There are many important questions to consider when buying a house. The list can feel daunting, in fact. Where do you want to live? How much can you afford? How much space do you need? What home style do you want?
With an expert real estate agent on your side, you’ll be able to narrow the answers to those questions and more. Julia Monaghan Real Estate is here to guide you toward the right home for you and your life. It’s thrilling to help our clients attain their real estate goals.
What Questions Should You Consider When Buying a House?
Buying a home is a big decision. Most people will only go through the process a few times in their lives. So how do you do it without worrying that you’re making major mistakes?
First, take a breath and relax. Assuming you have an excellent buyer’s agent, you are not traveling this path alone. Your realtor will help guide you as you search for your next home.
Second, ask yourself the following five questions as you prepare to make a home purchase. A little planning and pondering before signing a contract can save you significant time and ease your worries.
1. How Long Will You Stay in The Home?
The expenses involved in buying a home can be considerably more than the cost of moving into a rental. Closing costs average 2-5% of your total loan or about $3000 for every $100,000 you borrow.
It takes about five years for most homebuyers to gain enough equity to recuperate their closing costs. So if you intend to stay in the new house for five or more years, you will come out ahead. Of course, this timeframe can change depending on the housing market, but it’s a reasonable estimate.
On the other hand, if you know that you will only be living there for a year or two, it may not make sense to buy yet. Your agent and lender can help you weigh the pros and cons of purchasing a home when you know you will be moving again soon.
Portland-area homes have been increasing in value by about 5-15% per year since the Great Recession in 2008. A strong seller’s market can translate to a faster break-even point, but there are no guarantees.
2. Is the Location Right for You?
You’ve heard it before. The three most important features in a home are location, location, and location. While the address of your home isn’t the only critical feature, it is the one thing that you can’t change.
Location is one of the most crucial things to consider when choosing a house. Some questions to ask include:
- How long will it take to get to work?
- What school district is the house in? If you don’t have kids now, do you expect this to be relevant in the future?
- Do you like the feel of the area? If you like manicured lawns, but the neighborhood is marginally maintained, you might want to cross it off your list. Likewise, if you prefer to keep it simple, but the neighborhood has an amped-up HOA, it may not be a good fit.
- Are there paths and trails to walk or bike safely?
- How much space is there between neighbors?
- Is it on a busy street? Some people enjoy the energy of a well-traveled street outside their window. Ask yourself if you’re one of them before purchasing a home on a high-traffic road.
Your home search may start with locations you’re already familiar with, or you may find new favorite parts of town as you search.
3. Do You Want To Be Part of a Homeowners Association?
A homeowners association can be very effective at keeping a neighborhood functioning well. Rules often cover details such as house colors and yard maintenance.
Here are a few things commonly covered in HOA covenants and rules:
- Color and material choices for the exterior of your home
- Number of people allowed to reside at a property
- Holiday decorating
- Lawn maintenance
- Recreational vehicle parking
- Street parking
- Owner-occupancy vs. rentals
When you buy a house, it’s important to consider the details of an associated HOA. Read the covenants carefully before you make a decision.
4. Can You Truly Afford the Home?
One of the most appealing things about buying a house is that the price is set. Unlike rent, which can increase regularly, the cost to purchase your home is a fixed amount. Assuming you do not have an adjustable-rate mortgage, your monthly payment will stay the same unless you refinance.
But, while a typical mortgage has a consistent payment amount, other related expenses may change over time. Property taxes usually increase every year. Homeowner’s insurance is also likely to go up as your property value appreciates.
It’s also good to note that one part of your monthly payment, mortgage insurance, can disappear over time, saving you money. Financing typically includes mortgage insurance when you put less than 20% down on a home. Mortgage insurance can drop off as your equity grows, or a refinance can remove it.
Another piece of the affordability puzzle to consider is the cost of utilities. Ask the seller or their agent for information about the average monthly amounts for things like gas, water, and electricity.
In addition, when buying a house, you should consider the cost of maintenance and repairs. Renters can call a landlord to fix the stove or a leaky roof. But homeowners need to bear that expense on their own.
Homeownership will involve expensive repairs at one point or another, so plan accordingly. A rule of thumb is to save about 1% of the total value of your home each year for maintenance.
5. How Much Fixing Up Are You Willing To Do?
There is something special about seeing a dilapidated home restored to its former glory. But a thirty-minute HGTV show doesn’t capture all the work and money that goes into a fixer-upper.
If you’re considering purchasing a home because you can envision big improvements, start by talking to contractors. Get an estimate from a professional to have a realistic idea of the expense and time involved. You’ll be better prepared to determine a purchase price you can live with and not become house-poor.
Don’t Sweat the Cosmetic Stuff Too Much
Your home inspection is going to give you all kinds of information on your potential new property. While it is critical to learn about significant issues like roof leaks and faulty systems, there are some things you can let slide.
Tasks such as replacing dated appliances or updating the house’s color palette are pretty simple fixes that shouldn’t stop you from considering a well-built home in your dream neighborhood.
Stay focused on the essentials and non-negotiables as you determine your most important factors in buying a house.
When You’re Ready, We’ll Get You Home
Are you ready to buy or sell a house? Reach out to Julia Monaghan Real Estate to begin your Portland area home purchase or sale. Whether you want to get going quickly or you’re just learning the process, we’re here for you. Contact us today to get started.