Buying a house is a major decision. It’s critical to know what to look for when buying a house so you enter the process with clarity and purpose. Having criteria for your dream home and neighborhood could mean the difference between finding the right fit—or making a mistake.
Criteria To Consider When Buying a Home
Here are some key criteria to consider when buying a home:
- Price. What can you afford to spend on a property? The preapproval letter from your lender will include the maximum loan amount you qualify for. Consider your down payment and what you can afford in monthly mortgage payments coupled with recurring debts and household expenses (like daycare, groceries, utilities, tuition, etc.). You’ll also want to have savings set aside for home maintenance and major repairs.
- Location. The neighborhood, city, town, or state you want to live in is almost as important as a home’s amenities. Do you care about peace and quiet, or proximity to recreation or entertainment? What about being close to shopping, dining, grocery stores, schools, and job hubs?
- Commute time. How long would your commute to and from work and/or school be? Will you have easy access to public transportation and how important is that for your day-to-day needs?
- Schools. If you have or plan to have children, you’ll want to research the quality of the schools a home is zoned for. Pay attention to school ratings, test scores, teacher-to-student ratios and other success metrics to evaluate schools and school districts in the areas where you’re looking for a home.
- Home type. Owning a single-family home tends to come with higher upfront costs and maintenance responsibilities than buying a condo or townhome. Condos and townhomes tend to be smaller and less expensive. However, you’ll likely pay higher monthly homeowners association or condo fees for shared amenities, services, and maintenance.
- Design and upgrades. A new construction home is brand new, energy-efficient and can be tailored to your design tastes. The same goes for a flipped home, which is a property that is bought, fixed up and resold in a short timeframe. With a flipped home, you won’t have a say in design elements, but you’ll likely pay more than an existing home because it’s been upgraded. Or you can buy an existing home that may need to be updated but the price might be lower.
- Condition. Some properties may need minor cosmetic repairs like new paint and carpet, while others need significant renovations or require you to replace major costly systems. Do you have the extra cash, time, and energy to account for a house that’s not move-in ready?
- Space. Consider how many bedrooms, bathrooms, offices, and other spaces you may need. Do you want a large kitchen or a specific number of bedrooms to accommodate a growing family? Does the property check off all the boxes right now—or does it have the potential to add those spaces in the future?
- Energy efficiency. Utility bills can impact your monthly budget. How’s the property’s energy performance? What would need to be done to improve it? Are the appliances, windows, and other structures energy-efficient? What direction does the home face and how does that impact energy usage?
- Square footage. How big does the home need to be to match your lifestyle, family, and storage needs? Keep in mind the larger the home/property acreage, the higher it costs to maintain it. A larger home also means you’ll pay a higher purchase price.
- Parking. Do you want a garage/off-street parking, or are you okay with parking your vehicle on the street? Do you need other outdoor storage spaces for a boat or RV?
- Property additions. Do you want a property with interior or exterior space to extend the property or convert the loft or garage into an additional room? Is there a basement space you could finish down the road to add to your livable square footage?
- Outside space. Do you want a garden, patio, or back deck? How much maintenance are you able and willing to do? If you’re buying a townhome or condo, will you have access to any private outdoor spaces, or are they shared with other residents?
- Historical district. Check if the home is located within a historic district. This might impact your ability to extend the property or make changes to its exterior.
- Potential drawbacks. Is the property on a busy road, next to a highway or railway track, in a food desert or in a high-crime area? Decide what issues you are willing to live with before you buy. These properties may also take longer to resell and be harder to rent out.
Red Flags When Buying a House
With so many considerations to weigh in potential properties, here are some red flags to look out for when buying a house, especially during the viewing.
- Poor tiling or flooring work. This would be a sign of a bad flip or remodeling job, and you could end up spending a lot of money to fix it.
- Foundation issues. Hairline cracks are usually a sign the house is settling as it ages, but larger gaps or cracking could signal a bigger issue with the foundation.
- Poor maintenance. If it is apparent from the walkthrough that the seller has failed to keep the property in good condition, there might be even worse problems beneath the surface. A poorly maintained home might require costly repairs or renovations.
- Nearby water. If the home is near a pond, lake, canal, ocean or other body of water, the property could be at a higher risk of flooding. Ask your real estate agent to find out if the property is in a FEMA flood zone, which might trigger the need to buy special flood insurance in addition to homeowners insurance.
- Poorly installed windows. This could be a sign of foundation problems or a bad remodeling job requiring new windows. If you need help, check with your real estate agent.
- Mold. Check the bathroom and sink cabinets, as well as look around water pipes or drains. Look for small black or gray spots. You can also check the caulking around faucets as well as look for patches on the ceiling.
- Water damage. A musty odor may be a sign of water damage. Be sure to check walls and ceilings for water lines and look out for exposed piping in basements or laundry rooms to check for rust, water stains or leaks.
- Improper ventilation. Poor ventilation increases the risk of mold. Look for condensation on windows or slightly bubbled or peeling paint around windows, doors, or vents. This might mean there’s moisture in the walls or in the ceiling drywall.
Who Can Help You When Buying a House?
A number of professionals can offer you advice or assistance when you’re searching for a home, including:
- An experienced real estate agent helps you evaluate homes on the market and guides you through the buying process. They will make sure you view homes that meet your criteria and act as an intermediary with the seller and their agent to help you get the best deal.
- Your mortgage lender or mortgage broker helps you find the right home loan and understand how much house you can afford.
- A real estate attorney and/or title company can make sure you’re protected from a legal and financial standpoint. In some states, you must hire a real estate attorney to close a real estate transaction.
- A professional home inspector does a thorough review of the home’s core components—its structure, roof, air conditioning/heating and electrical systems—before you buy a property. Hiring a home inspector is highly recommended to ensure you get a good return on your investment and understand the home’s condition and any potential repairs/renovations.
- A professional home energy assessor can help you understand the home’s energy use and identify problem areas as well as fixes.
For more information on how you can protect your largest investment, call Hunter Insurance today at 769.9500.
Credit: Forbes Advisor