How to Buy a New Home

Are are planning to buy your first home? After your car, the next logical big purchase will be your first home. The process of buying a home is made up of several different elements. Maybe you decide to once you finally make enough money, you get married, you start a family or, maybe you are just tired of pouring your rent money down the drain. Buying a home is also an investment.

Buying-a-new-home

As mentioned before in my previous blog, before making any purchase, it is wise to chart your fixed expenses. Write down and categorize all expenditures for at least a month. Include all monthly bills (mortgage/rent, utilities, car payment, insurance premiums, etc.) Build a spreadsheet in a program such as Microsoft excel or Intuit’s Quicken – even just a notebook works. After charting, capture your variable expenses. This will be groceries, gas, transportation, ATM cash withdrawals etc. Estimate your monthly spending here and be sure to be reasonable. Now the bottom-line, add your fixed monthly expenses with your variable estimates, and subtract the total from your after-tax paycheck. Additionally, tally your debt so you know how much you owe. You will need to know how much money do you need/have for a down payment on a home which will depend on what the price of the home you are buying. Now, let’s build a checklist to consider before buying a home. These are things that you must consider and think about prior to talking to a realtor:

Questions to Consider Before Talking to a Realtor:

  • What monthly house payment can I afford (house, taxes and Insurance)?
  • How long do you plan on living there?
  • How many bedrooms -2 or 3?
  • Do you want wood floors or carpet?
  • Do I want a basement? (finished or not)
  • How many bathrooms?
  • What kind of kitchen (gas or electric)?
  • Do I need a dining room or dining area?
  • Garage – one or two car?
  • Do you have pets – Fenced in backyard and how big?
  • Do you want a garden?
  • Gas, oil or electric utilities ($$)? Checkout energy efficient utilities i.e. tankless hot water heaters
  • How far will I be willing to commute to work, i.e. transportation requirements
  • Location, Location, Location!

When you start looking for a home, find a realtor that you can talk to and work with. Give your realtor your parameters on what you are looking for in a home after you have answered the questions from the above list. Be realistic on what you can afford. When you start viewing homes, do your research and ask questions.

Questions you should ask your realtor:

  • How old is the home?
  • What kind of street is it on (traffic), very important if you have or are planning a family? Weekend traffic is usually different then weekdays.
  • Are there Good schools?
  • What are the Property taxes ($$)
  • If a house is for sale what are the utility bills per month (year’s history)?
  • Are the grounds flat? Or how is it slopped? (water flow/drainage)
  • What is the shape/condition of driveway?
  • Does the yard need work?
  • What is the age of the wiring? Is it wired to support Cable TV, Internet, Fiber or wire?
  • Is there Good water pressure?
  • What is the age of the hot water heater, furnace, refrigerator, oven, washing machine, and dryer? Does it have Central Air?
  • Are the inside walls painted or wall papered?
  • Is the basement dry (is there mold)?
  • What condition is the attic in?
  • What type of insulation? (very important if you live in the north!)
  • When was it last painted? Even a brick home has trim that will be painted!
  • What is the age of the Roof?
  • What shape are the windows, are they double pained?
  • What is the foundation like? Check the water sprockets for the outside?

Decide which of these above “showstoppers” are for you and what your parameters that you are looking for are. Obviously price range is the first. Some people love house shopping – others don’t. But to get what you want you have to pay attention to detail. It is also a good idea to have a house inspector (yours not the realtors). It is worth the $500 to ensure you are not buying a “money pit.” For some people the option is, do you want to live in your home or is your hobby is to fix your home up? What do you enjoy?

The previous list is more focused for an older home, not a brand new home. The list prior to meeting with a realtor is still an excellent list to have considered before talking to a builder. As a buyer it is important for you to see what the builder offers and what are your options – it is your money!! If you are buying a new home check the builder out. You can check out their reputation very easily. Bottom line, buying homes is more research driven then curb appeal to find the right place. Using common sense always helps – happy hunting future homeowner!