How to Budget when House Hunting
When house hunting, it’s easy to fall in love with gorgeous-looking properties with spacious living rooms, perfect outdoor spaces, and other features.
Many folks have been tempted to pay more than they could afford, throwing themselves into a financial mess. You don’t want to make the same mistake.
Here are some tips to guide you when house hunting.
Consider the affordability of the home.
The affordability of a house doesn’t depend only on the cost price of the home. You need to look at the size of the property and its present condition.
You may buy a property for what you think is a bargain but end up paying a lot more in repair costs.
That’s why it’s crucial to have a construction expert give you an idea of what the repair could cost. Buying a large house could also mean you’ll pay a lot for heating, cooling, and maintenance. If a home seems cheap, find out if it truly is.
Hunt for houses within the lower limit.
After getting a loan of $400,000 approved, most people hunt for homes that cost $390,000. Wrong move. Instead, look for homes within your lower limit that satisfy your needs.
Ask yourself what you need the most in a home. Do you want an easily accessible neighborhood or one with good schools? How many rooms will be just suitable for your family?
You probably don’t need a 5-bedroom home or one with an expansive lawn. Go for your homes at the lower limit, and you’ll be amazed to get what you need for a happy life.
Know when to walk away.
In a hot real estate market, it’s easy to get into a bidding way. After you make an offer on a house, other interested buyers might drive up the price. As such, you should know how high you’re willing to go in such scenarios.
Setting a limit will let you know when to walk away. While you want to be on the winning side and get the home of your dreams, you don’t want to go above budget.
Find a reliable, expert realtor.
Most real estate agents make money through commissions, which is a percentage of a home’s selling price. That means the higher they’re able to sell a home, the higher the money they get.
For this reason, some realtors show and badger you into going for homes above your limit. If your realtor does this, find someone else who understands your needs and works with you to find good homes within your budget.
Get your priorities right.
Your long-term friend just bought a home with a pergola, pool, spacious basement, excellent views, and other nice amenities for $400,000. You love the house and are looking for something similar.
But with a budget of $200,000, you most likely won’t get a home with the same excellent features. Don’t try to keep up by raising your budget. You and your friend have different priorities and financial goals. Stick to yours.
Know what you want and don’t become emotionally attached to any home. Also, be patient and work with a reliable local real estate expert who knows the market. If you’re looking to buy a home in Davison, Michigan, one real estate expert you’ll be glad to work with is the Brokaw Group.