Buying a home is one of the biggest and most complex financial decisions you’ll ever make. It is also a lifetime commitment since you’ll be taking on a sizable loan.
With that in mind, here are 10 things you need to know about buying a home.
1. Location
Get a location with easy access to main roads that take you to the office, school, shopping, recreation spots and the homes of family and friends.
Check traffic flow so you know if it’s going to be a hassle getting out of the neighbourhood during rush hour.
The location of the home within the neighbourhood is also important. Some prefer a lot near the main entrance, while others like to be away from traffic and further into the development.
If there is a park, pool or recreation area, some owners would choose the closest available lot.
2. Budget
Be honest about how much you can afford. Take into account your monthly income and expenses to see what you are comfortable with in terms of monthly payments.
However, this also depends on how much financing you get from the bank.
Careful consideration of your budget, no matter what others say you can afford, could give you more wiggle room for unexpected expenses like a medical emergency or job loss.
3. Look beyond paint
The house may look good on the outside, but consider the fixing up required inside.
It’s fairly inexpensive to fix something minor (a bit of paint or some wallpaper) but making changes to the kitchen and bathroom can be a costly affair.
Besides the cost of cabinets, appliances and counters, remember to factor in labour costs which can double or triple the bill.
Renovations can be an expensive affair when you factor in labour costs as well.
4. A trusted realtor
Realtors get a cut of the sales price of a home which makes some buyers hesitant to use their services for fear it drives up overall costs. However, keep in mind that it’s the seller, not the buyer who pays the commission.
When looking for a realtor, find one who works full-time so they can give all their time and attention to you. They should be available to meet you in-person without having to work around their full-time work schedule.
If you have any indication that they’re not fully working for you, it’s time to get a new realtor. A home is a huge purchase and you should feel comfortable every step of the way.
Finding a realtor you trust is worth getting out of your contract or agreement for. Ask for recommendations from friends and family or anyone familiar in the industry.
A savvy realtor who works for you can protect your interests and guide you through the buying process – from negotiating a price to navigating home inspections.
5. Number of bedrooms
Most people want at least two bedrooms, and if they have children, the number increases. Some families like their kids to share bedrooms, while others like separate bedrooms for each to accommodate different bedtimes and study habits.
If you have regular visitors for any length of time, a guest room is needed too.
6. Home inspection
A home inspection is where you as a buyer tour a home with an inspector and check for problems with the house as well as any issues that may currently exist (usually sub-sale).
If there are any deal breakers, you can walk away if you have an inspection contingency.
You also may be able to have the seller fix issues or knock some money off the purchase price for you to make the fixes. It doesn’t always happen, but it’s possible.
Tour the home with an inspector to check for problems, big or small.
7. Seller’s incentive
Some sellers will place their home on the market but don’t care if it sells or not. If not, they are happy to continue living there and will try again later. With this type of sale, there is not usually much wiggle room on the price.
There are times, however, when a seller is highly motivated to sell because of a job relocation or the urgent need to move out of the state. Sometimes a seller is saddled with two mortgages and wants to sell fast and get back to only one payment.
Your realtor will help you determine how motivated the seller is and how to draft the offer and counteroffers to get the best.
8. Maintenance
Unless you’re buying a new construction, there is generally quite a list of potential maintenance items. They might be repairs, large or small, replacements or additions to make the house a home.
Some items might be mainly minor, but others might take a lot of time and money to complete.
9. Other costs besides purchase price
The purchase price is just one step in the journey to owning a house – be sure to consider other costs like insurance and maintenance fees. Remember, you’ll need to fork out a good sum of money to furnish the house too.
10. You don’t have to buy a house
No rule says you have to buy a house by the time you’re 35 – or ever. Buying a home is a big decision and while it may seem like a sound financial investment, it’s not for everyone.
There is a lot to consider, including the housing market, interest rates, timing and your future plans.
Nevertheless, you can start by checking your home loan eligibility on the Property Guru’s Home Loan Pre-Approval website.
