7 Things You Should Do Before Buying a House
You are looking to buy your first property or maybe a second investment property. There are a few things to consider before you even start viewing. These seven tips when buying a house will help you prepare before you even start looking for a property.
Determine Insurance Requirements
Many properties may require specific insurance to be taken out against the property. Depending on where you live, this can be a simple building insurance cover, or you may need more specialized insurance. Perhaps insurance which covers damage that arises from flooding, earthquakes, hurricanes, and tornadoes. It is always beneficial to make sure these types of coverage are even needed. Some times they are not.
Create a Detailed Realistic Monthly Budget
There are many mortgage calculators which will help you determine the maximum loan amount you may qualify for. Many of these calculators do not take in detailed monthly expenditures but are a great starting point for figuring out what you can afford. Homeownership comes with additional expenses such as property tax, maintenance, building insurance, and life insurance (or assurance against the loan amount). Add these to your budget to determine how much you can afford every month.
Create a Detailed Realistic “Buying” Budget
Buying a property is a costly affair. After you have saved for your deposit, you may feel it’s as easy as signing the purchase contract and moving in. However, there are many additional costs associated with buying a property that needs to be paid upfront. These costs include inspection fees, legal fees, home loan application fees, home loan initiation fees, insurances (home and life), homeowners association fees or levies, moving costs, utility connection fees and deposits.
Create a Renovation Budget
Everyone wants to put their personal stamp on their property when buying a house. Whether this means upgrading a kitchen or simply applying a fresh coat of paint, the costs for renovations can easily and quickly add up.
This is especially handy when you are looking at houses or properties that are close to your budget but need to have work done at some point in time to either modernize or make the property work for you. Knowing how much a renovation will cost upfront is a great way to gauge if you can afford the property and if the renovation you have in mind will add value to the property.
If you are looking at a property that needs a significant amount of work, ask your real estate agent what they would put the value of the property at with a complete makeover to determine if the asking price plus renovation cost will result in an investment or a money pit.
Have a List of Needs and Wants
Sit down and make a list of needs and wants out of the property. This is especially important if you are buying a property with a partner. Lay out all the immediate needs and potential future needs (trying to look 50 to 10 years into the future). Then add to the list the nice-to-haves, such as an outdoor kitchen or swimming pool.
Now compare your needs and wants to what is available within your budget range. Your needs and wants may need to be adjusted according to what is available in your budget range.
Research the Neighborhoods you want to Buy Property in
You will probably have an idea of where you would like to buy a property. This may be narrowed down to one particular neighborhood or a few. Find out as much information about these areas as possible, from public transport systems, school districts, amenities available, and any potential developments.
When buying a house, also pay attention to which houses have been selling the quickest, and for what price range. You want to have a house that sits in sweet zone of having the needs that a potential buyer may be interested in (a house is not just a home, but an investment as well), within the price bracket that fits most people’s pockets. Having the most expensive house in the neighborhood may give you bragging rights, but it won’t sell any faster than the competition available.
Line up a Building Inspector
Once you have found a property you are interested in, have it inspected by a building inspector. Their job is to point out all the issues wrong with the house, such as issues with plumbing, electrics, the foundation, water, or pest damage.
Before you buy a property, set up your budget, and conduct some in-depth research into what you want and where you want to buy. This will help you plan financially to get the most out of your home and your investment.
Buying a house? Do you need help in conducting some in-depth research? Let the experts at Midtown Direct Homes help you. We are committed to making the home buying experience for all of our clients fun, exciting and totally stress-free. See the homes we have for sale and let us do a home search just for you. Get in touch to see what we can do for you.