10 Things No One Tells You About Buying a Home
You’ve saved up for your down payment, your credit is good, and you just got pre-approved to buy your dream home. Buying a home is an exciting, rewarding experience but let’s be real, it’s not for the faint of heart. If you don’t know the ins and outs of buying a new house excitement can quickly turn to frustration.
Whether you are a first-time buyer or a seasoned pro, doing your research before buying a home will make the experience smoother and more enjoyable. To help guide you on your journey, here are the ten things no one (but us) will tell you about buying a home:
1. Be prepared for the financial complexity of owning a home
Owning your home is an investment and an opportunity to build roots in your community. Homes tend to increase in value and provide an opportunity to build equity and long-term wealth.
Because of these advantages, owning your home comes with a certain amount of responsibility as well. Mortgage payments, property taxes, homeowner’s insurance, HOA fees, and home maintenance costs are all some of the things you will need to plan for.
2. Plan for the long game
Ideally, you should purchase a home that you will be planning to stay in for awhile. Moving and closing costs add up quickly so unless you stay in that home for at least a few years, it might not be worth it. However, if the market is right then your home will continue to increase in value over the years.
3. Choose a home in a great school district
Even if you don’t have children, it is a good idea to buy a house in a great school district. Living in a home in a high-ranked school district will raise your property value and be an advantage if you do decide to sell in the future.
4. Consider the location and lifestyle you are looking for
Would commuting an hour to work be a dealbreaker for you? Is it important to you that you are able to walk to most locations? Do you want to be close to a variety of restaurants and shopping locations? These are all things you will want to consider before making an offer on a house.
5. Beware of fixer-uppers
The right fixer-upper can be a great investment especially if you are able to do the renovations yourself. It can give you the chance to live in a neighborhood you might not otherwise be able to afford. However, fixer-uppers can be a risky investment and the wrong choice could end up turning into a money pit. Make sure you have the house thoroughly inspected and are ready for the financial obligations that come along with it.
6. Understand your market
Everyone wants to feel like they got a good deal but making offers that are too low in a competitive market isn’t always the best strategy. If you are too stingy on your price point or insist that the seller contributes a certain amount of money toward closing costs your offer will most likely look weak. Finding your offer routinely rejected or outbid can be a discouraging experience. However, this does lead us into our next point…
7. Don’t be afraid to walk away
When you are purchasing a home negotiations can get tense at times. This can be tricky, especially if you have already fallen in love with that house and can already imagine yourself living there. But don’t make the mistake of paying more than you can afford for your house.
There are plenty of other homes on the market that you will love. Go into negotiations knowing what your price limit is and don’t be afraid to stick to it.
8. Know the HOA guidelines
If you purchase a condo or new home you will likely be required to join the community Homeowner’s Association (HOA). An HOA requires monthly or yearly fees and the more upscale the neighborhood, the higher the fees will be. An HOA helps the community residents protect their property values.
Closing on a house involves a lot of paperwork and after signing your name on the dotted line for what feels like the millionth time, reading more paperwork is probably the last thing you feel like doing. However, it is a good idea to be familiar with the rules of your new HOA.
If you have promised your kids a trampoline in their new backyard it’s helpful to know if the HOA doesn’t allow trampolines. Or, if the dues increase by five percent every year you will want to be able to plan for this ahead of time.
9. Don’t decorate your home right away
The moment has finally come; the house is yours and you are all moved in. It is tempting to run out and buy new furniture, curtains, and everything else you think you will need but you will want to resist this temptation. Your home is a work in progress and you need to give yourself time to settle in and figure out how you will live in it. If you try to do everything at once you will likely just overwhelm yourself and end up wasting money.
10. Set aside some money for a rainy day
Now that you are a homeowner, you are responsible for maintaining that home. It is a good idea to set aside some money every month for unexpected repairs. That way if your dishwasher suddenly breaks or if a hailstorm causes roof damage you won’t be scrambling to try to find the money for repairs.
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Are you in the process of buying your first home? If you have purchased a home in the past is there anything you have to add to this list? Let us know in the comments!
Image courtesy of James Garcia