With a new year comes a fresh start, and if you’ve been renting for a long time and are ready for a change, your fresh start might be in the form of home buying. Because of the huge responsibility that comes with purchasing a home, you can’t just jump into it without doing some research. The smallest mistake can cost you big time, so here are a few tips that can help you through the experience.
1. Think long term – Buying a house is a big commitment, making it that much more important to consider a home you see yourself owning for a long time. Is there a chance that you might get relocated because of your job? Are you a young couple planning to have a family soon? Do you want to eventually retire in this house? Your answers to questions like these will determine if you should make the purchase and what kind of home you should buy.
2. Know how much you can afford – There’s no use pining over a home you don’t have the money for, so find out what you can reasonably pay before starting your search. Talk to a lender, or use an online mortgage calculator. Loan calculators tell you the amount you can loan from a bank based on details like your monthly income, and even tell you what your monthly payments will be depending on the loan term you choose.
3. Know all your payment options – Not everyone has cash on hand to pay for a property outright, so it’s important that you familiarize yourself with different loan options. Aside from banks, government programs like the Pag-IBIG Fund and SSS are also popular home financing methods. Different lending institutions have different requirements, so make sure you follow them to make the application process easier.
4. Get a pre-approval – A loan pre-approval is another way to determine how much you can afford so you don’t waste your time on properties that are out of your budget. Also, when the time comes that you’re ready to negotiate, there’s a bigger chance that the seller will consider your offer over others because a pre-approval shows them you’re serious about buying.
5. Save for a down payment – Much of your payment of a house might come in the form of a loan, but most sellers will require buyers to fork over a down payment. Developers for example, ask for a 20% down payment, but some sellers can go as low as 10% or as high as 30%. There are sellers that require no money down, but you don’t want to fall into a payment plan quicksand and lose your home in a few years, so make sure you study the terms first before considering their offer.
6. Hire a broker – If you can’t handle it yourself, hiring a real estate broker is your best bet. They most likely know where you can find a home for sale with your specifications and budget, they can negotiate for you, and they can even assist you with the paperwork. Just make sure you find one you can trust: ask family and friends for recommendations, or look for reputable brokerage firms.
7. Location, location, location – This real estate mantra still holds true today as it did since the beginning of time. A home’s location affects everything about it, and not just its price. For instance, some areas offer better real estate value than others, which is something to think about if you plan on reselling someday. If you have kids, you’d want a home in a kid-friendly neighborhood close to great schools and parks. Don’t want to spend more time on the road than at work? Location.
8. Use an online property finder – Gone are the days when you have to physically pound the pavement looking for a home, or circle “for sale” ads in the newspaper until your hands are black. With real estate classifieds websites, you don’t even have to physically leave the house or office to find a property: all you have to do is type in your specifications to get a list of homes you can check out. Keep in mind though that property websites are only the start of your search; you still need to inspect the home yourself before making a decision.
9. Ask questions – You won’t find every single detail about a property in a newspaper ad or a website, and the seller probably won’t offer the information unless you ask for it. Before you head to a showing, write down a list of questions you want more details on, like maintenance issues and community policies. In situations like this, there’s no such thing as a stupid question, so ask away and get the more crucial stuff in writing. Take note of visual cues too: if they hesitate to answer certain questions, there’s something about the property they don’t want you to know, so pay attention.
10. Take photos (and measurements) – Want to keep tabs on the stand-out features of every home you visit? Don’t just commit them to memory; take snapshots so you really don’t forget when you’re doing a pro-con list of each property. Bring a measuring tape with you too so you can compare details like doorway and corridor sizes, and so you won’t have to worry about whether your massive bed will fit in the master bedroom.
11. Talk to neighbors – There’s no better way to find out what a neighborhood really is like than asking the people who live in it. Want to know if the area is actually “flood-free” or if your next-door neighbor really is just ‘quirky’? Start knocking on doors.
12. Consult real estate professionals – Need more help figuring out if the house you’re eyeing is the right choice? There are a lot of specialists in the real estate industry that can assist you in any of your particular concerns. A home inspector, for instance, can spot damage or maintenance issues that you’ll probably miss. A real estate appraiser assesses a property’s actual value based on factors like location, buyer behavior, and investment potential. For more risky transactions like the purchase of a foreclosed property, a real estate attorney will come in handy so you don’t encounter legal issues down the road.
13. Find out what goes with the house – Home staging means setting up a property so it’ll look good in photos and showings to attract potential buyers. That doesn’t mean the gold bathroom fittings or the chandelier is included in the sale. Before you fall in love with the photo, ask the seller what comes with the house and get it in writing. You don’t want to pay extra for a fixture and not find it there when you move in.
14. Take a second look – When you’re beginning to seriously consider one home in particular, view it again to make sure you haven’t lost the loving feeling. This time, take an honest friend with you so they can give you a fair assessment. Also, try visiting at different times of the day to evaluate the noise and safety level of the neighborhood, or during a rainy day to see if there are leaks in the ceiling or gutters.
Photos from Mark Moz/Flickr Creative Commons