Entering into a real estate investment is not something that should be done lightly. Buying a home is an immense commitment. For most people, it means signing up for 15 to 30 years of paying off a mortgage.
Yet, buying a home has profound benefits. If you’re looking for a place to settle down, owning a home provides you with a haven under which you can raise a family. Conversely, as a real estate investor, buying a house is a safe investment that’s bound to help you build wealth and create a flow of passive income.
Of course, with any investment, personal or otherwise, there are certain things you need to consider. Keep reading for seven essential questions you need to ask before buying real estate.
1. Do I Need a Real Estate Agent?
This first question is one that many homebuyers struggle with. Most real estate agents charge around 3% of the home’s value. However, real estate agents bring a lot to the table.
An experienced real estate agent who’s familiar with the local neighborhoods can help you find exactly what you’re looking for within the parameters of your search. They have access to more real estate listings and have valuable community expertise. This is ideal for both private home buyers and real estate investors.
Furthermore, real estate agents have contacts they’ve gained through years in the industry with other local business owners and agents. By working with an agent, you can gain access to lenders, contractors, insurance providers, and other essential services.
2. How Much Can I Afford?
One of the most important questions to ask when buying a home pertains to your budget. How much can you afford in monthly mortgage payments? However, understand that there are additional expenses to owning a home.
For example, the costs associated with buying a property often include realtor fees, closing costs, appraisal fees, and inspection fees. Furthermore owning a home includes:
- Property taxes
- Utilities (gas, electrical, water, waste removal)
- Services (internet, cable, phone, etc.)
- HOA fees (for homes that fall under homeowners associations)
- Repairs and maintenance costs (usually about 1% of the home’s value per year)
- Homeowners insurance
- And more
While assessing your budget for buying a house, be sure to include these possible expenses. Ask your realtor which of these fees apply to the home you’re looking at. They should also be able to get information on the homes’ average utility costs.
3. Am I Qualified for a Mortgage?
Understanding your personal financial limitations is important. However, when buying a home, you might also be limited by your loan eligibility.
For this reason, it’s highly recommended to get preapproved for a mortgage before you start the house-hunting process. This piece of home buying advice is important for two reasons.
First, getting preapproved for a loan lets you know exactly how much you can afford (according to the bank). This knowledge will help you shop in the right price range and avoid uncomfortable situations, like putting an offer down on a home you’re not qualified for.
Secondly, getting preapproved gives you a chance to assess your finances. If you can’t get approved for the loan you want, it might be worthwhile to take a step back and spend some time building up your credit score.
4. Is This the Right Time to Buy a House?
One question often overlooked by homebuyers is whether or not now is the right time for buying real estate. The real estate market can fluctuate drastically.
For example, a house sold for $250,000 during a buyer’s market could easily sell for over $300,000 during a seller’s market. Buying a home during a seller’s market usually means paying more for real estate. The right agent can help you navigate any market.
If your sole interest is to procure a home for you and your family, this may not hold much significance. However, if you want to sell the house down the road for a profit, buying during a seller’s market is not ideal. Naturally, as a real estate investor, buying a home during a seller’s market marginalizes your potential earnings.
5. What Home Features Are Most Important to Me and My Family?
For most people, buying a home is an exciting experience where they allow themselves to dream big and imagine the perfect environment in which to raise their family. Therefore, ask yourself, “What features are non-negotiables in my future house?”
Sit down with your family and create a list of priorities. These might include:
- Number of rooms
- Property size
- Square footage
- Number of full bathrooms
- Outdoor features
- Extra structures (garage, shop, shed, etc.)
- Large, updated kitchen
While you can always renovate your future home to meet your needs, most buyers are looking for homes that already have everything they want. Be sure to communicate this list of priorities to your real estate agent.
6. What is the Ideal Location for My New Home?
When buying a home, location can be just as important as size and features. The location of your home will impact nearly every facet of your life.
For example, the neighborhood you live in affects which school districts your children have access to. This will dictate where they go to school, the friendships they build, and the opportunities they have in the future.
The location of your home also determines how long it takes you to drive to work, who your neighbors are, how close you are to emergency services, safety and security, and more.
7. Will This House Support My Lifestyle?
Finally, finding a home that supports your current or ideal lifestyle is one of the most essential house buying tips. If you buy a house that prevents you from living the way you want, you won’t be happy or content for very long.
For example, if you love hosting backyard BBQs where friends and family can engage in yard games and conversation, buying a home with a tiny backyard might not be the right choice. If you like entertaining, you’ll also want a home with an open layout and plenty of space in the kitchen, dining room, and living room.
Furthermore, think about your family life. If you’re planning on adding new members to your family over the years, buying a home with room for you to expand is important.
Are You Thinking About Buying a Home?
If you’re thinking about buying a home in the Tampa Bay area, we couldn’t be more excited for you. We know you’ll love this area and the community of people who call it home. Before you make an offer, however, make sure you’re asking the questions listed above.
And if you need help in the house-hunting process, we’re here for you. Contact us today to get in touch with an experienced local real estate agent who can help you find the perfect home for your needs.