If you’ve been paying attention to the real estate market right now, you probably know that it’s a sellers market right now. There’s more buyers out there than sellers, which means as a home buyer, you’re approaching some heavy competition for the homes you view. That means as you approach the market, you need to be sure of what you’re looking for so you don’t miss out on a home you love in this competition.
Whether you’re a first time home buyer, or a long-term homeowner looking to upgrade to something new, there are things you should consider as you approach the market.
Consider what you can afford
Before you even start looking at homes, it’s very important to have a budget planned out. Making such a large purchase as a home will have a huge impact on your finances. Upfront you’ll have a lot of big payments: your down payment, the closing costs, and moving expenses. You need to make sure before you find your home that you have a comfortable nest egg of savings so that you can make those payments.
After the initial payments are made, you also need to consider what your mortgage payments will be, and whether those will be able to fit within your lifestyle. Don’t leave yourself strapped for cash every month – take time to consider what you’re buying and if it’s something you can afford on a month-to-month basis.
You also need to consider what the unseen costs of your home will be. If some rooms need facelifts or renovations, the price of your home in the long run is much higher than you think. Before you approach the real estate market, make sure you have an idea of a five year budget plan, for your upfront costs, mortgage, and any other costs you might have associated with your new home.
Consider getting pre-approved
While you’re getting your budget together, consider what your mortgageability is. Get your finances in order, and think about your credit score and income. Consider what you’ll be looking at for a mortgage and what you’ll be approved for.
If you can, go to the bank and see about getting pre-approved for a mortgage. This will make looking at your budget and deciding what you can afford that much easier. This way you can approach the real estate market with ease, and not have to worry about falling in love with a house and having the mortgage fall through and realizing you can’t afford your dream home.
Consider how long you plan on living there
Before you approach the market, know what you’re looking to buy. Will this be your first starter home? Or, are you looking to upgrade to a better home that you’ll live in for the rest of your life? Or, maybe somewhere in between.
Finance experts will tell you that before you leave a home you should own it for at least five years in order to build equity and recoup from the expenses of buying the home. If you are looking to browse the market and find your first starter home, make sure you’re prepared to stay there for five years. Consider looking for something smaller, to break into the market, and grow your equity from there in order to upgrade your home in five years times.
If you’re looking for a home to settle down in, think about how many people are (or will be) in the home. If you’re on your own, think about if there’s room if you meet someone and move in together. If you’re a young couple, and you think the near future might include children or even just pets, ensure there’s enough room in the home you buy. Before you approach the market: know what you need now, but also know what you will need in the near future, too.
Consider where you want to live
The neighbourhood your home is in is almost as important as the home itself. Do some research into the areas of which cities you’d like to live in, and find homes that fit with what you want. If you happen to be starting a family, for example, you might want to look for a home in a good school district and near a good school.
Keep these things in mind when you look for houses. Your intentions with the house also matter in this decision. If you’re planning on settling into a house and living there for years to come, the location of the house might not matter beyond where you want to live. If you’re looking to buy a starter home, however, and you want to sell and buy a better home in a few years time you need to consider which areas will see growth so that your property value goes up – this way you’ll make more money on your home when you sell.
Consider a Better Homes realtor
Don’t approach the real estate market alone. Find yourself a realtor who has the experience you need to help you find exactly what you’re looking for. Get someone who you get along with and who can offer you the better experience for finding a home – they should listen to what you want, and know exactly where to direct you to look and find something right for you.