Buying your first home, what exactly should you consider?
Statista disclosed that over 15 million residential properties were purchased in the United States within 2016 – 2018.
About 50% of those home buyers (that’s 7.5 million people) say they regret buying their homes, according to a Trulia study.
That same study further disclosed that 1 in 5 Americans affirm that a mistake they made about buying a home in the past is depriving them the opportunity of changing their current housing situation.
Since buying a home is one of the biggest financial decision many people ever make, it’s easy to wonder why millions of home buyers want a do-over!
Considering how complex and sometimes stressful the home buying process is, you wouldn’t want to buy a home only to regret that decision in the next few years or even months!
So how can you prevent buyers’ remorse when you buy a property?
There are several different key things to consider before buying a home.
But too many first time home buyers are often caught up in the excitement and stress of buying a home – and then they skip the key things they ought to have considered before buying the property.
The outcome is buyers’ remorse and millions of people have made that same mistake and many more will follow!
If you’re interested in a step-by-step guide on how to buy a home, read about how to buy a house in 10 easy steps here.
To avoid costly mistakes that could tarnish your credit score, leave you in debt for many years, or make you regret buying the wrong property, I have compiled the most significant things you should consider before buying your first home.
If you’re yet to make up your mind to buy or rent, here’s Zillow’s Rent vs. Buy Calculator.
The calculator indicates the number of years it takes buying to equal renting and how to figure out which one is right for you.
Buying Your First Home: Key Things To Consider
1. Crime Rates
Crime rates sit at the top of this list because regardless of how beautiful your home is with all the perfect features, if you’re surrounded by criminals, you won’t spend one night in that house with a good sleep.
One of the worst nightmares of any first time home buyer is to end up in a neighborhood with a high crime rate.
While criminals aren’t protected under the Fair Housing Act, you may never be able to elicit all the information about crime rates in a neighborhood from your real estate agent or the home seller.
So the easiest way out is to do your own research before buying.
Here are 4 practical methods of researching any neighborhood crime before buying a home:
Make the most of the internet
The internet is one of the most useful and effective resources you can use to research almost any neighborhood crime rate.
There are several different websites that contain very valuable information about crime rates across the country.
The U.S. Department of Justice NSOPW
The U.S. Department of Justice NSOPW is described as a “public safety resource” where the public can get information about sex offenders across the country.
The website partners with the United States Department of Justice and states in order to provide accurate information about sex offenders regardless of where they are across the nation.
The website allows you to search for sex offenders by name, zip code, and county or by city/town.
You wouldn’t want to buy a house in the same neighborhood with one or two sex offenders. Play smart and play it safe!
AreaVibes Crime Rate Comparison Tool
AreaVibes created a livability score method that allows people to easily make up their minds about where they want to live using several different research data.
The website’s livability score is based on seven different metrics and crime rates
One of the best part of this tool is its comparison feature that allows users to see how one neighborhood compares to the others in terms of crime rates.
You can easily compare the town, neighborhood or areas you’re interested in buying a home in with other areas so you can make a logical and safe conclusion.
Also, if you’re trying to choose between two great cities or neighborhoods, you can easily streamline your comparison using several different metrics.
All you have to do is enter the names of both cities and see how they compare in terms of crimes committed including car theft, robberies assaults, murders, and burglaries etc.
SpotCrime is a crime aggregator website that sources for crime data from several different police departments, the media, and individuals who send them crime tips.
The website maps all the crime data it collects on Google Maps so users can easily view icons that depict several different crimes including theft, arrest, vandalism, arson, shooting, robbery, murder, burglary and several others.
One of the best features of the site is its accurate report about the date and address where a crime was committed as well as the type of crime that was committed.
There’s also an option to sign up for notifications of crimes in areas you’re interested in. You can sign up via RSS Feeds, email, Facebook, SMS, or Twitter.
CrimeMapping.com provides information about recent crimes committed in different neighborhoods across the United States.
To get started, enter a city or an address or you can zoom in on the map to figure out the number of crimes that were committed in a precise period in an area and what type of crime it was.
CrimeMapping collaborates with Esri a mapping and analytics software website.
If you intend to learn more about a specific neighborhood other than the crime rate, you can take advantage of the Esri ZIP code lookup feature.
The website also marks out several different demographics so you can figure out if the area you’re looking at is full of a certain group of people such as American Dreamers etc.
FamilyWatchdog.us provides useful information about sex offenders. The site aggregates data they collect from a state’s sex offender registry.
With access to such data, you can know if the place you’re looking to buy your first home has a registered sex offender close to it.
Perhaps the best feature of this website is that it can alert you whenever a sex offender relocates anywhere near your home or entire neighborhood.
