So, you have done your research and found a great real estate agent to work with. You have gotten pre-qualification from your lender. What are the next steps?
Buying a home is a big decision, and there are many factors to consider in your search. These days it is more important than ever to have a home that serves your needs, whatever they may be. How can you be sure your time and energy spent house hunting will yield the best results? Is it more space than you need most? Is there a particular neighborhood or school system that can make or break the deal? Are you saving the most money?
When considering what is most important to you, making a list of priorities can be extremely helpful. That way, even if you can’t check every box on the list, you can easily weigh your options and find the best fit that is available to you. Here are some items that can easily be overlooked but you will want to include on your list.
RENOVATIONS AND HOME IMPROVEMENTS
During your home buying search, it’s easy to be enamored with a home that’s for sale at under-market value. After all, finding a great deal on a home is the best-case scenario. Just remember: be sure to consider the renovation costs of any home that’s price seems too-good-to-be-true. From walls that need to be repainted, a kitchen that is in desperate need of modernization, a roof that is in disrepair – and everything in between – renovation costs are something that can sneak up on an unsuspecting home buyer.
Here’s a pro-tip: be sure to add on any renovation estimates to the listed price of the home – you’ll thank us later.
Also, keep in mind that fixer-uppers aren’t the only types of homes that need renovations. A beautiful home that looks lovely and perfect may still need crucial renovations and updates that aren’t apparent during a quick in-person or virtual tour. Always keep an extra renovation budget in mind throughout the entire home buying process.
LOCATION, LOCATION, LOCATION
When buying a home, you’re not just moving into a house, you’re moving into a neighborhood. Sometimes the most important aspects of your potential new home are not apparent from the real estate listing and photos. Remember to ask yourself important questions about the local school district, the friendliness of the neighbors, the overall condition of surrounding homes in the area, and everything else that can have a big impact on you and your family’s needs.
For example, if you and your family love playing basketball, find out ahead of time if the neighborhood permits a basketball hoop to be placed on the curb in front of your house. If you enjoy the convenience of a major grocery store in close proximity to your home, then do this research sooner rather than later. As with most big decisions (and buying a home is one of the biggest), doing your due diligence and amassing as much information as possible is key.
HOME PRICING AND FINANCING
Without a doubt, the single most impactful aspect of purchasing a home is the financial aspect. There are countless tools available both online and offline to help you navigate the financial side of it all, but like most purchases, you either know you can afford it or you don’t. And let’s be honest, we’re going to assume you can afford it if you’re reading this article in the first place.
Make sure you consider things such as:
Your own personal financial picture: buying a home will likely be the single largest purchase you’ll ever make in your entire life. We advise making sure you are looking at the home buying process from all angles. Yes, the thought of homeownership is a thrilling thought when thinking about it through a positive mindset. Don’t forget to also consider the possible negatives: will you still be able to make monthly payments if you lose your job or get sick for an extended period of time? Do you have healthy-enough savings to fall back on? Although considering these possibilities may seem like no fun at all, it’s important to respect all possible outcomes of buying a home.
Mortgage rates: these can slide up or down depending on market conditions, and it can be extremely beneficial to jump on rates when they are on the lower end. Make a habit of keeping track best you can and always reach out to your financial professional or lender for more information.
Down payment: the popular number tends to be at 20 percent. However, a down payment that high is not always required. There are often situations where you can avoid leaving 20 percent down if you’re a first-time homeowner, have prior service in the armed forces, or are eligible for government assistance programs.
Hidden costs and fees: this may include homeowner’s insurance, closing costs, and property taxes. In the current market, don’t discount the possibility that you may wind up paying over the home’s asking price if you find yourself in a bidding war with multiple buyers. Make sure you consider all possible costs. Ask your lender and real estate agent what to expect ahead of time, so there are no unwelcome surprises along the way.
Sometimes the mental aspect of home buying is the most important thing to consider out of everything that’s been covered so far. Buying a home comes with a lot of new responsibilities that go beyond just being able to afford a mortgage every month.
As a homeowner, you’re no longer able to call your landlord to fix a leaky faucet or an air-conditioning unit that decided to break during a heatwave. Instead, you are ultimately responsible for everything that happens under your roof. This newfound sense of responsibility can be overwhelming for some, and understandably so – the safety net is no longer there like it was when you were renting.
In addition, you’ll be adjusting to an entirely new environment. Familiar places and activities that you’re used to driving by or doing could possibly no longer be accessible in your new neighborhood. The morning sun may not shine through your new bedroom windows in the same way it did in your previous residence. Don’t worry, it’s all about perspective! With time you will find that the freedom of owning your own home will inspire new memories and new feelings compared to renting.
HOME INSPECTION AND APPRAISALS
At the end of it all, after you’ve found the home of your dreams in your ideal neighborhood with a curb that you can already picture a basketball hoop sitting on, you realize all that’s left to do is put in an offer. And once that offer is accepted, you’re almost there!
Home inspections and appraisals are one of the last hurdles you need to clear before you can start planning on officially moving in. An appraiser is usually sent by your bank to spend some time walking through the home and crunching some numbers to ensure that the home’s appraised value is reflective of the mortgage they are issuing you.
If everything is up to code, meaning there are no lingering foundation problems, roofing issues, water damage, etc., and no renovations are needed, then you’re home free (no pun intended!). The final paperwork will be coming your way in no time. But if something comes up during the appraisal, it’ll be back to the drawing board as far as negotiating a new price between you and the seller to offset the repairs that need to be made.
All in all, home buying is one of the most satisfying and important processes that you’ll ever go through, and we’re glad that we’re with you by your side to help you out with all the vital information related to it. Happy home buying, and good luck!
*This article is intended to be accurate, but the information is not guaranteed. Please reach out to us directly if you have any specific real estate or mortgage questions or would like help from a local professional. The article was written by Sparkling Marketing, Inc., with information from resources like Bankrate, CNN, RocketMortgage, and NerdWallet.