Buy Home: 25 Tips for buying a house
Buying a home is one of the major purchases of your life and you should come up very seriously before buying your dream home. For people who are moving to the other city or country sometimes it’s very tedious and hard work to deal with his first house purchase. Sometimes you feel like it’s time to buy a home and after this decision the prices suddenly rises up to the sun. If you want to find the high time for buying a house it’s important for you to read the next tips. We suggest you top 25 things you need to know when buying a home.
1. Do not buy a house if you do not plan to stay put and plan to move again in the nearest time
If you are not certain that you can remain in one place for at least some years, do not buy an apartment, at least not right now. If you plan to relocate in a few years check if you will be able to sell it or rent it out. You can lose a lot of money because of transaction costs of buying and selling home, even when the market is rising. But it may end up even worse when the prices are falling. Stick with a rental for right now if you are not in the strong rental market area, which will allow you to cover the mortgage on your house in case of moving.
2. Shore up your credit
Before getting a mortgage for buying a house make sure that your credit history is clean. Make copies of your credit report before searching for a house. If you discover any problems, fix it in time.
3. Look for a house you can afford
If you surf the Internet you will find many calculators available online which will help you to calculate your income, debts and expenses after buying a property in the other country. It will help you to count if you can afford such a house or not. If the online calculators do not provide you with enough information, use the service of estate agents. One of the rules is saying that usually you can afford buying a house which costs two-and-one-half times of your annual salary.
4. Do not bust your budget
While searching for a house sometimes you can get lost in number of property for sale. This one is looking so good, but this one is more available, and the next one is cheaper, and the location is more convenient. So what to choose? But if I pay more, I can get more things to make my home look like that one I was always dreaming about. Sometimes adding extra €10 000 – €20 000 does not seem a big deal to buy real estate of your dream. But do not overrate your abilities. Do not look at the top end of your monthly payment and think in advance. Consider how would you overcome the difficulties with your new house if your income goes down or if you change your job. In this case get pre-approved to your mortgage. It will prove that you are serious to the seller and to the realtor and you will also have the idea of your upper limit. The lender want you to max out. For him, the more you pay, the better. As for you, it’s better to take pre-approval number and cut 20% off.
5. Qualify for a loan if you cannot put down 20%
If you qualify, you can find among the variety of private or public lenders those, who offer low-interest mortgages which mean that you will pay small down payment.
6. Remember about added costs
When you buy a home it does not matter that you replace rental payment with the mortgage one. You will also have to pay maintenance and transportation costs, utilities and insurance costs and taxes on property. Try not to forget about it while thinking about how much you can afford. It’s better to figure out the total sum of money on the very beginning not to be surprised in the end by the new unexpected price. The best way for it is to ask the homeowner about the money needed for utilities and how much you should pay for property taxes. Or ask your realtor to estimate the price.
7. Do not put down nominal down payment
Even when the lender require to qualify for a mortgage, you are still able to buy a property with 3% down. It’s not so bad, but it means a little equity in your home while firstly moving into it. So in case of emergency when you have to sell the house, you will owe more than you can get after selling the house. But even if it does not happen, there is still private mortgage insurance to be paid. It should be done every month till the equity in the home exceeds 20% mark. Sometimes it takes years. Your loan is risky when you cannot put down 20%. Bank requires PMI (private mortgage insurance) to protect itself in case you default on your mortgage. If you cannot find these 20% for payment right now, consider if it’s prudent to buy property for the time being. Even though the interest rate are low, it’s not good if you need to borrow loads of money, because you do not have your own. If you will spend some years for saving money, you can avoid years of mortgage insurance.
8. Get everything in writing
If you do not want to discover that your must-have-all-the-appliances kitchen is empty just because the seller “promised”, try not to neglect to get everything in writing. And if you do not want the seller to take those things you expected to be left, you should also pay attention to your purchase contract. Not only you should look through it, but you have to learn it very thoroughly. And if cannot find there the thing you expected to be at home you’re supposed to buy, add it to the list. Otherwise you’re risking to get home without window treatments, light fixtures, bath and shower appliances, ceiling fans, washers and dryers. So if you want to have these things left, negotiate with the seller and change some contract conditions if you both agree. Just make sure you know about the filling of your future property before you move into it.
