Investing

10 Essential Things to Look for When Buying a Home

Looking to buy a home? Discover the top 10 things to consider before making a purchase, from location and budget to home inspections and future resale value

Thushan Weerakoon

Sep 9, 2024 — 7 min read

10 Essential Things to Look for When Buying a Home

Introduction

Buying a home is one of the biggest financial decisions most people will make in their lifetime. Whether you're a first-time homebuyer or experienced in real estate, it’s crucial to approach the process with careful consideration. A home is not just a place to live; it’s an investment that could significantly impact your financial future and lifestyle. From the location and budget to the condition of the property, understanding what to look for can make a difference in finding your dream home. In this guide, we’ll go over 10 essential things to look for when buying a home to help you make the right choice.

10 Essential Things to Look for When Buying a Home

1. Location

The location of a home is one of the most important factors to consider, as it affects both your quality of life and the home's future resale value. Look at the neighborhood, proximity to schools, public transportation, parks, and essential services like grocery stores and hospitals. Homes in desirable locations tend to appreciate faster, even in a fluctuating market.

Neighborhood Quality: Research the crime rate, traffic levels, and the general vibe of the area. Are the homes well-maintained?
Accessibility: Consider how close the home is to your work, schools, and main roadways. A location with easy access to amenities will enhance your daily living experience.
Future Development: Investigate potential future developments in the area. New schools, shopping centers, or businesses could either increase the value of your home or negatively affect your peace and quiet.

2. Budget and Affordability

Before you start house hunting, it’s important to have a clear understanding of your budget. This includes not only the price of the home but also other costs like property taxes, insurance, closing costs, and maintenance.

Mortgage Pre-Approval: Get pre-approved for a mortgage so you know exactly how much you can afford. This also strengthens your position as a buyer when making an offer.
Total Monthly Payments: Factor in all monthly costs, including homeowner’s insurance, mortgage payments, property taxes, and utilities, to ensure the home fits your financial plan.
Down Payment: Depending on the type of loan, you’ll need to put down anywhere from 3% to 20% of the home’s price. Ensure you have enough savings for the down payment without compromising your financial stability.

3. Size and Layout of the Home

When buying a home, size and layout should align with your current and future needs. Consider both the square footage and how the space is used.

Number of Bedrooms and Bathrooms: Will the home accommodate your family, or will you need to make adjustments down the road? Plan for future needs, like expanding your family or needing a home office.
Layout: Pay attention to how the rooms are laid out. Do you prefer an open floor plan, or do you want separate spaces for privacy? A poorly designed layout can make a home feel smaller than it actually is.
Storage Space: Lack of storage can become a major inconvenience over time. Ensure the home has adequate closets, a garage, or a basement for storage needs.

4. Condition of the Home

The condition of the home will directly impact how much you spend on repairs and maintenance. A thorough home inspection is crucial to identify potential issues that could lead to expensive fixes.

Foundation and Structure: Look for cracks in the walls or foundation, as these could indicate structural issues.
Roof Condition: A roof can last for decades, but an aging roof will need replacement sooner rather than later. Check for signs of wear like missing shingles or leaks.
Plumbing and Electrical Systems: Inspect the home’s plumbing and electrical systems. Outdated systems can be costly to replace or repair.
Pest Infestations: Look for signs of termites, ants, or rodents. An infestation can lead to significant structural damage over time.

5. Energy Efficiency

Energy-efficient homes save money in the long run and are better for the environment. Homes with energy-efficient appliances, windows, and insulation will lower your monthly utility bills and contribute to a more sustainable lifestyle.

Windows and Insulation: Proper insulation and double-pane windows can help keep your home at a comfortable temperature without overworking your heating and cooling systems.
Energy Star Appliances: Energy-efficient appliances use less electricity and water, leading to lower utility costs.
Solar Panels: Consider whether the home has solar panels or is suitable for solar energy installation. Solar energy can drastically reduce your electricity bills over time.

