Considering Purchasing a Home in 2020?

Thinking about purchasing a home this year? Here are some things to think about!

10 Factors to Consider When Purchasing a Home in 2020

1. Is it a buyer's or seller's market?
2. Is it advantageous to rent or buy?
3. Make sure you understand the process of buying your first home
4. Make a list of what you want in the house
5. Research the school districts and other kid-friendly areas
6. Decide if you can handle a fixer-upper
7. Determine what you can really afford
8. Review your credit report and credit score
9. Save up for your down payment
10. Put down roots

All right, so let's jump right into it, is it a buyer's or seller's market right now?

Right now (February 2020), across the country, we're seeing that it is still a pretty strong seller's market. So if you're planning to buy a home, anticipate paying pretty close to whatever that list price is.

What is a seller's market?

A seller's market is when there are more buyers than sellers out there. More people are trying to purchase a house than there are houses available to purchase.

What is a buyer’s market?

A buyer's market is the opposite; there are lots of houses for sale, but half as many buyers.

Is this the best time to consider purchasing a home, being that it is a seller's market?

The best way to answer this question is to consult with a local real estate professional who has an understanding of the market.

Is it more advantageous to buy or rent?

This is going to really depend… are you going to be in this area for a while? Does your job require you to move often? What will it cost to have a mortgage? Does it make sense to buy?

If you're only going to be in an area for a year or two and you're constantly on the go, maybe renting is the better choice.

Understanding the process of buying a home

Can I buy it on Amazon? Well, not as of right now, but it’s probably going to happen one day!

In any case, when it comes to purchasing a home, there's a lot to do.

Probably the best thing will be to sit down with your real estate professional. However, we’ll give you a quick rundown of the process:

First, you're going to have to get pre-approved or pre-qualified with a bank or a lender to see if you can even afford to purchase a home.

Then you’ll move on to searching for homes either with a real estate professional, or you can find a house that is for sale by owner and set up a time to look at the house yourself.

Next, you're going to negotiate a contract, which will then be followed by about 45 days’ worth of different things that are going to happen between contract and close.

Finally, you’re a homeowner, woohoo!

Let’s just say renting is a lot easier than that!

Make a list of what you want in a house

This is really important because if you're just going around not knowing what you're looking for, then you probably won't find anything. You’ll just be constantly looking at houses…which is probably pretty fun, but we suggest going through a couple of open houses to see what you might be interested in, then start making a list of things that you really, really need and things that you want to start to narrow down your options.

Research the school districts and other kid friendly locations

There are some things that we as real estate professionals can't tell you because of the fair housing act.

Luckily, there is always information on the internet that can give you insight into what the local schools are like, and where the best places to take your children are.

If you don’t have kids, this may not be of interest to you, however, being in a good school district may actually become a factor when reselling your home.

Decide if you can handle a fixer-upper

Can you handle a bathroom or kitchen remodel while you're living in the house? Have you ever tried it? Do you know friends that have?

We can tell you from experience that it is super stressful!

When Tim moved into a house in Ohio, he had to have the bathroom redone. The project that was supposed to take a week or two ended up taking a month and a half. And that was only for one bathroom! So just make sure that handling renovations is something you can deal with.

Determine what you really can afford

There is a slew of loan originators out there who can determine what you can afford to purchase. You can contact as many as you want to see what they say.

However, don’t just take what they say as your only determining factor, take a look at your current budget and figure out what you can afford to pay each month without draining your finances. Don’t get into a situation where you can’t go out and do anything because you’re worried about paying your mortgage.

Review your credit report and your credit score

This is also going to give you an idea of what your interest rate will look like when you end up purchasing a home. So, as you’re doing the math to determine if it will be more cost effective to rent or purchase, your credit is a factor that you may want to consider.

Save up for your down payment (if applicable)

If, for example, you are a veteran and have VA benefits, you won’t have to put down a down payment, but you can if you want to. You can contact a loan originator or a real estate professional for more information about that.

Putting down roots

Are you going to live in a place that you actually want to live in? If you hate the place that you're staying in, maybe you should reconsider purchasing a home. However, if you are looking to build up your real estate portfolio and are considering renting out your home, purchasing a home may be a worthwhile option. Again, talking with a real estate professional will help you determine a good plan for moving forward.

Questions? Contact us today!

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