9. Search for professional help
Even though unprecedented access to property for sale is often available, it does not matter that you cannot make the process of home searching even easier. Us the help of professional real estate agent and be sure that everything is under control. An exclusive realtor will sell his service for high price but you will be totally sure that he has your interests at heart. And also it will simplify the bidding process.
10. Buy house in an appropriate district
Searching for an area to live is almost as important as searching an apartment to buy. Learn if the transportation in the district is good for you and if the nearest places are available to get in the short time. Explore the district, it’s pros and cons, the climate, traditions and language level of population. Keep in mind that the area of the future purchase usually defines the price of your home. If you plan to live there with your children, check if the district is good in terms of education. And even if you do not have children, you’d better check it as well, because usually the good education is the top priority for those who are planning to buy a house, that’s why it boosts the value of the property.
11. Do not try to skip the inspection
Anyway your lender will require home appraisal. But this procedure is just for the bank to be sure that you are paying the right price and the home is worth this costs. But it’s preferably for you to hire own inspector, engineer, in the best case, to make home survey in the district you plan to live and to appraise the house you plan to live in. Using the services of home inspector will help you to avoid any future problems concerning repairs and something like that. And you both will point out the potential difficulties which may occur. Try to get as many recommendations from the realtor as you can. The inspection is worth every penny, so do not try to save money on your future comfort and prosperity.
12. Be careful while choosing between points and rate
When you pick up a mortgage, you have some options to choose from. You can pay additional points which is considered to be part of the closing interest. In this case you will get lower interest rate. If you plan to live in your future home for a long time (5-6 years) it’s better to take points, because the lower interest will help you to save more money.
13. Do not forget about appliances for your home
Brand-new home does not mean brand-new appliances for your home. Or it can be the other scenario. You can buy a new house with the new everything and after that realize that you are sitting in the ratty car which can hardly drive you this brand-new property. Or you can have the formal living room but no living furniture in it. And, for sure, it’s a mistake that you should renew everything or fill the house with a lot of furniture. Be sure that you will be able to keep up with the house till you’ll be deep in debts and credits. So firstly live in the new house for a while to realize what you really need and only after that buy these appliances.
14. Get pre-approved before looking for a house
If you want to prevent looking for a house which you cannot afford, get pre-approved. So you will be in a better position when it will be time to make a serious purchase offer. The cursory review of your current financial situation is only one step of this. Lender can provide you and it will be based on your salary, income, credit history and debts or its absence.
15. Before you bid do your homework
Before making your opening bid you should force yourself to make a huge job at home. It means that you should surf the Internet and the press with offers for sale and examine the rates in the region. In fact, after this job, your opening bid should be based on the comparison of the prices of homes in the district. Consider sales of the similar apartments in the last quarter. If the seller is asking you to pay 5% more the price the homes were sent for, you have the right to bid the price 8%-10% less than you were asked by the seller. In general, you should have the idea of how much you have to pay.
16. Decide what type of home suits your needs
When you are looking for a property for sale you will find the variety of homes to live in. Regard your needs and desires once more and review the pros and cons of living in different types of houses. You can choose from traditional single-family home, small studio apartment.
17. Walk away if you are not satisfied
Do not be afraid to walk away and look for the other homes for sale if you are not satisfied with the one you’ve found. Sometimes after the huge and long mess with buying home you got so tired and exhausted of it, that decide that this one is actually “yours” even if you have some problems with it and do not admire your new home. Or sometimes after the whole buying process you become emotionally tied to this building. So remember, that if your home do not meet your needs, there is always time for changing your decision. It’s better to spend more time for searching the right one rather to bear living in a house you do not like at all. One of the biggest problems of those who are buying house is emotional attachment. Home renovators and new house builders now this aspect of people’s mind. That’s why they ask you to customize the colors of the cabinet, choose the kitchen faucets and colors of the walls. Learn not to get attached to new house before all the documents are signed.
18.Negotiate till you get the best result
Try to know more about negotiation process before the buying process start. It’s beneficial for you to know what you can push for, how much you have to put down as a deposit. Besides the purchase price there are a lot of things to negotiate for. There are some furniture or other things which need fixing or replacement. Sometimes before buying property you should get the estimates from the repair companies to know the real price of it. Do not be afraid of telling your estate agent what exactly you need. That will help you both to make the home buying process more successful. Sometimes it’s searching process to be done before you buy a house. And even if the realtor is doing his job good, do not be afraid to say your opinion at any at any stage of the process. And make sure that you’re keeping the work of the realtor under control.
