What to Look for When Buying a House

You want to buy a new property and invest in real estate, but you are not sure how and where to start. You want to make the right decision and make this endeavor and the time you are willing to put in is worth the price. Yet, you are faced with numerous options that make you confused and overwhelmed since making the right choice is imperative. 

Truth be told - this issue is something we have encountered a lot when it comes to choosing the perfect real estate. The intricacies of prepurchase considerations, aspects to think about when choosing, and questions to ask in the process often make your head spin. This is a common sentiment, and you are not alone. 

At Kredium, we’ve guided countless clients through this exact challenge. With our extensive knowledge and expertise in the field of real estate, we have created an easy-to-follow guide for you to use once you decide to partake in this life decision. In this guide, you will learn everything there is to know about buying a property, like things to consider before the purchase, what to take into account to make the best choice possible, and questions to ask in the process.

What to Consider Before Buying a House

If you are already set on your decision of purchasing a new property, possibly moving, or wanting to rent, then you have come to the right place. Making a decision to take action, and taking action are two different things. First, are you looking to buy real estate in your country or internationally? Understanding the benefits of owning international real estate is essential.

Before you make a big decision, such as buying a house, there are certain aspects you must consider to ensure a safe and productive homebuying experience. The following paragraphs are going to discuss important things to keep in mind in the process of buying a house, like establishing your budget, checking your credit, researching first-time homebuyer programs, and checking out home loans. 

Establish Your Budget

First and foremost, establishing your budget is one of the most important aspects of getting real estate. You must know the amount of money you are going to work with before getting into the details. What you can afford depends on your gross income, credit score, debt and down payment. 

If you are considering going to a lender, they are going to ask for insight into your income, assets, debt-to-income ratio, credit reports and credit scores. These aspects of your financial situation are going to determine whether lenders approve of your mortgage and the percentage of interest rate they’ll present.

You may get a loan that is considerably higher than what you can afford monthly, so you will need to do some planning and determine what payment you can realistically afford long-term. Besides that, you should include utilities, repair, maintenance, property taxes, HOA fees, and insurance in your budget. 

Check Your Credit Score

When applying for a loan, there are several options you can choose from, such as a conventional loan, FHA loan, VA loan, or USDA loan. The minimum credit score required for a property depends on the lender and the loan program you select. Before choosing a loan, you can use Kredium mortgage calculator where you can check the breakdown of your total loan amount and monthly payment, divided into three categories: mandatory, recurring, and optional expenses.

Study First-time Homebuyer Programs

First-time homebuyer loans are supposed to help eligible buyers purchase their first home. Private sectors, backed by Fannie Mae and Freddie Mac, as well as government agencies, offer first-time homebuyer loans. Purchasing your first home with a first-time homebuyer loan can make the down payments lower, and ask for lower income requirements, or capped fees. 

Additionally, they offer down payment assistance in the form of grants and loans. Homebuyer’s eligibility to get a loan varies since some loans require the borrower to purchase private mortgage insurance (PMI). PMI acts as insurance for the lender if the borrower can’t make their monthly mortgage payments.

Check Out Home Loans

Last, but not least, you should think about conventional and government-backed loans as options for your homebuying experience. Conventional mortgage loans are offered by private lenders like banks, online lenders, or credit unions, and some of them may require a PMI. According to the Consumer Financial Protection Bureau, conventional loans cost less than any other type of loan, however, they tend to have stricter requirements.

Government-backed loans are offered by federal agencies, like the Federal Housing Administration (FHA), the US Department of Veterans Affairs, or the US Department of Agriculture. They may have strict requirements for credit scores and down payments when compared to other loan types. All FHA-backed loans require MIP.

Things to Look for When Buying a House

Now that we have established important things to consider before buying a house, we can discuss the aspects to analyze once you start your home-hunting journey. We have divided them into three main groups: location, house size, style and features, and home condition and potential renovations. This will give you a better idea of the property you are looking into, its features, and its condition, helping you make a better choice in the end. 

Location

One of the most important aspects to consider before buying real estate is location. Not only would you need to know where your future home is located, but you’d want to know information about the neighborhood, noise level, commute time between home and work, parking availability and space, convenience, schools, and the community. Since all of them are equally important, we have decided to break them down into separate categories and help you make your investment worth it! 

Neighborhood

If you are familiar with the location of your potential new real estate, you should visit the neighborhood at different times of the day to get to know the activity levels. The neighborhood and neighbors themselves are important factors to consider since you are going to be influenced by both in terms of neighborhood maintenance, the community, important information, and more. It is advised to do some research online beforehand, by simply going through the online communities, neighborhood groups, and crime maps, and potentially even contacting people who are already living there for some insight. 

Noise level

The noise level you are going to tolerate will depend on your lifestyle, age, career, family, or potential health conditions. You need to find a place that will fit into the life you are leading and your life conditions at the moment, so you need to ask yourself questions like: do you have children, are you working night shifts and need some peace during the day to catch up on sleep, is there an elderly person in your family, etc. Additionally, you will need to learn if the home you are thinking about is near a highway, railway, airport, public transport, etc. since those can affect noise levels a lot.

