Things to Consider Before a Home Search Begins

Real Estate Advisor: January 2016
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Things To Consider Before a Home Search Begins

January might seem like a time when looking at real estate might not be the best idea because of the low number of properties on the market. While this is one of the slower times for real estate throughout the U.S., it's a perfect time to start thinking about real estate and all the things that are needed and required when purchasing a home. If you're thinking about starting a real estate search in the next few months, now is the time to get yourself acquainted with the things you should know and do before you begin your real estate search.


Personal Priorities

When you begin your property search, you might be committed to a certain city, area or neighborhood for specific reasons. It's important to consider your personal priorities when you're thinking of starting a property search, as these can greatly impact where you look and what you look for. Are you only interested in a specific area? Are you only interested in a specific home style or type of property? Are your interests aligned with your budget (can you afford what you would most like in a home)? It's important to know what you want, where you want it, and if you can even afford it before you begin your home search, as these things will guide your search criteria.



Investment Potential

As stated above, you might be committed to a certain area because of the amenities, schools, activities or you just generally like the area. But it's important to consider the investment potential of the area you're interested in. Are home prices already at their highest for your desired area? Are home values expected to increase for the area, or are they expected to stagnate? Is the area popular, or is it up and coming? A property is a large investment, and most homeowners want to see an increase in the value of their investment over a certain amount of time. While thinking of the investment potential, also consider the time potential: will the area continue to grow? Is the area set up to accommodate large growth in terms of infrastructure? These considerations should help guide your property search.



Avoid Change

Have you been dreaming about a new home or a new piece of property? If your priorities for the new year include a property search, now is the best time to avoid any major changes. Major changes are those that might affect a mortgage approval should you need to apply for a mortgage loan. Changing jobs before you begin your property search, opening new lines of credit (or adding a large amount to existing credit) and changing banks should be avoided if you're looking into buying a property in the next year. When you apply for a mortgage, all of your monetary assets, income and work history are considered by the loan company. Right now, before your property search begins, is a great time to make all of these as strong as possible if you'll need to apply f or a mortgage loan in the coming months.



A Comfortable Price

Sometimes our dreams cost more than our budgets allow. You might be able to qualify for a large mortgage loan, but that doesn't mean you'll be comfortable with a large mortgage payment every month. Before you begin your search, take the time to talk to whomever will be involved in the purchase of the property (maybe you're the sole purchaser; maybe you're going to buy with a partner or spouse) and decide on what a comfortable price looks like. Now is the time to look at your finances as a whole: you need to have a good picture on where you stand with income, debts, savings, and just general monthly expenses. Determining a comfortable monthly payment beforehand will help guide you toward a good price range for your future property search.



All the Expenses

After you've settled on an amount you're comfortable with for a monthly payment, it's time to also consider the other expenses that come with homeownership. While a mortgage seems like the only thing that comes along with a new property, there are other expenses that shouldn't be forgotten. With a new home or property comes property taxes, property insurance, HOA fees (should your property be in a HOA community), any immediate repairs needed and general home maintenance costs. Once you've determined a comfortable monthly mortgage payment, don't forget to factor in the additional expenses that are very often forgotten about. These items might actually change your ideal mortgage amount.



Patience and Preparation

While you might be raring and ready to jump into a real estate search right now, patience is going to be your best friend when it comes to finding the property you truly want. Your local real estate market will likely see an influx of available properties in the early spring, so use this time to make sure you have everything in order before your property search begins. This includes getting a pre-approval for a mortgage loan, getting your credit and finances in order, making minor changes and updates to your own property if you will put it on the market, and understanding that patience and preparation are the most important things right now. The next few months will go by very quickly, especially if you have your mind set on a property searc h; you want to be in the best position possible when the real estate market heats up and you're ready to find the property of your dreams.



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