19. Less is more
The bigger family – the bigger house. On one hand, it’s obviously that it’s better to buy a bigger house when your family grows. But, of course, it depends on the person’s desires – for everybody a decent-sized place has different size. But, it goes without saying that buying a huge house for one person is not moneysaving. Of course, you can’t predict which house and how many rooms you will want in 3 or 5 years. But buying too much is now wise. Be happy with less and think over the issue of making some rooms multi-purposed. You can turn unfinished basement into the office, because there are some doubts if you will need 3 or 4 bedrooms at your disposal. As the saying goes, no matter how big the house is, you can sit only on one chair at the moment.
20. Make the right survey
There are 3 types of survey while buying real estate.
• Homebuyers report. It’s suitable for conventional property <50 years old.
• Full structural survey. It’s available for quirkier or older property. This survey is covering everything and is very detailed. They can cost a lot of money but usually it’s worth it. Moreover, this survey can give you some reasons to haggle down the price.
• Bank quick valuation report. Usually the report made by bank, not expensive but also not very trustworthy.
While looking for a surveyor, remember, that sometimes they are more willing to say verbally than in report, so do not hesitate to ask them.
21.Check out the neighborhood
Talking to the neighbors is useful not only for social reasons but also to get the full picture of what you are supposed to buy. Remember to ask the neighbors of the area, but not those who are next to your future doors. They will be honest about the area, the district and they are also less likely to get rid of the previous neighbors. Check how well maintained their house is, how much does it take them to get to different places of the area, which schools do their children attend. As far as they are your future neighbors, you will practice the same daily life as they do.
22.Look at the house for sale at different times of the day
Sometimes you can be charmed by the beauty of one place just because you looked at it only from one prospective, one time of a day or being in a very good mood. But then it turns out to be not so brilliant when you start living in that place and find all the “perfections” of it. To avoid being disappointed with a house, try to visit the landlord at different times of a day. Three is perfect. It will help you to get the idea what the apartment and neighborhood are look like.
23.Consider the opportunity to resale
Even when you think that you’ve found the property of your dream and plan to spend the rest of your life here, there is always an option to change the living property. And, of course, it can be the “right one” property for you, but not for your kids, for example. So to save your money till this time be sure that you considered ease of resale. If this property has been hanging around on the market for some time, try to discover why it had not been shifted. No place for parking? No schools nearby? No transport available? There should be some reasons for this property remaining unsold.
24.Ask the seller everything you consider to be appropriate
To make your life and the buying process easier, ask the previous owner all the essential questions. Remember that you have the right to do it till the owner will give you the key to the property. There are some obligatory top questions which should be asked:
• Where are the thermostat and the main stopcock?
• Who supplies the home phone, broadband and energy?
• Where did the bathroom and kitchen tiles come from?
• Where did fixed furniture come from?
• Does the seller have any manuals on electrical items?
• Where one can find the electricity and gas meters?
• Which special cleaning products are needed for any surfaces in the house?
Do not be afraid of keeping contact with the seller, because it would be useful in case you forgot to ask something very important and the landlord may owe this information.
25.And, in the end, remember, that you do not HAVE to buy a home
It does not matter how funny it may sound but still it’s true: you do not HAVE to buy a house. Nobody will push you to do this if you simply cannot find the best option. Some people always assume they would buy a house. But, in any case it’s better to take a deeper dive into the question whether buying or renting better. Concentrate whether buying is affordable and do not panic over property prices before you are sure that this decision is right and long-term. And there are also some “don’t” which may be useful for those who are planning to buy a house but have some doubts. Do not buy home if you are told that you are supposed to. Do not buy a house if you think that it can be good investment in the future. It’s not the only thing to invest your future. Do not buy property just to have space for hypothetical future (marriage, having kids etc) – let yourself do it when the time comes. Do not buy property just because your friends do the same (house on the nature for having rest, small studio for studying or working etc). Do not buy home just because others want you to do this. It should be your own decision and it’s only you who will be responsible for all the circumstances it will bring.
Of course, sometimes it’s tempting to buy the first brand-new nice-looking house and to think that you are on top of the world. But after making some tedious but always important research you can find yourself even higher then on the top – you can finally move in not only the acceptable ok-to-live in house, but into the home of your dream. Remember, that buying property is always very serious decision and brings a lot of challenges to deal with. Do it only if it makes sense financially and if you are ready to handle it.