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What You Need to Know When Buying a New Home

By Eric Hammer - 2010

Buying a new home can be incredibly scary and it's not the sort of thing that you want to take on lightly. This is especially true in the current economy when things seem to be on such shaky ground with jobs and real estate prices. On the other hand, now may be the perfect time to buy a new home precisely because of the fact that prices are so low and sellers are desperate to unload their property. Here's how to pick the perfect new home for you:

Have Some Imagination

Yes, you can try to look for the "perfect" home when looking into buying a new home. However, this is a recipe for spending a lot more money needlessly. The fact is that the homes which look perfect, with perfect lawns and with perfect furniture for staging purposes are going to cost more money. If you can get past looking at the ugly wall paper and the peeling paint on a fixer upper, you can easily save yourself tens of thousands of dollars.

The cost of replacing that ugly wall paper and having a new paint job done will cost no more than a few thousand dollars. However, because the market is so wide open right now, that ugly wall paper and peeling paint could mean tens of thousands in savings, meaning that you'll ultimately save big when buying your new home. The catch? You need to have enough imagination to see it as it could be, not as it is.

Visit More Than Once

Gone are the days when buying a new home meant needing to make a decision right away. These days, most homes for sale on the market tend to sit for a while. This means that you can visit more than once and make an informed decision rather than a snap decision. This is important for several reasons. First off, this is the place you'll be living in for the foreseeable future which means that you need to do more than make a snap decision.

Second and more importantly, the neighborhood make look nice during the day, but it make look awful when you come back to visit late at night (you may for example miss that tavern down the block or even the noisy family next door who fight with each other every night).

Look around the Neighborhood

It's also a good idea to spend the time to look around the neighborhood for a while before you make a snap decision to buy a new home. The fact is that a new home is more than just your own four walls. How close is the nearest all night grocery for that time when the baby is crying at the 3 in the morning and you're out of formula? How far is it to the supermarket? Can you walk there when there's a snowstorm or will you be stuck without food? If you don't own a car, how close is the nearest bus or train station? All of these questions are extremely important if you're going to be living somewhere for the long term. Speaking of that…

Plan to Stay for Seven Years

When you rent a new home, you can plan to stay only for a year or two before moving on if you're not happy. Buying a new home is different. In order to recoup your initial investment in paying the down payment on the mortgage and all the fees that are associated with that, you need to plan to be there for at least seven years. More is better, but seven years is the rule of thumb to break even.

Know You'll Be Happy

Finally, if there is something you find truly annoying about the possible home you want to buy, check in advance that it can be changed (i.e. if there is a wall where you think it shouldn't be and you want it knocked down, make sure that it's not a supporting wall which must stay before you sign on the dotted line). Nothing is worse than buying a new home and then realizing that there is something you're going to hate and be stuck with for years to come.

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Houses Under Fifty Thousand | Buying a New Home