Buying A Home:
Identify Your Goals
Purchasing
a home is one of the most important investments
you can make. As with any investment you should
know what you are getting into. I'm here to help.
You can call me in on the process at anytime you
feel comfortable. In this section I've supplied
some tips and tools to help make the process a
little easier.
1. Make
out your wish-list:
The First
thing you need to consider is what kind of house
you will need. What features do you require in a
home to satisfy your lifestyle now? Five years
from now? Depending on how long you plan to stay
in your home, you'll need to ensure that the home
has the amenities that you'll need. For example,
a two-bedroom dwelling may be perfect for a young
couple with no children. However, if they start a
family, they could quickly outgrow the space.
Therefore, they should consider a home with room
to grow. Could the basement be turned into a den
and extra bedrooms? Could the attic be turned
into a master suite? Having an idea of what
you'll need will help you find a home that will
satisfy you for years to come.
To help
with the process print out my home buyers wish
list.
As you
plan your wish-list, keep the following purchase
and resale considerations in mind:
- Weigh
your needs, budget and personal tastes in
deciding whether you want a home that’s
a newly constructed home, an older home
or a home that requires some work -- a
"fixer-upper."
- One-bedroom
condos are more difficult to resell than
two-bedroom ones.
- Two-bedroom/one-bath
single houses generally have less appeal
than houses with three or more bedrooms,
and therefore less appreciation potential.
- Homes
with "curb appeal" (a well-maintained,
attractive, and charming view-from-the-street
appearance) are the easiest to resell.
- When
resale is a possibility, don't buy the
most expensive house on the street, or
anything that is unusual or unique. The
best investment potential is
traditionally found in a less expensive,
more moderately sized home on the street.
Some
people advise making a list of nine things you
want in the new place. Then make a list of the
nine things you don't want. I call this "NINE
OF THIS AND NONE OF THAT"
2. Select
three or four neighborhoods you’d like to
live in:
When
evaluating a neighborhood you should investigate
local conditions. Depending on your own
particular needs and tastes, some of the
following factors may be more important
considerations than others:
- quality
of schools
- property
values
- traffic
- crime
rate
- future
construction
- proximity
to schools, employment, hospitals, shops,
public transportation, prisons, freeways,
airports, parks, stadiums and cultural
activities such as museums, concerts and
theaters.
If you’re
a first time-buyer with limited financial
resources, it's wise to buy a home that meets
your primary needs in the best neighborhood that
fits within your price range. Here are a couple
of tips for chosing good prospective
neighborhoods:
- Look
for communities that are likely to become
"hot neighborhoods" in the
coming years. They can often be
discovered on the periphery of the most
continuously desirable areas
- Look
into purchasing a condominium, rather
than a house, in a desirable neighborhood.
This way you still may be able to
purchase in a prime area that you
otherwise could not afford. With a condo,
you own "from the plaster in"
just as you would a single house. You
also own a certain percentage of the
"common elements" --
staircases, sidewalks, roofs and the like.
Monthly charges pay your share of taxes
and insurance on those elements, as well
as repairs and maintenance. A homeowners
association administers the development.
See for
yourself. Once you’ve narrowed your focus to
two or three neighborhoods, go there, and walk
around. Are homes tidy and well maintained? Are
streets quiet? Pick a warm day if you can and
chat with people working or playing outside. Are
they friendly? Are their children to play with
your family?
3. How
much home can you afford?:
Not only
does owning a home give you a haven for yourself
and your family, it makes great financial sense,
too.
I recommend going through my Home Affordability
Worksheet. The worksheet will take
you step-by-step through some calculations that
will help you determine just how much of a
mortgage you can afford.
If you
are currently renting, here is a quick
calculation to estimate a mortgage payment
equivalent to your current rent. This calculation
assumes a 28 percent income tax bracket. If your
bracket is higher, your savings will be too.
Rent: _________________________
Multiplier: X 1.32
Mortgage payment:__________________
Because of tax deductions, you can make a
mortgage payment—including taxes and
insurance—that is approximately one-third
larger than your current rent payment and end up
with the same amount of income.
4.
Reality Check: Can you get there from here?
Now let's
look at whether your wish-list and finances are
in agreement. Go to our Property Search Engine. On the side-bar
click on "Residential Listings" and
fill in the basic qualities on your wish-list
that are important to you: city, style of house,
age, price range, number of bedrooms, number of
bathrooms, minimum size in square feet, minimum
yard size, minimun garage size, etc.
If you
find affordable, desirable homes that meet your
wish-list qualifications and financial resources
- great! You can move on to next step, Pre-qualified or Pre-approved?.
If not,
you have some decisions to make:
Typically
homebuyers will need some money for a down
payment and closing costs. However, with today's
broad range of loan options, having a lot of
money saved for a down payment is not always
necessary - if you can prove that you are a good
financial risk to a lender. If your credit isn't
stellar but you have managed to save 10-20% for a
down payment, you will still appear to be a very
good financial risk to a lender.
Next: Pre-qualified or Pre-approved?
or
Return to Buying/Selling
Tips
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