So you want to buy a house? That’s awesome! Congratulations. But are you ready to buy a house? Have you done your research and legwork to find out the best house in the best neighborhood for you? I’m talking about all the other little things that influence your buying decision and the neighborhood you pick. Read on to see what I’m talking about.
Here are steps you need to take to put in the legwork of buying a house (in no particular order):
- See as many houses as you can. Seriously, the more houses you see the better an idea you will have of what’s available in your price range. You may find you need to spend a little bit more or that you will have to settle on doing some work on the house you buy. The more you can see the more you will know about the neighborhood as well. You will get a feel for the people that live there. Now here’s the thing – start this as soon as you can! If you think you are going to look for a house next year then start looking now if you can. This way you know what to expect when you are looking for real.
- Understand what you can really afford. Realtors, banks, and mortgage brokers will tell you that you can afford X amount. Odds are that amount is too high for your budget. Understand, it’s in the best interest of these people to get you into the most expensive house/biggest mortgage possible (though, to be fair,there are some very good realtors, banks, and mortgage brokers out there that will be honest with you). They are paid a percentage of what your house costs or what your mortgage is.
What is your budget NOW? How are you doing with it? Are you just getting by? If so you have to be honest with yourself and determine if you really can afford to buy a house. If you’re doing well and putting money away you still need to understand how your house will be more expensive and all of the costs in buying your homes besides the mortgage.
One way to see what you can afford is to figure out what you will be spending monthly at the new home (make sure you include utilities and all the incidental costs besides your mortgage and taxes). Now subtract what you are already paying monthly. Put the difference away in a savings account automatically. For example (using easy numbers), if you expect to need $2,500 a month in a new home and you need $2,000 now, you will put away $500 a month. If you can get by then at least you know you can hack $2,500 a month.
- Check your neighborhoods at different times. Usually, when you see a house it’s on a nice afternoon on the weekend. You go and see kids playing and everything look hunky dory. But you need to know the whole story. You need to see what the area is like on a Saturday night. Are there kids and such all out driving with music blasting? What’s it like in rush hour in the morning or in the evening? How about during the day in the middle of the week? Are there trucks going down the street making deliveries to local stores? How far away is the fire and police department? Will there be sirens at all hours?
Just remember, what may look idyllic at one time could be hectic at another.
- Talk to friends, family, co-workers, and potential neighbors. The more you talk about the neighborhoods you like and about owning a house in general the better off you will be. The current owners won’t tell you it costs $400 a month in utilities to keep the place warm in the Winter but your friend who grew up a town over will. You may have to take what you hear with a grain of salt but the more you hear the better.
Moving to a house for us meant we would really be taking on utility costs for the first time. In our previous homes we paid for electricity and maybe some gas but the bills were never big. By talking to friends and such we were able to know what to expect in the Summer and Winter and add that into our budget.
Especially if this is your first home purchase, you need to know everything you can about what it will really cost to run your home.
- Look for places of worship. This may be obvious to some but it may not. Either way, if having a local place of worship to go to is important to you, make sure you know what’s in your neighborhood. Attend and speak to some of the people there. Find out what the community is like. You may get some great information on the neighborhood as well.
- Look up the taxes. You need to understand the different taxes you will be paying in the neighborhood. You can have any combination of state/city/town/village/school taxes that you will be responsible for. What do those taxes cover? When are they due? How much have they gone up in the past 5-10 years?
Consider this – The neighborhood you are looking at may have expensive school taxes. If you have a few kids that will use the public schools then you may be getting your money’s worth (if the school district is good). If you plan on sending your kids to private school then you are paying taxes to school someone else’s kids. You also have to consider this if you don’t plan on having kids for a while or your kids are almost done with school. Is it worth paying those taxes to live in the neighborhood?
This is why you need to know about the taxes!
- Know the schools. As long as we’re talking about school taxes, you need to also know about the schools. How are the schools? Where will your kids be going? How will they get there? Is it walking distance? Are you OK with the walk? Is there a bus? Will you have to drive them? Is there pre-school? How about kindergarten? Some areas have full-day kindergarten while others may have half-day. What are the programs like? Does your child have a special need? Will the school system be able to meet that need? What are the graduation rates of the high school? What are the school zones? Does the school have kids from other neighborhoods coming in? From where?
A note about school zones – Don’t assume that one town or village has a school zone that matches the neighborhood’s borders. We have neighbors a couple of blocks away that are zoned for different schools than we are yet we are in the same village. If we lived just a little further away, in an area that has beautiful homes, we wouldn’t be zoned for what is considered the “better” schools. Make sure you understand your school’s zones and you do the research yourself. The realtor or the current residents may not ever know what the real situation is.
But wait, I don’t have kids, what do I care about the how good the schools are? I’ll tell you why – the value of your house. Should you ever want to (or need to) sell, then the better the school district, the more valuable the area is.
- Check the town and go window shopping. Most people will tell you to check the school ratings or the crime rate to see how good the neighborhood is. That’s important, but I say you need to check out the stores! What kind of stores are in the town? Are they upscale stores? Are they locally owned stores? Do they have what you need? What condition are they in? Does it look like the area is well kept? Are there a number of closed stores? Does it look like places are opening up or shutting down? Where are the shoppers coming from? Will you have a lot of traffic from other towns?
It may sounds snotty, but I think you can tell a lot by a neighborhood by the shops it has. You want to find a place to live that will stay nice, or get nicer, as time goes by.
- Transportation. What’s the situation with transportation? How is traffic in the area? What roads are there to use and how close are you (being close can be both good and bad)? Are there trains or buses should you need them? Do they make a lot of noise? What highways are nearby? Do you have a lot of traffic driving through the neighborhood? How quiet are the streets?
You don’t want to move and find out what you thought was a quiet street is full of rush hour traffic because folks are using your street as a shortcut. Just sayin’.
- Residential and commercial zones. What are the zones for residences and businesses in the area you are looking at? Are there rules? Can your potential next door neighbor on the corner sell their house to a gas station developer?
What are the rules on rental property? Does a house need to be zoned and approved to rent or can anyone re-build their home into a multi-family rental? Can that giant house across from you turn into a four-family home full of college-aged kids renting for the semester? Just sayin’.
- Find out if there are quirky town rules. Every city/town/village is different and some may have special rules you don’t know about until it’s too late. Some have limitations on home constructions while others let the owner more or less do what they want. There can be special garbage and recycling rules; lawn regulations; parking regulations; etc…
Where we live you can’t park on the street between 3 and 5 in the morning. This means you have to have your car in a driveway or garage. That’s a pretty important fact to know about if you have a few cars or have visitors stay over.
It is an awesome feeling to be looking for the new place you will be calling home! But this isn’t the time to be an impulsive buyer. There more you know going into shopping for a house the better off you will be. Don’t let what I’ve written scare you. Think of it as a guide of things to look out for and find out about so that the home of your dreams stays that way years and years after you move in.