As buying a home is one of the most important investment decisions you will ever make, it is crucial to understand the current real estate market before you dive in. Did you know interest rates have approximately doubled this past year? Home values rose double digits, year-over-year, the past couple years? The housing inventory has been low; however, it is growing? The solid seller's market is starting to balance out and become more friendly to buyers again? Here are a few considerations to keep in mind before you purchase a home.
Be Financially Prepared Before You Begin the Process
Talk with a mortgage lender before you begin the process of purchasing a home and working with a real estate agent. Your lender will pull your credit and gather information from you in regard to your income, savings and debts. The lender will pre-approve you for a specific price range for a home. This pre-approval will also take into consideration the current mortgage interest rate, real estate taxes, homeowner's insurance, and homeowner's association dues, if any. Be sure you are comfortable with the estimated house payment the lender estimates for you. There is a very informative article on Realtor.com, written by Daniel Bortz on June 20, 2022, How to Qualify for a Mortgage: Income, Credit, and Debt Requirements for a Loan. It will help you understand the mortgage process in more detail.
Now that you have considered the financial aspects of purchasing a home, it is time to decide on the area or general location for your new home. First, decide if you want to live in or near a city, further away in the suburbs or out in the country. If you like extra space and quiet, a suburb or rural location may be a better fit than the city. Take into consideration your work commute if you have one. If school districts or certain schools are important to you, be sure to tell your real estate agent to include that criterion in your home search parameters. If there are any other location search criteria that are important to you, express your wishes. Also, keep in mind the exact location of the home you purchase. For example, homes that back to busy roads or are next to something unsightly will affect home values.
Size and Amenities
Next, you will have to think about the size of the home you want or need. Inform your agent of the home style you are looking for and how many bedrooms and bathrooms you'd ideally prefer. If you have any square footage requirements, be sure to let your agent know. Think about your parking and garage requirements. Also, decide whether or not you need a basement. If there are specific rooms or spaces you require, have those be part of the search as well. Your agent should have a checklist to go over with you on your search criteria.
Age and Condition
The age and condition of the home you are purchasing are also extremely important considerations. An older home that is not updated will need more work and money put into it after closing. A new or newer home may not have as many defects or safety hazards as an older home. You will pay more for an updated home with an abundance of new features, mechanicals and appliances. Take into consideration not only the age and condition of the home itself but the age and condition of the structure, roof, foundation, mechanicals, systems, appliances and so on.
Hiring the right, experienced real estate agent who will guide you through the process of purchasing a home is critical. You can find qualified agents on websites such as homelight.com, realtor.com and other home related sites. Good luck with your home search and congratulations on taking the first steps to buying a home.