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8 Things You Should Know Before Buying a Home

Written by Posted On Monday, 01 January 2018 19:29
8 Things You Should Know Before Buying a Home

Buying a home is one of the biggest financial decisions you’ll make in your life—whether it’s your first home or your fourth. Being informed before signing on the dotted line is the best way to ensure you’ve made a sound investment that will provide value for many years to come. We asked home professionals what you need to know before making the final decision and got plenty of advice from pest inspectors to financial advisors.

Keep this information in mind as you walk through potential homes and browse properties online.

Home Buying Requires Patience and a Realistic Outlook

“First time homebuyers need to be realistic about what they are able to afford for their first home purchase. First time homebuyers are rarely able to buy their dream beach house or penthouse suite as their first purchase.

Homebuyers should compile a list of their top wants and needs and search for a home that satisfies the most items on the list within their budget. It’s important to remember that a starter home is often a great first step towards building equity and getting closer to that dream home.

First time homebuyers also need to understand that purchasing a home can become a long process. While most buyers would prefer to spend only a couple months searching for a home, it can often take a year or more to find a suitable property within a buyer’s budget. Having offers rejected and being outbid by other buyers is common. Be positive and don’t get frustrated.”

- Jeffrey Hensel, Broker Associate at North Coast Financial

Mid-Century Homes Are a Haven for Pests

“Many homebuyers would be surprised to find out that mid-century homes tend to be worse offenders of pest related damage and risks than pre-war homes—but it's because homeowners are more likely to be buying a home with original systems intact. (In most cases, a pre-war home will have had renovations to replace very outdated electrical or plumbing systems.) A WDI inspector will look for gaps in electrical and plumbing entry points to your home where pests might be able to enter or exit.”

- Leslie Wyman, President of Epcon Lane

You Have More Lending Options Than You Think

“Prospective buyers need to consider more than one lender before deciding where to apply. Evaluating multiple lenders will expose you to a variety of down payment programs and alternative financing options that can increase purchasing power, eliminate the need for mortgage insurance, or lower the monthly mortgage payment.”

- Michael Micheletti, Director of Corporate Communications for Unison

What It’s Like to Live in the Neighborhood

“Homebuyers often view their prospective purchase during the day, but I recommend checking out the neighborhood early in the morning and late in the evening to get a sense for the activity. Is it noisy? Abandoned? Are neighbors friendly? Families, young couples, or empty nesters? Does it feel safe? You are buying more than just the property and house—you are buying the experience of living in that house, probably for a fairly long time!”

- Emily Long, Community Outreach, Safewise

Don’t Assume the Total Cost of Ownership

“Home buyers should assess the “total cost of ownership” of homes they are considering buying. Many home buyers don’t plan enough for all these costs, and then find themselves in a ‘money pit’ type of situation. Here are a few examples:

 Assess buying a home that is perfect (no work required) which is usually priced higher, thus the buyer needs a bigger mortgage versus the option of buying a home that needs some remodel work, which may be a lower price and lower mortgage, but a realistic remodeling budgets need to be planned for.

Another example is budgeting for annual preventative maintenance and small fix-it / repair tasks. A good rule of thumb is between 1 to 4% of the purchase price of the home as the annual budget. One percent if the home is less than 5 years old, as much of the house’s materials are still new.  But if the house is older than 20 years, the budget is more around 4% because many materials in the house are coming to end of their useful life thus these things need to be replaced.”

- John Bodrozic, Co-Founder of Homezada

You Can Get Ahead

"Knowing the value of your ideal home is essential to getting a leg up in the home buying process. Many sellers in hot markets will list their homes at the top end of the range. An uneducated buyer can end up spending much more than the home is worth. We believe knowledge is power in the home buying negotiation, and a top local real estate agent can help make a competitive offer and close the home under list price."

- Sumant Sridharan, COO of HomeLight

You May Not Be Able to Alter Historic Homes

“If you're looking to purchase a home in a historic district, be aware that you may not have free reign to change whatever you'd like about the exterior of your home. For example, in New York City the Landmarks Preservation Commission sets rules and regulations for historic building protection. Instead of simply replacing or removing historic architectural details, you may end up having to foot the bill for costly restoration projects. The same can apply for additions like balconies, front stoops, fencing, or windows.

Likewise, Homeowners Associations in suburban neighborhoods can control what you can and can't do with your property. Work with your agent to find out what restrictions there are before even thinking of submitting an offer.”

- Emile L'Eplattenier, Real Estate Sales and Marketing Analyst at Fit Small Business

Removing Materials in Old Homes Is More Expensive Than You Think

“Some of the biggest hidden costs of buying an older home come from removing dangerous construction materials like lead paint, lead pipes, radon, and asbestos. Some insurance companies may not even write you a policy if you have these materials in your home.

Asbestos was introduced in the 1920s, and used right up until 1980. Since asbestos is directly linked with cancer, it's important to hire a professional to remove this material properly. Because of the serious health risks, most services will charge thousands of dollars for removal, so this cost should be taken into consideration when buying an older home.

Radon (a leading cause of lung cancer) also requires mitigation system installation. Depending upon the size of your home, this can easily exceed $1,000.”

- Jonas Sickler, Director of Operations at ConsumerSafety.org

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