For first time home buyers, here are five practical considerations when looking at a home to buy.
Homebuyers who are making their first purchase have a lot riding on their success. After all, it’s likely to be one of the most expensive purchases they’ll ever make. Key architectural components, such as granite countertops and open floor plans, are frequently fantasized about by potential buyers, but the reality of what they can afford may be quite different.
Similarly, there may be a contradiction between what a customer wants now and what they will desire or need in the future—for example, when they start or grow their family and don’t have enough space. Because of these inconsistencies, many first time homebuyers may make the wrong decision. They prioritize layout over pricing, or they make a purchasing decision based on their gut instinct rather than a thorough examination of their lifestyle and finances.
Consider these five questions to ask yourself while looking for a starting house as part of determining how much home you can afford.
Question #1. “Can I Afford This House?”
Some first time home buyers will be preapproved for a mortgage before looking for a starting home, and then market-based on the maximum amount they can borrow. After all, why not opt for the home at the top of the budget if the bank or mortgage firm indicated they qualified for a certain amount? However, just because you qualify for that 2,500-square-foot home on a one-acre lot doesn’t mean you should buy it.
This may result in financial issues, leaving you unable to pay your mortgage on a monthly basis. If you spend all of your money on home maintenance, it might rapidly become a cause of dissatisfaction. What matters more than your qualifications is what you can actually afford.
You want to buy a home you can afford since most experts recommend staying in your new home for five to seven years to recoup your costs and get a return on your investment. Rather than going all-in on your first house, it’s a better idea to look for a more reasonable starter home that won’t break the bank and provides room for entertainment and other unanticipated life expenses.
Question #2. “Is It a Good Fit for my Lifestyle?”
First time home buyers frequently make the mistake of focusing on what they want inside the house rather than other considerations such as distance to friends, family, shopping, and job. As a result, you may be enticed to buy a home because it is move-in ready, or because it has a pool in the backyard, or because it satisfies all of your buying criteria.
However, as a first time home buyer, you should think about more than just the floor plan and amenities. You must ensure that the home suits your lifestyle and the things that are important to you and your family (if you have one), such as a short commute to work or convenience to extended relatives.
The last thing you want to do is buy a house that is too far away from everything that matters to you. Not only will it increase your expenses if you spend more money and time commuting, but it will also cost you emotionally if you are stressed out from daily traffic or don’t see your friends and family as frequently as you’d want. Make a list of these kinds of lifestyle priorities and consider them before making a purchase.
Question #3. “What Are My Future Plans?”
Most people purchasing a starter home aren’t giving too much thought to their lives five or ten years down the road. But not peeking into the future can result in a costly mistake. Consider your plans for having children, for example. You and your spouse may not be gearing up to become parents in the next couple of years, but that may be a consideration down the road. If you don’t consider that possibility now, you could end up purchasing a starter home that won’t meet the needs of a growing family or that is unsuitable for small kids.
Let’s imagine you’re a single person trying to buy your first home. When you’re dating, buying in the heart of a city with plenty of nightlife may be excellent, but once you’ve settled down, you may prefer a quieter location. While it’s difficult to see into the future while living in the present, thinking about your long-term goals and attempting to include them in your purchasing decision might help you make a decision that will benefit you both now and in the future.
Question #4. “Has the property been well-kept?”
Home repair television shows make it appear that doing a range of modifications is simple, but this is far from the case. Just because you’re buying a starter house doesn’t mean you should go for a fixer-upper that requires a lot of modifications and renovations.
First time home buyers should look for a home that has been well-maintained and does not require extensive repairs or upkeep. Even normal home maintenance, let alone repairs and upgrading, is pricey. If extensive repairs or replacements are required, it may be preferable to relocate to a more well-maintained property.
Question #4. “What’s My Exit Plan?”
Because starter houses aren’t meant to be kept forever, you’ll want to choose one that has the potential to make you money when the time comes to sell.
That means you’ll want to have an exit strategy in place for the property you’re buying, whether it’s selecting a home that will be easy to rent in the future or one in a desirable neighborhood or school district that can be quickly sold. When you’re ready to move on, the last thing you want is to be trapped with the property.
These mistakes can be avoided by first time home buyers who are willing to approach the process pragmatically rather than emotionally. Sure, granite countertops are desirable, but so are affordable mortgage payments and a manageable commute to work.
Homeownership can be liberating, but it can also be intimidating, particularly for first time home buyers. Start by choosing a starter house that is well within your budget and satisfies your present and future wants and needs, while also considering an exit strategy.
If you’re a first time home buyer and you need help from a realtor, I’ll be glad to assist you. Call me today!