Tips for buying a house (part 4 of 5)
Condition of the property
Houses come in a whole range of conditions. They can range from needing to be torn down and rebuilt to brand new. With most of todays loans, the lending institution will have certain requirements for the condition in order for them to loan you the money. Just because it passes the banks requirements does not mean that it is in a condition that you can afford. If the house is brand new, you will not need to worry about this because most builders will have some sort of warranty on the house (length of warranty changes by company). Older houses are the ones that are the topic of this conversation. Don’t get me wrong, many older houses are well maintained.
Before I go further, let me explain why this can be an issue for you as a home buyer. You buy a house that appears to be in good condition. Two years later you discover that you need a new roof. If your mortgage is already at the maximum that you can afford, how will you be able to pay the $5,000-$20,000 for a new roof? This is where many home owners get into trouble. So do your research on the property to make sure that you can afford any of the repairs that need to be done. If you don’t know what you are looking for, it may be worth your time to pay for inspections. A quality inspector can be well worth the cost, especially if they discover a major issue with the property and prevent you from making a grave error. If they recommend that you get a specialist out to the property to look to see if there is a problem or not, do it. It is better to spend a few hundred dollars in stead of several thousands. Most of the time inspectors will tell you of several minor things that they recommend that you get repaired. This is what I call the “honey do list” or a list of things that can be fixed after you move in, just don’t forget to do them. If the inspector doesn’t find anything, at least you have some piece of mind. Most inspectors will also have a guarantee that they wont miss anything, so if they do, you may be able to go back on them if the problem was evident during their inspection.
That being said, sit down and figure out if you can afford any necessary repairs. This will be necessary for you to budget properly for your home. On top of any necessary repairs you will also want to consider any un-necessary repairs you may want to do. Window treatments, upgrades to the kitchen, bathroom, bedrooms, windows, anything that you want to do in order to set the house up the way you want it. Does the house come with appliances? If not, make sure you have money set aside for the purchase of them. It might be worth your time to shop for your appliances before you start shopping for a house. Figure out one or two models for each appliance you think you may need and price them. Save up the money for them and have that in the bank set aside just for them. If you end up buying a home and it already has appliances, you then have the option to upgrade to what you want, or keep the money to use elsewhere for any unexpected expenses.