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Thursday, July 5, 2012

5 Beneficial Home Buying Tips

Buying a home is an exciting experience, full of anticipation, joy, adventure and sometimes even a little stress. Typically, most people will only participate in the purchase of three, or less, homes throughout their lives, making it an infrequent event. Because the real estate market ebbs and flows in general more frequently than you buy a home, this means that each time you buy you will need to call upon a different skill set and timely information to put you in the best position to negotiate for your desired home. Here are 5 beneficial home buying tips designed to help you make reasonable and objective decisions when buying a home no matter when it happens in your life.

1. Make a long-term plan. For most people, buying a home will be among the largest financial transactions you will ever undertake. Because of this fact, it is critical to make the most-educated guesses possible about your future so that you can choose the correct home for your needs and purchase it under the most-favorable terms. For example, if you know that you will be relocating to a different state in three years, it may not be a good idea to purchase a home if you have to sell it to move. The costs associated with holding and selling the home for such a short time period in many cases could potentially cause you to lose money. As well, if you anticipate having children in the near future, you must consider the size and functionality of the home, plus the location to your desired school system to make the best possible decision about purchasing. No long-term plans are perfect, but taking the time to consider their affect on your home purchase can save you significant time and money.

2. Analyze your financial position. There are significant costs associated with buying and maintaining a home. You must make a household budget and reasonably estimate the costs associated with homeownership. In addition, if you are financing a home with a mortgage, you must submit to a mortgage pre-qualification to learn what financing options you will be offered, plus the associated costs. It is possible that you will discover through this process that buying a home is not the right move for you at this time and that you need to save money or work to improve your credit score. Frequently, I see potential home buyers skip this step only to discover that they cannot buy a home after spending hours looking for homes on the internet and driving around viewing homes in person. Know your financial position and your budget so that you can search for the right home that won't break the bank.

3. Define your wants and needs. Once you know your budget, you can begin to search for a home in earnest. The best first step when beginning your search is to clearly define your wants and needs. Simply, a need is something that you must have in a home and a want is something that you would like, but can do without. Examples of basic needs in a home can be the number of bedrooms and bathrooms, a first-floor bedroom or a space for a home office. Examples of typical wants in a home can be a gas hookup for a stove, a separate dining room or a swimming pool. Accurately defining your wants and needs will help you set the search parameters as you begin to search for your ideal home.

4. Set reasonable expectations. Buying a home is always a delicate compromise. Only in very rare cases will you ever get absolutely exactly what you want in a home, even if you build it from the ground up. The best approach is to know your needs in a home, and then begin to make small compromises with your wants. If you need to be in a certain area so that your children can attend a certain school, then you will likely make numerous compromises with a home so that you can meet the location need. In addition, if you really want a swimming pool with your home, but find the perfect home in every other way, you may consider adding a swimming pool later. It is all a grand balance and keeping track of your needs, plus setting reasonable expectations for meeting your needs, will help make the home buying process positive.

5. Be objective in your analysis of the home. Buying a home really is an art and a science. Much of the art of buying a home is understanding people and emotions, including how they factor into negotiations. The science portion typically involves carefully analyzing a home for value, taking into consideration location, functionality, condition, comparable sales, etc. To be objective in your analysis of a home you need accurate, timely information that pertains specifically to the home that interests you. In addition, you will have to work to emotionally detach yourself from the home to some degree and let your objective analysis runs its logical course. It is in this stage that the "perfect home" can fall victim to mechanical or structural issues, pricing issues, or challenges with the location that make it unviable for your needs.

I hope that these 5 home buying tips have been beneficial to you. Especially because we find ourselves in a challenging real estate market, I urge you to use caution whenever you buy a home and take the time to research all aspects of homeownership. If you would like to learn more about the process of buying a home, or would like to research the available homes in the area, please visit my Louisville Real Estate website. Happy home hunting!!

This is a sponsored contribution from Joe Hayden - Louisville Real Estate

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