Homeowners Share The Facts Every First-Time Buyer Should Know
Buying your first home is a big deal. You no longer have to rent or live with your parents, you can personalize your space, and you finally have the pride of owning your own house. But sometimes, the excitement of being a responsible and financially-stable adult takes over and before you know it, you’ve rushed into homeownership with a truckload of debt and a growing to-do list. It’s critical to educate yourself on house buying 101 before signing a contract. The more you know about your potential home, the more prepared you’ll be when you finally get the keys. Here are a few top tips from actual homeowners to get you started.
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#1 Fresh Paint
If the room below the bathroom has a freshly painted ceiling and it’s the only one in the house, you probably have leaks somewhere.
#2 Do You Have Signal?
#3 Check And Then Check Again
Go through the calculations in the paperwork. My husband found a $2,500 mistake. He had to argue it out before the company would acknowledge we were being double charged in one area. We think the company has been doing this for a while. Most people accept what professionals do as correct.
#4 What’s the Light Like?
How the sun rises and dips throughout the day. It helps with light and heat in a house if it shines in the windows. However, if it doesn’t, your house feels cold and dark all the time.
#5 Paint Can Be Changed
For the love of God, if you don’t like the color of the paint and that somehow makes the house less attractive, YOU CAN PAINT OVER IT YOURSELF.
#6 Beware of Flooding
Talk to the neighbors about flooding. If your property is at the bottom of a hill where all the roads drain onto your road, it could be bad news. Check if the house is in a flood zone where you have to pay to insure it. Note that the property could be in three different flood zones, but your house is up on the high property. You’ll have to get an elevation report to prove that your house is up high.
#7 What’s the Yard Like?
Everyone talks about the house itself, but the yard also matters in terms of how much work it will be. Is the landscaping competent? Is it kept up? Lazy gardeners will often attempt a few quick fixes, leaving the buyer with serious work afterward.
#8 It’ll Be Expensive
Expect to shell out $200 a weekend at Lowe’s, every weekend, for the first few months.
#9 Check the Climate
This is so important. Depending on the climate of the area you’re planning to move to, you may save a lot of money (and discomfort) by checking the orientation of the flat or building. Also, from my experience, apartments on the top floor might get too hot in the summer, depending on how well insulated the building is.
#10 No HOA
#11 Check the Meter
If you have an indoor water meter, a lot of them have a little gear visible on the face that spins when water is running. If that’s moving but nothing is using water, there’s a leak somewhere.
After you put in your offer there’s often some minor back and forth negotiating. For example, you offer $10,000 below their asking price and they counter with “OK, but we want to take the chandelier.” It’s easy to get wrapped up in these negotiations and lose sight of the big picture.
You probably didn’t care about the chandelier, but as soon as they made it an issue you feel obliged to fight for it. “If you want the chandelier, then you have to throw in the patio furniture.” “No, we’re keeping the patio furniture!” “The deals off!” Don’t let yourself get taken advantage of, but don’t walk away from a good deal because of a minor disagreement.
#13 Beware Paint
My parents gave me some good advice when I was looking for my first apartment: If you see or smell fresh paint, be careful because paint can cover up all sorts of stuff.
#14 Don’t Buy a Flipper
Never buy a house from a flipper. They are very good at covering up problems in such a way that you won’t notice them until you’ve lived in the house for a bit. After we bought our house, we discovered a bunch of problems clearly caused by shoddy work, but the plumbing was a doozy. One week after we moved in, sewage started leaking up from a floor drain that had been hastily covered up.
Turns out the main drain pipe under the house was falling apart. We spent a couple of weeks with very limited water use and a trench dug through our finished basement. With that in mind, make sure the home inspector scopes the plumbing, including the drain pipes leaving the house. They don’t all do this, so make sure you ask.
#15 Location is Everything
Walk through the neighborhood at different times during the week. Look at facilities like shops in the neighborhood. Also, look at the local government’s future plans for the neighborhood. That view from your house might get spoiled in two years and the value of your house could seriously drop. In real estate, location is everything.
#16 Cheap Builds
Any house built before 2000: Make sure it has sufficient electrical outlets and capacity. You don’t want to run power bars off of power bars to set up your home entertainment system. Also, check out the plumbing. There have been plenty of recalls of plumbing products from the ’90s and earlier, and if the lines are copper, there may be signs of corrosion.
Any house newer than 2000: If your house was built in a booming housing market at a time when house flipping was a pastime, make sure to check the fundamentals—especially structure and foundation. Too many slapdash rush jobs were built in time to sell, then dressed up with superficial cosmetics. A cheap build will always be a cheap build, no matter how much crown moulding you put up.
