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People searching for a first home do a lot of homework. Studying everything from amenities to neighborhoods and house types is a common task. Sometimes, people get hung on a few details, like the time of year, or neighborhood comps, and may not realize they are overlooking some important factors. This blog covers six crucial things new buyers should remember during the home search and contract process.
Leave Some Cushion in the Price
While it may seem limiting to go with a lower-end option, choosing a home below the maximum budget can be rewarding. This choice gives buyers the chance to get a lower interest rate and monthly payment. Buyers can spend the extra income on home repairs, upgrades, and new decor. By dropping the top dollar below qualification levels, buyers may find more opportunities because the decrease might put the group at the highest end of the next lowest price bracket.
Know that Negotiation Can Continue After the Inspection
Nothing is set in stone when the appraisal and home inspection reports come into the agent’s office. If there are problems with major systems in the home, then it is perfectly acceptable to ask the seller for concessions. Either the seller can fix the problem, or they can lower the asking price to allow the buyer to cover the cost. In a tight market, this tactic may not be productive. It is an excellent idea to study the area closely to see how fast houses are selling and how many offers each one gets before setting a top price.
The Better the School District, the Higher the Home Values
People want the best schools for their children. Homes in areas with excellent school districts and areas with high ratings for education are often in extreme demand. Buying in these areas will give homeowners peace of mind that the house value will remain high. The downside to living in these areas are regular increases in property taxes to maintain these schools. This trend is the same for areas with excellent elementary schools and those with top colleges and universities.
The Bigger the Down Payment, the Lower the Monthly Costs
Saving up a sizable down payment can do wonders for a first-time homebuyer. The more money a person can put down on a property, the less risky they are for securing a loan. The more money one pays upfront, the less the mortgage and interest payment each month. With more money down, lenders will offer a lower interest rate because they can trust the buyer to pay back the money over a riskier borrower. A bigger down payment means the buyer can pay off the loan faster or keep more money for utilities and updates each month.
Always Read the HOA Fine Print
When purchasing a property in a subdivision or master-planned community, there will be fees from the Homeowner’s Association. These costs are a requirement on top of the monthly mortgage and insurance payments. The fees often cover yard work, outdoor maintenance, street repairs, lighting, and community property like clubhouses, swimming pools, tennis courts, and playgrounds in the area. Some of these fees can be hundreds of dollars a month while others require a yearly membership fee. Knowing all of these costs makes it easier for buyers to budget expenses to see if living in the home is affordable.
Save Contractors Fees By Doing Familiar Tasks
Another way for new buyers to save money on the total home cost is to choose a fixer-upper. If the home inspection shows minor damage that the buyer can fix, then it may save them thousands of dollars in contractor’s fees to do the job themselves. Any problems with unfamiliar renovations are easier to afford to contract out when a homeowner takes care of minor issues they know how to repair. Instead of hiring out all the work, a new buyer can save the cost of outsourcing painting and smaller projects. Some things should be left to professional installation such as blown insulation, which is desired because of its high R Value.
New buyers have a lot of research to do before buying a home. Home and Garden Television tells readers to always get a property survey or property line inspection when buying a house. This survey will protect the new buyer from future disputes about boundaries and building fences and other items.
With these six tips, potential property owners can understand the options and think about different ways to use money to leverage a better loan payment. By choosing to investigate a variety of options, buyers do not get set on one style, price, or condition of a home giving them more ideas and opportunities to find the home they want. These tips can help buyers avoid settling for a house that fits the budget by making sure the money fits the buyer’s preferences.