Whether you are buying your first home or your last home, there are several things you will do right and some things that you may get wrong. One of our jobs is to help minimize the things that you may get wrong. Here are some tips for making sure the next home you buy is a sound investment for you and your family.
1: Don’t buy the most expensive house in the neighborhood
We are all drawn to the biggest, most beautiful house in the neighborhood. But bigger is usually not better when it comes to houses. We suggest that you don’t buy the biggest, best house in the area. Your home is only going to go up in value as much as the other houses around you. If you pay $750,000 for a home and your neighbors pay $350,000 to $500,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the best house.
2: Don’t buy a home without a home inspection
Would you buy a used car without checking under the hood? Even if you are one of the few that would, don’t buy your house that way. Hire a home inspector. It’ll cost a few hundred dollars but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can decide whether to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you must spend a fortune.
3: Don’t buy a home without understanding all homeownership costs
The difference between renting and home ownership is a bunch of expenses you aren’t used to paying as a renter. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and home improvements. Make sure you budget for these expenses, so you’ll be covered and won’t risk losing your house.
4: Don’t try to time the market before buying a home
Don’t obsess with trying to time the market and figure out the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find a house you like and can afford. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
5: Don’t buy a home based on your emotional reaction
Buying a house based on emotions is going to break your heart. If you fall in love with something, you might end up making a bad financial decision. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and make wise decisions.