18 Feb 6 Key Buying Strategies
Is 2020 the year you finally decide to buy your first home? How much practical, valuable real estate advice did you ignore in 2019? What’s your intent for 2020?
Whether 2020 represents time for a fresh start or continued work on important real estate goals, you don’t have to look any further to discover inspiration and relevant information.
In the spirit of “Keep It Simple, Sweetie” decision making, here are Six Key Buying Strategies to consider when deciding on your first-home buying strategy. This is the thinking to do before you zero in on decor “must haves” like dream kitchens and spa-like bathrooms.
1. Location, location, location is no joke
Location is the most permanent aspect of real estate; buildings can always be changed. Buy the best location you can afford. Do your homework and talk to real estate professionals to fully understand what location means in the communities and neighborhoods you’re considering for your first home.
Buy at the low end in the best location to ensure your real estate appreciates in value. The most expensive house on a street or in a neighborhood usually has its value suppressed by lesser homes near it. Buy the “least house” on a street or one in the mid-value range and your home may be bumped up in value as high-end homeowners continue to up-grade their castles.
2. Don’t buy your “forever home” too soon
If you are determined that your first home will be your “forever home,” you may be taking on too much. First homes should be financial stepping stones to that ultimate lifestyle realization. Wisely buy and sell two or three homes over many years—building equity as you go—to solidify your financial stability.
If you start with a “forever home” and skip this progression, you are searching for a home and a neighborhood to spend 60 or more years in. Really? In a world that changes so rapidly each year, each month, each day, how can you be so sure of what you’ll need and enjoy decades down the road? Buy a very large home for the many kids you want to have and you may overspend for the family you have now or be forced to move out of your too-big, too-much-work “forever home” when the kids leave.
If you’re thinking long term, search out stable economic areas and homes that can be easily modified to add and convert income-generating units. Flexibility of lifestyle and income is what survives over time.
3. Buy in moderation
Maxing out financially on your first home may not be the best real estate strategy. “House rich, cash poor” is not the ideal state to live in to fully enjoy your first home. Spending to the limit leaves no room to improve the home and increase its value. Being cash stretched may put you at financial risk if a big repair like a leaky roof or failed furnace pops up.
Because you qualify for a big mortgage does not mean you have to borrow or spend to the limit. Because you like the expensive home more, does not mean that’s the one you should buy. Is keeping monthly payments manageable more valuable to you than impressing visitors?
Consider your first home as the first financial stepping stone on the way to a mortgage-free forever home. Ask your real estate professional to share a range of financial options with you instead of directing them to “buy as much as I can.”
4. Stop waiting till Spring
Retail shopping has trained shoppers to think seasonally. With real estate, “now” may be the best time to buy. When you’re ready, go. Search and purchase when the masses are not and you may get a terrific buy from a seller who must move immediately and can’t wait for Spring.
Wintery weather may mean less traffic through builders’ sales centers and more attention paid to you. You may even find a few buying incentives thrown in. Wait until Spring and you may pay more and feel very pressured in the process.
5. Buying the country
Can you see beyond idyllic stereotypes of country living when considering “the big move” to cheaper, non-urban real estate? Moving into the suburbs or out into the country may mean you get a bigger house for your budget. If square footage is what matters most now and in the future, away you go.
However, if lifestyle, career opportunities, education choices, internet access, health services, and appreciating real estate value are key considerations, look closely at what you gain and give up by moving out of an urban neighborhood.
How many urban problems will you really leave behind? Small town and rural homeowners face many of the challenges city owners do: rising food and fuel costs, rising taxes, and environmental challenges. Which rural concerns like water quality, black outs, less convenience, and scarcity of services may significantly affect your home and lifestyle?
6. What’s your buying style?
If your search for a new home or cottage uses criteria set by “what’s on trend,” you are following the herd rather than leading yourself. For instance, open concept living space is “in,” but not without compromises. If you’re not aware what you give up to get “open concept,” you have not explored all the options open to you.
Wanting housing similar to or better than your peers may be a sign of compatibility, but make sure you’re not extending yourself financially for superficial reasons. Showing off is not a sound investment strategy. Learn where those you follow originally got the ideas that define their lives. Their reasons for acting may not match yours.
Everyone has to discover what real estate styles and ownership type are right for them. As you learn, be ready to get in there and explore all your options, not just the trendy ones.
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