We all see the photos on social media - our friends purchasing homes. Everyone is smiling, bottles of champagne are being held, keys proudly displayed. It looks like the American dream, right? Would it surprise you to learn that 51% of homeowners regretted something about their home purchase? If you are thinking about purchasing a home in the near future, here are some ways to claim a spot among the other happily content 49%.
How many beds and baths a home has is far from the only criteria to consider when looking for a home. There is a big difference between a 1,200 square foot 3/2 home versus a 3/2 that’s 2,200 sq. ft. in the practical livability for your family. 33% of surveyed homeowners reported regretting not buying a bigger home. This doesn’t mean that the home wasn’t the correct size for the family initially. Starting a home-based business, the addition of a child or two, or an aging parent joining the home can overturn the best-laid plans. When our Team conducts a buyer consult, we always ask what the short- and long-term plans are for that specific home. Do you plan on staying in this home 1-5 years? 5 years plus? Or will this be your FOREVER home? Based on the answer to this question, we strive to design an aggressive home-buying plan. If you think that larger square footage may be necessary in the future, our best advice would be to purchase a home where there is room and/or land to expand accordingly.
Once you've decided on the size and plan for your new home, the next most important question to ask is “where do we want to live?” Do you want to live close to family, or as far away as possible to avoid the “casual” pop-ins? Is there a certain school district that’s important for you and your family to remain in? What about proximity to work; what length commute are you comfortable committing to daily? The only thing you can’t change about a home (in nearly all cases) is LOCATION. It’s crucially important to drive the streets of a potential neighborhood, both at peak and off-hours, to determine the traffic and navigability. Also, walk around and speak to some people in the neighborhood about whether they enjoy living there as well or not. Asking questions like “how long have you lived here?” can provide great insight into a neighborhood’s turn-over. And nothing will make a house feel like a home more than a “homey-neighborhood vibe”.
Another important piece of the “Purchase Puzzle” is selecting a lender. Any professional Realtor will be quick to explain that not all lenders are created equal. Not by a long shot. Each lender and lending company will have different programs that may or may not suit your buying needs and the most important factors for you and your family. Is having the lowest interest rate to help keep your monthly payments as low as possible the most important? Or is paying less money out-of-pocket at closing to prepare for repairs and/or renovations a higher priority? A large portion of first-time homebuyers don’t know or didn’t know when purchasing their home, that you can and should shop lenders' rates and programs. Some lenders can provide programs that provide 100% financing, while others may offer Closing Cost contributions. The key is to do your research and contact as many lenders as necessary to find the appropriate fit for YOU.
Once you have selected a lender that best suits your particular needs, it’s imperative to determine your pre-approval amount. The lender, unless told differently, will review your credit and debt-to-income ratio to come up with an amount they believe you can afford. However, another way to determine your pre-approval target amount is to speak with your lender about the monthly payment you feel comfortable committing to. Review your budget! Just because you can spend more, doesn’t necessarily mean you need to! Even if you can qualify without difficulty for a $2,000 monthly payment, you may feel more comfortable in the $1,500 range. When you let your lender know that crucial info, he/she can back into that monthly payment amount and tell you a price-point to stay within to remain on target. Having a clear price-point in mind will allow you to move into the “search” stage of your house hunt confident that you won’t be looking at homes outside of your comfort zone.
As always, it’s even more clear that hiring a professional Realtor to help assist you with your home buying needs is the smartest and most efficient route to make owning your new home a reality!