If you’ve ever paid rent, did you get the feeling you were flushing your hard-earned dollars down the toilet one after the other? It is common to feel that way when you have nothing to show for the hundreds and even thousands of dollars you spend on rent each month.
If you live in a big and booming city like the Big Apple, it is easy to see how renting an apartment may be the only option, but in all actuality, it doesn’t have to be! With a few good pieces of advice and some dedication, you can own your own home sooner than you think.
As you dream of your dream home, consider these helpful hints on how you can get the most house for your bucks.
1. Start saving for your down payment right away. It’s true that every little bit helps. Save every month, even if it is only a small amount. Ten dollars here and twenty dollars there, $100 from every paycheck – it does all really add up. Also, invest in CDs and other accounts with higher interest rates. If you absolutely don’t plan to buy within the next, say, six months or more, consider dumping some of your funds into a CD (certificate of deposit) with a good interest rate. Let your money work for you!
2. Know what you can afford from the get-go. Work out your budget of monthly income and monthly expenses. Factor in the cost of utilities as well as the potential cost of your mortgage. Knowing this information up front could save you much heartache by keeping your sight focused on homes in your price range rather than ones in the next price bracket.
3. Shop around. Don’t always go with the first realtor who contacts you. Consider a buyer’s agent if you can find one in your area. Lastly, even if your realtor is super in every way, do your own searches online for real estate listings. You never know what may turn up in the market on a daily or weekly basis.
4. Get to know what you like. On your first appointment out with your realtor, try to see a number of different house styles. Find out if you like colonial, cape cods, one level ranchers, Victorian style homes, or the more simple townhouses. Learn about your preferences in terms of basements, garages, backyards, front yards, age of home, city or suburb, and so forth. Learning about what you want will give you a strong edge in finding your dream home.
5. Find out why the house is for sale. In most cases, it is due to a new job in a new location or a family move. Other times it could be due to a more serious or unique situation. It is always a good idea to know why the owners are selling the home before you get tied into buying it.
6. Bid below asking price unless you find yourself in a bidding war. Real estate is one thing in life that is always on sale. The price can flex due to many issues, so think about the home’s shortcomings and its necessary repairs. Base your offer accordingly and remember that buying a home is much like playing “Let’s Make a Deal.”
7. Definitely get a home inspection, even on a new home. Unfortunately, the sales industry is often a game of persuasion and polishing a product to hide its flaws. The real estate market is no different. Sellers put forth their homes’ best assets and downplay the flaws.
Many times a home inspector finds these things that may slip past your own eager eyes, such as settlement cracks or cracks in the foundation under the carpet, leaks, dryer vent problems, hot water heater issues, roof problems, and much more.
A home inspector finds these negative elements and brings them to your attention so you can take action. Sometimes an inspector’s report really can make or break a home purchase, and many times they can affect the final purchase price. Don’t skip this very important step!
8. Negotiate, negotiate, negotiate. When your inspection report comes back, now is the time to adjust your offer to reflect the necessary repairs and modifications for the house. You should have some bargaining chips by the time your home inspector is done, especially if you are purchasing a pre-owned home. Use the findings to your advantage by drafting an addendum to your agreement of sale so your realtor can work her magic.
9. Don’t get roped into any strange mortgage plans. In most cases, the 30-year conventional mortgage is the way to go. If you don’t have 10 to 20 percent of your home’s cost saved as a down payment, you may need to consider other options. Try to avoid the high-risk mortgage options, because they tend to be highly responsible for the many foreclosures out there on the market today.
10. Love your house inside and out, but don’t pick one that forces you to live outside your means. One of the biggest things that couples fight over is money. Protect your relationship and your financial stability by making a wise investment in a home that won’t put you in the poor house.