The following is the first in a four part series taken from the article “16 Homebuying Tips from an 8-Time Homebuyer” by Daniel B. Kline, originally published on The Motley Fool website, http://www.fool.com, on June 9, 2017. It offers excellent advice on subjects you may not have thought of…even if you have bought several homes yourself! Enjoy!
The good news is that you don’t have to worry about making mistakes, because I’ve made them all. Over the past 20 years, dating back to before we got married, my wife and I have purchased eight homes. We’ve owned houses, condos, a co-op, and a manufactured home that we just bought as a rental property.
Over the course of those deals, we’ve made some major blunders and learned some things that have made each successive purchase easier. Our advice can’t take all the fear out of what may be your only six-figure purchase, but it can allay those fears somewhat and help you avoid some of the mistakes we made.
Don’t spend too much
While your mortgage company may stop you from spending way too much, it may not stop you from stretching your budget further than you should. When deciding how much to spend on a home, there are two main considerations. The first is how much you’re willing to sacrifice in order to have the home you want. The second is whether you’ll be able to pay the mortgage if your employment and/or income changes.
Be conservative in both cases. You don’t want to eat ramen noodles for a decade, even if it seems romantic at first. You also don’t want to risk losing your house if you lose your job or take a pay cut. It’s possible to be too conservative when picking home.
Don’t spend too little
When my wife and I bought our first few houses, we ended up moving within a year because we were too conservative. We thought about price more than we did about being happy with the home. Once we realized how much room we had in our budget for bigger mortgage payments, we ended up looking for something else.
And of course, moving every year has its own costs. Simply moving your stuff from place to place is expensive, and there are all sorts of fees and taxes involved with a move, as well as real estate commissions when you sell.
Flush the toilets and run the water
While you’ll eventually have a home inspection, there are ways of looking for problems when you first see a home. An obvious one is to simply run the faucets and flush the toilets to see if they work as they should. Had I done that when we bought our first house, we may have noticed a poorly flushing toilet that the home inspector missed. As it turned out, there were vines growing into our pipes — that was a $600 fix up front. We then found out the pipes were made of laminated cardboard and at risk of collapsing, which would have required us to dig up the living room. The outdated and compromised plumbing was the main reason we moved out.
Look at the basement
Much like flushing the toilets can tell you a lot about the plumbing, looking at basement walls can teach you a lot about the home’s structural integrity and flood resistance. Water stains suggest flooding, but there are also more subtle clues. If the current homeowner doesn’t have anything on the floor itself — for example, if appliances are sitting on blocks and cardboard boxes are kept high off the ground — then that’s a potential red flag.
Hope you found these to be helpful. Stay tuned….four more tips will be coming soon!
Sabrina Jones-Schroeder, JD
Designated Broker | Owner
EXIT Real Estate Professionals