Searching for a home can be a fun experience. When you’re thinking of buying a home, every neighborhood is one big department store filled with stuff that you might want to buy. And most people like to go look at homes – indeed, any real estate agent can tell you that her open houses are often filled with people who aren’t even thinking of moving, but just like to “window-shop” what’s on the market.
And just as real shopping is more fun than window-shopping, actually looking for a new home for yourself is a lot more interesting that just checking out open houses. You get to explore new neighborhoods and imagine what it might be like to live there. You get to walk through a home visualizing yourself having dinner there, raising your family there, having parties there – basically, living there. Even more fun, you get to see how other people live, and render snarky judgments on their decorating choices!
So enjoy this part of the process. After all, once you find the home you want to buy, the fun ends and the hard slog of contracts and mortgage papers and moving begins.
What should you look for in a home? What makes a god investment? What will make you happy? Here are 10 things to keep in mind as you start your home search.
Before you get started in your home search, we wanted to share with you 10 fundamental principles about home buying that you might find helpful.
1) Get to know the market, but don’t take forever.
Very few people are lucky enough to find their perfect home in the first showing, or even in the first couple of showings. Indeed, finding your “dream home ” in the first showing can actually be counter-productive, because you’ll immediately think about all the other homes that might be EVEN BETTER that are still out there, without realizing that you lucked into the perfect home on the first try. So take your time to get to know your market and learn the inventory. Over time, you’ll get a sense of what you like and don’t like, and what’s a reasonable expectation given your price range. That said, of course, you should eventually come to the point that you’re confident in your read on the market, which is when you need to be ready to pull the trigger. Buyers who hold out for perfection often find the market passing them buy, as one great home after another gets snapped up while they’re deep in deliberation.
2) Buy something you love, but realize you won’t love everything about it.
Buying a home is like falling in love with your spouse. You go on the market, you check out the “inventory,” and you find someone that you absolutely love and want to spend the rest of your life with. But no matter how much you might love your spouse, you’re never going to love everything about him or her. It’s the same with buying a home. You’re buying a home for $350,000, and wish you could have that extra bedroom that the $500,000 house has. But that guy buying a $500,000 house really wishes he could afford the $700,000 house and get a bigger lot. And the guy buying the $700,000 house is frustrated that he can’t get the finished basement that’s available in the $900,000 house. It’s that way all the up the scale . It doesn’t matter what price range you’re in, because there’s always SOMETHING in that home you don’t like and wish you could change. But if you could change it, then the home would be worth a little more and then you wouldn’t be able to afford it. And if you COULD afford it, you’d move up in price range and find something new to aspire to – and to be disappointed with.
3) Buy value, or where you can add value.
When you’re buying a home, don’t be so focused on finding a “steal.” In an open market, it’s very tough to find something that is severely undervalued. More importantly, you don’t need to find a “steal,” you just need to find a home with value. And as you get to know the inventory, you’ll start to see where the values are. You might find value in a well-made home in a desirable area that you believe will appreciate well. Or you might find value in a home that is in an up-and-coming area that will develop over time and boost home prices. Moreover, you should look for a home where you can ADD value: a house that doesn’t show well because of it’s condition, but which will be worth much more once you make some cheap repairs and clean it up. Or a home with property taxes that are too high, but which you think you can get reduced with a grievance. Ultimately, in the kind of market we’re in right now, finding value is relatively easy, because property values are likely to increase across the board over the next few years.
4) Keep an open mind.
Most people start their home searches with a very firm idea of what they’re looking for. But you’d be surprised at how many of them end up buying a home that is completely different from the one they thought they’d be buying. Maybe they changed their location preferences once they got to know the areas better. Maybe they realized they didn’t want a big house yet, and decided to get a condo. Maybe they fell in love with an old-fashioned Victorian layout, even thought they started out wanting a modern floor plan. That happens all the time. So while it’s important for you to have a good sense of the kind of home you want, keep an open mind during your search process, and don’t be so fixed on those goals that you miss out on opportunities you might like.
5) You’re buying the home, not the furnishings.
