“It’s a great time to buy a home!” This seems to be the mantra of all real estate agents at any given time and in any given economic climate. It’s a statement that seems too good to be true, yet it is. You will always be able to find the advantages of home ownership when you’re looking, but here’s a better question to ask yourself: “Is this a great time for me to buy a home?” Here are a few things to consider while searching for your first home.
Personal Finances
The very first step in the homebuying process should begin by taking a strong look at your personal finances and then consulting with a professional in the financing industry. A loan officer can assist you in evaluating your short-term and long-term financial goals and give you an approximate amount of how much you can afford, what your monthly payments will be, and how much cash you will need for a down payment and/or closing costs. A loan officer will then be able to take a look at your credit and get you pre-qualified for a purchase price amount. Once pre-qualified, you can begin your search with a real estate agent.
Location
In most markets, the purchase price will correlate directly with certain geographic areas, school districts, subdivisions, or perhaps a certain style of home. That’s why finding your target purchase price is such a crucial first step. Price and location combined are vitally important to answering the question “Is this the best time for me to buy a home?” For example, if you’re pre-qualified for $240,000, your #1 priority is to move into a particular school district, and all the houses in that area sell for at least $260,000… it may be best to rent and save for just a while longer.
The best way to get a feel for your desired location is to explore the area. Mix it up a little: go at different times of day, in varying weather conditions, different routes, starting from your typical commute to work, driving to your favorite hang out spots, etc. Pay attention to the overall condition of all homes within a neighborhood. Does it seem like all the houses are falling apart? Is the neighborhood fully developed or will someone build a new house directly in front of your skyline view? Does it seem like the neighborhood is a majority of young professionals? Young families? Middle-aged families? Retired couples? Does any of that matter to you? Do you want neighbors at all? You probably won’t find those answers on Google; you’ll need to get out there, drive around, and make your own observations.
Property Value
You’ve got your price and, a general vicinity of where you want to live; now it’s time to find the house. A professional real estate agent can set up online search parameters, which sort through your area’s MLS (Multiple Listing Service) and narrow down your prospects. Once you find some that you like, schedule a time to take a look at them.
As you drive up to the property, make sure that you’re checking out the exterior features. Does it have a driveway? What’s the condition of the driveway? How’s the curb appeal? How’s the front yard? How’s the back yard? It’s important to make a visual inspection of some of the big ticket items such as the roof, siding, heat pump or AC unit. I recommend getting a professional to thoroughly inspect the property. On average, you should be able to obtain a good indication of how new or old things are. On the way in be sure to give the wood trim around doors and windows a good look and look out or any wood rot or bubbling paint.
As you’re walking through the house, observe the ceiling and look for water stains or cracking. Look down at the flooring and check for scratches, rips, and/or stains. Water can cause substantial damage so make sure to check under the sinks, around the washer, and in front of the dishwasher.
Beyond just looking for imperfections, make sure you’re getting a good feel for the floor plan and flow of the house. Would it work for your family? If you do a lot of entertaining, do you have enough living space? Do you love to cook; is the kitchen up to par? Would sharing a hallway bathroom be the end of your kids’ brotherly love? Basically, could you see yourself living and functioning on a daily basis in the home? If the home in its current condition cannot satisfy those desires, is it possible that it could meet all of your desires with some work?
One major thing to note is that most contracts allow for the purchase of the home to be contingent upon a property inspection. This allows you to submit an offer on a house, then hire a professional to inspect the property, and then using the report re-enter into negotiations if need be.
As you’re comparing similar properties to one another, take a look at the price per square foot. You also can compare that number to the average price per square foot of properties that have sold, or are active listings, or are under contract nearby.
Is it a great time to buy a home? Yes! Is it a great time for you to buy a home? That’s up to you. It’s a big decision that requires some consideration and planning. Begin your process as a homeowner by carefully assessing personal finances, location, and property value. Ultimately, this will help funnel down the sea of opportunities to your future dream home! What other tips would you pass along?
