8 Things to look for when buying a house: Expert Advice
Orignal article by Erik J. Martin can be found here.
What’s most important when buying a house?
Everybody has a wish list in mind when shopping for a home. Whether it’s a certain price, size, style, location, or otherwise, preferences are important.
But some criteria matter more than others, according to those in the know. For guidance, we asked several experts for their advice on what to look for when buying a house.
Here’s what priorities should rank highest and lowest in your search for a new home.
The first step to buying a house
Before you start house hunting — or even thinking about your wants and needs in a home — it’s crucial to understand your budget.
One of the biggest mistakes a first-time home buyer can make is getting their heart set on a certain home only to find out they can’t afford it.
“I don’t know how many times I have had people come to me saying they made an offer on a house only to find out that they were way outside of their budget,” says Jon Meyer, The Mortgage Reports loan expert and licensed MLO.
“Most people have a general understanding of what to look for when buying a house… What most people really have no exact idea of is how much home can they really afford.”
“Most people have a general understanding of what to look for when buying a house as well as their own internal list of needs and desires,” Meyer continues. “But what most people really have no exact idea of is the qualifying for a mortgage part — how much home can they really afford.”
That’s why the first step in your home buying process should be to get pre-approved or pre-qualified with a mortgage lender.
The preapproval process involves a lender looking at your financials — income, credit, and debt — to determine how much house you can afford. They’ll also give you a preapproval letter stating how much you’re approved to borrow, which will give you the backing you need to make a serious offer on a home.
What to look for when buying a house
There’s a lot to consider when buying a house, from the number of bedrooms and bathrooms, to the amount of outdoor space, to local amenities and neighborhood safety.
So how do you prioritize everything and decide which home is right for you?
We asked five real estate and housing experts what’s most important to look for when buying a house. They agreed on eight key factors to keep in mind:
- Home style and size
- Home amenities
- Quality of schools
- Taxes and cost of living
- Size of the property
- Homeowners association (if applicable)
Here’s why each of those things should be critical to your home search.
1. Location, location, location
You’ve probably heard it before. But the most important things to keep in mind when house hunting are location, location, location.
“Location is the one thing about your home that you cannot change, and therefore should be the single most important decision you make when buying,” suggests Glen Pizzolorusso, a licensed associate real estate broker with Compass in Fairfield County, Connecticut.
Mark J. Schmidt, a broker associate with RE/MAX Country, agrees.
Most other aspects of a home can be changed, but you cannot move your home’s location.
“You want to find a home in an area you’re going to enjoy, taking into consideration things like your commute to work and school, nearby shopping and entertainment, and anything else that’s important to you for where you want to live,” he says.
Suzanne Seini, CEO/partner of Active Realty, also places location at the top of her list.
“First-time buyers often get tricked into purchasing a home that backs up to a busy street or has power lines overhead because the home has a lower-priced tag. Sometimes these homes will look nicer than others that you walk through, but it can be hard for a first-time buyer to see through this if they’re not working with an expert,” explains Seini.
She reiterates, “Most other aspects of a home can be changed, but you cannot move your home’s location.”
Obviously, you need to choose a home within your price range. And it should have a monthly mortgage payment you’re comfortable with. That’s why, for most buyers, the home’s price tag is a make-or-break consideration.
In a highly competitive market where bidding wars are common and properties get claimed within days or even hours, you should be prepared to negotiate. But don’t break the bank on what you can ultimately afford.
3. Home style and size
You want to be content with the layout and square footage of the home you choose. Remember that your needs may change as your household grows, and if or when family members are added, so carefully consider short- and long-term size needs as well as the practicality of the floor plan.
Schmidt suggests asking yourself questions like:
- What style of home will work for you?
- Do you want everything on one floor, like a ranch, or would you prefer multi-floor living, as you could find in a colonial or split-level?
- Would you like something where you don’t need to maintain the exterior — as in a condo or townhome?
“You need to make sure the house has enough room and a footprint that allows for expansion,” Pizzolorusso notes. “For instance, with that two-bedroom Cape Cod will you have the potential to raise the second level and add an extra bed or bath?”
Upgrades aren’t cheap, of course. But buying a home with room to expand or renovate could save you a lot of money down the line if you don’t have to move as your needs and wants change.
4. Home amenities
Amenities inside and around the home matter a lot, too — from the type of flooring and quality of kitchen appliances to the lighting fixtures, bathroom finishes, and backyard features.
“Think about aspects of the home that may be on your wish list,” Schmidt adds. “Do you want a garage or a deck? Maybe a finished basement or an unfinished basement that you can put your personal touch on?”
Try to focus on expensive features that would be harder for you to add on your own after purchasing.
Amenities that can be easily changed or replaced, on the other hand, shouldn’t be the main driver behind your home purchase.
Jason Cook, Eastern Shore manager for Embrace Home Loans, says that while certain features are important, you may want to put them “toward the end of your priority list because you can always renovate and update a home after you purchase.”
