Purchasing your first home is a big step and one that is likely to affect your financial future for years to come.
Your first step will be to establish your budget, then speak with a mortgage broker to get a prequalification letter. It’s not just all about your mortgage payments, which include your principle, interest and real estate taxes and insurance (P.I.T.I.) You have to anticipate the other costs of owning like future increase in taxes, repairs, maintenance and emergencies and set aside a little savings for those situations in the future. Buy what you need while still anticipating future needed space as you expand your family. Buying too large a home adds to the cost of your mortgage, taxes, insurance and upkeep.
Also keep in mind that due to the Covid-19 pandemic you should ask yourself whether your job and/or business is in a strong position now and into the future. Purchasing your home and staying within your budget while living there for the near term might be your safest bet for now until the economy and your job or business improves. Keeping your expectations somewhat on the conservative side will be an excellent approach. Understanding potential appreciation and its effect on future purchasing will go a long way if and when you want to move up to a larger home.
Whether you sell, rent or exchange the current property, a home with long-term appreciation will provide greater buying options in the future. Next look for neighborhoods which expect a rise in value or most important that have top-notch school systems. Working with a reputable Broker or agent will also help you to minimize major as well as minor mistakes in the purchase process. You don’t do your own dental work or yearly physical do you? Then connecting and seeking out a professional by reviewing their online reviews and testimonials will be the most prudent, smartest and safest way in searching out and securing your next place to call home.
You should determine your specific needs and wants in your home. Will you consider a fixer-upper where you could build value and appreciation into home right from the beginning or prefer a excellent to mint condition home? But then again do you have the knowledge and/or connections to be able to renovate? I recommend this path if you have experience or have enough professionals within your immediate family or friends to be able to do the job.
Also, what are the minimum number of bedrooms and bathrooms you will need anticipating the growth of your family. Consider what other needs and wants you may have so you will have as clear a picture as possible before going out and looking. You may have to adjust those specifics as you go along as I have seen buyers completely change their thoughts on the style of the home as well as the interior because their preconceived ideas of needs and wants weren’t always inscribed in stone. Finding the right fit is most important and getting that tingling feeling and falling in love with that special home is how it sometimes happens.
The majority now search online to view photos and virtual tours to provide more than adequate information and insights into the homes and neighborhoods. Statistics about crime, schools, shopping, cultural offerings and things to do will also provide the information that will further educate you in making the right decision as to where you decide to live. Then you can physically go out to scope out the neighborhood, schools, amenities, public transportation and other important factors which will enable you to determine if the location is your best fit.
Your broker should be asking you probing questions as to your budget, if you have a pre-qualification lenders letter and what towns, style of homes, bedrooms and baths you are interested in. Once there is a clear picture of what you are looking to purchase, your broker will set you up on an automatic search and send you those homes on a regular basis that come as close to what you might be searching for. Our MLS system is the No. 1 source for updated information that is accurate. We have the listings first before they go out to the large online companies whose information is not always accurate and up-to-date.
Once you fall in love with a home, always make sure you hire a licensed and insured home inspector. Recommendations are always a sound and pragmatic way to go. Your real estate broker can also advise you as well as they have established strong relationships within a multitude of industries dealing with the real estate process and will know who are the most proficient and expert at their trade and have a long standing and stellar reputation for doing the right thing. Don’t be penny-wise and pound foolish and get stuck with expensive repairs or hidden defects. Hiring the best inspector for your money is the best route to take.
I also recommend making sure you receive insurance quotes for the home you are interested in for there are factors that will affect the price, e.g., the neighborhood, location, flood zones, etc. Make sure you inquire and check the accuracy of the taxes to be sure that all deductions for any senior, military and any other exemptions, including the STAR exemption, are added back so you will know the real taxes. School taxes are approximately 60-65 percent of your total real estate tax bill. An older couple or person with lower income may have a much higher STAR exemption deduction, which reduces their real estate taxes.
Your STAR exemption potentially will most likely be much lower than the current owner’s. Also, the S.A.L.T. (state and local taxes) deductibility maximum of $10,000 just might be eliminated in the near future. This was put into effect during the last administration and mainly affected the blue states with higher real estate taxes. It will all depend on what decisions Congress and President Biden determine are the right path to pursue. There are a great number of questions to be asked and decisions to be made as you go along searching for your home. Being pragmatic and using common sense will aid you in finally finding your next place to call home. If you have any questions or concerns, always feel free to reach out to me.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 39 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15-minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com