How to Buy A House - Part 2 - The Hunt
Having completed the steps outlined in Part 1, including selecting your Realtor® and determining your financing options, you are now well-prepared for the most exciting phase: house hunting.
This is the part everyone thinks of when they think of buying a house, and this is usually what people start doing before they do the other things I listed above. That’s a common approach and perfectly acceptable. You’ll still want to go back and do the other steps first or you may be sorry.
"I'm out looking at houses! This is fun! But what the heck am I looking for?"
Great question, thank you for asking. There's a lot that goes into deciding if a home is "the one," and unless you're just made of money, you can't really afford to ignore some key points here.
1. Location, Location, Location
The location of a property is the only thing you can’t change about real estate, and that’s why it’s of the utmost importance. You’ve probably heard this adage a million times, and it's because it could be worth millions to you in the long run. While proximity to your work, school, shopping, or social activities may be obvious priorities to you now, those aren't the only location details you should take into consideration. The location of a property affects its pricing.
Generally, the closer to the center of commerce in an area, the more expensive the homes will be. Also, the higher rating a school district has, the more expensive the homes will be. So, if you have your heart set on a brand new 4 bedroom, 3 bath, 2000+ square-foot single family home in the heart of Dallas, be prepared for sticker shock if your budget is $300,000.
You need to ask yourself how important the area is compared to the house itself. If you must be in the heart of Dallas, and your maximum budget is $300,000, we're likely going to be seeing a lot of condos and townhomes as those will be in the price range. But if you're absolutely married to the idea of a larger, newer, standalone home, and your budget cap is $300,000, saddle up, partner, because we're headed out of town.
The location of a property also affects your living experience and your resale values. Not only do you need to do some research on the proximity to work, school, et cetera, but you also need to look at things like accessibility throughout various times of day or even various times of year.
For example, living near a school, while it may be awesome for your current or future kids, it may also make quick trips to and from home a little more hectic than normal at certain times of the day and year. If you live on a densely populated street, finding parking in front of your home for guests may be an issue, so if you entertain a lot, look at how many cars are parked along the street at any given time of day.
If you’re unable to extensively research a potential home before you write that offer, one of my favorite resources is neighborhoodscout.com. It's an all-in-one resource tool that can tell you everything from crime stats to how quiet the neighborhood is. I have past clients who have sworn by it.
If you have more time and want to take a more hands on approach, head out to the neighborhood at different times of day, take time to chat with neighbors if you see them as you pass or stop by if there's a garage sale in the area. When you're looking for your next home, location is something that just can't be ignored.
2. Condition
This one might seem like a no-brainer to some people, if it looks awful, don't buy it. Hold yer horses! Not everyone is out for the same thing in a house and if the location is more important to you than the condition of the property, sometimes “ugly” houses are just the thing to get you where you want to be. For those skilled in home improvement or with access to such resources, then a renovation project might be the right choice for you. In fact, I bought my first home based on the location, fixed it up myself, and made quite a bit when I sold it 3 years later. But before you go falling in love with that 1900's built Victorian, or the 1955 Craftsman-style beauty, there are some things we must consider, not the least of which is your loan.
"Wait, I was pre-approved! What does my loan have to do with the house I want?!"
In a word, EVERYTHING. For example, about 90% of all home loan products out there have a condition approval clause in them, and that means the property condition must meet the lenders’ requirements or the loan will not go through, period. All those pre-approvals you've done are based around your viability as a borrower, now the house must pass muster too. Don't panic though, this is where a good real estate agent comes into play.
For instance, if you have an FHA loan and you're looking at a home that's less than perfect, but you love the layout, a good agent should be able to look at a property with you and help determine if it will qualify for the type of financing you plan to utilize.
3. Layout
You can easily fix a lot about a house, the roof, the floors, the HVAC system, an ugly kitchen, you can even knock out a wall or two. It's much harder, and much more expensive to fix a bad layout. If the house has an awkward flow, the rooms are too small or it's missing some other major component to your happiness, it might be best to walk away. Sure, you can take it down to the studs and do a full renovation. You might even be able to install additions or take in the garage, but you always need to keep in mind the cost versus resale. Something else to consider before taking on massive renovation projects are potential community restrictions to such activity. There are neighborhoods and co-ops that may not allow you to do things like garage conversions, or 2nd story additions, so if that's in your plan, make sure you and your agent do the research BEFORE you buy.
The Takeaway:
As usual, there's a lot to learn. This by no means is an all-inclusive list but keeping these 3 things in mind while you look will help you achieve long term success in not only your house hunt now, but ultimately, as you live in the home. The good news being that you don’t have to know it all before you start, and the fact that you’ve started your research now puts you ahead of the game. And remember, your questions are invaluable; they not only guide my work but also inspire future blog topics so feel free to ask questions below.
HAPPY HUNTING!
Emerald Scott-Farmer, Agent/Owner of
The EMERA Group of Keller Williams
Emerald@emeraldsellshomes.com 214-533-8191
** I am not an attorney and cannot give legal advice. **
(But I know some good ones if you want recommendations)