Buying a home is one of the Best and Biggest Investments a person can make. Between the mortgage and property taxes, the immediate upgrades you make and the long-term maintenance costs of home ownership, there’s a lot to consider before you sign your life away.
Whether you’re looking to buy a primary residence or a rental, it’s important to determine not only if the property you want is a smart investment, but if the purchase is even the right decision for you at this time. Here are 12 Questions to ask yourself.
1. Am I Financially Ready To Buy?
The most important question any home buyer should ask themselves must be whether they are financially ready to buy a home.
This makes us look at our spending and financial habits.
Take a Sheet of Paper and Write ALL your Income on one side and ALL your Expenses on One Side.
Figure out what is a need and a want.
Then see what the final total amount you have at the end of the month.
Will that final number be enough to cover that mortgage payment each month, while still living a social life, family time, travel or hobby time.
You Don’t want to live everyday as a struggle. Life is too short so make sure everything is in order before you take this big leap.
2. Is It Better For Me To Rent Instead?
Purchasing a home isn’t always the best financial decision.
When deciding whether to buy, I’d recommend taking into account the price of rent, how long you plan on living in the residence and whether the sales market is overvalued.
Write a Plan of action. What are your goals and plans for the future?
If its short term, Rent might be a wise decision unless your Realtor can find you a Great Value Property that has a chance for some short term equity, it might not be bad to buy either in that case.
But definitely have a clear mind that you are buying an investment at that point and not a home.
3. Do I Know My Options For Mortgage Products?
Most buyers are only focused on the lowest interest rate.
There are differences in mortgage products that can have major financial implications.
A mortgage broker can qualify you for more, get you a lower interest rate, waive discharge penalties and provide you with answers to questions you don’t even know to ask.
It’s Always better to Ask a Question than to never asked at all.
We all start somewhere, so find a Bank, Lender, Broker who you can trust to go over some ideas and plans that you feel comfortable speaking with.
While also making sure you completely understand what you are getting yourself into before you sign that dotted line.
Most Bankers are there to help and guide you to a be a Successful Homeowner, so don’t be afraid to shop around other banks if you don’t feel comfortable.
4. Are The ‘Guts’ Of The House Good?
You never want to purchase a home based solely on the flooring, granite color, cabinets and other cosmetic options.
Instead focus more on layout, structure, green capabilities, undercarriage, foundation, craftsmanship, location and, most importantly, neighbors homes!
Also understand that most transaction will allow you to have a professional home inspection on your home to find any damages to your future investment.
It an upfront cost but well worth the price if you have a Great Inspector who helps you learn about what to look out for in your Next Home.
5. Do I Have The Resources To Bring The House To My Satisfaction?
Consider the condition of the home and if you have the resources, meaning money, to bring it up to your satisfaction.
If the answer is no, purchase a newer home needing less updating.
This may mean considering a New Construction Home for less work or a Resale Established home with great history of a strong foundation with some minor work to bring up to a more modern taste.
6. Am I Making A Decision Based On Emotions?
Too many people let their emotions run their lives.
When buying a home, don’t get attached to the way the home looks as much as whether it is structurally sound and in a location that will not only best suit your needs, but also will be attractive to a buyer when you sell.
Also, from an investment standpoint, what would a home in that neighborhood rent for? Don’t overpay; think like an investor.
7. Do I Truly Understand My Wants Versus Needs?
Sometimes buyers get in mind that a wants/needs list that is heavier on the “needs” side.
Identifying those things that have flexibility will help with a home search.
There is never going to be a completely perfect home, even if buyers custom-build the home from scratch.
It is important for your agent to review with you those things that are truly must-haves
8. Does it meet the 85% rule?
If you’re not building a completely custom dream home, use the 85% rule: 85% of the home you love, 10% you can change over time and 5% you can’t do anything about but you can live with it.
9. Does The Home And Its Location Offer Long-Term Resale Value?
Buying a home will likely be the biggest financial commitment of your life.
It’s important to be sure that you’re thinking of the long-term implications of your purchase.
Does the location suit your needs?
Is there resale value in the community via factors like good school districts and easy access to freeways?
These factors will be more important in the long-term than anything else.
10. Will I Be Able To Sell This Home At All?
Buyers have to be aware of the home’s ability to be resold.
Poor location, road noise, neighborhood nuisances and other factors greatly reduce the desirability of a property and will make it harder to sell.
While it may be tempting to buy a lower priced home that is discounted for these reasons, the same will be true when choosing to sell it.
11. Do I Trust The People I’m Working With?
There are myriad reasons why you should purchase a home but in the end, the most important factor comes down to trust.
Buying a home is a big deal and making sure you find the house of your dreams is not an easy feat.
On the flip side, a real estate agent’s obligation is to help their customer find the perfect home.
If you can’t trust your agent, they aren’t doing their job right.
12. Do I Have A Clearly Defined End-Goal With My Purchase?
Everyone is different. What works for a friend, family member or colleague may not work for you.
Have a defined goal, and if you don’t or can’t articulate that clearly, make sure you’re working with a lender and realtor who can help you do so.
You’ll be better off in the long run if you prioritize your needs so you know exactly what you’re looking for.
Thanks so much for Reading my Blog on 12 First Time Home Buyers Questions To Ask Yourself.
Please don’t hesitate to contact me with any questions. Thanks You! See you in my Next Blog!