If you’re looking for general data such as the most dangerous cities or neighborhoods across the country or the safest places to live with your family, Neighborhood Scout is one of the best websites for such information.
However, if you want a more detailed report about specific cities and towns, you’re required to subscribe.
Once you subscribe, the website will send you a crime index rate of the places you’re interested in including the number of violent and property crimes that were committed and the chances that you could become a victim.
Contact the Local Police Department
The Local Police Department is another great place to get very relevant data about crime rates in a city, town or neighborhood.
You should contact the Local Police Department via a nonemergency number and ask for a police log where you can view records of crimes committed in the area within the past year.
Read the Crime Report Sections of Local Newspapers
There are several different local newspapers online. You can use a search engine like Google to find the local newspapers of a particular town or neighborhood.
Also, you can as well order for the print versions of local newspapers to read more about crime rates.
You can order a print version, or you can read the newspaper online. Find out what sorts of crimes are occurring where. Read the letters to the editor to see whether there are major concerns.
Drive Around the Neighborhood
You should drive around the neighborhood during the day and if possible at night too to find out if it seems like a safe place or not.
If you observe vacant buildings or stores that seem like an abandoned business place, gang graffiti, poor looking schools and several houses in very bad shape, it could be a sign that the neighborhood isn’t so safe.
However, if you see people walking around back and forth, and walking their pets in the evening, booming business activities with restaurants, stores, several well-lit shops, and couples walking around with their kids etc. it is an indication that the neighborhood is a safe place.
Don’t forget, crime rate is one of the key things to consider before buying your first home.
If you intend to start a family or if you already have a school-age kid,
Whatever neighborhood you choose should have some of the best schools in the entire town or city.
There are several websites on the internet that can help you out with some research.
Great Schools contains valuable resources about how to find the right school for your kid anywhere across the United States.
Great Schools also provide school rating and quality information to make it easier for parents to choose the best schools for kids and how to ensure kids get top-quality education as expected.
The site provides valuable tips about how to assess a school, how to bypass tricky school systems to access useful data you need and various tools you can use to decipher what makes up a great school or not.
Even more, you can find a whole lot of resources on the site that can help your kid’s academic and socio-emotional development.
These resources include articles, podcasts, videos, interactive tips and a whole lot more.
Neighborhood Scout’s School District page contains resources about the best schools across the United States.
So you can figure out how good or bad the public schools and local districts are in
They provide school rankings using test scores so you can easily compare the quality of schools in different locations using their academic performance.
Even more, they provide other valuable data about schooling including types of students, academic expenditures, class sizes, and learning environment etc. for almost all schools and districts in their database.
The website allows users to search for school quality and class size you prefer and they will provide answers in a list and even provide a map of your results to the neighborhood you want.
School Digger provides valuable information about more than 120, 000 schools across the United States. This include high school, middle and elementary schools.
The site contains useful data and information to help you make a rational decision about how to choose the right school for your kid.
School Digger data base contains student/teach ratio rankings, ethnic composition, district and school boundaries and a whole lot more.
The site allows you to search for schools by name or district, address, city, county or zip.
Add it to your checklist, school is one of the key things to consider before buying your first home.
3. Your Lifestyle
How on earth does your lifestyle factor into buying your first home?
When you’re buying a home, you’re also buying into a lifestyle.
If you’re interested in properties that are close to the beach, you probably love the sea and would enjoy filling your nostrils with fresh air.
Also, living close to the beach could mean morning walks or jogging along the beach, surfing at noon and enjoying great moments at a local cafe.
If you enjoy sports, going to the cinema, and love music festivals, you should buy a home in a lively city neighborhood where you can easily connect to all the things you love and enjoy.
But if you hate the noise of traffic, loud music and enjoy spending most of your time all alone, then you should buy a home in a very quiet and peaceful neighborhood where no one will disrupt your peace.
You shouldn’t make the mistake of buying a home in a neighborhood that doesn’t fit into your lifestyle just because the property is cheaper.
Dealing with buyer’s remorse while paying mortgage every month can leave you frustrated.
If you enjoy taking a walk or walking your dog at any time of the day, you should go for a safe town or neighborhood with long safe roads and sidewalks.
If you also want your new home to be within a short distance to some of the places you’d like to visit often like the grocery store, bars, parks, or even a Chinese restaurant, you shouldn’t overlook your preferences when you’re house hunting.
If you love tourist attractions, parks and recreation centers, consider their locations too when you’re looking to buy your first home.
Your lifestyle is one of the key things to consider before buying your first home.
4. Proximity To Public Transportation
You shouldn’t buy a property that is too far or too close to public transportation.
