5 Things To Consider Before Buying A House

Since the financial crisis in 2008, unemployment rates have been plummeting and the housing market has hit an all-time low. Recent college graduates and the millennial generation have been resorting to living at home with their parents or living in apartments with four or five other friends and acquaintances. But since last year, the economy has been slowly, but steadily recovering, and the unemployment rate has been gradually falling. The housing market is also starting to recover slightly, especially with interest rates hitting record-setting lows.

Recent studies have shown that the housing market has seen a spike in people between the ages of 25-34, the same age group who have been living at their parent’s homes and defaulting on student loan debt, despite having mostly steady income. While this is good news for Americans, purchasing a home is still a major decision that should be considered with care and planning.

Whether you are 25 or 47 years old, here are 5 tips you should follow before deciding to buy a new house:

1. Have the house inspected.

Buying a new house can be an exciting time, but it is important not to let your excitement cloud your judgment. When you are looking a potential houses, especially one you are taking a second look at, be sure to have it inspected for mold, termites, and the whole nine yards. You can do a preliminary check by yourself the first time you do a walk-through.

Be sure to smell around all the rooms for pet related odor or mold. You will also want to turn on all the water faucets and ensure there is hot water and warm pressure. Also make sure the toilet flushes properly and that the heating and air-conditioning work properly, as well as appliances like the dishwasher, refrigerator, and the washer and dryer. It might also be a good idea to check the window quality and if the walls are hollow.

2. Hire a reputable professional.

Some people still go through the process of purchasing a house all on their own, without any assistance from a realtor or lawyer. If you do enough research and check with your bank on all of the proper forms, this is definitely doable, but if you are not confidant in your ability to walk yourself through the process, hiring a professional realtor is definitely the way to go.

When searching for a credible realtor, it is important to check that they are properly licensed within their operating state(s) and that they have a reputable standing with their clients and company. Feel free to check on a realtor’s credibility with their past customers and also if the realtor has any additional credentials like a CRS (Certified Residential Specialist), ABR (Accredited Buyer’s Representative), SRES (Seniors Real Estate Specialist), or that they are a member of the National Association of Realtors.

3. Stay in control.

You can leave the task of negotiating prices and such to your realtor, but it is important that you still maintain control of the overall situation. Don’t feel afraid to walk away from a bad deal, or feel free to say “No” to your real estate agent. Remember, realtors are salespeople as well, but you should not feel obligated to close a deal if you think it’s a bad one or if you feel you are being pressured by your realtor to make a quick decision.

It is also your right to push in negotiations. If the property needs a lot of work done and the seller is not willing to go down far enough on price, or fix them before the time of sale, don’t feel obligated to make the purchase. Remember that above all else, this is a financial transaction, and one you should consider carefully before jumping right into, which brings us to the next point…

4. Consider your finances carefully.

Buying a house means taking out a mortgage and paying back loans and interest rates. Before you make a rash decision on any property, whether you really like it or not, pause and take a good look at your current financial situation. You should not base your decision on how much the bank allows you to borrow, but rather how much you can afford for a down payment and a monthly repayment plan.

It is important to consider your future financial situation as well. Your decision should be based on your current income and foreseeable expenses like cars, travel, and whether or not you have children or plan to have children. Even if you are expecting to make more money in the next few years, such a large financial decision should always be considered for your present situation.

5. Consider your personal investment in the house.

When I say personal investment I mean maintenance and repair. Purchasing a house that needs a lot of repairs done for a lower price can be a good investment, but you must also consider those repairs in your financial plans. Costs of labor and material to re-do a kitchen or living room flooring can be very expensive, let alone replacing insulation, painting, or replacing electrical wiring or plumbing.

You should also consider the outdoor maintenance the house requires. Properties with large yards and gardens require regular landscaping, whether that means simply mowing the grass or replacing mulch. It is important to consider your dedication in maintaining the outward appearance of your home as well as the expenses involved.

 

If you are purchasing a home for the first time, and are accustomed to calling the landlord every time a problem needs fixed or seeing a landscaping crew come by once a week, you need to prepare yourself for a wake up call. Purchasing a house can be a prosperous investment, but it also comes with a great amount of responsibility, so be sure to consider things carefully before deciding to make a purchase.