Purchasing a house is one of the biggest decisions that anyone can make. After all, how often do you plan on borrowing this magnitude of money in one fell swoop, let alone decide to spend tens and even hundreds of thousands of dollars in a single purchasing decision?
Fortunately, having past homeowner experience can make a huge difference in knowing what to look for, your likes and dislikes, and what you can afford. This can help you avoid mistakes and look for the best home to suit your needs.
If you’re a first time home buyer, though, the entire process can feel absolutely overwhelming.
If you’re somewhere in the process of preparing, searching for, or purchasing your first home, here are some of the primary things you’re going to want to keep in mind as you go along.
Work on Finances in Advance
Buying your first home doesn’t have to start a few weeks or months before you close and get the keys. It can begin years beforehand. In fact, you can begin budgeting and planning for your new home and how it will factor into your larger estate planning as early as high school.
Whether you’ve been saving for years or just now trying to gather up finances to make the leap into home ownership, though, you’re going to want to consider a few different financial items as you budget for your move and the new expenses that it will bring along with it:
- Start by creating a basic budget that considers all of your expenses and what is left over to put towards a mortgage.
- Remember all of the other expenses that come along with a house, such as utility bills, property taxes, and basic home maintenance costs (more on that last one further down).
- Do your market research in order to fully grasp what you should be able to get for your money — in other words, don’t assume that every house is priced accurately.
- Don’t forget to add in the costs of the move itself, too, including closing costs, moving expenses, new furniture, possible missed workdays, and anything else that may be a significant drain on your bank account.
If you do your financial homework before you start visiting homes, you’ll be able to make decisions with confidence. You’ll also be less likely to make a poor decision that costs you thousands of extra dollars over the course of a mortgage.
Categorize Wants Versus Needs
There’s no doubt that purchasing a home is an emotional experience — and that’s a good thing. However, when it comes to making important choices throughout the home buying process, don’t let emotions rule your decisions.
For instance, don’t let the presence of a jacuzzi on the back porch override the fact that the foundation of a home is crumbling. The hot tub may be nice, but it doesn’t make up for the headache and expense of fixing major architectural flaws.
It’s wise to create a “wants and needs” list before you begin visiting properties. This can help you categorize what you would like to have compared to what you absolutely need.
On the one hand, examples of wants could include a spacious yard, a front porch, or a large master bedroom. On the other hand, examples of needs could be a good school district, enough bedrooms for a future family, and, of course, a mortgage payment that can be easily made.
Finally, remember to keep home maintenance in mind. If you have to hire out every little home maintenance project, it can get very expensive very quickly. Make sure you’re aware of the work that must be put into a home on a regular basis, especially when it comes to things that are unique to a specific home.
A lake house, for instance, will likely require significant investments of time, money, and resources to maintain the exterior of the home and its landscaping. An unnecessarily large house will need to be regularly weatherproofed and cleaned. A big yard will still have to be mowed.
As you look at each house, consider what will need to be done regularly. Create lists for spring, summer, fall, and winter tasks that will have to be maintained each year. Consider how each job will vary with each location (e.g. a three-car garage may be nice, but it will require three times the effort to clean and maintain compared to a one-car garage). If you only have one or two cars, you may want to skip on the extra space.
Buying with Your Eyes Open
Whether you’re coming up with maintenance lists, budgeting out your expenses, conducting market research, or creating wants and needs comparisons, all of the above suggestions revolve around one crucial element: going into the home buying experience with both eyes open.
And that’s the key to it all. Regardless of your particular financial or geographical situation, if you pursue buying a house in an informed and calculated manner, you’re much more likely to come out of the other end of the experience with a home that genuinely fits your needs — rather than simply ending up with the first house that you saw with a nice backyard or a cute fireplace.