#17 Don’t Max Out
It’s not fun being “house poor.” That’s where you can’t afford to do anything (travel, entertainment, travel, etc.) because of your payments. Just because your budget is $250k doesn’t mean you should get a house for $249k. You don’t need to spend the max. Get a $150k or $175k house. Also, homes need repairs.
As someone living in an area that was affected by Hurrican Sandy back in 2012 and purchased a house since then, please look up flood maps from FEMA before you even consider putting in an offer for a house. Sure, it might sound dumb if you think the general area can’t be flooded, but just check to make sure because insurance for that can be a pain. Thanks to that, I actually didn’t put in an offer for a house that would have been in a floodzone and probably cost an arm and a leg to insure.
#19 Beware of Rentals
If the house was a rental: Pay close attention to the major items of maintenance. Landlords cheap out on this stuff and tenants don’t care unless the place is falling apart. There’s no homeowner taking pride in keeping the place up or looking out for his own best interests with it. Check the roof, check the attic, check the basement. If possible, check the insulation as well.
#20 Long Mortgage Repayments
Get a long mortgage repayment schedule. When you have extra money down the road, you can put it towards the balance. In the short term, those lower payments are a godsend as you spend a ton of money at the hardware store, garden center, paint store, furniture store, etc.
#21 Are You Retiring?
Unless you are 100 percent sure you will retire in it, look at its long term value oversize. Deliberately live beneath your means and use the money saved to either improve the home or set it away for retirement. I have seen a lot of friends buy homes they barely could afford and have to try and sell it three to four years later when they move to keep pace with their career.
#22 What’s Important?
Make a list ranking what’s important and you cannot compromise on, down to the stuff you like but can live without. Your list will change when you look at houses and realize certain things are not within your budget, or there are things that money can’t buy, or what you can convince the current owners to fix versus you add it in yourself.
Make sure you have enough for a down payment. In Canada, the minimum is 5 percent, but anything lower than 20 percent requires you to buy mortgage loan insurance (since you’re at risk of defaulting). The difference you pay every month is significant.
#23 Association Fees
We did not consider condos because of association fees. But now that I own my home, I realize those association fees come out in the wash. It is possible you will spend as much money on maintenance in your own home with similar or fewer amenities. So consider condos if you don’t love housework and yardwork and want a pool or gym.
#24 Everything is On You
That unlike in a rental environment, everything is on you. Water heater ruptures? You gotta pay someone to do it or do it yourself. Not the property manager. Leak happens? Again, that’s on you. I know people who plot out to buy homes but just don’t sit down and realize that there is no longer anyone to blame when something breaks; YOU have to deal with it/pay for it. As such you definitely need to keep money in the bank for stuff like this. If you can’t buy a home while having money socked away…probably best to reconsider your plans.
#25 Can You Afford It?
That you can actually afford it. Don’t just look at the monthly mortgage payments, you have to factor in utilities (electric, gas, water, sewage, trash, cable/internet). Then there are regular maintenance things like hvac filters, plus unexpected things that break that will need fixing. Make sure you know how much money this whole thing is really going to cost per month, then add 10-25% on top of that for unforeseen circumstances.
#26 Water Pressure
#27 Get it Professionally Inspected
Get the thing professionally inspected and study the output report carefully. Walk the neighborhood and look at the condition of the close neighbor’s homes. Check for things like lawns covered in dog turds or half-repaired cars that could indicate loud neighbors or pets.
Figure out which rooms are going to get the most use and concentrate on selecting a house that provides those rooms. For example, if you like a lot of light and sun, ensure the decks and windows line up with where the sun is at. If you appreciate good food, prioritize the kitchen.
#28 Well-Intentioned Advice
Hire the most thorough, licensed home inspector you can find to pinpoint any issues that could potentially end up becoming costly repairs. To avoid conflict, make sure your lawyer is not also representing the seller and the most important thing is to use your head not your heart Don’t be afraid to walk away from a bad deal. There will be other properties, maybe even better ones and remember that this is a financial transaction and that your terms must be met
As soon as you announce that you’re looking to buy property, you can expect friends and family to come out of the woodwork with all their well-intentioned advice. Remember that principles that may have been true in the past don’t necessarily continue to be so in the fluctuating property market.
#29 What Are the Trees Like?
If you have a lot of trees, have them checked out by an arborist, especially in the winter or spring if they haven’t bloomed yet. When we bought our first house we had a lot of dead and very expensive trees to remove.
