Unless you’re a seasoned real estate professional, the housing market can feel a little confusing and intimidating. After all, the home buying process is intensely demanding of buyers, who often experience pressure to make offers on properties that may not suit their needs.
To help you find a comfortable and affordable home in your desired location, we’ve put together our top tips for making the most of your budget. With a bit of real estate know-how, you can avoid getting ripped off and ensure your financial future is protected.
1. Do your research
Start your search by looking at recently sold properties in your desired neighborhood. Then, compare elements such as size, condition, price, and amenities to develop a realistic assessment of how far your budget will stretch. If affordable homes in your chosen area are a little smaller than expected, you may need to consider downsizing or searching a little further afield.
Your real estate agent will be an invaluable resource when conducting your research, as they possess plenty of timely information about comparable properties. You may also wish to compare properties currently in escrow.
2. Order a home inspection
According to a recent survey, around 20% of buyers waive their right to a home inspection. This is a big mistake! Home inspections happen once buyers are under contract and are used to identify the need for costly repairs. If an inspection report is full of expensive and urgent repairs, buyers can ask the seller to pay for the repairs themselves or offer a discount on the property in question. Avoiding this step could end up costing huge sums of money – you never know what kind of structural issues lie under the surface of a pristinely presented home.
3. Learn about the market
It may sound a little too much like homework, but analyzing the state of the market will help you find a good property deal. Timing your purchase to coincide with a period when property prices are low (a.k.a. a buyer’s market) could seriously lower your overall spend.
Of course, predicting when the housing market will peak or crash can be very difficult, and you will need to think about how mortgage interest rates could affect your purchase. If you’re still feeling a little confused after researching economic issues, a real estate professional could help you make a smart decision.
4. Consider seasonal fluctuations
In certain locations, you will find a better deal in summer or winter. If you want to live in an area with beautiful, sun-drenched summers, for example, it may be worth waiting to purchase in winter. On the other hand, colder months often see less seasonal interest and competition among buyers. If you’re wondering whether your desired location experiences seasonal fluctuations, look at long-term market trends and assess whether there are any patterns.
5. Consider the prospects of your desired area
The economic prospects of your desired area could affect its price and investment potential. If, for example, several exciting start-ups are moving to the area, demand for housing could rise considerably.
When demand increases, house prices go up, and homeowners in the area will see their assets rise in value. Therefore, if your desired area is in the early stages of regeneration and growth, you should try to purchase a property as soon as possible to avoid price hikes.
On the other hand, if you start to notice that grocery stores are closing down and families are moving away from your chosen location, you may wish to consider moving elsewhere. Purchasing a property in an area with declining economic prospects could make it very difficult to sell your home for a good price further down the line.
6. Trust your instincts
Have you found your dream property? Wondering whether you’re getting a good price for it? Have faith in your instincts. As long as you feel that the price is fair and affordable, you won’t be getting a raw deal. Just remember to order a home inspection and ask the seller as many questions as you need to before committing.
7. Be cautious when researching for-sale-owner (FSBO) properties
FSBO properties should be less expensive than those sold through a letting agent to reflect the fact that the sellers do not have to pay agency fees. Many FSBO sellers overlook this reality, however, leading to high purchase prices. If you want to avoid being ripped off by an inexperienced or dishonest seller, buying via a trusted agency is best.