real estate

What to Look for When Buying Your First Home

First-time home buying is exciting but also stressful.

First-time home buying is exciting but also stressful.

Buying your first home is an exciting new chapter in your life, whether you are tackling it as a bachelor (or bachelorette) or with your soon-to-be wife (or husband).

It can be fun daydreaming about designing your new home, but one of the biggest mistakes you can make is putting the cart before the horse. First-time home buyers have the tendency to house hunt first and prepare later. Avoid this mistake, which can cost you time and money, by following these guidelines before buying your first house:

  • Check your credit report and score. Don’t even bother reviewing all those online listings until you know whether or not your credit can handle buying a home. Even if your credit can handle it, you want to have a strong enough financial background that you will be able to get a lower interest rate on your loan. It is recommended to review this at least six months before the shopping process so that you can spend some time improving it.
  • Know what you need, and prioritize. There is a difference between needs and wants, and when going into a large purchase like this, you may have to make some sacrifices of what you want for what you need. Factors such as the neighborhood, school district and location should all make your checklist. Basing your home buying decision on looks and layout alone may leave you feeling regretful.
  • Know what you can afford. Getting your finances in order and knowing what you can afford each month for your new house will be imperative to avoiding future issues. Often, there are hidden costs that are forgotten once those papers are signed such as taxes, insurance, maintenance and so on. It is safer to over-estimate your monthly payments to ensure you are fully financially prepared. Another good home-buying practice is getting an idea of what your down payment will be. This venture is all about being as prepared as possible for all costs.
  • Get pre-approved. Once you know your credit score, it’s time to see how much you are able to borrow. Sellers want to know this number, and it’s important for you to realize your spending range as well. Getting pre-qualified for a loan will help to save you time and energy as you begin the process.
  • Find the best real estate agent for you. Buying your first home is no joke, so you should spend some time finding the right real estate agent for your needs, budgets and goals. Talk to co-workers, friends and families for referrals to try to find that person you feel like you can already trust. Take some time to shop around for a real estate agent as you shop around for your home. You may want to even look into hiring a realtor to take your search one step further and ensure that credibility.
  • Consider educational seminars or consulting. The best way to make sure you are making a wise home-buying decision is to know your stuff. Research, know what you are signing off to and keep yourself educated on the process. You may want to look into one-day seminars offered by real estate companies or even consulting with a mortgage lender to really grasp what to expect.
  • Get a home inspection. Last but certainly not least, get that home inspected. You definitely do not want to make such a large purchase without knowing what is beneath those walls. Issues within the home can be fixed prior to you taking over, which will be a huge relief off your shoulders. Just be aware of all the additional expenses in maintenance that would become your responsibility upon ownership.

Don’t be afraid to ask for help as you begin the home buying process. The more you understand, the better the chances are that you will set yourself up for financial success with your new home.

 

Things To Consider Before Buying A Fixer-Upper

A fixer-upper sounds like a good idea, but think before you buy.

fixer-upper

Fixer-upper concerns and things to keep in mind.

Recently, my  boyfriend of six years and I discussed the possibility of purchasing a fixer-upper in an effort to grow our financial portfolio and begin creating our own home after renting an apartment for the last three years together. It seemed like a great idea, and we even considered renting the house out when we would ultimately choose to move. However, after speaking with his father, who is in the banking business, we decided against it for more reasons than one.

Here is what we were advised and what you should consider, too, prior to diving in to this renovation project:

  • Before beginning any new investment, you should always do your research first and foremost. When buying a home, whether choosing one that needs restored or not, look at an inspection report. Along with this visual report, you will want to know the home’s full history and study its neighborhood. A house in a historic district, for example, will most likely have a higher value but may also require more costs due to rebuilding with accurate components. Moreover, you will want to assess the district to see its demand, crime rates and more as those notes are necessary to see how easy it’d be to resell or what would add profit to the property. Your neighborhood (and home) should have room to grow for an ideal situation.
  • What’s your budget? What would you hope to make back on the home, and is it possible to do so following your updates? Are any electrical upgrades required? Is there any concern of lead-based paint or asbestos? If so, what may have originally would have been a small investment may rack up the costs. These are all important questions to ask. Your finances should include the cost of the home, construction and the unexpected.
  • Are there any restorations you can do on your own? And not just that, but do you have the time to do them? Know and be realistic with your skills and availability to work on this project. Stripping wallpaper and painting is one thing; upgrading your sewer system is another.
  • Before you even make an offer on any house, make sure to price the expenses of repairs and remodeling, including cost of labor.
  • Have an idea of what changes you would want to make to the home. Get some direction from the inspector and another professional to prevent your project from turning into a total disaster. You also want to determine if the home is worth the investment. You don’t want to make unnecessary updates, such as tearing up original woodwork that could actually add value to the home, or buy a complete dud that really can’t be restored.

If you are considering taking this leap, just be sure to take all avenues into review. As I mentioned before, weigh out all the costs to figure out how much you should pay. This can be concluded through the renovation expenses of the property based on the housing report and all materials needed deducted from the home’s probable market value after the updates, using the area’s real estate prices. You should additionally subtract up to 10 percent for those unforeseen extra costs we were talking about earlier, as is expected with any new home purchase. What is left over should be your offer on the house.

By consulting with a few professionals, you should be led into the right direction and one step closer to home sweet home. Maybe one day we will end up getting that fixer-upper, but for now, my beau and I are content where we are.

Have you bought a fixer-upper? What were your results? What would you add to this list?