Too far from public transportation and it can affect the value of your home – even if you don’t care right now.
If its too close to your home, you’ll have to deal with regular noise, even when you’re trying to get some good night sleep.
You wouldn’t be happy to spend hours in traffic on your way to work or on your way back home after a hard day’s work.
By using the public transportation – just once in a while, you can live a less stressful life with shorter commutes time as you age.
Even if you have a personal car, easy access to
Also, no matter how well you think you’ll like your new home, you may have reasons to sell in the future.
So buying a home that is close to public transportation will definitely boost your home’s value.
A five years study conducted by the National Association of Realtors (NAR) and the American Public Transportation Association assessed sales data in different key cities across the United States with different degrees of public transportation structure.
The study deciphered that on the average, values of homes located in half a mile of public transportation known as “public transport shed” was 41% better than homes outside the shed.
The study strongly indicated that homes that are close to public transit are always very attractive to buyers.
You may decide to sell your home anytime in the future. So buy at the right location now to give yourself an edge.
Nearness to public transportation is one of the key things to consider before buying your first home.
5. Don’t Buy A Home For The Short Term
Investing in a property for the short term isn’t such a good idea – except if that’s the best decision you can make in your situation.
Ideally, you should aim for the long term whenever you’re looking to buy your first home.
If you have no plans to be in the neighborhood for at least five years, you probably have no reason to buy a home.
You shouldn’t make the mistake of buying when all you really need is a rental home.
So weigh your options carefully before committing yourself into buying your first home.
How long you intend to live in the property is one of the key things to consider before buying your first home.
6. Buy A Home That Matches Your Needs
If you’d love to own a home with a garden where your wife and kids can grow beautiful flowers, then you shouldn’t buy one without any garden space.
Since your home is where you’ll entertain your guests, loved ones and friends and where you’d probably be living with your family, it is absolutely important that the home has most of the things you need to make it livable.
Consider all the things you need right now and the ones you may acquire in the near future.
Throw those things into the mix of what you’ll like to have in your home.
Except you’re buying a tiny house, you shouldn’t buy a home that’s too small with the belief that you’ll be moving away very soon and so you can make do.
Rather, buy a home with enough space that can accommodate as many belongings as you may decide to buy in the future.
What’s the essence of buying a home if it wouldn’t be good enough for any of your needs in the near future?
Buying a property that matches your preference is one of the key things to consider before buying your first home.
Find out how to figure out the types of homes that match your preference here
7. Stay Within Your Budget Limit
Don’t waste your time shopping for homes that are way expensive beyond your reach and the amount lenders are willing to loan you.
So be realistic enough to create a budget and stick to it.
If you’re yet to be pre-
Even if you’re qualified for a home and it seems too expensive, you may consider other options.
You wouldn’t want to be caught in the web of mortgage payment, and then end up with a foreclosure or a short sale.
Your budget is one of the key things to consider before buying your first home.
8. Don’t Fall For Flashy Make Overs And Features
Many homeowners renovate their homes and improve its curb appeal before listing it.
So when you walk into the property during house hunting, all the features look more appealing than they really are.
If home staging is a part of the property marketing strategy, the home might appear absolutely stunning and breathtaking.
So do everything possible to look beyond the surface of the home design and curb appeal.
Go ahead and inspect the precise features you really need in a home to make it more livable and to make your life more comfortable.
Always remember “All that glitter is not gold”
So flashy makeovers and features are some of the things to consider before buying your first home.
9. Do Some Research
It’s easy to assume that because you’ve hired an agent to help you out with house hunting and buying the property you want, you should sit back and relax because you have nothing else to do.
That’s absolutely far from the truth!
You should do some research to ascertain the prices of several different things, like schools, amenities, hospitals and utilities etc.
So start asking questions around the neighborhood.
Before you decide to choose one property ahead of the other, you should consider asking some questions about the property in the neighborhood.
If the property has been listed for long, the homeowner might be willing to negotiate a new price.
On the other hand, it could mean that something is not right about the property or its location.
You should look around to see if people are moving out of the neighborhood and if stores are closing down.
This could be one of the reasons why the home has been on the market for long.
I’ll suggest you stay away from such locations too, except if its the best for you.
Doing a great deal of research is one of the key things to consider before buying your first home.
10. Traffic and Noise
Once you find a house that has most or all of the features you really need to make your home livable, do some more research before deciding to pay for the property.
You’ll have to dig deeper to learn more about the neighborhood the house is located in before making up your mind to buy.
Just before you decide to buy a house in any neighborhood, you should visit at different times of the day on weekdays and weekends.
