So you’re in the market for a new abode and you want to make sure you do the right thing. Maybe it’s your first time and you are overwhelmed with the process (not to mention the advice from every family member and friend who has ever been there before), or maybe you’ve done this before and have a few scars to show for it. You’ve read all the articles and you know not to do anything that’ll mess up your credit. You watched hundreds of hours of HGTV and you know exactly what kinds of rehab/updating you want to do. You’re cautiously optimistic. I’m not here to give you the same advice you’ve heard umpteen times already, though. Nope. I’m here to give you my top five, slightly out of the ordinary tips for the would-be home buyer.
5) Consider a grant. Did you know there are government grants for home buyers? Especially if you are a first time purchaser. Most of these programs are going to apply in specific geographical locations or if you meet personal income criteria, but the options are more numerous than you might realize. This one thing could be an entire article on it’s own, but there is good information just a click away.
4) Know your neighborhood (1). Just driving through when you go to see your potential dream home is not going to give you a full picture. You might want to try to stop in at a couple different days and times of day/eve to get a feel for the activity on your street. You don’t want to find out a week after you’ve moved in about the neighbor with the Harley repair side business that wakes up the whole block every weekend morning. You can only find out so much, of course, but spreading out your visit times gives you the best chance at a true picture. That said…
3) Know your neighborhood (2). Something I do for all my buyer clients is to go visit the neighbors of a home they are seriously considering. No one knows the neighborhood or some more facts about your target purchase quite as well as the neighbors do. In a recent transaction, I had a neighbor be very forthright with me about the constant termite problem on their block and, although the client didn’t end up making the purchase, had they gotten as far as the inspection process, they would have had been prepared for this. Another thing that has come up in the past is when a neighbor shared that the whole block was going to the next council meeting to oppose a strip mall that was being put up where the nice barn was at the end of the street. These are things you might want to know! Plus, wouldn’t you like to get a feel for the personalities of the people you’ll be living next to for the next part of your life? Maybe you aren’t the make-friends-with-everyone type that I am, but I’ve always enjoyed living in a home surrounded by neighbors who feel comfortable asking to borrow one another’s lawn tools. Maybe it’s just me. 🙂
2) Know your neighborhood (3). Another extremely important aspect of your neighborhood has more to do with it’s financial future. To this end, you may wish to have your agent research how many of the nearby homes are rental properties as opposed to owner occupied ones. When thinking about the resale value of your home, the overall quality of the surrounding homes and their resulting sale prices have a huge impact on your own home’s value. The value of your home is based on “comps” – or comparative analysis. That comparison isn’t based on a home 10 miles away. It’s based on your neighborhood and owner occupied homes are going to be better cared for (and thus sell at higher values) than rental homes in at least 90% of the cases. In other words, be in a neighborhood that’s best set up for future value growth.
1) Think like an investor. Some of what I’ve said above (especially in tip #2) applies to this, but I want to take this point even further. I know when you’re buying a home, it’s emotional and you are picturing living in it and all the fun things you can do there. It’s one of the most significant decisions of your life. It’s also a monumental part of your financial health. To that end, it behooves you to step outside of dreams of living there and step into the mindset of someone who would be buying the house strictly for profit at some point down the road. When done right, a home can be a great investment. In fact (as I’ve outlined in a previous article), real estate is one of the few investment vehicles in which your own effort/labor can effect the value of the investment. I’m not saying you have to buy a complete fixer-upper, but it’s a wise decision to look at potential home purchase and ask yourself: “Will I be able to make this worth more?” If you can think of a way or two that you’ll be able to add value to the home over the years you’ll be living there, then it’s that much wiser a purchase. Maybe it’s just some landscaping you’ll do to really make that curb appeal pop. Maybe it’s just some minor updating and a facelift. Maybe it’s adding a convenience like central air. Whatever it is, if you will be able to make your home worth more than just normal inflation will, then you have another positive and well advised reason to make the purchase.
That sums up my outside the box tips for you. If you’re new to this and looking for some very inside the box tips, I recommend you check out the following links: