by Michael Haynes,
Supervisor, HomeOwnership Center
Imagine this scenario… You are pre-approved by your lender for a mortgage in the amount of $200,000. You enlist the services of a realtor and together you both hit the ground running in search of your dream home. After several weeks of house shopping, you find the house of your dreams, which happens to be priced under the $200,000 amount for which you were pre-approved. This home has all the bells and whistles that you are looking for, and you are in love with the property’s location. You make an offer to purchase the home and have the details of your offer outlined in the purchase and sale agreement. The seller accepts your offer…
Before you go any further, treat this transaction as a business investment that may come with risks. Your task is to minimize your risks as much as you can. Start by understanding the local market and related activity. You can get information on current and future economic development activity from the town hall where the property is located. Study recent sales of homes in close proximity to the home you are trying to buy. This practice will help you to have a better understanding as to whether the home you want is priced in line with other homes in the same market. Your realtor will be able to help you with this.
Make sure you attend your home inspection and use it as an opportunity to “look under the hood.” The home inspection will give you an excellent opportunity to see property damage and related issues that should be addressed both internally and externally. You may not have caught these issues when you were initially walking through the home to see if it had enough bedrooms and bathrooms for your needs and yard space big enough to have summer cookouts.
During your home inspection, look closely at all aspects of the home including the mechanical systems. Ask questions about the wiring, plumbing, roof, and windows. You will want to know whether there are electrical, plumbing, or structural issues. You may not be able to see every finite detail, but do the best you can to take note of the items you can see. Think carefully about how you want to proceed should you come across costly issues that must be repaired. You can use this as leverage to get the seller to give you a better deal, but the seller does not have to comply. Think about the future costs to repair and renovate items in the home and whether the costs are feasible.
Do not allow yourself to end up with a home that will cost you more to live in than you bargained for… Take the time to understand the local real estate markets and the home maintenance costs expected prior to closing on the home. This can save you money and headaches.
The HomeOwnership Center at NHS of New Haven knows the local real estate markets well and has access to information pertaining to home maintenance expenses. Check us out online at www.nhsofnewhaven.org and give us a call at (203) 777-6925 so that we can help you minimize your home buying risks.