What to look for when buying a house
You are ready to find the right home: You have a budget. You know your affordability amount. You’re pre-approved for a loan. You’re working with a realtor, or you are comfortable working on your own. You know your timeline. You’re now a highly-qualified buyer, the only thing standing in your way is finding that perfect house. The great home search has begun!
Finding the right neighborhood
Exploring different neighborhoods might be the best part of the home buying experience. There’s nothing like cruising the streets in an area, looking at the houses, discovering parks, restaurants, coffee shops, and talking to your potential new neighbors.
When you are weighing locations, it’s important to consider what you want from your neighborhood. Do you prefer privacy, or do you want to join a thriving community? Do you want walkability? Does the local school system impact your decision? How long are you willing to commute every day? Do you want to live nearby to friends or family?
Sound overwhelming? Another easy way to answer these questions is to determine what you do not want. List all the things that drive you crazy now, rank the priority, and do the opposite.
Pro-tip: If you’re buying with another person, it’s important to work together to determine your needs, wants, and must-haves when it comes to your new home.
Once you have an idea of what you are looking for, it’s time to do your research. When assessing a neighborhood, here are a few things to consider:
- Safety – Above all else, you want to live somewhere safe. Neighborhood level safety info can be hard to find. Trulia has a crime map you can explore. The FBI consolidates crime reports, you can look up your potential neighborhoods in their database. The National Archive of Criminal Justice Data also has their National Crime Victimization Survey — a massive Excel file you can download and comb through. But nothing beats a simple call to the local police station!
- Economic factors – How do the home prices in this neighborhood line up against your affordability? Few things are worse than finding the perfect house and then realizing it’s just outside of your price range.
- Market factors – What is the local real estate market doing in the neighborhood? Some basic things to look for:
- Are homes going up or down in value?
- How is the inventory? Are there a lot of listings or just a few?
- How quickly are the homes selling? Is it a competitive market, or can you take your time shopping?
- Are there foreclosures in the area? If there are a lot of foreclosures, this is usually a red flag, especially if the homes are on the market for months or years at a time. This can make things difficult when it comes time for you to sell your home.
- Are there a lot of rentals in the area, or is it more homeowners? Homeowners tend to be rooted, where rental neighborhoods can have high turnover.
- How does the neighborhood compare to those around it?
Pro-tip: You can check out the Case Schiller index to see home price trends both nationally and in some major metro areas.
- Convenience – We love Walk Score. It is a great research tools when comparing neighborhoods. Pop in a property address and you can quickly see the nearest grocery stores, restaurants, coffee shops, and bars. Do these places line up with your expectations?
Once you have a few neighborhoods in mind, the next absolutely critical thing that you need to do is go visit. Some people may hesitate or skip this step, and it’s (in our opinion) a mistake. You’ll learn more in an hour visit than you would doing 10 hours of research online.
Go walk the shops. Have a meal there. See if it smells funny. Seriously — if the whole neighborhood reeks of Sriracha, that may be a deal breaker for you (or a bonus?).
We also recommend visiting a few times, and at different times of day. It’s always good to compare a weekday morning, especially with things like local school traffic, to a weekend night.
The best thing you can do on these visits is talk to people. Find a friendly bartender, or strike up a conversation with a local at a coffee shop. People tend to take pride in where they live and will be happy to tell you all about their neighborhood. If no one wants to talk to you, or you can’t find someone to talk to, that’s just as telling!
Finding the right house
Looking for houses can be one of the most fun and frustrating (funstrating?) experiences ever. Having a clear idea of what you want (and what your deal breakers are) can make this process infinitely easier.
If you are shopping with a spouse, significant other, or partner, have this discussion long before you step foot into an open house. Few things are less productive than a couple hashing it out in the living room of a stranger’s home after a long, unsuccessful day of showings.
Another important consideration here is how long you plan to live in your new home. This is where the FOMO kicks in for many people. You may start thinking “If I live in one spot for five years, I’ll never be able to do that 18-month around-the-world trip. How will I make my travel blog where I plank in front of international landmarks?” And to that, we say planking hasn’t been cool since 2011, get it together!