The street may seem peaceful and quiet sometimes in midday on a weekday.
But you shouldn’t conclude just like that. Rather, you should visit during the weekend too.
Traffic could be terrific at some periods of the day or some of the neighbors could be really noisy at night.
Worst still, the entire street could a chaotic zone at night.
So visit the neighborhood at different times of the day and pay attention to traffic patterns.
Drive around the routes you’ll take to work and other regular places you might visit if you move into the neighborhood.
If there’s a nearby airport, a train station, church or a school, they could cause more traffic or noise around the neighborhood.
Traffic and noise are some of the key things to consider before buying your first home.
Buying Your First Home: 5 Questions To Answer
How can you tell if you’re really ready to buy a home?
Should you just go ahead and buy one because everyone else around you is buying and they all seem like a happy and proud homeowner?
Is homeownership better than rentals?
So just because you make up your mind or not, here are 5 key questions to help you put the right foot forward:
1. Why Exactly Do You Want To Buy?
Trying to keep up with the Joneses is never a good reason to buy a home.
You may assume that homeownership is a key aspect of the American dream.
But you should ask yourself if the American dream involved taking out a loan for the next 15 or 30 years of your life.
It’s easy to jump into the conclusion that having a home is a tangible real estate investment.
I hate to burst your bubble, but the real estate market is never stable.
As such, it is unpredictable to decipher what will happen to the value of the property you just bought when it turns 10 to 15 years older into the future.
This is one of the key reasons real estate expert strongly recommends buying a home that you will enjoy living in.
It is absolutely true that a whole lot of people have made money by flipping properties.
But such moves require an in-depth knowledge about renovations and the local markets.
So play smart, review the key reasons behind your decision to buy a home so you can easily match your expectations to the right property.
Asking why you want to buy is one of the key things to consider before buying a home.
2. Are Your Finances In Order?
To be eligible for a mortgage, you’ll have to show that you have a strong credit history and a stable income.
In many cases, you will be required to make a down payment which depends on the type of loan you want.
Some lenders are known to ask for as low as 3.5% and others as high as 20%.
Loans such as VA land FHA loans request for smaller down payments.
However, such down payments could translate into higher interest rates and payment of PMI (Private Mortgage Insurance).
If you’re wondering what type of mortgage is right for you, here’s a homebuyer’s guide about types of mortgages.
To get started, check your credit reports for errors several months before you apply for a mortgage.
If there are errors in your report, you will definitely need some time for credit repair.
Also, you may need more time to improve your score to ensure that you qualify for a mortgage or to be eligible at a better rate.
You should learn more about the five key factors that determine your credit score.
Several real estate agents wouldn’t bother showing you properties until they see your pre-approval letter.
Mortgage pre-approval ensures you and the agent shop for the right properties that are within your financial capabilities.
Your finance status is one of the key things to consider before buying a home.
3. Are You Realistic About The Real Estate Market?
Several real estate markets lack appropriate inventory and some properties in such markets end up in a bidding war.
As such, you should target many McMansions and only a few of starter homes.
Just before you start house hunting, do some thorough research. If possible visit some open houses or discuss with some real estate experts about what you really want in a home and why.
Many first-time homebuyers are often compelled into lowering their expectations in the desired home in order to find a home that truly matches their budget.
Regardless of what you opt for, you shouldn’t forget to consider other things. Things like condo fees, closing costs, property taxes, and other costs into how much mortgage you can truly afford.
If you can afford $1000 per month in rent, you shouldn’t assume that you’re financially good enough for a mortgage of $1000.
There are several extra expenses that renters aren’t required to pay.
4. How Long Do You Intend To Live In The House?
If you’re only interested in owning a home only for a few years, then renting should be your preferred option.
Even if the home’s value increases within your ownership period, other expenses such as closing costs or real estate commissions can bite a huge chunk away from your profit.
A good reason why several experts strongly recommend that you stay in your home for no less than a period of five years.
Buying a home is most suitable for people who intend to live in the property for a longer period of time.
How long you intend to live in the property is one of the key things to consider before buying your first home.
5. Are You Ready To Take Responsibility For Repairs And Other Costs?
When you’re a renter, you may never have to worry about the cost of a broken pipe or a leaky toilet.
But when you’re the homeowner, you’ll have to be responsible for all these costs.
While your DIY skills might come in handy sometimes, there could be some other unexpected costs.
These costs include others such as a condo association’s special evaluation. Or even a jump in property taxes that are mandatory.
Having an emergency fund can save you from a whole lot of unexpected costs if you eventually decide to buy a home.
Repair costs and other related expenses are some of the key things to consider before buying your first home.