#30 You’re Buying a Neighborhood
My first house was more than I could afford; I had a constant feeling of drowning or a huge weight pressing down on my chest. My second house takes much less of my income to pay for and it feels really good. I can travel and do cool stuff with my family now. Also, you are buying a neighborhood. Make sure you like the neighbors.
#31 Consider the Sun
Consider how the sun will affect your commute. If you’re undecided between two houses, one to the east and one to the west of your office, take the one to the east. If you’re commuting from the east then the sun will be at your back during your drive to and from work, but if you’re commuting from the west you may have to deal with the sun in your eyes every single day.
#32 Land Appreciates
Houses don’t appreciate; land appreciates. Houses fall apart. Better to buy a “meh” house in a desirable location than a “wow” house in a “meh” spot.
#33 Things Go Wrong
Know where the sun comes up and comes down and what kind of people you are regarding that. For example, we both work throughout the day so we wanted the sun at the end of the day when we come back from work. Also, something CAN go wrong or change financially somewhere in the future, so make sure you don’t borrow at the max a bank tells you you can borrow.
#34 Take Note of Soffits
The soffit above the kitchen cabinets is either a vent, HVAC, or sewer line. If the basement has “seepage,” you have a foundation crack that will eventually need to be excavated from the outside to seal and fix. Did it flood? You also need a flood control basin. Does the electric panel look like a raccoon on coke last worked on it? No grounded outlets in the house? Cloth insulation? Knob and tube?
Check out your neighborhood on nextdoor.com. I bought a house in a seemingly quiet, normal neighborhood. I moved in and signed up for nextdoor only to learn that my neighbors are in a full-blown civil war. I have never seen neighbors be so nasty to each other!
#36 Neighbors Are Important
Check out the neighbors. You’ll probably be looking at the house around mid-day, but keep in mind most people are at work during this time. If you check it out around 6:00 p.m. or 7:00 p.m., you get a much better feel for how the neighborhood operates. For example, is there that one family that hangs out in their front yard, letting their dog run around the neighborhood unleashed, with their child running around in diapers crying, AND LOUD? Yeah, avoid that street.
#37 Solar Design
Know about the principles of passive solar design. Good orientation so the sun warms your house in winter, where the prevailing breeze comes from so you can flush the heat of the day out when the sun goes down. What can be built around you? There is a vacant block next to you, could someone bung a 3 story monstrosity on it and permanently shade it?
#38 Life Happens
If you are buying a house with someone (a spouse, girlfriend, or boyfriend) make sure that you purchase a home that one of you can afford on your own. Life happens. Knowing one of the two of you can afford your house and bills with the other not working is a huge relief if something were to ever happen.
#39 Copper Piping
When you get an inspection, your inspector might say, “Oh nice, you have all copper piping.” When, in reality, inside the walls where an inspector cannot look, you’ll have galvanized pipes that are rusting into your water supply and turning it brown.
Small but worthwhile fact: If your down payment is less than 20 percent of the home’s price, you’ll have to pay PMI (private mortgage insurance). But as you slowly pay it off and your equity rises above 20 percent, you can cancel the PMI. I mention this for two reasons: so you’re aware you’ll be paying that monthly fee, and so you can make a note to cancel it when you get above 20 percent (your lender won’t do that automatically – you have to inform them).
#41 Be Prepared
That most likely you won’t get the first, second, or even third house that you set your heart on. Buying a home is really, really stressful.
#42 Go While It’s Raining
Go out there while it is raining to see how that land handles the water. Does it pool? Where does it pool? I would even check out the crawl space (if there is one) after a good rain to see if there is any standing water under the house.
#43 You Can’t Change Location
You can do a lot to a house in your time there. Repaint, redecorate, change the furniture, change the floors and wallpaper, add or remove walls, convert the attic or even add an extension. You cannot change the location of your house, so make sure it’s an area you like. Traffic noise, congestion, whether there’s a lot of pedestrian footfall, and if it’s affected by the environment (vulnerable to flooding etc.) should all be checked out.
#44 Small Houses Are Best
Get a small house and be happy with it. You spend the first half of your life striving for something that, about the same time you achieve it, you no longer need, and then it is a financial burden. Your children will not resent having small bedrooms and you can go to the park to play. Be happy with less and do not be stressed out all the time and your children will be happier. Mostly I am aiming this at my wife, who always wants a bigger house.
#45 Get A “House” Account
Here are some things to remember: Unless you hired someone and are paying them (lawyer, home inspector, etc.), they don’t have your best interest at stake. This includes buyers agents; Even if you find the perfect house with no problems, you will still need money for various things in the beginning; You can’t call the landlord for anything. Either get handy or start asking around for good service techs you can depend on and start a “house” account for repairs.