Buying a House? Use This Checklist to Avoid Disaster
Congratulations! Shopping for houses is a very exciting stage in life, whether it’s a starter property or an upgrade. It can feel stressful no matter which kind of property or how experienced the buyer is. It doesn’t help that the real estate market is constantly changing as the economy is in flux.
There are a few simple steps that can save buyers a ton of grief. Before beginning the house-hunting process, think about putting these ideas into practice. Not only is it possible to save time and money, but this checklist can help ensure that the right house doesn’t pass you by.
Get Pre-Approved for a Mortgage
It’s not the most enjoyable part of house hunting, but it’s a necessary first step. Many first-time buyers make the mistake of talking to a real estate agent and going on house tours before they’ve even spoken to a bank. They visit lots of properties, fall in love with one, and suddenly find themselves unable to make an offer fast enough to beat the other interested parties.
Getting pre-approved for a mortgage is pretty simple, if time-consuming. The process will vary from bank to bank, but the first step is to collect the necessary financial documents. Every bank will need to see some kind of income verification, which can include bank statements, W2 forms, investment account statements, and even statements from employers. For self-employed people, this process can be a bit tricky. Without an employer to verify income, banks often require a larger down payment or offer a higher interest rate. Go to the local credit union and get advice from the financial officers. A well known federal resource for new home buyers is the FHA loan, which allows first-time homebuyers to purchase a property with less money down (provided they meet all the other criteria). There are often state- and city-specific resources for first-time homebuyers as well. Do a Google search for Colorado or Denver specific housing funds.
The real estate market in Colorado has a lot of interesting properties to choose from. But don’t put the cart before the horse. Don’t get into a situation where the dream house gets swiped by another buyer.
Bring the Experts
No matter how beautiful a house looks on the outside, there can always be hidden problems lurking underneath the surface. A trained property inspector can help spot those trouble areas before it’s too late. For instance, there could be a crack in the foundation that’s invisible to the eye. The water heater might be out of date and leaking. The plumbing system in Loveland might be cobbled together, or even illegally assembled by amateur contractors.
Occasionally, it’s possible to point out these issues to the seller and ask for them to be fixed before the house changes hands. For instance, if a sewer line replacement in Loveland is required on a property up for sale, try to get the issue resolved before moving in. It might feel rude to test the water pressure or investigate pipes during a house tour, but better to be safe than sorry. Try to avoid a situation where a triumphant first night in the new house is interrupted by a plumbing disaster (and a speedy call to plumbing services in Loveland).
Get to Know the Neighborhood
Buying a home is more than just owning property. It means joining a neighborhood and gaining access to a community of people and a network of coffee shops and service providers. Most people plan to stay in their new home for many years to come. Rather than falling in love with the architectural features of a house, try to fall in love with a neighborhood.
If kids might be coming down the line, look for a neighborhood that’s safe for walking and nearby good schools. If there are pets in the family, make sure to look for close access to parks in lieu of a fenced-in backyard. Try to think ahead to what the future might hold. Perhaps aging parents might need to move in and receive care. Is the location accessible enough for an elderly person to walk up the driveway with a walker? Could a garage be turned into a mother-in-law apartment? Call someone who can do plumbing in Loveland to get an estimate before you buy anything.
Budget for the Unknown
Everyone knows that life is unpredictable. From the Great Recession to COVID-19, there’s just no way to know for sure what the future holds. No matter how prepared a person feels on the inside, there are some external factors that can’t be ignored. The loss of a job can lead to an inability to make mortgage payments. This can lead to losing the house, and it can all turn into a downward spiral.
When planning a budget as a new homeowner, it’s important to leave plenty of room for the unknown. For instance, maybe the home inspector didn’t catch everything. A water heater might break, or a toilet might bubble up and suddenly a company that does sewer line repair in Loveland is knocking on the door.
If the entire budget is blown on purchasing the home, what’s to protect against unknown disasters?
Fortunately, a little bit of planning ahead and conservative spending can prevent the worst outcomes. Rather than purchasing a home at the top level of one’s income bracket, why not look for a more affordable option? Not only do closing costs add quite a bit extra to the final fee, but these surprise fixes can come as a real shocker to first-time homebuyers.
Protect the house and the bottom line by budgeting for the unknown.
Similarly, career stability is a great way to get prepared for purchasing a home. A full-time job and at least two years of work history is a great way to show banks a stable investment. Not only this but being established in a routine at work can help the chaos at home feel less scary. It might be a different house in the morning, but with a comfortable routine of coffee and commute, job stability is a great way to smooth the transition into a new property. When two people are purchasing a home together, job stability becomes even more important for at least one person.