6. Resale Value

Even if you plan to live in your new home for years, thinking about its resale value is important. Choose a home that will appreciate over time and be easy to sell when the time comes.

Neighborhood Trends: Homes in up-and-coming areas tend to increase in value faster than homes in stagnant markets.
Home Features: Some features, like an updated kitchen or a large backyard, will appeal to future buyers. Conversely, very unique or niche design elements may limit your potential buyer pool.
Comparable Sales: Look at recent sales of similar homes in the area to get an idea of the market’s trajectory and how much your home might be worth in a few years.

7. Homeowner Association (HOA) Rules and Fees

If the home you’re considering is part of a homeowner association (HOA), review the HOA's rules and fees.

Monthly Dues: HOA fees can range from $100 to over $500 per month, depending on the amenities provided, such as landscaping, pools, and security.
Rules and Restrictions: Some HOAs have strict guidelines about what you can and cannot do with your home, such as painting the exterior or adding outdoor features. Make sure these align with your lifestyle.

8. Age of the Home

The age of a home can tell you a lot about its potential maintenance needs and longevity. Older homes may have charm and character but could require significant updates or repairs, while newer homes might come with modern amenities but lack historical appeal.

Building Materials: Older homes may have been built with higher-quality materials, but they can also have outdated plumbing, wiring, or insulation.
Renovations and Updates: Consider what updates have been made to the home. A home that’s been updated with a new roof, kitchen, or HVAC system may save you money on repairs.
Building Codes: Homes built decades ago may not meet current building codes, so you’ll want to ensure everything is up to modern standards.

9. Outdoor Space

The outdoor space of a home is often as important as the indoor space, especially for families or homeowners who enjoy gardening, entertaining, or simply having space for pets and kids to play.

Yard Size and Maintenance: Consider how much yard space you need and how much maintenance it will require. A large yard can be great for kids but could also mean more upkeep.
Privacy: Is the yard fenced, and does it provide enough privacy from neighboring homes? Look at the landscaping and consider whether you’ll need to make improvements for privacy.
Outdoor Amenities: Check for features like a patio, deck, or pool. These can add significant enjoyment to your home but may also come with extra maintenance costs.

10. Home Inspection Report

A professional home inspection is one of the most important steps in the home-buying process. This report will provide a detailed analysis of the home's condition, uncovering potential issues that may not be immediately visible.

Major Structural Issues: The inspection will check for major structural problems that could require expensive repairs, like foundation cracks or roof damage.
Electrical and Plumbing Problems: Inspectors will look for outdated wiring, leaks, and other plumbing issues that could cost you thousands if not addressed.
Mold and Water Damage: Water damage and mold are serious concerns that can affect the health of your family and the integrity of the home.

FAQs

1. How do I know if I can afford a home?
Start by getting pre-approved for a mortgage. This will give you a clear picture of what you can afford. Factor in all monthly costs like mortgage payments, property taxes, insurance, and maintenance.

2. How important is location when buying a home?
Location is one of the most important factors because it affects both your quality of life and the home's future resale value. Proximity to schools, work, and amenities should be considered.

3. What should I look for in a home inspection?
A home inspection should cover structural integrity, roof condition, electrical and plumbing systems, and potential issues like mold or pest infestations.

4. Should I consider the resale value of a home even if I plan to stay long-term?
Yes, even if you plan to live in the home for a long time, it’s important to consider its potential resale value in case your plans change.

5. How do HOA fees affect my budget?
HOA fees can significantly impact your monthly expenses. Make sure to factor in these fees, and be sure the HOA rules align with your lifestyle.

Conclusion

Buying a home is a significant decision that requires careful thought and research. From the location and budget to the home's condition and future resale value, there are many factors to consider. Taking the time to thoroughly evaluate each aspect will ensure you make a smart investment that meets your current needs and future goals. By following this guide and understanding what to look for, you’ll be well-equipped to find a home that you’ll love and that will serve as a solid financial asset for years to come.

What is a good resale strategy?How do I get pre-approved?