4 minutes read | June 9th 2020
There Are Hidden Expenses
Oh, hey, remember that 20% down-payment you just made? Well, it's time to pay more. From closing fees to the hidden costs of home ownership, there are lots of expenses no one really tells you about. You have your mortgage payment; in some cases your property taxes and insurance aren't included in that (and they might increase every year). If you're part of a homeowner's association, you'll have fees associated with it. Maintenance can add up, too; there's no landlord to call when the oven doesn't work or the toilet overflows. Don't forget landscaping costs, snow removal, and pest control. Think about all these elements when you're deciding on a budget for your mortgage.
You Should Shop Around for a Real Estate Agent
This is one you've heard, but we're shouting it out. The agent is your expert, and you need someone you can trust to act as your advocate. This is especially true if you're shopping for homes in a new area that you don't know much about. Look at reviews online, and meet with a few agents to see how your personalities mesh. Ask for recommendations from friends and family. Put more time into this than you planned — it'll pay off in the end.
Flipping Isn't Easy
Turn off the TV. Flipping looks great on a Saturday morning from the couch sipping your coffee, but it isn't easy. You really shouldn't just make the decision to up and sell, flip-style. Plan on staying in your home for a few years, if possible — it makes more financial sense (hello, capital gains tax!) and gives you time to formulate a plan when you want to sell. Selling can be a lengthy process that ties up your assets. Markets change, and finances ebb and flow. These elements will affect your situation in the future, and it's pretty tough to predict how.
School Districts Matter, Even If You Don't Have Kids
The school district you live in is a huge factor that impacts the value of your home. Strong school districts drive up the prices of homes in an area. This can affect your property value and your future ability to sell. While you might not care what schools are in your potential area, future buyers with kids certainly will. Don't narrow your pool of buyers or affect your ability to resell by ignoring a home's proximity to good schools. Along with a good school district you should always check your potential neighborhood for risks and typical repair costs.
Don’t Sink Every Cent into Buying a House
Yes, this is an investment, but it shouldn’t be your only investment. You need to have some cash on hand for emergencies or even potential repairs. Don't use all your savings and drain retirement funds to buy your house. Look into lower down-payments that allow you to reserve some of your savings.
Really Think Before Buying a Fixer Upper
Grabbing a house with "good bones" can be a great way to stretch your budget, sure. However, you really need to think this through — especially if it's your first time.
Beyond the obvious need to have extra money to do the updates and repairs, make sure you understand this is a giant undertaking. Construction and renovation are messy and time-consuming — usually more so than your contractor predicts. Of course, if you don't mind living around the mess, are doing the work yourself, or have a year or two for the remodeling to wrap up, it might work out without causing too much interruption.
Researching and planning are your BFFs when you're buying a home. Tap into friends and family for their experiences, and expect surprises along the way. Make a plan that takes your unique needs and wants into consideration, and you'll find something that's just right.
Your plan isn't the only thing that should take your unique needs into consideration — your homeowners insurance should, too. As you get ready to purchase your new place, take a look at all the beneficial ways Pickle helps you create a customized policy that's just right for you.