Purchasing a new house is one of the most significant financial decisions a person can make. As property prices continue to rise in many regions, it’s essential to thoroughly consider all the factors involved in a potential home purchase to make the best decision for your requirements and budget. Rushing into a purchase without conducting research can result in buyer’s remorse, unanticipated fees, and other problems in the future.
When you find a house, take your time before deciding rather than moving quickly. Spend time carefully inspecting the property, comprehending the contract, and getting professional counsel. This strategy can help you avoid a great deal of worry and expense in the long term.
Below, we’ll discuss factors you must consider before signing the contract for your new house.
Assess the Location
Your new house’s location will greatly impact your lifestyle and the property’s potential for future sales. Spend time exploring the neighborhood and the surroundings rather than relying solely on a cursory web search. Before purchasing the house, visit the neighborhood to determine proximity to parks, care centers, grocery stores, etc. You can also determine the distance you’ll have to cover when moving all your belongings to your new house. This way, you can decide whether to DIY the move or hire professional movers.
If you want your furniture and other household items to reach their new destination safely, hiring movers is advised. They’ll properly pack your valuables, relocate them to the new house, and unpack them accordingly. On top of that, residential movers also offer storage solutions alongside packing and transporting your belongings to your new house. So, you won’t have to take everything with you to your new house and keep them tucked away in a storage unit for as long as you want.
Inspect the Property
Before the offer, thoroughly inspect the property or hire a professional home inspector to identify any issues or needed repairs. Attending the inspection lets you see problems first-hand and ask the inspector questions as they arise. Take time to closely examine the interior and exterior, looking for any signs of damage, defects, or safety hazards. Check walls and ceilings for cracks or water stains that may indicate leakage. Look for poor caulking around windows, doors, or siding that can lead to energy loss or moisture intrusion.
Also, check for any odd smells that could signal mold or other problems not visible on the surface. Carefully inspect the kitchen, bathrooms, laundry, and any other areas exposed to lots of moisture for evidence of leaks, mildew, or rot.
Review the Seller’s Disclosure
Most states require the seller to complete a detailed property disclosure form indicating any known defects, necessary repairs, past issues, and other facts about the home’s condition that could sway the buyer’s purchasing decision.
Scrutinize this disclosure form closely, making note of any red flags or concerns. Follow up with your real estate agent to get more details on any problems that required repairs while the seller owned the house. Insist on clear explanations for any significant issues shared on the seller’s disclosure.
Understand the Homeowners Association
If the house is part of a homeowner’s association, take time to thoroughly review the HOA bylaws, rules, fees, restrictions, and all other governing documents that may impact you as a member. The HOA often limits exterior modifications you can make to your home. And high monthly HOA dues can add up, significantly impacting your long-term housing budget.
Before purchasing the property, ensure you understand and are comfortable with the HOA fees, rules, and limitations.
Hire an Attorney
Before signing any purchase contract, hire a real estate attorney to review the agreement and ensure it adequately protects your interests as the buyer. An experienced attorney can identify any contingencies, clauses, or wording that could be problematic down the line. They’ll also scrutinize the preliminary title report, seller disclosures, HOA documents, and other paperwork for any warning signs or risks associated with the property.
Paying a few hundred dollars upfront for legal advice could save you thousands later.
Obtain an Appraisal from a Licensed Professional
While not required, it is wise to get an independent appraisal completed by a licensed professional to confirm the purchase price aligns with the home’s actual market value. Appraisals provide important data to safeguard against overpaying. If the appraisal is lower than the agreed purchase price, most lenders will not approve financing until the price is dropped to meet the appraised value.
Secure Financing Early
Being pre-approved for a mortgage gives you a price range and loan amount before even checking properties. Once your offer is accepted, confirm final loan approval and lock in an interest rate with your lender. Ask what conditions you must meet by closing day to guarantee funding will come through on time.
Having financing already secured helps avoid last-minute issues that could delay closing. Be in close contact with your lender throughout the process to ensure all bases are covered.
Purchase a Home Warranty
While optional, home warranties can provide peace of mind by covering repairs or replacement costs for appliances, systems, and other components for the first 12-24 months of ownership. Just read the terms to understand what is and isn’t included in the policy. Home warranties do not replace homeowner’s insurance, but they can help offset some maintenance and repair expenses in the first year.
Complete a Final Walkthrough Before Closing
Schedule a walkthrough inspection a day or two before the closing date. This way, you may ensure the property is in the same condition as when your offer was accepted. Check for any damage, missing fixtures, or other changes that may have occurred. You may also identify any issues and ensure the seller resolves them promptly.
Purchasing a house is a complex process that shouldn’t be rushed, no matter how excited you are to move in. Take the time to thoroughly evaluate all aspects of the property, understand the purchase terms, get professional opinions, and verify financing to avoid major surprises or regrets. While no house is perfect, following these steps will empower you to make the best decision for your needs and budget when finalizing a new home purchase.