5. Quality of nearby schools
If starting or growing a family is in your near-term plans, then you’ll want to pay attention to the local school district where you’re purchasing.
Ideally, every parent wants their child to attend highly-rated schools in an excellent school district. Take a close look at the public school system as well as private schools in your desired neighborhood and zoom in on test scores and other posted criteria that can suggest the level of education and the kind of experience your child can expect.
Make an in-person visit to each of the schools your child may attend and meet with teachers and administrators, if possible, to ask questions and learn more about the curriculum.
“Even if you don’t currently have kids, it’s a good idea to investigate the schools and see how they compare to schools in neighboring towns,” recommends Schmidt.
6. Taxes and cost of living
Your location can also make a big impact on what you’ll pay in taxes and other living expenses. Investigate what you’ll likely pay in:
- Property taxes
- Sales taxes at local stores
- Homeowners and automobile insurance
- Utility bills
A home on a large plot of land, for instance, will likely have higher property taxes than one with a small backyard. And homes in a danger-prone area — like a flood zone — can be very expensive to insure.
All these added costs will increase your monthly housing bill and your overall cost of living. So take some time to compare expenses if you’re considering homes in multiple locations.
7. Size of the property
“You want a decent-sized lot if you plan on adding any exterior features, such as special landscaping, a swimming pool, a deck, a gazebo, a shed, or a tennis court,” notes Pizzolorusso.
Carefully assess the size of your yards and grounds and envision how you may want to add these future outdoor amenities.
8. Homeowners association (if applicable)
If you plan to buy an attached home or property that falls within a condo or homeowners association (HOA), you should take some time to learn about that governing body. Look into:
- How it is governed and represented
- The covenants and bylaws
- Fees and assessments
- The HOA’s financial viability
- Legal history of the HOA (is it or has it been involved in lawsuits?)
“Homes in an HOA can come with restrictions and how you can use the home or decorate it, so you might want to consider that before placing an offer on a home with an HOA,” Schmidt says.
What’s not as important when choosing a home?
Jason Gelios, a Realtor in Southeast Michigan, stresses that home buyers should differentiate between wants versus needs and place the former down lower on their priority list.
“This will help make sure the right decisions are made when purchasing a home,” he adds.
Don’t fret about features that can be changed over time, advises Seini.
“If you don’t like the kitchen countertops, that shouldn’t stop you from buying the home. If the layout functionality doesn’t work and you and your agent don’t see a fix, however, that should be a deal-breaker,” Seini says.
Additionally, avoid worrying about the house being too “dated” (so long as it is structurally sound and doesn’t require major repairs).
“If you can find a house that’s near-perfect but hasn’t been updated since it was built decades ago, I recommend purchasing immediately. These are the houses I look for to flip, as they are well-built, and once the updating is done you will have built up a tremendous amount of equity,” says Pizzolorusso.
Why it’s important to set your priorities when home shopping
The worst-case scenario you can experience after purchasing a home is buyer’s remorse and the feeling that you overpaid or under-evaluated the property.
“That’s why it’s important to prioritize what you are looking for in a home ahead of time to avoid feeling like you made a mistake,” says Gelios. “Creating a list of priorities can help spell out what is really needed in a home.”
Seini aligns with that mindset.
“It’s essential to evaluate aspects of the home that can’t be changed and identify what your deal-breakers are. For example, if you are a family of four, a two-bedroom home may not cut it,” she says.
“Identifying your must-haves and your nice-to-haves can make a big difference. From there, you’ll be able to eliminate homes that don’t include your must-haves.”
Risks of “settling” on a house
The downside of not carefully assessing your priorities is a big one: You could purchase the wrong home in the wrong location for your short- and long-term needs and waste a lot of time and money. Before long, you may seek to move, which can be costly.
“I’ve heard of buyers, especially in this hot market we are currently experiencing, who have purchased a home because they got wrapped up in the process, were tired of getting beat out by other offers, and just wanted their search to be over. These folks wound up buying a home that did not match what they were looking for,” says Schmidt.
“When you rush into a purchase and don’t consider exactly what you are looking for, you can wind up with a home that not only doesn’t meet your needs but makes you miserable. And if you decide to sell because you’re so unhappy, you can stand to lose a good amount of money,” he cautions.
What to look for when buying a house: The bottom line
You can use the list above as a good starting point for putting together a checklist and kicking off your house hunt.
But remember, buying a home is personal. You’ll have to decide which factors to prioritize based on your needs and price range and which ones aren’t as important.
A great Realtor or real estate agent is key here. They can help you think about your priorities and measure the homes you view against those criteria.
Above all, make sure you come prepared with a “must-have” list. And if any homes don’t make the cut, be ready to walk away. This can be hard to do (especially in a hot market), but you’ll thank yourself a few years down the road when you’re settled in a home you love.