Realty Bites
There are plenty of things you’re probably going to have to compromise on when you buy a home: two bedrooms or three, more yard or a garage, square footage versus location, and the list goes on and on. But there are three things you absolutely shouldn’t compromise on, no matter what.
Homeowners’ Association Covenants
If you buy a home that’s part of a homeowners’ association, you are also buying a membership into a club that you can’t get out of (short of selling the home, at least). If you enter an area with a strict HOA, you could face fines or lose your home entirely for something as seemingly insignificant as planting too many roses or installing an air conditioner.
Before you sign anything that legally binds you to a home, make sure you get a copy of all HOA rules and read through them with a fine-toothed comb. If there’s anything in the rules you don’t feel you can live with, don’t buy the house anyway and assume the HOA won’t notice your transgression. Either decide to abide by 100% of the rules off the bat, or move on to a different property.
A Home Inspection
We know, the nice little old lady selling the house promised you that there’s not a thing wrong with it. Or perhaps the current homeowner is himself a repairman, so you assume the property is structurally sound and the faucets are screwed tight as a drum. You still need a home inspection, carried out by a qualified and objective professional.
Buying a home is likely the biggest purchase you’ll ever make in your lifetime. Closing costs can quickly start to pile up and it may be tempting to try to save a few bucks by skipping an inspection, but this is one mistake that can literally cost you for the rest of your life.
However, it’s important to keep in mind that almost every home is bound to have some problems, even if it’s a new construction — and once you own the property, new repairs and maintenance needs will crop up over time. A home inspection can give you a good idea of what shape the home is in at the moment and what kinds of maintenance expenses you may be looking at in the near future. In some cases, you can ask the sellers to pay for certain repairs, making the inspection more than pay for itself.
As an added bonus, following the home inspector around the property will save you from bumping around an unfamiliar basement in the middle of the night feeling around for a circuit breaker that’s actually in the attic, or from not realizing that there’s beautiful hardwood floors under that mediocre beige carpet.
Your Mortgage Payment
Photo Credit: CarbonNYC
When you imagine yourself living in your new home, you probably see your friends and family gathered around a nice dinner, drinks in hand, laughing and having a grand ol’ time. If you wind up compromising on how much you can afford to pay your mortgage lender, however, that fantasy can transform into a bunch of people sitting on cardboard boxes drinking Two Buck Chuck.
If you get a 30-year mortgage, you’re committed to making whatever monthly payment you decide on for thirty years. That’s a long time to have to slash your entertainment budget, share one car, and vacation one weekend a year at the local Holiday Inn. When you’re deciding how much you can spend, assume you’ll be making exactly what you’re making now (or less) and ask yourself how much you can comfortably afford while still enjoying life. If you stretch your budget to the limit on a house and don’t have much leftover for anything else, that dream home can become nightmarishly lonely pretty quickly.
Most everyone thinks they’ll make more money in a few years and that what seems like a steep mortgage payment now will be easy to digest then. Maybe — but maybe not. If you are so lucky as to enjoy a higher income in the future, there will be no shortage of ways to spend it, whether on remodeling or expanding your current home or even on a second home somewhere else. Deal with that “problem” of being able to afford a more expensive house when it comes, and only agree to a realistic mortgage payment right now.
If you’re still early in the home buying process, do yourself a favor and figure out the maximum amount of home you can comfortably afford (which may be radically different from what the bank says you can afford). Then only look at homes in this price range. Visiting open houses for properties outside your budget may sound like harmless fun, but it might encourage you to impulsively take on more mortgage than you can chew.
Thumbnail photo credit: LuMaxArt