The summer season is often a popular time to consider a home purchase. Perhaps it’s your first time buying, or maybe you’re looking to transition to a new neighborhood. Regardless, purchasing a home is one of the most expensive purchases you’ll ever make, and if you’re not adequately prepared, you could lose thousands of dollars and/or end up with a home that does not suit your needs.
If you’re in the market for a new home, brush up on these do’s and don’ts to ensure you avoid the most common home-buying pitfalls.
- Don’t start popping into random open houses on the weekends and get your heart set on the “home of your dreams” without establishing a budget. Yes, it’s fun to look at the possibilities—a large backyard, a rooftop view, wall-to-wall marble in the bathroom. Before you know it, you’ve moved yourself into these various properties in your mind, but you may not be able to afford the payments.
- Do understand what you can afford. Get preapproved for a mortgage and suddenly you have a price point when searching. Plus, a preapproval is a sign to sellers and realtors that you are serious and have the means to get a mortgage.
- Don’t look at less than five properties as you begin your search. It’s important to have an array of options and compare what you can get at your price point. If you fall in love with the first property you see, you might miss the house around the corner that’s even better. Buying a home is a long-term commitment. You don’t want to start your journey with buyer’s remorse.
- Do establish a list of things you want in a home before shopping. Are you keen on finding a house zoned in a fabulous school district? Do you need more than one bathroom? Do you desire a big kitchen or a dual-car garage? Sure, some of the items might be on your wish list, but you likely have some non-negotiables. Jot these down and share them with your realtor so you’re on the same page and avoid compromising on the details that matter most to you.
- Don’t fall into the trap of thinking there is always a better deal. If we had a crystal ball, we’d lock down our mortgages when the interest rates were perfect and the home values only destined to rise. While some realtors claim to know the perfect time to buy, they can’t predict the future. Home values could drop in a year, or interest rates could rise. Rely on the research you have and determine when it is the best time for you.
- Do consider the added costs of buying a home. There is the mortgage, yes. But don’t forget the property taxes, annual maintenance and cost of utilities. These extra financial responsibilities that come with home ownership can add hundreds of dollars to your monthly housing expenses. Ask the realtor and existing owner for these details so you can piece together a realistic estimate of what your new housing expenses could be.
- Don’t skip the home inspection, and ensure you hire a good inspector. On the surface, all could look great, but a professional home inspector will look at your potential new home with a different lens. They’ll spot everything from the staircase that is not built to code to faulty wiring or questionable plumbing. Better to know now than be surprised later.
- Do make a realistic offer. You want the best deal, but consider the property’s historic price, current market conditions and the home’s features. Lowball offers run the risk of being rejected, lengthening the sales process and irritating the sellers to the point that they won’t want to work with you at all. If you’re working with a professional familiar with the area, write an offer that makes sense and see what happens.
- Finally, don’t consider buying a home if there is a strong possibility that you’ll be moving again soon. There are so many upfront costs with buying a home that you’ll largely pay down on interest in those early years. While it’s painful to write those rent checks and get nothing in terms of equity in return, it’s important to recognize home ownership is best suited for those planning to stick around for at least seven years. So, think long term and give yourself a space you can grow with through the years.
Buying a home is exciting, but one of the most significant purchases you’ll ever make. Enter the journey informed, and you’re much more likely to be pleased with your investment for years to come. And remember, as a UNIFY member you have access to great low rates on Mortgage and Home Equity Loans.