Choosing a home to purchase can be an exciting and scary experience for new homeowners and seasoned homebuyers alike. Most times this will be your home
the next decade, maybe more, and you will want to ensure you make the right decision. The National Association of Realtors states that the typical home buyer searched for ten weeks and viewed ten homes in 2014 — this is two weeks shorter than the previous year’s report. In extremely hot markets like ours, this time is often much shorter. The trick here is to make sure you know what you want before you even begin viewing homes with a real estate agent. Consider what you need in a home, why you are buying, and where you would like to live.
“You want to be educated upfront, because when you are ready to buy you may need to act quickly,” said Keith Dunham, CEO at HomeCity Real Estate. “Clients need to put their best foot forward when searching for a home or risk losing out on deals that they want. In this market, homes are receiving multiple offers within a day of going on the market. Clients need to get with an agent to understand the process, but when they see a home that fits their pre-determined criteria, they need to be ready to put in an offer immediately.”
The ticket here is deciding exactly what you want in a home, that way you can make a quick decision regarding whether or not you want to put in an offer. Here are a few questions to ask yourself.
1. Do you want a new or existing home? Consider whether you wish to move into a newly built home or a home that has already been built. In general, new homes are more costly than existing homes, depending on the neighborhood. The perks of choosing a new home include brand new appliances, plumbing, electric… new everything! Many times a new home will have a more modern architecture, and in some cases the buyers can have input on the layout, fixtures, and accents. Maintenance costs will remain low for some time in a new home as well since it will generally be a while before repairs are needed. Existing homes have the advantage of being more ‘move in ready’. Many people like that existing homes have character and steer away from the cookie cutter design that new home communities can offer. There is often more availability and more styles to choose from when choosing an existing home, as well as a more negotiable price. It’s helpful to choose which option appeals to you before beginning your home search.
2. Which neighborhoods would you like to live in? This is one of the most important factors to consider when choosing a new home. One portion of choosing the right neighborhood includes selecting your children’s (or future children’s) school district. Most parents already know this, but it’s important to consider if you ever plan on having children in the future. Researching school districts on websites like greatschools.org can help you choose a good fit for you based on test scores, student reviews, and curriculum examples.
Another important aspect of choosing the neighborhood is determining its proximity to things you like to do or people you want to live near. If you like to be social, go out on the town, go out to eat, or go shopping, it might be best to choose a neighborhood that has access to these things. Do your friends or family live nearby? Proximity to them might be significant. Outdoors lovers might want to ensure their neighborhood has a hiking trail nearby. Your neighborhood should fit your personality.
Lastly, consider the demographic of your neighborhood. Do you want a homeowners association? Do you mind if there are loud neighbors, music venues or racetracks nearby? Would you rather live in a neighborhood full of young families so your children will have playmates? What is the crime rate? All of these are important to ask yourself to determine which neighborhoods are options to begin searching in.
3. What is your price range? Price range we are referring to here is your actual price range, rather than the maximum amount of money your lender is allotting you. The amount that you can realistically pay each month without sacrificing your quality of life. It’s handy to take things into account like property taxes, utility bills, and amount you are willing to spend on repairs. A house that is on the upper cusp of your spending limit, but is older and will need several repairs is probably not the best choice. You could love the size of a home, but if your bills will be outrageous you might want to reconsider.
Take the time to add up potential costs, and know what to look for when you are on the actual house hunt. Examine the annual amount of real estate taxes and other assessments levied on homes in the neighborhood you are considering. Nobody wants to overspend and feel regretful later on, so do your research beforehand and save yourself the headache.
4. Do you need room to grow? This could also go the opposite way, will you need to downsize in the next decade? Be prepared to look at homes within a reasonable size range for your needs not only today, but down the road as well. For example, a small two-bedroom condo downtown could look appealing to a pair of newlyweds, but if they plan on having children in the next several years they will probably want to consider a three-bedroom house. The same goes if a couple plans on expanding their family further in the next few years, having elderly move back in with them, or any situation that would require more room.
People who are sending their kids to college in the next five years might not want to purchase that five-bedroom home they’ve been dreaming about, and opt for a smaller home instead. Retirees may want to downsize to a cottage. Think about your life five, ten, twenty years down the road and take that into consideration when choosing a home, especially if you plan on living there for a while!
5. What condition would you like the home to be in? For many people, the prospect of getting a good deal is exciting. A house that is older and needs many repairs and updates can come at a good price, but decide beforehand how much work you are willing to put into it. Don’t be overly ambitious regarding your construction skills, and make sure that all projects are within your range of do-ability. A buyer will sometimes think that they have the time, drive, and means to update an older home but later realize this isn’t possible. Be realistic with your goals to avoid having many half finished projects on your hands.
If you aren’t very handy or don’t have a lot of time to work on the house make sure you choose a newer or newly renovated house that is likely to need less repairs. You can also work out a scenario in which you figure out how much you would be willing to pay to fix up a house, and how much of a discount you would have to get on that house to afford the necessary renovations. Having an idea of how much things cost before you go out looking can help you assess which houses are worth the effort and which aren’t.
Once you lay out your specific criteria, you’ll want to hire a real estate agent and get pre-approved by a mortgage lender. Discuss these criteria that you have outlined, and get ready to move quickly once you have found a good fit. Happy hunting!