Smart buyers have the ability to look past the superficial nature of how a home shows. Always remember that you’re buying the home itself. You’re not buying the furnishings. You’re not buying the clutter. You’re not buying the condition: the smell of cat urine, the stained carpets, the dirty windows. All those things leave with the sellers, leaving the home itself behind. When you see something that’s cluttered, or dirty, or poorly laid out, try to look past it. See it with the eyes of a real estate professional , someone who looks at properties and just sees the location, the square footage, the amenities, the layout. Those all stay with the property. The clutter and the smells? They don’t. And it goes the other way, too. If the home is beautifully staged, don’t be so overwhelmed that you forget to think about how it will look once you’re actually living there. It might seem roomy only because the sellers took out all the clutter that you’re going to be putting in! Pay for the home, not the staging.
6) Buy within your means.
When you sit down with your loan officer, you’ll get a sense of how much home you can afford, and establish your price range. But that doesn”t mean you absolutely have to spend that much. Lots of buyers purchase a home that’s below the price range they could otherwise afford, particularly if they are first-time buyers who are looking to move up within five to seven years. They’d rather make the investment that allows them to save some money both in their down payment and their monthly costs, so they can continue to save toward a larger down payment for their next home. Or maybe it’s just that they want to be sure they can make their payments while still building a “rainy day” fund. Either way, don’t feel obligated to spend up to your maximum.
7) You’re buying not just a home, but a neighborhood.
You’ve probably heard the expression, “don’t buy the best home on the block.” Why? Because it will be tough to sell, and you’ll never get the best price for it. But that’s a little misleading. Yes, if you buy the best home on the block, you’ll never get the kind of appreciation you’d get if the home were in a nicer neighborhood. But if the home were in a nicer area, it would cost you more in the first place! The better way to think about this is to simply remember that when you buy a home, you’re buying a neighborhood, and the value of your home will reflect the quality of that neighborhood. If the area goes up or down in value, so will your home. If the area changes, for better or worse, so will your property value – regardless of whether you have the best or worst home on the block.
8) Buy with an idea of what it will be like to sell.
Generally speaking, you always want to own a home that has broad appeal. The more buyers who might be interested in purchasing that home, the better the chances of both finding a buyer and getting a good price when you sell it. That’s why some agents will counsel you to avoid homes that are too quirky or idiosyncratic – because it can be tough to find buyers for them. That said, sometimes homes with narrow appeal are easy to sell precisely because their features align perfectly with the needs of a small but dependable group of potential buyers. After all, if you love the home, then other people will probably love it as well. Just go in with your eyes open that someday you’re going to have to sell that home, and there might not be a whole lot of people with your particular tastes.
9) Buy for your time frame.
We never advise people to “flip” homes unless they are professional investors. Flipping is just too expensive to make sense for the everyday home buyer. The investment of time and closing costs makes moving every few years prohibitively expensive, so be prepared to stay in your new home at least five years. That means finding something that will be able to handle your needs for the foreseeable future, both in terms of size and location. So when you buy, think about your time frame. If you’re planning on being in your home for fewer than five years, you might consider continuing to rent until you’re ready for a longer commitment.
10) A home is an investment, but it’s not JUST an investment.
Everyone says that buying a home is one of the biggest investments you’ll ever make. And that’s true. But it’s also a place where you’re going to live. So keep that in mind as you start your home search. Yes, you want to buy value. Yes, you want to think about what it will be like to sell that home. But most importantly, you want to buy something that’s going to make you happy for the time that you live there. If you end up falling in love with a home that has quirks, or is in a neighborhood that might not appreciate, so what? If you’re going to love living there for the next seven to ten years, buy it. We only have one life. We might as well like where we’re living it.
Conclusion: Dealing with Buyer’s Remorse
Finally, one last thing. No matter what you buy, no matter how good a deal you get, no matter how much you love it, you’re going to at some point feel a pang of buyer’s remorse. Recognize that for what it is – a small part of your brain that is playing games with you. Buyer’s remorse is normal. When you start to feel it, just write down all the reasons why you’re buying this home. Once you start doing that, the feeling will probably go away.