Some of our most asked questions center around home buying and the involved processes. When we think about it, that makes perfect sense. The item in your budget where you’re likely to spend the most is your primary residence. Buying a house is a huge undertaking. There are many important things to know when you’re ready to take the plunge! How many square feet to buy, how you’re going to finance, what exactly to look for, whether or not you want a realtor for help and on and on and on. That’s why we decided to launch this mini-series. We do have other resources available which discuss home buying. However, our goal with this series is to discuss the home buying steps in depth, one at a time. The process can be overwhelming so our goal is to break it down into more bite-sized pieces.
Step 3: Determine where you want to live
The cost of homes in the U.S. varies widely between cities but the price of property can also vary widely within cities, even neighborhoods. In San Jose, California, I’ve driven down a street where homes on the left side of the road are about $1M+ and on the other side, they’re in the $600,000 range. The difference in that neighborhood? School districts. However, schools aren’t the only factor that affects prices; local market prices, quality of the neighborhood and price history can have big impacts on price.Finding the right home at the right price in the right neighborhood can be challenging but it’s certainly manageable, and exciting! You just have to know what’s important to you, preferably in priority order.First, figure out what you want in a home and neighborhood. There are the standard questions about the number of bedrooms, bathrooms and dining rooms which are very important. In addition, here are some other items to consider when choosing a location:
- Commute to work
- Access to transit
- Demographics of the neighborhood
- Square feet
- Style of home: condominium, stand alone, multi-family, townhome
- Distance to restaurants and other services
- Access to parks
- Access to cultural interests
- Noise Level
Home Owners Associations (HOAs) are organizations managed by owners, and the developer if the neighborhood is still under development, that set the rules (by-laws) by which homeowners must abide. These rules generally dictate how the neighborhood shared spaces (parks, streets, common areas) and the exterior of each home are to be maintained. If you buy a property governed by an HOA you’ll also be subject to a monthly fee. HOA fees can be lofty depending on the inclusion of services which can range from as little as common area maintenance all the way to all exterior repairs and can include community amenities such as pools or clubhouses. And of course, the big question: What is your budget?You should have this number from “Step 2: How Much Can You Afford?”
Are you in the general locale where you want to buy?
This makes looking for your ideal neighborhood a lot easier. Before enlisting the service of an agent, go explore! Drive around different neighborhoods at different times during the day, and night, and look for things that are important to you. Once you find some areas that are attractive to you, check online real estate sites like realtor.com or zillow.com to see how homes are priced. You’ll quickly be able to get an idea if you can afford a particular area.
Not in the locale where you want to buy?
It’s okay! This may make it a little more difficult but it’s still possible to collect quite a bit of information from afar. Once you have an agent (step 4 LINK), it’s highly recommended you make at least one trip to the location to do your house hunting. In the meantime, you can search neighborhoods online by looking at homes on real estate sites, check crime statistics on crime maps, use online maps to check for parks, schools and amenities. It’s amazing what you’ll be able to find! If you have children, do your research on school ratings and then look for properties in ideal school zones. Once you do have an agent to work with, they will be of immense help for your long distance search.When you’re ready to start looking in earnest and you find your agent, have them help you narrow down neighborhoods that fit your requirements, including budget. Your perfect fit is just over the horizon! [button link="https://yourmoneyline.com/housing-series-part-four-find-an-agent-to-work-with" type="big" color="green"] On to STEP 4[/button]