By Suba Iyer Published June 20 2014 FiveCentNickel.com
It's been exactly one year since my husband and I purchased our first home.
As one might expect, we've learned a number of valuable lessons this
past year. There are plenty of articles full of useful tips for
first-time home buyers. I am not going to repeat them. Instead, I will
list the lessons I personally learned that I didn't find covered
Think long-term and think re-sale: Are you planning
to have kids? Will you be taking care of elderly relatives? You might be
planning to live in your first home for only a few years. In that case,
who is your target audience when it comes time to sell the house? If
you buy a house in a very bad school district or a house on a very busy
street, when you are ready to sell the house, most families with
children will be out of your list of potential buyers.
Make a list of items to check: Home-buying is an
emotional process. Ideally, you should set aside all your emotions when
evaluating a house. Practically, that is impossible. Instead, make a
checklist of your must-haves, nice-to-haves and other essentials. Then
print copies of this checklist. Every time you visit a house, take the
checklist along with you; take photographs so you can cross each item
off your list. If you fall in love with the house and your checklist
shows that the house has none of your must-haves, it will at least make
you pause and think.
Look at ALL the expenses when you are budgeting for the house:
When budgeting for the house, don't stop with principal, interest,
taxes and insurance; add in utilities, cost of commuting and upgrades.
Call the utility companies that service the house you are considering
and ask for an estimate of what the cost will be, whether there are any
budget plans available, etc. Will the gas budget for your car go up if
you are moving further away from the places you frequently visit? Budget
all of these expenses and see if you can still afford the house.
Ask for the homeowners association contract before you make a decision:
Our long term plan is to rent out the house, if and when we move away.
With this in mind, once we identified the neighborhood we found most
desirable, I asked for a copy of the HOA contract after going to an open
house in the area. It turned out that none of the houses in that
neighborhood could be rented out. If you are buying a house that is part
of an HOA, it is absolutely essential to read the HOA contract before
you do anything else.
Research grants and other sources of funding: When I was researching our mortgage
options, I came across so many grants and funding sources I have never
heard of before. I always thought the income limit for qualifying for
these types of funding would be very low, but I was pleasantly surprised
by the generous income limit on many of the options. There are many
different options based on profession (grants for teachers, farmers,
etc.) as well as the area of the potential house (whether it's in a
rural area, high-poverty area, etc.) Research all the grants and funding
options you are eligible for before you automatically decide you won't
qualify for anything.
Be sure to read your contract before you sign it: A
house is probably the largest purchase you will ever make in your life,
so make sure you understand the terms of your contract. If you don't
understand any of the terms, ask your mortgage broker and your real
estate agent. If they won't explain the terms clearly to you, fire them;
there are enough people who will be more than happy to help you and
work for your business.
Learn about the neighborhood demographics: If you
are buying a house in a neighborhood full of renters, it only takes a
few bad renters or bad landlords to drive the neighborhood down fast. If
the neighborhood is full of single people, will you be happy there if
you have very young kids?
If you like the view, buy it: Buy the view, not the
house. A set of people in our neighborhood are at war with the county
for approving a new development next to ours. The reason? There was a
wetland and a nice wooded area with a view of snow-peaked mountains from
their homes. They bought their homes for that view. Now, within a year
of moving in, their view is gone. Unless you own the land between your
house and the view, don't buy a house for the view.
Look beyond the staging: I read about staging while I
was researching buying a home, but I never expected the amount of
staging a house goes through. The psychology does work; staged houses
look far better than houses that are still being occupied. One house we
went to had nightstands with lamps on it next to the bed that really
increased the appeal of the room. In reality, though, there were no plug
points anywhere near the lights. So practically that setup would not
have been possible without remodeling. When you are considering a house,
mentally try to remove the staging. Pay more attention to the layout of
the house and the structure itself. Ugly wallpaper and paint can be
easily fixed later.
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