What to Look for When Buying a House

Factors to Consider When Buying a House

Every house is unique, and so is every homeowner. Whether you’re searching for a starter home or the house of your dreams, it’s important to find the right fit. Here are some of the most important elements to keep in mind.

Price

The sale price of a home will have a direct impact on your wallet, so it’s important to make sure that you find a home that fits your budget. More specifically, you’ll want to keep your monthly housing cost—that includes principal, interest, taxes and insurance—to 28% of your gross income or less.

Getting prequalified with a mortgage lender or broker can give you an idea of how much house you can afford. You can also use a mortgage calculator to get more details on monthly expenses to determine your comfort level.

Learn more >> How Much House Can I Afford?

Location

Where you choose to live is another crucial factor to consider. For example, do you want to live in a bustling urban neighborhood with excellent walkability and amenities close by? Or would you rather live in a quiet suburban or rural area with more space, not to mention peace and quiet?

If you’re concerned about safety, you may also want to check out crime statistics for the areas you’re considering. It’s also a good idea to calculate your commute time.

Schools

If you have children or you plan to start a family soon, take some time to learn about the public and charter schools your kids may attend. More specifically, you’ll want to focus on ratings, test scores, the ratio of teachers to students and transportation options.

If you plan to send your children to a private school, research options in the area, including tuition costs, distance and other factors that are important to you.

Type of Home

Consider whether you want a single-family home, or if you’d prefer a multi-unit property, such as a townhouse or condominium. Multi-unit properties tend to be less expensive, and some come with special amenities like a swimming pool or gym. However, you’ll have shared walls with your neighbors, and you’re also more likely to have homeowners association (HOA) fees.

Square Footage

You’ll want to make sure that your new home has enough space for you and your loved ones, especially if you plan to grow your family in the next few years. While square footage is important, it’s also crucial to understand how that space is portioned.

For example, check to see how many levels the home has and what the square footage is for each one. You’ll also want to know how many bedrooms and bathrooms the house has, along with other spaces for various activities you enjoy.

Condition

While some properties may only need a handful of small repairs, others may have significant repair needs that have been neglected by previous owners. While a fixer-upper can come with a lower price tag, it’s important to determine whether you have the money, time and patience to follow through with repairs and renovations.

Parking

If you opt for a townhouse or condominium, you may be more likely to have off-street or covered parking, leaving you more vulnerable to theft, vandalism and the weather. In contrast, many single-family homes have garages to keep your vehicle safe—though some may only have carports.

In addition to parking for your cars, you may also consider whether you need extra space for an RV, boat or other type of vehicle. Also think about storage for items that are likely to be necessary to keep up your home, such as a lawnmower, snowblower or trash cans.

Yard Space

Think about the type of outdoor space you want for your family. For example, are you OK with a small patio, or do you want a sprawling yard with room for a garden, a trampoline and a basketball hoop?

You may also want to think about how much privacy you’d get from your neighbors while relaxing in your outdoor space.

Special Amenities

If there’s a specific amenity you want in your new home, focus on property listings with that feature. For example, maybe you want a hot tub or swimming pool in the backyard, or you might be a movie buff who wants a theater room to get a better viewing experience. Whatever it is, though, remember that special amenities can increase the overall cost of the home and decrease your available choices.

Red Flags to Look for When Buying a House

In addition to preferable features, you’ll also want to watch out for potential red flags that could turn your home into a money pit or even affect your health. Here are some hazards to focus on.

Foundation Issues

Small cracks are a sign of normal aging, especially with an older home. However, if you’re seeing significant damage in the foundation or walls—especially in a newer house—it could be an indication of serious issues with the foundation.

Water Damage

A leaky pipe can cause pervasive damage to a home, especially if it’s not caught early. As you walk around the home, watch out for signs of water damage, including musty smells, water stains, mold and peeling or bubbling paint. You should also make sure your home inspector tests for moisture levels around the house.

Mold

If the house has a mold problem, it could be hazardous to your health, especially if you have small children or elderly loved ones living with you (or anyone with respiratory issues, such as asthma). Watch out for black, green or white spots and musty smells throughout the house, especially in the basement, kitchen and bathrooms.

Signs of Pests

Whether it’s cockroaches, mice, termites, ants, wasps or any other type of pest, you’ll want to check for signs of infestations. Not only can pests make for unsanitary living conditions, but some can also cause structural damage to the home, resulting in costly repairs.

Some of the signs to pay attention to include droppings, rotted wood, nests, roof or siding damage and traps. You’ll also want to make sure all doors and windows are properly sealed.

Bad Remodeling

It’s natural to want to save money on home renovations, but unless you’re buying a new construction home, you’re likely to inherit some bad DIY projects from previous owners. While some poor renovation work is easily fixed, other DIY jobs can be incredibly expensive to make right.

Buried Oil Tank

Before natural gas, many homes had underground oil tanks to provide heat. If you’re buying a home built as recently as the 1990s, you likely don’t need to worry about it. However, older homes may still have one of these environmental time bombs just a handful of feet away from your foundation.

Corrosion and damage can result in soil and groundwater contamination, and any liability you incur likely won’t be covered by homeowners insurance. Ask your inspector to look for signs of an oil tank. If they find one, it may not be worth the hassle, even if the seller offers to remove it—the damage may have already been done.

How to Get Help Buying a House

Buying a house can be an exciting experience, but it requires a lot of due diligence. Unless you’re a real estate investor with a lot of experience buying and selling houses, you’ll likely want help from a professional who can help you spot anything you might miss.

Here are some steps you can take:

• Hire an agent. An experienced real estate agent can offer valuable insight as you search for a new home. In addition to helping you find listings that meet your preferences, they can also spot potential issues they may have dealt with in the past.
• Bring family members and friends. It’s important to make multiple walk-throughs of the home before finalizing a contract. But even with more than one glance, you might want a second opinion from someone who doesn’t have a financial or emotional connection to the property.
• Get an inspection before signing. Make sure to add a home inspection contingency to your contract. This will give you some time to get a home inspector to come out to the house and gather more information about the home’s condition and potential red flags. Based on what you find, you may be able to negotiate a lower selling price or have the seller make repairs. In some cases, a bad inspection might be enough to get out of the contract altogether.

Make Sure Your Credit Is Ready to Buy a Home

Before you start the house-hunting process, it’s important to prepare yourself financially, and that includes shoring up your credit score. While you can get a mortgage loan with a score as low as 620—or even lower in some cases—you’ll have a much easier time securing a low rate with a score in the mid-700s or higher.

With Experian, you can check your credit report and FICO Score for free. If you learn that your credit needs some work, use your credit report to help you determine which steps you’ll need to take to improve your credit before buying a home.