Updated: Feb 2, 2019
By Laura James, Fairmont Agency
So you want to buy a house? You may have even found a house that makes your heart skip a beat. Or maybe your apartment is currently stretched to its limits. Or maybe its time to relocate to a new city. Whatever the reason buying a house is a BIG DECISION and involves forking over a LARGE SUM OF MONEY. Here are twelve question to making sure you are on the right track.
1. Am I Financially Ready To Buy?
The first, and arguably most important, question any home buyer should ask themselves must be whether they are financially ready to buy a home. This question makes us deep dive and look at our spending, saving and financial habits.
2. Is It Better For Me To Rent Instead?
Purchasing a home isn't always the best financial decision for you at a particular time. When deciding whether to buy consider whether it is smarter for you than renting. Remember just because you want a nice house, does not mean you have to buy it!! Compare the cost of renting and the price of buying by taking into account the price of rentals in your area, how long you plan on living in the residence and whether the sales market is overvalued. In some cities, calculations actually skew toward renting being cheaper.
3. Do I Know My Options for Mortgage Products?
Many home buyers are laser focused on finding the lowest interest rate. While, a lower interest rate can save you some coin, there are difference in mortgage products that can have major financial implications. A mortgage broker can qualify you for more, get you a lower interest rate, waive discharge penalties and provide you with answers to questions you don't even know to ask. (BTW if you don't already know, we have a pretty amazing partner, Fairmont Financial who is a great resource for ALL of this information.
4. Are the "Bones" and "Guts" of the House Healthy?
We all LOVE a beautiful home, one that has all the great upgrades, bells and whistles, designer touches, etc. However, NEVER EVER purchase a home based solely on the flooring, granite color, cabinets, appliances or any other cosmetic options. Instead focus (I know its hard) on the home's layout, structure, foundation, craftsmanship, location and condition of all the working parts. It is a WHOLE LOT cheaper to make cosmetic upgrades to a home than to deal with foundation issues, or updating plumbing or wiring, or dealing with a home layout that just does not work for you.
5. Do I Have The Resources To Bring The House to My Satisfaction?
Okay, so most houses are not 100% move in perfect for you. When considering houses, look at your budget make sure you have the money to bring it up to your satisfaction. If you do not have a lot leftover for updating, consider houses which you are comfortable living with until you can afford to upgrade.
6. Am I Making A Decision Based Upon Emotions?
Too many of us (yes, me too!!) make decisions based upon emotions. When buying a home, don't get too attached to the way the home looks, focus on whether the home is structurally sound, in a good location, will be attractive to a buyer when you sell, good for you budget, has rental potential should you need to rent it in the future, etc. While there is undoubtedly an emotional component of purchasing a home, think like an investor and make smart decisions.
7. Do I Truly Understand My Wants Versus Needs?
Make a list. Yes, make a list. Then scrutinize you "needs" and ask yourself, "is this REALLY a NEED or a WANT?" When you have flexibility in what you want, your home search will so much easier. But stick to your needs, there is no point to getting the great house that just does not have the bathroom you need.
8. Does it Meet the 85% Rule?
What is this 85% rule you speak of Laura?? Don't worry I got you!!
THE 85% RULE
- 85% of the Home you LOVE
- 10% of the Home you can Change Over Time
- 5% of the Home you can't do anything about but you can live with it.
9. Does The Home and Its Location Offer Long-Term Resale Value?
Buying a home will likely be the biggest financial commitment of your life. It's important to be sure that you consider the long-term implications of your purchase. Is there resale value in the community via factors like good school districts, easy access to freeways and shopping, and safety. Also consider the nuances of the home, poor location, road noise, neighborhood nuisances and other factors that may reduce the desirability of and make it harder to sell.
10. Do I Trust The People I Am Working With?
Buying a home is big deal and can come with a ton of stress, do not add a difficult or questionable realtor add to that. Your real estate agent should make you feel 100% comfortable and should make the process simple, easy to understand, and hopefully a little FUN!