat the Small Stuff
You also want to consider the smaller parts of the home buying process before you find yourself looking at homes. This includes common factors like the number of bedrooms you need or square footage you desire. It can also include even smaller details, too, such as:
- Deal breakers like well water or a septic tank.
- Minor details such as cathedral ceilings or a finished basement.
- Exterior considerations like the size of the yard, playground equipment, and privacy.
It’s easy to write off smaller considerations like these. After all, your time will be filled with bigger items like finances, paperwork, and moving logistics. However, these minor factors will make a big difference once you’re settled into your new place. Make sure you have them well in mind before you start the homebuying process.
There are many factors that go into buying a home. Finances, realtors, geographic location, timing, and even minor details are all important to flesh out beforehand. If you can start the house-hunting process with all of these in place, you’ll be in a prime position to find, purchase, and move into the perfect house in minimal time.