Buying a house is one of the biggest decisions that you can make. The amount of debt is immense, the financial commitment is usually decades-long, and the responsibility level is drastically higher than when renting. With that being said, buying can be extremely advantageous in a lot of situations. To determine whether or not buying is a good idea in your situation, as well as what you should be looking for as you go through the buying process, ask yourself the following 12 questions. As always, these questions are just to be used as general guidance, and we are not liable for any decisions that you make based on the information in this post.
1. Can I afford a house?
One of the first things to determine is whether you can even afford a house in the first place. After all, houses are not cheap, and not everyone can afford to make the monthly payment on a mortgage! Before house hunting, you should meet with a trustworthy real estate agent or advisor who can help you to understand the full picture of the costs and expenses that go along with homeownership.
2. How much money can I spend on a house?
Generally understanding that you can afford a house is one thing. Understanding exactly how much you can afford to spend is another. There are a lot of hidden costs that go into home ownership, and properly estimating them is crucial before signing any mortgage agreement. Property taxes, utilities, mortgage insurance, closing costs, and general upkeep are all things that many buyers underestimate, which can really be a problem when money gets tight.
3. How much should I save for a down payment?
Conventionally, it is best to pay 20% of the price of a house in the form of a down payment. This means that if a house is selling for $250,000, the typical buyer would put down $50,000 at closing. While this is the standard practice, buyers can often put as little as 3% down on their house, and the actual amount your lender requires you to put down will likely vary.
4. How much are closing costs?
Closing costs are the expenses that a buyer needs to pay at closing that deal with the sale of the house. From the home inspection to the title transfer and more, these costs are what facilitate the actual sale of the house. The average closing costs vary depending on the sale and where it occurs, but you can generally expect them to be about 3-6% of the total mortgage amount, which is equal to the sale price minus the down payment.
5. How much do I need to save for moving expenses?
Everyone’s move-in looks different. Some people might try to do the entire move by themselves while others might employ a moving crew to handle the bulk of the work. For this reason, the moving costs you will pay will vary greatly depending on how you plan to move your things. First, you should figure out how you plan to move, and then you should research what those specific costs might look like.
6. How are the nearby schools?
If you have children, you might be very interested in the local school districts. While some parents opt to send their children to private school or homeschool them, the vast majority of American children attend public school. If you plan to send your children to public school, it is crucial that you check out the local school districts before picking a house, as some houses might be located within the confines of subpar school districts.
7. How is the neighborhood?
When you move into a home, you naturally become a part of the local community. As homeownership is generally more permanent than renting, you can expect to get involved in one way or another with your neighborhood. Understanding the general makeup of the neighborhood, as well as what facilities are located within it, is a crucial step in the home-buying process. If you like the ability to walk to a park or a grocery store, for example, it is crucial that you check out houses in a more walkable neighborhood.
8. Are there any noticeable problems or defects within the house?
When you go through the home-buying process, you will have the opportunity to ask all the questions you want. It is important that you use this opportunity wisely. You will likely have an inspection done during the process, and it is important that you speak to the inspector to make sure that you understand the exact state of the home before you buy it.
9. Will you need to immediately fix or replace anything within the house?
There are certain aspects of a home that need to be repaired or replaced over time, and it is important that you understand the state of those things before closing on a house. Replacing a roof or a boiler is very expensive, and it is important that you understand the current status of these expensive components before the sale is finalized. If the roof needs to be replaced soon, you may be able to get the seller to pay for it, or reduce the sale price so that you can pay for it once the sale goes through.
10. How much are similar homes in the neighborhood selling for?
Property values often tend to move in sync. Generally speaking, houses in the same neighborhood tend to appreciate at the same rate. So, if other, similar houses in the same neighborhood are selling for much more or much less than the house you are looking at, it is important to figure out why.
11. How many days has the house been on the market?
Some sellers have all the time in the world to sell their homes, while others are in a bit more of a hurry. If a house has been listed on the market for a long time, there are two things that you should know. Firstly, it could signal that there is a problem with the home. Normally, there is a reason that a house isn’t selling, and this is especially true if nearby houses are selling more quickly. Secondly, it could provide you with some extra negotiating room, as a desperate seller might be more willing to offload the home for a much lower price.
12. Why do you want to purchase a home rather than rent?
The final key question in our list is simple: what is driving you to buy a house rather than continue renting? Buying a home is a massive commitment, and it isn’t always the best decision. It is important that you ask yourself about your motives before you get too far in the process, as shortsighted motives can lead to real financial woes down the line. Buying a house requires a large amount of discernment, and it’s important to truly understand your desires and reasons before you get too involved in the process.
Thanks for reading our post on questions to ask yourself before buying a home! Hopefully these questions are helpful for you as you begin your housing search. While buying a home is not for everyone, it is truly a rewarding experience for many people who decide to take the big step into homeownership.
If you visit Myrtle Beach or any other place in South Carolina and fall in love, we’re here to help. We at The Boyd Team are committed to helping you find the right property for your needs and dreams. Any question that you have about moving to the area and finding your dream home by the beach is our pleasure to answer. Feel free to send us an email at email@example.com or text or call us at (843) 222-8566, and we will get back to you as soon as we can. Being true natives of the Grand Strand and Horry County and with over 25 years of experience in the local real estate market, whether buying or selling, we can help you make your dreams a reality.
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Written by Greg