What To Look Out For When Buying A New Home
If you are looking for a house in your price range that meets the requirements of your ‘dream home’, you may end up looking for several decades! The reality is the market has changed, Covid has thrown all the balls up in the air, no one has any certainty anymore and the chances of getting a foot on the property ladder with your ‘dream home’ is more than just far from realistic…….Good luck finding anything right now!
However it’s not all doom and gloom and there’s some really important things to consider before you even start window (or door, or driveway) shopping.
Renovate or ready to move into?
Many buyers like you are often looking for ‘ready-to-move into’ homes to avoid costly repairs and upgrades after moving in. A great solution if you can find it as not only should you be happy with your new home, but if a renovation has been done well, it will likely grow in value over the time you live there, especially if you intend to sell it in the future. [Sources: 0, 3, 5]
Know your neighbourhood
A good estate agent will search the market for properties that fit your needs and will guide you through the negotiations and closing processes. If you can’t find or can’t afford a home or apartment in your ideal neighbourhood, you might want to ask yourself a few questions and enlist the help of your real estate agent to find a place that suits your lifestyle, needs and budget. Research what you can know about the neighbourhood and potential home, including schools and transportation, nearby home prices, busy roads, employment opportunities, and anything else that you and your real estate agents can imagine could affect the value of your home. [Sources: 0, 5, 13]
Do some price research
Make sure the purchase price of the house you are buying is appropriate for its location, check comparable sales and get your agent’s opinion before making an offer. Talk to potential agents and ask about their experiences, how they help first time buyers in your market and how they want to help you find a home. [Sources: 12, 13]
Get pre-approved
Make sure you have a pre-approved loan before you offer a home, before you seriously consider looking for a rental property. It is a good thing for your business not to drag out the process of buying a home, as the continued success of your business is crucial to repaying the mortgage. When it comes to buying a new home, be realistic, take your time, not be impulsive, and make a purchase decision that is best for your long term vision and your finances. [Sources: 12]
Talk to family and friends
Knowing what to do when buying a home will help you throughout your new build and home purchase process. A house is the largest purchase most people will make in their lives and trying to understand the process of buying a home can seem overwhelming. If you understand potential problems, you will be able to have more confidence in the buying experience and enjoy your new home without worrying about what might be wrong. Talk to family and friends about their experience[Sources: 2, 9, 11]
Get a good mortgage broker
Before buyers buy a home, they first need to look for a lender. Whether you’ve won the lottery, played professional sports or have wealthy relatives, you’ll need a mortgage (or, in a word, a home loan) to buy a house. [Sources: 2, 11]
Rachael Thompson, also known as ‘The Smarter Mortgage’ is a leader in helping people get pre-approved and finally get into their own place to call home. According to Rachael, one of the most important parts of her job is the education.
“A number of people trying to get a house and a mortgage don’t realise that the servicing of short term debt can affect your ability to service a mortgage as most lenders have a different affordability calculator and servicing rate and therefore your maximum mortgage number is calculated differently.”
While that may sound relatively complex, taking a look at the numbers and educating her clients about what they mean and how to transform your financial situation and your potential for a lender to approve your application.
“In my capacity as ‘The Smarter Mortgage Lady, I have helped a number of people with short term debt, buy a home. Consolidating short term debt might mean that you can afford the house you want and can get the maximum mortgage you need to do it, but it can mean you pay more for the short term debt in the long run.
Using savings to pay off short term debt may mean you don’t pay more for the debt when you get a mortgage, but may affect your ability to buy a house as it will reduce your deposit.”
Here’s a quick video from Rachael about the pre-approval process.
Which leads us beautifully into the next topic…….
Know your numbers
Understanding your finances and the maximum loan amount you can get gives you a firm idea of what you will be spending on a new home. A pre-approval letter shows the home seller or estate agent that you are a serious buyer, which can give you an advantage over home buyers who do not. [Sources: 2, 13]
If you want access to Rachael’s ‘Pre-approve Yourself‘ spreadsheet so you can get an accurate idea of the numbers, send her a message by clicking here!
Future proof for family
If you plan to expand your family in the near future, make sure that the new home fits your plans, be it extra space for a new baby, a daughter-in-law suite, a master bedroom or move to a state that welcomes many visitors. A good floor plan makes good use of the square area and fits what you want for your new home. If your family has mobility problems or you are planning to age your house, consider whether you want a house with stairs. [Sources: 0, 4, 5]
Create your wishlist
Today’s homebuyers juggle many different priorities when buying a home and these characteristics are rated from the most important to least important by most buyers according to the Zillow Group Consumer Housing Trends Report 2019. Understanding which features mean the most will help eliminate houses that don’t work for you when you compare houses. Let us review a few things to look out for when buying a new home. [Sources: 0, 3, 5]
Should you use an agent?
Finding a top local agent with negotiating experience is be one of the most important things you can do during the purchase process. While there is nothing wrong with researching online property portals or visiting an open house on your own, an experienced broker can be your best ally if you are serious about your first home, especially if you have not yet gone through the process. Each real estate agent is different, so it’s important that Realtors.com (R) goes through and explains everything, including working with real estate agents, and guides you through working with one to help you get the most out of the buying process. [Sources: 2, 11]
Look out for hidden costs
There are many costs associated with your new potential home, including the cost of insurance, bank fees, lawyers fees property taxes, and depending on where you live, they can quickly add up. [Sources: 1]
Many people are tempted to buy more of a home than they can afford, believing they can save their mortgage interest and later make up for it. At this point it only makes sense if you have the money and plan on staying at home for a long time. [Sources: 1, 13]
##### Sources #####
[0]: https://www.rockethomes.com/blog/home-buying/what-to-look-for-when-buying-a-house
[1]: https://www.forbes.com/sites/kellyphillipserb/2016/01/05/10-things-you-absolutely-need-to-know-about-buying-a-home/
[2]: https://resources.ownup.com/buying-a-house-checklist
[3]: https://homeia.com/10-important-features-to-consider-when-buying-a-house/
[4]: https://www.opendoor.com/w/guides/what-to-look-for-when-buying-a-house
[5]: https://www.zillow.com/home-buying-guide/what-to-look-for-when-buying-a-house/
[6]: https://www.quickenloans.com/learn/things-look-shopping-next-home
[7]: https://www.trulia.com/guides/what-to-look-for-when-buying-a-house/
[8]: https://www.financialsamurai.com/warning-signs-to-look-out-for-before-buying-a-house/
[9]: https://www.mymove.com/buying-selling/guides/things-look-buying-new-house/
[10]: https://www.rocketmortgage.com/learn/best-home-buying-checklist
[11]: https://www.raleighrealtyhomes.com/blog/new-construction-home-buying-tips-how-to-buy-a-new-house.html
[12]: https://www.investopedia.com/articles/mortgage-real-estate/09/buy-house-emotion-free.asp
[13]: https://www.nerdwallet.com/article/mortgages/tips-for-first-time-home-buyers