Home Buying 101 Series: Navigating the Waters of House Hunting

November 14, 2018

The best feeling in the world is finally knowing you took a step in the right direction.
A step towards the future where everything that you never thought was possible, is possible.

In my last post, I wrote about getting ready to buy a home. We covered everything from finding the right lender and real estate agent to discovering your “why.” Now that that’s out of the way, let’s discuss the first part of the actual process and what you can expect with a home purchase.

1. Emotions: Many say that buying a home is one of the top five most stressful life events. It’s right up there with the death of a loved one, getting married or divorced, or the birth of a child. The process is going to be an emotional rollercoaster of excitement, joy, frustration, fear and anxiety all mixed in there. I don’t know that there is anything one can really do to prepare themselves for all of these emotions, other than being aware that it’s normal to have these feelings. Remember that your realtor and lender can’t read your mind, so it’s important to be honest about your feelings and concerns. This is not the time to be a lone ranger!

2. Finding the Home: This part of the process can be both exciting and frustrating. It’s exciting because you are daring to see your life differently. Yet it’s frustrating because what many buyers want versus what they can afford are two different things. It’s the proverbial champagne taste with a beer budget, so to speak.

3. Condos/Townhomes: If you’re using an FHA or VA loan and shopping in the condo market, it can be downright maddening to find a complex that will get approved. Plus, you’ll want to consider owner versus tenant occupancy and any pending complex litigation as well. When I’m working with a buyer in this situation, I take the extra step of checking these issues out in advance before taking someone to see a property. There’s no need to waste energy or risk falling in love with a property only to find out that the community doesn’t qualify. It’s also important to keep pet policies and HOA involvement in mind when purchasing this type of home.

4. Homes: Lender requirements are not as strict for detached single-family homes. The house only needs to meet their habitability guidelines. If the condition is fair or below, or there are foundation issues, it will be difficult to get a “normal” loan. There are rehab loans available for these types of situations, but it’s important to keep in mind that the property needs to appraise for the cost of the home and the finished remodel.

I once had a client go into escrow on a beautiful home that had been completely remodeled on the interior. It was at the top of where they felt comfortable price-wise. During the home inspection, we discovered issues with all of the major components – roofing, plumbing, sewer, HVAC and more. While the buyer wouldn’t have had to do anything on the interior, the expenses they would have had to incur in the first five years of homeownership would have been significantly beyond their financial capability. With broken hearts, they walked away from the purchase. Who can blame them for not wanting to be house poor? Shortly after, we found something larger and less expensive for them. Even though it needed cosmetic upgrades, it was easier for them financially and an all-around better fit.

5. Miscellaneous Items to Consider: Regardless of whether you’re looking at attached or detached homes, it’s good to ask and do the following: Does the floor plan of the home make sense for your needs? Is it on a busy street? Are there large power lines, strange odors, or air traffic? Talk to the neighbors. What do they like or dislike about the complex, neighborhood, local schools, or area? Drive by the home and area at different times of the day. Check crime statistics and the Megan’s Law database for the area. All of these components can impact the value and future sale of the home.

I hope you found this information to be helpful! Don’t forget about the first article in our Home Buying 101 Series: Preparation is Key. Our next installment will cover the process of writing an offer and going through escrow – stay tuned!

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