Our team would like to share six pieces of advice we would give based on our home shopping and buying experiences.
Know what you can afford before you start home shopping.
When getting approval for a mortgage, more times than not the number for which you are approved might be more than you had planned. However, before increasing your home search to include higher priced homes, really think about what you can afford, and, more importantly, what you want to pay. Just because the bank says you can doesn’t mean you should.
Besides the mortgage, other costs to consider include taxes, insurance, utilities and maintenance items like yard work and home repair. Ask the seller’s realtor for an average utility price before buying our home to make sure you are comfortable with the impact on your monthly budget.
Once you decide on a home budget, don’t even tempt yourself by looking at a home that is higher priced.
A team member recalls, “One of the first homes we saw was more than we wanted to spend. Bad idea. I loved everything about it, and was ready to throw my budget out the window until my husband reminded me that I probably still wanted be able to eat out, travel and go shopping.” While it can be beneficial to look at as many houses as you can before making a decision, this team member could have saved the heartache by being more firm with the numbers prior to beginning the home search.
Don’t go home shopping with your heart.
Leave your emotions at home when searching for a new home (see point number two). One of the best pieces of advice is not to fall in love.
Resist the urge to fall in love as soon as you go into the kitchen that seems to come straight from the set of your favorite HGTV show. Upon seeing the countertops and backsplash combo of your dreams, you won’t pay attention to anything else and may miss items needing critical repair.
Find a realtor you can trust.
Employ a realtor who can recognize and point out both the negatives and positives of a home, so you can make an informed decision with which you are comfortable. In addition to expertise, a realtor will have a list of trusted professionals who can performed inspections and gave you bids of work that needed to be done prior to closing on the home. With this information, you will be able to enter into home ownership prepared for what needs to be fixed, and how it will impact your wallet.
Make sure you have an adequate emergency fund and savings before buying a home.
We’ve known many people who neglected their emergency fund in order to save up for a home, or even used their emergency fund for the down payment. It’s important to keep your emergency fund for actual emergencies in case your furnace breaks, you need to repair your roof, etc. Unlike renting, you’ll now be responsible for any repairs that come up, and you’ll want to make sure you have the funds to do so.
While many people feel like renting a home is throwing away money each month, not being responsible for maintenance and repairs gives you the ability to budget more easily and build up your emergency fund and savings. So if you don’t feel adequately prepared, it’s better to wait another year before making the home ownership plunge.
Be OK with empty spaces for awhile.
While you wait for some home repairs to be completed before moving in, we encourage practicing patience and holding off on purchasing some items. Your new home may a lot bigger in your mind than in reality, and fill up rather quickly once you get settled.
Being prepared and having professionals help you navigate the process will be a huge advantage and may help you avoid hitting a bump in the road.
If you’re thinking of a buying a new home, see how Legacy Next can help you. Our financial forecasting allows you to see the impact of a down payment on your future goals. In addition, we have a list of professionals we trust, including realtors, who can provide guidance whether you’re a new or established home owner.