How can you determine what is the right house, the right area, the right location and the right house for you and your family? Here are tips to consider as you’re out there in the marketplace looking at houses with your real estate agent…
What type of house are you looking for? Are you looking for a single-family residence, a multi-family property, brand new construction, etc.? Let’s just assume for our purposes we’re talking about a single-family home, a resale home or a brand-new home. A brand-new home will probably have very little problems associated with it but is not free from manufacturing defects. Little odds and ends after you buy a brand-new house from a builder are to be expected. Inevitably, when you buy a house from a builder because the house is brand new, it’s probable that you might end up paying an additional premium for a brand-new house because it’s specifically brand new. So that leaves us with a resale home.
If you’re looking for a resale, house price and payment is a driver of your decision-making. Resale homes may need work in the form of TLC. This means a new roof, for example, home inspection issues, termite issues and the list goes on. Homeownership is not for everyone, but for those that are willing to stomach the process, it can be a very sound and prudent financial move. So, let’s say you’re looking at a resale home, you love the location, you love the neighborhood and you love the house. Then you discover that the house has a shot roof which is going to cost about $15,000 to fix.
Many times repairs to the house such as a roof might need to happen, but they might not need to happen for years down the line which would afford you and your family time to move in, get acclimated to the home and then determine which way you want to handle it. Forgoing a house due to needing a new roof for a good price, in a good location potentially could be an opportunity lost.
Maybe your real estate agent can take into consideration the cost of the roof and negotiate the cost of the roof from the sale of the house? When you buy a house, replacing the roof at some point down the line anyway is inevitable. So, if you resign yourself to only looking at houses which don’t need a new roof or don’t have termite pest issues, for example, you are taking a very broad approach to give you the maximum opportunity and you’re narrowing yourself out of the market.
Just know in a real estate transaction the deal must be beneficial for everybody. Everyone has to walk away from the deal feeling like they’ve got something. Be open-minded to houses that need work because, let’s face it, a house is probably priced competitively, or shall we say, lower, if the house needs work, meaning if the house didn’t need the work and the house had a brand new roof and didn’t have any of those challenges in terms of repairs and TLC needed, then the purchase price would be higher. A higher purchase price contains a higher payment which means the house may be unattainable. Buy a home within your budget which may need a little bit of work. You can make those repairs to the house and increasing your sweat equity over the course of time and do very well for yourself financially so long as the house is in a good location for you.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.