If you start with a mortgage pre-approval, you’ll have defined one of the two most important home search criteria – price. The bottom of your range should be at least 10 percent below the maximum set by your lender. A range of 15 percent or more will increase your options, an advantage when home inventory is low.
If the look and feel of your home is very important to you, it can make sense to buy a fixer with good bones at a price under budget. Then you can remodel with the savings. On the other hand, you may consider going slightly above your preferred ceiling if the monthly payment is still affordable or you have extra cash to make a bigger down payment.
Location is the other top factor in your home search. Distance from family and friends or work, lifestyle and schools often rank high in decision making. But it’s also wise to approach the purchase as an investment. You want to have confidence that the value of your home will be stable or increase. Consider these factors when choosing neighborhoods.
- Whether or not you have kids, homes served by good schools have the best chance of appreciating.
- Low crime rates are also a good predictor of stability or gains in real estate values – and of your personal safety.
- Look for areas with high employment, good incomes and a mixture of young and old people – all signs of economic vitality.
- Speed of sales and average differences between list and sale prices also help you to gauge a neighborhood’s desirability.
Realtors are prohibited by Fair Housing laws from commenting on neighborhood schools or crime, but they can direct you to websites that provide information. For example:
Posted in: FAQ for Buyers