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As I mentioned in our ‘The Journey Begins’ post, Victoria and I are very fortunate to already have two homes.  This is almost unheard among today’s millennials.  Reviewing Zillow’s latest trends, millennials just aren’t making the plunge into home ownership and continue to either rent apartments well into their 30s or live with their parents.  I love my parents more than life itself, but no thanks!

I was 20 years old when I decided that I wanted to own my own property.  Whenever I had spare time, I scoured the internet for homes in my area.  I finally found the house of my 20 year old dreams.  It wasn’t until I showed my parents the house that I even remotely considered how to pay for it.  My parents started drilling me on ‘What if’ and ‘How are you going to’ type questions and I very quickly became overwhelmed.  The problem was that I didn’t understand the full scope of the home buying process and potential issues that I may have along the way.

It took me three years to go from that rock bottom point to the time that I closed on my first home.  As you can imagine, my dream home had been sold and my requirements changed drastically.  I learned a lot in those three years and here are some of the best questions that I feel you can ask yourself to see if you’re ready to make the commitment.

  1. Have I created and do I adhere to a budget?
    I cannot stress the importance of creating a budget. It’s a simple concept, but you would be surprised how many people ignore the advice of just about every financial expert.  Homeownership brings new monthly expenses that a lot of people don’t even think about prior to purchasing.  If you haven’t already read our post on creating your own personal budget, take some time to sit down and plan your expenses.One thing we can tell you from experience is that there are a number of expenses that you may not be used to when you purchase a new home.  It may seem like a no brainer, but going from an apartment to a home may mean that you need to purchase kitchen appliances, lawn care equipment, homeowner’s association dues, property tax, and home insurance.
  2. Have I checked my credit?
    To make sure you get the the best interest rate, you want to be sure that you have established credit.  There are many ways to get an idea of your credit. One popular source is Credit Karma.  My favorite place (and favorite credit card for that matter) is from Discover.  Victoria plans to write a post in the near future about credit, so I won’t get too far into the credit wormhole here, but you often get a better rate on your mortgage if you have a higher credit rating.In addition to checking your credit rating, it’s strongly advised to pull a full credit report to see what lines of credit you have open.  Not only is this good for credit housekeeping, but it can also give you an idea if there are accounts open that you may not even be aware of.  If you see anything out of the ordinary, it’s strongly advised to contact the company to get more information.  Victoria and I both use to check our reports.  Federal law allows you to get up to 1 free credit report from each credit reporting agency (Equifax, Transunion, Experian) each year.
  3. What repairs are needed / Has the home been inspected?
    You’ve found the home of your dreams. The seller did a fantastic job of making the home displayed in a way that you don’t see the foundation issue.  You also don’t see that there are a few leaks in the roof.  These are just a couple of the many issues that can be found by doing an inspection of the property.  In my state (and most for that matter), performing an inspection of a home is not required.  However, as the buyer, paying a couple hundred dollars upfront can save you thousands of dollars and numerous headaches.One way to look at the repairs is to split them into two categories:  What will I need to repair for the house to be livable & what will I need to repair to make the house sellable.  They are pretty self-explanatory categories.  The repairs to make the home livable are what you (or what you negotiate with the seller) are going to have to do before you can move in.  Other repairs (like maybe a fence that needs painted or sliding closet door that is hung) can be fixed on your time and budget.Outside of the inspection, consider when the home was built and if it has been completely renovated.  Older homes were built on different standards and often times different material.  Be sure to consider the insulation of the home, the appliances that may or may not be a part of the purchase, the paint or wallpaper of the property, the age of the carpet in the home, and the type of foundation used.
  4. What did the seller pay for the home?
    The price that the seller paid for the home can be a key indicator in the trend of the housing market in the area of purchasing. It can also help you in determining the amount of offer.  You can find this information from the county courthouse, Zillow, from your realtor, or even a title company.
  5. How long has the home been on the market?
    If a home has been on the market for a long time, this can tell you that the home may not be priced right for the market. It could also mean that there might be some issue with the home causing other offers to fall through (structural issue, liens on the home, insurable issue, etc.).   If you’re interested in purchasing a home that has been on the market for an extended time, be sure to do extra research.  See if the seller has adjusted their price as time passes and use this information as leverage on your offer.
  6. How is the neighborhood that the home is in?
    Looking to other homes in the neighborhood can tell you a lot about the future value of the home. Are there any foreclosures in the area?  Does it appear that other homeowners are taking care of their properties?  If the next door neighbor hasn’t mowed in two months and has a beat up car in the drive way that hasn’t moved in 5 years, odds are they have things inside the home that are just as scary!A few other things to consider:  Does the neighborhood have sidewalks?  Is there a neighborhood park or recreational facility?  Is the area kid friendly?  How is the area lit at night? Is the home near a highway or railroad track that could cause excessive noise?  Is there a lot of traffic through the neighborhood?  Is there a homeowner’s association?
  7. What do I (my family) need in a home?
    Before moving down to Texas, I had a 45 minute commute to and from work. It wasn’t terrible, but after two years it became draining.  If you think about it in terms of the work week, that commute added 7.5 hours to my work week.  Be sure to take into consideration your commute to various locations (and not the most obvious work commute).  How far away is the local grocery store?  Is the home within driving distance to my kid’s school?  Is there a hospital nearby?In addition to the commute, consider the actual home.  Do I need an attached garage?  One story or two story home?  Do I need an attic/basement or some other area for storage?Also be sure to consider futureproofing your investment in terms of family planning.  If you’re planning on having a baby in the near future, how far away are the bedrooms from each other? How is the school district in my area?

Asking these questions prior to purchasing a home can save you quite a bit of headache and money.  Start by asking these questions and let your realtor help you through the purchasing process.

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