Buying a home for the first time is among the most momentous occasions in a person’s life. While it is a lengthy process, your goal is to end up with a home that you love at a price you can afford. It should be that simple, yet somehow, it can get pretty complicated. Make sure that you take the time to consider everything from all angles before placing an offer.
Below are a few factors that first time home-buyers should consider when searching the market for a new home.
School Districts Impact House Value
Even if you don’t have children and never plan to do so, it can be pretty beneficial to scope out a neighborhood’s school district before buying a home. Living in an area with a well-performing school district can raise the value of your property. Alternatively, however, a low-performing school district can reduce the value of your home.
If you plan on never selling your home or having children, then moving into a neighborhood with an underperforming school district would be a great way to save on a home.
Becoming a homeowner comes a long with a stable of new responsibilities and costs—often more than one might realize. Buying a house involves raising a huge down payment (typically 20 percent of the total cost of the house) and paying a monthly mortgage, which can last anywhere from 5 to 30 years, depending on the type of loan you can afford.
The monthly mortgage includes the loan principal and interest, plus homeowner’s insurance and pro-rated property tax. Depending on the neighborhood, you may have to pay the HOA (Home Owner’s Association) additional monthly costs just for living among them!
In the long-term, you can build up your property’s equity which you can tap into later in life. An example of this is how reverse mortgages allow you to access your home’s equity, by using a reverse mortgage calculator, you can equate how much you can use for retirement or other purposes.
The State of the Market
House prices can fluctuate significantly based on the supply and demand for housing in your region. When the economy is doing well with a low unemployment rate, you will find that more people are looking for homes. If there aren’t enough houses to fit demand, prices will usually go up— this is known as a “seller’s market.”
As a future homebuyer, it’s more cost-effective to look for houses during economic downtimes, when demand for homes are lower and prices are reduced.
Amenities of the Home
There are certain additions or amenities that can raise the cost of a home. Items such as solar panels, standby generators and pools can all be costly additions to the home. Pools may not be worth the extra cost and effort that goes into maintaining them. However, standby generators (and Generac generators, in particular) are additions that don’t cost much to maintain and can really save you time and money during a power outage.
Not all additions will increase the value of the home by too much, but it is still an important factor to consider when buying your first home.
Sealing the Deal
Once you’ve found the right house in the right neighborhood for the right price, you can enter the supremely chaotic world that is the buying process. There may be other offers on the house that will require patient and careful negotiating. Make sure you are prepared with the right real estate agent before entering into this phase alone. No first time buyer should try and purchase a home without the help of a professional.
Buying a home is an exciting yet stressful time, put in the time and effort to make it the most rewarding experience possible.