For many people, living the dream involves financial security and owning your own home. Owning a home is widely perceived as an investment that leads to long-term stability and security. Although this step is often recommended by financial experts, there are a few things to know before you find your dream home to avoid common mishaps and complications.
Know How Long You'll Live at the Residence
You may have the savings, salary, and credit to purchase a home, but it doesn't necessarily mean that it's a wise purchase if you aren't looking to stay at the property long-term. You should only begin shopping around for a home if you plan to own it for several years without moving again. If you have a job that may relocate you or obligations that can cause you to move to another city, it's best to continue renting until you have more stability. It's a long-term investment that requires thousands of dollars, which can be lost if you sell it too quickly after purchasing the home.
Determine What You Can Afford
You may be able to use a simple mortgage calculator to determine the type and size of home that you can afford to purchase, but there are several other costs to take into consideration. The square footage of the home will determine what you pay in utilities each month, as well as repairs or maintenance that are needed due to the age of the home. It's also important to consider property taxes, private mortgage insurance, and homeowners insurance. The added costs may make it difficult to become a homeowner. You need to determine if it's worth the risk and if you have the financial freedom to invest more than you would spend renting.
Learn How to Negotiate
Avoid entering the home buying process without first learning how to negotiate, which will be crucial in saving thousands of dollars after making an offer on a property. Research the current state of the market and talk with your realtor. You can also consider asking for the closing costs to be paid by the seller. You'll have more leeway negotiating the selling price if you're already pre-approved for a loan, which will allow the seller to take you seriously and avoid going with another buyer. Don't be afraid to walk away while negotiating. This means you need to leave emotion at the door. Any issues or problems that were found during inspections can also determine how much control you have while negotiating the price, making it important to use a home inspector that you hire on your own.
The time of year you're purchasing can also influence your negotiating strategy. Sellers are often more motivated at the end of the year when less buyers are in the market for a new home.
Consider the Neighbourhood
The neighbourhood you choose will ultimately determine how comfortable and safe you feel in the environment. Research nearby schools, shopping centres, and public parks in the area. You'll also want to determine if there are similar individuals or families living on the street and if you feel safe in the area. Research the current crime rate and visit the area at different times of the day to determine the overall quality of the area.
There are a lot of factors you need to consider when you're planning on buying a house. But if you keep these four things in mind, you'll be ahead of the game.
Photo credit: stock.adobe.comPosted by Terry Paranych on