Take a stroll down almost any street and you’ll find at least one “House for Sale” sign. Drive around town and you’ll find dozens — even hundreds — of properties on the market. It may seem like easy pickings for buyers searching for an affordable new home, but with so many ch
oices and an unpredictable market, how can you be sure that you are making a sound investment?
“Purchasing a home is one of the most important transactions we make, but many buyers treat it like retail,” said T.C. Hyatt, a real estate agent in Snohomish County. By not doing their
research, asking the right questions or evaluating their lifestyle requirements, many buyers purchase homes they can’t afford or pay for things they don’t need. Avoid costly mistakes by following these guidelines:
Know your time horizon
Every time horizon is different and is defined by the lifestyle a buyer expects to live over the next five or more years. A newly married couple may anticipate young children and pets, which could require an extra bedroom or two, fenced yard and close distance to a dog and kid-friendly park. A husband and wife sending their third child off to college would possess a very different time horizon as they scale down their household needs.
To determine your time horizon, visualize your life five years from now. Are you starting college in the spring? This change may call for a quiet place to study, or a reasonable commute to campus. Is your disabled parent moving in? This could necessitate ground-floor access to the kitchen and bath. Weigh these factors before you study home listings or attend open-house events.
Be smart about finances
Prior to making any decisions (or signing your name to mortgage deals), pore over your finances. Review payment stubs, receipts and bank statements, and be realistic about what you find. Evaluate how much money you have available for a down payment and monthly mortgage, and don’t forget to factor out income sources that come and go, such as occasional overtime checks and bonuses.
Also, analyze your employment situation. Do you hold a steady job? Do you have a backup plan in case you lose your primary source of income? As you move forward with your home search, remember to keep enough cash on hand for savings, entertainment, emergencies and unforeseen expenses. Refuse to over-spend.
Prioritize your needs, wants
With so many attractive and affordable properties on the market, it’s easy for buyers to lose track of their goals, and end up purchasing more house than they can afford. Instead of daydreaming about breathtaking views and a Jacuzzi bathtub, sit down and organize your priorities.
With your time horizon and financial information nearby, reflect on your dreams and desires for your new home. Write your needs on paper, including the size, amenities and location that you require to support your quality of living. Now, think about the features that you want (not need). A newly renovated, luxury kitchen? Fourth bedroom? Immaculate new carpeting?
If money is a concern of yours (as it is for most buyers), consider the perks carefully. “Look past the bells and whistles,” said Hyatt, “just because something is brand-new doesn’t mean it’s the best.” Hyatt added that many buyers have the ability to perform basic remodeling work themselves, saving costs in the long run.
Build relationships
Who do you turn to for knowledgeable, unbiased real estate advice? Who provides insights on market trends, communities, contracts and financing options? This is a critical time in the real estate industry. Many buyers are wary about spending money and financial institutions are cautious about lending. Establish a network of capable and experienced local professionals. Ask questions, express your concerns and trust their advice.
Read the fine print
Real estate contracts and financing incentives can be complex. Read through the fine print, line by line, and ask your real estate agent or attorney to explain confusing or complicated details. Never sign anything that you don’t understand.
Even in the existing buyer’s market, it is vital that first-time and seasoned buyers make thoughtful, informed decisions. Take your time. Set your priorities. Develop a trustworthy network of people to support you. And, finally, don’t pursue any deals until you determine your needs, expectations and what you can afford.
Eve Nicholas is a Whidbey Island free-lance writer who writes a weekly column for The Herald on finding a job.
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