Purchasing a house takes a lot of thought and preparation. Because it represents the most significant debt many Americans will ever go into in their lifetime, it’s important to know what to look for.
You’ll want to know what to look for price-wise and feature-wise, and we are here to help you with that. In this article, we will break down for you all the things you need to look for when buying a house.
At Clever, we’ve seen more than our share of real estate transactions to know what to look for when buying a home, and we are prepared to share it with you.
This is the Clever Real Estate House Hunting Checklist.
The Clever Real Estate House Hunting Checklist
Save for a Downpayment
Some types of loans have low down payment options but save as much as you can. The larger the amount of money you put down, the less interest you’ll pay. If you put down at least 20%, you can even avoid PMI or Private Mortgage Insurance. There are many ways to save for a down payment, so jump in and start saving now!
It may seem like a hassle, but it is one worth taking the time to do. Getting a pre-approval letter is your ticket to working with the best real estate agents and having the upper hand in negotiations.
Pick the Right Real Estate Agent
Don’t work with an agent before you do your research. Are they highly reviewed? Are they familiar with the market you’re looking in? What services do they provide? Are there any perks to working with them? Choose the real estate agent that is the right fit for you, and you’ll have a much smoother transaction.
Know What You’re Looking For
Are you looking for an investment property? A place to raise your family? A home with a view? Know your top priorities before looking, and everything else will fall into place. It may help to make a list of property must-haves and things you are willing to negotiate on.
Consider the Numbers
Before making an offer on the house, consider the price compared to other homes in the area. You may even want to do a Comparative Price Analysis. You want a home that is priced at the fair market value, ideally one that you’ll have instant equity in once you sign the papers.
If you are looking for a property to invest, this is one of the most important aspects to pay attention to. Take a look at more than the current price of the home, take a look for what it’s sold for in the past.
Take a look at the area: what’s the average income for the area? What is the Rental yield? Is the economy going up or down, and what has it done in the past?
Make a list of 60-100 properties, compare numbers, and narrow your decision that way before going to look at the house.
Do Your Research
Before you get too invested in a property, do your research! What has it sold for in the past? If it’s a rental property, how much of an income is made from each of the units? Have there been any problems in the past such as fires, drug use on the property, or illegal additions to the home? Knowing these things before you get attached will make sure you are aware of any skeletons in this property’s closet.
Tour the Property
If at all possible, tour the property before you buy it. And don’t just stroll from room to room, either. Peek under cabinets and in closets. Flush toilets and turn on lights. Investigate weird smells and take a flashlight into dark areas. You want to know this house from top to bottom. Make sure you check out the attic and crawl space as well to make sure they’re properly maintained.
Get to Know the Neighborhood
Check out the area. Get to know the crime rate and demographics, but also get to know your potential neighbors. They’ll be able to tell you more about the house and area than the description on the listing will tell you. Are there yappy dogs that live three doors down? Do loud vehicles race up and down the street in the middle of the night? Get to know these details upfront so you can make an informed decision.
Know Your Limits
Are you handy with a hammer? Know how much fixing you can do and when to walk away. If you’re going into a renovation project, it may be a good idea to bring a general contractor along if you are unfamiliar with the amount of work and money the home will take. Make sure you have the budget for the repairs as well as the time it will take. If the repairs are extensive enough, know where you are going to live meanwhile.
Get a Pre-Sale Inspection
One of the biggest mistakes a buyer can make is not getting a pre-sale inspection. Sure, it costs you a bit of money upfront, but it could save you ten times the amount you’ll pay an inspector. Be sure to choose a reputable inspector, as you’ll want them to be as thorough as possible.
Negotiate the Price
This is one of the places your pre-approval letter comes in handy. Having that as you come to the table with your offer adds incentive for the seller to accept your offer. Don’t think that means you should lowball, however. Know your bottom line and don’t cross it, but take into consideration the value of the house. You want to find that sweet spot both you and the buyer are happy with.
Have your real estate agent put a contingency upon the final walkthrough. This will give you access to the property right before you close on the house. Make sure everything is still in the same state as it was when you decided to purchase the house. If anything seems fishy, talk to your real estate agent and the seller about it before finalizing on the house. It’s better to walk away at the last minute rather than going through with something that just doesn’t sit right.
Thank Your Agent
Many people expect to receive gifts from their real estate agent, and that’s great! Just remember to thank the team that got you to where you’re at. The best way to thank your lender, inspector and the real estate agent is by leaving a glowing review and referring them to others you know.
House hunting? You need a knowledgeable real estate agent by your side. No, we’re not talking about regular real estate agents, we’re talking about Clever agents. At Clever, our agents come with great reviews and an extensive knowledge of the area. Beyond that, our agents even offer commission rebates after closing. How’s that for Clever?