You’ve reached that exciting place in life: you’re ready to buy your first home. It’s exciting and intimidating, exhilarating and nerve-racking all at the same time. Sometimes there are so many emotions, you may not even know what you are feeling at a specific moment.
If you want to end up on the right side of the emotional ledger, take time to find the right community. You’ll also want to consider your plans for a family. Buying a home you can grow into may save you an expensive move in a couple of years.
Speaking of expense, staying within your budget will reduce much of the stress associated with a new home purchase. There will inevitably be repairs or updates you’ll want to make, so don’t max out your capital on the purchase price alone. Leave some funds available for replacing that outdated carpet or planting the azaleas you always longed for.
Feeling overwhelmed yet? Don’t be. These four tips will help you find the right first home for you.
1. Choose Your Location Thoughtfully
Sure, there are footloose people who move every year or so. For most people, though, buying a home is a long-term decision. To ensure that decision is the right one, think carefully about what you want in a neighborhood. Your self-awareness will help you and your realtor search locations you will be happiest.
Your first decision involves selecting an urban, suburban, or rural community. Each of these choices has implications. If you want to walk to shops and restaurants, you’re a born urban dweller. If you want a yard and plentiful parking — but relatively easy access to city amenities — suburbia is calling. And if you really want room to spread out, a rural location is for you.
Ponder your options thoughtfully so you’ll be content over the long haul. Those cocktail bars might be enticing in your late 20s (at least after COVID-19 passes), but will you eventually need a nursery? You may favor wide-open spaces, but when that means a 45-minute bus ride to school for your kids, the appeal may fade.
2. Consider Utilities
Location will also be a factor in those most basic of life’s basics: utilities. You’ll need to research utility delivery for each potential home you consider, including gas, electric, water, sewage, and trash pickup. Again, that country manse may look tempting, but do you really want to deal with a septic system?
No current discussion of utilities can ignore the internet. People are increasingly dependent on high-speed internet service and cell phone reception. So don’t make a move until you’ve investigated the residential options in areas you’d like to live in.
Fiber is the newest technology available and offers the fastest, most reliable service, but it’s still relatively rare outside urban areas. Cable is more widely available but tends to slow down with heavy use. DSL is available nearly anywhere, but it often has the slowest service.
Find out what the options are in the areas you are considering. You’ll also want to know where nearby cell towers are and how the terrain affects a service provider’s reception.
3. Investigate School Districts
School districts are a good index of home values in an area. Most parents will spend a little more money to live near the schools they want their children to attend. It’s simply a fact that higher-performing schools are generally found where crime is lower and the standard of living is higher.
Cities will have numerous public and private schools to choose from — provided you can afford the latter. If you want your kids to get the classic walk-to-school experience, vet the neighborhood schools carefully before you buy. Research test scores, teacher-student ratios, and crimes stats thoroughly. You wouldn’t want your child walking to a school where they don’t feel safe or wouldn’t thrive.
The suburbs often feature both private and public school options, but well-resourced public schools are generally the draw here. That said, walkability is usually out. Your kids will likely be taking the bus, or you’ll be driving them to school every day. Snow days may be a thing of the past during the pandemic, but do consider your plan for when the kids can’t go to school.
Rural areas often lack the variety of choices available closer to urban areas. There’s often just one school district, and there may, in fact, be just one K-12 school. With more limited options, it’s essential to evaluate future educational needs now.
4. Know Your Budget
Of course, there’s money to consider. Experts recommend that your mortgage, insurance, and utilities not exceed 28-33% of your income, so knowing your budget is critical.
If you buy an older home, add a budget line for future maintenance and upgrades. Depending on age, the roof, siding, and heating and air conditioning systems may need replacing soon.
If you’re not in a city, you may also need to add outside maintenance expenses associated with fences and yards. Many homeowners fail to plan for these expenses and experience some stress when they hit unexpectedly. Former apartment dwellers will have to learn to mow the lawn or get someone to do it for them.
In some communities, you may have homeowner association (HOA) factors to consider. HOAs often have a mandatory membership fee. They may also limit or restrict what you can do with your home. Many homeowners are surprised when their HOA prohibits certain changes to the outside of a home (e.g., no aluminum siding). This may result in costlier upgrades or repairs.
Home ownership may come with unexpected events that will stress a family’s budget. Those old-growth trees are gorgeous until you have to pay thousands of dollars to remove one. A best practice is to save 20% of your income as an emergency reserve for unexpected situations. If you can’t put aside 20% for savings right now, find an amount you can set aside and build on.
Buying your first home is an exciting moment, one that many adults consider a rite of passage. Knowing what you want and doing your research will help you find a first home that’s also your dream home.