Buying Your First Home: 5 Common Mistakes First T
ime Home Buyers Make
It’s common for many people to make a wrong move when they are looking to buy their first home.
Good news is that you can learn from the mistake of previous first time home buyers. So you wouldn’t make such errors.
1. Buying A Property Without A Strong Resale Value
Too many first time home buyers are known for buying properties without a second thought about the resale value of the properties.
When buyers are shopping for their first home, they often assume that they will spend up to 20 years or more living in the property.
In the end, many first time home buyers move away from their homes sooner than they ever imagined.
There are several different reasons why this happens.
Some of the most common reasons are job transfers, high crime rates, divorce, death, climate change, natural and disasters etc.
So since you’re looking to buy your first home, you should never buy without considering the property’s resale value.
As such, go for homes with a broader appeal.
Start by asking your agent about housing trends in the area. Ask how the property’s value could rise or fall in the near future.
The resale value of the property is one of the key things to consider before buying your first home.
2. Overlooking The Cost You Might Incur After Buying The Property
You might be too busy paying attention to mortgage payments and closing costs to notice all other expenses floating around.
Nonetheless, you’ll have to be responsible for all other costs that are attached to home ownership.
One easy way to figure out other costs is to ask your seller for a property expense list.
The list contains details of the amount of money you’re expected to pay every month.
It gives you a crystal clear picture of how much you have to set aside to play safe financially. An emergency fund can easily come in handy here.
It gives you a crystal clear picture of how much you have to set aside to play safe financially. An emergency fund can easily come in handy here.
Other unexpected costs like landscaping and pest control, might hit you harder than you thought if you have to dig deeper to clear them off.
A brilliant rule of thumb is to keep 1% of the home value aside for repairs, renovations, and even maintenance.
3. Leaving Out Home Inspections To Save Costs
What a professional home inspector looks for in a home is quite different from what a real estate agent looks for.
So just because your real estate agent said that the home is worth its value, has great features that match
A professional home inspector can help you find red flags that could save you from spending thousands of dollars in repairs and maintenance costs down the road.
They usually charge a 2 – 4 hours fees to do their job.
As a first time home buyer, odds are you wouldn’t be aware of all the key things to consider when buying your first home.
Many of such defects could cost you a huge sum of money in the near future.
Professional home inspectors’ costs varies depending on the size of your home, its location and how it was built.
Several professional home inspectors charge up to $450 on the average.
Home inspection is one of the key things to consider before buying your first home.
4. Making Offers Without Being Pre-approved For A Loan
Before making up your mind to place any offer for a home, make sure you have a mortgage pre-approval.
The logic behind this is very simple. What you assume that you can afford might be different from what your lender believes you’re eligible for.
This is often the outcome of your credit report and an unstable income.
If you make an offer for a home without a mortgage pre-approval, and then found out that your lender is not ready to give you the amount of money you thought you’re eligible for or the lender’s terms and conditions are a bit too harsh for you, you’ll end up wasting the time of everyone involved in the deal, including your time.
Even more, if you’ve been pre-approved for a mortgage, your loan might be declined for some reasons.
For instance, if you take out a loan that could change your credit score significantly like an automobile purchase.
If the entire real estate transaction failed to go through because of your actions.
You may lose whatever amount of money you’ve invested in the deal when you put your signature on the contract.
The amount of loan you’re eligible for is one of the key things to consider before buying your first home.
5. Making A Compromise On What You Really Need
I’m sure you have a checklist of what you want in a home before making up your mind to buy one.
Many first time home buyers have to let go of what they really want in a home because they want to cut costs.
If you intend to start a family or you already have one, odds are you might need a home with up to three bedrooms.
Do not squeeze your family into a home with two bedrooms because you want to save costs.
If you don’t like the idea of sharing walls with neighbors, avoid buying a condo just because it costs less.
To be realistic, you may have to make one or two compromises in order to get your first home.
You shouldn’t make a huge compromise that could trigger you into buyers’ remorse or make you regret the entire deal.
What you really need and what you don’t are among the things to consider before buying your first home.
So what are the things to consider before buying your first home?
Too many first time home buyers have ended up in the wrong property that makes them regret their buying decisions.
One of the best decisions you can make when you’re looking to buy your first home is to learn from the mistakes of others.
Never buy a home in a hurry. Never invest in a property without considering all the things mentioned in this article.
You’ll have so many things to be thankful for if you buy the right home.
If you ever want to sell in the future for whatever reason, you’ll sell the property at the best possible price.
Now I’m sure you know all the key things to consider before buying your first home.
What’s the relevance and essence of a 1003 mortgage application form?.
What is Subprime mortgages?