Buying your first home can be an exciting time. That being said, shopping for your first home is also incredibly stressful. If you’re not used to looking at houses for sale on the real estate market, you can easily be overwhelmed.
So where do you start looking? What’s a deal-breaker, and what’s not as big of an issue?
This beginner’s guide to shopping for your first home and things you should be on the look-out for can help:
Energy Efficiency
While it might not seem like too big of a deal right now, having a more energy efficient home can help you save on your expenses in the long run. When you’re touring your first homes for sale, be sure to ask about the type of construction used in the building, since some types are more energy efficient than others. For example, modular construction reduces energy consumption during the building process by as much as 67%. It also reduces energy costs later on for occupants.
Additionally, be sure to check the doors and windows of the home for potential drafts and heat loss. In the average home, 38% of heat loss is through windows and doors. If your home has drafty single-pane windows, heat loss through windows may increase to 50%. While these are elements that can be changed once you’ve moved in, the cost can quickly add up, meaning it’s best to avoid these fixes altogether by finding a home that’s fully up to date.
Updates And Upgrades
Even if you’re planning on purchasing a home in need of a few fixes and updates, make sure you know what you’re getting into. All homes end up needing some degree of fixing, but odds are, you’ll likely find additional things in need of repair after you close on the home. Know your renovation plans going in, and prioritize your renovations based on the potential return on investment. For example, remodeling your bathroom can expect a return on investment of 70%, making it well worth what you’ll end up spending on it.
Location, Location, Location
Shopping for a first home in the right location for you should be one of your top priorities once you start your home search. Even if you can’t find a home in your dream neighborhood, make sure you aren’t moving too far from important landmarks in your life, like your job or school. On average, Americans drive 29 miles per day, making two trips with an average total duration of 46 minutes. However, moving too far outside your ideal neighborhood when shopping for homes can increase this average, meaning you’ll end up spending more money on gas and other travel expenses.
Remember Your Budget
Many people overdo it when shopping for a first home. It’s easy to look at the homes that are just a bit outside of your budget. It’s even easier to justify going with one of the slightly more expensive option. However, do your best to stick to your original budget; your future self paying off your mortgage will thank you. Keep in mind the additional closing fees and repair costs you might end up paying as well. After all, those fees can easily push you over your original intended purchase price.
Buying a home is a serious decision to make. So be sure you’re making the right call on which house to purchase for you and your family. These tips can help ensure you’re picking a home that’ll be a good investment for you and your future.
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Very good points. I would like to add that first time buyers need to also be realistic about needs, wants, and reality. Life is not a beer commercial, nor a HGTV renovation show.
Use the 30% rule….of net income. Mortgage term should be as short as possible in order to not have a necessary payment to make in your higher earning years. And your mortgage payment should be at/around what rent would be for the same property. The difference was your down payment. Finally, it helps new buyers to budget for taxes by linking a tax account to your mortgage payment. Many lenders require this, if not all.
For those who decry the price of RE and my points as unrealistic, I can say as a lifelong carpenter much of the too high prices are because of bling and emotional add-ons. If your budget, (BUDGET) cannot function in a high priced RE market, then maybe you should live elsewhere.
I used to do free home inspections for my friends before it became an industry. On one occasion my buddy was looking for his first home and I recommended a small rancher, right across from a park. Our employer told him he should buy the biggest home (most expensive) home that he ‘could get into’, meaning, barely qualify for mortgage qualification. I retired at 57 on a riverfront place with property and rentals, etc. Our old boss is 75 and still working at his declining business. He continues to live in the huge sub division house with just his wife. My buddy remarried someone with dinero and lives in a condo because he hates cutting the lawn. Working out retirement plans…but still working.
If you pay off your mortgage you can take that same payment and put it to work for you. If your mortgage is realistic because you bought something affordable in the first place, it is possible to get ahead. Otherwise, you’ll be whistling the old ditty, “I owe, I owe, it’s off to work I go”, for a long long time. All good, and I really like working, but it’s nice to have a choice in the matter.
Use a budget, in all matters. It works.
regards
Buy a modest house and prepay on the mortgage every month which shaves years and thousands of dollars off the amount you spend to buy the house. Many people disagree with this and claim you should “invest” the extra and have a long mortgage. Most likely if you don’t prepay on the principal of the mortgage you won’t invest that unspent money either. I paid off the 20 year mortgage on my house in 11 1/2 years and saved thousands of dollars in interest. Then I could relax, only having to pay taxes, insurance, repairs and utilities on my house. I rented out both bays of the garage for extra income, rented a spot at the back of the lot for a man to store his boat. Held 2 yard sales a year to raise money and declutter. Planted a vegetable garden for almost free food all summer. Then eventually moved in with a friend and rented my entire mortgage free house. I now invest the money which I DON’T pay to the mortgage company every month. My house has SKYROCKETED in value from the $90,000. paid for it to over $700,000. today and for a long time it has been mortgage free. If you don’t have a mortgage you have a lot less pressure on you financially. If you become desperate you can rent a room for yourself and rent out your whole house to a tenant, or you rent out a room or two to tenants to pay the taxes. Being mortgage free is good for the soul!