Understanding the Basics
For the vast majority of Americans, homeownership is both the realization of a dream and the path to financial well-being. We hope that understanding the basics will give you the chance to say “happy is the place you call home”.
That said, it can sometimes feel like a precarious, stressful and crazy-making process to get there. Here’s our guide to understanding the basics.
There are many factors to consider when embarking on a new home search. We’ll cover the basics, especially as they relate to our most recent market experiences. Ultimately, the goal is to achieve happiness in your home purchase. The road to that happiness can be an uphill climb. Here, we review the primary considerations for a home buyer who wants to break it down to understandable components. The most important aspects a home buyer must consider are price and affordability, location, size, amenities, condition, and resale.
UNDERSTANDING THE BASICS OF AFFORDABILITY
A smart buyer needs to assess their financial capabilities both current and future.
Knowing where you are on the career path may help forecast your future income.
A younger person entering their prime earning years likely can “stretch” to reach the maximum end of their spending range. Someone who is anticipating retirement may want to limit expenses, even if they can afford them now, because of an anticipated decrease in income. Your financial advisor can be a key partner in this process.
A loan officer can also help you determine what price points may be open to you. Assuming you will be getting a mortgage, you will need to get pre-approved – possibly even submit your application pending property identification – to ensure you are prepared to quickly act once you have found a property for which you would like to submit an offer.
UNDERSTANDING THE BASICS OF LOCATION
UNDERSTANDING THE BASICS OF If you are interested in staying local, you may have a clear sense of what town or neighborhood you would prefer to search.
If you are moving to a new area, this can be more challenging. A strong local real estate agent can be immensely helpful here as they will know the relative merits of each town or neighborhood including school choice, recreational options, shopping, dining, community lifestyle and more. They can also advise regarding property tax comparisons and other considerations.
If you are not committed to a specific town because of school district or other considerations, you may find that you can get a lot more for your money in nearby towns and neighborhoods. Likewise, you may be able to buy in the neighborhood you desire but choose a less favorable location within it such as a busier road, a property that backs up to commercial property, school or cemetery.
UNDERSTANDING THE BASICS OF SIZE
UNDERSTANDING THE BASICS OF The size of your prospective home usually reflects a combination of wants and needs such as the number of bedrooms required given the number of members of your household.
It can also be a function of how many members work remotely from home and need a private workspace. And then of course, there are things like basements which may potentially provide more space for all of the above. It is important for you to determine which are must haves vs. optional and to communicate this to your agent.
UNDERSTANDING THE BASICS OF AMENITIES
Amenities is a pretty broad category and can include things like a fenced yard and pool, an oversized garage, a fireplace or outdoor kitchen.
They are largely lifestyle choices and, once again, may be a “must have” or simply a preference. Communicate these to your agent, as well, and prioritize which are most important.
UNDERSTANDING THE BASICS OF CONDITION
UNDERSTANDING THE BASICS OF It likely goes without saying that most people would prefer a home that is “move in ready”, requiring no renovation.
But some buyers prefer to have a project, or at least an opportunity to “make their own mark”.
This can be a true advantage for the buyer who is willing to take on a house that needs work or an older home, even if it has already been updated. We love old houses. Frankly, they’re usually built better with higher quality materials and with a higher level of finish. If this resonates with you, this may provide you with greater negotiating power as you’ll have less competition.]
UNDERSTANDING THE BASICS OF RESALE
First and foremost, we remind our clients to make a choice for their enjoyment, perhaps a home to raise your family, the best place where your life may be lived out.
Secondarily, it is a financial investment. There is no guarantee of value appreciation, especially in the short term. As such, resale should never be your primary focus but you still may want to consider all of the above factors from a resale perspective when buying a home. Basically, accept the fact that concerns which may have lessened the value at the time of your purchase may very well still be a factor at the time of resale. Sometimes school districts improve greatly, traffic gets rerouted, or the surrounding neighborhood improves significantly – these may eliminate or minimize previous resale considerations.
There are many other factors that a smart buyer is aware of – the sales process, the inspection period, the mortgage application and approval, and ultimately, the closing – and we’re glad to educate you and answer any questions you may have but we hope understanding the basics will help you to be a more informed and educated buyer. Happy house hunting! Search for new homes and learn “How to be a Smart Buyer in any Market” at our website.
HOW TO GET YOUR OFFER ACCEPTED WHEN YOU’VE REACHED THE TOP OF YOUR BUDGET
There are factors other than your offering price that can lead to your contract getting accepted. Check out the strategies which our top agents employ to make sure their client’s offer is the one that gets signed by the seller.
HOW TO KNOW IF YOU ARE OVERPAYING
HOW TO KNOW IF YOU ARE OVERPAYINGIt can be easy to get caught in the frenzy of a hot market. Is there a point where you should withdraw from the negotiation (even when you can afford to go higher)? Here are our tips for maintaining clarity regarding value with our top rules on how NOT to value a home.