10 Step Guide to Buying a House – Step 5
Step 5 – Choose a Home
Choosing a home and making an offer is both exciting and a little scary. If your offer is accepted, the place you’ve chosen will be your home for the next several years. You not only need to feel emotionally satisfied, but financially comfortable that you’re buying a home that you can afford and that will hold its value or hopefully increase in value over the years.
While no one can know for sure what will happen to housing values, if you make the choice to buy a home that meets your needs and priorities, you’ll be happy to live in it for years to come.
Neighborhood or Home Amenities
For some buyers, the neighborhood takes precedence over all other priorities, for others, the home itself matters more. Ideally you will find the perfect home in the neighborhood you love, but realistically, most people have to make some compromises.
You should make a list of what features you want, such as number of bedrooms, fenced yard, granite counters, etc..and then rank them in terms of priority.
When to Compromise
Once you’ve determined whether the location or the house itself matters most, you may have to compromise on some of your priorities. If location is most important but you find that homes are priced above your budget, you can compromise in several ways:
Look for a different home type within the community, such as a smaller home or a townhome or condo. Decide if you can live with one less bedroom or other features on your list.
Consult with your lender to discuss your options for increasing your budget. While you don’t want to overspend, you should recognize that increasing your loan by 10K will only add about $60 to your payment with a 6% interest rate.
Lower your expectations about the condition of the home. While everyone prefers a move-in ready home, you can often get a better deal on a home that needs some cosmetic repair. Be careful, though, to have a home inspection to evaluate the structure of the home. Moving walls and adding a bathroom are costly renovations while painting and replacing appliances are more reasonable.
If you have your heart set on a specific home style of a home with a larger yard, your compromise if more likely to be in the location. If you’re willing to commute farther or choose a community next to the ‘hot’ neighborhood, you can often find a more affordable home that fulfills your wish list.