But seriously, people are generally more rooted than they would like to admit. Do you live near family? Close friends? How tied are you to your job? Is your industry rooted in your current city? Any one of these things could keep you in a city long term. In many cases, the house is not the thing that anchors you.
Prior to buying, it’s good to at least consider where life will take you in the next few years. For instance, do you want a dog in the future? Then having a yard may be important. Thinking of going freelance or starting a small business? Then you may want some space for a home office or workspace. Plan on having kids anytime soon? It might be easier to save a little more for your down payment and get that extra bedroom now instead of racing to upgrade your home before your baby comes. You may even decide to rent that spare room out on a site like AirBnB or Home Away, which could help cover your mortgage payment.
Another consideration is what to do when you’re ready to move out of your new home. Is your goal to convert the home to a rental property when you’re ready to move? Are you more concerned with making a good investment and having the home appreciate over the next few years? Or is your primary goal finding a home you love? Even if you aren’t sure, considering your exit scenario may be helpful while you are house hunting.
And if your future goal really is to do your around-the-world plank-a-palooza? Perfect! Look for a home in a desirable rental neighborhood. With a little effort now, you may be able to make some money every month by renting the home during your trip.
The trick here is understanding what you want and where you’re going in life vs. realizing you’ve missed something after it’s too late. (Admittedly, this is easier said than done.)
These are great conversations to have with your realtor and loan officer as well. If they understand your perspective, they can refine the types of homes or loan products they recommend, which can make your purchasing process much more efficient. Your team will be firing on all cylinders.
Rank your priorities
Having realistic expectations here is key. It may be impossible to find that perfect craftsman house that’s old but not too old, offset from the street and private, with a large backyard, that backs up to a park, with tons of street parking, in the middle of the city, walking distance to your favorite bar, biking distance to work, and just far enough from your mother that she has to call before coming over.
We find it helpful to make a list. (Who doesn’t love lists?!) Create a few columns: needs, wants, nice to haves, and deal breakers. Then go through and start adding different amenities to each column. If you’re buying with another person, romantic or otherwise, it’s a good idea to have both people do this and compare notes.
Home showings & open houses
We love looking at houses — there’s a joy to it that cannot be substituted.
Walking through a home and trying to see yourself living there is fun. What color would you paint the walls? How would you arrange your furniture? What would it be like to have friends over? How would you fix that hideous bathroom?
In many cases, you’ll walk in and realize a house just isn’t the one. It looked good online, but in person the floor plan makes the place feel like the Winchester Mystery House. This part of the process can get draining after a while, which is why patience is key. It’s easy to get frustrated and give up, or worse, make an offer on a house you’re not excited about.
There are a few things we recommend doing for every house you are at least somewhat interested in. First, using a simple checklist for each home can be a huge help. Be sure to take a ton of pictures. You’ll usually have a limited time exploring the home, and it’s not uncommon to see four or five houses in a weekend. Having photos of key areas of the house will help you weigh your options later. It may also help to take a video as you walk through the home. You can play this back later to remind you where, exactly, that second bathroom was.
Pro-tip: Bring a measuring tape and something to capture the measurements with you to showings and open houses. A quick sketch of the floor plan with some rough measurements will always be helpful when weighing your options.
We also recommend making notes about each property as you walk through it. Listing information doesn’t always capture things like appliances, garage space, laundry room info, etc.
Make notes about the area as well: Is the house on a busy street with lots of traffic noise? Does the nextdoor neighbor look like they’re running a junkyard? Often, you’ll also learn things that would never be in a listing, like how motivated the seller is, how old the roof is, or the interesting history of the property or the neighborhood.
It’s a marathon, not a sprint
Try to stay positive through this process. House hunting can take months. Try to enjoy the process, and don’t let it stress you out. If you spend months searching, make sure to keep your realtor and loan officer in the loop. When the right home comes, you will want to be prepared and move quickly. And if you decide that buying isn’t right for you, that’s okay! This process isn’t that different if you’re buying or renting a single family house. Either way, when you move, you’ll be making an informed decision.