It can feel both exciting and daunting buying a home for the first time. You can’t wait to move into your dream home, but you also want to make sure you are getting it for the best deal. There are several factors you should consider when examining a house:
The Neighborhood – Consider how long your commute will be, traffic conditions, safety, and quality of schools to determine whether the house is a good value.
Home Safety – Do a proper home inspection to be sure the building is free of dangerous and expensive issues. If there are things flagged by an inspector, you could use it to negotiate a better contract to accommodate the repairs.
Home Value – A property appraisal is meant to assess the house’s functionality, safety, and marketability. The property appraiser will also assess similar homes sold in the area. Your contract will likely have a contingency for appraisals, allowing you to renegotiate or void the agreement if the house is estimated at less than the selling price.
Do your homework
Be sure the home will increase or hold its value over time, is safe, and logically laid out. It will be more difficult to sell a house that requires people to go through the kitchen to get to the bedroom, for example. You can do an online search to eliminate most undesirable home, but some issues will not be noticed until you see it in person or with the help of a professional.
The easiest thing you can do to sift out undesirable houses is by doing an online search. Here are some factors to search for:
● Crime stats
● The appearance of the neighborhood using Street View on Google Maps
● Average household income
● Environmental concerns
● School rating
● Real estate pricing data
Most of this information should be readily available to the public through municipal and provincial government websites. This information will help ensure you pick a home that will hold or increase in value.
No home is perfect
Even a new build is bound to have an issue or two. It will likely be minor issues, but you will want to be protected in case it is a significant issue. An inspection from a professional will help you avoid buying a home that is unsafe or requires expensive and extensive renovations. Your real estate agent will probably write a home inspection contingency into the contract, which gives you one to two weeks to have the house inspected. You can use any flagged issues to negotiate a better deal as well.
Buyers may specify a minimum amount the repairs must hit before the contract is renegotiable. This specification makes the contingency less of a burden for sellers. A contract might say that only repairs of more than $3,000 can warrant further negotiations. In this case, the seller might fix all or some of the repairs. If the seller refuses to make the repairs, the buyer then decides whether to go through with the sale or cancel the deal.
Remember to complete the inspection within the time frame specified in the agreement, or risk losing your money. Complete the inspection as soon as you can because one examination can trigger a more specific and extensive one, which will require even more time. If an inspector notices low water pressure, for example, they may request a plumbing inspection.
How to decode the home appraisal
To get approval for a mortgage, the lender will likely require an appraisal. Even if they do not, it is best to get one anyway to avoid spending thousands extra on an overvalued house. An appraisal is different than an inspection, though, An appraiser may flag a potential issue but will not look deeper into it. Instead, the appraiser compares the house to others in the area.