Blog posted On June 24, 2021
When the housing market is hot and inventory is low, finding the right home can be difficult. You’ll likely have fewer choices and more buyers competing for the same homes. Consequently, you might have to expand your search and sacrifice certain home features. This can help you buy your home sooner, but there are certain compromises you shouldn’t make even when you are eager to buy.
Real estate experts often say that the three most important features of a home are “location, location, location.” There are many features that you can change once you purchase a home. Location is not one of them. This is why many REALTORS® encourage their clients to make sure their home is in a neighborhood they like. When looking for a home, you can assess its neighborhood by looking at what’s nearby. Is it in a good school district? Is it close to work? Are there grocery stores nearby? What is the crime level in the area? The best way to get a feel for the neighborhood is by driving around or taking a tour. "If you have a certain neighborhood that you're really focusing on, go ahead and start riding through the neighborhood to see if you're comfortable with how it is before you start looking there," said Shanelle Burton, REALTOR® for Historic and Distinctive Homes. There are also several online resources that you can use if you are not close enough to take a drive. With our Around the Neighborhood tool, you can type in the address you are interested in and get local data about the area. There are many local crime websites as well.
The common frustration for many is that their home is too small, though some have also said that their home is too big. What this can mean is that the size of their home is hard to maintain. If you live in a large house but don’t have anyone to help you clean it or maintain the yard, it can be a big undertaking. Think about the size of your home and how it will meet your needs. If you are purchasing it alone, consider the added effort of maintaining a large house with multiple bedrooms and acres of property. You probably have different housing needs than a family of five. Aside from the size of your family, consider your work situation. If you work from home, you might want to purchase a house with an office space.
Finding a home at the right price can be challenging if you are trying to do it on your own. Working with a REALTOR® and lender can help you make the most of your budget, but not stretch it too far. By getting preapproved, you can get a general gauge of how much home you can afford. Another good piece of guidance is the 30/30/3 rule. The rule states that you should spend no more than 30% of your gross income on your monthly mortgage payments, have at least 30% of your home’s value in savings or liquid assets, and limit the price of your home to 3x the amount of your annual gross income. If purchasing a house would push your budget to its limits, don’t forget that you will have to factor in maintenance costs as well. In 2021, 21% of millennials said that their home’s maintenance costs were too expensive.
Expanding your home search can be a good idea, but there are certain compromises you shouldn’t make. You may not get the backyard pool or white picket fence, but if you find a house that meets your location, size, and affordability needs, then you can add those features later. Curious about how much house you could afford? Submit an application by clicking the “Get Started” button above.
Sources: Business Insider, Financial Samurai