Buying a home can be exciting, and with the quick pace of the market today, it’s easy to get caught up in the moment. The competitive real estate market can lead people to make home offers before they’ve done their due diligence. The result can be buying a home that doesn’t really fit their needs or wants, or worse costs more than they planned on spending.
There’s a lot that goes into buying a home, but the most important step is planning. A home is a significant financial investment that extends far beyond the mortgage payment. Here are five things to avoid so that your home-buying experience is more enjoyable.
1. Acting on Impulse
It’s easy to get caught up in the moment – especially in today’s hot real estate market. When homes are only on the market for a short time, and there are multiple bidders on a property, it’s easy to become distracted. The result can be buying a home that doesn’t suit your wants or needs.
Start your home-buying process by securing financing. When you become pre-approved, you’ll know your maximum budget – this helps with bidding and prevents you from overspending. Then make a list of your must-haves and like-to-haves. Do research ahead of time on location and everything else to narrow down your search. When your ideal home goes on the market, you’ll be better prepared to make an offer.
2. Buying Too Much Home
Just because you can afford a larger home doesn’t necessarily mean it’s the right financial move. In addition to the higher price tag, bigger homes cost more to insure, the property taxes are higher, and utility bills will be more expensive. They also require more time to clean and lead to higher maintenance costs.
When buying a home, make sure the property matches your current and future needs. If you’re planning to start a family or your family is growing, a larger home might be exactly what you need. But you might also consider a smaller home and use the savings to build your retirement fund or take family vacations throughout the year. Buying under budget also means you have more flexibility to upgrade the house as you see fit.
3. Underestimating Repairs or Upgrades
When buying an older home or even a fixer-upper, it’s easy to underestimate the costs of repairs and upgrades. If you ever watched an HGTV show, you know some other repair is always lurking behind the walls.
When making an offer on a home you know needs repairs, it’s always wise to hire a contractor to get a quote on the work required. Even if you plan on doing many of the repairs yourself, their quote is a good benchmark for estimating the costs. The last thing you want to do is buy a home and find the repairs are out of your budget.
4. Forgetting Maintenance Costs
If you’re transitioning from an apartment, many maintenance costs might be new to you, such as lawn care and maintaining your appliances. Before you switch from renter to homeowner, make sure you budget for these items. Stop by your local hardware store to estimate the costs of a lawnmower and yard equipment, or search online for the price of hiring a lawn care service.
5. Misjudging the Importance of Location
When buying a home in a hot real estate market, buyers often select homes based on availability. Not sticking to their ideal location is a decision that many homeowners regret. Where you live can have a tremendous impact on your daily life and your financial goals.
For example, you may choose to live in a specific area because you want your children to be in a certain school district. You might want quick access to the Interstate for your commute to and from work. Fiscally, you might choose a home in an area that is expanding, and home values are rising – protecting your financial investment.
Narrow down the area where you want to live first. Even if you have to wait longer for the ideal home in that area to become available, it will likely be well worth the wait.
Takeaway
In today’s market, making an offer on the first home that checks off some of your wants and needs can be tempting. But it’s essential to step back and take the time necessary to prepare for your home purchase. Yes, homes sell quicker today, but you want to make sure the decision is right for you and your family.
Determine your must-haves and like-to-haves, secure financing, and prepare your household budget for after the move. Going into your new home search fully prepared will make the experience more enjoyable and memorable.
We’re Here to Help!
If you have questions about buying a home or want to learn more about our home financing options, we’re ready to help. Please schedule a time to meet with one of our home loan specialists by calling 800-782-4899 or stop by any of our convenient branch locations.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.