Top 5 Home Buying Tips to Avoid Future Problems
Little steps go long way in securing your dream home.
One of the great American dreams is buying a home. A home where you and your family can live, create memories, and live happily ever after. But all is not sweet and roses in the real estate world. Every now and then people face issues which take their home away and break their dream. Some events are unforeseen, while many more can be avoided. Fortune favors the prepared.
So, we will quickly go through top 5 buying tips so that you can avoid known problems in future.
Buying home needs money, everyone knows this, but everyone is not always well prepared for this. This is one of those unfortunate things which can really be avoided if properly planned and executed.
One of the first steps is make sure you have very good Credit score. This will help you get mortgage loans easily and with low rates compared to those with low credit score. Building credit score takes time, so while you are at it, do 2 things: 1. Build an emergency fund and 2. Start saving for the down payment. If you can’t afford the down payment, either reduce the house price, or buy the house when you can afford the down payment. While there are ways to get loans with reduced down payment amount, make no mistake that first you will get a higher rate and second you will have to take extra coverage or insurance to make up for the missed down payment.
Also, remember that down payment and emergency funds are two separate things. Because you bought a new house, doesn’t mean suddenly you are granted immunity from all other life emergencies, we wish that would be the case, but life is stranger than fiction, and accidents happen more often than you think. So don’t out yourself or your family’s basic health and wealth by risk by using emergency fund for down payment.
This brings us to the next point which calculate How much house can you afford. This is an important step, and a wise man would never buy something he can’t afford. Generally, you shouldn’t cross 3 times your annual post tax income amount but check the affordability calculators available from your bank or other famous online sites.
So, once you have nailed your credit score, saved for down payment, you know how much house you can, the final logical step is to Get pre-approved. Never start the process of house bidding or approach a seller’s real estate agent without getting pre-approved because first they won’t be sure you can afford the house, and second they may not take you as seriously v/s someone who has got pre-approved already.
Carry out all necessary home inspections
This is an extremely important step. No matter how busy everyone is, no matter how rush there is, never ever buy a property without thoroughly getting it inspected by professionals. The money spent in such inspections are one of the best investments into the future of your home. This allows you to know everything is right and you are not walking into a trap. Some homeowners may offer their own pre-performed home inspections to speed up the process, well while you appreciate the gesture, nevertheless perform your own inspections. Remember, one rainy night at 4 am if the roof starts leaking, it will be you and your family trapped in a house where you can’t live unless the damage is fixed.
Also, when you book inspection meetings with professionals, please make sure you check what you are getting. Not everyone does everything. For example, pest inspection is different and won’t be done by someone who does structural inspection.
Another important part is to be physically present there when the inspections are happening, this gives you a good sense of the property and shows you what to look for and where.
Research the neighborhood
You and your family are going to live in your house day and night for years to come. Probably you are planning for child or already have children. Maybe you have pet. Maybe you don’t like loud neighborhoods or maybe the opposite. Whatever you and your family are, one of the most overlooked but top step to make sure you inspect the neighborhood thoroughly.
Drive around the area as many times you want and at different times of day and night. Check the school district and their rating if you have children. Check nearest amenities like grocery stores, gas stations, hospitals. Park your car nearby and see what goes on there, of course abiding by community laws and protocols. If possible, talk to neighbors. Visit the local parks, and other public areas to check out the local population. May be drive from the new neighborhood to the office during rush hours and find out you can handle it for real.
The point is, to get a feel of what it would be if you and your family is really living here.
Get a good real estate agent
Everything is online, you can go to those popular real estate sites and you would think you can make an offer to the owner and he will accept the offer and then you will buy and everything will be just fine. Well, we all can pray for that, the reality is, it won’t happen that way. First, there is just too much competition in the market, and you will never be able to math up with zillions of other buyer’s agents. Also, a real estate agent is a professional, and knows the industry and the loopholes and the traps. So, they can help you with insightful tips and save you from traps. It’s nice to have someone look after your back while you are busy searching about your dream home.
So, unless you are experienced in real estate transactions yourself, get a good experienced agent who will look after you and your interests.
The agent will also help in performing various tasks which otherwise will take a lot of time away from your schedule. Agents can also help you in referring to known local resources which in turn helps you in getting some discounts or peace of mind that the works are getting done by known professionals who have your interest in mind for once.
Everyone else out there is trying to sell, this one guy will be there to ask you not to buy a house if there are problems or if it doesn’t match your description.
Get good insurance
This is as important as health insurance. This is not talked about much, but this is reason for many well to do family’s complete wealth depletion. If something goes wrong, you don’t want to wind down with huge amount of money which now you have to pay from your income.
An insurance product, by design is there to save you from accidents and mistakes. Accidents happen, and human beings make mistakes. So, buy a good insurance and keep yourself and your house safe.
Buying a house can be a good or bad experience based on how well prepared you are. It can be good or bad decision based on how prepared you are. And a house is going to be your home based on how prepared and willing to prepare you are.