Homeownership and the pursuit of the American Dream is an integral piece of our history, livelihood and stability. Whether you are in the market for a place to enjoy your golden years, in pursuit of your first home or looking for your tropical getaway, here are some things for homebuyers to consider along that journey.
Here are 12 things that every new, retiring and second homebuyer should know:
1. Create a plan
Take a look at your lifestyle, finances and activities. What’s most important to you? Do you have kids and want to be near good schools?
Is a 55-and-up golf club resort community appealing? Looking to have a boat in your backyard in the Florida Keys?
Take some time to chart out, create lists and talk extensively with your significant other about why you are entering the real estate market. Then, look five years down the road — what does that look like?
Things will change, obviously, but at least at this moment, you are considering the big picture, and this exercise will go a long way to empower you.
2. Hire a professional
Even if you have bought and sold several homes throughout your lifetime, you will need an experienced real estate agent to guide you through the process, legalese and updated market information.
Talk to your friends and family, and get referrals. Open houses are also a great place to meet prospective agents. Then, conduct interviews with the agents, and see which one is the best fit for you based on your criteria and personality. You are in the driver’s seat, and your agent is there to navigate every step of the way.
3. Don’t forget: real estate is an investment
The process of buying a new home can be very emotional, and it’s easy to get caught up in the shiny new object effect, but in the long run, you must be logical in your purchase.
Make a list of what you want, need and are willing to compromise. Think about resale, local market statistics and sales history. How long will you live there? Is it the nicest house on the block, or are you getting a deal because you are willing to do some remodeling? Remember that this purchase is an investment in your future.
4. Obtain loan approval
Ask your real estate agent who he or she recommend for the loan process. Then take some time and meet with at least three people to make sure you feel confident in the loan programs being offered.
How much down will you need? What is the interest rate? There’s a lot that goes into this piece of the puzzle — so buckle down, and get approved.
This step will help you understand how much home you can truly afford, and it will help clarify your financial standing. Don’t be afraid to consult your financial adviser and certified public accountant as well. They will be able to shed some light on the financial aspects of obtaining a loan.
5. Look at the tax benefits
There are certain write-offs that you are entitled to when you own a home. Real estate property taxes, mortgage interest, discount points and mortgage insurance are all examples of what you migt be able to write-off on a yearly basis.
6. Think location, location, location
This is where the fun begins. What are your favorite neighborhoods, and why do you want to live there? Where do you work, and do you need to be near the office?
What amenities are important to you? Would you like to be near flat walking trails, Starbucks and a dog park? Or is being on a secluded five acres with horses more your style?
If you are moving to a new city where you haven’t lived before, be thorough in your research. It might be perfect weather in November, but what happens in July when it’s 110 degrees?
Also, be sure to find out what new businesses are coming to that area, which ones are leaving and what kind of new construction is planned. Check with the chamber of commerce and the city building department to get a pulse on activity.
7. Research the internet
There’s a ton of information on the internet, and it’s a great place to get a fresh perspective on all things real estate related. Look up real estate related terms, peruse various real estate websites, and ask your agent for recommendations on his or her favorite sites.
Make notes on things you come across that you don’t understand, and talk to your agent about it.
8. Explore lots of homes
Drive by homes that interest you, attend open houses, and go home shopping with your agent. Touring homes is an excellent way to become educated in a particular market as well as experience what’s available in your price range.
Take notes on properties you like, or rate them on a scale of 1-10. If you find your perfect match after seeing five houses, congratulations. But if it takes some time, that’s OK.
Please keep in mind that if you enter a house and you know you won’t buy it — leave. You do not need to spend 30 minutes walking through it with a critique for each room.
Sometimes this can be helpful in the process of elimination, of course, but keep in mind that time is valuable. If you are focusing on a property that won’t work, you might be missing your chance at a house that will.
9. Look past the staging and fancy furniture
Focus on the floor plan, condition, location and how you will live in the house. Picture yourself living there on a daily basis.
Is the yard big enough? Master suite on the main floor? Check out the neighbors too. If you are getting serious about a particular property, walk around the neighborhood, and go back at a different time of day.
I have known buyers to knock on the neighbors doors to say hello and introduce themselves. Take measurements, sit on the couch and listen, open all the closets, etc. If there is a view, is it protected?
10. Understand contracts
Contracts exist to make sure everyone is on the same page. Your agent will utilize expert negotiating skills to obtain the best price and terms for you. Make sure you understand everything in the contract. Review it, and ask questions before signing it.
11. Do your due diligence
Time is of the essence, and you want to make sure that you have the opportunity to research all aspects of the home that are important to you. As a homebuyer, you will need to do a thorough amount of research on the house you are in contract to purchase.
Get an inspection, period. Hire a professional. If there’s a well or septic system, inspect that too. Recent remodel? Check the permits. Read through the homeowner’s association rules, know the additional fees, etc.
12. Trust your instincts
After all the research, articles and lists of what to do and what not to do — remember to rely on your gut. If something does seem right, look into it.
If you need extra time with something make sure you get it. Real estate purchases are usually the biggest expenditures we make, and you will always be the best advocate for what is right for you.
Buying a home is a sophisticated journey, and you are not expected to know everything. Do your research, ask lots of questions, be prepared and enjoy the process. If you take your time and have a trusted real estate agent on your side the experience will be enjoyable.