Renting can be an economical option for some. Unfortunately, many people would be better served by owning a home. Homeownership is a personal financial decision that just isn’t evaluated.
The decision to stop renting and buy a home isn’t one to be taken lightly. But it can deliver rewards both financial and personal for decades to come.
When seeking out your first place – whether a house or condominium or anything in between – it’s important to do your homework.
As a renter, you have the luxury of choosing a place that meets your needs at the moment. Buying a home is a much bigger commitment, both in terms of finances and the length of time you’ll likely live there.
Here are 5 things to consider as you begin the process of purchasing your first place.
The Growth Possibilities
Shop for a place that meets your current spaces needs, but also consider one that can adjust to a changing household. You may not need extra bedrooms now, but you might in the future.
A five-year plan may not pan out as you expect, so think about possible life changes that could impact your need for bedrooms, bathrooms and square footage.
Many first-time homeowners (ourselves included) buy a home with the expectations that they will sell it in just a few years and move somewhere else.
Our plan to stay in a home for three years was interrupted by the financial crisis and made our stay into nine. By that time we absolutely had to move because we needed more space for our growing family.
Mechanicals and System Health
Your first place may not come with many frills or luxury features – but all the basics should be in good condition. Thoroughly inspect prospective properties. Before any purchase is made, hiring a professional inspector is an absolute must.
In the height of the market, individuals were buying homes without inspections. Many found out later that this mistake would cost them tens of thousands in unexpected repairs.
We can guide you through this crucial step with recommendations on qualified and licensed home inspectors familiar with the type of home you are buying.
Know that NO Home will be Perfect
Your first home may likely not be the perfect place. It just has to be right for you and your needs. That means that the kitchen may not be brand new or that the bathrooms have pink tile.
This is the time when many Champagne tastes run into the reality of beer budgets. So recognize that your first home may not even be as nice as your last apartment.
Finding the right home is often a matter of prioritizing. Make a list of “must haves,” along with “nice to haves” and “not necessary to haves.” A three-car garage is nice, but would you rather have a larger kitchen or live in a good neighborhood?
Only you can measure the importance of the amenities you are looking for.
Consider ALL the costs of Home Ownership
When you buy a home , you take on recurring costs you don’t have to worry about as a renter.
Look for a home that meets your budget in terms of full living costs – mortgage, utilities, trash pick-up, sewage fees, homeowner’s association dues and other fees. Cable, Internet and services like lawn or tree care add up.
Your lender doesn’t take into account these costs when approving your home loan. A good real estate agent and/or loan officer can help you calculate estimated monthly costs to determine the most appropriate price range for you.
The Lifespan of Things
In addition to identifying cosmetic and structural flaws before you buy, know what to expect from the home’s components. How long until you need to replace the roof, appliances, furnace or carpet?
As your agent, we look at the roof, HVAC (furnace and air conditioning), water heater and appliances as the biggest concerns for age. As a group, they are the single biggest hidden cost of homeownership when it comes to their replacement.
Everything may be in working order now, but all homes need these types of repairs at some point. Ask you agent the expected remaining life on large-ticket items. Don’t be afraid to do some research.
Ask your agent about home warranties to protect you against unforeseen costs in your first year or two of home ownership.
Stop Renting ~ Look to Your Future
Home ownership can be a scary proposition if you haven’t looked at the numbers or done an evaluation of your finances. It can also save you money in the long run.
From taxes benefits to equity savings, to loan sources, you home can be a big part of your financial foundation. And the sooner you start the better you will be.
These five items are by no means an exhaustive list when it comes to things to think about. As your agent, we’ve gone through this process ourselves and helped countless others. We know what to look for and how to help.
The professionals at Wissel Homes know the Central Maryland market because it’s our home too. We live and breathe the local neighborhoods in Howard County, Carroll County, Baltimore County, Anne Arundel County and more. We understand what it takes to get the job done right. Contact us today to set up an appointment to list your home or to start the home buying process. Let our experience help move you into your dream home.