Commute time

Whether you commute by car or public transport, you need to know the necessary information about the average commute time. How busy is the rush hour there? Is the house you want close to the bus/train/metro station? Try to do a trial run by commuting from the potential location to your usual drive stops, be that your office, your kid’s school, grocery stores, coffee shops, or friends and family. 

Parking

You must think about parking possibilities if you are a driver. You will need to decide if you want a garage or off-street parking, or are you willing to park your vehicle on the street. Also, if you have multiple vehicles, a boat, or an RV you will need to consider an outdoor storage space for that. 

Convenience

The point of buying property is to make your life better and easier, therefore you need to think about the convenience of this new location. Go through your typical day and errands you run, what are the places you stop by daily, weekly, biweekly, and monthly? Consider how efficient you can be in this location: are there grocery stores, gyms, restaurants, or other important gathering spaces? 

Schools

If you have children, or planning to, the quality of nearby schools is something you should take into account when switching locations. Research the quality of schools in the area, and look at the ratings, test scores, teachers, administration, staff, and other important metrics to evaluate schools. Even if you don’t have children, don’t plan to, or your children have already finished school, it’s good to have good schools in the area because the home will hold a stronger resale value. 

Social connections

Knowing someone from the area will significantly impact your acclimation to the new environment. Not only that, but you will feel like you have someone you can talk to, a support system to help you throughout this transition. Although it seems unbelievable, studies show that living near friends is positively affecting your mental health and well-being. 

House Size, Style, and Features

The next category you should focus on is the house’s size, style, and features, ensuring they are what you expected them to be. In the following paragraphs, we will tackle important aspects of square footage, style and design (interior and exterior), rooms and their sizes, amenities, floor plan, and outdoor space. The guide will walk you through each one of them individually, helping you gather all the necessary information, and make a proper decision. 

Square footage

Not only will you need to consider your needs for space now, but you’ll also have to have a good idea of your plans for the future. Whether you are planning for kids, are thinking about taking care of the elderly from the family at one point in the future, or something else entirely, it is essential to keep that in mind when choosing the square footage of your new home. You should keep in mind that the larger the property, the higher the cost is to maintain it. 

Additionally, if you will need more space down the line, think about whether there is a room, a basement, or an addition to the house to adapt, and make it a living space. This potential for adaptability will ensure you are using all the square footage you have purchased, and make the investment worth the price. 

Home style and design

Choosing your house based on style and design is solely related to your personal preferences. Classic, older homes have unique appeal and history behind them, they are intriguing and mysterious, whereas newer or modern homes, tend to be more tech-savvy, energy-efficient, and seamless. If you are a first-time homebuyer it is advised to keep an open mind and think about the amount of home inventory before making a final decision.  

Interior

Looking at the lighting, flooring, paintwork, furniture, decor, and appliances is a significant step in the process. Not only for the aesthetics and design of it, but functionality and quality. If you are buying a resold home, you’d want it to be in the best condition possible! 

Your choice and estimation will depend on your taste and style. If you are a fan of cozy, inviting homes, you’d want to stay away from marble details and flooring, as well as metal, and industrial materials. However, if you are a lover of minimalism, and all things modern, you’d gravitate to neutral colors and simple designs. 

Exterior

The same goes for the exterior of the property. The design, size, and style of it will be dependent on your lifestyle, needs, and plans. If you have a big family or love to organize social gatherings, you’d want a nicely, neatly decorated exterior, with lots of seating room, and potential for additions. 

Rooms and sizes

You should think about how many bedrooms and bathrooms you want, how many are ideal, and how many are realistic. If these three are the same number, you should be good to go, however, if not, make sure you are considering every possibility for the future. Furthermore, what you need to analyze is the features you want in the living room, dining room, or kitchen. 

Keep in mind that, more often than not, you will need to compromise. A home might have your ideal number of bedrooms and a beautiful, huge kitchen with an island, but it lacks a storage room. It is all about how flexible you are, and how you can manage the space you are purchasing. 

Amenities

Amenities can make all the difference when buying a property. They are everything that comes with the house and are considered extra, like kitchen appliances, heating, conditioning, smart home technology, private outdoor spaces, swimming pools, garages, dedicated parking spaces, energy-efficient windows, etc. All of these are extremely useful to have in the home you are looking to buy.

When it comes to community amenities, it’s great to have recreational areas around, fitness centers or gyms, security features like a gated community, etc. Some of the location-related amenities we have touched upon when we discussed the convenience of your location. Things like proximity to public transportation, quality schools in the area, shopping malls and grocery stores, local attractions and places to go for entertainment, etc, are all advantages, and things that add value to a potential location. 

Floor plan

We have discussed rooms and sizes, however, what’s also significant to consider is the floor plan. The location of rooms is potentially more important than their size, for example, having a bathroom close to the bedrooms, and on every floor is convenient. You’d want to make sure that the floor plan directly reflects your lifestyle, so if you work from home, you should make sure that you have an office or a room that is secluded from the rest of the living areas for some quiet. 

