Things to consider when buying your first home

Are you planning to buy a new house for the first time?

Congratulations!!

Home buying for the first time is a sweet experience at the same time it is a steep learning curve.

We have experienced buying a few houses that too without a realtor as we always bought new houses and built them.
Here are some things that we learnt along the process.  Hope these points help someone new to the process.

Location is everything. Buy house close to work place. Wasting time and money in travelling is not worth it in the long term.

Do not buy too large house trying to look rich. The money spent on property taxes, cleaning, lawn and snow removal services is not fun.

30-year loan makes your monthly mortgage payments small but builds equity very slowly. Most of the mortgage payments go for interest for the first several years. However, you will have peace of mind as monthly payments are small.

15-year loan makes monthly payments slightly higher but equity builds up faster.

If you live in that house for a very long time, 30-year loan makes sense. If you live only for a few years, you will lose a lot of money with 30-year mortgage for interest.

Do not buy a costly home just because bank offered you a bigger loan. Buy the size you need. Comfortable spot is somewhere around 2 times your annual single salary not combined salary.

Don’t get your heart set on a house. There will always be another house. Don’t enter into a bidding war. Don’t fall in love with any house before buying as you may end up paying a lot more than its actual cost.

Avoid having a pool in the backyard at all costs. They are money pits.

Having a full bath in the first floor is important if  you have elders who have joint issues. Look for that option if you need that.

Fire place is good for single family house as it can help enhancing resale value. If you want to buy a townhome which you want to rent later, I would not do fireplace. 

Look for good school district. Look for any nearby highway or freeway as those can cause a lot of noise.

Make sure property taxes are not that high.

Do not buy house in a corner as it affects privacy and have to clean a lot of walkway in snow areas.

I would not buy a house which is situated at low level than neighboring houses in that community. It may cause basement flooding or just remove privacy depending on location and height of other houses. 

Do not buy a ‘north facing house in snow areas if the drive way is steep’ as snow does not melt in this direction that easily leading to falls.

If  you have kids, having carpet in the floor where you spend most of the time can be a disaster for the carpet. We placed wood and it cost us more but better than having a dirty carpet. 

Do not buy very big lots as the cost of lawn mowing adds up pretty fast.

If you are planning to buy a house in a particular area, definitely talk to a trusted friend or two who live in that community already. There are a lot of things to consider and you may not be aware of all the info.

It helps immensely to talk to the owner of the house with similar model if you planning to buy a particular model of the house.  Ask them to show their house and know what all upgrades they did. Take pictures if they allow as it helps to compare the prices offered to you with what prices were given to them. This step makes the whole house buying process very easy. 

If a new community is starting, you may get good deals as the builders are trying to attract home buyers. Once a community is established, you may not get good deals as prices already appreciated by that time.
Save 20% of the cost of the house if you want to avoid paying for mortgage insurance [PMI].

You can buy the cheapest house in the best community if you want to live in a good community but don’t have a lot of money. This has some negative affect as sometimes the best communities can have higher HOA fees.

If you buy a foreclosure, you’re responsible for all of the back taxes on the property while it was in the bank’s possession.
The more complicated your house is the more things need to be repaired and updated. Keep it simple.

Visit the site of the property at different times of the day to see how it is. Some houses may not have shade in the morning or evening where you want to sit and relax. West facing house has good shade in the backyard in the evening. Opposite is true for East facing houses.

Write a list of all things you want to have in your house. When you see the new house model, check if all or at least ‘almost all’ prerequisites are present in the new house.

Don’t trust a realtor just like that. Their aim is to get maximum commission. They would rather please the builder than you as they need repeated business with builder. Some realtors can be very good.

When asked to choose upgrades in your new house [if you are building], put almost all the upgrades they tell first. Then, go home and think what you really need and what you don’t.  Slowly eliminate what you don’t need or what you think is costing too much. Then, go to builder agent and ask for the price again after removing the options that you do not need. Keep doing this a few times. Then, you will have a house that you really want. 

The builders tend to keep the drive way as minimal as possible [but following code] to save on asphalt/road pavement  but see if you can move the house a little backward to have a little longer drive way if you like longer drive way. 

The whole negotiation process should take a long time if possible while building a new house so that you can offer the best price to your advantage as after all that seller agent may just want to give it to you at a discount and move on to the next one instead of starting all over with a new client. This works to a certain extent.

Most people life sun room. I would definitely recommend one.  

Take your time. Don’t buy house in a hurry.

Don’t buy a house in a community just because your friends are buying. You may miss a lot of things and may not like your house later.

Talk to a few mortgage lenders and take the one who gives the best deal. You can put competition among them to get the best deal. They match others’ deals to get your business actually can give better deal their competitors. Use to your advantage.

For new houses, timing of finishing basement is purely your choice-during construction vs later. There is not good answer as to when you should do it.

If you plan to move and rent it later, do not do too much upgrades.

House buying is a sweet experience. Enjoy it.

Do you have any other ideas?