Buying a house is a big decision and demands an even more significant investment. Planning to buy a house may bring mixed emotions like happiness, stress, excitement, or regret, depending on the questions lingering in the back of your mind. Questions such as whether the purchased property is a good investment, or will you be able to keep pace with the financial demand attached to it. Indeed, a bad decision on property selection can take a serious toll mentally and financially, thus it is very important to understand and move cautiously before buying a house. To make your life a lot easier, we compiled a list of things that you need to keep in mind before buying your dream house.
1. The reason behind your decision to buy a house:
There could be multiple reasons that have motivated one to decide on this, such as wanting to move to a different location with a more calm and natural environment or moving close to the city. Or this could be due to the reason that spending on rent is not worth it or may be looking for a more spacious place for you and your family, or could be planning to resell in the future. So, your first task is to get a clear thought on why you want to buy a house.
One of the most important aspects which needed serious consideration is the budget. Make a note of all your expenses and how much you are likely to save every month, as a percentage of this money will go for down-payment and mortgage. There’s a big difference between reality and what the mortgage company believes you can afford. From maintenance to homeowner insurance, taxes come closer to 28% of total gross and this is something you need to make out from the remaining saved money. So set up the budget accordingly.
3. A Credit Score:
A credit score is one of the significant factors in deciding on your mortgage application, so it is important to know where your credit stands and how to get the best mortgage rate. Credit scores can range from 300 (low) to 850 (high), and scores of 740 or more are considered to be very good. Generally, the minimum credit score needed for a mortgage is 620; however, some government-backed mortgages have a lower credit requirement. And having more debt means you are falling behind on your loan applications.
4. Real Estate Agents:
Partnership with a real estate agent while buying a property is very crucial, though not necessary, having an expert opinion provides valuable inputs which can help you sign a sweet deal. Before signing a contract with a real estate agent you need to understand the types of real estate agents and what knowledge they bring to the table.
Realtors are members of the National Association of Realtors and follow a certain standard of ethics and moral code, that’s what makes them trustworthy. One of the advantages of hiring realtors is that they have access to the properties that other agents do not have.
Seller agents represent clients who wish to sell their property. Their main purpose is to protect the client’s interest and negotiate with the potential buyers, thus bringing the best price for the listed property.
Buyer agents are as the name suggests representing buyers interested in buying property. These agents are someone who brings so much to the negotiation table and helps you with the perfect house for the lowest and best price.
Dual agents represent both parties and there’s always a conflict of interest and are considered illegal in some states as they pocket from both sides.
So, when buying your dream house, it is recommended to secure the service of a real estate agent since they have deep knowledge and understanding of the estate market.
5. Radon Test:
When buying a house there are so many things to consider from bedrooms to bathrooms, from the kitchen to the lawn. But, one thing we forget, yet a very important one is the Radon test. So, you might be wondering what exactly radon is? Radon is a naturally occurring, odorless, colorless, and tasteless radioactive gas formed after the breaking down of radioactive metals in rock, water, and soil over time. Radon is the second leading cause of lung cancer in the US, but it doesn’t mean a deal-breaker, before taking your final decision, it is better and safer to ask for a radon test on the property. Radon is measured in picocuries/liter and as per EPA (Environment Protection Agency) house needs to be fixed if the radon level is 4 pCi/L or more.
Buying a house is emotional but requires rational approaches. So, don’t let your emotions come in and consider the aforementioned before buying your dream home.