Buying a new home is an exciting and sometimes stressful process. Having a REALTOR® to guide you through the process is invaluable. Here are some of Carol's suggestions to help you get prepared and to ensure the process is as enjoyable and stress-free as possible. Develop a Wants vs Needs List Before You Buy
Everyone has a picture of an ideal home including all the features you need in a home as well as many you may have long desired. However, when it comes time to buy a home, you will quickly learn those additional desires cost more. While it’s nice to think about having a beautifully landscaped backyard, or a hot tub, perhaps even some built-in appliances, these are usually considered luxury items, which can add considerably to the price of your home. That is why it’s a good idea to develop a Wants vs Needs lists. Begin your list with items you really need such as adequate space, a garage, parking spots and the number of bedrooms and bathrooms. On the second part of the list make note of things that would be an added bonus such as decks, landscaping, additional bedrooms or space for a hot tub. For most people, basic needs should be considered first then decide what additional items from the want list you can afford. Once you've made your list, you are less likely to be caught up in the excitement of the pursuit. You’ll have a good idea of what you want, within you price range, and if you can afford those additional items.
How Long Will The Home Meet Your Needs?
What features do you require in a home to satisfy your lifestyle now? Depending on how long you plan to stay in your home, you may also want to consider future needs. Will the home have enough room for children if your family expands? Will strata regulations allow your grandchildren to stay with you during summer holidays? You will want to ensure the home has amenities that you'll need now, that it fits your current lifestyle and also fits your future plans. If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals. How Long Do You Plan to Live in the Home?
If you purchase a home and get a job transfer or decide to move after only a short time, in the end you may lose money on the sale. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.
The length of time that it will take to cover those costs depends on various economic factors in the area of the home. In Victoria, we have an approximate 5% appreciation on most properties. In this case, you should plan to stay in your home at least 2 years to cover buying and selling costs. The longer you stay in your home, the more you increase the value through maintenance and renovations. And the more the market increases, the more valuable your house will be. Learn About The Neighbourhood
Often times the house you find may be in a neighborhood that you're not familiar with. This is ok, it just means that you'll have to do a little more research. If you find a house that you like, ask for a list of the neighbourhood properties that sold in the last year. How does your home rank? Is it at the top of the price range? If so, it might belong there as 'the best house on the block' but it may also be harder to resell. Is it average or on the low end? If so, great - as the other home prices go up, they will pull your home's value up as well. Check out the schools - are they sought after? A good school district means your neighborhood will always be valued by families. This is a great reassurance to future purchasers as well as a value-added factor if you have school-age children. Contact the police station and obtain crime statistics. Are they acceptable to you? Sometimes, if they won't give them to you, it could be a cause for alarm. Talk to the neighbours. The more people you talk to, the better sense you will get of who makes up the neighbourhood and how they will affect your time spent in it. Check out the location of shopping, police and fire stations, schools, and air traffic overhead. These are all things that might affect your property value or quality of life.
Consider The Ongoing Costs of Home Ownership
Ongoing maintenance, improvements, taxes, utilities and insurance are all costs that are added to a monthly house payment and should be considerations when deciding what you can afford. If you buy a condominium or townhouse, a monthly strata fee will be required and should be considered with your monthly expenses. If the home requires renovating, overdue maintenance or updating or the appliances need to be replaced soon, remember to consider these additional expenses in your overall budget. Have Reasonable Expectations
Remember these two golden rules: There is a lot of money at stake.
No house is perfect. Emotions run high for both buyers and sellers. Sellers may have loving memories and years of sweat equity in the house or perhaps they are being relocated and don't want to move. Understanding a seller's motivations for selling will help you appreciate their situation and predicament during these emotional times. Remembering the two golden rules will help diffuse the negotiation stage, the inspection stage and the closing stage. There is a lot of money at stake for all parties involved. Remember that market value (the value of a home) is the price that a willing buyer and a willing seller can agree to. If you can not agree on a price, ask yourself: Is there something you missed? Are there other homes in the neighbourhood that support the price they want? What are the motivations that might factor into the price they are demanding? In the end, does it matter? What is the house worth to you today and what do you think you can reasonably sell it for based on the amount of time you plan to spend in it? Think about the answers to those questions before you make your move. No house is perfect so always get an inspection. It might be a few hundred dollars, but it's worth it. It is the inspector's job to find any problems with the house that could cost you thousands of dollars to repair down the road. Some inspectors have a tendency to be over-cautious with some of the deficiencies they may find. Get objective opinions that you trust before making a decision on an inspection report. Likewise, if an inspector says a foundation is cracked but its nothing to worry about - get a second opinion. Ask a handyman for an idea of how much repairs will cost and how complicated they are. Check out my Tips and Resources page for Home Inspectors I recommend. The home buying process is an emotional, complex and time-consuming process, but it is worth it. Nothing compares to owning your own home in a neighborhood that you selected. |