Outdoor space

If you have a green thumb and love gardening, getting a property with a big garden or backyard should be one of your top priorities. Not only is it better to cultivate your food, but it’s a great hobby to have - you spend more time outside and ground yourself daily. Additionally, if you have children or pets, outdoor space is extremely important, and something you’d want to have.

With a big and spacious outdoor space comes maintenance. You will potentially spend much more time maintaining and tidying up your whole property if the outdoor space is big. However, when you have the potential and possibilities of building a pool, making a patio, or a deck that you can sit on during warm summer nights - it will all be worth it!

Home Condition and Potential Renovations

If you are getting a house, whether it was already owned, or it’s a new construction home, you should expect that there is some work to be done. By examining the condition of the home you are buying carefully, you are saving yourself a lot of time and headaches in the future. You want to know what you are getting yourself into, so inspecting the plumbing, heating, ventilation, and conditioning of the house is essential! 

Plumbing

Checking the pipes, water pressure, water heater, and drainage systems should be on your priorities list. These need to be in good condition if you want to avoid unexpected and costly issues in the future. You need to ask questions like: how fresh are the sewer lines, how do the toilets, sinks, tubs, and showers look, and in what state is the water heater?

Heating

Firstly, you’ll need to know the type of heating your home has, is it gas, or electric heat? However, most important of all is knowing when these systems were last updated. Understanding this will help you know what to expect once the property is yours entirely. 

Ventilation

If the home you have set your eyes on had improper ventilation it increases the risk of mold. You’ll need to look for condensation on windows and inspect the paintwork around windows, doors, or vents for bubbled or peeling paint. This is usually an indicator that there is moisture in the walls or the ceiling drywall. 

Conditioning

AC units typically last from 10-25 years, so one of the first things you’d want to know how old the conditioning in the house is. If it is broken, the repairs are costly. It is expected to spend an average of $7,000 to replace an existing AC unit. 

Key Questions to Ask When Buying a House

Buying a new property is a big investment. That’s why you must be well prepared and informed about all the aspects that are necessary to know on this journey. Besides going through this guide step by step, and following the instructions, you also need to know what kind of questions to ask before purchasing. 

In the following paragraphs, we are sharing the best questions to ask when buying a new home. These will help you understand the selling circumstances, the state, and condition of the property, and some important amenities. 

Why is the Property Being Sold?

Understanding why is the property being sold will give you a good idea of how quickly they will move. Whether they are moving for work-related reasons and need to sell as soon as possible, or simply testing the water by putting their home on the market, you will still benefit from knowing the reason. Finding out the circumstances will let you know how receptive the sellers are, and if there is any room for negotiating the price, or stating your offer.

How Long Has It Been on the Market?

If a property has been on the market for a while, it could indicate two inconveniences: the property has problems (the condition is bad, or there are repairs necessary), or, it is overpriced. Whatever the case is, you can definitely use this information to your advantage. Knowing the length of their market exposure could help you lower the selling price. 

What Work Has Been Done on the Property?

Communicate with your real estate agent and ask about any major renovation work that has been done on the property. You’d want to know who did the work, and if there are any guarantees. Additionally, don’t forget to inquire about the planning permission, and whether it was obtained properly. 

How Many Times Has It Been Sold? 

Looking for red flags is necessary, and the property that has been sold multiple times in a short period is definitely one of them! If the house has been sold and resold a lot of times, that could imply that there are some underlying issues with the property, neighbors, or the general area. Knowing the length of time an owner has spent in the house might indicate what the reason for reselling is, and give you a general idea of what to expect. 

Does It Have Fibre Internet Access?

Staying online is one of the most important things today, so having good internet access where you are located is extremely important. You could be working from home, having an important meeting every week, or streaming online, but whatever it is, a stable internet connection is essential. When choosing a house, you’ll need to inquire about the type of cables your internet provider is using, whether it is copper (slower speed), or fiber optic cables (faster speed). 

How Old is the Boiler?

Boilers are among the most expensive appliances to buy, replace, or repair. That’s why you must ask about how old the boiler is and whether it has been serviced before, or not. Old boilers can cause concerns, therefore, you must consult with the agent about the age of the property’s heating and hot water systems. 

Is There a History of Neighbors Issues?

At the end of the day, there is only so much you can do when it comes to choosing a good home, with well-kept appliances and amenities, a good floor plan, and room sizes since all that could be in vain if there are recurring neighbors issues. Sellers are bound by law to emphasize if there were any disputes with neighbors if asked. Therefore, you need to make sure you do.

Finding an Ideal Home - Next Steps

In the broad market of real estate, finding the perfect, new home for yourself seems like a daunting task. Doing necessary research beforehand, considering the location, size, style, and home’s condition and potential renovations, while also asking the right questions and getting informed about everything is overwhelming. That’s why it is of utmost importance to find a professional to help you through your homeowning journey.

At Kredium, we offer personalized advice and answer all your questions about your desired future real estate. Whether you want to inquire about a specific property, or you need information about available real estate in a certain area, around certain schools, or offices, Kredium is there to guide you and tell you everything you want to know. Let’s make that real estate dream of yours into reality, fill in the form and our relevant department will get in touch!

Photo Credits | Pexels