Jess’s top 10 tips for finding the perfect home:
1. Figure out what your ‘perfect home’ looks like on paper.
Write down on a piece of paper all of the “must-haves” for your new home, the things that “would be nice” to have and things that “you don’t need”.
2. Get Pre-Approved for Your Home Loan.
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
3. Bigger isn’t always better.
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. While we all dream of having a huge mansion, it’s good to think about what will be best for you and your family. Figure out how many rooms you need to fit your family comfortably and look in that range.
There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, 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 biggest house.
4. Avoid Sleeper Costs.
The difference between renting and homeownership is the sleeper costs. 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 potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house.
5. Think about remodeling.
Many homes you will look at may not be in the best condition but think about the potential of the house. Would painting and new wood floors turn it into your dream house? How about a kitchen or bathroom remodel? There are many easy fix-ups such as adding new light fixtures and painting that can turn your house into the perfect home.
6. Location is important.
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus a bad school district even in the same town, the value can be affected as much as 20 percent. Even if you don’t have children buying in a good school district can be beneficial for resale.
7. The opening bid is important.
Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood and you want to get an average price per square foot. Sizing up a house on a price-per-square-foot basis is a great equalizer. Also, see if the neighbors have plans to put up a new addition or a basketball court or tennis court, something that might detract from the property’s value down the road.
Today, so many sellers are behind in their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office.
Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you’ve given the offer careful thought.
8. Do a home inspection.
The home inspector will look at everything in a home and give you a non-bias opinion. They will also give you an idea of how much any repairs for defects would cost to mitigate. I tell my buyers to always follow the home inspector during their inspections. It’s better to spend a couple of hundred dollars doing a home inspection then finding out the house had several problems.
FYI: During the inspection period of your home purchase, you can terminate the contract and get your earnest money back if the inspection finds anything your not comfortable with.
9. Picture your family living in the house.
When you walk into the home, can you picture your family living there? Does it have a good feeling? Picture your family living in each room and see how you feel. Where would the TV or couch be located? Does the kitchen work for you?
10. Don’t put your expectations too high.
Realize that most houses aren’t perfect, to begin with. Even if you are building your dream home, there are always things that could have been different. Be flexible. Once you move in and add your own style it will soon become your dream home.
Please send me your comments and questions. Happy house hunting!